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ANNUAL REPORT
MAY 31, 1999
RETAIL FUNDS
[Logo] NORWEST
ADVANTAGE FUNDS-R-
INCOME FUNDS
Stable Income Fund
Intermediate Government Income Fund
Income Fund
Total Return Bond Fund
TAX-FREE INCOME FUNDS
Tax-Free Income Fund
Colorado Tax-Free Fund
Minnesota Tax-Free Fund
EQUITY FUNDS
Growth Balanced Fund
Income Equity Fund
ValuGrowth-SM- Stock Fund
Diversified Equity Fund
Growth Equity Fund
Large Company Growth Fund
Diversified Small Cap Fund
Small Company Stock Fund
Small Cap Opportunities Fund
International Fund
Not FDIC Insured. -- No bank guarantee. -- May lose value.
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TABLE OF CONTENTS MAY 31, 1999
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MESSAGE TO OUR SHAREHOLDERS............................................... 1
INVESTMENT ADVISER'S REPORT AND PERFORMANCE DATA.......................... 2
Stable Income Fund............................................... 2
Intermediate Government Income Fund.............................. 3
Income Fund...................................................... 4
Total Return Bond Fund........................................... 5
Tax-Free Income Fund............................................. 6
Colorado Tax-Free Fund........................................... 7
Minnesota Tax-Free Fund.......................................... 8
Growth Balanced Fund............................................. 9
Income Equity Fund............................................... 10
ValuGrowth Stock Fund............................................ 11
Diversified Equity Fund.......................................... 12
Growth Equity Fund............................................... 13
Large Company Growth Fund........................................ 14
Diversified Small Cap Fund....................................... 15
Small Company Stock Fund......................................... 16
Small Cap Opportunities Fund..................................... 17
International Fund............................................... 18
NORWEST ADVANTAGE FUNDS
Independent Auditors' Report.............................................. 19
Statements of Assets and Liabilities...................................... 20
Statements of Operations.................................................. 24
Statements of Changes in Net Assets....................................... 28
Financial Highlights...................................................... 36
Notes to Financial Highlights............................................. 48
Notes to Financial Statements............................................. 49
Supplementary Information (Unaudited)..................................... 54
Schedules of Investments.................................................. 55
Stable Income Fund............................................... 55
Intermediate Government Income Fund.............................. 55
Income Fund...................................................... 55
Total Return Bond Fund........................................... 57
Tax-Free Income Fund............................................. 57
Colorado Tax-Free Fund........................................... 60
Minnesota Tax-Free Fund.......................................... 62
Growth Balanced Fund............................................. 65
Income Equity Fund............................................... 65
ValuGrowth Stock Fund............................................ 66
Diversified Equity Fund.......................................... 67
Growth Equity Fund............................................... 67
Large Company Growth Fund........................................ 67
Diversified Small Cap Fund....................................... 67
Small Company Stock Fund......................................... 67
Small Cap Opportunities Fund..................................... 67
International Fund............................................... 67
Notes to Schedules of Investments................................ 68
CORE TRUST (DELAWARE)
Independent Auditors' Report.............................................. 73
Statements of Assets and Liabilities...................................... 74
Statements of Operations.................................................. 76
Statements of Changes in Net Assets....................................... 78
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TABLE OF CONTENTS (CONCLUDED) MAY 31, 1999
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CORE TRUST (DELAWARE) (CONTINUED)
Financial Highlights...................................................... 80
Notes to Financial Statements............................................. 81
Schedules of Investments.................................................. 86
Stable Income Portfolio.......................................... 86
Managed Fixed Income Portfolio................................... 88
Positive Return Bond Portfolio................................... 90
Strategic Value Bond Portfolio................................... 90
Index Portfolio.................................................. 92
Income Equity Portfolio.......................................... 98
Disciplined Growth Portfolio..................................... 99
Large Company Growth Portfolio................................... 100
Small Cap Index Portfolio........................................ 101
Small Company Stock Portfolio.................................... 109
Small Cap Value Portfolio........................................ 112
Small Company Value Portfolio.................................... 113
Small Company Growth Portfolio................................... 115
International Portfolio.......................................... 117
International Equity Portfolio................................... 119
Notes to Schedules of Investments................................ 121
SCHRODER CAPITAL FUNDS
Report of Independent Accountants......................................... 124
Statements of Assets and Liabilities...................................... 125
Statements of Operations.................................................. 126
Statements of Changes in Net Assets....................................... 127
Financial Highlights...................................................... 128
Notes to Financial Statements............................................. 129
Schedules of Investments.................................................. 132
Schroder U.S. Smaller Companies Portfolio........................ 132
Schroder Global Growth Portfolio................................. 133
Schroder EM Core Portfolio....................................... 135
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A MESSAGE TO OUR SHAREHOLDERS
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July 16, 1999
Dear Valued Shareholders:
We are pleased to present the 1999 Annual Report for
Norwest Advantage Funds for the fiscal year ended May 31,
1999. This report includes seventeen of our thirty-nine
mutual funds, with our money market funds and three
Norwest WealthBuilder II Portfolios reported separately.
A period of relative calm returned to global markets
due to Asia's improving economic condition. After a brief
scare late last summer, U.S. financial markets shook off
any threats to domestic prosperity, with the Dow Jones
Industrial Average (DJIA) climbing 3,000 points from
October through April to peak at a record high 11,000.
Thanks to the combination of low unemployment, low
inflation and strong consumer spending, the nation's
"Goldilock's" economy seemed just right--at least until
May.
Recent events in the U.S. economy may signal a turning
point for domestic and international markets. Fear of
interest rate increases threw the DJIA into a spin during
May, and triggered a sell-off in the bond market that sent
yields on 30-Year Treasury bonds to the highest levels in
a year. We believe that bond yields--which move inversely
to bond prices--will not peak until the Fed raises rates
high enough to produce a meaningful economic slowdown.
Although higher interest rates will help cool the
nation's strong economic growth, economies from Asia to
Latin America are concerned about the prospect of a
tightening U.S. monetary policy. Higher interest rates
translate into higher bond yields, raising the debt
service burden throughout emerging markets. So while the
health of the world's economies remains questionable,
signs of optimism are emerging.
Whatever the market conditions, we recommend that you
continually review your investment portfolio with your
financial consultant to determine an appropriate mix of
investments to meet your ongoing needs. We appreciate your
business and strive to deliver personalized service along
with an array of investment options to help you achieve
your financial goals. If you have any questions or need
information, please contact us at
1-(800) 338-1348 or (612) 667-8833, option 2.
Again, thank you for choosing Norwest Advantage Funds.
Sincerely,
/s/ John Y. Keffer
John Y. Keffer
CHAIRMAN, NORWEST ADVANTAGE
FUNDS
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INVESTMENT ADVISER'S REPORT AND PERFORMANCE DATA MAY 31, 1999
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STABLE INCOME FUND
The Fund outperformed the Lipper Short Investment Grade Debt Funds Category for
the fiscal year ended May 31, 1999, with a return of 4.74% versus 4.35%. Fund
performance slightly lagged the return on the Merrill Lynch One-Year Treasury
Bill Index of 5.21% and the Lipper Ultra Short Average return of 4.87%.
Interest rates were extremely volatile over the past 12 months. From perceived
global deflation to rampant economic growth, the bond market experienced several
twists of fate during the period. In fact, the dramatic changes in interest
rates aided fund performance as we do not rely on predicting the direction of
interest rates. The volatility in risk premiums hurt fund performance over the
past year, but our strategic allocation across asset classes and diversification
insulated performance.
Asian economies appear to be recovering, while Europe remains mixed. Many of the
factors which have kept inflation lower have not changed, although energy prices
and some other commodity prices have recently rebounded. It appears world-wide
monetary easing and restructuring in 1998 may be prompting stabilization in the
Japan/Asian economies. If global growth rebounds, U.S. economic expansion could
continue longer than expected. At May 31, 1999, the Federal Reserve remained
neutral on monetary policy, but indicated a bias to tighten. Our style is not
based on anticipating the direction of interest rates. As a result, portfolio
style is generally not affected by Federal Reserve action.
Fund positioning diversifies exposure across asset classes, which seeks to
provide consistent performance in varying economic and interest rate cycles
while avoiding excessive risk concentrations. The bond market could continue to
display a large amount of volatility over the next 12 months. Interest rates
have increased nearly 2.00% since September, while risk premiums have widened to
levels not evidenced since the fourth quarter of 1998. That said, risk
associated with Y2K could inflate bond market fears over the next six months
with corresponding improvements through the first half of 2000.
THE OPINIONS EXPRESSED REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH MAY
31, 1999. THE MANAGER'S OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON
MARKET AND OTHER CONDITIONS. THE COMPOSITION, INDUSTRIES AND HOLDINGS OF THE
PORTFOLIO ARE SUBJECT TO CHANGE.
THE PERFORMANCE REPRESENTS INFORMATION OF A SHARES EXCLUDING SALES LOAD. HAD THE
PERFORMANCE INCLUDED SALES LOAD, THE RETURN WOULD HAVE BEEN LOWER. THE
PERFORMANCE FOR OTHER CLASSES WILL DIFFER.
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COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
STABLE INCOME FUND ("FUND") VS. ONE-YEAR U.S. TREASURY BILL ("INDEX") AND
MERRILL LYNCH TREASURY BILL 1 YEAR ("ML INDEX")
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The following chart reflects the value of a $10,000 investment in the Fund,
including reinvested dividends and distributions, since inception. The result is
compared with two broad-based security market indices. The Fund's total return
includes operating expenses and sales charges (if applicable) that reduce
returns, while the total returns of the Indices do not. Total return of the Fund
would have been lower had certain fees and expenses not been voluntarily waived
and/or reimbursed. The Fund is professionally managed while the Indices are
unmanaged and are not available for investment. Investment return and principal
value of an investment in the Fund will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost. PAST
PERFORMANCE IS NOT PREDICTIVE NOR A GUARANTEE OF FUTURE RESULTS.
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AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1999
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ML
A SHARES* B SHARES** INDEX INDEX
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
ONE YEAR 3.17% 3.32% 5.21% 5.21%
SINCE INCEPTION 5.69% 5.25% 5.93% 5.92%
INCEPTION DATE 11/11/94 11/11/94 10/31/94 10/31/94
VALUE MAY 31, 1999 $ 12,870 $ 12,627 $ 13,020 $ 13,015
</TABLE>
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<CAPTION>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
A SHARES B SHARES INDEX ML INDEX
<S> <C> <C> <C> <C>
10/31/94 $9,850.00 $10,000.00 $10,000.00 $10,000.00
11/30/94 $9,879.55 $10,025.68 $9,995.20 $9,995.00
12/31/94 $9,918.95 $10,059.28 $10,028.98 $10,028.98
01/31/95 $9,968.20 $10,102.82 $10,128.97 $10,129.27
02/28/95 $10,047.00 $10,176.87 $10,217.70 $10,218.41
03/31/95 $10,125.80 $10,250.21 $10,276.97 $10,277.68
04/30/95 $10,184.90 $10,303.72 $10,336.37 $10,337.29
05/31/95 $10,293.25 $10,406.77 $10,428.46 $10,429.29
06/30/95 $10,352.35 $10,460.10 $10,488.43 $10,488.74
07/31/95 $10,391.75 $10,493.25 $10,540.24 $10,540.13
08/31/95 $10,450.85 $10,546.24 $10,590.41 $10,590.72
09/30/95 $10,500.10 $10,589.44 $10,634.36 $10,634.15
10/31/95 $10,559.20 $10,642.30 $10,698.38 $10,697.95
11/30/95 $10,638.00 $10,715.16 $10,761.82 $10,761.07
12/31/95 $10,705.67 $10,776.15 $10,822.30 $10,821.33
01/31/96 $10,778.07 $10,842.17 $10,890.92 $10,889.51
02/29/96 $10,778.07 $10,835.71 $10,903.77 $10,902.57
03/31/96 $10,809.10 $10,860.00 $10,933.53 $10,932.01
04/30/96 $10,836.44 $10,880.60 $10,971.69 $10,970.27
05/31/96 $10,872.48 $10,907.69 $11,011.63 $11,009.76
06/30/96 $10,934.38 $10,962.30 $11,069.66 $11,068.12
07/31/96 $10,991.20 $11,010.66 $11,112.06 $11,110.18
08/31/96 $11,029.82 $11,040.74 $11,163.95 $11,162.39
09/30/96 $11,112.26 $11,117.83 $11,240.20 $11,238.30
10/31/96 $11,195.94 $11,193.93 $11,322.93 $11,321.46
11/30/96 $11,258.19 $11,249.62 $11,378.64 $11,376.94
12/31/96 $11,290.51 $11,266.63 $11,417.44 $11,415.62
01/31/97 $11,333.55 $11,310.71 $11,473.61 $11,471.55
02/28/97 $11,373.61 $11,344.47 $11,515.49 $11,512.85
03/31/97 $11,392.05 $11,356.36 $11,544.17 $11,541.63
04/30/97 $11,490.64 $11,447.58 $11,612.62 $11,609.73
05/31/97 $11,551.17 $11,500.09 $11,684.85 $11,681.71
06/30/97 $11,614.01 $11,557.38 $11,753.68 $11,750.63
07/31/97 $11,739.97 $11,674.93 $11,838.19 $11,835.24
08/31/97 $11,747.85 $11,675.95 $11,875.12 $11,871.93
09/30/97 $11,838.98 $11,759.43 $11,938.18 $11,934.85
10/31/97 $11,924.74 $11,836.94 $12,004.31 $12,000.49
11/30/97 $11,954.07 $11,847.77 $12,039.49 $12,035.29
12/31/97 $12,020.04 $11,915.53 $12,096.55 $12,093.06
01/31/98 $12,108.45 $11,996.19 $12,175.18 $12,171.66
02/28/98 $12,149.78 $12,030.27 $12,206.23 $12,202.09
03/31/98 $12,187.52 $12,060.32 $12,268.72 $12,264.32
04/30/98 $12,244.36 $12,096.82 $12,325.90 $12,321.97
05/31/98 $12,287.71 $12,133.29 $12,375.82 $12,371.25
06/30/98 $12,344.51 $12,181.92 $12,435.34 $12,430.64
07/31/98 $12,405.77 $12,234.25 $12,493.92 $12,489.06
08/31/98 $12,508.44 $12,327.75 $12,594.49 $12,590.22
09/30/98 $12,613.03 $12,435.45 $12,697.26 $12,693.46
10/31/98 $12,645.32 $12,446.64 $12,762.78 $12,759.47
11/30/98 $12,666.71 $12,460.67 $12,763.80 $12,760.74
12/31/98 $12,725.26 $12,508.87 $12,808.73 $12,805.41
01/31/99 $12,749.63 $12,538.73 $12,854.20 $12,850.22
02/28/99 $12,749.35 $12,531.76 $12,860.88 $12,856.65
03/31/99 $12,823.53 $12,596.60 $12,938.82 $12,935.08
04/30/99 $12,871.59 $12,635.37 $12,985.79 $12,981.64
05/31/99 $12,870.33 $12,627.12 $13,020.20 $13,015.39
</TABLE>
* 5/2/96 was the inception date of Class A Shares of the Fund. Returns prior to
that date are for Class I Shares.
** 5/17/96 was the inception date of Class B Shares of the Fund. Returns prior
to that date are for Class I Shares, adjusted for Class B Share expenses.
THE ABOVE GRAPH REPRESENTS PERFORMANCE INFORMATION OF CLASS A AND B SHARES.
PERFORMANCE OF OTHER CLASSES WILL DIFFER.
THE RETURNS ABOVE ARE CALCULATED USING THE MAXIMUM 1.50% SALES CHARGE FOR CLASS
A SHARES AND THE MAXIMUM 1.50% DEFERRED SALES CHARGE (DECLINING TO ZERO AFTER
THE SECOND YEAR) FOR CLASS B SHARES.
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INVESTMENT ADVISER'S REPORT AND PERFORMANCE DATA (CONTINUED) MAY 31, 1999
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INTERMEDIATE GOVERNMENT INCOME FUND
For the fiscal year ended on May 31, 1999, the Fund returned 4.21%, versus 3.42%
for the Lipper Intermediate U.S. Government Average.
The goal of the Fund is to provide income and safety of principal by investing
primarily in U.S. Government Securities. We seek to provide income greater than
the yield of the five-year Treasury note, while at the same time varying our
duration 30% above or below the five-year Treasury. We utilize both agency notes
and mortgage-backed securities when there is value in those sectors.
The Fund benefited from the decline in interest rates during the third quarter
of 1998, but performance has been hurt with the rise of rates since October
1998. The turmoil in Asia, a driving force in our bond markets during 1998 has
cooled considerably. In the short run, global issues should take a back seat to
our domestic economy. The market has already been tightening for the Fed, thus
the markets and the Fund should not be adversely impacted by a small rate
increase. If it appears that we are in for a series of rate increase, we will
re-evaluate our duration positioning to reduce our interest rate risk.
This Fund manages risk by investing only in U.S. Government and agency
securities and by limiting its duration to 30% around the duration of the
five-year Treasury note. It adds yield by the use of mortgage-backed securities.
We have maintained our profile, as we believe that this recent rate increase is
temporary. We will only change our duration positioning if it appears that the
economy is heating up and inflation is back to stay. The bond markets should
return to positive total returns as interest rates peak and begin to decline.
THE OPINIONS EXPRESSED REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH MAY
31, 1999. THE MANAGER'S OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON
MARKET AND OTHER CONDITIONS. THE COMPOSITION, INDUSTRIES AND HOLDINGS OF THE
PORTFOLIO ARE SUBJECT TO CHANGE.
THE PERFORMANCE REPRESENTS INFORMATION OF A SHARES EXCLUDING SALES LOAD. HAD THE
PERFORMANCE INCLUDED SALES LOAD, THE RETURN WOULD HAVE BEEN LOWER. THE
PERFORMANCE FOR OTHER CLASSES WILL DIFFER.
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COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
INTERMEDIATE GOVERNMENT INCOME FUND ("FUND") VS. LEHMAN BROTHERS INTERMEDIATE
GOVERNMENT INDEX ("LEHMAN INDEX") AND LIPPER INTERMEDIATE U.S. GOVERNMENT
AVERAGE ("LIPPER AVERAGE")
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The following chart reflects the value of a $10,000 investment in the Fund,
including reinvested dividends and distributions, over the past 10 fiscal year
periods. The result is compared with a broad-based securities market index and a
peer based average. The Fund's total return includes operating expenses and
sales charges (if applicable) that reduce returns, while the total return of the
Index does not. Total return of the Fund would have been lower had certain fees
and expenses not been voluntarily waived and/or reimbursed. The Fund is
professionally managed while the Index is unmanaged and is not available for
investment. The Lipper Average does not include sales charges but does include
management fees and expenses. The Lipper Average is calculated by taking an
arithmetic average of the returns of the funds in the group. Investment return
and principal value of an investment in the Fund will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. PAST PERFORMANCE IS NOT PREDICTIVE NOR A GUARANTEE OF FUTURE RESULTS.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1999
-------------------------------------------------
B LEHMAN LIPPER
A SHARES*+ SHARES**+ INDEX AVERAGE++
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
ONE YEAR (0.48%) (0.41%) 4.98% 3.42%
FIVE YEAR 5.51% 5.67% 7.41% 6.33%
TEN YEAR 6.35% 6.06% 8.08% 7.12%
VALUE MAY 31, 1999 $18,499 $18,002 $21,767 $19,892
</TABLE>
<TABLE>
<CAPTION>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
A SHARES B SHARES LEHMAN INDEX LIPPER AVERAGE
<S> <C> <C> <C> <C>
05/31/89 $9,550.00 $10,000.00 $10,000.00 $10,000.00
06/30/89 $9,645.54 $10,094.04 $10,255.00 $10,233.00
07/31/89 $9,744.81 $10,191.65 $10,463.18 $10,409.01
08/31/89 $9,771.46 $10,213.19 $10,321.92 $10,297.63
09/30/89 $9,844.71 $10,283.61 $10,371.47 $10,337.79
10/31/89 $9,946.44 $10,383.48 $10,589.27 $10,547.65
11/30/89 $10,050.51 $10,485.88 $10,694.10 $10,637.30
12/31/89 $10,082.93 $10,513.18 $10,725.12 $10,666.02
01/31/90 $10,014.07 $10,434.85 $10,658.62 $10,558.30
02/28/90 $10,043.05 $10,459.19 $10,698.06 $10,596.31
03/31/90 $10,061.32 $10,471.71 $10,710.90 $10,601.61
04/30/90 $10,025.98 $10,428.63 $10,674.48 $10,517.85
05/31/90 $10,221.33 $10,625.34 $10,902.91 $10,786.06
06/30/90 $10,339.06 $10,741.33 $11,045.74 $10,931.67
07/31/90 $10,485.80 $10,887.09 $11,200.38 $11,089.09
08/31/90 $10,437.02 $10,829.67 $11,160.06 $10,983.74
09/30/90 $10,521.82 $10,911.14 $11,259.38 $11,065.02
10/31/90 $10,654.63 $11,042.07 $11,415.89 $11,201.12
11/30/90 $10,838.54 $11,226.01 $11,588.27 $11,421.78
12/31/90 $10,966.48 $11,351.54 $11,748.19 $11,586.26
01/31/91 $11,066.26 $11,447.75 $11,869.19 $11,711.39
02/28/91 $11,130.37 $11,507.62 $11,941.60 $11,785.17
03/31/91 $11,183.73 $11,555.62 $12,007.27 $11,844.09
04/30/91 $11,299.63 $11,668.40 $12,130.95 $11,962.54
05/31/91 $11,363.29 $11,726.86 $12,198.88 $12,027.13
06/30/91 $11,335.64 $11,691.25 $12,208.64 $12,011.50
07/31/91 $11,458.21 $11,810.38 $12,340.49 $12,165.24
08/31/91 $11,689.39 $12,041.30 $12,574.96 $12,415.85
09/30/91 $11,917.52 $12,269.03 $12,788.74 $12,646.78
10/31/91 $12,032.04 $12,379.26 $12,934.53 $12,785.90
11/30/91 $12,179.19 $12,523.19 $13,085.86 $12,915.04
12/31/91 $12,499.71 $12,844.94 $13,403.85 $13,263.74
01/31/92 $12,319.85 $12,652.09 $13,275.17 $13,096.62
02/29/92 $12,350.01 $12,675.67 $13,316.33 $13,158.17
03/31/92 $12,281.48 $12,597.42 $13,261.73 $13,088.43
04/30/92 $12,391.36 $12,702.50 $13,381.09 $13,185.29
05/31/92 $12,564.70 $12,872.26 $13,580.46 $13,393.62
06/30/92 $12,745.50 $13,049.70 $13,776.02 $13,566.39
07/31/92 $12,995.03 $13,297.04 $14,040.52 $13,795.67
08/31/92 $13,146.91 $13,444.14 $14,183.74 $13,926.73
09/30/92 $13,330.72 $13,623.96 $14,379.47 $14,095.24
10/31/92 $13,147.35 $13,428.04 $14,206.92 $13,912.00
11/30/92 $13,102.82 $13,374.43 $14,147.25 $13,868.87
12/31/92 $13,247.59 $13,513.83 $14,332.58 $14,047.78
01/31/93 $13,485.02 $13,747.58 $14,599.16 $14,303.45
02/28/93 $13,714.60 $13,973.87 $14,813.77 $14,515.14
03/31/93 $13,804.10 $14,056.31 $14,868.58 $14,564.49
04/30/93 $13,922.28 $14,168.13 $14,984.56 $14,672.27
05/31/93 $13,903.66 $14,140.32 $14,944.10 $14,653.20
06/30/93 $14,102.65 $14,334.14 $15,160.79 $14,889.11
07/31/93 $14,130.32 $14,353.28 $15,191.11 $14,936.76
08/31/93 $14,357.57 $14,575.13 $15,417.46 $15,160.81
09/30/93 $14,444.15 $14,654.18 $15,480.67 $15,209.32
10/31/93 $14,486.23 $14,687.70 $15,517.82 $15,247.35
11/30/93 $14,362.59 $14,553.43 $15,440.23 $15,122.32
12/31/93 $14,432.30 $14,614.96 $15,503.54 $15,188.86
01/31/94 $14,561.33 $14,736.46 $15,657.02 $15,357.45
02/28/94 $14,266.93 $14,430.19 $15,442.52 $15,107.13
03/31/94 $13,959.05 $14,109.75 $15,217.06 $14,806.50
04/30/94 $13,714.31 $13,853.82 $15,118.15 $14,664.35
05/31/94 $13,512.51 $13,641.29 $15,223.98 $14,632.09
06/30/94 $13,437.47 $13,557.28 $15,254.43 $14,608.68
07/31/94 $13,657.21 $13,770.50 $15,454.26 $14,813.20
08/31/94 $13,611.84 $13,716.13 $15,499.08 $14,826.53
09/30/94 $13,526.89 $13,622.23 $15,370.43 $14,653.06
10/31/94 $13,524.92 $13,611.71 $15,373.51 $14,626.69
11/30/94 $13,493.79 $13,574.71 $15,304.33 $14,569.64
12/31/94 $13,542.37 $13,614.94 $15,354.83 $14,636.66
01/31/95 $13,705.12 $13,769.89 $15,605.11 $14,873.78
02/28/95 $13,996.62 $14,054.84 $15,906.29 $15,178.69
03/31/95 $14,086.49 $14,136.14 $15,993.78 $15,259.14
04/30/95 $14,256.53 $14,298.06 $16,179.31 $15,439.20
05/31/95 $14,645.19 $14,678.75 $16,635.56 $15,944.06
06/30/95 $14,749.65 $14,774.39 $16,742.03 $16,038.13
07/31/95 $14,703.49 $14,718.75 $16,750.40 $15,999.64
08/31/95 $14,815.23 $14,821.23 $16,889.43 $16,161.23
09/30/95 $14,902.68 $14,899.58 $17,002.59 $16,288.91
10/31/95 $15,055.71 $15,043.09 $17,189.62 $16,477.86
11/30/95 $15,245.19 $15,223.13 $17,399.33 $16,693.72
12/31/95 $15,403.92 $15,370.96 $17,571.58 $16,890.70
01/31/96 $15,526.94 $15,483.93 $17,719.18 $16,998.80
02/29/96 $15,331.72 $15,280.02 $17,531.36 $16,735.32
03/31/96 $15,230.09 $15,169.00 $17,450.72 $16,618.17
04/30/96 $15,176.26 $15,105.69 $17,400.11 $16,520.13
05/31/96 $15,145.53 $15,067.10 $17,391.41 $16,480.48
06/30/96 $15,278.22 $15,192.13 $17,568.80 $16,660.12
07/31/96 $15,326.08 $15,229.95 $17,623.27 $16,696.77
08/31/96 $15,291.90 $15,186.26 $17,642.65 $16,675.06
09/30/96 $15,518.55 $15,388.77 $17,870.24 $16,928.52
10/31/96 $15,812.17 $15,684.44 $18,163.31 $17,253.55
11/30/96 $16,065.82 $15,913.23 $18,479.35 $17,517.53
12/31/96 $15,886.82 $15,733.26 $18,379.57 $17,363.38
01/31/97 $15,951.19 $15,779.72 $18,449.41 $17,406.79
02/28/97 $15,944.50 $15,778.40 $18,478.93 $17,431.15
03/31/97 $15,779.26 $15,591.02 $18,373.60 $17,260.33
04/30/97 $15,985.76 $15,785.38 $18,638.18 $17,482.99
05/31/97 $16,110.43 $15,897.66 $18,798.47 $17,615.86
06/30/97 $16,264.75 $16,056.96 $19,009.01 $17,790.26
07/31/97 $16,713.96 $16,474.34 $19,548.86 $18,206.55
08/31/97 $16,543.49 $16,296.30 $19,355.33 $18,059.07
09/30/97 $16,797.10 $16,536.16 $19,645.66 $18,293.84
10/31/97 $17,060.40 $16,784.24 $19,985.53 $18,533.49
11/30/97 $17,113.70 $16,827.01 $20,029.50 $18,581.68
12/31/97 $17,272.33 $16,984.93 $20,191.74 $18,745.20
01/31/98 $17,556.01 $17,238.68 $20,454.23 $18,988.88
02/28/98 $17,477.60 $17,151.76 $20,431.73 $18,950.91
03/31/98 $17,520.42 $17,183.09 $20,495.07 $19,002.07
04/30/98 $17,586.03 $17,251.48 $20,593.45 $19,076.18
05/31/98 $17,752.42 $17,388.92 $20,735.54 $19,234.52
06/30/98 $17,900.86 $17,523.79 $20,874.47 $19,376.85
07/31/98 $17,932.86 $17,543.12 $20,953.79 $19,411.73
08/31/98 $18,340.03 $17,931.22 $21,349.82 $19,763.08
09/30/98 $18,959.22 $18,541.77 $21,847.27 $20,207.75
10/31/98 $18,874.81 $18,431.32 $21,884.41 $20,104.69
11/30/98 $18,842.16 $18,388.75 $21,816.57 $20,116.75
12/31/98 $18,939.15 $18,468.29 $21,901.65 $20,183.14
01/31/99 $19,009.06 $18,527.35 $22,000.21 $20,278.00
02/28/99 $18,580.83 $18,115.19 $21,698.81 $19,913.00
03/31/99 $18,705.56 $18,209.22 $21,842.02 $20,032.47
04/30/99 $18,749.18 $18,239.76 $21,900.99 $20,074.54
05/31/99 $18,499.17 $18,002.11 $21,767.40 $19,891.86
</TABLE>
* 5/2/96 was the inception date of Class A Shares of the Fund. Returns prior to
that date are for Class I Shares. Performance shown for Class A Shares for the
period prior to November 11, 1994 reflects performance of the shares of the
predecessor collective investment fund (see footnote + below) adjusted to
reflect the Fund's 1994 estimate of its expense ratio for the first year of
operations as a mutual fund, including any applicable sales load (without giving
effect to any fee waivers or expense reimbursements).
** 5/17/96 was the inception date of Class B Shares of the Fund. Returns prior
to that date are for Class I Shares, adjusted for Class B Share expenses.
Performance shown for Class B Shares for the period prior to November 11, 1994
reflects performance of the shares of the predecessor collective investment fund
(see footnote + below) adjusted to reflect Class B Share expenses (before
waivers and reimbursements).
+ Prior to November 11, 1994, Norwest Investment Management managed a collective
investment fund with investment objectives and polices that were, in all
material respects, equivalent to the Fund. The performance of the Fund includes
the performance of the predecessor collective investment fund for the periods
before it became a mutual fund on November 11, 1994. The collective investment
fund was not registered under the Investment Company Act of 1940 (the "1940
Act"), nor subject to certain investment limitations, diversification
requirements and other restrictions imposed by the 1940 Act and the Internal
Revenue Code, which, if applicable, may have adversely affected the performance
results.
+ Source: Lipper Analytical Services, Inc. is an independent mutual fund rating
service that ranks funds in various fund categories by making comparative
calculations using total returns. Although gathered from reliable sources, data
accuracy and completeness cannot be guaranteed.
THE ABOVE GRAPH REPRESENTS PERFORMANCE INFORMATION OF CLASS A AND B SHARES.
PERFORMANCE OF OTHER CLASSES WILL DIFFER.
THE RETURNS ABOVE ARE CALCULATED USING THE MAXIMUM 4.50% SALES CHARGE FOR CLASS
A SHARES AND THE MAXIMUM 5.00% DEFERRED
SALES CHARGE (DECLINING TO ZERO AFTER THE SIXTH YEAR) FOR CLASS B SHARES.
[LOGO]
3
<PAGE>
INVESTMENT ADVISER'S REPORT AND PERFORMANCE DATA (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
INCOME FUND
For the fiscal year ended May 31, 1999, the Fund returned 2.81%, versus 2.55%
for the Lipper Corporate Debt A-Rated Average.
The goal of the Fund is to provide total return consistent with current income.
We seek to provide income greater than the yield of the seven to ten year
treasury note, while at the same time varying our duration 30% around the
duration of our competitors in the Lipper Corporate A peer group. We utilize
corporate notes, asset-backed and mortgage-backed securities, U.S. Treasury and
agency notes, and taxable municipal securities. We vary the weightings of these
sectors depending upon yield and opportunity for spread tightening.
The Fund benefited from the decline in interest rates during the third quarter
of 1998, but performance was hurt with the rise of rates beginning in October
1998. The turmoil in Asia, a driving force in our bond markets during 1998, has
cooled considerably. In the short run, global issues should take a back seat to
our domestic economy. The market has already anticipated the Federal Reserve
Board (the Fed) raising interest rates, but the markets and the Fund should not
experience an adverse impact by a small rate increase. If it appears that we are
in for a series of rate increase, we will re-evaluate our duration positioning
to reduce our interest rate risk.
We have maintained our long duration, as we believe that the recent rate
increase is temporary. We will only change our duration positioning if it
appears that the economy is heating up and inflation is back to stay. We believe
that the bond markets should return to positive total returns as interest rates
peak and begin to decline.
THE OPINIONS EXPRESSED REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH MAY
31, 1999. THE MANAGER'S OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON
MARKET AND OTHER CONDITIONS. THE COMPOSITION, INDUSTRIES AND HOLDINGS OF THE
PORTFOLIO ARE SUBJECT TO CHANGE.
THE PERFORMANCE REPRESENTS INFORMATION OF A SHARES EXCLUDING SALES LOAD. HAD THE
PERFORMANCE INCLUDED SALES LOAD, THE RETURN WOULD HAVE BEEN LOWER. THE
PERFORMANCE FOR OTHER CLASSES WILL DIFFER.
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
INCOME FUND ("FUND") VS. LEHMAN BROTHERS AGGREGATE INDEX ("LEHMAN INDEX") AND
LIPPER CORPORATE DEBT A-RATED AVERAGE ("LIPPER AVERAGE")
- --------------------------------------------------------------------------------
The following chart reflects the value of a $10,000 investment in the Fund,
including reinvested dividends and distributions, over the past 10 fiscal year
periods. The result is compared with a broad-based securities market index and a
peer based average. The Fund's total return includes operating expenses and
sales charges (if applicable) that reduce returns, while the total return of the
Index does not. Total return of the Fund would have been lower had certain fees
and expenses not been voluntarily waived and/or reimbursed. The Fund is
professionally managed while the Index is unmanaged and is not available for
investment. The Lipper Average does not include sales charges but does include
management fees and expenses. The Lipper Average is calculated by taking an
arithmetic average of the returns of the funds in the group. Investment return
and principal value of an investment in the Fund will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. PAST PERFORMANCE IS NOT PREDICTIVE NOR A GUARANTEE OF FUTURE RESULTS.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1999
-------------------------------------------------
LEHMAN LIPPER
A SHARES B SHARES* INDEX AVERAGE+
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
ONE YEAR (1.82)% (1.84)% 4.34% 2.55%
FIVE YEAR 5.59% 5.59% 7.84% 6.98%
TEN YEAR 7.17% 6.83% 8.50% 7.88%
VALUE MAY 31, 1999 $ 19,977 $ 19,376 $ 22,626 $ 21,367
</TABLE>
<TABLE>
<CAPTION>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
A SHARES B SHARES LEHMAN INDEX LIPPER AVERAGE
<S> <C> <C> <C> <C>
05/31/89 $9,550.00 $10,000.00 $10,000.00 $10,000.00
06/30/89 $9,669.14 $10,118.54 $10,304.00 $10,297.00
07/31/89 $9,770.00 $10,217.60 $10,523.48 $10,476.17
08/31/89 $9,803.33 $10,245.89 $10,367.73 $10,341.03
09/30/89 $9,855.55 $10,294.11 $10,420.60 $10,375.15
10/31/89 $9,970.00 $10,407.04 $10,676.95 $10,585.77
11/30/89 $10,033.62 $10,467.00 $10,778.38 $10,660.93
12/31/89 $10,077.92 $10,506.50 $10,807.48 $10,681.18
01/31/90 $10,106.64 $10,529.69 $10,678.87 $10,531.64
02/28/90 $10,158.00 $10,577.09 $10,713.05 $10,547.44
03/31/90 $10,216.70 $10,631.43 $10,720.55 $10,555.88
04/30/90 $10,209.72 $10,617.56 $10,621.92 $10,435.54
05/31/90 $10,381.42 $10,789.31 $10,936.32 $10,726.69
06/30/90 $10,510.57 $10,916.84 $11,112.40 $10,899.39
07/31/90 $10,653.01 $11,057.77 $11,265.75 $11,035.64
08/31/90 $10,648.24 $11,045.72 $11,114.79 $10,846.93
09/30/90 $10,662.45 $11,053.60 $11,207.04 $10,884.89
10/31/90 $10,679.55 $11,064.24 $11,349.37 $11,000.27
11/30/90 $10,856.91 $11,241.11 $11,593.38 $11,244.48
12/31/90 $11,005.20 $11,387.45 $11,774.24 $11,421.02
01/31/91 $11,146.01 $11,525.82 $11,920.24 $11,538.65
02/28/91 $11,343.19 $11,723.05 $12,021.56 $11,673.65
03/31/91 $11,460.02 $11,836.27 $12,104.51 $11,761.21
04/30/91 $11,596.88 $11,970.28 $12,235.24 $11,904.69
05/31/91 $11,666.49 $12,034.46 $12,306.20 $11,965.41
06/30/91 $11,656.39 $12,016.56 $12,300.05 $11,943.87
07/31/91 $11,821.14 $12,178.69 $12,471.02 $12,099.14
08/31/91 $12,113.02 $12,471.59 $12,740.40 $12,388.31
09/30/91 $12,380.08 $12,738.82 $12,999.03 $12,658.37
10/31/91 $12,523.01 $12,877.72 $13,143.32 $12,782.43
11/30/91 $12,676.33 $13,027.40 $13,264.23 $12,898.75
12/31/91 $13,081.50 $13,435.26 $13,658.18 $13,360.52
01/31/92 $12,936.61 $13,277.83 $13,472.43 $13,149.43
02/29/92 $12,972.51 $13,306.72 $13,560.00 $13,215.17
03/31/92 $12,915.02 $13,239.21 $13,484.07 $13,153.06
04/30/92 $12,981.24 $13,298.89 $13,581.15 $13,226.72
05/31/92 $13,250.73 $13,566.45 $13,837.83 $13,495.22
06/30/92 $13,430.12 $13,741.70 $14,028.80 $13,693.60
07/31/92 $13,821.87 $14,133.73 $14,314.98 $14,053.74
08/31/92 $13,928.45 $14,233.66 $14,459.57 $14,170.39
09/30/92 $14,179.45 $14,481.33 $14,631.63 $14,346.10
10/31/92 $13,958.29 $14,246.18 $14,437.03 $14,110.83
11/30/92 $13,937.75 $14,216.38 $14,439.92 $14,113.65
12/31/92 $14,122.36 $14,395.31 $14,669.52 $14,353.58
01/31/93 $14,374.12 $14,642.71 $14,951.17 $14,663.62
02/28/93 $14,632.14 $14,897.08 $15,212.82 $14,997.95
03/31/93 $14,678.27 $14,934.50 $15,276.71 $15,054.94
04/30/93 $14,795.63 $15,044.65 $15,383.65 $15,154.30
05/31/93 $14,769.59 $15,008.54 $15,403.65 $15,160.36
06/30/93 $14,982.25 $15,215.32 $15,682.45 $15,499.96
07/31/93 $15,041.08 $15,265.33 $15,771.84 $15,620.86
08/31/93 $15,289.64 $15,497.79 $16,047.85 $15,980.14
09/30/93 $15,316.84 $15,501.37 $16,091.18 $16,029.67
10/31/93 $15,359.30 $15,534.23 $16,150.72 $16,103.41
11/30/93 $15,316.95 $15,481.66 $16,013.43 $15,902.12
12/31/93 $15,379.89 $15,533.87 $16,099.91 $15,983.22
01/31/94 $15,519.03 $15,665.40 $16,317.26 $16,218.17
02/28/94 $15,286.54 $15,435.54 $16,033.34 $15,877.59
03/31/94 $14,991.21 $15,110.78 $15,637.31 $15,471.12
04/30/94 $14,678.51 $14,801.27 $15,512.21 $15,297.85
05/31/94 $14,536.90 $14,649.17 $15,510.66 $15,248.89
06/30/94 $14,483.28 $14,585.90 $15,476.54 $15,197.05
07/31/94 $14,672.77 $14,767.56 $15,784.52 $15,461.48
08/31/94 $14,696.29 $14,766.19 $15,803.46 $15,464.57
09/30/94 $14,446.25 $14,504.52 $15,571.15 $15,231.05
10/31/94 $14,404.55 $14,469.31 $15,557.14 $15,189.93
11/30/94 $14,209.30 $14,248.24 $15,522.91 $15,147.40
12/31/94 $14,302.76 $14,348.19 $15,630.02 $15,264.03
01/31/95 $14,526.61 $14,564.29 $15,939.49 $15,528.10
02/28/95 $14,847.59 $14,861.67 $16,318.85 $15,893.01
03/31/95 $14,940.66 $14,944.72 $16,418.40 $16,004.26
04/30/95 $15,197.47 $15,193.24 $16,648.26 $16,223.52
05/31/95 $15,771.65 $15,758.47 $17,292.55 $16,883.82
06/30/95 $15,844.50 $15,820.84 $17,418.78 $16,990.19
07/31/95 $15,775.97 $15,742.75 $17,380.46 $16,912.03
08/31/95 $15,978.70 $15,935.34 $17,590.76 $17,130.20
09/30/95 $16,133.12 $16,079.24 $17,761.39 $17,311.78
10/31/95 $16,334.18 $16,286.61 $17,992.29 $17,559.33
11/30/95 $16,541.65 $16,483.61 $18,262.18 $17,833.26
12/31/95 $16,783.14 $16,696.59 $18,517.85 $18,107.89
01/31/96 $16,865.46 $16,768.33 $18,640.06 $18,191.19
02/29/96 $16,502.03 $16,396.19 $18,315.73 $17,789.16
03/31/96 $16,363.94 $16,248.12 $18,187.52 $17,641.51
04/30/96 $16,223.78 $16,115.68 $18,085.67 $17,503.91
05/31/96 $16,179.15 $16,060.24 $18,049.50 $17,468.90
06/30/96 $16,383.76 $16,236.83 $18,291.36 $17,678.53
07/31/96 $16,422.74 $16,265.03 $18,340.75 $17,712.12
08/31/96 $16,366.03 $16,197.47 $18,309.57 $17,666.07
09/30/96 $16,632.66 $16,472.20 $18,628.15 $17,985.82
10/31/96 $17,011.24 $16,821.55 $19,041.70 $18,397.70
11/30/96 $17,301.89 $17,098.62 $19,367.31 $18,752.77
12/31/96 $17,104.09 $16,909.61 $19,187.19 $18,544.62
01/31/97 $17,126.91 $16,921.03 $19,246.67 $18,574.29
02/28/97 $17,125.09 $16,909.34 $19,294.79 $18,631.87
03/31/97 $16,885.02 $16,643.60 $19,080.62 $18,387.79
04/30/97 $17,144.19 $16,907.51 $19,366.83 $18,643.38
05/31/97 $17,277.76 $17,028.43 $19,550.81 $18,809.31
06/30/97 $17,501.87 $17,238.73 $19,783.47 $19,051.95
07/31/97 $18,160.81 $17,858.62 $20,317.62 $19,642.56
08/31/97 $17,861.98 $17,552.75 $20,144.92 $19,406.85
09/30/97 $18,202.32 $17,895.51 $20,443.07 $19,711.54
10/31/97 $18,546.89 $18,223.01 $20,739.49 $19,973.70
11/30/97 $18,643.14 $18,287.34 $20,834.89 $20,055.59
12/31/97 $18,858.20 $18,486.79 $21,045.33 $20,250.13
01/31/98 $19,151.12 $18,762.36 $21,314.71 $20,507.31
02/28/98 $19,049.77 $18,651.94 $21,297.65 $20,466.29
03/31/98 $19,093.20 $18,701.79 $21,370.07 $20,531.78
04/30/98 $19,172.33 $18,767.60 $21,481.19 $20,622.12
05/31/98 $19,431.60 $18,990.11 $21,685.26 $20,836.59
06/30/98 $19,628.81 $19,171.36 $21,869.59 $21,013.71
07/31/98 $19,630.03 $19,160.22 $21,915.51 $21,017.91
08/31/98 $19,991.86 $19,521.22 $22,272.74 $21,276.43
09/30/98 $20,554.76 $20,059.02 $22,793.92 $21,763.66
10/31/98 $20,351.38 $19,827.65 $22,673.11 $21,522.08
11/30/98 $20,490.96 $19,951.61 $22,802.35 $21,692.11
12/31/98 $20,550.82 $20,017.10 $22,870.75 $21,772.37
01/31/99 $20,691.04 $20,140.84 $23,033.14 $21,931.31
02/28/99 $20,081.84 $19,535.66 $22,630.06 $21,431.27
03/31/99 $20,227.78 $19,644.87 $22,754.52 $21,568.43
04/30/99 $20,246.58 $19,671.03 $22,827.34 $21,613.73
05/31/99 $19,977.25 $19,375.97 $22,626.45 $21,367.33
</TABLE>
* 8/5/93 was the inception date of Class B Shares of the Fund. Returns prior to
that date are for Class A Shares, adjusted for Class B Share expenses.
+ Source: Lipper Analytical Services, Inc. is an independent mutual fund rating
service that ranks funds in various fund categories by making comparative
calculations using total returns. Although gathered from reliable sources, data
accuracy and completeness cannot be guaranteed.
THE ABOVE GRAPH REPRESENTS PERFORMANCE INFORMATION OF CLASS A AND B SHARES.
PERFORMANCE OF OTHER CLASSES WILL DIFFER.
THE RETURNS ABOVE ARE CALCULATED USING THE MAXIMUM 4.50% SALES CHARGE FOR CLASS
A SHARES AND THE MAXIMUM 5.00% DEFERRED SALES CHARGE (DECLINING TO ZERO AFTER
THE SIXTH YEAR) FOR CLASS B SHARES.
[LOGO]
4
<PAGE>
INVESTMENT ADVISER'S REPORT AND PERFORMANCE DATA (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
TOTAL RETURN BOND FUND
The Fund has performed extremely well over the past year. Fund performance for
the fiscal year ended May 31, 1999 of 3.26% exceeded the Lipper Corporate Debt
Funds A-Rated Category Average return of 2.55%. The Fund has performed precisely
as anticipated, and has shown above-average risk-adjusted returns versus its
peer group.
The Fund invests in a strategically diversified portfolio of higher income
producing fixed income investments to build a yield advantage versus its Lipper
Universe peer group. Whereas many funds emphasize active duration bets such as
market timing, or target specific asset classes such as corporates or mortgages,
as a method to outperform their peer group, the Fund invests across all sectors
of the fixed income market on an opportunistic basis. Diversified exposure
across asset classes provides more consistent performance in varying economic
and interest rate cycles while avoiding excessive risk concentrations.
Our investment decision making process focuses on selecting individual issues
with the best relative value as determined through a rigorous valuation of each
security's cash flows and properly evaluating the impact of embedded options,
credit quality, structure, liquidity, trading history, and supply/demand factors
on expected returns. We believe that avoiding the pitfalls of interest rate
timing and buying fundamentally cheap securities has the potential to provide
more consistent, value added returns over time.
THE OPINIONS EXPRESSED REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH MAY
31, 1999. THE MANAGER'S OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON
MARKET AND OTHER CONDITIONS. THE COMPOSITION, INDUSTRIES AND HOLDINGS OF THE
PORTFOLIO ARE SUBJECT TO CHANGE.
THE PERFORMANCE REPRESENTS INFORMATION OF A SHARES EXCLUDING SALES LOAD. HAD THE
PERFORMANCE INCLUDED SALES LOAD, THE RETURN WOULD HAVE BEEN LOWER. THE
PERFORMANCE FOR OTHER CLASSES WILL DIFFER.
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
TOTAL RETURN BOND FUND ("FUND") VS. LEHMAN BROTHERS INTERMEDIATE
GOVERNMENT/CORPORATE INDEX ("LEHMAN INDEX") AND LIPPER CORPORATE DEBT A-RATED
AVERAGE ("LIPPER AVERAGE")
- --------------------------------------------------------------------------------
The following chart reflects the value of a $10,000 investment in the Fund,
including reinvested dividends and distributions, since inception. The result is
compared with a broad-based securities market index and a peer based average.
The Fund's total return includes operating expenses and sales charges (if
applicable) that reduce returns, while the total return of the Index does not.
Total return of the Fund would have been lower had certain fees and expenses not
been voluntarily waived and/or reimbursed. The Fund is professionally managed
while the Index is unmanaged and is not available for investment. The Lipper
Average does not include sales charges but does include management fees and
expenses. The Lipper Average is calculated by taking an arithmetic average of
the returns of the funds in the group. Investment return and principal value of
an investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. PAST PERFORMANCE
IS NOT PREDICTIVE NOR A GUARANTEE OF FUTURE RESULTS.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
AS OF MAY 31, 1999
------------------------------------------------
LEHMAN LIPPER
A SHARES B SHARES INDEX AVERAGE+
----------- ----------- --------- -----------
<S> <C> <C> <C> <C>
ONE YEAR (1.39)% (1.32)% 4.78% 2.55%
FIVE YEAR 5.47% 5.53% 7.02% 6.98%
SINCE INCEPTION 4.66% 4.67% 5.94% 5.51%
INCEPTION DATE 12/31/93 12/1/93 12/31/93 12/31/93
VALUE MAY 31, 1999 $12,795 $12,806 $13,670 $13,368
</TABLE>
<TABLE>
<CAPTION>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
A SHARES B SHARES LEHMAN INDEX LIPPER AVERAGE
<S> <C> <C> <C> <C>
12/31/93 $9,550.00 $10,000.00 $10,000.00 $10,000.00
01/31/94 $9,608.92 $10,061.70 $10,111.00 $10,147.00
02/28/94 $9,502.12 $9,954.43 $9,961.36 $9,933.91
03/31/94 $9,415.66 $9,857.00 $9,796.99 $9,679.60
04/30/94 $9,358.13 $9,791.19 $9,730.38 $9,571.19
05/31/94 $9,363.98 $9,780.42 $9,737.19 $9,540.57
06/30/94 $9,359.78 $9,780.70 $9,738.16 $9,508.13
07/31/94 $9,485.63 $9,895.12 $9,878.39 $9,673.57
08/31/94 $9,502.87 $9,906.89 $9,909.01 $9,675.50
09/30/94 $9,431.92 $9,826.48 $9,817.85 $9,529.40
10/31/94 $9,432.33 $9,821.00 $9,816.97 $9,503.67
11/30/94 $9,425.57 $9,818.18 $9,772.79 $9,477.06
12/31/94 $9,486.36 $9,863.98 $9,806.99 $9,550.04
01/31/95 $9,631.84 $10,009.30 $9,972.73 $9,715.25
02/28/95 $9,796.65 $10,185.33 $10,179.17 $9,943.56
03/31/95 $9,858.21 $10,231.54 $10,237.19 $10,013.17
04/30/95 $9,962.73 $10,333.97 $10,363.11 $10,150.35
05/31/95 $10,245.74 $10,620.53 $10,676.07 $10,563.47
06/30/95 $10,316.28 $10,697.47 $10,747.60 $10,630.02
07/31/95 $10,307.30 $10,670.59 $10,748.68 $10,581.12
08/31/95 $10,386.58 $10,756.84 $10,846.49 $10,717.61
09/30/95 $10,466.53 $10,832.57 $10,924.59 $10,831.22
10/31/95 $10,566.46 $10,929.34 $11,045.85 $10,986.11
11/30/95 $10,677.37 $11,037.26 $11,190.55 $11,157.49
12/31/95 $10,793.89 $11,139.14 $11,308.05 $11,329.32
01/31/96 $10,851.15 $11,191.49 $11,405.30 $11,381.43
02/29/96 $10,707.48 $11,048.18 $11,271.86 $11,129.90
03/31/96 $10,643.92 $10,975.48 $11,214.37 $11,037.52
04/30/96 $10,600.04 $10,923.50 $11,175.12 $10,951.43
05/31/96 $10,595.07 $10,899.52 $11,166.18 $10,929.53
06/30/96 $10,692.74 $11,005.30 $11,284.54 $11,060.68
07/31/96 $10,716.98 $11,023.30 $11,318.39 $11,081.70
08/31/96 $10,710.51 $11,009.24 $11,327.45 $11,052.88
09/30/96 $10,855.03 $11,163.12 $11,484.90 $11,252.94
10/31/96 $11,063.02 $11,357.68 $11,688.18 $11,510.63
11/30/96 $11,237.65 $11,541.48 $11,842.47 $11,732.79
12/31/96 $11,094.31 $11,374.83 $11,766.68 $11,602.56
01/31/97 $11,122.35 $11,408.31 $11,812.57 $11,621.12
02/28/97 $11,189.66 $11,458.65 $11,835.01 $11,657.14
03/31/97 $11,079.99 $11,351.80 $11,753.35 $11,504.44
04/30/97 $11,222.62 $11,490.75 $11,890.86 $11,664.35
05/31/97 $11,319.73 $11,582.77 $11,989.56 $11,768.16
06/30/97 $11,438.45 $11,696.93 $12,098.66 $11,919.97
07/31/97 $11,716.93 $11,961.29 $12,344.26 $12,289.49
08/31/97 $11,619.00 $11,866.32 $12,282.54 $12,142.02
09/30/97 $11,768.37 $12,011.30 $12,425.02 $12,332.64
10/31/97 $11,939.84 $12,165.83 $12,562.94 $12,496.67
11/30/97 $11,962.12 $12,193.67 $12,590.58 $12,547.91
12/31/97 $12,083.03 $12,309.05 $12,691.30 $12,669.62
01/31/98 $12,199.67 $12,419.85 $12,857.56 $12,830.52
02/28/98 $12,166.82 $12,379.44 $12,847.27 $12,804.86
03/31/98 $12,204.12 $12,409.54 $12,888.38 $12,845.84
04/30/98 $12,264.81 $12,463.52 $12,952.82 $12,902.36
05/31/98 $12,390.50 $12,583.14 $13,047.38 $13,036.54
06/30/98 $12,502.59 $12,689.07 $13,130.88 $13,147.36
07/31/98 $12,512.27 $12,690.93 $13,176.84 $13,149.98
08/31/98 $12,729.83 $12,903.10 $13,383.72 $13,311.73
09/30/98 $12,973.08 $13,141.19 $13,719.65 $13,616.57
10/31/98 $12,825.29 $12,983.60 $13,705.93 $13,465.42
11/30/98 $12,926.13 $13,077.63 $13,704.56 $13,571.80
12/31/98 $12,943.06 $13,072.72 $13,759.38 $13,622.02
01/31/99 $13,051.00 $13,187.14 $13,835.05 $13,721.46
02/28/99 $12,810.58 $12,937.36 $13,631.68 $13,408.61
03/31/99 $12,888.98 $13,008.25 $13,733.92 $13,494.42
04/30/99 $12,938.52 $13,036.33 $13,776.49 $13,522.76
05/31/99 $12,794.96 $12,805.82 $13,670.41 $13,368.60
</TABLE>
+ Source: Lipper Analytical Services, Inc. is an independent mutual fund rating
service that ranks funds in various fund categories by making comparative
calculations using total returns. Although gathered from reliable sources, data
accuracy and completeness cannot be guaranteed.
THE ABOVE GRAPH REPRESENTS PERFORMANCE INFORMATION OF CLASS A AND B SHARES.
PERFORMANCE OF OTHER CLASSES WILL DIFFER.
THE RETURNS ABOVE ARE CALCULATED USING THE MAXIMUM 4.50% SALES CHARGE FOR CLASS
A SHARES AND THE MAXIMUM 5.00% DEFERRED SALES CHARGE (DECLINING TO ZERO AFTER
THE SIXTH YEAR) FOR CLASS B SHARES.
[LOGO]
5
<PAGE>
INVESTMENT ADVISER'S REPORT AND PERFORMANCE DATA (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
TAX-FREE INCOME FUND
During the fiscal year ended May 31, 1999, the Fund outperformed its benchmark,
the Lipper General Municipal Debt Average, with a return of 4.04% compared to
3.26%.
Changes in interest rates are typically the single most important economic
factor that influences the total return of the Fund. Interest rates fell during
the first five months of the fiscal year as the Federal Reserve Board (the Fed)
lowered interest rates in response to various international economic problems.
As economic conditions overseas stabilized later in the period, interest rates
slowly increased. However, the net change in long-term interest rates on
municipal bonds for the year is a modest increase of .10%.
We have been surprised by the degree of rise in interest rates during 1999. In
our view, inflation is not an imminent problem in the U.S. and therefore, the
rise in interest rates is an over-reaction. Nevertheless, long-term interest
rates have risen in anticipation of at least a 0.25% tightening by the Fed to
insure the economy does not over heat.
The Fund's objective is to produce current income exempt from federal income
taxes. Given our outlook for interest rates, we will make changes to the
portfolio to maintain the desired level of market exposure. Our current plan is
to keep the portfolio positioned for an eventual decline in interest rates. We
don't expect much additional increase. We make adjustments to the portfolio
seeking to maximize the return while maintaining a prudent level of risk.
THE OPINIONS EXPRESSED REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH MAY
31, 1999. THE MANAGER'S OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON
MARKET AND OTHER CONDITIONS. THE COMPOSITION, INDUSTRIES AND HOLDINGS OF THE
PORTFOLIO ARE SUBJECT TO CHANGE.
THE PERFORMANCE REPRESENTS INFORMATION OF A SHARES EXCLUDING SALES LOAD. HAD THE
PERFORMANCE INCLUDED SALES LOAD, THE RETURN WOULD HAVE BEEN LOWER. THE
PERFORMANCE FOR OTHER CLASSES WILL DIFFER.
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
TAX-FREE INCOME FUND ("FUND") VS. LEHMAN BROTHERS 10-YEAR MUNICIPAL INDEX
("LEHMAN INDEX") AND
LIPPER GENERAL MUNICIPAL DEBT AVERAGE ("LIPPER AVERAGE")
- --------------------------------------------------------------------------------
The following chart reflects the value of a $10,000 investment in the Fund,
including reinvested dividends and distributions, since inception. The result is
compared with a broad-based securities market index and a peer based average.
The Fund's total return includes operating expenses and sales charges (if
applicable) that reduce returns, while the total return of the Index does not.
Total return would have been lower had certain fees and expenses not been
voluntarily waived and/or reimbursed. The Fund is professionally managed while
the Index is unmanaged and is not available for investment. The Lipper Average
does not include sales charges but does include management fees and expenses.
The Lipper Average is calculated by taking an arithmetic average of the returns
of the funds in the group. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. PAST PERFORMANCE
IS NOT PREDICTIVE NOR A GUARANTEE OF FUTURE RESULTS.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
AS OF MAY 31, 1999
------------------------------------------------
LEHMAN LIPPER
A SHARES B SHARES* INDEX AVERAGE+
----------- ----------- --------- -----------
<S> <C> <C> <C> <C>
ONE YEAR (0.64)% (0.70)% 4.62% 3.26%
FIVE YEAR 6.30% 6.32% 7.42% 6.33%
SINCE INCEPTION 6.24% 5.96% 7.96% 6.89%
INCEPTION DATE 8/1/89 8/1/89 7/31/89 7/31/89
VALUE MAY 31, 1999 $18,131 $17,675 $21,241 $19,254
</TABLE>
<TABLE>
<CAPTION>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
A SHARES B SHARES LEHMAN INDEX LIPPER AVERAGE
<S> <C> <C> <C> <C>
07/31/89 $9,550.00 $10,000.00 $10,000.00 $10,000.00
08/31/89 $9,446.27 $9,885.18 $9,941.00 $9,897.00
09/30/89 $9,404.06 $9,834.88 $9,894.28 $9,867.31
10/31/89 $9,546.88 $9,977.95 $10,007.07 $9,985.72
11/30/89 $9,708.35 $10,140.53 $10,174.19 $10,143.49
12/31/89 $9,755.42 $10,183.19 $10,278.98 $10,212.47
01/31/90 $9,705.38 $10,124.43 $10,248.15 $10,104.21
02/28/90 $9,777.57 $10,193.88 $10,319.88 $10,204.25
03/31/90 $9,786.22 $10,196.36 $10,303.37 $10,201.19
04/30/90 $9,673.55 $10,072.65 $10,372.41 $10,068.57
05/31/90 $9,894.06 $10,295.81 $10,597.49 $10,332.37
06/30/90 $9,992.26 $10,391.61 $10,697.10 $10,431.56
07/31/90 $10,142.87 $10,541.58 $10,845.79 $10,604.72
08/31/90 $9,966.96 $10,352.00 $10,689.61 $10,377.78
09/30/90 $10,024.00 $10,404.83 $10,691.75 $10,392.31
10/31/90 $10,156.68 $10,535.88 $10,926.97 $10,543.00
11/30/90 $10,319.48 $10,698.23 $11,149.88 $10,791.81
12/31/90 $10,329.10 $10,701.35 $11,176.64 $10,838.22
01/31/91 $10,475.31 $10,845.96 $11,361.05 $10,971.53
02/28/91 $10,616.82 $10,986.21 $11,458.76 $11,035.16
03/31/91 $10,565.22 $10,925.77 $11,453.03 $11,058.34
04/30/91 $10,692.47 $11,050.59 $11,611.08 $11,220.89
05/31/91 $10,800.75 $11,155.41 $11,698.16 $11,323.00
06/30/91 $10,776.35 $11,123.29 $11,684.13 $11,290.17
07/31/91 $10,885.85 $11,229.19 $11,806.81 $11,455.00
08/31/91 $10,985.03 $11,324.31 $11,966.20 $11,601.63
09/30/91 $11,093.99 $11,429.60 $12,149.28 $11,750.13
10/31/91 $11,151.38 $11,481.41 $12,247.69 $11,857.05
11/30/91 $11,161.57 $11,484.78 $12,268.52 $11,872.47
12/31/91 $11,301.00 $11,620.89 $12,529.83 $12,150.28
01/31/92 $11,349.63 $11,663.44 $12,556.15 $12,145.42
02/29/92 $11,397.61 $11,705.76 $12,537.31 $12,164.86
03/31/92 $11,426.92 $11,728.37 $12,518.51 $12,172.16
04/30/92 $11,525.72 $11,822.51 $12,637.43 $12,282.92
05/31/92 $11,627.66 $11,919.49 $12,785.29 $12,454.88
06/30/92 $11,762.53 $12,050.36 $13,006.48 $12,681.56
07/31/92 $11,963.21 $12,248.23 $13,433.09 $13,131.76
08/31/92 $11,919.79 $12,195.93 $13,274.58 $12,922.96
09/30/92 $11,996.77 $12,267.14 $13,384.76 $12,973.36
10/31/92 $11,816.84 $12,075.29 $13,248.23 $12,738.54
11/30/92 $11,988.38 $12,243.10 $13,490.68 $13,065.92
12/31/92 $12,129.52 $12,379.37 $13,647.17 $13,226.64
01/31/93 $12,203.61 $12,447.06 $13,876.44 $13,374.77
02/28/93 $12,474.43 $12,716.09 $14,384.32 $13,899.06
03/31/93 $12,391.72 $12,623.63 $14,174.31 $13,737.84
04/30/93 $12,494.63 $12,720.64 $14,308.96 $13,888.95
05/31/93 $12,542.20 $12,760.93 $14,359.04 $13,969.51
06/30/93 $12,754.93 $12,969.47 $14,641.92 $14,209.78
07/31/93 $12,771.42 $12,977.93 $14,678.52 $14,209.78
08/31/93 $13,033.40 $13,267.86 $14,982.37 $14,523.82
09/30/93 $13,143.44 $13,371.59 $15,166.65 $14,695.20
10/31/93 $13,166.43 $13,386.71 $15,190.92 $14,721.65
11/30/93 $12,979.64 $13,201.40 $15,066.35 $14,570.02
12/31/93 $13,279.67 $13,484.40 $15,387.26 $14,861.42
01/31/94 $13,469.08 $13,668.50 $15,576.53 $15,027.87
02/28/94 $13,082.90 $13,268.05 $15,149.73 $14,637.14
03/31/94 $12,549.94 $12,718.02 $14,567.98 $13,987.25
04/30/94 $12,672.63 $12,834.74 $14,751.54 $14,039.01
05/31/94 $12,760.14 $12,915.45 $14,845.95 $14,165.36
06/30/94 $12,714.62 $12,861.14 $14,782.11 $14,073.28
07/31/94 $12,897.36 $13,037.78 $15,030.45 $14,320.97
08/31/94 $12,946.84 $13,079.43 $15,089.07 $14,355.34
09/30/94 $12,770.82 $12,906.40 $14,885.37 $14,119.91
10/31/94 $12,600.18 $12,712.73 $14,668.04 $13,848.81
11/30/94 $12,360.69 $12,463.41 $14,390.81 $13,552.45
12/31/94 $12,633.77 $12,730.15 $14,649.85 $13,885.84
01/31/95 $12,969.93 $13,061.06 $15,029.28 $14,298.25
02/28/95 $13,290.50 $13,376.09 $15,454.61 $14,717.19
03/31/95 $13,373.34 $13,450.24 $15,663.25 $14,851.11
04/30/95 $13,404.76 $13,474.03 $15,682.04 $14,852.60
05/31/95 $13,835.16 $13,897.96 $16,179.16 $15,314.51
06/30/95 $13,705.54 $13,758.56 $16,078.85 $15,146.05
07/31/95 $13,823.33 $13,868.47 $16,315.21 $15,242.99
08/31/95 $13,973.29 $14,010.10 $16,537.10 $15,410.66
09/30/95 $14,052.81 $14,080.79 $16,642.93 $15,501.58
10/31/95 $14,245.76 $14,265.26 $16,834.33 $15,740.31
11/30/95 $14,580.34 $14,591.39 $17,059.91 $16,045.67
12/31/95 $14,764.92 $14,766.48 $17,163.97 $16,226.99
01/31/96 $14,890.15 $14,882.62 $17,337.33 $16,304.88
02/29/96 $14,780.73 $14,764.34 $17,122.35 $16,182.59
03/31/96 $14,587.68 $14,562.17 $17,062.42 $15,925.29
04/30/96 $14,552.62 $14,518.14 $17,014.64 $15,850.44
05/31/96 $14,566.90 $14,522.54 $17,176.28 $15,858.36
06/30/96 $14,688.93 $14,635.84 $17,341.18 $16,007.43
07/31/96 $14,878.19 $14,815.06 $17,507.65 $16,146.70
08/31/96 $14,846.53 $14,773.39 $17,507.65 $16,138.62
09/30/96 $15,044.66 $14,962.01 $17,687.98 $16,369.41
10/31/96 $15,250.90 $15,157.52 $17,910.85 $16,544.56
11/30/96 $15,502.87 $15,398.21 $18,272.65 $16,832.43
12/31/96 $15,464.88 $15,350.78 $18,190.42 $16,760.05
01/31/97 $15,491.34 $15,367.03 $18,261.36 $16,760.05
02/28/97 $15,631.86 $15,497.46 $18,433.02 $16,905.87
03/31/97 $15,402.97 $15,261.37 $18,186.02 $16,686.09
04/30/97 $15,566.89 $15,414.30 $18,320.59 $16,826.25
05/31/97 $15,795.59 $15,630.89 $18,580.75 $17,066.87
06/30/97 $15,958.26 $15,782.10 $18,785.13 $17,259.72
07/31/97 $16,454.72 $16,262.87 $19,313.00 $17,780.97
08/31/97 $16,255.40 $16,055.54 $19,125.66 $17,574.71
09/30/97 $16,467.54 $16,255.12 $19,368.56 $17,792.63
10/31/97 $16,586.95 $16,362.62 $19,471.21 $17,904.73
11/30/97 $16,721.08 $16,484.69 $19,560.78 $18,006.79
12/31/97 $17,051.86 $16,800.03 $19,869.84 $18,293.09
01/31/98 $17,190.02 $16,925.37 $20,090.39 $18,466.88
02/28/98 $17,174.86 $16,916.68 $20,088.38 $18,455.80
03/31/98 $17,199.22 $16,929.89 $20,074.32 $18,461.33
04/30/98 $17,041.09 $16,747.88 $19,963.91 $18,346.87
05/31/98 $17,427.56 $17,116.85 $20,303.30 $18,645.93
06/30/98 $17,498.95 $17,176.44 $20,378.42 $18,707.46
07/31/98 $17,523.23 $17,189.33 $20,411.03 $18,733.65
08/31/98 $17,847.24 $17,496.18 $20,766.18 $19,024.02
09/30/98 $18,119.37 $17,752.12 $21,075.60 $19,250.41
10/31/98 $18,022.70 $17,646.22 $21,084.03 $19,177.26
11/30/98 $18,143.31 $17,753.41 $21,147.28 $19,236.71
12/31/98 $18,149.19 $17,747.85 $21,212.83 $19,269.41
01/31/99 $18,341.16 $17,924.02 $21,537.39 $19,485.23
02/28/99 $18,219.93 $17,794.94 $21,343.55 $19,360.52
03/31/99 $18,208.92 $17,772.69 $21,332.88 $19,362.46
04/30/99 $18,280.65 $17,848.57 $21,390.48 $19,406.99
05/31/99 $18,131.41 $17,674.70 $21,240.75 $19,253.67
</TABLE>
* 8/6/93 was the inception date of Class B Shares of the Fund. Returns prior to
that date are for Class A Shares, adjusted for Class B Share expenses.
+ Source: Lipper Analytical Services, Inc. is an independent mutual fund rating
service that ranks funds in various fund categories by making comparative
calculations using total returns. Although gathered from reliable sources, data
accuracy and completeness cannot be guaranteed.
THE ABOVE GRAPH REPRESENTS PERFORMANCE INFORMATION OF CLASS A AND B SHARES.
PERFORMANCE OF OTHER CLASSES WILL DIFFER.
THE RETURNS ABOVE ARE CALCULATED USING THE MAXIMUM 4.50% SALES CHARGE FOR CLASS
A SHARES AND THE MAXIMUM 5.00% DEFERRED SALES CHARGE (DECLINING TO ZERO AFTER
THE SIXTH YEAR) FOR CLASS B SHARES.
[LOGO]
6
<PAGE>
INVESTMENT ADVISER'S REPORT AND PERFORMANCE DATA (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
COLORADO TAX-FREE FUND
During the fiscal year ended May 31, 1999, the Fund outperformed its benchmark,
the Lipper Colorado Municipal Debt Average. The Fund's total return was 3.79%
versus 3.53% for the benchmark.
Changes in interest rates are typically the single most important economic
factor that influences the total return of the fund. Interest rates fell during
the first five months of the fiscal year as the Federal Reserve Board (the Fed)
lowered interest rates in response to various international economic problems.
As economic conditions overseas stabilized later in the period, interest rates
slowly increased. However, the net change in long-term interest rates on
municipal bonds for the year is a modest increase of 0.10%.
We have been surprised by the degree of rise in interest rates during 1999. In
our view, inflation is not an imminent problem in the U.S. and therefore, the
rise in interest rates is an over-reaction. Nevertheless, long-term interest
rates have risen in anticipation of at least a 0.25% tightening by the Fed to
insure the economy does not overheat.
The Fund's objective is to provide shareholders with a high level of current
income exempt from both federal and Colorado state income taxes consistent with
the preservation of capital. Given our outlook for interest rates, we will make
changes to the portfolio to maintain the desired level of market exposure. Our
current plan is to keep the portfolio positioned for an eventual decline in
interest rates. We don't expect much additional increase. We make adjustments to
the portfolio seeking to maximize the return while maintaining a prudent level
of risk.
THE OPINIONS EXPRESSED REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH MAY
31, 1999. THE MANAGER'S OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON
MARKET AND OTHER CONDITIONS. THE COMPOSITION, INDUSTRIES AND HOLDINGS OF THE
PORTFOLIO ARE SUBJECT TO CHANGE.
THE PERFORMANCE REPRESENTS INFORMATION OF A SHARES EXCLUDING SALES LOAD. HAD THE
PERFORMANCE INCLUDED SALES LOAD, THE RETURN WOULD HAVE BEEN LOWER. THE
PERFORMANCE FOR OTHER CLASSES WILL DIFFER.
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
COLORADO TAX-FREE FUND ("FUND") VS. LEHMAN BROTHERS 10-YEAR MUNICIPAL INDEX
("LEHMAN INDEX") AND
LIPPER COLORADO MUNICIPAL DEBT AVERAGE ("LIPPER AVERAGE")
- --------------------------------------------------------------------------------
The following chart reflects the value of a $10,000 investment in the Fund,
including reinvested dividends and distributions, since inception. The result is
compared with a broad-based securities market index and a peer based average.
The Fund's total return includes operating expenses and sales charges (if
applicable) that reduce returns, while the total return of the Index does not.
Total return of the Fund would have been lower had certain fees and expenses not
been voluntarily waived and/or reimbursed. The Fund is professionally managed
while the Index is unmanaged and is not available for investment. The Lipper
Average does not include sales charges but does include management fees and
expenses. The Lipper Average is calculated by taking an arithmetic average of
the returns of the funds in the group. Investment return and principal value of
an investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. PAST PERFORMANCE
IS NOT PREDICTIVE NOR A GUARANTEE OF FUTURE RESULTS.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
AS OF MAY 31, 1999
------------------------------------------------
LEHMAN LIPPER
A SHARES B SHARES* INDEX AVERAGE+
----------- ----------- --------- -----------
<S> <C> <C> <C> <C>
ONE YEAR (0.88)% (1.02)% 4.62% 3.53%
FIVE YEAR 6.11% 6.13% 7.42% 6.49%
SINCE INCEPTION 5.42% 5.33% 6.74% 5.72%
INCEPTION DATE 6/1/93 6/1/93 5/31/93 5/31/93
VALUE MAY 31, 1999 $13,723 $13,656 $14,793 $13,962
</TABLE>
<TABLE>
<CAPTION>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
A SHARES B SHARES LEHMAN INDEX LIPPER AVERAGE
<S> <C> <C> <C> <C>
05/31/93 $9,550.00 $10,000.00 $10,000.00 $10,000.00
06/30/93 $9,685.30 $10,135.69 $10,197.00 $10,156.00
07/31/93 $9,671.33 $10,114.59 $10,222.49 $10,185.45
08/31/93 $9,923.02 $10,375.58 $10,434.10 $10,386.11
09/30/93 $10,061.09 $10,533.69 $10,562.44 $10,513.85
10/31/93 $10,056.28 $10,512.01 $10,579.34 $10,538.04
11/30/93 $9,933.20 $10,377.01 $10,492.59 $10,453.73
12/31/93 $10,175.97 $10,623.31 $10,716.08 $10,650.26
01/31/94 $10,334.98 $10,782.83 $10,847.89 $10,789.78
02/28/94 $10,027.28 $10,466.04 $10,550.65 $10,504.93
03/31/94 $9,617.20 $10,031.41 $10,145.51 $10,061.62
04/30/94 $9,644.56 $10,043.79 $10,273.34 $10,090.80
05/31/94 $9,743.03 $10,140.08 $10,339.09 $10,191.71
06/30/94 $9,671.41 $10,059.38 $10,294.63 $10,116.29
07/31/94 $9,833.26 $10,231.63 $10,467.58 $10,305.47
08/31/94 $9,864.22 $10,246.78 $10,508.41 $10,319.89
09/30/94 $9,713.62 $10,083.87 $10,366.54 $10,158.90
10/31/94 $9,558.41 $9,916.94 $10,215.19 $9,972.99
11/30/94 $9,383.39 $9,729.58 $10,022.13 $9,761.57
12/31/94 $9,572.66 $9,918.98 $10,202.52 $9,993.89
01/31/95 $9,767.11 $10,114.31 $10,466.77 $10,290.71
02/28/95 $10,024.19 $10,385.14 $10,762.98 $10,580.91
03/31/95 $10,112.33 $10,469.24 $10,908.28 $10,654.98
04/30/95 $10,141.82 $10,482.85 $10,921.37 $10,668.83
05/31/95 $10,471.25 $10,816.28 $11,267.58 $10,997.43
06/30/95 $10,391.12 $10,726.53 $11,197.72 $10,891.85
07/31/95 $10,508.26 $10,840.97 $11,362.32 $10,969.18
08/31/95 $10,661.36 $10,991.91 $11,516.85 $11,088.75
09/30/95 $10,720.01 $11,045.37 $11,590.56 $11,151.95
10/31/95 $10,873.61 $11,196.67 $11,723.85 $11,327.04
11/30/95 $11,061.12 $11,393.74 $11,880.95 $11,519.60
12/31/95 $11,199.56 $11,517.44 $11,953.42 $11,652.07
01/31/96 $11,280.45 $11,604.66 $12,074.15 $11,721.99
02/29/96 $11,194.79 $11,509.75 $11,924.43 $11,652.83
03/31/96 $11,057.64 $11,361.76 $11,882.70 $11,487.36
04/30/96 $10,997.53 $11,293.30 $11,849.43 $11,451.75
05/31/96 $11,031.56 $11,309.19 $11,962.00 $11,467.78
06/30/96 $11,168.51 $11,454.41 $12,076.83 $11,567.55
07/31/96 $11,299.79 $11,570.11 $12,192.77 $11,663.56
08/31/96 $11,278.53 $11,552.04 $12,192.77 $11,669.39
09/30/96 $11,462.67 $11,722.17 $12,318.35 $11,811.76
10/31/96 $11,595.78 $11,850.71 $12,473.57 $11,936.96
11/30/96 $11,750.85 $12,001.51 $12,725.53 $12,126.76
12/31/96 $11,746.02 $11,989.04 $12,668.27 $12,094.02
01/31/97 $11,811.45 $12,047.96 $12,717.67 $12,108.53
02/28/97 $11,893.00 $12,124.16 $12,837.22 $12,209.03
03/31/97 $11,732.61 $11,953.72 $12,665.20 $12,067.41
04/30/97 $11,842.08 $12,057.82 $12,758.92 $12,163.95
05/31/97 $12,024.10 $12,235.25 $12,940.10 $12,323.29
06/30/97 $12,145.45 $12,351.09 $13,082.44 $12,478.57
07/31/97 $12,540.94 $12,744.98 $13,450.06 $12,847.93
08/31/97 $12,345.14 $12,538.19 $13,319.59 $12,715.60
09/30/97 $12,516.04 $12,715.96 $13,488.75 $12,865.64
10/31/97 $12,641.50 $12,822.93 $13,560.24 $12,960.85
11/30/97 $12,718.14 $12,904.87 $13,622.62 $13,023.06
12/31/97 $12,954.86 $13,136.21 $13,837.86 $13,228.83
01/31/98 $13,070.77 $13,245.07 $13,991.46 $13,363.76
02/28/98 $13,071.20 $13,225.66 $13,990.06 $13,351.73
03/31/98 $13,076.43 $13,222.60 $13,980.26 $13,357.07
04/30/98 $12,958.02 $13,107.25 $13,903.37 $13,275.59
05/31/98 $13,221.64 $13,365.09 $14,139.73 $13,485.35
06/30/98 $13,274.14 $13,397.47 $14,192.05 $13,531.20
07/31/98 $13,291.78 $13,406.80 $14,214.75 $13,558.26
08/31/98 $13,520.61 $13,628.91 $14,462.09 $13,758.92
09/30/98 $13,723.32 $13,824.73 $14,677.58 $13,922.65
10/31/98 $13,612.27 $13,704.20 $14,683.45 $13,887.85
11/30/98 $13,713.75 $13,797.84 $14,727.50 $13,943.40
12/31/98 $13,750.20 $13,825.73 $14,773.15 $13,964.31
01/31/99 $13,894.40 $13,961.79 $14,999.18 $14,108.15
02/28/99 $13,776.89 $13,848.74 $14,864.19 $14,024.91
03/31/99 $13,768.41 $13,818.60 $14,856.76 $14,023.51
04/30/99 $13,809.69 $13,864.43 $14,896.87 $14,057.16
05/31/99 $13,722.83 $13,655.57 $14,792.59 $13,961.57
</TABLE>
* 8/2/93 was the inception date of Class B Shares of the Fund. Returns prior to
that date are for Class A Shares, adjusted for Class B Share expenses.
+ Source: Lipper Analytical Services, Inc. is an independent mutual fund rating
service that ranks funds in various fund categories by making comparative
calculations using total returns. Although gathered from reliable sources, data
accuracy and completeness cannot be guaranteed.
THE ABOVE GRAPH REPRESENTS PERFORMANCE INFORMATION OF CLASS A AND B SHARES.
PERFORMANCE OF OTHER CLASSES WILL DIFFER.
THE RETURNS ABOVE ARE CALCULATED USING THE MAXIMUM 4.50% SALES CHARGE FOR CLASS
A SHARES AND THE MAXIMUM 5.00% DEFERRED SALES CHARGE (DECLINING TO ZERO AFTER
THE SIXTH YEAR) FOR CLASS B SHARES.
[LOGO]
7
<PAGE>
INVESTMENT ADVISER'S REPORT AND PERFORMANCE DATA MAY 31, 1999
- --------------------------------------------------------------------------------
MINNESOTA TAX-FREE FUND
During the fiscal year ended May 31, 1999, the Fund returned 3.96%,
outperforming the Lipper Minnesota Municipal Debt Average, which returned 3.66%.
Early in the fiscal year the Fund outperformed its benchmark as interest rates
declined, then underperformed in October as rates spiked upward. Since our
interest rate outlook over the past year has been for lower rates, the portfolio
duration has been maintained somewhat long relative to the peer group duration.
We focus on favorable coupon and call structure that will produce good price
performance in that type of interest rate environment. While we have continued
to believe in our outlook long term, it has hurt our performance during the
period of volatile rate movements.
The prime driver of performance was the movement of interest rates, which fell
to all-time low levels early in the period, then spiked higher in October 1998
and have gradually risen since. Quality spreads have been very narrow and
trading opportunities have been limited, so relative performance has been
determined chiefly by having the correct interest rate outlook and having the
Fund structured to take advantage of the movement in rates. Municipals traded
very cheap relative to taxable fixed income securities during the early part of
the fiscal year but as interest rates have moved higher, municipals have
outperformed. Therefore, municipal funds declined less in value as rates rose,
than did taxable fixed income funds during that period.
We expect the the Fed to remain vigilant against inflation. We think that a
small rate hike may be warranted later this summer, but that will be sufficient
to ease inflation worries. They have accomplished a lot with "jawboning" and
will continue to use that technique to guide interest rates higher if the level
of growth creates the need. This portfolio is positioned somewhat long in
duration compared to its peer group and has a core, non-callable segment that
will provide good price performance in the interest rate environment that we
anticipate. We will maintain this strategy until and unless our rate outlook
calls for a more cautious strategy.
We expect rates to decline from their current levels and that the low inflation
environment will make municipals very attractive relative to other investment
alternatives. Over the past few months, municipals have significantly
outperformed taxable bonds, but still remain attractive by historical norms. The
Minnesota economy remains very strong, which is creating many financing needs
that will provide attractive investment opportunities for the Fund. The strategy
for this Fund focuses on total return performance relative to a peer group
consisting of primarily long-term (longer than seven years) Minnesota funds.
THE OPINIONS EXPRESSED REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH MAY
31, 1999. THE MANAGER'S OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON
MARKET AND OTHER CONDITIONS. THE COMPOSITION, INDUSTRIES AND HOLDINGS OF THE
PORTFOLIO ARE SUBJECT TO CHANGE.
THE PERFORMANCE REPRESENTS INFORMATION OF A SHARES EXCLUDING SALES LOAD. HAD THE
PERFORMANCE INCLUDED SALES LOAD, THE RETURN WOULD HAVE BEEN LOWER. THE
PERFORMANCE FOR OTHER CLASSES WILL DIFFER.
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
MINNESOTA TAX-FREE FUND ("FUND") VS. LEHMAN BROTHERS 10-YEAR MUNICIPAL INDEX
("LEHMAN INDEX") AND LIPPER MINNESOTA MUNICIPAL DEBT AVERAGE ("LIPPER AVERAGE")
- --------------------------------------------------------------------------------
The following chart reflects the value of a $10,000 investment in the Fund,
including reinvested dividends and distributions, over the past 10 fiscal year
periods. The result is compared with a broad-based securities market index and a
peer based average. The Fund's total return includes operating expenses and
sales charges (if applicable) that reduce returns, while the total return of the
Index does not. Total return of the Fund would have been lower had certain fees
and expenses not been voluntarily waived and/or reimbursed. The Fund is
professionally managed while the Index is unmanaged and is not available for
investment. The Lipper Average does not include sales charges but does include
management fees and expenses. The Lipper Average is calculated by taking an
arithmetic average of the returns of the funds in the group. Investment return
and principal value of an investment in the Fund will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. PAST PERFORMANCE IS NOT PREDICTIVE NOR A GUARANTEE OF FUTURE RESULTS.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
AS OF MAY 31, 1999
------------------------------------
LEHMAN LIPPER
A SHARES B SHARES* INDEX AVERAGE+
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
ONE YEAR (0.72)% (0.79)% 4.62% 3.66%
FIVE YEAR 5.83% 5.85% 7.42% 5.90%
TEN YEAR 6.19% 5.86% 8.10% 6.61%
VALUE MAY 31, 1999 $ 18,229 $ 17,683 $ 21,799 $ 18,969
</TABLE>
<TABLE>
<CAPTION>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
A SHARES B SHARES LEHMAN INDEX LIPPER AVERAGE
<S> <C> <C> <C> <C>
05/31/89 $9,550.00 $10,000.00 $10,000.00 $10,000.00
06/30/89 $9,620.55 $10,067.68 $10,117.00 $10,127.00
07/31/89 $9,733.84 $10,179.78 $10,262.68 $10,220.17
08/31/89 $9,659.86 $10,095.90 $10,202.13 $10,152.72
09/30/89 $9,632.57 $10,061.12 $10,154.18 $10,112.10
10/31/89 $9,758.85 $10,186.58 $10,269.94 $10,241.54
11/30/89 $9,886.08 $10,313.07 $10,441.45 $10,369.56
12/31/89 $9,939.27 $10,361.96 $10,549.00 $10,431.78
01/31/90 $9,910.99 $10,325.84 $10,517.35 $10,368.14
02/28/90 $9,997.36 $10,409.86 $10,590.97 $10,466.64
03/31/90 $9,992.30 $10,397.93 $10,574.03 $10,486.53
04/30/90 $9,912.74 $10,308.69 $10,644.87 $10,389.00
05/31/90 $10,106.09 $10,503.17 $10,875.87 $10,599.90
06/30/90 $10,189.89 $10,583.74 $10,978.10 $10,690.00
07/31/90 $10,302.40 $10,693.83 $11,130.69 $10,845.00
08/31/90 $10,208.97 $10,590.00 $10,970.41 $10,673.65
09/30/90 $10,215.27 $10,589.98 $10,972.61 $10,700.34
10/31/90 $10,382.88 $10,756.95 $11,214.00 $10,849.07
11/30/90 $10,528.67 $10,901.33 $11,442.77 $11,067.14
12/31/90 $10,570.23 $10,937.33 $11,470.23 $11,120.26
01/31/91 $10,676.29 $11,040.07 $11,659.49 $11,235.91
02/28/91 $10,757.89 $11,118.08 $11,759.76 $11,310.07
03/31/91 $10,761.29 $11,114.47 $11,753.88 $11,331.56
04/30/91 $10,858.53 $11,208.01 $11,916.09 $11,460.74
05/31/91 $10,940.08 $11,285.01 $12,005.46 $11,560.44
06/30/91 $10,968.10 $11,306.93 $11,991.05 $11,547.73
07/31/91 $11,022.25 $11,355.51 $12,116.96 $11,682.84
08/31/91 $11,124.95 $11,454.04 $12,280.54 $11,805.51
09/30/91 $11,208.01 $11,532.47 $12,468.43 $11,929.46
10/31/91 $11,274.99 $11,594.01 $12,569.42 $12,016.55
11/30/91 $11,307.81 $11,620.57 $12,590.79 $12,033.37
12/31/91 $11,472.06 $11,781.90 $12,858.97 $12,252.38
01/31/92 $11,508.79 $11,812.08 $12,885.98 $12,284.23
02/29/92 $11,538.62 $11,835.62 $12,866.65 $12,319.86
03/31/92 $11,594.53 $11,885.40 $12,847.35 $12,340.80
04/30/92 $11,662.02 $11,947.21 $12,969.40 $12,425.95
05/31/92 $11,764.66 $12,044.72 $13,121.14 $12,563.88
06/30/92 $11,889.21 $12,164.77 $13,348.14 $12,754.85
07/31/92 $12,134.90 $12,408.37 $13,785.96 $13,151.53
08/31/92 $12,049.16 $12,312.76 $13,623.28 $12,993.71
09/30/92 $12,127.59 $12,385.27 $13,736.35 $13,037.89
10/31/92 $12,054.31 $12,302.52 $13,596.24 $12,834.50
11/30/92 $12,223.55 $12,467.63 $13,845.05 $13,114.29
12/31/92 $12,337.88 $12,576.25 $14,005.66 $13,261.17
01/31/93 $12,457.11 $12,689.75 $14,240.95 $13,421.63
02/28/93 $12,800.02 $13,031.74 $14,762.17 $13,845.75
03/31/93 $12,662.26 $12,883.14 $14,546.64 $13,729.45
04/30/93 $12,789.71 $13,004.84 $14,684.84 $13,876.36
05/31/93 $12,864.26 $13,072.32 $14,736.23 $13,958.23
06/30/93 $13,061.95 $13,265.12 $15,026.54 $14,181.56
07/31/93 $13,083.96 $13,278.99 $15,064.10 $14,194.32
08/31/93 $13,368.78 $13,542.70 $15,375.93 $14,488.14
09/30/93 $13,581.72 $13,749.87 $15,565.05 $14,669.24
10/31/93 $13,575.90 $13,722.65 $15,589.96 $14,695.65
11/30/93 $13,437.38 $13,586.53 $15,462.12 $14,575.15
12/31/93 $13,724.17 $13,854.74 $15,791.46 $14,849.16
01/31/94 $13,865.26 $14,002.01 $15,985.70 $15,003.59
02/28/94 $13,496.63 $13,621.12 $15,547.69 $14,643.50
03/31/94 $12,959.06 $13,068.74 $14,950.66 $14,046.05
04/30/94 $13,009.52 $13,111.88 $15,139.04 $14,093.80
05/31/94 $13,114.39 $13,209.48 $15,235.93 $14,240.38
06/30/94 $13,024.46 $13,110.68 $15,170.41 $14,159.21
07/31/94 $13,169.73 $13,248.56 $15,425.28 $14,392.84
08/31/94 $13,250.56 $13,321.34 $15,485.44 $14,427.38
09/30/94 $13,032.56 $13,093.35 $15,276.38 $14,215.30
10/31/94 $12,834.37 $12,873.24 $15,053.35 $13,940.94
11/30/94 $12,583.66 $12,626.99 $14,768.84 $13,603.57
12/31/94 $12,900.18 $12,935.81 $15,034.68 $13,947.74
01/31/95 $13,277.89 $13,306.61 $15,424.08 $14,360.59
02/28/95 $13,671.27 $13,692.78 $15,860.58 $14,768.44
03/31/95 $13,782.48 $13,781.11 $16,074.69 $14,873.29
04/30/95 $13,789.48 $13,793.11 $16,093.98 $14,874.78
05/31/95 $14,235.62 $14,216.87 $16,604.16 $15,289.79
06/30/95 $14,100.89 $14,086.35 $16,501.22 $15,127.71
07/31/95 $14,177.93 $14,154.82 $16,743.79 $15,198.81
08/31/95 $14,342.28 $14,309.86 $16,971.50 $15,349.28
09/30/95 $14,424.00 $14,382.17 $17,080.12 $15,444.45
10/31/95 $14,668.57 $14,617.01 $17,276.54 $15,665.30
11/30/95 $14,941.97 $14,866.53 $17,508.05 $15,931.61
12/31/95 $15,120.14 $15,048.09 $17,614.85 $16,098.90
01/31/96 $15,210.49 $15,128.66 $17,792.75 $16,166.51
02/29/96 $15,073.53 $14,983.17 $17,572.12 $16,051.73
03/31/96 $14,854.44 $14,755.86 $17,510.62 $15,790.09
04/30/96 $14,803.38 $14,696.03 $17,461.59 $15,731.66
05/31/96 $14,801.03 $14,683.72 $17,627.48 $15,752.11
06/30/96 $14,989.33 $14,862.03 $17,796.70 $15,909.63
07/31/96 $15,112.09 $14,959.91 $17,967.55 $16,040.09
08/31/96 $15,067.41 $14,919.73 $17,967.55 $16,038.49
09/30/96 $15,315.95 $15,157.17 $18,152.62 $16,246.99
10/31/96 $15,484.46 $15,314.19 $18,381.34 $16,404.59
11/30/96 $15,757.55 $15,559.90 $18,752.64 $16,663.78
12/31/96 $15,692.25 $15,500.09 $18,668.25 $16,595.46
01/31/97 $15,688.52 $15,486.27 $18,741.06 $16,600.44
02/28/97 $15,810.40 $15,597.54 $18,917.23 $16,741.54
03/31/97 $15,591.83 $15,372.62 $18,663.74 $16,538.97
04/30/97 $15,762.85 $15,516.96 $18,801.85 $16,672.93
05/31/97 $15,982.13 $15,737.85 $19,068.83 $16,883.01
06/30/97 $16,137.99 $15,881.56 $19,278.59 $17,050.15
07/31/97 $16,631.17 $16,356.53 $19,820.32 $17,493.46
08/31/97 $16,409.87 $16,128.54 $19,628.06 $17,329.02
09/30/97 $16,629.20 $16,334.07 $19,877.34 $17,512.71
10/31/97 $16,759.80 $16,451.96 $19,982.69 $17,621.28
11/30/97 $16,857.90 $16,538.07 $20,074.61 $17,718.20
12/31/97 $17,129.20 $16,793.55 $20,391.79 $17,946.77
01/31/98 $17,308.35 $16,958.19 $20,618.14 $18,101.11
02/28/98 $17,309.21 $16,934.00 $20,616.07 $18,097.49
03/31/98 $17,315.55 $16,944.72 $20,601.64 $18,117.40
04/30/98 $17,194.76 $16,815.98 $20,488.33 $18,041.30
05/31/98 $17,534.46 $17,137.38 $20,836.64 $18,299.29
06/30/98 $17,602.77 $17,177.90 $20,913.73 $18,368.83
07/31/98 $17,625.46 $17,204.68 $20,947.19 $18,400.06
08/31/98 $17,936.10 $17,496.91 $21,311.68 $18,670.54
09/30/98 $18,197.27 $17,725.17 $21,629.22 $18,862.84
10/31/98 $18,074.02 $17,609.36 $21,637.87 $18,823.23
11/30/98 $18,157.85 $17,680.16 $21,702.78 $18,894.76
12/31/98 $18,195.27 $17,689.39 $21,770.06 $18,940.11
01/31/99 $18,364.45 $17,858.53 $22,103.14 $19,108.68
02/28/99 $18,280.87 $17,767.00 $21,904.22 $19,030.33
03/31/99 $18,286.70 $17,761.36 $21,893.26 $19,036.04
04/30/99 $18,339.27 $17,801.33 $21,952.38 $19,081.73
05/31/99 $18,228.61 $17,682.66 $21,798.71 $18,969.14
</TABLE>
* 8/6/93 was the inception date of Class B Shares of the Fund. Returns prior to
that date are for Class A Shares, adjusted for Class B share expenses.
+ Source: Lipper Analytical Services, Inc. is an independent mutual fund rating
service that ranks funds in various fund categories by making comparative
calculations using total returns. Although gathered from reliable sources, data
accuracy and completeness cannot be guaranteed.
THE ABOVE GRAPH REPRESENTS PERFORMANCE INFORMATION OF CLASS A AND B SHARES.
PERFORMANCE OF OTHER CLASSES WILL DIFFER.
THE RETURNS ABOVE ARE CALCULATED USING THE MAXIMUM 4.50% SALES CHARGE FOR CLASS
A SHARES AND THE MAXIMUM 5.00% DEFERRED SALES CHARGE (DECLINING TO ZERO AFTER
THE SIXTH YEAR) FOR CLASS B SHARES.
[LOGO]
8
<PAGE>
INVESTMENT ADVISER'S REPORT AND PERFORMANCE DATA MAY 31, 1999
- --------------------------------------------------------------------------------
GROWTH BALANCED FUND
The assets of the Fund consist of a 65% stock and 35% bond mix, and experienced
a return of 16.18% during the fiscal period ended May 31, 1999.
For most of the fiscal period, investors continued to rotate back to growth
stocks. A low interest rate environment, along with moderate economic growth,
boosted the market in general, and growth stocks in particular. While stocks
with large market capitalizations and high price/earnings ratios performed best
during the period, small stocks rebounded during the final two-thirds of the
fiscal year and showed signs of improved momentum as the fiscal year closed. In
continental Europe, holdings in telecommunications, semiconductor and oil
sectors performed well. The area where stock selection detracted was in Japan.
Limited growth prospects and big challenges in improving returns are expected to
continue for many Japanese banks. Economic growth is expected to be moderate in
the U.S. and parts of Europe, but the rest of the world may witness an upturn in
growth.
Beginning in June of 1998, a powerful and sustained bond market rally drove
interest rates on long bonds about 3/4% lower. The second half of the period
yields turned sharply higher, ending nearly where they began 12 months before.
Interest rates were extremely volatile over the past twelve months. From
perceived global deflation to rampant economic growth, the bond market
experienced several twists of fate during the period.
The diversified equity component, which makes up 65% of the Fund's assets,
returned 15.08% during the fiscal period. This component is comprised of large
cap growth and value stocks, small company growth and value issues and non-U.S.
stocks. The diversified bond style, comprising 35% of assets, returned 4.15%.
This portfolio consists of high quality U.S. government and agency bonds,
corporate issues, as well as asset-backed and mortgage-backed instruments.
THE OPINIONS EXPRESSED REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH MAY
31, 1999. THE MANAGER'S OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON
MARKET AND OTHER CONDITIONS. THE COMPOSITION, INDUSTRIES AND HOLDINGS OF THE
PORTFOLIO ARE SUBJECT TO CHANGE.
THE PERFORMANCE REPRESENTS INFORMATION OF A SHARES EXCLUDING SALES LOAD. HAD THE
PERFORMANCE INCLUDED SALES LOAD, THE RETURN WOULD HAVE BEEN LOWER. THE
PERFORMANCE FOR OTHER CLASSES WILL DIFFER.
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
GROWTH BALANCED FUND ("FUND") VS. STANDARD & POOR'S 500 INDEX ("S&P INDEX"),
LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE INDEX ("LEHMAN INDEX"), FUND
COMPOSITE BENCHMARK ("BENCHMARK") AND LIPPER BALANCED FUND AVERAGE ("LIPPER
AVERAGE")
- --------------------------------------------------------------------------------
The following chart reflects the value of a $10,000 investment in the Fund,
including reinvested dividends and distributions, over the past 10 fiscal year
periods. The result is compared with two broad-based securities market indices
and two peer based averages. The Fund's total return includes operating expenses
that reduce returns, while the total returns of the Indices do not. Total return
of the Fund would have been lower had certain fees and expenses not been
voluntarily waived and/or reimbursed. The Fund is professionally managed while
the Indices are unmanaged and are not available for investment. The Benchmark
represents the appropriate base allocation percentages applied to the Lipper
Universe Averages. The Lipper Universe Averages do not include sales charges but
do include management fees and expenses. The Lipper Universe Averages are
calculated by taking arithmetic averages of the returns of the funds in the
groups. Investment return and principal value of an investment in the Fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original cost. PAST PERFORMANCE IS NOT PREDICTIVE NOR A GUARANTEE OF
FUTURE RESULTS.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
AS OF MAY 31, 1999
-----------------------------------------------------------------------------------------
S&P LEHMAN LIPPER
A SHARES*+ B SHARES**+ C SHARES**+ INDEX INDEX BENCHMARK++ AVERAGE++
----------- ----------- ----------- --------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ONE YEAR 9.50% 11.39% 15.48% 21.04% 4.78% 8.71% 8.26%
FIVE YEAR 15.61% 16.03% 16.16% 25.84% 7.02% 14.70% 14.63%
TEN YEAR 12.97% 12.81% 12.82% 18.10% 7.90% 12.02% 12.15%
VALUE MAY 31,
1999 $ 33,843 $ 33,370 $ 33,394 $ 52,810 $ 21,390 $ 31,142 $ 31,503
</TABLE>
<TABLE>
<CAPTION>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
A SHARES B SHARES S&P INDEX LEHMAN INDEX BENCHMARK LIPPER AVERAGE
<S> <C> <C> <C> <C> <C> <C>
05/31/89 $9,425.00 $10,000.00 $10,000.00 $10,000.00 $10,000.00 $10,000.00
06/30/89 $9,403.00 $9,971.02 $9,989.54 $10,252.00 $10,058.00 $10,033.00
07/31/89 $10,036.00 $10,636.37 $10,890.70 $10,462.17 $10,560.90 $10,583.81
08/31/89 $10,143.00 $10,741.44 $11,102.89 $10,327.20 $10,645.39 $10,660.02
09/30/89 $10,191.00 $10,785.94 $11,057.68 $10,375.74 $10,634.74 $10,713.32
10/31/89 $10,051.00 $10,631.15 $10,801.25 $10,595.71 $10,518.82 $10,547.26
11/30/89 $10,219.00 $10,802.64 $11,020.63 $10,696.37 $10,658.72 $10,691.76
12/31/89 $10,364.00 $10,947.76 $11,284.90 $10,725.25 $10,761.05 $10,844.65
01/31/90 $9,932.00 $10,485.46 $10,527.68 $10,656.61 $10,313.39 $10,405.44
02/28/90 $10,003.00 $10,553.26 $10,664.28 $10,696.03 $10,391.77 $10,469.95
03/31/90 $10,192.00 $10,745.65 $10,946.66 $10,709.94 $10,528.94 $10,606.06
04/30/90 $10,099.00 $10,641.12 $10,673.98 $10,672.45 $10,331.00 $10,418.34
05/31/90 $10,865.00 $11,441.13 $11,712.46 $10,907.25 $10,932.26 $11,074.69
06/30/90 $10,993.00 $11,569.00 $11,633.51 $11,053.41 $10,982.55 $11,134.49
07/31/90 $10,951.00 $11,518.19 $11,596.33 $11,207.05 $10,980.35 $11,147.86
08/31/90 $10,283.00 $10,807.72 $10,549.41 $11,161.10 $10,369.84 $10,435.51
09/30/90 $9,891.00 $10,388.82 $10,036.71 $11,247.04 $10,084.67 $10,018.09
10/31/90 $9,953.00 $10,446.65 $9,994.28 $11,377.51 $10,062.49 $10,027.10
11/30/90 $10,338.00 $10,844.70 $10,639.04 $11,550.44 $10,514.29 $10,418.16
12/31/90 $10,566.00 $11,078.09 $10,935.25 $11,708.68 $10,775.05 $10,636.94
01/31/91 $11,020.00 $11,546.35 $11,410.28 $11,826.94 $11,142.48 $11,011.36
02/28/91 $11,589.00 $12,137.27 $12,225.30 $11,921.56 $11,647.23 $11,569.64
03/31/91 $11,818.00 $12,368.69 $12,521.04 $12,002.62 $11,859.21 $11,764.01
04/30/91 $11,834.00 $12,377.80 $12,550.46 $12,133.45 $11,912.58 $11,838.12
05/31/91 $12,226.00 $12,780.53 $13,090.39 $12,207.47 $12,277.10 $12,151.83
06/30/91 $11,816.00 $12,343.95 $12,491.11 $12,216.01 $11,910.02 $11,786.06
07/31/91 $12,274.00 $12,813.87 $13,072.83 $12,351.61 $12,307.81 $12,197.40
08/31/91 $12,561.00 $13,106.05 $13,381.64 $12,587.53 $12,615.51 $12,474.28
09/30/91 $12,571.00 $13,109.19 $13,157.63 $12,804.03 $12,645.78 $12,542.88
10/31/91 $12,802.00 $13,341.43 $13,333.78 $12,950.00 $12,805.12 $12,717.23
11/30/91 $12,560.00 $13,081.71 $12,798.30 $13,098.92 $12,524.69 $12,448.90
12/31/91 $13,515.00 $14,066.52 $14,259.48 $13,418.54 $13,492.85 $13,345.22
01/31/92 $13,439.00 $13,978.07 $13,993.74 $13,296.43 $13,397.05 $13,305.18
02/29/92 $13,471.00 $14,003.98 $14,175.24 $13,348.28 $13,541.74 $13,443.56
03/31/92 $13,246.00 $13,761.85 $13,899.81 $13,296.23 $13,341.32 $13,217.70
04/30/92 $13,383.00 $13,895.07 $14,307.38 $13,413.23 $13,476.07 $13,352.53
05/31/92 $13,558.00 $14,068.42 $14,377.35 $13,621.14 $13,621.61 $13,540.80
06/30/92 $13,382.00 $13,876.43 $14,163.56 $13,822.73 $13,493.56 $13,417.57
07/31/92 $13,655.00 $14,151.92 $14,742.05 $14,097.80 $13,906.47 $13,750.33
08/31/92 $13,536.00 $14,019.28 $14,440.58 $14,238.78 $13,775.75 $13,655.45
09/30/92 $13,681.00 $14,160.35 $14,610.33 $14,432.43 $13,954.83 $13,789.28
10/31/92 $13,701.00 $14,173.00 $14,660.48 $14,244.81 $13,966.00 $13,760.32
11/30/92 $14,114.00 $14,590.86 $15,158.31 $14,194.95 $14,292.80 $14,079.56
12/31/92 $14,268.00 $14,740.86 $15,344.29 $14,380.90 $14,505.76 $14,311.87
01/31/93 $14,296.00 $14,760.84 $15,472.46 $14,661.33 $14,701.59 $14,517.96
02/28/93 $14,249.00 $14,703.36 $15,683.26 $14,892.98 $14,825.08 $14,660.24
03/31/93 $14,625.00 $15,082.24 $16,014.14 $14,952.55 $15,099.35 $14,988.63
04/30/93 $14,418.00 $14,859.00 $15,627.08 $15,072.17 $14,936.27 $14,909.19
05/31/93 $14,751.00 $15,192.33 $16,043.88 $15,039.01 $15,170.77 $15,182.03
06/30/93 $14,768.00 $15,201.97 $16,090.73 $15,275.13 $15,343.72 $15,292.85
07/31/93 $14,851.00 $15,276.89 $16,026.00 $15,311.79 $15,377.48 $15,370.85
08/31/93 $15,395.00 $15,827.04 $16,632.82 $15,555.24 $15,848.03 $15,905.75
09/30/93 $15,459.00 $15,883.21 $16,501.52 $15,620.58 $15,884.48 $15,956.65
10/31/93 $15,646.00 $16,065.42 $16,842.59 $15,662.75 $16,043.32 $16,184.83
11/30/93 $15,394.00 $15,788.98 $16,682.79 $15,575.04 $15,818.72 $15,922.64
12/31/93 $15,732.00 $16,132.88 $16,884.55 $15,646.68 $16,103.45 $16,287.27
01/31/94 $16,134.00 $16,535.78 $17,458.04 $15,820.36 $16,512.48 $16,736.79
02/28/94 $15,834.00 $16,219.55 $16,984.58 $15,586.22 $16,180.58 $16,408.75
03/31/94 $15,282.00 $15,642.39 $16,245.07 $15,329.05 $15,578.66 $15,804.91
04/30/94 $15,378.00 $15,731.55 $16,453.56 $15,224.81 $15,617.61 $15,861.81
05/31/94 $15,447.00 $15,791.65 $16,722.88 $15,235.47 $15,681.64 $15,909.39
06/30/94 $15,120.00 $15,446.78 $16,313.34 $15,236.99 $15,404.08 $15,648.48
07/31/94 $15,499.00 $15,825.39 $16,848.63 $15,456.41 $15,755.29 $16,006.83
08/31/94 $16,001.00 $16,328.02 $17,538.21 $15,504.32 $16,155.47 $16,437.41
09/30/94 $15,771.00 $16,083.60 $17,110.10 $15,361.68 $15,854.98 $16,172.77
10/31/94 $15,902.00 $16,207.23 $17,493.23 $15,360.30 $15,940.60 $16,324.80
11/30/94 $15,596.00 $15,887.01 $16,857.00 $15,291.18 $15,550.05 $15,897.09
12/31/94 $15,704.00 $15,993.37 $17,106.54 $15,344.70 $15,693.11 $16,011.55
01/31/95 $15,837.00 $16,117.51 $17,549.80 $15,604.02 $15,900.26 $16,152.45
02/28/95 $16,211.00 $16,484.10 $18,233.09 $15,927.02 $16,385.22 $16,604.72
03/31/95 $16,535.00 $16,804.54 $18,770.25 $16,017.81 $16,680.16 $16,945.11
04/30/95 $16,826.00 $17,089.15 $19,322.60 $16,214.83 $16,990.41 $17,295.88
05/31/95 $17,299.00 $17,560.66 $20,093.36 $16,704.52 $17,561.28 $17,830.32
06/30/95 $17,706.00 $17,960.50 $20,559.73 $16,816.44 $17,903.73 $18,163.75
07/31/95 $18,230.00 $18,484.40 $21,241.16 $16,818.12 $18,328.05 $18,645.09
08/31/95 $18,314.00 $18,552.87 $21,294.35 $16,971.16 $18,483.84 $18,766.28
09/30/95 $18,845.00 $19,085.01 $22,192.52 $17,093.35 $18,890.48 $19,199.78
10/31/95 $18,687.00 $18,912.55 $22,113.27 $17,283.09 $18,841.37 $19,119.14
11/30/95 $19,169.00 $19,390.40 $23,083.05 $17,509.50 $19,425.45 $19,665.95
12/31/95 $19,362.00 $19,566.24 $23,527.68 $17,693.35 $19,689.63 $19,982.57
01/31/96 $19,765.00 $19,966.57 $24,327.50 $17,845.51 $20,053.89 $20,328.27
02/29/96 $19,919.00 $20,110.52 $24,553.67 $17,636.72 $20,132.10 $20,405.52
03/31/96 $20,065.00 $20,244.30 $24,790.13 $17,546.77 $20,212.63 $20,527.95
04/30/96 $20,408.00 $20,579.75 $25,155.24 $17,485.36 $20,420.82 $20,842.03
05/31/96 $20,716.00 $20,877.77 $25,802.96 $17,471.37 $20,682.21 $21,108.80
06/30/96 $20,724.00 $20,874.04 $25,901.29 $17,656.57 $20,702.89 $21,129.91
07/31/96 $20,063.00 $20,193.58 $24,757.49 $17,709.54 $20,135.63 $20,483.34
08/31/96 $20,338.00 $20,454.71 $25,280.47 $17,723.70 $20,483.98 $20,849.99
09/30/96 $21,143.00 $21,254.45 $26,702.09 $17,970.06 $21,235.74 $21,600.59
10/31/96 $21,332.00 $21,432.48 $27,438.29 $18,288.13 $21,645.59 $21,920.28
11/30/96 $22,308.00 $22,394.71 $29,510.46 $18,529.54 $22,615.31 $22,873.81
12/31/96 $22,110.00 $22,187.69 $28,925.86 $18,410.95 $22,389.16 $22,686.24
01/31/97 $22,851.00 $22,912.18 $30,731.99 $18,482.75 $23,000.38 $23,269.28
02/28/97 $22,851.00 $22,899.00 $30,973.24 $18,517.87 $23,025.68 $23,294.88
03/31/97 $22,129.00 $22,166.09 $29,703.02 $18,390.09 $22,394.78 $22,686.88
04/30/97 $22,870.00 $22,889.68 $31,474.72 $18,605.26 $23,008.40 $23,256.32
05/31/97 $23,995.00 $23,999.70 $33,389.74 $18,759.68 $23,997.76 $24,363.32
06/30/97 $24,856.00 $24,847.23 $34,884.83 $18,930.39 $24,705.69 $25,128.33
07/31/97 $26,266.00 $26,245.16 $37,659.74 $19,314.68 $26,089.21 $26,455.11
08/31/97 $25,231.00 $25,192.96 $35,551.55 $19,218.11 $25,416.11 $25,711.72
09/30/97 $26,366.00 $26,308.94 $37,497.43 $19,441.04 $26,376.84 $26,789.04
10/31/97 $25,855.00 $25,779.92 $36,246.51 $19,656.83 $25,941.62 $26,180.93
11/30/97 $26,349.00 $26,256.64 $37,923.02 $19,700.08 $26,346.31 $26,560.55
12/31/97 $26,707.00 $26,598.44 $38,573.82 $19,857.68 $26,704.62 $26,897.87
01/31/98 $27,060.00 $26,932.97 $39,000.02 $20,117.82 $26,862.17 $27,118.43
02/28/98 $28,266.00 $28,115.87 $41,811.26 $20,101.72 $27,968.90 $28,311.64
03/31/98 $29,109.00 $28,934.32 $43,950.66 $20,166.05 $28,749.23 $29,214.79
04/30/98 $29,429.00 $29,236.37 $44,392.67 $20,266.88 $28,930.35 $29,416.37
05/31/98 $29,129.00 $28,918.68 $43,630.45 $20,414.83 $28,646.83 $29,098.67
06/30/98 $29,874.00 $29,642.88 $45,401.32 $20,545.48 $29,065.07 $29,552.61
07/31/98 $29,513.00 $29,263.51 $44,919.16 $20,617.39 $28,637.82 $29,174.34
08/31/98 $26,875.00 $26,630.40 $38,432.83 $20,941.08 $26,149.19 $26,458.21
09/30/98 $27,982.00 $27,714.58 $40,895.11 $21,466.70 $27,208.23 $27,429.22
10/31/98 $29,638.00 $29,308.15 $44,218.61 $21,445.24 $28,285.68 $28,564.79
11/30/98 $31,188.00 $30,830.12 $46,897.51 $21,443.09 $29,292.65 $29,638.83
12/31/98 $32,685.00 $32,296.24 $49,598.25 $21,528.86 $30,285.67 $30,691.01
01/31/99 $33,512.00 $33,109.88 $51,671.50 $21,647.27 $30,761.16 $31,182.06
02/28/99 $32,614.00 $32,209.45 $50,066.07 $21,329.06 $29,921.38 $30,255.95
03/31/99 $33,430.00 $32,990.55 $52,068.61 $21,489.03 $30,597.60 $30,988.15
04/30/99 $34,285.00 $33,825.89 $54,085.02 $21,555.64 $31,564.48 $31,982.87
05/31/99 $33,843.00 $33,370.25 $52,809.69 $21,389.66 $31,141.52 $31,503.13
</TABLE>
* 10/14/98 was the inception date of Class A Shares of the Fund. Returns prior
to that date are for Class I Shares, and have not been adjusted for Class A
Share expenses. If such returns had been adjusted for Class A Share expenses,
returns would have been lower. Performance shown for Class A Shares for the
period prior to November 11, 1994 reflects performance of the shares of the
predecessor collective investment fund (see footnote + below) adjusted to
reflect the Fund's 1994 estimate of its expense ratio for the first year of
operations as a mutual fund, including any applicable sales load (without giving
effect to any fee waivers or expense reimbursements).
** 10/1/98 was the inception date of Class B and C Shares of the Fund. Returns
prior to that date are for Class I Shares, adjusted for Class B and Class C
Share expenses, respectively. Performance shown for Class B and Class C Shares
for the period prior to November 11, 1994 reflects performance of the shares of
the predecessor collective investment fund (see footnote + below) adjusted to
reflect Class B and Class C Share expenses (before waivers and reimbursements),
respectively.
+ Prior to November 11, 1994, Norwest Investment Management managed a collective
investment fund with investment objectives and polices that were, in all
material respects, equivalent to the Fund. The performance of the Fund includes
the performance of the predecessor collective investment fund for the periods
before it became a mutual fund on November 11, 1994. The collective investment
fund was not registered under the Investment Company Act of 1940 (the "1940
Act"), nor subject to certain investment limitations, diversification
requirements and other restrictions imposed by the 1940 Act and the Internal
Revenue Code, which, if applicable, may have adversely affected the performance
results.
++ Source: Lipper Analytical Services, Inc. is an independent mutual fund rating
service that ranks funds in various fund categories by making comparative
calculations using total returns. Although gathered from reliable sources, data
accuracy and completeness cannot be guaranteed.
THE ABOVE GRAPH REPRESENTS PERFORMANCE INFORMATION OF CLASS A AND B SHARES.
PERFORMANCE OF OTHER CLASSES WILL DIFFER.
THE RETURNS ABOVE ARE CALCULATED USING THE MAXIMUM 5.75% SALES CHARGE FOR CLASS
A SHARES, THE MAXIMUM 5.00% DEFERRED SALES CHARGE (DECLINING TO ZERO AFTER THE
SIXTH YEAR) FOR CLASS B SHARES AND THE MAXIMUM 1.00% DEFERRED SALES CHARGE
(DECLINING TO ZERO AFTER ONE YEAR) FOR CLASS C SHARES.
[LOGO]
9
<PAGE>
INVESTMENT ADVISER'S REPORT AND PERFORMANCE DATA MAY 31, 1999
- --------------------------------------------------------------------------------
INCOME EQUITY FUND
During the fiscal year ended May 31, 1999, the Fund provided above average
returns of 14.74% versus the Lipper Equity Income Average, which returned 8.10%.
The Fund benefited during the period from an emphasis on capital goods and
technology companies such as Hewlett Packard, Lucent Technologies, General
Electric and United Technologies. Healthcare, led by Johnson & Johnson, American
Home Products and Merck, also provided good relative performance.
Asian and some European countries had a negative impact on performance as a
number of the Fund's holdings derived a fair amount of revenues from foreign
sources. As prospects for those economies improved, stock prices rebounded at
the end of the period for companies such as Honeywell, 3M, and DuPont. A
positive turn is expected to continue in Asian economies, which may benefit the
prospects for large U.S. companies doing business in those markets. A tightening
of Federal Reserve Board policy may benefit stable, high quality dividend paying
companies.
The Fund seeks to identify companies with consistent historical growth and
strong future growth potential that are undervalued due to short-term
controversies, including business slowdowns, industry pressures and management
issues. We expect the trend will shift toward companies that have demonstrated
consistent growth with above average dividend growth. The Fund will maintain its
emphasis on capital goods and consumer cyclicals. A continued focus on above
average dividend yield and better valuation may provide some stability within
the Fund in a market downturn. No significant changes in positioning are
anticipated in the near future.
THE OPINIONS EXPRESSED REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH MAY
31, 1999. THE MANAGER'S OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON
MARKET AND OTHER CONDITIONS. THE COMPOSITION, INDUSTRIES AND HOLDINGS OF THE
PORTFOLIO ARE SUBJECT TO CHANGE.
THE PERFORMANCE REPRESENTS INFORMATION OF A SHARES EXCLUDING SALES LOAD. HAD THE
PERFORMANCE INCLUDED SALES LOAD, THE RETURN WOULD HAVE BEEN LOWER. THE
PERFORMANCE FOR OTHER CLASSES WILL DIFFER.
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
INCOME EQUITY FUND ("FUND") VS. STANDARD & POOR'S 500 INDEX ("S&P INDEX") AND
LIPPER EQUITY INCOME AVERAGE ("LIPPER AVERAGE")
- --------------------------------------------------------------------------------
The following chart reflects the value of a $10,000 investment in the Fund,
including reinvested dividends and distributions, over the past 10 fiscal year
periods. The result is compared with a broad-based securities market index and a
peer based average. The Fund's total return includes operating expenses and
sales charges (if applicable) that reduce returns, while the total return of the
Index does not. Total return of the Fund would have been lower had certain fees
and expenses not been voluntarily waived and/or reimbursed. The Fund is
professionally managed while the Index is unmanaged and is not available for
investment. The Lipper Average does not include sales charges but does include
management fees and expenses. The Lipper Average is calculated by taking an
arithmetic average of the returns of the funds in the group. Investment return
and principal value of an investment in the Fund will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. PAST PERFORMANCE IS NOT PREDICTIVE NOR A GUARANTEE OF FUTURE RESULTS.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
AS OF MAY 31, 1999
-------------------------------------------------------------
S&P LIPPER
A SHARES*+ B SHARES**+ C SHARES**+ INDEX AVERAGE++
----------- ----------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C>
ONE YEAR 8.15% 9.90% 13.79% 21.04% 8.10%
FIVE YEAR 22.13% 22.59% 22.65% 25.84% 18.23%
TEN YEAR 15.98% 15.80% 15.80% 18.10% 13.67%
VALUE MAY 31,
1999 $ 44,047 $ 43,385 $ 43,355 $ 52,810 $ 36,028
</TABLE>
<TABLE>
<CAPTION>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
A SHARES B SHARES S&P INDEX LIPPER AVERAGE
<S> <C> <C> <C> <C>
05/31/89 $9,425.00 $10,000.00 $10,000.00 $10,000.00
06/30/89 $9,325.13 $9,887.87 $9,989.54 $10,011.00
07/31/89 $10,063.33 $10,664.32 $10,890.70 $10,607.66
08/31/89 $10,216.84 $10,820.21 $11,102.89 $10,782.68
09/30/89 $10,109.39 $10,699.75 $11,057.68 $10,758.96
10/31/89 $9,971.28 $10,546.75 $10,801.25 $10,457.71
11/30/89 $10,175.96 $10,756.74 $11,020.63 $10,581.11
12/31/89 $10,386.37 $10,972.31 $11,284.90 $10,728.19
01/31/90 $9,755.75 $10,299.13 $10,527.68 $10,161.74
02/28/90 $9,798.32 $10,338.14 $10,664.28 $10,272.50
03/31/90 $10,094.54 $10,644.09 $10,946.66 $10,378.31
04/30/90 $9,937.57 $10,472.02 $10,673.98 $10,073.19
05/31/90 $10,837.95 $11,414.14 $11,712.46 $10,711.83
06/30/90 $10,914.85 $11,488.10 $11,633.51 $10,645.41
07/31/90 $10,953.85 $11,521.83 $11,596.33 $10,541.09
08/31/90 $10,110.01 $10,626.90 $10,549.41 $9,759.99
09/30/90 $9,743.12 $10,234.70 $10,036.71 $9,296.39
10/31/90 $9,747.26 $10,232.53 $9,994.28 $9,147.65
11/30/90 $10,237.83 $10,741.21 $10,639.04 $9,661.75
12/31/90 $10,521.88 $11,032.39 $10,935.25 $9,868.51
01/31/91 $10,945.98 $11,470.04 $11,410.28 $10,240.55
02/28/91 $11,739.01 $12,294.43 $12,225.30 $10,882.64
03/31/91 $12,009.75 $12,570.15 $12,521.04 $11,106.82
04/30/91 $12,047.00 $12,601.40 $12,550.46 $11,172.35
05/31/91 $12,528.11 $13,096.62 $13,090.39 $11,624.83
06/30/91 $11,947.37 $12,481.45 $12,491.11 $11,205.17
07/31/91 $12,357.88 $12,902.36 $13,072.83 $11,648.90
08/31/91 $12,704.07 $13,255.59 $13,381.64 $11,928.47
09/30/91 $12,538.20 $13,074.35 $13,157.63 $11,912.96
10/31/91 $12,662.89 $13,196.04 $13,333.78 $12,076.17
11/30/91 $12,215.71 $12,721.90 $12,798.30 $11,648.68
12/31/91 $13,547.90 $14,101.18 $14,259.48 $12,587.56
01/31/92 $13,182.34 $13,711.71 $13,993.74 $12,569.94
02/29/92 $13,277.72 $13,802.75 $14,175.24 $12,781.11
03/31/92 $13,219.17 $13,733.09 $13,899.81 $12,620.07
04/30/92 $13,646.45 $14,168.52 $14,307.38 $12,939.36
05/31/92 $13,649.20 $14,162.35 $14,377.35 $13,038.99
06/30/92 $13,438.02 $13,934.50 $14,163.56 $12,909.90
07/31/92 $14,090.22 $14,601.92 $14,742.05 $13,344.97
08/31/92 $13,769.06 $14,259.79 $14,440.58 $13,128.78
09/30/92 $13,885.03 $14,371.11 $14,610.33 $13,258.75
10/31/92 $13,811.38 $14,285.73 $14,660.48 $13,262.73
11/30/92 $14,206.20 $14,685.30 $15,158.31 $13,632.76
12/31/92 $14,294.12 $14,766.84 $15,344.29 $13,883.60
01/31/93 $14,181.87 $14,641.46 $15,472.46 $14,082.14
02/28/93 $14,419.09 $14,877.95 $15,683.26 $14,338.44
03/31/93 $14,886.06 $15,350.30 $16,014.14 $14,767.15
04/30/93 $14,675.45 $15,123.66 $15,627.08 $14,615.05
05/31/93 $15,099.71 $15,551.24 $16,043.88 $14,828.43
06/30/93 $14,994.55 $15,433.35 $16,090.73 $14,952.99
07/31/93 $14,970.91 $15,399.19 $16,026.00 $15,053.18
08/31/93 $15,567.76 $16,003.30 $16,632.82 $15,602.62
09/30/93 $15,411.23 $15,832.53 $16,501.52 $15,624.46
10/31/93 $15,492.29 $15,905.72 $16,842.59 $15,833.83
11/30/93 $15,278.81 $15,676.74 $16,682.79 $15,589.99
12/31/93 $15,384.96 $15,775.67 $16,884.55 $15,850.34
01/31/94 $15,801.74 $16,192.98 $17,458.04 $16,316.34
02/28/94 $15,328.87 $15,699.09 $16,984.58 $15,924.75
03/31/94 $14,687.82 $15,032.55 $16,245.07 $15,273.43
04/30/94 $14,896.35 $15,236.72 $16,453.56 $15,436.85
05/31/94 $15,279.43 $15,618.84 $16,722.88 $15,589.68
06/30/94 $14,916.22 $15,237.94 $16,313.34 $15,335.57
07/31/94 $15,333.16 $15,654.17 $16,848.63 $15,729.69
08/31/94 $16,330.79 $16,662.71 $17,538.21 $16,229.89
09/30/94 $16,062.25 $16,378.44 $17,110.10 $15,947.49
10/31/94 $16,377.62 $16,689.58 $17,493.23 $16,044.77
11/30/94 $15,901.90 $16,198.55 $16,857.00 $15,444.70
12/31/94 $16,099.50 $16,389.51 $17,106.54 $15,563.62
01/31/95 $16,572.00 $16,860.08 $17,549.80 $15,865.56
02/28/95 $17,285.05 $17,575.83 $18,233.09 $16,385.95
03/31/95 $17,748.96 $18,036.35 $18,770.25 $16,775.93
04/30/95 $18,290.19 $18,575.23 $19,322.60 $17,160.10
05/31/95 $18,986.06 $19,270.11 $20,093.36 $17,683.48
06/30/95 $19,114.93 $19,389.02 $20,559.73 $17,897.45
07/31/95 $19,604.61 $19,873.38 $21,241.16 $18,378.90
08/31/95 $19,699.12 $19,956.51 $21,294.35 $18,568.20
09/30/95 $20,730.03 $20,988.60 $22,192.52 $19,179.09
10/31/95 $20,635.53 $20,879.55 $22,113.27 $18,991.14
11/30/95 $21,760.95 $22,005.41 $23,083.05 $19,819.15
12/31/95 $22,286.17 $22,522.27 $23,527.68 $20,302.74
01/31/96 $23,073.05 $23,303.13 $24,327.50 $20,794.06
02/29/96 $23,204.20 $23,421.70 $24,553.67 $20,985.37
03/31/96 $23,475.24 $23,680.36 $24,790.13 $21,266.57
04/30/96 $23,813.17 $24,006.48 $25,155.24 $21,515.39
05/31/96 $24,379.31 $24,558.88 $25,802.96 $21,848.88
06/30/96 $24,644.69 $24,806.78 $25,901.29 $21,881.65
07/31/96 $23,659.61 $23,805.21 $24,757.49 $21,113.61
08/31/96 $23,979.09 $24,109.26 $25,280.47 $21,668.90
09/30/96 $25,036.34 $25,165.57 $26,702.09 $22,500.98
10/31/96 $25,509.23 $25,623.29 $27,438.29 $23,011.75
11/30/96 $27,302.64 $27,409.30 $29,510.46 $24,316.52
12/31/96 $26,798.12 $26,880.87 $28,925.86 $24,207.10
01/31/97 $28,122.81 $28,183.59 $30,731.99 $24,988.99
02/28/97 $28,525.58 $28,578.90 $30,973.24 $25,318.84
03/31/97 $27,627.39 $27,662.32 $29,703.02 $24,546.62
04/30/97 $28,518.31 $28,527.89 $31,474.72 $25,258.47
05/31/97 $29,841.18 $29,835.27 $33,389.74 $26,718.41
06/30/97 $31,118.28 $31,091.73 $34,884.83 $27,682.94
07/31/97 $33,178.38 $33,125.35 $37,659.74 $29,462.96
08/31/97 $31,571.61 $31,501.10 $35,551.55 $28,632.10
09/30/97 $33,169.47 $33,078.91 $37,497.43 $30,060.84
10/31/97 $32,140.96 $32,033.15 $36,246.51 $29,165.03
11/30/97 $33,674.55 $33,546.75 $37,923.02 $30,069.14
12/31/97 $34,320.60 $34,158.61 $38,573.82 $30,772.76
01/31/98 $34,367.04 $34,186.38 $39,000.02 $30,732.76
02/28/98 $36,670.56 $36,454.36 $41,811.26 $32,444.57
03/31/98 $38,601.67 $38,359.06 $43,950.66 $33,885.11
04/30/98 $38,955.81 $38,674.01 $44,392.67 $33,888.50
05/31/98 $38,387.32 $38,090.43 $43,630.45 $33,329.34
06/30/98 $38,997.39 $38,676.28 $45,401.32 $33,522.65
07/31/98 $37,885.05 $37,544.74 $44,919.16 $32,570.61
08/31/98 $33,127.22 $32,805.28 $38,432.83 $28,551.39
09/30/98 $34,953.44 $34,599.36 $40,895.11 $30,113.15
10/31/98 $37,438.74 $37,032.85 $44,218.61 $31,910.91
11/30/98 $39,198.24 $38,747.51 $46,897.51 $33,276.70
12/31/98 $40,435.33 $39,951.24 $49,598.25 $34,145.22
01/31/99 $40,321.69 $39,811.06 $51,671.50 $34,032.54
02/28/99 $40,416.39 $39,885.94 $50,066.07 $33,287.23
03/31/99 $41,994.51 $41,415.93 $52,068.61 $33,992.92
04/30/99 $44,160.74 $43,525.64 $54,085.02 $36,399.61
05/31/99 $44,046.73 $43,384.99 $52,809.69 $36,028.34
</TABLE>
* 5/2/96 was the inception date of Class A Shares of the Fund. Returns prior to
that date are for Class I Shares. Performance shown for Class A Shares for the
period prior to November 11, 1994 reflects performance of the shares of the
predecessor collective investment fund (see footnote + below) adjusted to
reflect the Fund's 1994 estimate of its expense ratio for the first year of
operations as a mutual fund, including any applicable sales load (without giving
effect to any fee waivers or expense reimbursements).
** 5/2/96 and 10/1/98 were the inception dates of Class B and C Shares,
respectively, of the Fund. Returns prior to May 2, 1996 for Class B Shares and
prior to October 1, 1998 for Class C Shares are for Class I Shares, adjusted for
Class B and Class C Share expenses, respectively. Performance shown for Class B
and Class C Shares for the period prior to November 11, 1994 reflects
performance of the Shares of the predecessor collective investment fund (see
footnote + below) adjusted to reflect Class B and Class C Share expenses (before
waivers and reimbursements), respectively.
+ Prior to November 11, 1994, Norwest Investment Management managed a collective
investment fund with investment objectives and polices that were, in all
material respects, equivalent to the Fund. The performance of the Fund includes
the performance of the predecessor collective investment fund for the periods
before it became a mutual fund on November 11, 1994. The collective investment
fund was not registered under the Investment Company Act of 1940 (the "1940
Act"), nor subject to certain investment limitations, diversification
requirements and other restrictions imposed by the 1940 Act and the Internal
Revenue Code, which, if applicable, may have adversely affected the performance
results.
++ Source: Lipper Analytical Services, Inc. is an independent mutual fund rating
service that ranks funds in various fund categories by making comparative
calculations using total returns. Although gathered from reliable sources, data
accuracy and completeness cannot be guaranteed.
THE ABOVE GRAPH REPRESENTS PERFORMANCE INFORMATION OF CLASS A AND B SHARES.
PERFORMANCE OF OTHER CLASSES WILL DIFFER.
THE RETURNS ABOVE ARE CALCULATED USING THE MAXIMUM 5.75% SALES CHARGE FOR CLASS
A SHARES, THE MAXIMUM 5.00% DEFERRED SALES CHARGE (DECLINING TO ZERO AFTER THE
SIXTH YEAR) FOR CLASS B SHARES AND THE MAXIMUM 1.00% DEFERRED SALES CHARGE
(DECLINING TO ZERO AFTER ONE YEAR) FOR CLASS C SHARES.
[LOGO]
10
<PAGE>
INVESTMENT ADVISER'S REPORT AND PERFORMANCE DATA (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
VALUGROWTH STOCK FUND
The Fund's performance was -0.16% for the fiscal year ended May 31, 1999, while
the Lipper Growth Average was up 15.63%.
The Fund was underweight in large capitalization, high growth stocks and in the
technology sector, and for most of the past 12 months it held a small but
significant position in mid-cap issues versus large cap growth stocks. These are
the primary reasons for its underperformance. In addition, growth managers have
been willing to make investments at higher valuations than are typically made by
the Fund.
The U.S. economy is in the midst of a technological revolution enabled by the
widespread adoption of computer and Internet technology that has benefited a
small number of very high-tech companies and a small number of companies that
are early adopters of that technology. The Fund held some positions in such
companies, but not as much as was held by other growth funds.
The Fund style is to invest in companies that are expected to have earnings and
dividend growth faster than both inflation and the economy and to make such
investments at reasonable prices.
THE OPINIONS EXPRESSED REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH MAY
31, 1999. THE MANAGER'S OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON
MARKET AND OTHER CONDITIONS. THE COMPOSITION, INDUSTRIES AND HOLDINGS OF THE
PORTFOLIO ARE SUBJECT TO CHANGE.
THE PERFORMANCE REPRESENTS INFORMATION OF A SHARES EXCLUDING SALES LOAD. HAD THE
PERFORMANCE INCLUDED SALES LOAD, THE RETURN WOULD HAVE BEEN LOWER. THE
PERFORMANCE FOR OTHER CLASSES WILL DIFFER.
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
VALUGROWTH STOCK FUND ("FUND") VS. STANDARD & POOR'S 500 INDEX ("S&P INDEX")
AND LIPPER GROWTH AVERAGE ("LIPPER AVERAGE")
- --------------------------------------------------------------------------------
The following chart reflects the value of a $10,000 investment in the Fund,
including reinvested dividends and distributions, over the past 10 fiscal year
periods. The result is compared with a broad-based securities market index and a
peer based average. The Fund's total return includes operating expenses and
sales charges (if applicable) that reduce returns, while the total return of the
Index does not. Total return of the Fund would have been lower had certain fees
and expenses not been voluntarily waived and/or reimbursed. The Fund is
professionally managed while the Index is unmanaged and is not available for
investment. The Lipper Average does not include sales charges but does include
management fees and expenses. The Lipper Average is calculated by taking an
arithmetic average of the returns of the funds in the group. Investment return
and principal value of an investment in the Fund will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. PAST PERFORMANCE IS NOT PREDICTIVE NOR A GUARANTEE OF FUTURE RESULTS.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
AS OF MAY 31, 1999
------------------------------------------------
S&P LIPPER
A SHARES B SHARES* INDEX AVERAGE+
----------- ----------- --------- -----------
<S> <C> <C> <C> <C>
ONE YEAR (5.90)% (4.15)% 21.04% 15.63%
FIVE YEAR 13.63% 14.00% 25.84% 20.55%
TEN YEAR 12.18% 12.00% 18.10% 15.64%
VALUE MAY 31, 1999 $31,578 $31,048 $52,810 $42,797
</TABLE>
<TABLE>
<CAPTION>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
A SHARES B SHARES S&P INDEX LIPPER AVERAGE
<S> <C> <C> <C> <C>
05/31/89 $9,425.00 $10,000.00 $10,000.00 $10,000.00
06/30/89 $9,192.98 $9,747.63 $9,989.54 $9,877.00
07/31/89 $10,044.77 $10,644.61 $10,890.70 $10,600.98
08/31/89 $10,181.38 $10,782.60 $11,102.89 $10,869.19
09/30/89 $10,245.67 $10,844.01 $11,057.68 $10,889.84
10/31/89 $9,963.53 $10,538.49 $10,801.25 $10,544.63
11/30/89 $10,213.42 $10,796.31 $11,020.63 $10,697.53
12/31/89 $10,334.34 $10,916.97 $11,284.90 $10,814.13
01/31/90 $9,772.33 $10,316.31 $10,527.68 $10,114.46
02/28/90 $9,940.09 $10,487.48 $10,664.28 $10,285.39
03/31/90 $10,393.06 $10,958.69 $10,946.66 $10,591.90
04/30/90 $10,258.41 $10,809.96 $10,673.98 $10,359.93
05/31/90 $11,411.32 $12,017.98 $11,712.46 $11,334.80
06/30/90 $11,537.56 $12,143.48 $11,633.51 $11,369.94
07/31/90 $11,309.34 $11,895.54 $11,596.33 $11,184.61
08/31/90 $10,168.26 $10,687.74 $10,549.41 $10,165.69
09/30/90 $9,635.76 $10,121.41 $10,036.71 $9,585.23
10/31/90 $9,431.83 $9,900.75 $9,994.28 $9,409.82
11/30/90 $9,916.17 $10,403.07 $10,639.04 $10,048.75
12/31/90 $10,205.07 $10,699.50 $10,935.25 $10,403.47
01/31/91 $10,768.23 $11,283.13 $11,410.28 $11,081.78
02/28/91 $11,604.43 $12,152.82 $12,225.30 $11,881.88
03/31/91 $11,877.47 $12,431.01 $12,521.04 $12,271.61
04/30/91 $11,868.92 $12,414.39 $12,550.46 $12,259.34
05/31/91 $12,476.48 $13,041.97 $13,090.39 $12,799.97
06/30/91 $11,877.47 $12,407.74 $12,491.11 $12,147.17
07/31/91 $12,598.88 $13,153.45 $13,072.83 $12,790.97
08/31/91 $12,847.94 $13,405.10 $13,381.64 $13,183.66
09/30/91 $12,504.41 $13,038.38 $13,157.63 $13,058.41
10/31/91 $12,780.18 $13,317.62 $13,333.78 $13,331.33
11/30/91 $12,478.56 $12,995.10 $12,798.30 $12,811.41
12/31/91 $13,969.43 $14,539.40 $14,259.48 $14,256.54
01/31/92 $13,960.80 $14,521.15 $13,993.74 $14,292.18
02/29/92 $14,098.94 $14,656.18 $14,175.24 $14,509.42
03/31/92 $13,753.38 $14,287.61 $13,899.81 $14,093.00
04/30/92 $14,099.38 $14,638.24 $14,307.38 $14,052.13
05/31/92 $14,134.00 $14,664.84 $14,377.35 $14,164.55
06/30/92 $13,761.14 $14,268.93 $14,163.56 $13,772.19
07/31/92 $14,333.79 $14,853.62 $14,742.05 $14,262.48
08/31/92 $14,290.39 $14,799.17 $14,440.58 $13,957.26
09/30/92 $14,446.75 $14,951.98 $14,610.33 $14,193.14
10/31/92 $14,516.33 $15,014.46 $14,660.48 $14,475.58
11/30/92 $15,282.18 $15,797.33 $15,158.31 $15,197.92
12/31/92 $15,317.02 $15,823.03 $15,344.29 $15,460.84
01/31/93 $15,192.20 $15,684.01 $15,472.46 $15,652.55
02/28/93 $15,281.41 $15,767.07 $15,683.26 $15,434.98
03/31/93 $15,781.26 $16,272.77 $16,014.14 $15,874.88
04/30/93 $15,165.02 $15,627.29 $15,627.08 $15,392.28
05/31/93 $15,450.98 $15,912.01 $16,043.88 $15,971.03
06/30/93 $15,415.20 $15,865.33 $16,090.73 $16,010.96
07/31/93 $15,155.44 $15,587.87 $16,026.00 $15,948.52
08/31/93 $15,872.43 $16,306.17 $16,632.82 $16,634.31
09/30/93 $15,655.75 $16,075.73 $16,501.52 $16,787.34
10/31/93 $15,880.43 $16,260.19 $16,842.59 $17,022.36
11/30/93 $15,661.74 $16,026.53 $16,682.79 $16,715.96
12/31/93 $16,335.04 $16,709.11 $16,884.55 $17,189.02
01/31/94 $16,820.25 $17,195.60 $17,458.04 $17,744.23
02/28/94 $16,592.09 $16,952.22 $16,984.58 $17,462.10
03/31/94 $15,843.30 $16,174.86 $16,245.07 $16,653.60
04/30/94 $15,687.97 $16,006.17 $16,453.56 $16,716.88
05/31/94 $15,712.66 $16,040.87 $16,722.88 $16,802.14
06/30/94 $15,181.89 $15,487.41 $16,313.34 $16,230.87
07/31/94 $15,772.85 $16,083.44 $16,848.63 $16,662.61
08/31/94 $16,502.38 $16,815.79 $17,538.21 $17,454.08
09/30/94 $16,052.90 $16,355.47 $17,110.10 $17,129.44
10/31/94 $16,300.86 $16,590.46 $17,493.23 $17,412.07
11/30/94 $15,607.11 $15,870.98 $16,857.00 $16,764.34
12/31/94 $15,645.71 $15,910.49 $17,106.54 $16,911.87
01/31/95 $15,839.09 $16,089.47 $17,549.80 $17,043.78
02/28/95 $16,410.37 $16,664.43 $18,233.09 $17,686.33
03/31/95 $16,760.70 $17,003.94 $18,770.25 $18,188.62
04/30/95 $17,083.56 $17,324.77 $19,322.60 $18,579.68
05/31/95 $17,397.36 $17,625.95 $20,093.36 $19,150.08
06/30/95 $17,916.87 $18,145.75 $20,559.73 $19,975.44
07/31/95 $18,379.36 $18,609.09 $21,241.16 $20,928.27
08/31/95 $18,305.33 $18,514.48 $21,294.35 $21,083.14
09/30/95 $18,680.32 $18,883.63 $22,192.52 $21,702.99
10/31/95 $18,309.68 $18,495.35 $22,113.27 $21,394.80
11/30/95 $19,478.72 $19,670.26 $23,083.05 $22,165.02
12/31/95 $19,358.86 $19,528.75 $23,527.68 $22,227.08
01/31/96 $19,536.21 $19,700.47 $24,327.50 $22,729.41
02/29/96 $20,105.86 $20,258.84 $24,553.67 $23,265.82
03/31/96 $20,442.20 $20,588.22 $24,790.13 $23,449.62
04/30/96 $20,745.98 $20,879.47 $25,155.24 $24,207.05
05/31/96 $21,171.37 $21,290.18 $25,802.96 $24,843.69
06/30/96 $21,051.06 $21,157.45 $25,901.29 $24,528.18
07/31/96 $20,134.17 $20,220.94 $24,757.49 $23,098.19
08/31/96 $20,835.87 $20,908.99 $25,280.47 $23,890.45
09/30/96 $22,184.08 $22,257.37 $26,702.09 $25,280.88
10/31/96 $22,296.59 $22,343.42 $27,438.29 $25,498.29
11/30/96 $23,768.65 $23,806.21 $29,510.46 $27,079.19
12/31/96 $23,338.26 $23,361.04 $28,925.86 $26,664.88
01/31/97 $24,711.10 $24,718.99 $30,731.99 $28,000.79
02/28/97 $24,648.70 $24,644.73 $30,973.24 $27,656.38
03/31/97 $23,534.83 $23,509.56 $29,703.02 $26,373.12
04/30/97 $24,732.93 $24,697.77 $31,474.72 $27,409.58
05/31/97 $26,108.14 $26,045.12 $33,389.74 $29,396.78
06/30/97 $26,986.40 $26,915.06 $34,884.83 $30,552.07
07/31/97 $29,479.53 $29,376.35 $37,659.74 $33,100.12
08/31/97 $27,847.71 $27,727.37 $35,551.55 $31,987.95
09/30/97 $29,074.78 $28,941.96 $37,497.43 $33,756.89
10/31/97 $27,813.62 $27,657.96 $36,246.51 $32,480.87
11/30/97 $28,427.16 $28,259.47 $37,923.02 $33,042.79
12/31/97 $28,615.42 $28,429.30 $38,573.82 $33,369.92
01/31/98 $28,988.93 $28,772.71 $39,000.02 $33,546.78
02/28/98 $31,085.38 $30,845.43 $41,811.26 $36,079.56
03/31/98 $32,196.26 $31,921.03 $43,950.66 $37,681.49
04/30/98 $32,619.10 $32,338.46 $44,392.67 $38,133.67
05/31/98 $31,628.45 $31,331.72 $43,630.45 $37,012.54
06/30/98 $32,333.99 $32,006.97 $45,401.32 $38,337.59
07/31/98 $30,628.38 $30,300.42 $44,919.16 $37,440.49
08/31/98 $25,511.55 $25,217.61 $38,432.83 $31,311.48
09/30/98 $26,608.68 $26,285.74 $40,895.11 $33,168.25
10/31/98 $28,789.72 $28,421.99 $44,218.61 $35,519.88
11/30/98 $30,861.70 $30,447.75 $46,897.51 $37,675.94
12/31/98 $31,318.52 $30,883.40 $49,598.25 $40,656.11
01/31/99 $32,069.46 $31,603.71 $51,671.50 $42,318.94
02/28/99 $30,670.66 $30,208.11 $50,066.07 $40,596.56
03/31/99 $32,050.68 $31,543.69 $52,068.61 $42,374.69
04/30/99 $32,626.44 $32,098.93 $54,085.02 $43,599.32
05/31/99 $31,578.26 $31,048.47 $52,809.69 $42,797.09
</TABLE>
* 8/5/93 was the inception date of Class B Shares of the Fund. Returns prior to
that date are for Class A Shares, adjusted for Class B Share expenses.
+ Source: Lipper Analytical Services, Inc. is an independent mutual fund rating
service that ranks funds in various fund categories by making comparative
calculations using total returns. Although gathered from reliable sources, data
accuracy and completeness cannot be guaranteed.
THE ABOVE GRAPH REPRESENTS PERFORMANCE INFORMATION OF CLASS A AND B SHARES.
PERFORMANCE OF OTHER CLASSES WILL DIFFER.
THE RETURNS ABOVE ARE CALCULATED USING THE MAXIMUM 5.75% SALES CHARGE FOR CLASS
A SHARES AND THE MAXIMUM 5.00% DEFERRED SALES CHARGE (DECLINING TO ZERO AFTER
THE SIXTH YEAR) FOR CLASS B SHARES.
[LOGO]
11
<PAGE>
INVESTMENT ADVISER'S REPORT AND PERFORMANCE DATA MAY 31, 1999
- --------------------------------------------------------------------------------
DIVERSIFIED EQUITY FUND
During the fiscal year ended May 31, 1999, the Fund returned 15.08%. We employ
five unique and complementary equity styles that make up the strategic asset
allocation of the Fund to help moderate the volatility of the Fund's annual
return, improve its performance and provide effective diversification across a
broad equity spectrum.
For most of the fiscal year, investors continued to rotate back to growth
stocks. A low interest rate environment, along with moderate economic growth,
boosted the market in general, and growth stocks in particular. While stocks
with large market capitalizations and high price/earnings ratios performed best
during the period, small stocks rebounded during the final two-thirds of the
fiscal year, and showed signs of improved momentum as the fiscal year closed. In
Continental Europe, holdings in telecommunications, semiconductor and oil
sectors performed well. The area where stock selection detracted was in Japan.
Limited growth prospects and big challenges in improving returns are expected to
continue for many Japanese banks. Economic growth is expected to moderate in the
U.S. and parts of Europe, but the rest of the world may witness an upturn in
growth.
The large company style of the Diversified Equity Fund, which invests in large
cap growth stocks, gained 33.41% during the fiscal year. The income equity
style, which purchases higher-yielding large cap issues, returned 14.75%, while
the index style, which tracks the S&P 500 Index, returned 20.57%. The
diversified small cap style, which is comprised of a diversified portfolio of
small company growth and value stocks, fell -14.54% during the year. The
international style of non-U.S. growth stocks decreased -1.32% during the
period.
THE OPINIONS EXPRESSED REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH MAY
31, 1999. THE MANAGER'S OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON
MARKET AND OTHER CONDITIONS. THE COMPOSITION, INDUSTRIES AND HOLDINGS OF THE
PORTFOLIO ARE SUBJECT TO CHANGE.
THE PERFORMANCE REPRESENTS INFORMATION OF A SHARES EXCLUDING SALES LOAD. HAD THE
PERFORMANCE INCLUDED SALES LOAD, THE RETURN WOULD HAVE BEEN LOWER. THE
PERFORMANCE FOR OTHER CLASSES WILL DIFFER.
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
DIVERSIFIED EQUITY FUND ("FUND") VS. STANDARD & POOR'S 500 INDEX ("S&P INDEX"),
FUND COMPOSITE BENCHMARK ("BENCHMARK") AND LIPPER GROWTH & INCOME AVERAGE
("LIPPER AVERAGE")
- --------------------------------------------------------------------------------
The following chart reflects the value of a $10,000 investment in the Fund,
including reinvested dividends and distributions, over the past 10 fiscal year
periods. The result is compared with a broad-based securities market index and
two peer based averages. The Fund's total return includes operating expenses and
sales charges (if applicable) that reduce returns, while the total return of the
Index does not. Total return of the Fund would have been lower had certain fees
and expenses not been voluntarily waived and/or reimbursed. The Fund is
professionally managed while the Index is unmanaged and is not available for
investment. The Lipper Average does not include sales charges but does include
management fees and expenses. The Lipper Average is calculated by taking an
arithmetic average of the returns of the funds in the group. Investment return
and principal value of an investment in the Fund will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. PAST PERFORMANCE IS NOT PREDICTIVE NOR A GUARANTEE OF FUTURE RESULTS.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1999
----------------------------------------------------------------------------
LIPPER
A SHARES*+ B SHARES**+ C SHARES**+ S&P INDEX BENCHMARK++ AVERAGE+++
----------- ----------- ----------- --------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
ONE YEAR 8.46% 10.24% 14.49% 21.04% 10.34% 11.42%
FIVE YEAR 19.81% 20.25% 20.41% 25.84% 18.68% 20.06%
TEN YEAR 15.75% 15.58% 15.61% 18.10% 14.46% 14.92%
VALUE MAY 31, 1999 $43,173 $42,526 $42,639 $52,810 $38,616 $40,209
</TABLE>
<TABLE>
<CAPTION>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
A SHARES B SHARES S&P INDEX BENCHMARK LIPPER AVERAGE
<S> <C> <C> <C> <C> <C>
05/31/89 $9,425.00 $10,000.00 $10,000.00 $10,000.00 $10,000.00
06/30/89 $9,294.80 $9,855.69 $9,989.54 $9,925.00 $9,948.00
07/31/89 $10,133.71 $10,738.95 $10,890.70 $10,673.35 $10,631.43
08/31/89 $10,331.02 $10,941.20 $11,102.89 $10,856.93 $10,852.56
09/30/89 $10,384.60 $10,991.21 $11,057.68 $10,916.64 $10,808.07
10/31/89 $10,069.60 $10,650.81 $10,801.25 $10,561.85 $10,498.96
11/30/89 $10,297.50 $10,885.29 $11,020.63 $10,749.85 $10,662.74
12/31/89 $10,489.09 $11,080.88 $11,284.90 $10,980.97 $10,809.88
01/31/90 $9,841.56 $10,389.76 $10,527.68 $10,357.25 $10,193.72
02/28/90 $9,907.97 $10,453.89 $10,664.28 $10,443.22 $10,322.16
03/31/90 $10,189.81 $10,744.60 $10,946.66 $10,652.08 $10,543.06
04/30/90 $10,064.04 $10,605.36 $10,673.98 $10,401.76 $10,284.75
05/31/90 $11,165.77 $11,759.59 $11,712.46 $11,278.63 $11,091.08
06/30/90 $11,276.14 $11,868.58 $11,633.51 $11,294.42 $11,086.64
07/31/90 $11,167.10 $11,746.26 $11,596.33 $11,236.81 $11,000.16
08/31/90 $10,151.38 $10,670.38 $10,549.41 $10,200.78 $10,116.85
09/30/90 $9,487.23 $9,965.69 $10,036.71 $9,553.03 $9,617.08
10/31/90 $9,540.55 $10,015.36 $9,994.28 $9,542.52 $9,469.94
11/30/90 $10,046.23 $10,540.02 $10,639.04 $10,029.19 $10,035.29
12/31/90 $10,344.08 $10,845.80 $10,935.25 $10,287.94 $10,328.32
01/31/91 $10,994.36 $11,520.72 $11,410.28 $10,792.05 $10,826.15
02/28/91 $11,835.60 $12,395.60 $12,225.30 $11,569.08 $11,532.01
03/31/91 $12,121.51 $12,687.14 $12,521.04 $11,809.72 $11,800.71
04/30/91 $12,097.48 $12,654.17 $12,550.46 $11,843.97 $11,813.69
05/31/91 $12,675.41 $13,250.63 $13,090.39 $12,291.67 $12,289.78
06/30/91 $12,015.68 $12,552.79 $12,491.11 $11,723.79 $11,778.53
07/31/91 $12,669.89 $13,228.25 $13,072.83 $12,277.16 $12,273.22
08/31/91 $13,014.24 $13,579.36 $13,381.64 $12,560.76 $12,555.51
09/30/91 $12,944.98 $13,498.72 $13,157.63 $12,540.66 $12,436.23
10/31/91 $13,246.38 $13,804.41 $13,333.78 $12,740.06 $12,624.02
11/30/91 $12,811.97 $13,343.19 $12,798.30 $12,257.21 $12,125.37
12/31/91 $14,231.67 $14,813.26 $14,259.48 $13,424.10 $13,323.36
01/31/92 $14,110.44 $14,677.64 $13,993.74 $13,444.23 $13,323.36
02/29/92 $14,132.71 $14,692.05 $14,175.24 $13,620.35 $13,563.18
03/31/92 $13,774.50 $14,310.31 $13,899.81 $13,289.38 $13,338.03
04/30/92 $13,926.96 $14,459.88 $14,307.38 $13,454.17 $13,566.11
05/31/92 $14,114.27 $14,645.15 $14,377.35 $13,621.00 $13,650.22
06/30/92 $13,722.69 $14,229.81 $14,163.56 $13,328.15 $13,378.58
07/31/92 $14,196.70 $14,712.27 $14,742.05 $13,670.68 $13,822.75
08/31/92 $13,932.86 $14,429.48 $14,440.58 $13,461.52 $13,547.67
09/30/92 $14,056.93 $14,549.08 $14,610.33 $13,571.90 $13,706.18
10/31/92 $14,151.29 $14,637.47 $14,660.48 $13,642.48 $13,788.42
11/30/92 $14,743.77 $15,241.28 $15,158.31 $14,140.43 $14,305.49
12/31/92 $14,906.38 $15,399.67 $15,344.29 $14,385.06 $14,532.94
01/31/93 $14,920.53 $15,404.48 $15,472.46 $14,550.48 $14,701.52
02/28/93 $14,811.38 $15,282.93 $15,683.26 $14,617.42 $14,833.84
03/31/93 $15,346.02 $15,824.86 $16,014.14 $15,083.71 $15,223.97
04/30/93 $14,986.37 $15,444.22 $15,627.08 $14,904.22 $14,960.59
05/31/93 $15,493.33 $15,956.84 $16,043.88 $15,323.02 $15,306.18
06/30/93 $15,419.07 $15,870.52 $16,090.73 $15,339.88 $15,367.41
07/31/93 $15,515.29 $15,959.45 $16,026.00 $15,416.58 $15,358.19
08/31/93 $16,217.57 $16,671.67 $16,632.82 $16,081.03 $15,923.37
09/30/93 $16,273.65 $16,719.03 $16,501.52 $16,126.06 $15,912.22
10/31/93 $16,539.18 $16,981.18 $16,842.59 $16,448.58 $16,146.13
11/30/93 $16,188.37 $16,610.53 $16,682.79 $16,121.25 $15,931.39
12/31/93 $16,715.95 $17,141.29 $16,884.55 $16,641.97 $16,289.84
01/31/94 $17,279.06 $17,707.81 $17,458.04 $17,231.10 $16,802.97
02/28/94 $16,931.81 $17,341.76 $16,984.58 $16,883.03 $16,465.24
03/31/94 $16,159.19 $16,539.39 $16,245.07 $16,131.73 $15,786.87
04/30/94 $16,335.61 $16,709.76 $16,453.56 $16,302.73 $15,952.63
05/31/94 $16,482.64 $16,849.51 $16,722.88 $16,392.40 $16,108.97
06/30/94 $15,950.84 $16,295.49 $16,313.34 $15,997.34 $15,736.85
07/31/94 $16,473.79 $16,819.36 $16,848.63 $16,429.27 $16,177.48
08/31/94 $17,295.79 $17,647.88 $17,538.21 $17,089.72 $16,788.99
09/30/94 $16,968.81 $17,303.38 $17,110.10 $16,775.27 $16,402.84
10/31/94 $17,277.77 $17,607.40 $17,493.23 $17,031.93 $16,589.83
11/30/94 $16,631.47 $16,942.85 $16,857.00 $16,372.80 $15,982.65
12/31/94 $16,854.46 $17,159.22 $17,106.54 $16,508.69 $16,155.26
01/31/95 $17,038.99 $17,336.16 $17,549.80 $16,587.93 $16,408.90
02/28/95 $17,569.54 $17,865.99 $18,233.09 $17,110.45 $17,032.43
03/31/95 $18,138.53 $18,433.20 $18,770.25 $17,589.55 $17,473.57
04/30/95 $18,622.94 $18,914.12 $19,322.60 $18,020.49 $17,882.46
05/31/95 $19,199.62 $19,487.77 $20,093.36 $18,525.06 $18,476.15
06/30/95 $19,799.37 $20,084.50 $20,559.73 $18,995.60 $18,873.39
07/31/95 $20,668.24 $20,953.09 $21,241.16 $19,797.22 $19,501.88
08/31/95 $20,737.44 $21,009.90 $21,294.35 $19,874.42 $19,640.34
09/30/95 $21,537.10 $21,807.12 $22,192.52 $20,480.59 $20,259.01
10/31/95 $21,168.03 $21,419.52 $22,113.27 $20,210.25 $20,011.85
11/30/95 $21,883.11 $22,129.90 $23,083.05 $20,945.90 $20,894.37
12/31/95 $22,068.41 $22,302.85 $23,527.68 $21,316.65 $21,247.49
01/31/96 $22,698.26 $22,925.19 $24,327.50 $21,809.06 $21,846.67
02/29/96 $23,123.41 $23,340.93 $24,553.67 $22,138.38 $22,176.55
03/31/96 $23,430.46 $23,636.00 $24,790.13 $22,426.18 $22,484.80
04/30/96 $24,086.09 $24,282.46 $25,155.24 $23,027.20 $22,869.29
05/31/96 $24,642.49 $24,819.79 $25,802.96 $23,501.56 $23,322.11
06/30/96 $24,553.79 $24,714.14 $25,901.29 $23,393.45 $23,256.80
07/31/96 $23,360.37 $23,503.22 $24,757.49 $22,261.21 $22,268.39
08/31/96 $23,836.12 $23,966.46 $25,280.47 $22,884.52 $22,896.36
09/30/96 $25,110.18 $25,234.27 $26,702.09 $23,946.36 $23,954.17
10/31/96 $25,279.51 $25,380.55 $27,438.29 $24,228.93 $24,433.25
11/30/96 $26,868.05 $26,965.31 $29,510.46 $25,629.36 $26,060.51
12/31/96 $26,585.81 $26,660.56 $28,925.86 $25,424.33 $25,789.48
01/31/97 $27,873.54 $27,938.69 $30,731.99 $26,387.91 $26,911.32
02/28/97 $27,865.39 $27,914.11 $30,973.24 $26,393.19 $27,056.64
03/31/97 $26,732.51 $26,758.87 $29,703.02 $25,487.90 $26,096.13
04/30/97 $27,857.24 $27,873.14 $31,474.72 $26,293.32 $27,061.69
05/31/97 $29,756.22 $29,749.38 $33,389.74 $28,094.41 $28,742.22
06/30/97 $31,149.90 $31,125.83 $34,884.83 $29,280.00 $29,851.67
07/31/97 $33,301.54 $33,256.05 $37,659.74 $31,244.68 $32,048.75
08/31/97 $31,598.16 $31,527.30 $35,551.55 $30,041.76 $30,946.28
09/30/97 $33,464.54 $33,378.95 $37,497.43 $31,745.13 $32,512.16
10/31/97 $32,103.47 $31,994.31 $36,246.51 $30,443.58 $31,374.23
11/30/97 $32,951.08 $32,821.82 $37,923.02 $31,070.72 $32,233.89
12/31/97 $33,413.22 $33,258.72 $38,573.82 $31,524.35 $32,772.19
01/31/98 $33,796.58 $33,616.25 $39,000.02 $31,700.89 $32,804.96
02/28/98 $36,183.86 $35,970.69 $41,811.26 $33,866.06 $35,042.26
03/31/98 $37,769.57 $37,522.88 $43,950.66 $35,464.54 $36,598.14
04/30/98 $38,327.18 $38,054.81 $44,392.67 $35,758.89 $36,847.01
05/31/98 $37,516.90 $37,226.40 $43,630.45 $34,997.23 $36,087.96
06/30/98 $38,719.26 $38,403.62 $45,401.32 $35,700.67 $36,687.02
07/31/98 $38,048.38 $37,706.01 $44,919.16 $34,961.67 $35,736.82
08/31/98 $32,437.40 $32,125.10 $38,432.83 $29,738.39 $30,504.95
09/30/98 $34,101.52 $33,755.77 $40,895.11 $31,073.65 $32,121.72
10/31/98 $36,384.25 $35,996.85 $44,218.61 $33,186.66 $34,460.18
11/30/98 $38,545.00 $38,107.13 $46,897.51 $35,015.24 $36,207.31
12/31/98 $40,882.33 $40,394.58 $49,598.25 $36,864.05 $37,822.15
01/31/99 $42,063.44 $41,527.05 $51,671.50 $37,641.88 $38,442.44
02/28/99 $40,846.54 $40,305.40 $50,066.07 $36,301.83 $37,246.88
03/31/99 $42,296.08 $41,714.31 $52,068.61 $37,510.68 $38,464.85
04/30/99 $43,870.89 $43,239.14 $54,085.02 $39,299.94 $40,738.12
05/31/99 $43,172.96 $42,525.77 $52,809.69 $38,616.12 $40,208.53
</TABLE>
* 5/2/96 was the inception date of Class A Shares of the Fund. Returns prior to
that date are for Class I Shares. Performance shown for Class A Shares for the
period prior to November 11, 1994 reflects performance of the shares of the
predecessor collective investment fund (see footnote + below) adjusted to
reflect the Fund's 1994 estimate of its expense ratio for the first year of
operations as a mutual fund, including any applicable sales load (without giving
effect to any fee waivers or expense reimbursements).
** 5/6/96 and 10/1/98 were the inception dates of Class B and C Shares,
respectively, of the Fund. Returns prior to May 6, 1996 for Class B Shares and
prior to October 1, 1998 for Class C Shares are for Class I Shares, adjusted for
Class B and Class C Share expenses, respectively. Performance shown for Class B
and Class C Shares for the period prior to November 11, 1994 reflects
performance of the shares of the predecessor collective investment fund (see
footnote + below) adjusted to reflect Class B and Class C Share expenses (before
waivers and reimbursements), respectively.
+ Prior to November 11, 1994, Norwest Investment Management managed a collective
investment fund with investment objectives and polices that were, in all
material respects, equivalent to the Fund. The performance of the Fund includes
the performance of the predecessor collective investment fund for the periods
before it became a mutual fund on November 11, 1994. The collective investment
fund was not registered under the Investment Company Act of 1940 (the "1940
Act"), nor subject to certain investment limitations, diversification
requirements and other restrictions imposed by the 1940 Act and the Internal
Revenue Code, which, if applicable, may have adversely affected the performance
results.
++ Composite benchmark represents the appropriate base allocation percentages
applied to the Lipper Universe averages.
+++ Source: Lipper Analytical Services, Inc. is an independent mutual fund
rating service that ranks funds in various fund categories by making comparative
calculations using total returns. Although gathered from reliable sources, data
accuracy and completeness cannot be guaranteed.
THE ABOVE GRAPH REPRESENTS PERFORMANCE INFORMATION OF CLASS A AND B SHARES.
PERFORMANCE OF OTHER CLASSES WILL DIFFER.
THE RETURNS ABOVE ARE CALCULATED USING THE MAXIMUM 5.75% SALES CHARGE FOR CLASS
A SHARES, THE MAXIMUM 5.00% DEFERRED SALES CHARGE (DECLINING TO ZERO AFTER THE
SIXTH YEAR) FOR CLASS B SHARES AND THE MAXIMUM 1.00% DEFERRED SALES CHARGE
(DECLINING TO ZERO AFTER ONE YEAR) FOR CLASS C SHARES.
[LOGO]
12
<PAGE>
INVESTMENT ADVISER'S REPORT AND PERFORMANCE DATA MAY 31, 1999
- --------------------------------------------------------------------------------
GROWTH EQUITY FUND
During the fiscal year ended May 31, 1999, the Fund experienced a gain of 7.57%.
The Fund is globally diversified, with investments in large and small
capitalization stocks spread over the domestic and international markets. Using
three equity styles helps us moderate the volatility of the Fund's annual
return, improve its performance and provide effective diversification across
equity investing.
For most of the fiscal year, investors continued to rotate back to growth
stocks. A low interest rate environment, along with moderate economic growth,
boosted the market in general, and growth stocks in particular. While stocks
with large market capitalizations and high price/earnings ratios performed best
during the period, small stocks rebounded during the final two-thirds of the
fiscal year, and showed signs of improved momentum as the fiscal year closed. In
Continental Europe, holdings in telecommunications, semiconductor and oil
sectors performed well. The area where stock selection detracted was in Japan.
Limited growth prospects and big challenges in improving returns are expected to
continue for many Japanese banks. Economic growth is expected to moderate in the
U.S. and parts of Europe, but the rest of the world may witness an upturn in
growth.
The large company growth portfolio of the Growth Equity Fund returned 33.41%
during the fiscal year. The small company style, which is comprised of a
diversified portfolio of small company growth and value stocks, decreased
- -14.54%. The international portfolio segment decreased -1.32% during the period.
THE OPINIONS EXPRESSED REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH MAY
31, 1999. THE MANAGER'S OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON
MARKET AND OTHER CONDITIONS. THE COMPOSITION, INDUSTRIES AND HOLDINGS OF THE
PORTFOLIO ARE SUBJECT TO CHANGE.
THE PERFORMANCE REPRESENTS INFORMATION OF A SHARES EXCLUDING SALES LOAD. HAD THE
PERFORMANCE INCLUDED SALES LOAD, THE RETURN WOULD HAVE BEEN LOWER. THE
PERFORMANCE FOR OTHER CLASSES WILL DIFFER.
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
GROWTH EQUITY FUND ("FUND") VS. STANDARD & POOR'S 500 INDEX ("S&P INDEX"), FUND
COMPOSITE
BENCHMARK ("BENCHMARK") AND LIPPER GROWTH AVERAGE ("LIPPER AVERAGE")
- --------------------------------------------------------------------------------
The following chart reflects the value of a $10,000 investment in the Fund,
including reinvested dividends and distributions, over the past 10 fiscal year
periods. The result is compared with a broad-based securities market index and
two peer based averages. The Fund's total return includes operating expenses and
sales charges (if applicable) that reduce returns, while the total return of the
Index does not. Total return of the Fund would have been lower had certain fees
and expenses not been voluntarily waived and/or reimbursed. The Fund is
professionally managed while the Index is unmanaged and is not available for
investment. The Lipper Average does not include sales charges but does include
management fees and expenses. The Lipper Average is calculated by taking an
arithmetic average of the returns of the funds in the group. Investment return
and principal value of an investment in the Fund will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. PAST PERFORMANCE IS NOT PREDICTIVE NOR A GUARANTEE OF FUTURE RESULTS.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1999
------------------------------------------------------------------------------
S&P LIPPER
A SHARES*+ B SHARES**+ C SHARES**+ INDEX BENCHMARK++ AVERAGE+++
----------- ------------ ------------ --------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
ONE YEAR 1.39% 2.78% 7.63% 21.04% 3.63% 15.63%
FIVE YEAR 15.35% 15.75% 16.04% 25.84% 14.90% 20.55%
TEN YEAR 14.88% 14.70% 14.79% 18.10% 13.03% 15.64%
VALUE MAY 31, 1999 $40,019 $39,420 $39,726 $52,810 $34,056 $42,797
</TABLE>
<TABLE>
<CAPTION>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
A SHARES B SHARES S&P INDEX BENCHMARK LIPPER AVERAGE
<S> <C> <C> <C> <C> <C>
05/31/89 $9,425.00 $10,000.00 $10,000.00 $10,000.00 $10,000.00
06/30/89 $9,220.51 $9,776.88 $9,989.54 $9,852.00 $9,877.00
07/31/89 $10,075.58 $10,677.31 $10,890.70 $10,570.21 $10,600.98
08/31/89 $10,356.84 $10,968.56 $11,102.89 $10,763.65 $10,869.19
09/30/89 $10,530.47 $11,145.69 $11,057.68 $10,936.94 $10,889.84
10/31/89 $10,026.22 $10,604.88 $10,801.25 $10,486.34 $10,544.63
11/30/89 $10,256.99 $10,842.43 $11,020.63 $10,682.43 $10,697.53
12/31/89 $10,440.65 $11,029.67 $11,284.90 $10,939.88 $10,814.13
01/31/90 $9,801.33 $10,347.25 $10,527.68 $10,319.59 $10,114.46
02/28/90 $9,903.75 $10,449.43 $10,664.28 $10,392.86 $10,285.39
03/31/90 $10,201.97 $10,757.42 $10,946.66 $10,647.48 $10,591.90
04/30/90 $10,138.70 $10,684.07 $10,673.98 $10,429.21 $10,359.93
05/31/90 $11,401.15 $12,007.63 $11,712.46 $11,350.11 $11,334.80
06/30/90 $11,628.67 $12,239.85 $11,633.51 $11,465.88 $11,369.94
07/31/90 $11,434.00 $12,027.14 $11,596.33 $11,391.35 $11,184.61
08/31/90 $10,259.63 $10,784.19 $10,549.41 $10,167.92 $10,165.69
09/30/90 $9,286.83 $9,755.01 $10,036.71 $9,320.93 $9,585.23
10/31/90 $9,383.32 $9,850.15 $9,994.28 $9,359.15 $9,409.82
11/30/90 $9,880.45 $10,365.94 $10,639.04 $9,770.95 $10,048.75
12/31/90 $10,298.31 $10,797.73 $10,935.25 $10,067.01 $10,403.47
01/31/91 $11,121.21 $11,653.66 $11,410.28 $10,679.08 $11,081.78
02/28/91 $12,067.70 $12,638.76 $12,225.30 $11,531.28 $11,881.88
03/31/91 $12,387.26 $12,965.40 $12,521.04 $11,809.18 $12,271.61
04/30/91 $12,289.34 $12,854.90 $12,550.46 $11,822.17 $12,259.34
05/31/91 $12,964.15 $13,552.58 $13,090.39 $12,230.03 $12,799.97
06/30/91 $12,151.44 $12,694.63 $12,491.11 $11,596.52 $12,147.17
07/31/91 $13,007.95 $13,581.34 $13,072.83 $12,205.34 $12,790.97
08/31/91 $13,467.60 $14,052.61 $13,381.64 $12,504.37 $13,183.66
09/30/91 $13,631.44 $14,214.90 $13,157.63 $12,608.15 $13,058.41
10/31/91 $14,185.96 $14,784.09 $13,333.78 $12,862.84 $13,331.33
11/30/91 $13,616.00 $14,180.99 $12,798.30 $12,372.76 $12,811.41
12/31/91 $15,109.73 $15,727.67 $14,259.48 $13,524.67 $14,256.54
01/31/92 $15,403.86 $16,023.81 $13,993.74 $13,796.51 $14,292.18
02/29/92 $15,297.10 $15,903.20 $14,175.24 $13,962.07 $14,509.42
03/31/92 $14,631.70 $15,201.32 $13,899.81 $13,490.15 $14,093.00
04/30/92 $14,461.17 $15,014.77 $14,307.38 $13,382.23 $14,052.13
05/31/92 $14,748.51 $15,303.55 $14,377.35 $13,616.42 $14,164.55
06/30/92 $14,134.70 $14,657.20 $14,163.56 $13,171.16 $13,772.19
07/31/92 $14,492.79 $15,019.20 $14,742.05 $13,362.15 $14,262.48
08/31/92 $14,263.85 $14,772.38 $14,440.58 $13,196.46 $13,957.26
09/30/92 $14,413.17 $14,917.91 $14,610.33 $13,286.19 $14,193.14
10/31/92 $14,677.05 $15,181.53 $14,660.48 $13,442.97 $14,475.58
11/30/92 $15,560.13 $16,085.60 $15,158.31 $14,069.41 $15,197.92
12/31/92 $15,873.64 $16,399.46 $15,344.29 $14,377.53 $15,460.84
01/31/93 $16,000.80 $16,520.38 $15,472.46 $14,571.63 $15,652.55
02/28/93 $15,460.71 $15,953.25 $15,683.26 $14,431.74 $15,434.98
03/31/93 $16,188.15 $16,693.70 $16,014.14 $15,001.79 $15,874.88
04/30/93 $15,959.73 $16,447.85 $15,627.08 $14,907.28 $15,392.28
05/31/93 $16,628.61 $17,126.72 $16,043.88 $15,476.74 $15,971.03
06/30/93 $16,548.42 $17,033.57 $16,090.73 $15,439.60 $16,010.96
07/31/93 $16,775.24 $17,256.19 $16,026.00 $15,601.71 $15,948.52
08/31/93 $17,765.43 $18,263.77 $16,632.82 $16,381.80 $16,634.31
09/30/93 $18,128.43 $18,625.69 $16,501.52 $16,583.29 $16,787.34
10/31/93 $18,482.22 $18,977.33 $16,842.59 $16,973.00 $17,022.36
11/30/93 $17,920.91 $18,389.28 $16,682.79 $16,475.69 $16,715.96
12/31/93 $19,008.04 $19,493.11 $16,884.55 $17,337.37 $17,189.02
01/31/94 $19,653.09 $20,142.21 $17,458.04 $18,003.13 $17,744.23
02/28/94 $19,405.70 $19,877.07 $16,984.58 $17,785.29 $17,462.10
03/31/94 $18,395.87 $18,830.05 $16,245.07 $16,938.71 $16,653.60
04/30/94 $18,624.10 $19,052.06 $16,453.56 $17,092.85 $16,716.88
05/31/94 $18,469.01 $18,881.27 $16,722.88 $17,002.26 $16,802.14
06/30/94 $17,747.46 $18,131.97 $16,313.34 $16,521.09 $16,230.87
07/31/94 $18,322.04 $18,707.45 $16,848.63 $16,909.34 $16,662.61
08/31/94 $19,242.08 $19,634.93 $17,538.21 $17,693.93 $17,454.08
09/30/94 $18,941.70 $19,316.31 $17,110.10 $17,478.07 $17,129.44
10/31/94 $19,190.93 $19,558.17 $17,493.23 $17,750.73 $17,412.07
11/30/94 $18,395.18 $18,735.82 $16,857.00 $17,035.37 $16,764.34
12/31/94 $18,752.70 $19,088.02 $17,106.54 $17,166.54 $16,911.87
01/31/95 $18,582.46 $18,902.57 $17,549.80 $16,897.03 $17,043.78
02/28/95 $19,084.69 $19,402.57 $18,233.09 $17,368.46 $17,686.33
03/31/95 $19,765.67 $20,082.55 $18,770.25 $17,880.83 $18,188.62
04/30/95 $20,216.83 $20,528.55 $19,322.60 $18,272.42 $18,579.68
05/31/95 $20,616.91 $20,921.73 $20,093.36 $18,619.59 $19,150.08
06/30/95 $21,553.27 $21,859.03 $20,559.73 $19,280.59 $19,975.44
07/31/95 $22,983.34 $23,295.47 $21,241.16 $20,406.57 $20,928.27
08/31/95 $23,111.03 $23,410.05 $21,294.35 $20,467.79 $21,083.14
09/30/95 $23,732.43 $24,025.06 $22,192.52 $20,938.55 $21,702.99
10/31/95 $22,966.32 $23,234.20 $22,113.27 $20,467.44 $21,394.80
11/30/95 $23,408.96 $23,667.68 $23,083.05 $21,079.41 $22,165.02
12/31/95 $23,416.28 $23,659.38 $23,527.68 $21,416.68 $22,227.08
01/31/96 $23,841.87 $24,074.32 $24,327.50 $21,703.67 $22,729.41
02/29/96 $24,489.12 $24,713.53 $24,553.67 $22,224.55 $23,265.82
03/31/96 $24,923.57 $25,136.23 $24,790.13 $22,611.26 $23,449.62
04/30/96 $26,043.12 $26,249.34 $25,155.24 $23,673.99 $24,207.05
05/31/96 $26,601.12 $26,795.04 $25,802.96 $24,223.23 $24,843.69
06/30/96 $26,070.56 $26,242.00 $25,901.29 $23,845.34 $24,528.18
07/31/96 $24,542.92 $24,693.47 $24,757.49 $22,390.78 $23,098.19
08/31/96 $25,338.76 $25,476.95 $25,280.47 $23,210.28 $23,890.45
09/30/96 $26,601.12 $26,730.52 $26,702.09 $24,247.78 $25,280.88
10/31/96 $26,399.88 $26,509.30 $27,438.29 $24,116.84 $25,498.29
11/30/96 $27,735.42 $27,836.61 $29,510.46 $25,204.51 $27,079.19
12/31/96 $27,814.26 $27,898.67 $28,925.86 $25,224.68 $26,664.88
01/31/97 $28,739.22 $28,801.36 $30,731.99 $25,855.29 $28,000.79
02/28/97 $28,384.18 $28,434.64 $30,973.24 $25,488.15 $27,656.38
03/31/97 $27,178.93 $27,212.25 $29,703.02 $24,644.49 $26,373.12
04/30/97 $27,842.29 $27,851.66 $31,474.72 $24,947.62 $27,409.58
05/31/97 $30,355.57 $30,352.85 $33,389.74 $27,065.67 $29,396.78
06/30/97 $31,906.51 $31,885.54 $34,884.83 $28,318.81 $30,552.07
07/31/97 $33,859.21 $33,813.15 $37,659.74 $30,009.44 $33,100.12
08/31/97 $32,560.53 $32,487.33 $35,551.55 $29,199.19 $31,987.95
09/30/97 $34,728.11 $34,640.62 $37,497.43 $31,079.62 $33,756.89
10/31/97 $33,083.74 $32,966.88 $36,246.51 $29,488.34 $32,480.87
11/30/97 $33,074.39 $32,948.08 $37,923.02 $29,438.21 $33,042.79
12/31/97 $33,401.62 $33,250.54 $38,573.82 $29,700.21 $33,369.92
01/31/98 $33,922.22 $33,743.06 $39,000.02 $29,795.25 $33,546.78
02/28/98 $36,369.04 $36,163.76 $41,811.26 $31,985.20 $36,079.56
03/31/98 $37,712.18 $37,463.18 $43,950.66 $33,498.10 $37,681.49
04/30/98 $38,388.96 $38,123.37 $44,392.67 $33,869.93 $38,133.67
05/31/98 $37,202.00 $36,918.26 $43,630.45 $32,863.99 $37,012.54
06/30/98 $38,232.78 $37,924.27 $45,401.32 $33,287.94 $38,337.59
07/31/98 $37,368.59 $37,044.01 $44,919.16 $32,325.92 $37,440.49
08/31/98 $31,173.46 $30,882.24 $38,432.83 $26,820.81 $31,311.48
09/30/98 $32,454.13 $32,129.26 $40,895.11 $27,641.53 $33,168.25
10/31/98 $34,234.58 $33,868.81 $44,218.61 $29,330.43 $35,519.88
11/30/98 $36,441.92 $36,038.01 $46,897.51 $31,072.66 $37,675.94
12/31/98 $38,912.27 $38,451.38 $49,598.25 $33,020.91 $40,656.11
01/31/99 $40,096.12 $39,598.68 $51,671.50 $33,615.29 $42,318.94
02/28/99 $38,093.53 $37,593.68 $50,066.07 $31,907.63 $40,596.56
03/31/99 $39,078.23 $38,540.49 $52,068.61 $32,947.82 $42,374.69
04/30/99 $40,472.30 $39,888.29 $54,085.02 $34,473.30 $43,599.32
05/31/99 $40,018.67 $39,420.46 $52,809.69 $34,056.18 $42,797.09
</TABLE>
* 5/2/96 was the inception date of Class A Shares of the Fund. Returns prior to
that date are for Class I Shares. Performance shown for Class A Shares for the
period prior to November 11, 1994 reflects performance of the shares of the
predecessor collective investment fund (see footnote + below) adjusted to
reflect the Fund's 1994 estimate of its expense ratio for the first year of
operations as a mutual fund, including any applicable sales load (without giving
effect to any fee waivers or expense reimbursements).
** 5/6/96 and 10/1/98 were the inception dates of Class B and C Shares,
respectively, of the Fund. Returns prior to May 6, 1996 for Class B Shares and
prior to October 1, 1998 for Class C Shares are for Class I Shares, adjusted for
Class B and Class C Share expenses, respectively. Performance shown for Class B
and Class C Shares for the period prior to November 11, 1994 reflects
performance of the shares of the predecessor collective investment fund (see
footnote + below) adjusted to reflect Class B and Class C Share expenses (before
waivers and reimbursements), respectively.
+ Prior to November 11, 1994, Norwest Investment Management managed a collective
investment fund with investment objectives and polices that were, in all
material respects, equivalent to the Fund. The performance of the Fund includes
the performance of the predecessor collective investment fund for the periods
before it became a mutual fund on November 11, 1994. The collective investment
fund was not registered under the Investment Company Act of 1940 (the "1940
Act"), nor subject to certain investment limitations, diversification
requirements and other restrictions imposed by the 1940 Act and the Internal
Revenue Code, which, if applicable, may have adversely affected the performance
results.
++ Composite benchmark represents the appropriate base allocation percentages
applied to the Lipper Universe averages.
+++ Source: Lipper Analytical Services, Inc. is an independent mutual fund
rating service that ranks funds in various fund categories by making comparative
calculations using total returns. Although gathered from reliable sources, data
accuracy and completeness cannot be guaranteed.
THE ABOVE GRAPH REPRESENTS PERFORMANCE INFORMATION OF CLASS A AND B SHARES.
PERFORMANCE OF OTHER CLASSES WILL DIFFER.
THE RETURNS ABOVE ARE CALCULATED USING THE MAXIMUM 5.75% SALES CHARGE FOR CLASS
A SHARES, THE MAXIMUM 5.00% DEFERRED SALES CHARGE (DECLINING TO ZERO AFTER THE
SIXTH YEAR) FOR CLASS B SHARES AND THE MAXIMUM 1.00% DEFERRED SALES CHARGE
(DECLINING TO ZERO AFTER ONE YEAR) FOR CLASS C SHARES.
[LOGO]
13
<PAGE>
INVESTMENT ADVISER'S REPORT AND PERFORMANCE DATA MAY 31, 1999
- --------------------------------------------------------------------------------
LARGE COMPANY GROWTH FUND
During the fiscal year ended May 31, 1999, the Fund outperformed its growth and
general market benchmarks. During the period, the Fund provided a 39.84% fee
return versus the 15.63% return for the Lipper Growth Average.
The Fund focuses exclusively on mid-to-large capitalization growth companies,
and invests for the long-term in very high quality, dynamic growth stocks,
selling at attractive valuation levels. In addition, the focus only on dominant
or niche companies acts as a natural diversification governor. Since growth was
in favor, this focus aided Fund performance significantly. The companies held in
the Fund are growing earnings much more rapidly than the average S&P 500
company. The Fund's holdings have grown trendline earnings in excess of 20% over
the past several years, compared to 7% for the S&P 500 companies.
We continue to expect solid U.S. economic growth, good corporate profit growth,
and ongoing variability among international economies. The Federal Reserve
Board, along with financial markets, will continue to be vigilant regarding
accelerating inflation--potentially keeping a lid on economic growth. Over the
next twelve months, revenue growth (mainly unit volume growth) will be the key
driver of earnings growth. Earnings growth, versus price-to-earnings expansion,
will also be the key driver of stock prices. It will be difficult for many
companies to sustain revenue and earnings growth above average over a long time
horizon. That is why we focus the Fund on a select few companies with the
ability to sustain rapid unit volume and earnings growth over a long period. The
companies that the Fund continues to invest in sell at attractive relative
valuations.
Consistency of philosophy, style, and process are hallmarks of the Fund;
therefore, any changes in the portfolio would be driven solely by our stock
selection process.
THE OPINIONS EXPRESSED REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH MAY
31, 1999. THE MANAGER'S OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON
MARKET AND OTHER CONDITIONS. THE COMPOSITION, INDUSTRIES AND HOLDINGS OF THE
PORTFOLIO ARE SUBJECT TO CHANGE.
THE PERFORMANCE REPRESENTS INFORMATION OF A SHARES EXCLUDING SALES LOAD. HAD THE
PERFORMANCE INCLUDED SALES LOAD, THE RETURN WOULD HAVE BEEN LOWER. THE
PERFORMANCE FOR OTHER CLASSES WILL DIFFER.
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
LARGE COMPANY GROWTH FUND ("FUND") VS. STANDARD & POOR'S 500 INDEX ("S&P INDEX")
AND LIPPER GROWTH AVERAGE ("LIPPER AVERAGE")
- --------------------------------------------------------------------------------
The following chart reflects the value of a $10,000 investment in the Fund,
including reinvested dividends and distributions, over the past 10 fiscal year
periods. The result is compared with a broad-based securities market index and a
peer based average. The Fund's total return includes operating expenses that
reduce returns, while the total return of the Index does not. Total return of
the Fund would have been lower had certain fees and expenses not been
voluntarily waived and/or reimbursed. The Fund is professionally managed while
the Index is unmanaged and is not available for investment. The Lipper Average
does not include sales charges but does include management fees and expenses.
The Lipper Average is calculated by taking an arithmetic average of the returns
of the funds in the group. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. PAST PERFORMANCE
IS NOT PREDICTIVE NOR A GUARANTEE OF FUTURE RESULTS.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
AS OF MAY 31, 1999
------------------------------------
B S & P LIPPER
A SHARES*+ SHARES**+ INDEX AVERAGE++
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
ONE YEAR 31.80% 35.02% 21.04% 15.63%
FIVE YEAR 26.36% 26.89% 25.84% 20.55%
TEN YEAR 19.73% 19.57% 18.10% 15.64%
VALUE MAY 31, 1999 $60,554 $59,732 $52,810 $42,797
</TABLE>
<TABLE>
<CAPTION>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
A SHARES B SHARES S&P INDEX LIPPER AVERAGE
<S> <C> <C> <C> <C>
05/31/89 $9,425.00 $10,000.00 $10,000.00 $10,000.00
06/30/89 $9,176.00 $9,729.56 $9,989.54 $9,877.00
07/31/89 $10,077.00 $10,679.36 $10,890.70 $10,600.98
08/31/89 $10,209.00 $10,812.00 $11,102.89 $10,869.19
09/30/89 $10,291.00 $10,891.86 $11,057.68 $10,889.84
10/31/89 $10,023.00 $10,602.36 $10,801.25 $10,544.63
11/30/89 $10,258.00 $10,842.62 $11,020.63 $10,697.53
12/31/89 $10,257.00 $10,834.82 $11,284.90 $10,814.13
01/31/90 $9,429.00 $9,954.14 $10,527.68 $10,114.46
02/28/90 $9,627.00 $10,157.98 $10,664.28 $10,285.39
03/31/90 $10,124.00 $10,675.30 $10,946.66 $10,591.90
04/30/90 $10,122.00 $10,667.14 $10,673.98 $10,359.93
05/31/90 $11,538.00 $12,152.15 $11,712.46 $11,334.80
06/30/90 $11,777.00 $12,397.29 $11,633.51 $11,369.94
07/31/90 $11,310.00 $11,898.47 $11,596.33 $11,184.61
08/31/90 $10,291.00 $10,818.01 $10,549.41 $10,165.69
09/30/90 $9,717.00 $10,207.92 $10,036.71 $9,585.23
10/31/90 $9,487.00 $9,960.02 $9,994.28 $9,409.82
11/30/90 $10,321.00 $10,828.78 $10,639.04 $10,048.75
12/31/90 $10,608.00 $11,122.48 $10,935.25 $10,403.47
01/31/91 $11,655.00 $12,213.42 $11,410.28 $11,081.78
02/28/91 $12,622.00 $13,219.17 $12,225.30 $11,881.88
03/31/91 $13,245.00 $13,864.11 $12,521.04 $12,271.61
04/30/91 $13,133.00 $13,738.61 $12,550.46 $12,259.34
05/31/91 $14,203.00 $14,848.23 $13,090.39 $12,799.97
06/30/91 $13,492.00 $14,095.65 $12,491.11 $12,147.17
07/31/91 $14,553.00 $15,194.98 $13,072.83 $12,790.97
08/31/91 $15,172.00 $15,830.96 $13,381.64 $13,183.66
09/30/91 $14,740.00 $15,370.48 $13,157.63 $13,058.41
10/31/91 $15,388.00 $16,037.15 $13,333.78 $13,331.33
11/30/91 $15,505.00 $16,149.13 $12,798.30 $12,811.41
12/31/91 $17,719.00 $18,446.13 $14,259.48 $14,256.54
01/31/92 $17,333.00 $18,032.03 $13,993.74 $14,292.18
02/29/92 $17,231.00 $17,915.46 $14,175.24 $14,509.42
03/31/92 $16,669.00 $17,319.91 $13,899.81 $14,093.00
04/30/92 $16,397.00 $17,025.91 $14,307.38 $14,052.13
05/31/92 $16,694.00 $17,322.50 $14,377.35 $14,164.55
06/30/92 $15,923.00 $16,513.06 $14,163.56 $13,772.19
07/31/92 $16,690.00 $17,297.65 $14,742.05 $14,262.48
08/31/92 $16,278.00 $16,860.08 $14,440.58 $13,957.26
09/30/92 $16,553.00 $17,134.90 $14,610.33 $14,193.14
10/31/92 $16,944.00 $17,527.98 $14,660.48 $14,475.58
11/30/92 $18,047.00 $18,658.01 $15,158.31 $15,197.92
12/31/92 $18,047.00 $18,646.13 $15,344.29 $15,460.84
01/31/93 $17,908.00 $18,490.94 $15,472.46 $15,652.55
02/28/93 $17,195.00 $17,743.81 $15,683.26 $15,434.98
03/31/93 $17,818.00 $18,375.13 $16,014.14 $15,874.88
04/30/93 $16,303.00 $16,802.47 $15,627.08 $15,392.28
05/31/93 $17,104.00 $17,616.91 $16,043.88 $15,971.03
06/30/93 $16,885.00 $17,379.57 $16,090.73 $16,010.96
07/31/93 $17,038.00 $17,526.91 $16,026.00 $15,948.52
08/31/93 $17,664.00 $18,158.74 $16,632.82 $16,634.31
09/30/93 $17,830.00 $18,318.60 $16,501.52 $16,787.34
10/31/93 $18,097.00 $18,580.52 $16,842.59 $17,022.36
11/30/93 $17,619.00 $18,078.39 $16,682.79 $16,715.96
12/31/93 $17,982.00 $18,439.90 $16,884.55 $17,189.02
01/31/94 $18,642.00 $19,104.19 $17,458.04 $17,744.23
02/28/94 $18,467.00 $18,913.85 $16,984.58 $17,462.10
03/31/94 $17,643.00 $18,058.17 $16,245.07 $16,653.60
04/30/94 $17,537.00 $17,939.07 $16,453.56 $16,716.88
05/31/94 $17,708.00 $18,101.22 $16,722.88 $16,802.14
06/30/94 $16,704.00 $17,063.19 $16,313.34 $16,230.87
07/31/94 $17,535.00 $17,902.24 $16,848.63 $16,662.61
08/31/94 $18,302.00 $18,673.16 $17,538.21 $17,454.08
09/30/94 $17,974.00 $18,327.09 $17,110.10 $17,129.44
10/31/94 $18,382.00 $18,730.73 $17,493.23 $17,412.07
11/30/94 $17,605.00 $17,932.50 $16,857.00 $16,764.34
12/31/94 $17,791.00 $18,111.85 $17,106.54 $16,911.87
01/31/95 $18,156.00 $18,471.58 $17,549.80 $17,043.78
02/28/95 $18,610.00 $18,922.24 $18,233.09 $17,686.33
03/31/95 $19,161.00 $19,471.44 $18,770.25 $18,188.62
04/30/95 $19,665.00 $19,970.26 $19,322.60 $18,579.68
05/31/95 $20,276.00 $20,578.17 $20,093.36 $19,150.08
06/30/95 $21,746.00 $22,056.08 $20,559.73 $19,975.44
07/31/95 $22,812.00 $23,121.84 $21,241.16 $20,928.27
08/31/95 $23,019.00 $23,316.95 $21,294.35 $21,083.14
09/30/95 $23,995.00 $24,291.17 $22,192.52 $21,702.99
10/31/95 $23,256.00 $23,527.20 $22,113.27 $21,394.80
11/30/95 $23,731.00 $23,991.42 $23,083.05 $22,165.02
12/31/95 $22,997.00 $23,235.71 $23,527.68 $22,227.08
01/31/96 $23,604.00 $23,834.22 $24,327.50 $22,729.41
02/29/96 $24,709.00 $24,935.37 $24,553.67 $23,265.82
03/31/96 $24,988.00 $25,200.67 $24,790.13 $23,449.62
04/30/96 $26,013.00 $26,218.86 $25,155.24 $24,207.05
05/31/96 $26,840.00 $27,034.66 $25,802.96 $24,843.69
06/30/96 $26,483.00 $26,657.13 $25,901.29 $24,528.18
07/31/96 $25,011.00 $25,157.53 $24,757.49 $23,098.19
08/31/96 $25,278.00 $25,411.80 $25,280.47 $23,890.45
09/30/96 $27,627.00 $27,757.23 $26,702.09 $25,280.88
10/31/96 $27,408.00 $27,519.57 $27,438.29 $25,498.29
11/30/96 $29,152.00 $29,251.31 $29,510.46 $27,079.19
12/31/96 $28,776.00 $28,856.01 $28,925.86 $26,664.88
01/31/97 $31,083.00 $31,150.94 $30,731.99 $28,000.79
02/28/97 $30,381.00 $30,429.38 $30,973.24 $27,656.38
03/31/97 $28,224.00 $28,250.11 $29,703.02 $26,373.12
04/30/97 $30,431.00 $30,441.30 $31,474.72 $27,409.58
05/31/97 $32,728.00 $32,719.56 $33,389.74 $29,396.78
06/30/97 $34,453.00 $34,424.11 $34,884.83 $30,552.07
07/31/97 $37,633.00 $37,579.02 $37,659.74 $33,100.12
08/31/97 $35,556.00 $35,481.83 $35,551.55 $31,987.95
09/30/97 $38,034.00 $37,932.17 $37,497.43 $33,756.89
10/31/97 $36,600.00 $36,477.55 $36,246.51 $32,480.87
11/30/97 $37,724.00 $37,574.68 $37,923.02 $33,042.79
12/31/97 $38,373.00 $38,196.76 $38,573.82 $33,369.92
01/31/98 $39,382.00 $39,175.90 $39,000.02 $33,546.78
02/28/98 $42,505.00 $42,258.97 $41,811.26 $36,079.56
03/31/98 $43,602.00 $43,320.59 $43,950.66 $37,681.49
04/30/98 $44,740.00 $44,424.83 $44,392.67 $38,133.67
05/31/98 $43,299.00 $42,964.86 $43,630.45 $37,012.54
06/30/98 $47,243.00 $46,854.05 $45,401.32 $38,337.59
07/31/98 $47,343.00 $46,920.97 $44,919.16 $37,440.49
08/31/98 $39,441.00 $39,058.38 $38,432.83 $31,311.48
09/30/98 $43,149.00 $42,706.09 $40,895.11 $33,168.25
10/31/98 $46,311.00 $45,843.31 $44,218.61 $35,519.88
11/30/98 $50,711.00 $50,173.61 $46,897.51 $37,675.94
12/31/98 $56,791.00 $56,148.06 $49,598.25 $40,656.11
01/31/99 $61,420.00 $60,707.42 $51,671.50 $42,318.94
02/28/99 $58,834.00 $58,120.86 $50,066.07 $40,596.56
03/31/99 $62,482.00 $61,693.82 $52,068.61 $42,374.69
04/30/99 $62,744.00 $61,934.94 $54,085.02 $43,599.32
05/31/99 $60,554.00 $59,731.98 $52,809.69 $42,797.09
</TABLE>
* 10/6/98 was the inception date of Class A Shares of the Fund. Returns prior to
that date are for Class I Shares, and have not been adjusted for Class A Share
expenses. If such returns had been adjusted for Class A Share expenses, returns
would have been lower. Performance shown for Class A Shares for the period prior
to November 11, 1994 reflects performance of the shares of the predecessor
collective investment fund (see footnote + below) adjusted to reflect the Fund's
1994 estimate of its expense ratio for the first year of operations as a mutual
fund, including any applicable sales load (without giving effect to any fee
waivers or expense reimbursements).
** 10/1/98 was the inception date of Class B Shares of the Fund. Returns prior
to that date are for Class I Shares, adjusted for Class B Share expenses.
Performance shown for Class B Shares for the period prior to November 11, 1994
reflects performance of the shares of the predecessor collective investment fund
(see footnote + below) adjusted to reflect Class B Share expenses (before
waivers and reimbursements).
+ Prior to November 11, 1994, Norwest Investment Management managed a collective
investment fund with investment objectives and polices that were, in all
material respects, equivalent to the Fund. The performance of the Fund includes
the performance of the predecessor collective investment fund for the periods
before it became a mutual fund on November 11, 1994. The collective investment
fund was not registered under the Investment Company Act of 1940 (the "1940
Act"), nor subject to certain investment limitations, diversification
requirements and other restrictions imposed by the 1940 Act and the Internal
Revenue Code, which, if applicable, may have adversely affected the performance
results.
++ Source: Lipper Analytical Services, Inc. is an independent mutual fund rating
service that ranks funds in various fund categories by making comparative
calculations using total returns. Although gathered from reliable sources, data
accuracy and completeness cannot be guaranteed.
THE ABOVE GRAPH REPRESENTS PERFORMANCE INFORMATION OF CLASS A AND B SHARES.
PERFORMANCE OF OTHER CLASSES WILL DIFFER.
THE RETURNS ABOVE ARE CALCULATED USING THE MAXIMUM 5.75% SALES CHARGE FOR CLASS
A SHARES AND THE MAXIMUM 5.00% DEFERRED SALES CHARGE (DECLINING TO ZERO AFTER
THE SIXTH YEAR) FOR CLASS B SHARES.
[LOGO]
14
<PAGE>
INVESTMENT ADVISER'S REPORT AND PERFORMANCE DATA MAY 31, 1999
- --------------------------------------------------------------------------------
DIVERSIFIED SMALL CAP FUND
The Diversified Small Cap Fund returned -14.51% during the fiscal year ended May
31, 1999. The Fund is comprised of five different small cap investing styles:
two value styles, two growth styles and an index style. The index style tracks
the S&P 600 Index of small company stocks. These styles help us moderate the
volatility of the Fund's annual return, improve its performance and provide
effective diversification across small cap investing.
The weak global economy that pushed U.S. markets down in the third and early
fourth quarters of 1998 hit domestic small cap stocks the hardest. Three factors
that negatively affected small cap stocks and small cap value stocks throughout
the fiscal year were: the larger the market capitalization the better the
performance; the higher the valuation the better the performance; and the
internet industry stock performance. With the exception of the utility sector,
all other small stock sectors had negative returns in the third quarter of 1998.
However, after sinking to new depths of undervaluation in a market that seemed
to reward an even narrower group of high price/earnings multiple and large cap
stocks, small stocks rallied late in the second quarter of 1999. We believe that
over time, the extremely large valuation disparity between large and smaller
companies will narrow as investors return to the smaller companies sector.
THE OPINIONS EXPRESSED REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH MAY
31, 1999. THE MANAGER'S OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON
MARKET AND OTHER CONDITIONS. THE COMPOSITION, INDUSTRIES AND HOLDINGS OF THE
PORTFOLIO ARE SUBJECT TO CHANGE.
THE PERFORMANCE REPRESENTS INFORMATION OF A SHARES EXCLUDING SALES LOAD. HAD THE
PERFORMANCE INCLUDED SALES LOAD, THE RETURN WOULD HAVE BEEN LOWER. THE
PERFORMANCE FOR OTHER CLASSES WILL DIFFER.
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
DIVERSIFIED SMALL CAP FUND ("FUND") VS. RUSSELL 2000 VALUE INDEX ("RUSSELL
INDEX")
AND LIPPER SMALL CAP AVERAGE ("LIPPER AVERAGE")
- --------------------------------------------------------------------------------
The following chart reflects the value of a $10,000 investment in the Fund,
including reinvested dividends and distributions, since inception. The result is
compared with a broad-based securities market index and a peer based average.
The Fund's total return includes operating expenses that reduce returns, while
the total return of the Index does not. Total return of the Fund would have been
lower had certain fees and expenses not been voluntarily waived and/or
reimbursed. The Fund is professionally managed while the Index is unmanaged and
is not available for investment. The Lipper Average does not include sales
charges but does include management fees and expenses. The Lipper Average is
calculated by taking an arithmetic average of the returns of the funds in the
group. Investment return and principal value of an investment in the Fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original cost. PAST PERFORMANCE IS NOT PREDICTIVE NOR A GUARANTEE OF
FUTURE RESULTS.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
AS OF MAY 31, 1999
-------------------------------------------
RUSSELL LIPPER
A SHARES* B SHARES** INDEX AVERAGE+
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ONE YEAR (19.42)% (18.35)% (9.53)% (4.08)%
SINCE INCEPTION (11.04)% (10.39)% (3.54)% 0.90%
INCEPTION DATE 12/31/97 12/31/97 12/31/97 12/31/97
VALUE MAY 31, 1999 $8,476 $8,830 $9,503 $10,128
</TABLE>
<TABLE>
<CAPTION>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
A SHARES B SHARES RUSSELL INDEX LIPPER AVERAGE
<S> <C> <C> <C> <C>
12/31/97 $9,425.00 $10,000.00 $10,000.00 $10,000.00
01/31/98 $9,311.90 $9,873.63 $9,819.08 $9,836.00
02/28/98 $10,075.33 $10,677.43 $10,412.67 $10,601.24
03/31/98 $10,527.73 $11,150.06 $10,835.00 $11,099.50
04/30/98 $10,574.85 $11,193.10 $10,888.55 $11,189.41
05/31/98 $9,915.10 $10,487.65 $10,503.09 $10,559.44
06/30/98 $9,849.13 $10,411.40 $10,443.73 $10,640.75
07/31/98 $9,104.55 $9,617.68 $9,625.72 $9,876.74
08/31/98 $7,163.00 $7,560.58 $8,118.25 $7,896.46
09/30/98 $7,511.73 $7,924.00 $8,576.72 $8,359.98
10/31/98 $7,852.81 $8,282.58 $8,831.38 $8,695.21
11/30/98 $8,253.46 $8,710.64 $9,070.44 $9,257.79
12/31/98 $8,618.85 $9,088.93 $9,354.85 $9,938.24
01/31/99 $8,529.81 $8,989.38 $9,142.51 $9,976.01
02/28/99 $7,781.89 $8,202.94 $8,518.32 $9,160.97
03/31/99 $7,683.95 $8,093.43 $8,448.05 $9,338.69
04/30/99 $8,218.18 $8,650.91 $9,219.27 $9,937.30
05/31/99 $8,476.39 $8,830.50 $9,502.64 $10,128.10
</TABLE>
* 10/6/98 was the inception date of Class A Shares of the Fund. Returns prior to
that date are for Class I Shares, and have not been adjusted for Class A Share
expenses. If such returns had been adjusted for Class A Share expenses, returns
would have been lower.
** 10/1/98 was the inception date of Class B Shares of the Fund. Returns prior
to that date are for Class I Shares, adjusted for Class B Share expenses.
+ Source: Lipper Analytical Services, Inc. is an independent mutual fund rating
service that ranks funds in various fund categories by making comparative
calculations using total returns. Although gathered from reliable sources, data
accuracy and completeness cannot be guaranteed.
THE ABOVE GRAPH REPRESENTS PERFORMANCE INFORMATION OF CLASS A AND B SHARES.
PERFORMANCE OF OTHER CLASSES WILL DIFFER.
THE RETURNS ABOVE ARE CALCULATED USING THE MAXIMUM 5.75% SALES CHARGE FOR CLASS
A SHARES AND THE MAXIMUM 5.00% DEFERRED SALES CHARGE (DECLINING TO ZERO AFTER
THE SIXTH YEAR) FOR CLASS B SHARES.
INVESTMENTS IN SMALL COMPANIES GENERALLY CARRY GREATER RISK THAN IS CUSTOMARILY
ASSOCIATED WITH LARGER COMPANIES SUCH AS NARROWER MARKETS, LIMITED FINANCIAL
RESOURCES AND LESS LIQUID STOCKS.
[LOGO]
15
<PAGE>
INVESTMENT ADVISER'S REPORT AND PERFORMANCE DATA MAY 31, 1999
- --------------------------------------------------------------------------------
SMALL COMPANY STOCK FUND
For the fiscal year ended May 31, 1999, the Fund returned -27.25%,
underperforming the Lipper Small Cap Average of -4.08%. The Fund's managers
changed in March 1999. Kenneth Lee and Thomas Zeifang of Wells Capital
Management replaced Kirk McCown of Crestone Capital Management. However, the
style remains a core small cap investing style, which seeks above-average,
long-term capital appreciation by investing in a diversified, actively managed
portfolio of small cap stocks.
Most of the lag in performance relative to the benchmark came before the
transition of the Fund's management. Since taking over the fund, we have removed
the almost micro-cap focus of the portfolio and increased the average market cap
of the fund. Although we have made up some ground by changing the liquidity make
up of the portfolio, the fund still trailed the benchmark due to the lack of
internet exposure.
Low interest rates, weak foreign economies and a strong domestic economy boded
well for all growth stocks. If the global markets begin to pick up, they may
create some inflation pressures that when combined with a strong domestic
economy, could force the Federal Reserve Board (the Fed) to prop up rates.
If interest rates continue to rise during the year, the small cap sector may
remain volatile. Our focus is to maintain our bottom-up discipline and keep the
portfolio well diversified. Small caps have the potential to do well as market
participation continues to broaden. The relative valuations of small cap stocks
versus large cap stocks are still wide, but we expect this disparity to
converge.
THE OPINIONS EXPRESSED REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH MAY
31, 1999. THE MANAGER'S OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON
MARKET AND OTHER CONDITIONS. THE COMPOSITION, INDUSTRIES AND HOLDINGS OF THE
PORTFOLIO ARE SUBJECT TO CHANGE.
THE PERFORMANCE REPRESENTS INFORMATION OF A SHARES EXCLUDING SALES LOAD. HAD THE
PERFORMANCE INCLUDED SALES LOAD, THE RETURN WOULD HAVE BEEN LOWER. THE
PERFORMANCE FOR OTHER CLASSES WILL DIFFER.
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
SMALL COMPANY STOCK FUND ("FUND") VS. RUSSELL 2000 INDEX ("RUSSELL INDEX") AND
LIPPER SMALL CAP AVERAGE ("LIPPER AVERAGE")
- --------------------------------------------------------------------------------
The following chart reflects the value of a $10,000 investment in the Fund,
including reinvested dividends and distributions, since inception. The result is
compared with a broad-based securities market index and a peer based average.
The Fund's total return includes operating expenses and sales charges (if
applicable) that reduce returns, while the total return of the Index does not.
Total return of the Fund would have been lower had certain fees and expenses not
been voluntarily waived and/or reimbursed. The Fund is professionally managed
while the Index is unmanaged and is not available for investment. The Lipper
Average does not include sales charges but does include management fees and
expenses. The Lipper Average is calculated by taking an arithmetic average of
the returns of the funds in the group. Investment return and principal value of
an investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. PAST PERFORMANCE
IS NOT PREDICTIVE NOR A GUARANTEE OF FUTURE RESULTS.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
AS OF MAY 31, 1999
------------------------------------
RUSSELL LIPPER
A SHARES B SHARES INDEX AVERAGE+
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
ONE YEAR (31.43)% (30.74)% (2.62)% (4.08)%
FIVE YEAR 3.72% 4.01% 13.28% 15.02%
SINCE INCEPTION 3.28% 3.47% 11.45% 12.84%
INCEPTION DATE 12/31/93 12/31/93 12/31/93 12/31/93
VALUE MAY 31, 1999 $11,907 $11,947 $17,993 $19,241
</TABLE>
<TABLE>
<CAPTION>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
A SHARES B SHARES RUSSELL INDEX LIPPER AVERAGE
<S> <C> <C> <C> <C>
12/31/93 $9,425.00 $10,000.00 $10,000.00 $10,000.00
01/31/94 $9,432.54 $10,008.00 $10,306.00 $10,251.00
02/28/94 $9,391.94 $9,951.90 $10,267.87 $10,249.97
03/31/94 $9,177.24 $9,711.13 $9,709.30 $9,716.98
04/30/94 $9,537.13 $10,092.74 $9,766.58 $9,724.75
05/31/94 $9,347.53 $9,884.66 $9,640.59 $9,553.59
06/30/94 $8,996.04 $9,512.22 $9,293.53 $9,190.56
07/31/94 $9,533.33 $10,071.47 $9,438.51 $9,346.80
08/31/94 $9,948.16 $10,505.98 $9,951.02 $9,907.60
09/30/94 $9,957.69 $10,505.98 $9,905.25 $9,954.17
10/31/94 $9,910.00 $10,455.47 $9,863.64 $10,069.64
11/30/94 $9,308.52 $9,798.21 $9,447.40 $9,706.13
12/31/94 $9,730.64 $10,239.29 $9,683.58 $9,912.87
01/31/95 $9,542.58 $10,040.22 $9,553.73 $9,809.77
02/28/95 $9,886.08 $10,398.73 $9,938.50 $10,209.03
03/31/95 $9,828.09 $10,320.00 $10,101.20 $10,488.76
04/30/95 $10,101.36 $10,608.93 $10,310.37 $10,631.40
05/31/95 $10,303.59 $10,805.36 $10,479.44 $10,800.44
06/30/95 $10,787.78 $11,316.98 $11,012.98 $11,426.87
07/31/95 $11,794.89 $12,360.68 $11,646.50 $12,265.60
08/31/95 $12,017.62 $12,590.90 $11,879.70 $12,474.12
09/30/95 $11,886.78 $12,452.71 $12,092.49 $12,766.01
10/31/95 $11,271.12 $11,799.86 $11,552.80 $12,342.18
11/30/95 $11,596.06 $12,130.20 $12,050.52 $12,838.33
12/31/95 $11,620.48 $12,145.26 $12,358.21 $13,063.01
01/31/96 $11,610.32 $12,123.80 $12,344.08 $13,014.67
02/29/96 $11,874.42 $12,392.02 $12,734.21 $13,550.88
03/31/96 $12,402.62 $12,939.20 $12,986.78 $13,919.46
04/30/96 $13,814.55 $14,398.35 $13,684.62 $14,963.42
05/31/96 $14,241.18 $14,838.24 $14,234.16 $15,590.39
06/30/96 $13,123.82 $13,658.05 $13,653.84 $15,001.07
07/31/96 $11,793.16 $12,263.28 $12,462.27 $13,734.98
08/31/96 $12,778.46 $13,282.53 $13,185.95 $14,560.45
09/30/96 $13,296.51 $13,808.26 $13,700.77 $15,300.12
10/31/96 $13,530.14 $14,044.29 $13,487.59 $15,010.95
11/30/96 $14,159.92 $14,688.04 $14,040.91 $15,456.78
12/31/96 $14,634.36 $15,166.66 $14,401.61 $15,680.90
01/31/97 $14,938.34 $15,476.65 $14,686.63 $16,074.49
02/28/97 $14,145.83 $14,650.01 $14,331.07 $15,431.51
03/31/97 $12,973.34 $13,421.52 $13,659.09 $14,655.31
04/30/97 $12,560.80 $12,996.71 $13,692.74 $14,558.58
05/31/97 $15,144.61 $15,648.87 $15,219.76 $16,299.79
06/30/97 $15,416.02 $15,924.42 $15,866.43 $17,163.68
07/31/97 $16,425.66 $16,957.73 $16,606.72 $18,243.27
08/31/97 $16,846.62 $17,379.95 $16,981.47 $18,580.77
09/30/97 $18,109.55 $18,669.12 $18,221.15 $19,978.05
10/31/97 $16,857.89 $17,368.01 $17,411.22 $19,114.99
11/30/97 $16,102.39 $16,580.18 $17,292.69 $18,839.74
12/31/97 $15,998.66 $16,470.63 $17,603.09 $18,997.99
01/31/98 $15,630.40 $16,078.48 $17,335.00 $18,686.43
02/28/98 $17,185.26 $17,661.63 $18,634.83 $20,140.23
03/31/98 $17,662.63 $18,140.94 $19,417.86 $21,086.82
04/30/98 $17,730.82 $18,213.56 $19,524.52 $21,257.62
05/31/98 $16,366.91 $16,790.17 $18,477.03 $20,060.82
06/30/98 $16,503.30 $16,920.89 $18,529.91 $20,215.29
07/31/98 $14,689.30 $15,047.25 $17,016.76 $18,763.83
08/31/98 $10,993.11 $11,256.39 $13,717.21 $15,001.68
09/30/98 $11,538.67 $11,808.31 $14,778.57 $15,882.28
10/31/98 $11,975.12 $12,244.04 $15,384.81 $16,519.16
11/30/98 $12,643.44 $12,926.69 $16,197.12 $17,587.95
12/31/98 $13,270.84 $13,551.24 $17,208.32 $18,880.66
01/31/99 $12,820.75 $13,086.46 $17,431.54 $18,952.41
02/28/99 $11,647.79 $11,895.46 $16,027.08 $17,404.00
03/31/99 $11,429.56 $11,648.54 $16,274.17 $17,741.64
04/30/99 $11,947.85 $12,156.90 $17,730.60 $18,878.87
05/31/99 $11,906.93 $12,029.92 $17,992.80 $19,241.35
</TABLE>
+ Source: Lipper Analytical Services, Inc. is an independent mutual fund rating
service that ranks funds in various fund categories by making comparative
calculations using total returns. Although gathered from reliable sources, data
accuracy and completeness cannot be guaranteed.
THE ABOVE GRAPH REPRESENTS PERFORMANCE INFORMATION OF CLASS A AND B SHARES.
PERFORMANCE OF OTHER CLASSES WILL DIFFER.
THE RETURNS ABOVE ARE CALCULATED USING THE MAXIMUM 5.75% SALES CHARGE FOR CLASS
A SHARES AND THE MAXIMUM 5.0% DEFERRED SALES CHARGE (DECLINING TO ZERO AFTER THE
SIXTH YEAR) FOR CLASS B SHARES.
INVESTMENTS IN SMALL COMPANIES GENERALLY CARRY GREATER RISK THAN IS CUSTOMARILY
ASSOCIATED WITH LARGER COMPANIES SUCH AS NARROWER MARKETS, LIMITED FINANCIAL
RESOURCES AND LESS LIQUID STOCKS.
[LOGO]
16
<PAGE>
INVESTMENT ADVISER'S REPORT AND PERFORMANCE DATA MAY 31, 1999
- --------------------------------------------------------------------------------
SMALL CAP OPPORTUNITIES FUND
During the fiscal year ended May 31, 1999, the Fund returned -13.03%,
underperforming the Lipper Small Cap Average of -4.08%. The Fund suffered
through the year mainly due to a lack of exposure to some of the faster growing
but more expensive technology stocks.
During the first quarter of 1999, smaller companies that were expected to lose
money outperformed dramatically those that were expected to report profits. This
was largely a result of internet-related issues and other rapidly-growing
concept stocks. As always, the Fund looked to balance risk and return and to
focus on growing companies trading at reasonable price-earnings ratios. As a
result of such strong internet performance, our technology exposure had the
worst impact on performance over the last six months.
The announcement by OPEC in the second half of the fiscal year of intentions to
scale back production helped reverse the decline in oil prices witnessed in the
first six months. The Fund's energy holdings are concentrated in service
companies such as BJ Services and Cooper Cameron Corp. that benefited from this
reversal in prices. The capital goods sector was also a positive contributor to
performance as economic growth in the U.S. remained strong and manufacturing
oriented companies came back into favor. Two of the Fund's top ten holdings,
Safety-Kleen Corp. and SPX Corp. are examples of the high-growth, underfollowed
companies that benefited from this trend. We also saw strong returns from
holdings in the media/publishing sector including Catalina Marketing, a provider
of in-store couponing services
The Fund remains well-diversified across sectors, with investments continuing to
be made primarily on a bottom-up and opportunistic basis rather than top-down
economic and sector analysis. Looking forward, management continues to search
for companies that can grow their earnings independently of the economic cycle.
While smaller companies are trading at very low valuations relative to large
companies and have little overseas exposure and attractive earnings growth
prospects, there is no immediate catalyst for the sector. Management continues
to believe that over time the market is efficient and that the extremely large
valuation disparity between large and smaller companies will narrow, as
investors return to the smaller companies sector. In any event, the Fund will
remain true to its discipline of investing in under-followed and misunderstood
companies that have the potential to offer above-average earnings growth.
THE OPINIONS EXPRESSED REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH MAY
31, 1999. THE MANAGER'S OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON
MARKET AND OTHER CONDITIONS. THE COMPOSITION, INDUSTRIES AND HOLDINGS OF THE
PORTFOLIO ARE SUBJECT TO CHANGE.
THE PERFORMANCE REPRESENTS INFORMATION OF A SHARES EXCLUDING SALES LOAD. HAD THE
PERFORMANCE INCLUDED SALES LOAD, THE RETURN WOULD HAVE BEEN LOWER. THE
PERFORMANCE FOR OTHER CLASSES WILL DIFFER.
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
SMALL CAP OPPORTUNITIES FUND ("FUND") VS. RUSSELL 2000 INDEX ("RUSSELL INDEX")
AND
LIPPER SMALL CAP AVERAGE ("LIPPER AVERAGE")
- --------------------------------------------------------------------------------
The following chart reflects the value of a $10,000 investment in the Fund,
including reinvested dividends and distributions, since inception. The result is
compared with a broad-based securities market index and a peer based average.
The Fund's total return includes operating expenses and sales charges (if
applicable) that reduce returns, while the total return of the Index does not.
Total return of the Fund would have been lower had certain fees and expenses not
been voluntarily waived and/or reimbursed. The Fund is professionally managed
while the Index is unmanaged and is not available for investment. The Lipper
Average does not include sales charges but does include management fees and
expenses. The Lipper Average is calculated by taking an arithmetic average of
the returns of the funds in the group. Investment return and principal value of
an investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. PAST PERFORMANCE
IS NOT PREDICTIVE NOR A GUARANTEE OF FUTURE RESULTS.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
AS OF MAY 31, 1999
-------------------------------------------------
RUSSELL LIPPER
A SHARES* B SHARES** INDEX AVERAGE+
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
ONE YEAR (18.03)% (17.19)% (2.62)% (4.08)%
FIVE YEAR 15.74% 16.14% 13.28% 15.02%
SINCE INCEPTION 15.83% 16.06% 12.30% 13.84%
INCEPTION DATE 8/1/93 8/1/93 7/31/93 7/31/93
VALUE MAY 31, 1999 $23,559 $23,832 $19,678 $21,312
</TABLE>
<TABLE>
<CAPTION>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
A SHARES B SHARES RUSSELL INDEX LIPPER AVERAGE
<S> <C> <C> <C> <C>
07/31/93 $9,425.00 $10,000.00 $10,000.00 $10,000.00
08/31/93 $9,754.88 $10,343.84 $10,411.49 $10,481.00
09/30/93 $10,197.85 $10,807.18 $10,697.37 $10,809.06
10/31/93 $10,358.08 $10,970.09 $10,960.83 $10,984.16
11/30/93 $10,094.18 $10,683.84 $10,590.36 $10,631.57
12/31/93 $10,558.16 $11,168.07 $10,936.66 $11,075.97
01/31/94 $10,985.43 $11,612.91 $11,271.32 $11,353.98
02/28/94 $11,127.85 $11,756.78 $11,229.62 $11,352.84
03/31/94 $10,577.15 $11,167.47 $10,618.73 $10,762.49
04/30/94 $10,729.07 $11,320.98 $10,681.38 $10,771.10
05/31/94 $10,691.09 $11,273.70 $10,543.59 $10,581.53
06/30/94 $10,501.19 $11,066.50 $10,164.02 $10,179.43
07/31/94 $10,624.63 $11,189.53 $10,322.58 $10,352.48
08/31/94 $11,232.29 $11,822.38 $10,883.10 $10,973.63
09/30/94 $10,994.92 $11,565.25 $10,833.03 $11,025.21
10/31/94 $11,213.30 $11,787.59 $10,787.53 $11,153.10
11/30/94 $10,729.07 $11,271.29 $10,332.30 $10,750.48
12/31/94 $11,027.82 $11,577.69 $10,590.61 $10,979.46
01/31/95 $11,077.05 $11,622.00 $10,448.59 $10,865.27
02/28/95 $11,667.82 $12,235.16 $10,869.40 $11,307.49
03/31/95 $12,022.29 $12,599.06 $11,047.34 $11,617.32
04/30/95 $12,337.37 $12,921.49 $11,276.11 $11,775.31
05/31/95 $12,613.06 $13,202.01 $11,461.01 $11,962.54
06/30/95 $13,154.61 $13,760.70 $12,044.53 $12,656.37
07/31/95 $14,247.54 $14,895.23 $12,737.39 $13,585.34
08/31/95 $14,779.24 $15,441.61 $12,992.43 $13,816.29
09/30/95 $15,291.25 $15,967.05 $13,225.15 $14,139.60
10/31/95 $14,907.24 $15,555.90 $12,634.91 $13,670.16
11/30/95 $15,724.48 $16,399.11 $13,179.25 $14,219.70
12/31/95 $16,440.52 $17,134.00 $13,515.75 $14,468.55
01/31/96 $16,362.18 $17,041.44 $13,500.30 $14,415.01
02/29/96 $16,809.85 $17,497.88 $13,926.98 $15,008.91
03/31/96 $17,705.18 $18,418.36 $14,203.21 $15,417.15
04/30/96 $18,824.34 $19,571.25 $14,966.40 $16,573.44
05/31/96 $19,943.51 $20,722.35 $15,567.42 $17,267.87
06/30/96 $19,283.20 $20,023.48 $14,932.74 $16,615.14
07/31/96 $17,828.29 $18,499.96 $13,629.56 $15,212.82
08/31/96 $18,376.68 $19,057.23 $14,421.03 $16,127.11
09/30/96 $19,428.69 $20,136.45 $14,984.07 $16,946.37
10/31/96 $19,283.20 $19,984.44 $14,750.92 $16,626.09
11/30/96 $19,921.12 $20,632.85 $15,356.07 $17,119.88
12/31/96 $20,149.63 $20,858.06 $15,750.56 $17,368.12
01/31/97 $20,575.25 $21,275.92 $16,062.28 $17,804.06
02/28/97 $20,564.05 $21,264.31 $15,673.41 $17,091.90
03/31/97 $19,802.42 $20,463.42 $14,938.48 $16,232.17
04/30/97 $19,869.62 $20,521.45 $14,975.29 $16,125.04
05/31/97 $22,210.52 $22,924.13 $16,645.33 $18,053.60
06/30/97 $23,509.77 $24,235.74 $17,352.58 $19,010.44
07/31/97 $24,629.82 $25,384.85 $18,162.21 $20,206.19
08/31/97 $25,178.64 $25,930.39 $18,572.06 $20,580.01
09/30/97 $26,892.31 $27,683.07 $19,927.86 $22,127.62
10/31/97 $25,671.46 $26,406.28 $19,042.07 $21,171.71
11/30/97 $25,469.85 $26,185.75 $18,912.43 $20,866.84
12/31/97 $25,677.23 $26,377.06 $19,251.91 $21,042.12
01/31/98 $25,160.70 $25,829.77 $18,958.70 $20,697.03
02/28/98 $26,859.51 $27,554.93 $20,380.28 $22,307.26
03/31/98 $28,523.88 $29,244.39 $21,236.66 $23,355.70
04/30/98 $28,558.31 $29,256.29 $21,353.31 $23,544.88
05/31/98 $27,089.07 $27,745.29 $20,207.71 $22,219.30
06/30/98 $27,123.51 $27,757.19 $20,265.54 $22,390.39
07/31/98 $25,264.01 $25,841.67 $18,610.66 $20,782.76
08/31/98 $20,305.33 $20,749.48 $15,002.05 $16,615.82
09/30/98 $20,821.86 $21,272.97 $16,162.82 $17,591.17
10/31/98 $21,590.91 $22,034.42 $16,825.85 $18,296.57
11/30/98 $22,887.97 $23,343.16 $17,714.24 $19,480.36
12/31/98 $23,283.98 $23,728.87 $18,820.16 $20,912.17
01/31/99 $22,824.28 $23,252.38 $19,064.29 $20,991.63
02/28/99 $21,353.22 $21,739.55 $17,528.28 $19,276.62
03/31/99 $21,364.72 $21,739.55 $17,798.52 $19,650.58
04/30/99 $22,778.31 $23,145.18 $19,391.36 $20,910.19
05/31/99 $23,559.33 $23,831.85 $19,678.12 $21,311.66
</TABLE>
* 10/9/96 was the inception date of Class A Shares of the Fund. Returns prior to
that date are for Class I Shares, and have not been adjusted for Class A Share
expenses. If such returns had been adjusted for Class A Share expenses, returns
would have been lower.
** 11/8/96 was the inception date of Class B Shares of the Fund. Returns prior
to that date are for Class I Shares, adjusted for Class B Share expenses.
+ Source: Lipper Analytical Services, Inc. is an independent mutual fund rating
service that ranks funds in various fund categories by making comparative
calculations using total returns. Although gathered from reliable sources, data
accuracy and completeness cannot be guaranteed.
THE FUND HAS ASSUMED THE PERFORMANCE HISTORY OF THE SCHRODER CORE PORTFOLIO IN
WHICH IT INVESTS.
THE ABOVE GRAPH REPRESENTS PERFORMANCE INFORMATION OF CLASS A AND B SHARES.
PERFORMANCE OF OTHER CLASSES WILL DIFFER.
THE RETURNS ABOVE ARE CALCULATED USING THE MAXIMUM 5.75% SALES CHARGE FOR CLASS
A SHARES AND THE MAXIMUM 5.00% DEFERRED SALES CHARGE (DECLINING TO ZERO AFTER
THE SIXTH YEAR) FOR CLASS B SHARES.
INVESTMENTS IN SMALL COMPANIES GENERALLY CARRY GREATER RISK THAN IS CUSTOMARILY
ASSOCIATED WITH LARGER COMPANIES SUCH AS NARROWER MARKETS, LIMITED FINANCIAL
RESOURCES AND LESS LIQUID STOCKS.
[LOGO]
17
<PAGE>
INVESTMENT ADVISER'S REPORT AND PERFORMANCE DATA MAY 31, 1999
- --------------------------------------------------------------------------------
INTERNATIONAL FUND
For the fiscal year ended May 31, 1999, the Fund returned -1.36%, compared to
the Lipper International Average of -1.26%.
While the second half of the fiscal year saw strong performance, particularly
the first three months of 1999, it was the relatively poor showing in the first
half of the fiscal year that brought this overall figure down. As was mentioned
in the November 30, 1998 semi-annual report, the main reason for underperformace
during this period had to do with the Fund's defensive position both in country
and stock selection (a position that had helped us at the end of the prior
fiscal year). In the last six months, the Fund outperformed the Lipper
International Average by 0.67%. The most value added in this period came from
stock selection. In Continental Europe, the Fund favored the telecommunications,
semiconductor and oil sectors. Holdings in these industries included TELECOM
ITALIA which was subject to a takeover during the period, the French oil company
ELF AQUITAINE which benefited from a rise in oil prices and PHILIPS ELECTRONICS
in the Netherlands. Stock selection in the U.K. also added value with most of
the gains again coming from telecommunications and oil.
The area where stock selection detracted was in Japan. Historically, the Fund
has benefited from a very limited exposure to the Japanese banking industry.
However, in the six months ending May 31, the sector experienced an upturn and
the Fund's position detracted from performance. We continue to believe that many
Japanese banks have limited growth prospects and big challenges in improving
returns on capital, and the Fund remains underweight. The Fund was also hurt by
a shift in Japan away from high-quality dependable names such as TAKEDA CHEMICAL
and FUJI PHOTO and towards more cyclical, lower-quality companies which could
reverse if, as we expect, the economy experiences some renewed weakness later in
the calendar year. Overall, country allocation detracted in the final six months
of the fiscal year while currency management, including a hedge of the British
pound (now closed) and the Japanese yen helped to add value.
We believe that the global economic environment is as favorable as it has been
since the emerging markets crisis began in 1997. However, under this surface
there appear to be some strains, particularly in the developed markets. The
Fund's positioning reflects in part this outlook, as well as market prices and
valuations. We expect economic growth to moderate in the United States and parts
of Europe, but may witness an upturn in growth for the rest of the world. The
Fund has a core exposure to growth securities that we expect have the potential
to perform well in the moderate scenario, and recently has added cyclical stocks
(such as oil companies) to reflect anticipated growth in places such as the U.K.
and Asian emerging markets.
THE OPINIONS EXPRESSED REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH MAY
31, 1999. THE MANAGER'S OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON
MARKET AND OTHER CONDITIONS. THE COMPOSITION, INDUSTRIES AND HOLDINGS OF THE
PORTFOLIO ARE SUBJECT TO CHANGE.
THE PERFORMANCE REPRESENTS INFORMATION OF A SHARES EXCLUDING SALES LOAD. HAD THE
PERFORMANCE INCLUDED SALES LOAD, THE RETURN WOULD HAVE BEEN LOWER. THE
PERFORMANCE FOR OTHER CLASSES WILL DIFFER.
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
INTERNATIONAL FUND ("FUND") VS. MSCI EAFE INDEX ("INDEX") AND
LIPPER INTERNATIONAL AVERAGE ("LIPPER AVERAGE")
- --------------------------------------------------------------------------------
The following chart reflects the value of a $10,000 investment in the Fund,
including reinvested dividends and distributions, over the past 10 fiscal year
periods. The result is compared with a broad-based securities market index and a
peer based average. The Fund's total return includes operating expenses and
sales charges (if applicable) that reduce returns, while the total return of the
Index does not. Total return of the Fund would have been lower had certain fees
and expenses not been voluntarily waived and/or reimbursed. The Fund is
professionally managed while the Index is unmanaged and is not available for
investment. The Lipper Average does not include sales charges but does include
management fees and expenses. The Lipper Average is calculated by taking an
arithmetic average of the returns of the funds in the group. Investment return
and principal value of an investment in the Fund will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. PAST PERFORMANCE IS NOT PREDICTIVE NOR A GUARANTEE OF FUTURE RESULTS.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1999
----------------------------------------------------
B LIPPER
A SHARES*+ SHARES**+ INDEX AVERAGE++
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
ONE YEAR (7.03)% (5.90)% 4.36% (1.26)%
FIVE YEAR 6.57% 6.71% 7.63% 7.83%
TEN YEAR 8.27% 8.02% 5.99% 8.58%
VALUE MAY 31, 1999 $22,131 $21,627 $17,889 $22,782
</TABLE>
<TABLE>
<CAPTION>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
A SHARES B SHARES INDEX LIPPER AVERAGE
<S> <C> <C> <C> <C>
05/31/89 $9,425.00 $10,000.00 $10,000.00 $10,000.00
06/30/89 $9,451.95 $10,022.45 $9,832.00 $9,966.00
07/31/89 $10,377.38 $11,000.68 $11,065.92 $10,925.73
08/31/89 $10,602.00 $11,235.63 $10,569.06 $10,854.71
09/30/89 $11,150.07 $11,805.62 $11,049.95 $11,295.41
10/31/89 $10,709.82 $11,331.89 $10,606.85 $10,761.14
11/30/89 $11,069.21 $11,704.28 $11,139.31 $11,174.36
12/31/89 $11,536.42 $12,193.81 $11,550.35 $11,792.31
01/31/90 $11,491.49 $12,135.71 $11,120.68 $11,628.39
02/28/90 $10,952.41 $11,565.93 $10,345.57 $11,259.77
03/31/90 $10,700.83 $11,291.09 $9,267.56 $11,196.72
04/30/90 $10,673.88 $11,249.06 $9,194.34 $11,014.21
05/31/90 $11,617.28 $12,243.18 $10,243.69 $11,844.68
06/30/90 $11,922.76 $12,553.73 $10,153.55 $12,091.05
07/31/90 $12,237.23 $12,881.62 $10,295.70 $12,560.19
08/31/90 $11,033.27 $11,600.67 $9,295.99 $11,242.62
09/30/90 $9,577.74 $10,060.87 $8,000.13 $9,981.20
10/31/90 $10,718.80 $11,255.54 $9,245.75 $10,793.67
11/30/90 $10,224.64 $10,727.68 $8,700.25 $10,521.67
12/31/90 $10,233.63 $10,737.82 $8,841.19 $10,482.74
01/31/91 $10,709.82 $11,223.90 $9,126.76 $10,763.68
02/28/91 $11,347.74 $11,889.03 $10,105.15 $11,609.70
03/31/91 $10,673.88 $11,176.34 $9,498.84 $11,248.64
04/30/91 $10,772.71 $11,272.00 $9,591.93 $11,371.25
05/31/91 $10,745.76 $11,233.79 $9,691.69 $11,481.55
06/30/91 $10,188.70 $10,644.32 $8,980.32 $10,892.55
07/31/91 $10,646.93 $11,118.30 $9,421.25 $11,380.53
08/31/91 $10,377.38 $10,835.32 $9,230.00 $11,323.63
09/30/91 $10,862.56 $11,327.55 $9,749.65 $11,682.59
10/31/91 $10,781.70 $11,238.80 $9,888.09 $11,736.33
11/30/91 $10,269.57 $10,695.17 $9,426.32 $11,327.91
12/31/91 $10,718.80 $11,161.06 $9,913.66 $11,885.24
01/31/92 $10,736.77 $11,174.53 $9,702.50 $11,967.25
02/29/92 $10,602.00 $11,024.83 $9,355.15 $11,968.44
03/31/92 $10,269.57 $10,670.25 $8,737.71 $11,555.53
04/30/92 $10,593.02 $11,003.54 $8,778.78 $11,842.11
05/31/92 $11,186.01 $11,608.66 $9,366.95 $12,421.19
06/30/92 $10,907.48 $11,316.14 $8,922.96 $12,078.36
07/31/92 $10,593.02 $10,981.81 $8,694.53 $11,666.49
08/31/92 $10,700.83 $11,080.99 $9,239.68 $11,778.49
09/30/92 $10,512.15 $10,886.14 $9,056.73 $11,518.19
10/31/92 $10,233.63 $10,588.05 $8,581.26 $11,155.36
11/30/92 $10,170.73 $10,512.73 $8,661.92 $11,217.83
12/31/92 $10,287.54 $10,628.67 $8,706.96 $11,368.15
01/31/93 $10,269.57 $10,601.47 $8,706.09 $11,407.94
02/28/93 $10,485.20 $10,824.55 $8,969.01 $11,671.46
03/31/93 $11,069.21 $11,419.48 $9,751.11 $12,333.24
04/30/93 $11,805.96 $12,165.89 $10,677.47 $12,943.73
05/31/93 $11,913.78 $12,269.29 $10,902.76 $13,219.43
06/30/93 $11,877.84 $12,226.55 $10,732.68 $12,948.43
07/31/93 $12,282.15 $12,641.52 $11,108.32 $13,353.72
08/31/93 $13,072.81 $13,447.02 $11,708.17 $14,161.62
09/30/93 $13,207.58 $13,577.32 $11,444.74 $14,073.82
10/31/93 $13,827.53 $14,203.03 $11,797.24 $14,678.99
11/30/93 $13,324.38 $13,674.73 $10,766.16 $14,105.04
12/31/93 $14,941.63 $15,325.10 $11,543.48 $15,412.58
01/31/94 $15,777.22 $16,172.52 $12,518.90 $16,352.75
02/28/94 $15,435.80 $15,812.26 $12,483.85 $15,996.26
03/31/94 $14,743.97 $15,096.09 $11,945.79 $15,290.82
04/30/94 $15,193.21 $15,546.78 $12,452.29 $15,674.62
05/31/94 $15,175.24 $15,520.32 $12,381.32 $15,624.46
06/30/94 $15,013.51 $15,341.69 $12,555.89 $15,461.97
07/31/94 $15,256.10 $15,581.69 $12,676.43 $15,884.08
08/31/94 $15,876.05 $16,209.56 $12,975.59 $16,346.31
09/30/94 $15,507.67 $15,823.54 $12,566.86 $15,944.19
10/31/94 $15,777.22 $16,082.02 $12,985.34 $16,250.32
11/30/94 $15,175.24 $15,461.14 $12,360.74 $15,458.93
12/31/94 $15,049.45 $15,323.13 $12,438.62 $15,310.52
01/31/95 $14,195.90 $14,444.30 $11,960.97 $14,557.24
02/28/95 $14,150.98 $14,390.28 $11,926.29 $14,577.62
03/31/95 $14,950.62 $15,194.28 $12,670.49 $15,060.14
04/30/95 $15,521.46 $15,641.47 $13,146.90 $15,543.57
05/31/95 $15,829.53 $15,941.78 $12,989.13 $15,681.91
06/30/95 $15,883.90 $15,996.57 $12,761.82 $15,688.18
07/31/95 $16,690.33 $16,800.05 $13,556.89 $16,525.93
08/31/95 $16,164.79 $16,252.22 $13,039.01 $16,218.55
09/30/95 $16,635.96 $16,717.87 $13,293.27 $16,460.21
10/31/95 $16,309.77 $16,380.04 $12,934.36 $16,135.94
11/30/95 $16,409.44 $16,471.35 $13,296.52 $16,310.21
12/31/95 $16,949.04 $17,001.04 $13,832.37 $16,794.62
01/31/96 $17,299.65 $17,334.94 $13,889.15 $17,174.18
02/29/96 $17,465.72 $17,492.62 $13,936.11 $17,248.03
03/31/96 $17,779.42 $17,798.69 $14,232.06 $17,544.70
04/30/96 $18,249.98 $18,253.17 $14,645.82 $18,099.11
05/31/96 $18,286.88 $18,280.99 $14,376.34 $18,059.29
06/30/96 $18,425.28 $18,401.57 $14,457.25 $18,182.09
07/31/96 $17,844.01 $17,807.97 $14,034.67 $17,512.99
08/31/96 $17,954.73 $17,909.99 $14,065.42 $17,717.90
09/30/96 $18,323.79 $18,262.44 $14,439.08 $18,102.37
10/31/96 $17,917.82 $17,845.07 $14,261.48 $17,991.95
11/30/96 $18,600.58 $18,522.14 $14,828.90 $18,771.00
12/31/96 $18,591.96 $18,492.98 $14,638.20 $18,838.58
01/31/97 $18,377.61 $18,270.06 $14,125.71 $18,753.80
02/28/97 $18,759.70 $18,641.59 $14,356.90 $19,012.61
03/31/97 $18,862.21 $18,734.48 $14,408.88 $19,060.14
04/30/97 $19,011.32 $18,873.80 $14,485.34 $19,113.51
05/31/97 $20,176.23 $20,006.97 $15,427.96 $20,241.20
06/30/97 $21,108.16 $20,917.22 $16,278.76 $21,186.47
07/31/97 $21,527.53 $21,325.91 $16,542.12 $21,788.16
08/31/97 $19,654.35 $19,449.67 $15,306.75 $20,210.70
09/30/97 $20,726.07 $20,499.25 $16,164.22 $21,469.83
10/31/97 $19,365.46 $19,143.16 $14,921.84 $19,833.82
11/30/97 $19,011.32 $18,780.92 $14,769.79 $19,657.30
12/31/97 $19,161.33 $18,917.12 $14,898.61 $19,820.46
01/31/98 $19,838.94 $19,578.75 $15,579.98 $20,288.22
02/28/98 $20,902.41 $20,613.14 $16,579.69 $21,633.33
03/31/98 $21,749.43 $21,433.19 $17,090.21 $22,736.63
04/30/98 $22,257.63 $21,927.09 $17,225.48 $23,048.12
05/31/98 $22,436.45 $22,085.50 $17,141.86 $23,073.48
06/30/98 $22,295.28 $21,936.40 $17,271.63 $22,898.12
07/31/98 $22,408.21 $22,029.59 $17,446.73 $23,232.43
08/31/98 $19,791.88 $19,438.97 $15,285.08 $19,917.16
09/30/98 $19,208.38 $18,861.21 $14,816.44 $19,204.13
10/31/98 $20,110.64 $19,726.43 $16,360.90 $20,630.99
11/30/98 $20,956.11 $20,554.25 $17,199.09 $21,697.62
12/31/98 $21,576.94 $21,140.38 $17,877.59 $22,370.24
01/31/99 $21,946.11 $21,493.51 $17,824.80 $22,544.73
02/28/99 $21,654.66 $21,197.64 $17,400.04 $21,949.55
03/31/99 $22,247.28 $21,770.30 $18,126.35 $22,715.59
04/30/99 $22,917.61 $22,409.76 $18,860.81 $23,758.23
05/31/99 $22,130.70 $21,627.13 $17,889.48 $22,781.77
</TABLE>
* 4/12/95 was the inception date of Class A Shares of the Fund. Returns prior to
that date are for Class I Shares. Performance shown for Class A Shares for the
period prior to November 11, 1994 reflects performance of the shares of the
predecessor collective investment fund (see footnote + below) adjusted to
reflect the Fund's 1994 estimate of its expense ratio for the first year of
operations as a mutual fund, including any applicable sales load (without giving
effect to any fee waivers or expense reimbursements).
** 5/12/95 was the inception date of Class B Shares of the Fund. Returns prior
to that date are for Class I Shares, adjusted for Class B Share expenses.
Performance shown for Class B Shares for the period prior to November 11, 1994
reflects performance of the shares of the predecessor collective investment fund
(see footnote + below) adjusted to reflect Class B Share expenses (before
waivers and reimbursements).
+ Prior to November 11, 1994, Norwest Bank Minnesota, N.A. managed a collective
investment fund with investment objectives and polices that were, in all
material respects, equivalent to the Fund. The performance of the Fund includes
the performance of the predecessor collective investment fund for the periods
before it became a mutual fund on November 11, 1994. Performance reflects the
historic performance of the mutual fund in which the collective investment fund
invested, which was managed by Schroder Capital Management International Inc.
The collective investment fund was not registered under the Investment Company
Act of 1940 (the "1940 Act"), nor subject to certain investment limitations,
diversification requirements and other restrictions imposed by the 1940 Act and
the Internal Revenue Code, which, if applicable, may have adversely affected the
performance results.
++ Source: Lipper Analytical Services, Inc. is an independent mutual fund rating
service that ranks funds in various fund categories by making comparative
calculations using total returns. Although gathered from reliable sources, data
accuracy and completeness cannot be guaranteed.
THE ABOVE GRAPH REPRESENTS PERFORMANCE INFORMATION OF CLASS A AND B SHARES.
PERFORMANCE OF OTHER CLASSES WILL DIFFER.
THE RETURNS ABOVE ARE CALCULATED USING THE MAXIMUM 5.75% SALES CHARGE FOR CLASS
A SHARES, THE MAXIMUM 5.00% DEFERRED SALES CHARGE
(DECLINING TO ZERO AFTER THE SIXTH YEAR) FOR CLASS B SHARES.
INVESTING IN FOREIGN SECURITIES INVOLVES GREATER RISKS THAN INVESTING IN
SECURITIES OF U.S. ISSUERS, INCLUDING CURRENCY FLUCTUATION AND POLITICAL
UNCERTAINTY.
[LOGO]
18
<PAGE>
INDEPENDENT AUDITORS' REPORT MAY 31, 1999
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareholders
Norwest Advantage Funds
We have audited the accompanying statements of assets
and liabilities of Stable Income Fund, Intermediate
Government Income Fund, Income Fund, Total Return Bond
Fund, Tax-Free Income Fund, Colorado Tax-Free Fund,
Minnesota Tax-Free Fund, Growth Balanced Fund, Income
Equity Fund, ValuGrowth Stock Fund, Diversified Equity
Fund, Growth Equity Fund, Large Company Growth Fund,
Diversified Small Cap Fund, Small Company Stock Fund,
Small Cap Opportunities Fund, and International Fund,
portfolios of Norwest Advantage Funds (collectively the
"Funds"), including the schedules of investments, as of
May 31, 1999, and the related statements of operations for
the year then ended, statements of changes in net assets
for each of the years or periods in the two year period
then ended and financial highlights for the periods
presented on pages 36 to 48. These financial statements
and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an
opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and
financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures
included confirmation of securities owned as of May 31,
1999, by correspondence with the custodian and brokers. An
audit also includes assessing the accounting principles
used and significant estimates made by management, as well
as evaluating the overall financial statement
presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of the Funds as
of May 31, 1999, the results of their operations, changes
in their net assets and financial highlights for each of
the periods indicated in the first paragraph above, in
conformity with generally accepted accounting principles.
/s/ KPMG LLP
Boston, Massachusetts
July 16, 1999
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19
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERMEDIATE
STABLE GOVERNMENT
INCOME INCOME
FUND FUND
------------- -------------
<S> <C> <C>
ASSETS
Investments (Note 2)
Investments at cost......... $ 191,625,870 $450,422,623
Net unrealized appreciation
(depreciation)........... (663,452) (8,347,163)
------------- -------------
TOTAL INVESTMENTS AT VALUE... 190,962,418 442,075,460
Collateral for securities
loaned (Notes 2 and 5)... - 93,411,953
Receivable for dividends,
interest and other
receivables.............. - 4,782,323
Receivable for investments
sold..................... - -
Receivable for Fund shares
issued................... 1,010,377 969,886
Organization costs, net of
amortization (Note 2).... 5,397 5,397
------------- -------------
TOTAL ASSETS.................. 191,978,192 541,245,019
------------- -------------
LIABILITIES
Payable for investments
purchased................ - -
Payable for securities loaned
(Notes 2 and 5).......... - 93,411,953
Dividends payable............ 1,026 15,803
Payable for Fund shares
redeemed................. 1,776,693 88,659
Payable to investment adviser
and affiliates (Note
3)....................... 28,864 222,004
Payable to other related
parties (Note 3)......... 8,035 23,436
Accrued expenses and other
liabilities.............. 17,374 45,251
------------- -------------
TOTAL LIABILITIES............. 1,831,992 93,807,106
------------- -------------
NET ASSETS.................... $ 190,146,200 $447,437,913
------------- -------------
------------- -------------
COMPONENTS OF NET ASSETS
Paid in capital.............. $ 197,611,399 $472,441,067
Undistributed (distributions
in excess of) net
investment income........ 135,855 520,614
Accumulated net realized gain
(loss) from
investments.............. (6,937,542) (17,176,605)
Net unrealized appreciation
(depreciation) on
investments.............. (663,452) (8,347,163)
------------- -------------
NET ASSETS.................... $ 190,146,200 $447,437,913
------------- -------------
------------- -------------
NET ASSETS BY SHARE CLASS
A Shares..................... $ 8,558,054 $ 18,593,604
B Shares..................... 2,387,171 8,539,738
C Shares..................... - -
I Shares..................... 179,200,975 420,304,571
------------- -------------
NET ASSETS.................... $ 190,146,200 $447,437,913
------------- -------------
------------- -------------
SHARES OF BENEFICIAL INTEREST
A Shares..................... 833,717 1,683,685
B Shares..................... 232,623 773,849
C Shares..................... - -
I Shares..................... 17,453,256 38,046,624
NET ASSET VALUE PER SHARE (Net
Assets Divided by Shares of
Beneficial Interest)
A Shares..................... $ 10.26 $ 11.04
B Shares..................... $ 10.26 $ 11.04
C Shares..................... $ - $ -
I Shares..................... $ 10.27 $ 11.05
OFFERING PRICE PER SHARE
(NAV/(1-Maximum Sales
Load)
A Shares..................... $ 10.42 $ 11.56
B Shares..................... $ 10.26 $ 11.04
C Shares..................... $ - $ -
I Shares..................... $ 10.27 $ 11.05
MAXIMUM SALES LOAD
A Shares..................... 1.50% 4.50%
B Shares..................... N/A N/A
C Shares..................... N/A N/A
I Shares..................... N/A N/A
</TABLE>
See Notes to Financial Statements
[LOGO]
20
<PAGE>
MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN TAX-FREE COLORADO MINNESOTA
INCOME BOND INCOME TAX-FREE TAX-FREE
FUND FUND FUND FUND FUND
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments (Note 2)
Investments at cost......... $ 373,544,413 $ 93,045,325 $ 349,646,415 $ 95,359,332 $ 84,392,963
Net unrealized appreciation
(depreciation)........... (8,011,223) (2,602,757) 11,011,322 2,671,570 2,330,951
------------- ------------- ------------- ------------- -------------
TOTAL INVESTMENTS AT VALUE... 365,533,190 90,442,568 360,657,737 98,030,902 86,723,914
Collateral for securities
loaned (Notes 2 and 5)... 38,268,957 - - - -
Receivable for dividends,
interest and other
receivables.............. 5,116,286 - 6,448,006 1,757,300 1,282,107
Receivable for investments
sold..................... 19,891,253 - 17,158,291 - -
Receivable for Fund shares
issued................... 1,124,379 28,657 218,848 280,421 221,491
Organization costs, net of
amortization (Note 2).... - - - - -
------------- ------------- ------------- ------------- -------------
TOTAL ASSETS.................. 429,934,065 90,471,225 384,482,882 100,068,623 88,227,512
------------- ------------- ------------- ------------- -------------
LIABILITIES
Payable for investments
purchased................ 19,500,513 - 9,982,438 - 986,023
Payable for securities loaned
(Notes 2 and 5).......... 38,268,957 - - - -
Dividends payable............ 1,550,906 327,462 1,027,823 204,343 136,350
Payable for Fund shares
redeemed................. 416,853 205,400 107,285 6,234 2,646
Payable to investment adviser
and affiliates (Note
3)....................... 187,524 2,954 163,261 37,409 30,333
Payable to other related
parties (Note 3)......... 30,164 3,840 13,472 1,616 2,771
Accrued expenses and other
liabilities.............. 50,856 13,412 70,531 25,209 60,526
------------- ------------- ------------- ------------- -------------
TOTAL LIABILITIES............. 60,005,773 553,068 11,364,810 274,811 1,218,649
------------- ------------- ------------- ------------- -------------
NET ASSETS.................... $ 369,928,292 $ 89,918,157 $ 373,118,072 $ 99,793,812 $ 87,008,863
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
COMPONENTS OF NET ASSETS
Paid in capital.............. $ 388,634,457 $ 93,409,937 $ 363,362,206 $ 97,473,899 $ 84,779,067
Undistributed (distributions
in excess of) net
investment income........ 14,155 (278,956) (510,093) - (43,360)
Accumulated net realized gain
(loss) from
investments.............. (10,709,097) (610,067) (745,363) (351,657) (57,795)
Net unrealized appreciation
(depreciation) on
investments.............. (8,011,223) (2,602,757) 11,011,322 2,671,570 2,330,951
------------- ------------- ------------- ------------- -------------
NET ASSETS.................... $ 369,928,292 $ 89,918,157 $ 373,118,072 $ 99,793,812 $ 87,008,863
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
NET ASSETS BY SHARE CLASS
A Shares..................... $ 13,730,973 $ 1,304,300 $ 43,388,040 $ 39,958,172 $ 38,254,884
B Shares..................... 7,725,606 2,756,538 17,973,193 10,909,418 21,492,677
C Shares..................... - - - - -
I Shares..................... 348,471,713 85,857,319 311,756,839 48,926,222 27,261,302
------------- ------------- ------------- ------------- -------------
NET ASSETS.................... $ 369,928,292 $ 89,918,157 $ 373,118,072 $ 99,793,812 $ 87,008,863
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
SHARES OF BENEFICIAL INTEREST
A Shares..................... 1,449,092 142,232 4,157,382 3,787,333 3,490,261
B Shares..................... 816,631 300,043 1,721,823 1,032,778 1,961,273
C Shares..................... - - - - -
I Shares..................... 36,808,911 9,349,252 29,855,023 4,636,496 2,487,114
NET ASSET VALUE PER SHARE (Net
Assets Divided by Shares of
Beneficial Interest)
A Shares..................... $ 9.48 $ 9.17 $ 10.44 $ 10.55 $ 10.96
B Shares..................... $ 9.46 $ 9.19 $ 10.44 $ 10.56 $ 10.96
C Shares..................... $ - $ - $ - $ - $ -
I Shares..................... $ 9.47 $ 9.18 $ 10.44 $ 10.55 $ 10.96
OFFERING PRICE PER SHARE
(NAV/(1-Maximum Sales
Load)
A Shares..................... $ 9.93 $ 9.60 $ 10.93 $ 11.05 $ 11.48
B Shares..................... $ 9.46 $ 9.19 $ 10.44 $ 10.56 $ 10.96
C Shares..................... $ - $ - $ - $ - $ -
I Shares..................... $ 9.47 $ 9.18 $ 10.44 $ 10.55 $ 10.96
MAXIMUM SALES LOAD
A Shares..................... 4.50% 4.50% 4.50% 4.50% 4.50%
B Shares..................... N/A N/A N/A N/A N/A
C Shares..................... N/A N/A N/A N/A N/A
I Shares..................... N/A N/A N/A N/A N/A
</TABLE>
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21
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH INCOME VALUGROWTH
BALANCED EQUITY STOCK
FUND FUND FUND
--------------- --------------- -------------
<S> <C> <C> <C>
ASSETS
Investments (Note 2)
Investments at cost......... $ 639,211,882 $ 1,194,087,388 $ 149,734,117
Net unrealized appreciation
(depreciation)........... 222,039,396 537,929,530 76,504,220
--------------- --------------- -------------
TOTAL INVESTMENTS AT VALUE... 861,251,278 1,732,016,918 226,238,337
Collateral for securities
loaned (Notes 2 and 5)... - - 23,829,038
Receivable for dividends,
interest and other
receivables.............. 2,434 3,084 338,918
Receivable for investments
sold..................... - - -
Receivable for Fund shares
issued................... 4,704,237 3,336,817 8,270
Organization costs, net of
amortization (Note 2).... 5,397 5,397 -
--------------- --------------- -------------
TOTAL ASSETS.................. 865,963,346 1,735,362,216 250,414,563
--------------- --------------- -------------
LIABILITIES
Payable for investments
purchased................ - - -
Payable for securities loaned
(Notes 2 and 5).......... - - 23,829,038
Dividends payable............ - 6,569 94,974
Payable for Fund shares
redeemed................. 1,219,662 2,251,498 798,127
Payable to investment adviser
and affiliates (Note
3)....................... 260,254 327,985 164,975
Payable to other related
parties (Note 3)......... 26,071 99,191 19,212
Accrued expenses and other
liabilities.............. 73,106 181,125 149,844
--------------- --------------- -------------
TOTAL LIABILITIES............. 1,579,093 2,866,368 25,056,170
--------------- --------------- -------------
NET ASSETS.................... $ 864,384,253 $ 1,732,495,848 $ 225,358,393
--------------- --------------- -------------
--------------- --------------- -------------
COMPONENTS OF NET ASSETS
Paid in capital.............. $ 593,603,450 $ 1,188,879,050 $ 69,008,771
Undistributed (distributions
in excess of) net
investment income........ 9,068,551 2,812,753 1,009,103
Accumulated net realized gain
(loss) from
investments.............. 39,672,856 2,874,515 78,836,299
Net unrealized appreciation
(depreciation) on
investments.............. 222,039,396 537,929,530 76,504,220
--------------- --------------- -------------
NET ASSETS.................... $ 864,384,253 $ 1,732,495,848 $ 225,358,393
--------------- --------------- -------------
--------------- --------------- -------------
NET ASSETS BY SHARE CLASS
A Shares..................... $ 3,667,409 $ 105,161,929 $ 18,902,480
B Shares..................... 8,977,895 106,687,522 7,784,040
C Shares..................... 1,236,229 1,105,847 -
I Shares..................... 850,502,720 1,519,540,550 198,671,873
--------------- --------------- -------------
NET ASSETS.................... $ 864,384,253 $ 1,732,495,848 $ 225,358,393
--------------- --------------- -------------
--------------- --------------- -------------
SHARES OF BENEFICIAL INTEREST
A Shares..................... 111,866 2,268,414 883,711
B Shares..................... 291,888 2,305,791 376,292
C Shares..................... 40,147 23,287 -
I Shares..................... 27,501,003 32,780,825 9,302,715
NET ASSET VALUE PER SHARE (Net
Assets Divided by Shares of
Beneficial Interest)
A Shares..................... $ 32.78 $ 46.36 $ 21.39
B Shares..................... $ 30.76 $ 46.27 $ 20.69
C Shares..................... $ 30.79 $ 47.49 $ -
I Shares..................... $ 30.93 $ 46.35 $ 21.36
OFFERING PRICE PER SHARE
(NAV/(1-Maximum Sales
Load)
A Shares..................... $ 34.78 $ 49.19 $ 22.69
B Shares..................... $ 30.76 $ 46.27 $ 20.69
C Shares..................... $ 30.79 $ 47.49 $ -
I Shares..................... $ 30.93 $ 46.35 $ 21.36
MAXIMUM SALES LOAD
A Shares..................... 5.75% 5.75% 5.75%
B Shares..................... N/A N/A N/A
C Shares..................... N/A N/A N/A
I Shares..................... N/A N/A N/A
(a) Actual net assets and
number of C shares at May
31, 1999, were $59,902.04
and 1,650.470.
</TABLE>
See Notes to Financial Statements
[LOGO]
22
<PAGE>
MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LARGE SMALL
DIVERSIFIED GROWTH COMPANY DIVERSIFIED COMPANY
EQUITY EQUITY GROWTH SMALL CAP STOCK
FUND FUND FUND FUND FUND
---------------- ---------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments (Note 2)
Investments at cost......... $ 1,029,230,259 $ 656,811,863 $ 804,262,869 $ 58,522,658 $ 35,549,955
Net unrealized appreciation
(depreciation)........... 781,773,715 301,958,214 187,836,112 3,405,644 (5,950,884)
---------------- ---------------- ------------- -------------- --------------
TOTAL INVESTMENTS AT VALUE... 1,811,003,974 958,770,077 992,098,981 61,928,302 29,599,071
Collateral for securities
loaned (Notes 2 and 5)... - - - - -
Receivable for dividends,
interest and other
receivables.............. 1,581 4,672 27,954 1,915 -
Receivable for investments
sold..................... - - - - -
Receivable for Fund shares
issued................... 1,638,511 1,303,288 5,179,320 349,167 1,574,316
Organization costs, net of
amortization (Note 2).... 5,397 5,397 5,397 2,504 -
---------------- ---------------- ------------- -------------- --------------
TOTAL ASSETS.................. 1,812,649,463 960,083,434 997,303,093 62,281,888 31,173,387
---------------- ---------------- ------------- -------------- --------------
LIABILITIES
Payable for investments
purchased................ - - - - -
Payable for securities loaned
(Notes 2 and 5).......... - - - - -
Dividends payable............ 2,632 - - - 5,218
Payable for Fund shares
redeemed................. 1,182,221 2,647,401 3,294,339 16,320 80,289
Payable to investment adviser
and affiliates (Note
3)....................... 569,923 341,371 40,554 6,334 -
Payable to other related
parties (Note 3)......... 103,741 42,970 32,528 985 -
Accrued expenses and other
liabilities.............. 183,799 95,953 455,349 17,138 28,243
---------------- ---------------- ------------- -------------- --------------
TOTAL LIABILITIES............. 2,042,316 3,127,695 3,822,770 40,777 113,750
---------------- ---------------- ------------- -------------- --------------
NET ASSETS.................... $ 1,810,607,147 $ 956,955,739 $ 993,488,882 $ 62,241,111 $ 31,059,637
---------------- ---------------- ------------- -------------- --------------
---------------- ---------------- ------------- -------------- --------------
COMPONENTS OF NET ASSETS
Paid in capital.............. $ 965,790,612 $ 600,446,303 $ 773,035,265 $ 63,019,363 $ 60,604,190
Undistributed (distributions
in excess of) net
investment income........ 5,854,223 (159,002) - - -
Accumulated net realized gain
(loss) from
investments.............. 57,188,597 54,710,224 32,617,505 (4,183,896) (23,593,669)
Net unrealized appreciation
(depreciation) on
investments.............. 781,773,715 301,958,214 187,836,112 3,405,644 (5,950,884)
---------------- ---------------- ------------- -------------- --------------
NET ASSETS.................... $ 1,810,607,147 $ 956,955,739 $ 993,488,882 $ 62,241,111 $ 31,059,637
---------------- ---------------- ------------- -------------- --------------
---------------- ---------------- ------------- -------------- --------------
NET ASSETS BY SHARE CLASS
A Shares..................... $ 69,768,178 $ 17,334,531 $ 191,233,426 $ 1,503,838 $ 5,563,397
B Shares..................... 111,105,564 18,975,508 156,870,470 475,998 2,904,315
C Shares..................... 542,350 59,902(a) - - -
I Shares..................... 1,629,191,055 920,585,798 645,384,986 60,261,275 22,591,925
---------------- ---------------- ------------- -------------- --------------
NET ASSETS.................... $ 1,810,607,147 $ 956,955,739 $ 993,488,882 $ 62,241,111 $ 31,059,637
---------------- ---------------- ------------- -------------- --------------
---------------- ---------------- ------------- -------------- --------------
SHARES OF BENEFICIAL INTEREST
A Shares..................... 1,445,956 479,198 3,292,254 157,993 637,433
B Shares..................... 2,329,933 536,155 2,878,178 53,154 348,193
C Shares..................... 11,237 1,650(a) - - -
I Shares..................... 33,767,838 25,449,660 11,805,608 6,700,536 2,603,945
NET ASSET VALUE PER SHARE (Net
Assets Divided by Shares of
Beneficial Interest)
A Shares..................... $ 48.25 $ 36.17 $ 58.09 $ 9.52 $ 8.73
B Shares..................... $ 47.69 $ 35.39 $ 54.50 $ 8.96 $ 8.34
C Shares..................... $ 48.26 $ 36.29 $ - $ - $ -
I Shares..................... $ 48.25 $ 36.17 $ 54.67 $ 8.99 $ 8.68
OFFERING PRICE PER SHARE
(NAV/(1-Maximum Sales
Load)
A Shares..................... $ 51.19 $ 38.38 $ 61.63 $ 10.10 $ 9.26
B Shares..................... $ 47.69 $ 35.39 $ 54.50 $ 8.96 $ 8.34
C Shares..................... $ 48.26 $ 36.29 $ - $ - $ -
I Shares..................... $ 48.25 $ 36.17 $ 54.67 $ 8.99 $ 8.68
MAXIMUM SALES LOAD
A Shares..................... 5.75% 5.75% 5.75% 5.75% 5.75%
B Shares..................... N/A N/A N/A N/A N/A
C Shares..................... N/A N/A N/A N/A N/A
I Shares..................... N/A N/A N/A N/A N/A
(a) Actual net assets and
number of C shares at May
31, 1999, were $59,902.04
and 1,650.470.
<CAPTION>
SMALL
CAP
OPPORTUNITIES INTERNATIONAL
FUND FUND
------------- --------------
<S> <C> <C>
ASSETS
Investments (Note 2)
Investments at cost......... $191,309,526 $247,347,381
Net unrealized appreciation
(depreciation)........... 19,323,081 29,684,340
------------- --------------
TOTAL INVESTMENTS AT VALUE... 210,632,607 277,031,721
Collateral for securities
loaned (Notes 2 and 5)... - -
Receivable for dividends,
interest and other
receivables.............. 422 12,326
Receivable for investments
sold..................... - -
Receivable for Fund shares
issued................... 481,435 173,209
Organization costs, net of
amortization (Note 2).... - 5,397
------------- --------------
TOTAL ASSETS.................. 211,114,464 277,222,653
------------- --------------
LIABILITIES
Payable for investments
purchased................ - -
Payable for securities loaned
(Notes 2 and 5).......... - -
Dividends payable............ - 48
Payable for Fund shares
redeemed................. 322,449 794,360
Payable to investment adviser
and affiliates (Note
3)....................... 74,181 180,468
Payable to other related
parties (Note 3)......... 8,591 152,688
Accrued expenses and other
liabilities.............. 8,342 15,981
------------- --------------
TOTAL LIABILITIES............. 413,563 1,143,545
------------- --------------
NET ASSETS.................... $210,700,901 $276,079,108
------------- --------------
------------- --------------
COMPONENTS OF NET ASSETS
Paid in capital.............. $222,083,543 $229,327,733
Undistributed (distributions
in excess of) net
investment income........ - 124,058
Accumulated net realized gain
(loss) from
investments.............. (30,705,723) 16,942,977
Net unrealized appreciation
(depreciation) on
investments.............. 19,323,081 29,684,340
------------- --------------
NET ASSETS.................... $210,700,901 $276,079,108
------------- --------------
------------- --------------
NET ASSETS BY SHARE CLASS
A Shares..................... $ 4,697,878 $ 2,865,957
B Shares..................... 4,187,124 1,973,392
C Shares..................... - -
I Shares..................... 201,815,899 271,239,759
------------- --------------
NET ASSETS.................... $210,700,901 $276,079,108
------------- --------------
------------- --------------
SHARES OF BENEFICIAL INTEREST
A Shares..................... 229,114 125,806
B Shares..................... 208,400 87,103
C Shares..................... - -
I Shares..................... 9,840,932 11,898,706
NET ASSET VALUE PER SHARE (Net
Assets Divided by Shares of
Beneficial Interest)
A Shares..................... $ 20.50 $ 22.78
B Shares..................... $ 20.09 $ 22.66
C Shares..................... $ - $ -
I Shares..................... $ 20.51 $ 22.80
OFFERING PRICE PER SHARE
(NAV/(1-Maximum Sales
Load)
A Shares..................... $ 21.75 $ 24.17
B Shares..................... $ 20.09 $ 22.66
C Shares..................... $ - $ -
I Shares..................... $ 20.51 $ 22.80
MAXIMUM SALES LOAD
A Shares..................... 5.75% 5.75%
B Shares..................... N/A N/A
C Shares..................... N/A N/A
I Shares..................... N/A N/A
(a) Actual net assets and
number of C shares at May
31, 1999, were $59,902.04
and 1,650.470.
</TABLE>
[LOGO]
23
<PAGE>
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERMEDIATE
STABLE GOVERNMENT
INCOME INCOME
FUND FUND
------------ -------------
<S> <C> <C>
INVESTMENT INCOME
Interest income (b).......... $ 10,130,249 $ 28,618,975
Dividend income (a)(b)....... - -
Securities lending income
(Notes 2 and 5).......... 33,850 109,732
Net expenses from Portfolios
(Note 1)................. (633,514) -
------------ -------------
TOTAL INVESTMENT INCOME...... 9,530,585 28,728,707
------------ -------------
EXPENSES
Advisory (Note 3)............ - 1,470,878
Management and Administration
(Note 3)................. 88,346 445,720
Transfer agent (Note 3)
A Shares.................... 21,905 43,002
B Shares.................... 5,182 21,888
C Shares.................... - -
I Shares.................... 414,635 1,049,412
Custody (Note 3)............. - -
Accounting (Note 3).......... 37,500 87,250
Legal........................ 2,606 6,806
Registration
A Shares.................... 7,663 7,771
B Shares.................... 5,881 5,633
C Shares.................... - -
I Shares.................... 18,905 16,730
Audit........................ 5,900 14,200
Trustees..................... 2,020 5,235
Distribution fees (Note 3)
A Shares.................... - -
B Shares.................... 20,728 87,552
C Shares.................... - -
Amortization of organization
costs (Note 2)........... 11,920 11,920
Miscellaneous................ 28,814 72,590
------------ -------------
TOTAL EXPENSES............... 672,005 3,346,587
Fees waived and expenses
reimbursed (Note 3)...... (141,531) (249,512)
------------ -------------
NET EXPENSES................. 530,474 3,097,075
------------ -------------
NET INVESTMENT INCOME
(LOSS)................... 9,000,111 25,631,632
------------ -------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS
Net Realized Gain (Loss)
from
Securities.............. - 9,601,541
Financial futures
transactions.......... - -
Securities transactions
allocated from
Portfolios (Note 1)... 77,235 -
Foreign currency
transactions allocated
from Portfolios....... - -
Financial futures
transactions allocated
from Portfolios....... - -
------------ -------------
Net Realized Gain (Loss)
from Investments....... 77,235 9,601,541
------------ -------------
Net Change in Unrealized
Appreciation
(Depreciation) of
Securities.............. - (17,398,354)
Securities transactions
allocated from
Portfolios (Note 1)... (817,887) -
Foreign currency
transactions allocated
from Portfolios....... - -
Financial futures
transactions allocated
from Portfolios....... - -
------------ -------------
Net Change in Unrealized
Appreciation
(Depreciation) of
Investments............ (817,887) (17,398,354)
------------ -------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS.............. (740,652) (7,796,813)
------------ -------------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS............... $ 8,259,459 $ 17,834,819
------------ -------------
------------ -------------
(a) Net of foreign
withholding taxes of..... $ - $ -
(b) Interest income and dividend income include amounts
allocated from Portfolios where applicable.
</TABLE>
See Notes to Financial Statements
[LOGO]
24
<PAGE>
FOR THE YEAR ENDED MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN TAX-FREE COLORADO MINNESOTA
INCOME BOND INCOME TAX-FREE TAX-FREE
FUND FUND FUND FUND FUND
------------- -------------- ------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest income (b).......... $ 23,264,109 $ 7,012,578 $ 19,642,349 $ 4,696,387 $ 4,112,192
Dividend income (a)(b)....... - - - - -
Securities lending income
(Notes 2 and 5).......... 172,051 15,396 - - -
Net expenses from Portfolios
(Note 1)................. - (596,926) - - -
------------- -------------- ------------- ----------------- -----------------
TOTAL INVESTMENT INCOME...... 23,436,160 6,431,048 19,642,349 4,696,387 4,112,192
------------- -------------- ------------- ----------------- -----------------
EXPENSES
Advisory (Note 3)............ 1,735,605 - 1,808,783 442,396 394,355
Management and Administration
(Note 3)................. 347,122 53,022 361,756 88,478 78,870
Transfer agent (Note 3)
A Shares.................... 26,918 4,960 107,416 96,898 90,579
B Shares.................... 16,179 7,454 34,062 24,432 49,192
C Shares.................... - - - - -
I Shares.................... 824,705 252,698 762,914 99,867 57,406
Custody (Note 3)............. 49,712 - 51,176 17,696 15,774
Accounting (Note 3).......... 85,250 37,500 85,250 63,250 62,250
Legal........................ 4,619 1,629 5,544 2,981 2,885
Registration
A Shares.................... 8,589 4,681 14,644 3,215 2,805
B Shares.................... 7,038 6,394 8,115 863 2,032
C Shares.................... - - - - -
I Shares.................... 30,492 10,583 18,395 4,396 1,783
Audit........................ 13,850 6,225 13,700 13,075 13,399
Trustees..................... 3,964 1,314 4,206 1,006 906
Distribution fees (Note 3)
A Shares.................... - - - - -
B Shares.................... 64,717 29,816 136,247 97,729 196,769
C Shares.................... - - - - -
Amortization of organization
costs (Note 2)........... - 3,814 - - -
Miscellaneous................ 63,627 19,052 70,367 33,693 36,783
------------- -------------- ------------- ----------------- -----------------
TOTAL EXPENSES............... 3,282,387 439,142 3,482,575 989,975 1,005,788
Fees waived and expenses
reimbursed (Note 3)...... (629,250) (218,127) (1,209,700) (385,757) (384,934)
------------- -------------- ------------- ----------------- -----------------
NET EXPENSES................. 2,653,137 221,015 2,272,875 604,218 620,854
------------- -------------- ------------- ----------------- -----------------
NET INVESTMENT INCOME
(LOSS)................... 20,783,023 6,210,033 17,369,474 4,092,169 3,491,338
------------- -------------- ------------- ----------------- -----------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS
Net Realized Gain (Loss)
from
Securities.............. 1,744,973 - 3,445,224 501,049 216,836
Financial futures
transactions.......... - - - - -
Securities transactions
allocated from
Portfolios (Note 1)... - (554,982) - - -
Foreign currency
transactions allocated
from Portfolios....... - - - - -
Financial futures
transactions allocated
from Portfolios....... - - - - -
------------- -------------- ------------- ----------------- -----------------
Net Realized Gain (Loss)
from Investments....... 1,744,973 (554,982) 3,445,224 501,049 216,836
------------- -------------- ------------- ----------------- -----------------
Net Change in Unrealized
Appreciation
(Depreciation) of
Securities.............. (14,614,100) - (7,184,375) (1,664,572) (920,274)
Securities transactions
allocated from
Portfolios (Note 1)... - (1,892,683) - - -
Foreign currency
transactions allocated
from Portfolios....... - - - - -
Financial futures
transactions allocated
from Portfolios....... - - - - -
------------- -------------- ------------- ----------------- -----------------
Net Change in Unrealized
Appreciation
(Depreciation) of
Investments............ (14,614,100) (1,892,683) (7,184,375) (1,664,572) (920,274)
------------- -------------- ------------- ----------------- -----------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS.............. (12,869,127) (2,447,665) (3,739,151) (1,163,523) (703,438)
------------- -------------- ------------- ----------------- -----------------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS............... $ 7,913,896 $ 3,762,368 $ 13,630,323 $ 2,928,646 $ 2,787,900
------------- -------------- ------------- ----------------- -----------------
------------- -------------- ------------- ----------------- -----------------
(a) Net of foreign
withholding taxes of..... $ - $ - $ - $ - $ -
(b) Interest income and dividend income include amounts
allocated from Portfolios where applicable.
</TABLE>
[LOGO]
25
<PAGE>
STATEMENTS OF OPERATIONS (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH INCOME VALUGROWTH DIVERSIFIED GROWTH
BALANCED EQUITY STOCK EQUITY EQUITY
FUND FUND FUND FUND FUND
----------------- ------------- ------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest income (b).......... $ 16,505,856 $ 1,414,305 $ 728,350 $ 3,162,860 $ 2,887,005
Dividend income (a)(b)....... 6,214,559 29,415,238 5,516,775 21,348,564 8,201,197
Securities lending income
(Notes 2 and 5).......... 186,803 201,664 138,072 415,781 289,867
Net expenses from Portfolios
(Note 1)................. (3,820,678) (8,178,939) - (9,503,595) (7,370,526)
----------------- ------------- ------------- ------------- ----------------
TOTAL INVESTMENT INCOME...... 19,086,540 22,852,268 6,383,197 15,423,610 4,007,543
----------------- ------------- ------------- ------------- ----------------
EXPENSES
Advisory (Note 3)............ 1,854,353 - 3,347,114 4,237,011 2,425,572
Management and Administration
(Note 3)................. 370,872 747,064 425,138 847,404 485,114
Transfer agent (Note 3)
A Shares.................... 4,892 218,651 55,327 154,548 46,374
B Shares.................... 6,382 209,221 20,743 238,513 43,863
C Shares.................... 549 503 - 415 68
I Shares.................... 1,844,286 3,306,949 986,775 3,843,535 2,335,267
Custody (Note 3)............. - - 57,514 - -
Accounting (Note 3).......... 37,501 45,500 78,249 45,500 45,500
Legal........................ 14,489 24,988 7,366 30,324 16,341
Registration
A Shares................... 6,176 13,482 7,085 8,451 5,221
B Shares................... 7,363 13,888 5,823 11,992 5,647
C Shares................... 5,589 5,482 - 5,356 5,248
I Shares................... 42,856 53,865 14,772 25,650 21,324
Audit........................ 5,900 5,900 13,775 5,900 5,900
Trustees..................... 8,472 17,104 6,059 20,021 11,911
Distribution fees (Note 3)
A Shares.................... 1,254 - - - -
B Shares.................... 25,528 836,884 82,971 954,051 175,451
C Shares.................... 1,648 1,509 - 1,246 204
Amortization of organization
costs (Note 2)........... 11,920 11,920 - 11,921 11,920
Miscellaneous................ 58,370 176,581 51,589 182,080 91,352
----------------- ------------- ------------- ------------- ----------------
TOTAL EXPENSES............... 4,308,400 5,689,491 5,160,300 10,623,918 5,732,277
Fees waived and expenses
reimbursed (Note 3)..... (1,202,580) (541,616) (846,039) (2,463,311) (839,114)
----------------- ------------- ------------- ------------- ----------------
NET EXPENSES................. 3,105,820 5,147,875 4,314,261 8,160,607 4,893,163
----------------- ------------- ------------- ------------- ----------------
NET INVESTMENT INCOME
(LOSS)................... 15,980,720 17,704,393 2,068,936 7,263,003 (885,620)
----------------- ------------- ------------- ------------- ----------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS
Net Realized Gain (Loss)
from
Securities.............. (18,548) - 79,485,975 - -
Financial futures
transactions........ 28,062,285 - - - -
Securities transactions
allocated from
Portfolios (Note
1).................. 26,493,420 7,349,243 - 68,677,749 66,680,075
Foreign currency
transactions
allocated from
Portfolios.......... (255,086) - - (917,082) (948,677)
Financial futures
transactions
allocated from
Portfolios.......... 552,469 - - 1,674,322 (312,231)
----------------- ------------- ------------- ------------- ----------------
Net Realized Gain (Loss)
from Investments...... 54,834,540 7,349,243 79,485,975 69,434,989 65,419,167
----------------- ------------- ------------- ------------- ----------------
Net Change in Unrealized
Appreciation
(Depreciation) of
Securities.............. - - (99,501,701) - -
Securities transactions
allocated from
Portfolios (Note
1).................. 41,409,045 197,583,941 - 155,956,095 4,819,250
Foreign currency
transactions
allocated from
Portfolios.......... (13,976) - - 8,502 (219,223)
Financial futures
transactions
allocated from
Portfolios.......... (247,999) - - (805,642) 156,336
----------------- ------------- ------------- ------------- ----------------
Net Change in Unrealized
Appreciation
(Depreciation) of
Investments........... 41,147,070 197,583,941 (99,501,701) 155,158,955 4,756,363
----------------- ------------- ------------- ------------- ----------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS.............. 95,981,610 204,933,184 (20,015,726) 224,593,944 70,175,530
----------------- ------------- ------------- ------------- ----------------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS............... $ 111,962,330 $ 222,637,577 $(17,946,790) $ 231,856,947 $ 69,289,910
----------------- ------------- ------------- ------------- ----------------
----------------- ------------- ------------- ------------- ----------------
(a) Net of foreign
withholding taxes of..... $ 193,325 $ - $ - $ 658,698 $ 762,717
(b) Interest income and dividend income include amounts allocated
from Portfolios where applicable.
</TABLE>
See Notes to Financial Statements
[LOGO]
26
<PAGE>
FOR THE YEAR ENDED MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LARGE SMALL
COMPANY DIVERSIFIED COMPANY SMALL CAP
GROWTH SMALL CAP STOCK OPPORTUNITIES INTERNATIONAL
FUND FUND FUND FUND FUND
------------- ------------- ------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest income (b).......... $ 754,159 $ 101,753 $ 262,648 $ 589,988 $ 1,313,316
Dividend income (a)(b)....... 1,858,536 288,874 449,791 1,297,606 3,878,954
Securities lending income
(Notes 2 and 5).......... 146,392 11,002 20,684 - 78,030
Net expenses from Portfolios
(Note 1)................. (3,760,435) (308,897) (655,598) (1,853,798) (1,665,744)
------------- ------------- ------------- ----------------- -----------------
TOTAL INVESTMENT INCOME...... (1,001,348) 92,732 77,525 33,796 3,604,556
------------- ------------- ------------- ----------------- -----------------
EXPENSES
Advisory (Note 3)............ - 87,077 - - 680,154
Management and Administration
(Note 3)................. 266,452 17,416 33,514 726,099 952,216
Transfer agent (Note 3)
A Shares.................... 294,538 4,766 15,642 14,131 8,216
B Shares.................... 101,712 450 10,025 12,198 5,053
C Shares.................... - - - - -
I Shares.................... 1,041,740 83,572 141,913 578,754 666,885
Custody (Note 3)............. - - - - -
Accounting (Note 3).......... 29,499 29,500 37,500 37,501 37,500
Legal........................ 156,414 518 1,727 3,767 5,111
Registration
A Shares................... 49,144 5,707 5,530 5,267 4,846
B Shares................... 41,836 5,444 6,021 5,378 4,697
C Shares................... - - - - -
I Shares................... 85,397 19,482 10,971 12,509 19,005
Audit........................ 5,900 5,900 5,900 5,900 5,901
Trustees..................... 4,772 318 1,038 3,121 3,276
Distribution fees (Note 3)
A Shares.................... 75,523 1,222 - - -
B Shares.................... 406,848 1,800 40,099 48,792 20,211
C Shares.................... - - - - -
Amortization of organization
costs (Note 2)........... 11,920 687 3,814 - 11,920
Miscellaneous................ 48,588 3,135 10,194 24,337 23,050
------------- ------------- ------------- ----------------- -----------------
TOTAL EXPENSES............... 2,620,283 266,994 323,888 1,477,754 2,448,041
Fees waived and expenses
reimbursed (Note 3)..... (591,488) (154,479) (144,601) (267,522) (17,031)
------------- ------------- ------------- ----------------- -----------------
NET EXPENSES................. 2,028,795 112,515 179,287 1,210,232 2,431,010
------------- ------------- ------------- ----------------- -----------------
NET INVESTMENT INCOME
(LOSS)................... (3,030,143) (19,783) (101,762) (1,176,436) 1,173,546
------------- ------------- ------------- ----------------- -----------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS
Net Realized Gain (Loss)
from
Securities.............. - - - - -
Financial futures
transactions........ - - - - -
Securities transactions
allocated from
Portfolios (Note
1).................. 38,470,599 (4,168,370) (22,765,959) (30,744,151) 20,970,144
Foreign currency
transactions
allocated from
Portfolios.......... - - - - (998,535)
Financial futures
transactions
allocated from
Portfolios.......... - 75,661 - - -
------------- ------------- ------------- ----------------- -----------------
Net Realized Gain (Loss)
from Investments...... 38,470,599 (4,092,709) (22,765,959) (30,744,151) 19,971,609
------------- ------------- ------------- ----------------- -----------------
Net Change in Unrealized
Appreciation
(Depreciation) of
Securities.............. - - - - -
Securities transactions
allocated from
Portfolios (Note
1).................. 110,679,616 3,586,957 (7,332,265) (11,334,217) (25,830,198)
Foreign currency
transactions
allocated from
Portfolios.......... - - - - 135,015
Financial futures
transactions
allocated from
Portfolios.......... - 8,309 - - -
------------- ------------- ------------- ----------------- -----------------
Net Change in Unrealized
Appreciation
(Depreciation) of
Investments........... 110,679,616 3,595,266 (7,332,265) (11,334,217) (25,695,183)
------------- ------------- ------------- ----------------- -----------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS.............. 149,150,215 (497,443) (30,098,224) (42,078,368) (5,723,574)
------------- ------------- ------------- ----------------- -----------------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS............... $ 146,120,072 $ (517,226) $(30,199,986) $(43,254,804) $ (4,550,028)
------------- ------------- ------------- ----------------- -----------------
------------- ------------- ------------- ----------------- -----------------
(a) Net of foreign
withholding taxes of..... $ - $ - $ - $ - $ 715,009
(b) Interest income and dividend income include amounts
allocated from Portfolios where applicable.
</TABLE>
[LOGO]
27
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERMEDIATE
STABLE GOVERNMENT
INCOME INCOME
FUND FUND
-------------- --------------
<S> <C> <C>
NET ASSETS - MAY 31, 1997..... $ 124,537,806 $ 393,286,171
-------------- --------------
OPERATIONS
Net investment income
(loss)................... 7,703,069 25,236,285
Net realized gain (loss) from
investments.............. 180,042 590,854
Net change in unrealized
appreciation
(depreciation) of
investments.............. 280,340 12,638,932
-------------- --------------
Net increase (decrease) in
net assets resulting from
operations............... 8,163,451 38,466,071
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM
Net investment income
A Shares.................... (506,395) (728,517)
B Shares.................... (68,901) (425,732)
I Shares.................... (6,890,484) (23,651,745)
Net realized gain from
investments
A Shares.................... - -
B Shares.................... - -
I Shares.................... - -
Return of Capital
A Shares.................... - -
B Shares.................... - -
I Shares.................... - -
-------------- --------------
Total distributions to
shareholders............. (7,465,780) (24,805,994)
-------------- --------------
NET INCREASE (DECREASE) FROM
CAPITAL SHARE
TRANSACTIONS.............. 29,356,933 16,001,507
-------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS.................... 30,054,604 29,661,584
-------------- --------------
NET ASSETS - MAY 31, 1998
(a)....................... 154,592,410 422,947,755
-------------- --------------
OPERATIONS:
Net investment income
(loss)................... 9,000,111 25,631,632
Net realized gain (loss) from
investments.............. 77,235 9,601,541
Net change in unrealized
appreciation
(depreciation) of
investments.............. (817,887) (17,398,354)
-------------- --------------
Net increase (decrease) in
net assets resulting from
operations............... 8,259,459 17,834,819
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM
Net investment income
A Shares.................... (441,356) (989,253)
B Shares.................... (91,337) (436,710)
C Shares.................... - -
I Shares.................... (8,493,767) (24,119,784)
Net realized gain from
investments
A Shares.................... - -
B Shares.................... - -
C Shares.................... - -
I Shares.................... - -
-------------- --------------
Total distributions to
shareholders............. (9,026,460) (25,545,747)
-------------- --------------
NET INCREASE (DECREASE) FROM
CAPITAL SHARE
TRANSACTIONS.............. 36,320,791 32,201,086
-------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS.................... 35,553,790 24,490,158
-------------- --------------
NET ASSETS - MAY 31, 1999
(b)....................... $ 190,146,200 $ 447,437,913
-------------- --------------
-------------- --------------
(a) Undistributed
(distributions in excess
of) net investment income,
May 31, 1998.............. $ 201,603 $ 436,911
-------------- --------------
-------------- --------------
(b) Undistributed
(distributions in excess
of) net investment income,
May 31, 1999.............. $ 135,855 $ 520,614
-------------- --------------
-------------- --------------
(c) Beginning of period....... Jun 1, 1997 Jun 1, 1997
</TABLE>
See Notes to Financial Statements
[LOGO]
28
<PAGE>
FOR THE YEARS OR PERIODS ENDED MAY 31, 1998(c) AND 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN TAX-FREE COLORADO MINNESOTA
INCOME BOND INCOME TAX-FREE TAX-FREE
FUND FUND FUND FUND FUND
------------- ------------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
NET ASSETS - MAY 31, 1997..... $ 266,697,641 $130,775,974 $ 296,406,673 $ 60,940,499 $ 48,002,309
------------- ------------- -------------- ------------- --------------
OPERATIONS
Net investment income
(loss)................... 17,724,169 7,844,196 15,876,439 3,267,484 2,779,840
Net realized gain (loss) from
investments.............. 5,713,653 3,752,024 5,515,394 477,006 348,871
Net change in unrealized
appreciation
(depreciation) of
investments.............. 8,900,463 120,524 8,997,364 2,416,938 2,099,959
------------- ------------- -------------- ------------- --------------
Net increase (decrease) in
net assets resulting from
operations............... 32,338,285 11,716,744 30,389,197 6,161,428 5,228,670
------------- ------------- -------------- ------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM
Net investment income
A Shares.................... (363,744) (192,400) (1,575,363) (1,535,133) (1,457,615)
B Shares.................... (219,574) (131,933) (392,899) (335,170) (550,306)
I Shares.................... (17,140,851) (7,519,863) (13,908,177) (1,397,181) (771,919)
Net realized gain from
investments
A Shares.................... - (14,547) - - -
B Shares.................... - (12,417) - - -
I Shares.................... - (677,747) - - -
Return of Capital
A Shares.................... - - - - -
B Shares.................... - - - - -
I Shares.................... - - - - -
------------- ------------- -------------- ------------- --------------
Total distributions to
shareholders............. (17,724,169) (8,548,907) (15,876,439) (3,267,484) (2,779,840)
------------- ------------- -------------- ------------- --------------
NET INCREASE (DECREASE) FROM
CAPITAL SHARE
TRANSACTIONS.............. 21,769,987 (19,182,003) 22,005,402 11,917,170 20,430,717
------------- ------------- -------------- ------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS.................... 36,384,103 (16,014,166) 36,518,160 14,811,114 22,879,547
------------- ------------- -------------- ------------- --------------
NET ASSETS - MAY 31, 1998
(a)....................... 303,081,744 114,761,808 332,924,833 75,751,613 70,881,856
------------- ------------- -------------- ------------- --------------
OPERATIONS:
Net investment income
(loss)................... 20,783,023 6,210,033 17,369,474 4,092,169 3,491,338
Net realized gain (loss) from
investments.............. 1,744,973 (554,982) 3,445,224 501,049 216,836
Net change in unrealized
appreciation
(depreciation) of
investments.............. (14,614,100) (1,892,683) (7,184,375) (1,664,572) (920,274)
------------- ------------- -------------- ------------- --------------
Net increase (decrease) in
net assets resulting from
operations............... 7,913,896 3,762,368 13,630,323 2,928,646 2,787,900
------------- ------------- -------------- ------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM
Net investment income
A Shares.................... (644,375) (117,344) (2,067,331) (1,824,431) (1,672,985)
B Shares.................... (338,080) (155,532) (551,723) (386,596) (758,676)
C Shares.................... - - - - -
I Shares.................... (19,800,568) (6,019,279) (14,750,632) (1,881,142) (1,061,276)
Net realized gain from
investments
A Shares.................... - (31,421) (44,165) (131,438) (32,277)
B Shares.................... - (70,769) (11,881) (32,338) (17,801)
C Shares.................... - - - - -
I Shares.................... - (2,192,711) (278,688) (135,528) (20,012)
------------- ------------- -------------- ------------- --------------
Total distributions to
shareholders............. (20,783,023) (8,587,056) (17,704,420) (4,391,473) (3,563,027)
------------- ------------- -------------- ------------- --------------
NET INCREASE (DECREASE) FROM
CAPITAL SHARE
TRANSACTIONS.............. 79,715,675 (20,018,963) 44,267,336 25,505,026 16,902,134
------------- ------------- -------------- ------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS.................... 66,846,548 (24,843,651) 40,193,239 24,042,199 16,127,007
------------- ------------- -------------- ------------- --------------
NET ASSETS - MAY 31, 1999
(b)....................... $ 369,928,292 $ 89,918,157 $ 373,118,072 $ 99,793,812 $ 87,008,863
------------- ------------- -------------- ------------- --------------
------------- ------------- -------------- ------------- --------------
(a) Undistributed
(distributions in excess
of) net investment income,
May 31, 1998.............. $ 14,155 $ (15,111) $ (509,881) $ - $ (41,761)
------------- ------------- -------------- ------------- --------------
------------- ------------- -------------- ------------- --------------
(b) Undistributed
(distributions in excess
of) net investment income,
May 31, 1999.............. $ 14,155 $ (278,956) $ (510,093) $ - $ (43,360)
------------- ------------- -------------- ------------- --------------
------------- ------------- -------------- ------------- --------------
(c) Beginning of period....... Jun 1, 1997 Jun 1, 1997 Jun 1, 1997 Jun 1, 1997 Jun 1, 1997
</TABLE>
[LOGO]
29
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DIVERSIFIED
GROWTH INCOME VALUGROWTH EQUITY
BALANCED EQUITY STOCK FUND GROWTH
FUND FUND FUND FUND EQUITY
-------------- -------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
NET ASSETS - MAY 31, 1997..... $ 503,381,834 $ 502,531,239 $ 205,625,200 $1,271,706,512 $ 918,279,219
-------------- -------------- ------------- ------------- -------------
OPERATIONS
Net investment income
(loss)................... 13,920,148 14,251,745 2,767,779 8,475,282 (1,202,479)
Net realized gain (loss) from
investments.............. 28,958,690 12,683,426 102,163,282 90,735,628 124,921,732
Net change in unrealized
appreciation
(depreciation) of
investments.............. 67,300,551 217,868,488 (16,652,982) 236,638,160 79,116,165
-------------- -------------- ------------- ------------- -------------
Net increase (decrease) in
net assets resulting from
operations............... 110,179,389 244,803,659 88,278,079 335,849,070 202,835,418
-------------- -------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM
Net investment income
A Shares.................... - (804,582) (148,126) (276,764) (21,720)
B Shares.................... - (283,201) (9,192) (113,973) -
I Shares.................... (13,409,934) (11,749,514) (3,083,321) (9,474,703) (1,101,414)
Net realized gain from
investments
A Shares.................... - (1,048,454) (2,872,556) (2,253,590) (1,880,012)
B Shares.................... - (850,000) (1,010,191) (3,232,355) (1,221,598)
I Shares.................... (25,716,573) (13,660,767) (49,504,124) (78,384,186) (95,402,591)
Return of Capital
A Shares.................... - - - - -
B Shares.................... - - - - -
I Shares.................... - - - - -
-------------- -------------- ------------- ------------- -------------
Total distributions to
shareholders............. (39,126,507) (28,396,518) (56,627,510) (93,735,571) (99,627,335)
-------------- -------------- ------------- ------------- -------------
NET INCREASE (DECREASE) FROM
CAPITAL SHARE
TRANSACTIONS.............. 91,323,239 637,975,931 408,494,094 144,420,420 49,945,698
-------------- -------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS.................... 162,376,121 854,383,072 440,144,663 386,533,919 153,153,781
-------------- -------------- ------------- ------------- -------------
NET ASSETS - MAY 31, 1998
(a)....................... 665,757,955 1,356,914,311 645,769,863 1,658,240,431 1,071,433,000
-------------- -------------- ------------- ------------- -------------
OPERATIONS:
Net investment income
(loss)................... 15,980,720 17,704,393 2,068,936 7,263,003 (885,620)
Net realized gain (loss) from
investments.............. 54,834,540 7,349,243 79,485,975 69,434,989 65,419,167
Net change in unrealized
appreciation
(depreciation) of
investments.............. 41,147,070 197,583,941 (99,501,701) 155,158,955 4,756,363
-------------- -------------- ------------- ------------- -------------
Net increase (decrease) in
net assets resulting from
operations............... 111,962,330 222,637,577 (17,946,790) 231,856,947 69,289,910
-------------- -------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM
Net investment income
A Shares.................... (19,084) (1,080,235) (16,207) (269,774) (14,034)
B Shares.................... (30,335) (454,877) - - -
C Shares.................... (474) (1,183) - (905) (30)
I Shares.................... (14,247,665) (16,436,298) (1,060,322) (6,719,636) (743,167)
Net realized gain from
investments
A Shares.................... (33,896) (532,668) (3,832,600) (1,318,172) (1,027,051)
B Shares.................... (56,634) (507,071) (1,542,891) (2,118,718) (1,049,213)
C Shares.................... (842) (66) - (4,423) (2,165)
I Shares.................... (25,305,527) (8,080,050) (61,428,852) (32,833,554) (54,387,314)
-------------- -------------- ------------- ------------- -------------
Total distributions to
shareholders............. (39,694,457) (27,092,448) (67,880,872) (43,265,182) (57,222,974)
-------------- -------------- ------------- ------------- -------------
NET INCREASE (DECREASE) FROM
CAPITAL SHARE
TRANSACTIONS.............. 126,358,425 180,036,408 (334,583,808) (36,225,049) (126,544,197)
-------------- -------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS.................... 198,626,298 375,581,537 (420,411,470) 152,366,716 (114,477,261)
-------------- -------------- ------------- ------------- -------------
NET ASSETS - MAY 31, 1999
(b)....................... $ 864,384,253 $1,732,495,848 $ 225,358,393 $1,810,607,147 $ 956,955,739
-------------- -------------- ------------- ------------- -------------
-------------- -------------- ------------- ------------- -------------
(a) Undistributed
(distributions in excess
of) net investment income,
May 31, 1998.............. $ 7,652,666 $ 3,083,891 $ 288,928 $ 6,542,972 $ 188,975
-------------- -------------- ------------- ------------- -------------
-------------- -------------- ------------- ------------- -------------
(b) Undistributed
(distributions in excess
of) net investment income,
May 31, 1999.............. $ 9,068,551 $ 2,812,753 $ 1,009,103 $ 5,854,223 $ (159,002)
-------------- -------------- ------------- ------------- -------------
-------------- -------------- ------------- ------------- -------------
(c) Beginning of period....... Jun 1, 1997 Jun 1, 1997 Jun 1, 1997 Jun 1, 1997 Jun 1, 1997
</TABLE>
See Notes to Financial Statements
[LOGO]
30
<PAGE>
FOR THE YEARS OR PERIODS ENDED MAY 31, 1998(c) AND 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LARGE SMALL
COMPANY DIVERSIFIED COMPANY SMALL CAP
GROWTH SMALL CAP STOCK OPPORTUNITIES INTERNATIONAL
FUND FUND FUND FUND FUND
------------- -------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
NET ASSETS - MAY 31, 1997..... $ 131,768,093 $ - $ 174,475,904 $ 77,854,351 $ 232,459,312
------------- -------------- ------------- ------------- --------------
OPERATIONS
Net investment income
(loss)................... (644,393) (5,731) (1,023,115) (791,599) 1,122,442
Net realized gain (loss) from
investments.............. 13,678,786 (98,200) 34,416,452 4,160,372 4,029,919
Net change in unrealized
appreciation
(depreciation) of
investments.............. 33,488,238 (189,624) (23,455,025) 23,475,868 21,976,707
------------- -------------- ------------- ------------- --------------
Net increase (decrease) in
net assets resulting from
operations............... 46,522,631 (293,555) 9,938,312 26,844,641 27,129,068
------------- -------------- ------------- ------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM
Net investment income
A Shares.................... - - - - (29,002)
B Shares.................... - - - - (6,111)
I Shares.................... - - - - (2,248,551)
Net realized gain from
investments
A Shares.................... - - (1,666,653) (76,723) -
B Shares.................... - - (1,144,041) (45,659) -
I Shares.................... (12,167,899) - (38,640,779) (4,293,143) -
Return of Capital
A Shares.................... - - (42,048) - -
B Shares.................... - - (29,123) - -
I Shares.................... - - (1,000,911) - -
------------- -------------- ------------- ------------- --------------
Total distributions to
shareholders............. (12,167,899) - (42,523,555) (4,415,525) (2,283,664)
------------- -------------- ------------- ------------- --------------
NET INCREASE (DECREASE) FROM
CAPITAL SHARE
TRANSACTIONS.............. 66,376,400 12,844,720 (14,953,535) 197,553,437 27,949,215
------------- -------------- ------------- ------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS.................... 100,731,132 12,551,165 (47,538,778) 219,982,553 52,794,619
------------- -------------- ------------- ------------- --------------
NET ASSETS - MAY 31, 1998
(a)....................... 232,499,225 12,551,165 126,937,126 297,836,904 285,253,931
------------- -------------- ------------- ------------- --------------
OPERATIONS:
Net investment income
(loss)................... (3,030,143) (19,783) (101,762) (1,176,436) 1,173,546
Net realized gain (loss) from
investments.............. 38,470,599 (4,092,709) (22,765,959) (30,744,151) 19,971,609
Net change in unrealized
appreciation
(depreciation) of
investments.............. 110,679,616 3,595,266 (7,332,265) (11,334,217) (25,695,183)
------------- -------------- ------------- ------------- --------------
Net increase (decrease) in
net assets resulting from
operations............... 146,120,072 (517,226) (30,199,986) (43,254,804) (4,550,028)
------------- -------------- ------------- ------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM
Net investment income
A Shares.................... - (102) - - (28,212)
B Shares.................... - - - - -
C Shares.................... - - - - -
I Shares.................... - (1,573) - - (2,016,250)
Net realized gain from
investments
A Shares.................... (82,577) - - (7,474) (77,857)
B Shares.................... (70,277) - - (5,893) (43,845)
C Shares.................... - - - - -
I Shares.................... (8,107,762) - - (280,588) (5,871,186)
------------- -------------- ------------- ------------- --------------
Total distributions to
shareholders............. (8,260,616) (1,675) - (293,955) (8,037,350)
------------- -------------- ------------- ------------- --------------
NET INCREASE (DECREASE) FROM
CAPITAL SHARE
TRANSACTIONS.............. 623,121,642 50,208,847 (65,677,503) (43,587,244) 3,412,555
------------- -------------- ------------- ------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS.................... 760,981,098 49,689,946 (95,877,489) (87,136,003) (9,174,823)
------------- -------------- ------------- ------------- --------------
NET ASSETS - MAY 31, 1999
(b)....................... $ 993,480,323 $ 62,241,111 $ 31,059,637 $210,700,901 $ 276,079,108
------------- -------------- ------------- ------------- --------------
------------- -------------- ------------- ------------- --------------
(a) Undistributed
(distributions in excess
of) net investment income,
May 31, 1998.............. $ - $ (2,549) $ - $ - $ 1,993,474
------------- -------------- ------------- ------------- --------------
------------- -------------- ------------- ------------- --------------
(b) Undistributed
(distributions in excess
of) net investment income,
May 31, 1999.............. $ - $ - $ - $ - $ 124,058
------------- -------------- ------------- ------------- --------------
------------- -------------- ------------- ------------- --------------
(c) Beginning of period....... Jun 1, 1997 Dec 31, 1997 Jun 1, 1997 Jun 1, 1997 Jun 1, 1997
</TABLE>
[LOGO]
31
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERMEDIATE
STABLE GOVERNMENT
INCOME INCOME INCOME
FUND FUND FUND
-------------- -------------- -------------
<S> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS --
DOLLARS
PERIOD ENDED MAY 31, 1998(c)
SALE OF SHARES
A shares.................... $ 29,800,927 $ 4,221,460 $ 3,728,447
B shares.................... 1,235,385 1,494,445 1,708,790
I shares.................... 81,486,735 309,607,835 193,004,368
SHARES ISSUED IN CONVERSION
(NOTE 7)
I shares.................... - - -
REINVESTMENT OF DISTRIBUTIONS
A shares.................... 210,983 533,971 296,527
B shares.................... 58,778 302,863 181,100
I shares.................... 5,750,754 2,504,469 501,723
REDEMPTION OF SHARES
A shares.................... (33,964,911) (3,988,483) (1,801,850)
B shares.................... (539,946) (2,847,150) (582,886)
I shares.................... (54,681,772) (295,827,903) (175,266,232)
-------------- -------------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM CAPITAL SHARE
ACTIVITY.................. $ 29,356,933 $ 16,001,507 $ 21,769,987
-------------- -------------- -------------
-------------- -------------- -------------
YEAR ENDED MAY 31, 1999
SALE OF SHARES
A shares.................... $ 69,160,904 $ 10,419,234 $ 9,443,566
B shares.................... 1,191,404 2,225,321 4,176,972
C shares.................... - - -
I shares.................... 104,727,907 99,614,489 95,770,484
SHARES ISSUED IN CONVERSION
(NOTE 7)
A shares.................... - - -
I shares.................... - - 20,822,516
REINVESTMENT OF DISTRIBUTIONS
A shares.................... 274,004 656,708 444,993
B shares.................... 81,915 306,880 258,830
C shares.................... - - -
I shares.................... 7,027,178 3,149,067 1,404,934
REDEMPTION OF SHARES
A shares.................... (68,232,510) (6,477,809) (3,311,262)
B shares.................... (738,126) (2,117,425) (1,281,451)
C shares.................... - - -
I shares.................... (77,171,885) (75,575,379) (48,013,907)
-------------- -------------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM CAPITAL SHARE
ACTIVITY.................. $ 36,320,791 $ 32,201,086 $ 79,715,675
-------------- -------------- -------------
-------------- -------------- -------------
CAPITAL SHARE TRANSACTIONS --
SHARES
PERIOD ENDED MAY 31, 1998(c)
SALE OF SHARES
A shares.................... 2,883,671 383,818 384,279
B shares.................... 120,284 138,949 176,755
I shares.................... 7,944,101 27,888,520 20,150,168
SHARES ISSUED IN CONVERSION
(NOTE 7)
I shares.................... - - -
REINVESTMENT OF DISTRIBUTIONS
A shares.................... 18,447 47,920 30,693
B shares.................... 5,242 27,197 18,772
I shares.................... 505,180 224,878 51,839
REDEMPTION OF SHARES
A shares.................... (3,287,302) (357,902) (186,546)
B shares.................... (52,325) (256,081) (60,281)
I shares.................... (5,295,664) (26,688,598) (18,349,206)
-------------- -------------- -------------
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING........ 2,841,634 1,408,701 2,216,473
-------------- -------------- -------------
-------------- -------------- -------------
YEAR ENDED MAY 31, 1999
SALE OF SHARES
A shares.................... 6,572,253 882,227 963,101
B shares.................... 148,486 197,858 429,256
C shares.................... - - -
I shares.................... 10,204,127 8,727,027 9,749,900
SHARES ISSUED IN CONVERSION
(NOTE 7)
A shares.................... - - -
I shares.................... - - 2,096,930
REINVESTMENT OF DISTRIBUTIONS
A shares.................... 26,555 57,675 38,853
B shares.................... 7,941 24,843 22,307
C shares.................... - - -
I shares.................... 680,833 276,758 126,666
REDEMPTION OF SHARES
A shares.................... (6,595,554) (532,944) (335,760)
B shares.................... (100,175) (186,963) (131,835)
C shares.................... - - -
I shares.................... (7,428,994) (6,624,019) (4,886,126)
-------------- -------------- -------------
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING........ 3,515,472 2,822,462 8,073,292
-------------- -------------- -------------
-------------- -------------- -------------
(c) Beginning of period....... Jun 1, 1997 Jun 1, 1997 Jun 1, 1997
</TABLE>
See Notes to Financial Statements
[LOGO]
32
<PAGE>
FOR THE YEARS OR PERIODS ENDED MAY 31, 1998
AND MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN TAX-FREE COLORADO MINNESOTA
BOND INCOME TAX-FREE TAX-FREE
FUND FUND FUND FUND
------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS --
DOLLARS
PERIOD ENDED MAY 31, 1998(c)
SALE OF SHARES
A shares.................... $ 1,926,421 $ 10,396,839 $ 7,477,552 $ 8,705,064
B shares.................... 577,233 4,015,589 2,868,087 6,079,249
I shares.................... 26,212,554 207,775,946 8,617,144 11,447,292
SHARES ISSUED IN CONVERSION
(NOTE 7)
I shares.................... - - - -
REINVESTMENT OF DISTRIBUTIONS
A shares.................... 202,458 1,248,714 1,197,281 1,064,641
B shares.................... 122,628 302,167 232,515 409,199
I shares.................... 756,511 724,544 34,709 244,073
REDEMPTION OF SHARES
A shares.................... (2,266,442) (7,217,647) (3,579,424) (3,166,663)
B shares.................... (360,395) (986,449) (1,495,848) (1,616,019)
I shares.................... (46,352,971) (194,254,301) (3,434,846) (2,736,119)
------------- -------------- ------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM CAPITAL SHARE
ACTIVITY.................. $(19,182,003) $ 22,005,402 $ 11,917,170 $ 20,430,717
------------- -------------- ------------- --------------
------------- -------------- ------------- --------------
YEAR ENDED MAY 31, 1999
SALE OF SHARES
A shares.................... $ 791,190 $ 26,792,072 $ 8,062,435 $ 9,934,681
B shares.................... 917,955 7,878,776 2,711,082 7,870,849
C shares.................... - - - -
I shares.................... 17,002,115 69,131,581 25,981,176 10,924,972
SHARES ISSUED IN CONVERSION
(NOTE 7)
A shares.................... - - - -
I shares.................... - - - -
REINVESTMENT OF DISTRIBUTIONS
A shares.................... 135,402 1,475,236 1,484,203 1,117,394
B shares.................... 187,072 398,550 283,211 531,439
C shares.................... - - - -
I shares.................... 1,012,258 1,553,614 99,412 290,837
REDEMPTION OF SHARES
A shares.................... (2,601,577) (19,489,915) (3,272,343) (6,075,592)
B shares.................... (839,577) (1,152,002) (1,091,277) (3,243,082)
C shares.................... - - - -
I shares.................... (36,623,801) (42,320,576) (8,752,873) (4,449,364)
------------- -------------- ------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM CAPITAL SHARE
ACTIVITY.................. $(20,018,963) $ 44,267,336 $ 25,505,026 $ 16,902,134
------------- -------------- ------------- --------------
------------- -------------- ------------- --------------
CAPITAL SHARE TRANSACTIONS --
SHARES
PERIOD ENDED MAY 31, 1998(c)
SALE OF SHARES
A shares.................... 201,230 999,879 709,964 798,495
B shares.................... 60,044 386,728 270,553 555,223
I shares.................... 2,733,673 20,205,190 812,957 1,051,163
SHARES ISSUED IN CONVERSION
(NOTE 7)
I shares.................... - - - -
REINVESTMENT OF DISTRIBUTIONS
A shares.................... 21,103 120,185 113,433 97,609
B shares.................... 12,755 29,057 21,971 37,450
I shares.................... 79,696 69,534 3,282 22,358
REDEMPTION OF SHARES
A shares.................... (235,845) (693,862) (340,595) (290,915)
B shares.................... (37,561) (94,437) (142,636) (147,723)
I shares.................... (4,823,029) (18,916,946) (327,437) (250,492)
------------- -------------- ------------- --------------
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING........ (1,987,934) 2,105,328 1,121,492 1,873,168
------------- -------------- ------------- --------------
------------- -------------- ------------- --------------
YEAR ENDED MAY 31, 1999
SALE OF SHARES
A shares.................... 86,415 2,543,283 766,228 922,167
B shares.................... 96,353 747,909 258,066 719,314
C shares.................... - - - -
I shares.................... 1,776,125 6,519,161 2,654,052 987,346
SHARES ISSUED IN CONVERSION
(NOTE 7)
A shares.................... - - - -
I shares.................... - - - -
REINVESTMENT OF DISTRIBUTIONS
A shares.................... 10,106 113,579 116,262 83,650
B shares.................... 17,500 31,924 20,601 36,310
C shares.................... - - - -
I shares.................... 101,848 124,119 7,663 21,678
REDEMPTION OF SHARES
A shares.................... (268,924) (1,832,413) (298,588) (556,377)
B shares.................... (88,334) (108,363) (101,120) (292,516)
C shares.................... - - - -
I shares.................... (3,842,417) (3,983,394) (1,049,402) (398,588)
------------- -------------- ------------- --------------
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING........ (2,111,328) 4,155,805 2,373,762 1,522,984
------------- -------------- ------------- --------------
------------- -------------- ------------- --------------
(c) Beginning of period....... Jun 1, 1997 Jun 1, 1997 Jun 1, 1997 Jun 1, 1997
</TABLE>
[LOGO]
33
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH INCOME VALUGROWTH DIVERSIFIED
BALANCED EQUITY STOCK EQUITY
FUND FUND FUND FUND
-------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS --
DOLLARS
PERIOD ENDED MAY 31, 1998(c)
SALE OF SHARES
A shares.................... $ - $ 25,802,002 $ 9,756,755 $ 27,277,888
B shares.................... - 26,991,385 1,656,624 41,099,564
I shares.................... 173,888,398 724,447,714 463,597,240 309,400,646
SHARES ISSUED IN CONVERSION
(NOTE 7)
I shares.................... - 477,132,068 443,623,815 -
REINVESTMENT OF DISTRIBUTIONS
A shares.................... - 1,802,610 2,917,450 2,508,624
B shares.................... - 1,100,313 1,005,500 3,272,867
I shares.................... 39,022,268 11,445,588 21,586,227 86,692,121
REDEMPTION OF SHARES
A shares.................... - (8,154,670) (4,932,945) (4,847,852)
B shares.................... - (4,311,667) (674,256) (5,131,550)
I shares.................... (121,587,427) (618,279,412) (530,042,316) (315,851,888)
-------------- -------------- ------------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM CAPITAL SHARE
ACTIVITY.................. $ 91,323,239 $ 637,975,931 $408,494,094 $ 144,420,420
-------------- -------------- ------------- -------------
-------------- -------------- ------------- -------------
YEAR ENDED MAY 31, 1999
SALE OF SHARES
A shares.................... $ 3,621,964 $ 31,030,310 $ 3,911,141 $ 18,382,464
B shares.................... 8,854,582 36,986,937 710,974 26,937,589
C shares.................... 1,256,425 1,073,688 - 531,763
I shares.................... 204,369,753 291,511,720 7,491,168 308,645,466
SHARES ISSUED IN CONVERSION
(NOTE 7)
A shares.................... - - - -
I shares.................... - 30,884,547 - -
REINVESTMENT OF DISTRIBUTIONS
A shares.................... 54,918 1,790,207 3,686,939 1,555,531
B shares.................... 84,019 928,800 1,474,327 2,057,513
C shares.................... 1,012 406 - 4,011
I shares.................... 39,403,839 7,548,280 35,907,517 38,912,029
REDEMPTION OF SHARES
A shares.................... (168,266) (14,225,873) (11,759,874) (13,727,157)
B shares.................... (130,627) (9,778,614) (1,688,072) (10,529,111)
C shares.................... (24,491) (2,757) - (19,649)
I shares.................... (130,964,703) (197,711,243) (374,317,928) (408,975,498)
-------------- -------------- ------------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM CAPITAL SHARE
ACTIVITY.................. $ 126,358,425 $ 180,036,408 $(334,583,808) $ (36,225,049)
-------------- -------------- ------------- -------------
-------------- -------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS --
SHARES
PERIOD ENDED MAY 31, 1998(c)
SALE OF SHARES
A shares.................... - 673,475 377,663 668,348
B shares.................... - 706,729 65,527 1,015,535
I shares.................... 6,418,622 19,738,592 17,920,557 7,679,211
SHARES ISSUED IN CONVERSION
(NOTE 7)
I shares.................... - 13,451,708 17,761,394 -
REINVESTMENT OF DISTRIBUTIONS
A shares.................... - 50,267 121,256 66,201
B shares.................... - 31,134 42,872 87,194
I shares.................... 1,512,613 317,407 926,648 2,287,744
REDEMPTION OF SHARES
A shares.................... - (217,182) (189,738) (118,188)
B shares.................... - (115,169) (26,363) (125,529)
I shares.................... (4,523,554) (16,842,496) (20,514,350) (7,875,238)
-------------- -------------- ------------- -------------
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING........ 3,407,681 17,794,465 16,485,466 3,685,278
-------------- -------------- ------------- -------------
-------------- -------------- ------------- -------------
YEAR ENDED MAY 31, 1999
SALE OF SHARES
A shares.................... 115,386 746,028 164,421 413,591
B shares.................... 293,564 879,514 30,232 613,385
C shares.................... 40,904 23,317 - 11,575
I shares.................... 6,897,939 6,061,084 316,329 6,936,823
SHARES ISSUED IN CONVERSION
(NOTE 7)
A shares.................... - - - -
I shares.................... - 833,816 - -
REINVESTMENT OF DISTRIBUTIONS
A shares.................... 1,793 37,930 171,775 35,487
B shares.................... 2,916 23,066 72,699 47,366
C shares.................... 35 29 - 91
I shares.................... 1,364,871 1,081,099 1,712,457 888,401
REDEMPTION OF SHARES
A shares.................... (5,313) (340,027) (513,185) (311,744)
B shares.................... (4,592) (235,545) (77,107) (240,909)
C shares.................... (792) (59) - (429)
I shares.................... (4,488,548) (4,683,126) (16,019,833) (9,367,163)
-------------- -------------- ------------- -------------
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING........ 4,218,163 4,427,126 (14,142,212) (973,526)
-------------- -------------- ------------- -------------
-------------- -------------- ------------- -------------
(c) Beginning of period....... Jun 1, 1997 Jun 1, 1997 Jun 1, 1997 Jun 1, 1997
</TABLE>
See Notes to Financial Statements
[LOGO]
34
<PAGE>
FOR THE YEAR OR PERIOD ENDED MAY 31, 1998
AND MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LARGE SMALL SMALL
GROWTH COMPANY DIVERSIFIED COMPANY CAP
EQUITY GROWTH SMALL CAP STOCK OPPORTUNITIES INTERNATIONAL
FUND FUND FUND FUND FUND FUND
------------- ------------- -------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS --
DOLLARS
PERIOD ENDED MAY 31, 1998(c)
SALE OF SHARES
A shares.................... $ 8,477,025 $ - $ - $ 32,666,817 $ 6,586,891 $ 1,806,507
B shares.................... 7,062,682 - - 1,056,804 6,098,057 571,189
I shares.................... 203,089,698 96,865,190 14,057,810 88,835,637 222,106,855 63,830,151
SHARES ISSUED IN CONVERSION
(NOTE 7)
I shares.................... - - - 44,432,702 - -
REINVESTMENT OF DISTRIBUTIONS
A shares.................... 1,889,663 - - 1,700,465 76,078 28,988
B shares.................... 1,216,596 - - 1,155,994 46,101 6,031
I shares.................... 96,307,274 11,421,974 - 10,996,066 3,497,844 1,644,365
REDEMPTION OF SHARES
A shares.................... (4,689,355) - - (32,367,012) (440,970) (1,002,906)
B shares.................... (1,402,259) - - (719,617) (167,823) (197,871)
I shares.................... (262,005,626) (41,910,764) (1,213,090) (162,711,391) (40,249,596) (38,737,239)
------------- ------------- -------------- ------------- ------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM CAPITAL SHARE
ACTIVITY.................. $ 49,945,698 $ 66,376,400 $ 12,844,720 $ (14,953,535) $197,553,437 $ 27,949,215
------------- ------------- -------------- ------------- ------------- --------------
------------- ------------- -------------- ------------- ------------- --------------
YEAR ENDED MAY 31, 1999
SALE OF SHARES
A shares.................... $ 3,376,261 $ 93,839,663 $ 2,942,162 $ 65,503,634 $ 1,872,644 $ 1,205,713
B shares.................... 3,615,753 158,195,013 495,965 527,098 632,224 177,716
C shares.................... 54,890 - - - - -
I shares.................... 120,780,283 408,193,236 59,524,813 7,149,812 70,541,322 60,427,481
SHARES ISSUED IN CONVERSION
(NOTE 7)
A shares.................... - 169,603,833 - - - -
I shares.................... - - - - - 1,767,537
REINVESTMENT OF DISTRIBUTIONS
A shares.................... 1,037,693 82,347 102 42 7,338 105,370
B shares.................... 1,032,313 65,108 - - 5,838 43,448
C shares.................... 2,195 - - - - -
I shares.................... 55,000,456 6,949,708 1,066 - 223,800 6,065,939
REDEMPTION OF SHARES
A shares.................... (8,534,711) (91,794,834) (1,656,498) (66,475,563) (3,174,125) (1,683,986)
B shares.................... (2,465,177) (2,426,417) (46,696) (1,838,496) (1,651,678) (384,535)
C shares.................... (49) - - - - -
I shares.................... (300,444,104) (119,577,456) (11,052,067) (70,544,030) (112,044,607) (64,312,128)
------------- ------------- -------------- ------------- ------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM CAPITAL SHARE
ACTIVITY.................. $(126,544,197) $ 623,130,201 $ 50,208,847 $ (65,677,503) $(43,587,244) $ 3,412,555
------------- ------------- -------------- ------------- ------------- --------------
------------- ------------- -------------- ------------- ------------- --------------
CAPITAL SHARE TRANSACTIONS --
SHARES
PERIOD ENDED MAY 31, 1998(c)
SALE OF SHARES
A shares.................... 242,061 - - 2,539,744 279,457 80,906
B shares.................... 202,901 - - 79,101 259,433 25,847
I shares.................... 5,835,291 2,562,358 1,303,714 5,774,480 9,752,210 2,872,843
SHARES ISSUED IN CONVERSION
(NOTE 7)
I shares.................... - - - 2,892,754 - -
REINVESTMENT OF DISTRIBUTIONS
A shares.................... 60,274 - - 145,570 3,533 1,436
B shares.................... 39,280 - - 102,296 2,132 300
I shares.................... 3,072,002 331,263 - 967,636 162,388 81,404
REDEMPTION OF SHARES
A shares.................... (134,074) - - (2,510,624) (18,241) (45,582)
B shares.................... (40,469) - - (55,925) (6,248) (8,757)
I shares.................... (7,547,813) (1,111,098) (110,791) (11,868,058) (1,738,955) (1,776,454)
------------- ------------- -------------- ------------- ------------- --------------
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING........ 1,729,453 1,782,523 1,192,923 (1,933,026) 8,695,709 1,231,943
------------- ------------- -------------- ------------- ------------- --------------
------------- ------------- -------------- ------------- ------------- --------------
YEAR ENDED MAY 31, 1999
SALE OF SHARES
A shares.................... 96,167 1,640,660 329,220 7,133,219 96,329 56,943
B shares.................... 106,848 2,919,636 58,846 57,123 32,183 8,712
C shares.................... 1,587 - - - - -
I shares.................... 3,479,533 8,208,824 6,784,576 761,007 3,460,168 2,751,723
SHARES ISSUED IN CONVERSION
(NOTE 7)
A shares.................... - 3,418,054 - - - -
I shares.................... - - - - - 91,630
REINVESTMENT OF DISTRIBUTIONS
A shares.................... 31,004 1,664 11 3 382 3,714
B shares.................... 31,425 1,398 - - 309 1,275
C shares.................... 65 - - - - -
I shares.................... 1,643,276 149,263 123 - 11,650 204,563
REDEMPTION OF SHARES
A shares.................... (251,667) (1,768,124) (171,238) (7,197,782) (158,680) (75,036)
B shares.................... (73,787) (42,856) (5,692) (210,398) (87,408) (17,633)
C shares.................... (1) - - - - -
I shares.................... (8,597,077) (2,373,039) (1,277,086) (7,603,507) (5,697,246) (2,873,704)
------------- ------------- -------------- ------------- ------------- --------------
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING........ (3,532,627) 12,155,480 5,718,760 (7,060,335) (2,342,313) 152,187
------------- ------------- -------------- ------------- ------------- --------------
------------- ------------- -------------- ------------- ------------- --------------
(c) Beginning of period....... Jun 1, 1997 Jun 1, 1997 Dec 31, 1997 Jun 1, 1997 Jun 1, 1997 Jun 1, 1997
</TABLE>
[LOGO]
35
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED
BEGINNING NET AND DIVIDENDS DISTRIBUTIONS ENDING
NET ASSET INVESTMENT UNREALIZED FROM NET FROM NET NET ASSET
VALUE PER INCOME GAIN (LOSS) ON INVESTMENT REALIZED RETURN OF VALUE PER
SHARE (LOSS) INVESTMENTS INCOME GAINS CAPITAL SHARE
--------- ---------- -------------- ---------- ------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
STABLE INCOME FUND
- --------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31, 1999.......... $10.31 $ 0.54 $(0.06) $(0.53) $ - $ - $10.26
June 1, 1997 to May 31, 1998.......... 10.24 0.58 0.06 (0.57) - - 10.31
June 1, 1996 to May 31, 1997.......... 10.20 0.58 0.04 (0.58) - - 10.24
May 2, 1996(g) to May 31, 1996........ 10.22 0.02 - (0.04) - - 10.20
B SHARES
June 1, 1998 to May 31, 1999.......... 10.30 0.44 (0.04) (0.44) - - 10.26
June 1, 1997 to May 31, 1998.......... 10.24 0.51 0.04 (0.49) - - 10.30
June 1, 1996 to May 31, 1997.......... 10.20 0.52 0.02 (0.50) - - 10.24
May 17, 1996(g) to May 31, 1996....... 10.23 0.02 (0.01) (0.04) - - 10.20
I SHARES
June 1, 1998 to May 31, 1999.......... 10.30 0.52 (0.02) (0.53) - - 10.27
June 1, 1997 to May 31, 1998.......... 10.24 0.58 0.05 (0.57) - - 10.30
June 1, 1996 to May 31, 1997.......... 10.20 0.58 0.04 (0.58) - - 10.24
November 1, 1995 to May 31, 1996...... 10.72 0.28 0.03 (0.77) (0.06) - 10.20
November 11, 1994(g) to October 31,
1995................................ 10.00 0.50 0.22 - - - 10.72
INTERMEDIATE GOVERNMENT INCOME FUND
- --------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31, 1999.......... 11.22 0.64 (0.17) (0.65) - - 11.04
June 1, 1997 to May 31, 1998.......... 10.84 0.77 0.31 (0.70) - - 11.22
June 1, 1996 to May 31, 1997.......... 10.89 0.73 (0.05) (0.73) - - 10.84
May 2, 1996(g) to May 31, 1996........ 10.89 0.03 - (0.03) - - 10.89
B SHARES
June 1, 1998 to May 31, 1999.......... 11.21 0.53 (0.13) (0.57) - - 11.04
June 1, 1997 to May 31, 1998.......... 10.83 0.69 0.31 (0.62) - - 11.21
June 1, 1996 to May 31, 1997.......... 10.89 0.64 (0.05) (0.65) - - 10.83
May 17, 1996(g) to May 31, 1996....... 10.97 0.03 (0.08) (0.03) - - 10.89
I SHARES
June 1, 1998 to May 31, 1999.......... 11.22 0.66 (0.18) (0.65) - - 11.05
June 1, 1997 to May 31, 1998.......... 10.84 0.71 0.37 (0.70) - - 11.22
June 1, 1996 to May 31, 1997.......... 10.89 0.72 (0.04) (0.73) - - 10.84
November 1, 1995 to May 31, 1996...... 12.40 0.40 0.53 (1.32) (1.12) - 10.89
November 11, 1994(g) to October 31,
1995(e)............................. 11.11 0.93 0.36 - - - 12.40
INCOME FUND
- --------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31, 1999.......... 9.79 0.59 (0.31) (0.59) - - 9.48
June 1, 1997 to May 31, 1998.......... 9.27 0.61 0.52 (0.61) - - 9.79
June 1, 1996 to May 31, 1997.......... 9.27 0.62 - (0.62) - - 9.27
June 1, 1995 to May 31, 1996.......... 9.63 0.61 (0.36) (0.61) - - 9.27
June 1, 1994 to May 31, 1995.......... 9.52 0.65 0.11 (0.65) - - 9.63
B SHARES
June 1, 1998 to May 31, 1999.......... 9.77 0.52 (0.31) (0.52) - - 9.46
June 1, 1997 to May 31, 1998.......... 9.26 0.54 0.51 (0.54) - - 9.77
June 1, 1996 to May 31, 1997.......... 9.26 0.55 - (0.55) - - 9.26
June 1, 1995 to May 31, 1996.......... 9.61 0.54 (0.35) (0.54) - - 9.26
June 1, 1994 to May 31, 1995.......... 9.51 0.58 0.10 (0.58) - - 9.61
I SHARES
June 1, 1998 to May 31, 1999.......... 9.78 0.59 (0.31) (0.59) - - 9.47
June 1, 1997 to May 31, 1998.......... 9.27 0.61 0.51 (0.61) - - 9.78
June 1, 1996 to May 31, 1997.......... 9.26 0.62 0.01 (0.62) - - 9.27
June 1, 1995 to May 31, 1996.......... 9.62 0.61 (0.36) (0.61) - - 9.26
June 1, 1994 to May 31, 1995.......... 9.51 0.65 0.11 (0.65) - - 9.62
</TABLE>
[LOGO]
See Notes to Financial Highlights and Notes to Financial Statements
36
<PAGE>
SELECTED DATA FOR A SHARE OUTSTANDING DURING EACH PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS NET ASSETS AT
--------------------------------------------------- PORTFOLIO END OF PERIOD
NET INVESTMENT NET GROSS TOTAL TURNOVER (000'S
INCOME (LOSS) EXPENSES EXPENSES(a) RETURN(b) RATE OMITTED)
--------------- -------------- ---------------- ------------ --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
STABLE INCOME FUND
- --------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31,
1999................. 5.11%(d) 0.65%(d) 0.95%(d) 4.74% 29.46%(f) $ 8,559
June 1, 1997 to May 31,
1998................. 5.74%(d) 0.65%(d) 0.91%(d) 6.38% 37.45%(f) 8,561
June 1, 1996 to May 31,
1997................. 5.69% 0.65% 0.87% 6.24% 41.30% 12,451
May 2, 1996(g) to May
31, 1996............. 5.77%(c) 0.70%(c) 2.22%(c) 0.23% 109.95% 16,256
B SHARES
June 1, 1998 to May 31,
1999................. 4.34%(d) 1.40%(d) 2.15%(d) 4.07% 29.46%(f) 2,387
June 1, 1997 to May 31,
1998................. 4.94%(d) 1.40%(d) 2.31%(d) 5.50% 37.45%(f) 1,817
June 1, 1996 to May 31,
1997................. 4.96% 1.39% 2.89% 5.43% 41.30% 1,056
May 17, 1996(g) to May
31, 1996............. 5.02%(c) 1.42%(c) 3.07%(c) 0.12% 109.95% 867
I SHARES
June 1, 1998 to May 31,
1999................. 5.10%(d) 0.65%(d) 0.76%(d) 4.95% 29.46%(f) 179,201
June 1, 1997 to May 31,
1998................. 5.69%(d) 0.65%(d) 0.76%(d) 6.28% 37.45%(f) 144,215
June 1, 1996 to May 31,
1997................. 5.73% 0.65% 0.79% 6.24% 41.30% 111,030
November 1, 1995 to May
31, 1996............. 5.74%(c) 0.65%(c) 0.92%(c) 2.97% 109.95% 83,404
November 11, 1994(g) to
October 31, 1995..... 5.91%(c) 0.65%(c) 0.98%(c) 7.20% 115.85% 48,087
INTERMEDIATE GOVERNMENT INCOME FUND
- --------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31,
1999................. 5.76% 0.68% 0.87% 4.21% 123.61% 18,594
June 1, 1997 to May 31,
1998................. 6.35% 0.68% 0.86% 10.19% 96.76% 14,325
June 1, 1996 to May 31,
1997................. 6.58% 0.68% 0.80% 6.36% 183.05% 13,038
May 2, 1996(g) to May
31, 1996............. 7.32%(c) 0.75%(c) 1.74%(c) 0.26% 74.64% 16,562
B SHARES
June 1, 1998 to May 31,
1999................. 5.01% 1.43% 1.91% 3.53% 123.61% 8,540
June 1, 1997 to May 31,
1998................. 5.60% 1.43% 1.85% 9.38% 96.76% 8,277
June 1, 1996 to May 31,
1997................. 5.80% 1.42% 1.85% 5.51% 183.05% 8,970
May 17, 1996(g) to May
31, 1996............. 5.56%(c) 1.35%(c) 2.65%(c) (0.49%) 74.64% 10,682
I SHARES
June 1, 1998 to May 31,
1999................. 5.77% 0.68% 0.72% 4.30% 123.61% 420,305
June 1, 1997 to May 31,
1998................. 6.35% 0.68% 0.72% 10.19% 96.76% 400,346
June 1, 1996 to May 31,
1997................. 6.57% 0.68% 0.72% 6.36% 183.05% 371,278
November 1, 1995 to May
31, 1996............. 6.71%(c) 0.71%(c) 1.17%(c) 0.60% 74.64% 399,324
November 11, 1994(g) to
October 31,
1995(e).............. 7.79%(c) 0.68%(c) 0.93%(c) 11.58% 240.90% 50,213
INCOME FUND
- --------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31,
1999................. 5.98% 0.75% 1.08% 2.81% 202.22% 13,731
June 1, 1997 to May 31,
1998................. 6.29% 0.75% 1.14% 12.47% 167.09% 7,661
June 1, 1996 to May 31,
1997................. 6.59% 0.75% 1.17% 6.79% 231.00% 5,142
June 1, 1995 to May 31,
1996................. 6.33% 0.75% 1.16% 2.58% 270.17% 5,521
June 1, 1994 to May 31,
1995................. 7.02% 0.75% 1.24% 8.49% 98.83% 6,231
B SHARES
June 1, 1998 to May 31,
1999................. 5.22% 1.50% 2.13% 2.03% 202.22% 7,726
June 1, 1997 to May 31,
1998................. 5.54% 1.50% 2.19% 11.52% 167.09% 4,855
June 1, 1996 to May 31,
1997................. 5.87% 1.50% 2.25% 6.03% 231.00% 3,349
June 1, 1995 to May 31,
1996................. 5.57% 1.50% 2.27% 1.92% 270.17% 3,292
June 1, 1994 to May 31,
1995................. 6.24% 1.50% 2.21% 7.57% 98.83% 3,296
I SHARES
June 1, 1998 to May 31,
1999................. 6.00% 0.75% 0.92% 2.81% 202.22% 348,472
June 1, 1997 to May 31,
1998................. 6.32% 0.75% 0.92% 12.35% 167.09% 290,566
June 1, 1996 to May 31,
1997................. 6.59% 0.75% 1.02% 6.90% 231.00% 258,207
June 1, 1995 to May 31,
1996................. 6.30% 0.75% 1.06% 2.58% 270.17% 271,157
June 1, 1994 to May 31,
1995................. 7.02% 0.75% 1.06% 8.49% 98.83% 109,994
</TABLE>
[LOGO]
37
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED
BEGINNING NET AND DIVIDENDS DISTRIBUTIONS ENDING
NET ASSET INVESTMENT UNREALIZED FROM NET FROM NET NET ASSET
VALUE PER INCOME GAIN (LOSS) ON INVESTMENT REALIZED RETURN OF VALUE PER
SHARE (LOSS) INVESTMENTS INCOME GAINS CAPITAL SHARE
--------- ---------- -------------- ---------- ------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31, 1999.......... $ 9.63 $ 0.56 $(0.24) $(0.56) $(0.22) $ - $ 9.17
June 1, 1997 to May 31, 1998.......... 9.40 0.59 0.28 (0.59) (0.05) - 9.63
June 1, 1996 to May 31, 1997.......... 9.40 0.60 0.03 (0.60) (0.03) - 9.40
June 1, 1995 to May 31, 1996.......... 9.73 0.64 (0.31) (0.64) (0.02) - 9.40
June 1, 1994 to May 31, 1995.......... 9.54 0.67 0.19 (0.67) - - 9.73
B SHARES
June 1, 1998 to May 31, 1999.......... 9.65 0.49 (0.24) (0.49) (0.22) - 9.19
June 1, 1997 to May 31, 1998.......... 9.42 0.52 0.28 (0.52) (0.05) - 9.65
June 1, 1996 to May 31, 1997.......... 9.40 0.53 0.05 (0.53) (0.03) - 9.42
June 1, 1995 to May 31, 1996.......... 9.73 0.57 (0.31) (0.57) (0.02) - 9.40
June 1, 1994 to May 31, 1995.......... 9.54 0.59 0.19 (0.59) - - 9.73
I SHARES
June 1, 1998 to May 31, 1999.......... 9.64 0.56 (0.24) (0.56) (0.22) - 9.18
June 1, 1997 to May 31, 1998.......... 9.41 0.59 0.28 (0.59) (0.05) - 9.64
June 1, 1996 to May 31, 1997.......... 9.40 0.60 0.04 (0.60) (0.03) - 9.41
June 1, 1995 to May 31, 1996.......... 9.73 0.64 (0.31) (0.64) (0.02) - 9.40
June 1, 1994 to May 31, 1995.......... 9.54 0.67 0.19 (0.67) - - 9.73
TAX-FREE INCOME FUND
- --------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31, 1999.......... 10.54 0.52 (0.10) (0.51) (0.01) - 10.44
June 1, 1997 to May 31, 1998.......... 10.05 0.53 0.49 (0.53) - - 10.54
June 1, 1996 to May 31, 1997.......... 9.78 0.54 0.27 (0.54) - - 10.05
June 1, 1995 to May 31, 1996.......... 9.82 0.55 (0.04) (0.55) - - 9.78
June 1, 1994 to May 31, 1995.......... 9.60 0.55 0.22 (0.55) - - 9.82
B SHARES
June 1, 1998 to May 31, 1999.......... 10.54 0.44 (0.10) (0.43) (0.01) - 10.44
June 1, 1997 to May 31, 1998.......... 10.05 0.46 0.48 (0.45) - - 10.54
June 1, 1996 to May 31, 1997.......... 9.78 0.46 0.27 (0.46) - - 10.05
June 1, 1995 to May 31, 1996.......... 9.82 0.48 (0.04) (0.48) - - 9.78
June 1, 1994 to May 31, 1995.......... 9.60 0.48 0.22 (0.48) - - 9.82
I SHARES
June 1, 1998 to May 31, 1999.......... 10.54 0.52 (0.10) (0.51) (0.01) - 10.44
June 1, 1997 to May 31, 1998.......... 10.06 0.53 0.48 (0.53) - - 10.54
June 1, 1996 to May 31, 1997.......... 9.78 0.54 0.28 (0.54) - - 10.06
June 1, 1995 to May 31, 1996.......... 9.82 0.55 (0.04) (0.55) - - 9.78
June 1, 1994 to May 31, 1995.......... 9.60 0.55 0.22 (0.55) - - 9.82
COLORADO TAX-FREE FUND
- --------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31, 1999.......... 10.69 0.51 (0.10) (0.51) (0.04) - 10.55
June 1, 1997 to May 31, 1998.......... 10.22 0.53 0.47 (0.53) - - 10.69
June 1, 1996 to May 31, 1997.......... 9.89 0.54 0.33 (0.54) - - 10.22
June 1, 1995 to May 31, 1996.......... 9.90 0.53 (0.01) (0.53) - - 9.89
June 1, 1994 to May 31, 1995.......... 9.69 0.48 0.21 (0.48) - - 9.90
</TABLE>
[LOGO]
See Notes to Financial Highlights and Notes to Financial Statements
38
<PAGE>
SELECTED DATA FOR A SHARE OUTSTANDING DURING EACH PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS NET ASSETS AT
--------------------------------------------------- PORTFOLIO END OF PERIOD
NET INVESTMENT NET GROSS TOTAL TURNOVER (000'S
INCOME (LOSS) EXPENSES EXPENSES(a) RETURN(b) RATE OMITTED)
--------------- -------------- ---------------- ------------ --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
TOTAL RETURN BOND FUND
- -------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31,
1999................. 5.85%(d) 0.75%(d) 1.38%(d) 3.26% 48.43%(f) $ 1,304
June 1, 1997 to May 31,
1998................. 6.14%(d) 0.75%(d) 1.13%(d) 9.46% 134.56%(f) 3,030
June 1, 1996 to May 31,
1997................. 6.37% 0.75% 1.31% 6.84% 55.07% 3,086
June 1, 1995 to May 31,
1996................. 6.48% 0.76% 1.57% 3.41% 77.49% 2,010
June 1, 1994 to May 31,
1995................. 6.94% 0.64% 2.38% 9.42% 35.19% 599
B SHARES
June 1, 1998 to May 31,
1999................. 5.13%(d) 1.50%(d) 2.31%(d) 2.49% 48.43%(f) 2,757
June 1, 1997 to May 31,
1998................. 5.37%(d) 1.50%(d) 2.22%(d) 8.64% 134.56%(f) 2,648
June 1, 1996 to May 31,
1997................. 5.61% 1.49% 2.37% 6.27% 55.07% 2,254
June 1, 1995 to May 31,
1996................. 5.75% 1.51% 2.48% 2.63% 77.49% 2,098
June 1, 1994 to May 31,
1995................. 6.17% 1.41% 3.09% 8.59% 35.19% 919
I SHARES
June 1, 1998 to May 31,
1999................. 5.88%(d) 0.75%(d) 0.98%(d) 3.26% 48.43%(f) 85,857
June 1, 1997 to May 31,
1998................. 6.14%(d) 0.75%(d) 0.86%(d) 9.45% 134.56%(f) 109,084
June 1, 1996 to May 31,
1997................. 6.36% 0.75% 1.05% 6.95% 55.07% 125,437
June 1, 1995 to May 31,
1996................. 6.57% 0.75% 1.07% 3.41% 77.49% 120,767
June 1, 1994 to May 31,
1995................. 7.04% 0.71% 1.17% 9.43% 35.19% 96,199
TAX-FREE INCOME FUND
- -------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31,
1999................. 4.81% 0.60% 0.98% 4.04% 105.53% 43,388
June 1, 1997 to May 31,
1998................. 5.09% 0.60% 0.99% 10.33% 142.81% 35,121
June 1, 1996 to May 31,
1997................. 5.41% 0.50% 1.06% 8.43% 152.33% 29,217
June 1, 1995 to May 31,
1996................. 5.54% 0.40% 1.06% 5.29% 126.20% 33,914
June 1, 1994 to May 31,
1995................. 5.87% 0.60% 1.12% 8.42% 130.90% 30,786
B SHARES
June 1, 1998 to May 31,
1999................. 4.05% 1.35% 2.01% 3.26% 105.53% 17,973
June 1, 1997 to May 31,
1998................. 4.31% 1.35% 2.05% 9.52% 142.81% 11,070
June 1, 1996 to May 31,
1997................. 4.64% 1.26% 2.15% 7.63% 152.33% 7,329
June 1, 1995 to May 31,
1996................. 4.77% 1.14% 2.21% 4.50% 126.20% 5,897
June 1, 1994 to May 31,
1995................. 5.05% 1.35% 2.21% 7.61% 130.90% 3,729
I SHARES
June 1, 1998 to May 31,
1999................. 4.83% 0.60% 0.91% 4.04% 105.53% 311,757
June 1, 1997 to May 31,
1998................. 5.09% 0.60% 0.92% 10.22% 142.81% 286,734
June 1, 1996 to May 31,
1997................. 5.40% 0.50% 1.03% 8.54% 152.33% 259,861
June 1, 1995 to May 31,
1996................. 5.57% 0.32% 1.06% 5.29% 126.20% 276,159
June 1, 1994 to May 31,
1995................. 5.84% 0.60% 1.05% 8.42% 130.90% 94,454
COLORADO TAX-FREE FUND
- -------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31,
1999................. 4.71% 0.60% 1.02% 3.79% 76.62% 39,958
June 1, 1997 to May 31,
1998................. 5.00% 0.60% 1.04% 9.96% 69.87% 34,254
June 1, 1996 to May 31,
1997................. 5.36% 0.45% 1.14% 9.00% 129.26% 27,806
June 1, 1995 to May 31,
1996................. 5.30% 0.30% 1.13% 5.35% 171.41% 26,991
June 1, 1994 to May 31,
1995................. 5.10% 0.30% 1.15% 7.47% 47.88% 25,997
</TABLE>
[LOGO]
39
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED
BEGINNING NET AND DIVIDENDS DISTRIBUTIONS ENDING
NET ASSET INVESTMENT UNREALIZED FROM NET FROM NET NET ASSET
VALUE PER INCOME GAIN (LOSS) ON INVESTMENT REALIZED RETURN OF VALUE PER
SHARE (LOSS) INVESTMENTS INCOME GAINS CAPITAL SHARE
--------- ---------- -------------- ---------- ------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
COLORADO TAX-FREE FUND (CONT'D)
- --------------------------------------------------------------------------------------------------------------------------------
B SHARES
June 1, 1998 to May 31, 1999.......... $10.71 $ 0.43 $(0.11) $(0.43) $(0.04) $ - $10.56
June 1, 1997 to May 31, 1998.......... 10.23 0.45 0.48 (0.45) - - 10.71
June 1, 1996 to May 31, 1997.......... 9.90 0.47 0.33 (0.47) - - 10.23
June 1, 1995 to May 31, 1996.......... 9.91 0.46 (0.01) (0.46) - - 9.90
June 1, 1994 to May 31, 1995.......... 9.70 0.41 0.21 (0.41) - - 9.91
I SHARES
June 1, 1998 to May 31, 1999.......... 10.69 0.51 (0.10) (0.51) (0.04) - 10.55
June 1, 1997 to May 31, 1998.......... 10.22 0.53 0.47 (0.53) - - 10.69
June 1, 1996 to May 31, 1997.......... 9.89 0.54 0.33 (0.54) - - 10.22
June 1, 1995 to May 31, 1996.......... 9.90 0.53 (0.01) (0.53) - - 9.89
June 1, 1994 to May 31, 1995.......... 9.69 0.48 0.21 (0.48) - - 9.90
MINNESOTA TAX-FREE FUND
- --------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31, 1999.......... 11.05 0.51 (0.08) (0.51) (0.01) - 10.96
June 1, 1997 to May 31, 1998.......... 10.57 0.53 0.48 (0.53) - - 11.05
June 1, 1996 to May 31, 1997.......... 10.30 0.54 0.27 (0.54) - - 10.57
June 1, 1995 to May 31, 1996.......... 10.45 0.56 (0.15) (0.56) - - 10.30
June 1, 1994 to May 31, 1995.......... 10.15 0.53 0.30 (0.53) - - 10.45
B SHARES
June 1, 1998 to May 31, 1999.......... 11.05 0.43 (0.08) (0.43) (0.01) - 10.96
June 1, 1997 to May 31, 1998.......... 10.57 0.45 0.48 (0.45) - - 11.05
June 1, 1996 to May 31, 1997.......... 10.30 0.46 0.27 (0.46) - - 10.57
June 1, 1995 to May 31, 1996.......... 10.44 0.48 (0.14) (0.48) - - 10.30
June 1, 1994 to May 31, 1995.......... 10.15 0.45 0.29 (0.45) - - 10.44
I SHARES
June 1, 1998 to May 31, 1999.......... 11.05 0.52 (0.09) (0.51) (0.01) - 10.96
June 1, 1997 to May 31, 1998.......... 10.57 0.53 0.48 (0.53) - - 11.05
June 1, 1996 to May 31, 1997.......... 10.30 0.54 0.27 (0.54) - - 10.57
June 1, 1995 to May 31, 1996.......... 10.45 0.56 (0.15) (0.56) - - 10.30
June 1, 1994 to May 31, 1995.......... 10.16 0.53 0.29 (0.53) - - 10.45
GROWTH BALANCED FUND
- --------------------------------------------------------------------------------------------------------------------------------
A SHARES
October 14, 1998(g) to May 31, 1999... 28.09 0.63 5.67 (0.58) (1.03) - 32.78
B SHARES
October 1, 1998(g) to May 31, 1999.... 26.96 0.56 4.82 (0.55) (1.03) - 30.76
C SHARES
October 1, 1998(g) to May 31, 1999.... 26.96 0.65 4.79 (0.58) (1.03) - 30.79
I SHARES
June 1, 1998 to May 31, 1999.......... 28.06 0.60 3.88 (0.58) (1.03) - 30.93
June 1, 1997 to May 31, 1998.......... 24.77 0.58 4.52 (0.60) (1.21) - 28.06
June 1, 1996 to May 31, 1997.......... 22.83 0.62 2.86 (0.63) (0.91) - 24.77
November 1, 1995 to May 31, 1996...... 21.25 0.31 1.95 (0.51) (0.17) - 22.83
November 11, 1994(g) to October 31,
1995................................ 17.95 0.47 2.83 - - - 21.25
</TABLE>
[LOGO]
See Notes to Financial Highlights and Notes to Financial Statements
40
<PAGE>
SELECTED DATA FOR A SHARE OUTSTANDING DURING EACH PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSETS
AT
RATIOS TO AVERAGE NET ASSETS END OF
--------------------------------------------------- PORTFOLIO PERIOD
NET INVESTMENT NET GROSS TOTAL TURNOVER (000'S
INCOME (LOSS) EXPENSES EXPENSES(a) RETURN(b) RATE OMITTED)
--------------- -------------- ---------------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
COLORADO TAX-FREE FUND (CONT'D)
- ------------------------------------------------------------------------------------------------------------------------
B SHARES
June 1, 1998 to May 31,
1999................. 3.96% 1.35% 2.03% 2.92% 76.62% $ 10,909
June 1, 1997 to May 31,
1998................. 4.24% 1.35% 2.04% 9.25% 69.87% 9,156
June 1, 1996 to May 31,
1997................. 4.60% 1.20% 2.15% 8.19% 129.26% 7,218
June 1, 1995 to May 31,
1996................. 4.64% 1.05% 2.16% 4.56% 171.41% 6,400
June 1, 1994 to May 31,
1995................. 4.32% 1.05% 2.16% 6.67% 47.88% 5,198
I SHARES
June 1, 1998 to May 31,
1999................. 4.71% 0.60% 0.99% 3.79% 76.62% 48,926
June 1, 1997 to May 31,
1998................. 5.01% 0.60% 1.01% 9.97% 69.87% 32,342
June 1, 1996 to May 31,
1997................. 5.35% 0.45% 1.13% 9.00% 129.26% 25,917
June 1, 1995 to May 31,
1996................. 5.30% 0.30% 1.13% 5.35% 171.41% 24,074
June 1, 1994 to May 31,
1995................. 5.08% 0.30% 1.16% 7.47% 47.88% 24,539
MINNESOTA TAX-FREE FUND
- ------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31,
1999................. 4.61% 0.60% 1.03% 3.96% 24.84% 38,255
June 1, 1997 to May 31,
1998................. 4.83% 0.60% 1.07% 9.71% 68.27% 33,597
June 1, 1996 to May 31,
1997................. 5.11% 0.60% 1.21% 7.98% 96.68% 25,739
June 1, 1995 to May 31,
1996................. 5.26% 0.48% 1.26% 3.97% 77.10% 26,610
June 1, 1994 to May 31,
1995................. 5.25% 0.49% 1.61% 8.55% 139.33% 15,559
B SHARES
June 1, 1998 to May 31,
1999................. 3.85% 1.35% 2.04% 3.18% 24.84% 21,493
June 1, 1997 to May 31,
1998................. 4.07% 1.35% 2.08% 8.89% 68.27% 16,549
June 1, 1996 to May 31,
1997................. 4.35% 1.34% 2.21% 7.18% 96.68% 11,128
June 1, 1995 to May 31,
1996................. 4.51% 1.23% 2.29% 3.28% 77.10% 8,825
June 1, 1994 to May 31,
1995................. 4.52% 1.21% 2.62% 7.63% 139.33% 5,090
I SHARES
June 1, 1998 to May 31,
1999................. 4.62% 0.60% 1.00% 3.96% 24.84% 27,261
June 1, 1997 to May 31,
1998................. 4.84% 0.60% 1.04% 9.71% 68.27% 20,736
June 1, 1996 to May 31,
1997................. 5.12% 0.60% 1.23% 7.98% 96.68% 11,135
June 1, 1995 to May 31,
1996................. 5.24% 0.51% 1.30% 3.97% 77.10% 3,988
June 1, 1994 to May 31,
1995................. 5.29% 0.48% 1.58% 8.44% 139.33% 1,799
GROWTH BALANCED FUND
- ------------------------------------------------------------------------------------------------------------------------
A SHARES
October 14, 1998(g) to
May 31, 1999......... 1.92%(c)(d) 1.15%(c)(d) 1.88%(c)(d) 22.83% N/A(h) 3,667
B SHARES
October 1, 1998(g) to
May 31, 1999......... 1.34%(c)(d) 1.75%(c)(d) 2.43%(c)(d) 20.36% N/A(h) 8,978
C SHARES
October 1, 1998(g) to
May 31, 1999......... 1.45%(c)(d) 1.68%(c)(d) 4.43%(c)(d) 20.59% N/A(h) 1,236
I SHARES
June 1, 1998 to May 31,
1999................. 2.16%(d) 0.93%(d) 1.13%(d) 16.38% N/A(h) 850,503
June 1, 1997 to May 31,
1998................. 2.38%(d) 0.93%(d) 1.09%(d) 21.40% N/A(h) 665,758
June 1, 1996 to May 31,
1997................. 2.47%(d) 0.94%(d) 1.16%(d) 15.81% 24.33% 503,382
November 1, 1995 to May
31, 1996............. 2.66%(c)(d) 0.98%(c)(d) 1.16%(c)(d) 10.87% 38.78% 484,641
November 11, 1994(g) to
October 31, 1995..... 2.63%(c)(d) 0.99%(c)(d) 1.23%(c)(d) 18.38% 41.04% 374,892
</TABLE>
[LOGO]
41
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED
BEGINNING NET AND DIVIDENDS DISTRIBUTIONS ENDING
NET ASSET INVESTMENT UNREALIZED FROM NET FROM NET NET ASSET
VALUE PER INCOME GAIN (LOSS) ON INVESTMENT REALIZED RETURN OF VALUE PER
SHARE (LOSS) INVESTMENTS INCOME GAINS CAPITAL SHARE
--------- ---------- -------------- ---------- ------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME EQUITY FUND
- --------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31, 1999.......... 41.19 0.51 5.45 (0.53) (0.26) - 46.36
June 1, 1997 to May 31, 1998.......... 33.16 0.52 8.77 (0.54) (0.72) - 41.19
June 1, 1996 to May 31, 1997.......... 27.56 0.57 5.54 (0.51) - - 33.16
May 2, 1996(g) to May 31, 1996........ 26.94 0.07 0.55 - - - 27.56
B SHARES
June 1, 1998 to May 31, 1999.......... 41.12 0.19 5.45 (0.23) (0.26) - 46.27
June 1, 1997 to May 31, 1998.......... 33.09 0.24 8.75 (0.24) (0.72) - 41.12
June 1, 1996 to May 31, 1997.......... 27.54 0.36 5.52 (0.33) - - 33.09
May 2, 1996(g) to May 31, 1996........ 26.94 0.02 0.58 - - - 27.54
C SHARES
October 1, 1998(g) to May 31, 1999.... 37.26 0.47 10.39 (0.48) (0.15) - 47.49
I SHARES
June 1, 1998 to May 31, 1999.......... 41.18 0.51 5.45 (0.53) (0.26) - 46.35
June 1, 1997 to May 31, 1998.......... 33.16 0.52 8.76 (0.54) (0.72) - 41.18
June 1, 1996 to May 31, 1997.......... 27.56 0.56 5.55 (0.51) - - 33.16
November 1, 1995 to May 31, 1996...... 24.02 0.29 4.02 (0.69) (0.08) - 27.56
November 11, 1994(g) to October 31,
1995................................ 18.90 0.46 4.66 - - - 24.02
VALUGROWTH STOCK FUND
- --------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31, 1999.......... 26.18 0.24 (0.39) (0.13) (4.51) - 21.39
June 1, 1997 to May 31, 1998.......... 25.06 0.13 4.69 (0.16) (3.54) - 26.18
June 1, 1996 to May 31, 1997.......... 22.63 0.17 4.80 (0.13) (2.41) - 25.06
June 1, 1995 to May 31, 1996.......... 18.82 0.13 3.93 (0.13) (0.12) - 22.63
June 1, 1994 to May 31, 1995.......... 17.17 0.17 1.66 (0.18) - - 18.82
B SHARES
June 1, 1998 to May 31, 1999.......... 25.52 (0.04) (0.28) - (4.51) - 20.69
June 1, 1997 to May 31, 1998.......... 24.55 (0.02) 4.56 (0.03) (3.54) - 25.52
June 1, 1996 to May 31, 1997.......... 22.28 0.01 4.68 (0.01) (2.41) - 24.55
June 1, 1995 to May 31, 1996.......... 18.65 (0.02) 3.87 (0.10) (0.12) - 22.28
June 1, 1994 to May 31, 1995.......... 17.10 0.07 1.61 (0.13) - - 18.65
I SHARES
June 1, 1998 to May 31, 1999.......... 26.15 0.25 (0.40) (0.13) (4.51) - 21.36
June 1, 1997 to May 31, 1998.......... 25.03 0.06 4.75 (0.16) (3.54) - 26.15
June 1, 1996 to May 31, 1997.......... 22.61 0.16 4.80 (0.13) (2.41) - 25.03
June 1, 1995 to May 31, 1996.......... 18.80 0.14 3.91 (0.12) (0.12) - 22.61
June 1, 1994 to May 31, 1995.......... 17.16 0.18 1.64 (0.18) - - 18.80
DIVERSIFIED EQUITY FUND
- --------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31, 1999.......... 43.06 0.08 6.29 (0.20) (0.98) - 48.25
June 1, 1997 to May 31, 1998.......... 36.51 (0.16) 8.99 (0.27) (2.33) - 43.06
June 1, 1996 to May 31, 1997.......... 30.56 0.20 6.10 (0.16) (0.19) - 36.51
May 2, 1996(g) to May 31, 1996........ 29.89 0.02 0.65 - - - 30.56
B SHARES
June 1, 1998 to May 31, 1999.......... 42.69 (0.11) 6.09 - (0.98) - 47.69
June 1, 1997 to May 31, 1998.......... 36.31 0.06 8.85 (0.08) (2.33) - 42.69
June 1, 1996 to May 31, 1997.......... 30.54 0.03 6.00 (0.07) (0.19) - 36.31
May 6, 1996(g) to May 31, 1996........ 29.41 0.02 1.11 - - - 30.54
C SHARES
October 1, 1998(g) to May 31, 1999.... 38.71 0.08 10.65 (0.20) (0.98) - 48.26
I SHARES
June 1, 1998 to May 31, 1999.......... 43.06 0.22 6.15 (0.20) (0.98) - 48.25
June 1, 1997 to May 31, 1998.......... 36.50 0.22 8.94 (0.27) (2.33) - 43.06
June 1, 1996 to May 31, 1997.......... 30.55 0.25 6.05 (0.16) (0.19) - 36.50
November 1, 1995 to May 31, 1996...... 27.53 0.16 4.25 (0.42) (0.97) - 30.55
November 11, 1994(g) to October 31,
1995................................ 22.21 0.22 5.10 - - - 27.53
</TABLE>
[LOGO]
See Notes to Financial Highlights and Notes to Financial Statements
42
<PAGE>
SELECTED DATA FOR A SHARE OUTSTANDING DURING EACH PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS NET ASSETS AT
---------------------------------------------------- PORTFOLIO END OF PERIOD
NET INVESTMENT NET GROSS TOTAL TURNOVER (000'S
INCOME (LOSS) EXPENSES EXPENSES(a) RETURN(b) RATE OMITTED)
------------------ ------------- --------------- ------------ --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
INCOME EQUITY FUND
- ---------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31,
1999................. 1.23%(d) 0.85%(d) 0.93%(d) 14.74% 3.21%(f) 105,162
June 1, 1997 to May 31,
1998................. 1.44%(d) 0.85%(d) 0.91%(d) 28.64% 3.46%(f) 75,144
June 1, 1996 to May 31,
1997................. 1.95% 0.85% 0.93% 22.40% 4.76% 43,708
May 2, 1996(g) to May
31, 1996............. 3.69%(c) 0.91%(c) 1.91%(c) 2.30% 0.69% 31,448
B SHARES
June 1, 1998 to May 31,
1999................. 0.48%(d) 1.60%(d) 1.94%(d) 13.90% 3.21%(f) 106,688
June 1, 1997 to May 31,
1998................. 0.69%(d) 1.60%(d) 1.91%(d) 27.67% 3.46%(f) 67,385
June 1, 1996 to May 31,
1997................. 1.24% 1.59% 1.96% 21.48% 4.76% 33,626
May 2, 1996(g) to May
31, 1996............. 2.92%(c) 1.72%(c) 2.63%(c) 2.23% 0.69% 17,318
C SHARES
October 1, 1998(g) to
May 31, 1999......... 0.48%(c)(d) 1.60%(c)(d) 4.37%(c)(d) 28.55% 3.21%(f) 1,106
I SHARES
June 1, 1998 to May 31,
1999................. 1.23%(d) 0.85%(d) 0.89%(d) 14.75% 3.21%(f) 1,519,541
June 1, 1997 to May 31,
1998................. 1.43%(d) 0.85%(d) 0.86%(d) 28.61% 3.46%(f) 1,214,385
June 1, 1996 to May 31,
1997................. 1.97% 0.85% 0.90% 22.40% 4.76% 425,197
November 1, 1995 to May
31, 1996............. 2.72%(c) 0.86%(c) 1.13%(c) 18.14% 0.69% 230,831
November 11, 1994(g) to
October 31, 1995..... 2.51%(c) 0.85%(c) 1.12%(c) 27.09% 7.03% 49,000
VALUGROWTH STOCK FUND
- ---------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31,
1999................. 0.51% 1.00% 1.26% (0.16%) 68.72% 18,902
June 1, 1997 to May 31,
1998................. 0.56% 1.00% 1.26% 21.15% 74.25% 27,771
June 1, 1996 to May 31,
1997................. 0.70% 1.01% 1.39% 23.32% 75.50% 18,830
June 1, 1995 to May 31,
1996................. 0.63% 1.20% 1.42% 21.69% 105.43% 15,232
June 1, 1994 to May 31,
1995................. 1.01% 1.20% 1.43% 10.72% 63.82% 12,138
B SHARES
June 1, 1998 to May 31,
1999................. (0.24%) 1.75% 2.30% (0.90%) 68.72% 7,784
June 1, 1997 to May 31,
1998................. (0.19%) 1.75% 2.31% 20.30% 74.25% 8,943
June 1, 1996 to May 31,
1997................. (0.07%) 1.76% 2.48% 22.33% 75.50% 6,591
June 1, 1995 to May 31,
1996................. (0.12%) 1.96% 2.54% 20.79% 105.43% 5,130
June 1, 1994 to May 31,
1995................. 0.28% 1.95% 2.51% 9.88% 63.82% 3,569
I SHARES
June 1, 1998 to May 31,
1999................. 0.50% 1.00% 1.19% (0.16%) 68.72% 198,672
June 1, 1997 to May 31,
1998................. 0.53% 1.00% 1.20% 21.18% 74.25% 609,056
June 1, 1996 to May 31,
1997................. 0.67% 1.01% 1.33% 23.30% 75.50% 180,204
June 1, 1995 to May 31,
1996................. 0.62% 1.20% 1.32% 21.72% 105.43% 156,553
June 1, 1994 to May 31,
1995................. 1.02% 1.20% 1.33% 10.67% 63.82% 136,589
DIVERSIFIED EQUITY FUND
- ---------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31,
1999................. 0.47%(d) 1.00%(d) 1.22%(d) 15.08% N/A(h) 69,768
June 1, 1997 to May 31,
1998................. 0.60%(d) 1.00%(d) 1.20%(d) 26.08% N/A(h) 56,350
June 1, 1996 to May 31,
1997................. 0.81%(d) 1.02%(d) 1.40%(d) 20.75% 48.08% 25,271
May 2, 1996(g) to May
31, 1996............. 1.88%(c)(d) 1.52%(c)(d) 4.06%(c)(d) 2.24% 5.76% 2,699
B SHARES
June 1, 1998 to May 31,
1999................. (0.28%)(d) 1.75%(d) 2.22%(d) 14.24% N/A(h) 111,106
June 1, 1997 to May 31,
1998................. (0.15%)(d) 1.75%(d) 2.19%(d) 25.13% N/A(h) 81,548
June 1, 1996 to May 31,
1997................. 0.09%(d) 1.76%(d) 2.41%(d) 19.86% 48.08% 33,870
May 6, 1996(g) to May
31, 1996............. 1.24%(c)(d) 2.37%(c)(d) 4.95%(c)(d) 3.84% 5.76% 2,447
C SHARES
October 1, 1998(g) to
May 31, 1999......... (0.28%)(c)(d) 1.75%(c)(d) 5.15%(c)(d) 28.02% N/A(h) 542
I SHARES
June 1, 1998 to May 31,
1999................. 0.47%(d) 1.00%(d) 1.17%(d) 15.08% N/A(h) 1,629,191
June 1, 1997 to May 31,
1998................. 0.60%(d) 1.00%(d) 1.13%(d) 26.12% N/A(h) 1,520,343
June 1, 1996 to May 31,
1997................. 0.79%(d) 1.02%(d) 1.31%(d) 20.76% 48.08% 1,212,565
November 1, 1995 to May
31, 1996............. 1.00%(c)(d) 1.06%(c)(d) 1.30%(c)(d) 16.38% 5.76% 907,223
November 11, 1994(g) to
October 31, 1995..... 1.01%(c)(d) 1.09%(c)(d) 1.37%(c)(d) 23.95% 10.33% 711,111
</TABLE>
[LOGO]
43
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED
BEGINNING NET AND DIVIDENDS DISTRIBUTIONS ENDING
NET ASSET INVESTMENT UNREALIZED FROM NET FROM NET NET ASSET
VALUE PER INCOME GAIN (LOSS) ON INVESTMENT INVESTMENT RETURN OF VALUE PER
SHARE (LOSS) INVESTMENTS INCOME GAINS CAPITAL SHARE
--------- ---------- -------------- ---------- ------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
GROWTH EQUITY FUND
- --------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31, 1999.......... $35.73 $(0.02) $ 2.56 $(0.03) $(2.07) $ - $36.17
June 1, 1997 to May 31, 1998.......... 32.49 (0.06) 6.88 (0.04) (3.54) - 35.73
June 1, 1996 to May 31, 1997.......... 29.08 (0.02) 4.06 (0.04) (0.59) - 32.49
May 2, 1996(g) to May 31, 1996........ 28.50 - 0.58 - - - 29.08
B SHARES
June 1, 1998 to May 31, 1999.......... 35.23 (0.25) 2.48 - (2.07) - 35.39
June 1, 1997 to May 31, 1998.......... 32.28 (0.23) 6.72 - (3.54) - 35.23
June 1, 1996 to May 31, 1997.......... 29.07 (0.13) 3.93 - (0.59) - 32.28
May 6, 1996(g) to May 31, 1996........ 28.18 - 0.89 - - - 29.07
C SHARES
October 1, 1998(g) to May 31, 1999.... 30.66 (0.13) 7.86 (0.03) (2.07) - 36.29
I SHARES
June 1, 1998 to May 31, 1999.......... 35.72 (0.03) 2.58 (0.03) (2.07) - 36.17
June 1, 1997 to May 31, 1998.......... 32.48 (0.04) 6.86 (0.04) (3.54) - 35.72
June 1, 1996 to May 31, 1997.......... 29.08 (0.02) 4.05 (0.04) (0.59) - 32.48
November 1, 1995 to May 31, 1996...... 26.97 - 4.09 (0.12) (1.86) - 29.08
November 11, 1994(g) to October 31,
1995................................ 22.28 (0.02) 4.71 - - - 26.97
LARGE COMPANY GROWTH FUND
- --------------------------------------------------------------------------------------------------------------------------------
A SHARES
October 6, 1998(g) to May 31, 1999.... 38.48 (0.16) 20.82 - (1.05) - 58.09
B SHARES
October 1, 1998(g) to May 31, 1999.... 39.80 (0.17) 15.92 - (1.05) - 54.50
I SHARES
June 1, 1998 to May 31, 1999.......... 39.94 (0.17) 15.95 - (1.05) - 54.67
June 1, 1997 to May 31, 1998.......... 32.63 (0.11) 10.20 - (2.78) - 39.94
June 1, 1996 to May 31, 1997.......... 26.97 (0.03) 5.91 - (0.22) - 32.63
November 1, 1995 to May 31, 1996...... 23.59 (0.04) 3.64 - (0.22) - 26.97
November 11, 1994(g) to October 31,
1995................................ 18.50 (0.05) 5.14 - - - 23.59
DIVERSIFIED SMALL CAP FUND
- --------------------------------------------------------------------------------------------------------------------------------
A SHARES
October 6, 1998(g) to May 31, 1999.... 7.77 (0.02) 1.77 -(i) - - 9.52
B SHARES
October 1, 1998(g) to May 31, 1999.... 7.97 (0.03) 1.02 - - - 8.96
I SHARES
June 1, 1998 to May 31, 1999.......... 10.52 - (1.53) -(i) - - 8.99
December 31, 1997(g) to May 31,
1998................................ 10.00 - 0.52 - - - 10.52
SMALL COMPANY STOCK FUND
- --------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31, 1999.......... 12.00 (0.01) (3.26) - - - 8.73
June 1, 1997 to May 31, 1998.......... 13.95 (0.07) 1.02 - (2.90) - 12.00
June 1, 1996 to May 31, 1997.......... 14.02 (0.04) 0.88 - (0.91) - 13.95
June 1, 1995 to May 31, 1996.......... 10.64 0.01 3.93 (0.03) (0.53) - 14.02
June 1, 1994 to May 31, 1995.......... 9.84 0.12 0.87 (0.11) (0.08) - 10.64
B SHARES
June 1, 1998 to May 31, 1999.......... 11.56 (0.16) (3.06) - - - 8.34
June 1, 1997 to May 31, 1998.......... 13.63 (0.11) 0.94 - (2.90) - 11.56
June 1, 1996 to May 31, 1997.......... 13.83 (0.11) 0.82 - (0.91) - 13.63
June 1, 1995 to May 31, 1996.......... 10.56 (0.08) 3.90 (0.02) (0.53) - 13.83
June 1, 1994 to May 31, 1995.......... 9.82 0.07 0.84 (0.09) (0.08) - 10.56
I SHARES
June 1, 1998 to May 31, 1999.......... 11.93 (0.01) (3.24) - - - 8.68
June 1, 1997 to May 31, 1998.......... 13.88 (0.09) 1.11 - (2.90) (0.07) 11.93
June 1, 1996 to May 31, 1997.......... 13.96 (0.04) 0.87 - (0.91) - 13.88
June 1, 1995 to May 31, 1996.......... 10.59 0.01 3.93 (0.03) (0.54) - 13.96
June 1, 1994 to May 31, 1995.......... 9.80 0.12 0.87 (0.12) (0.08) - 10.59
</TABLE>
[LOGO]
See Notes to Financial Highlights and Notes to Financial Statements
44
<PAGE>
SELECTED DATA FOR A SHARE OUTSTANDING DURING EACH PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS
-------------------------------------------------------- PORTFOLIO
NET INVESTMENT NET GROSS TOTAL TURNOVER
INCOME (LOSS) EXPENSES EXPENSES(a) RETURN(b) RATE
----------------- ---------------- ----------------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
GROWTH EQUITY FUND
- -------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31,
1999...................... (0.08%)(d) 1.25%(d) 1.44%(d) 7.57% N/A(h)
June 1, 1997 to May 31,
1998...................... (0.11%)(d) 1.25%(d) 1.42%(d) 22.55% N/A(h)
June 1, 1996 to May 31,
1997...................... (0.12%)(d) 1.30%(d) 1.95%(d) 14.11% 9.06%
May 2, 1996(g) to May 31,
1996...................... 0.34%(c)(d) 2.08%(c)(d) 6.40%(c)(d) 2.04% 7.39%
B SHARES
June 1, 1998 to May 31,
1999...................... (0.83%)(d) 2.00%(d) 2.45%(d) 6.78% N/A(h)
June 1, 1997 to May 31,
1998...................... (0.85%)(d) 2.00%(d) 2.45%(d) 21.63% N/A(h)
June 1, 1996 to May 31,
1997...................... (0.82%)(d) 2.04%(d) 3.02%(d) 13.28% 9.06%
May 6, 1996(g) to May 31,
1996...................... (0.40%)(c)(d) 2.92%(c)(d) 7.44%(c)(d) 3.16% 7.39%
C SHARES
October 1, 1998(g) to May
31, 1999.................. (0.87%)(c)(d) 2.01%(c)(d) 21.40%(c)(d) 25.73% N/A(h)
I SHARES
June 1, 1998 to May 31,
1999...................... (0.08%)(d) 1.25%(d) 1.38%(d) 7.60% N/A(h)
June 1, 1997 to May 31,
1998...................... (0.11%)(d) 1.25%(d) 1.35%(d) 22.52% N/A(h)
June 1, 1996 to May 31,
1997...................... (0.09%)(d) 1.30%(d) 1.84%(d) 14.11% 9.06%
November 1, 1995 to May 31,
1996...................... 0.01%(c)(d) 1.35%(c)(d) 1.85%(c)(d) 15.83% 7.39%
November 11, 1994(g) to
October 31, 1995.......... (0.11%)(c)(d) 1.38%(c)(d) 1.92%(c)(d) 21.10% 8.90%
LARGE COMPANY GROWTH FUND
- -------------------------------------------------------------------------------------------------------------------------
A SHARES
October 6, 1998(g) to May
31, 1999.................. (0.68%)(c)(d) 1.20%(c)(d) 1.35%(c)(d) 54.16% 28.15%(f)
B SHARES
October 1, 1998(g) to May
31, 1999.................. (1.22%)(c)(d) 1.76%(c)(d) 2.15%(c)(d) 40.01% 28.15%(f)
I SHARES
June 1, 1998 to May 31,
1999...................... (0.49%)(d) 1.00%(d) 1.09%(d) 39.96% 28.15%(f)
June 1, 1997 to May 31,
1998...................... (0.36%)(d) 1.00%(d) 1.03%(d) 32.29% 13.03%(f)
June 1, 1996 to May 31,
1997...................... (0.18%) 0.99% 1.09% 21.93% 24.37%
November 1, 1995 to May 31,
1996...................... (0.30%)(c) 1.00%(c) 1.13%(c) 15.40% 16.93%
November 11, 1994(g) to
October 31, 1995.......... (0.23%)(c) 1.00%(c) 1.20%(c) 27.51% 31.60%
DIVERSIFIED SMALL CAP FUND
- -------------------------------------------------------------------------------------------------------------------------
A SHARES
October 6, 1998(g) to May
31, 1999.................. (0.22%)(c)(d) 1.40%(c)(d) 2.30%(c)(d) 22.52% N/A(h)
B SHARES
October 1, 1998(g) to May
31, 1999.................. (0.84%)(c)(d) 1.99%(c)(d) 5.63%(c)(d) 12.42% N/A(h)
I SHARES
June 1, 1998 to May 31,
1999...................... (0.05%)(d) 1.20%(d) 1.65%(d) (14.54%) N/A(h)
December 31, 1997(g) to May
31, 1998.................. 0.25%(c)(d) 1.21%(c)(d) 2.65%(c)(d) 5.20% N/A(h)
SMALL COMPANY STOCK FUND
- -------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31,
1999...................... (0.12%)(d) 1.20%(d) 1.55%(d) (27.25%) 183.61%(f)
June 1, 1997 to May 31,
1998...................... (0.50%)(d) 1.20%(d) 1.42%(d) 8.07% 166.16%(f)
June 1, 1996 to May 31,
1997...................... (0.38%) 1.19% 1.67% 6.34% 210.19%
June 1, 1995 to May 31,
1996...................... 0.03% 1.21% 1.87% 38.22% 134.53%
June 1, 1994 to May 31,
1995...................... 1.14% 0.53% 2.32% 10.19% 68.09%
B SHARES
June 1, 1998 to May 31,
1999...................... (0.86%)(d) 1.95%(d) 2.63%(d) (27.85%) 183.61%(f)
June 1, 1997 to May 31,
1998...................... (1.26%)(d) 1.95%(d) 2.47%(d) 7.29% 166.16%(f)
June 1, 1996 to May 31,
1997...................... (1.13%) 1.94% 2.73% 5.46% 210.19%
June 1, 1995 to May 31,
1996...................... (0.74%) 1.96% 2.96% 37.32% 134.53%
June 1, 1994 to May 31,
1995...................... 0.38% 1.27% 3.56% 9.31% 68.09%
I SHARES
June 1, 1998 to May 31,
1999...................... (0.11%)(d) 1.20%(d) 1.43%(d) (27.24%) 183.61%(f)
June 1, 1997 to May 31,
1998...................... (0.53%)(d) 1.20%(d) 1.32%(d) 8.12% 166.16%(f)
June 1, 1996 to May 31,
1997...................... (0.38%) 1.19% 1.56% 6.30% 210.19%
June 1, 1995 to May 31,
1996...................... 0.05% 1.21% 1.60% 38.30% 134.53%
June 1, 1994 to May 31,
1995...................... 1.14% 0.52% 1.82% 10.13% 68.09%
<CAPTION>
NET ASSETS AT
END OF PERIOD
(000'S OMITTED)
---------------
<S> <C>
GROWTH EQUITY FUND
- ---------------------------------------------------------------
A SHARES
June 1, 1998 to May 31,
1999...................... $ 17,335
June 1, 1997 to May 31,
1998...................... 21,567
June 1, 1996 to May 31,
1997...................... 14,146
May 2, 1996(g) to May 31,
1996...................... 3,338
B SHARES
June 1, 1998 to May 31,
1999...................... 18,976
June 1, 1997 to May 31,
1998...................... 16,615
June 1, 1996 to May 31,
1997...................... 8,713
May 6, 1996(g) to May 31,
1996...................... 703
C SHARES
October 1, 1998(g) to May
31, 1999.................. 60
I SHARES
June 1, 1998 to May 31,
1999...................... 920,586
June 1, 1997 to May 31,
1998...................... 1,033,251
June 1, 1996 to May 31,
1997...................... 895,420
November 1, 1995 to May 31,
1996...................... 735,728
November 11, 1994(g) to
October 31, 1995.......... 564,004
LARGE COMPANY GROWTH FUND
- -------------------------------------------------------------------------------
A SHARES
October 6, 1998(g) to May
31, 1999.................. 191,233
B SHARES
October 1, 1998(g) to May
31, 1999.................. 156,870
I SHARES
June 1, 1998 to May 31,
1999...................... 645,385
June 1, 1997 to May 31,
1998...................... 232,499
June 1, 1996 to May 31,
1997...................... 131,768
November 1, 1995 to May 31,
1996...................... 82,114
November 11, 1994(g) to
October 31, 1995.......... 63,567
DIVERSIFIED SMALL CAP FUND
- -----------------------------------------------------------------------------------------------
A SHARES
October 6, 1998(g) to May
31, 1999.................. 1,504
B SHARES
October 1, 1998(g) to May
31, 1999.................. 476
I SHARES
June 1, 1998 to May 31,
1999...................... 60,261
December 31, 1997(g) to May
31, 1998.................. 12,551
SMALL COMPANY STOCK FUND
- ---------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31,
1999...................... 5,563
June 1, 1997 to May 31,
1998...................... 8,426
June 1, 1996 to May 31,
1997...................... 7,355
June 1, 1995 to May 31,
1996...................... 5,426
June 1, 1994 to May 31,
1995...................... 1,540
B SHARES
June 1, 1998 to May 31,
1999...................... 2,904
June 1, 1997 to May 31,
1998...................... 5,799
June 1, 1996 to May 31,
1997...................... 5,125
June 1, 1995 to May 31,
1996...................... 4,125
June 1, 1994 to May 31,
1995...................... 963
I SHARES
June 1, 1998 to May 31,
1999...................... 22,592
June 1, 1997 to May 31,
1998...................... 112,713
June 1, 1996 to May 31,
1997...................... 161,995
June 1, 1995 to May 31,
1996...................... 125,986
June 1, 1994 to May 31,
1995...................... 54,240
</TABLE>
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45
<PAGE>
FINANCIAL HIGHLIGHTS (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED
BEGINNING NET AND DIVIDENDS DISTRIBUTIONS ENDING
NET ASSET INVESTMENT UNREALIZED FROM NET FROM NET NET ASSET
VALUE PER INCOME GAIN (LOSS) ON INVESTMENT REALIZED RETURN OF VALUE PER
SHARE (LOSS) INVESTMENTS INCOME GAINS CAPITAL SHARE
--------- ---------- -------------- ---------- ------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
SMALL CAP OPPORTUNITIES FUND
- --------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31, 1999.......... $23.60 $(0.11) $(2.97) $ - $(0.02) $ - $20.50
June 1, 1997 to May 31, 1998.......... 19.83 (0.07) 4.37 - (0.53) - 23.60
October 9, 1996(g) to May 31, 1997.... 17.39 (0.01) 2.46 - (0.01) - 19.83
B SHARES
June 1, 1998 to May 31, 1999.......... 23.32 (0.31) (2.90) - (0.02) - 20.09
June 1, 1997 to May 31, 1998.......... 19.75 (0.05) 4.15 - (0.53) - 23.32
November 8, 1996(g) to May 31, 1997... 17.41 (0.05) 2.40 - (0.01) - 19.75
I SHARES
June 1, 1998 to May 31, 1999.......... 23.61 (0.11) (2.97) - (0.02) - 20.51
June 1, 1997 to May 31, 1998.......... 19.84 (0.06) 4.36 - (0.53) - 23.61
August 15, 1996(g) to May 31, 1997.... 16.26 (0.01) 3.60 - (0.01) - 19.84
INTERNATIONAL FUND
- --------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31, 1999.......... 23.84 0.04 (0.43) (0.21) (0.46) - 22.78
June 1, 1997 to May 31, 1998.......... 21.66 0.03 2.35 (0.20) - - 23.84
June 1, 1996 to May 31, 1997.......... 19.82 0.10 1.94 (0.20) - - 21.66
November 1, 1995 to May 31, 1996...... 17.97 0.35 1.83 (0.33) - - 19.82
April 12, 1995(g) to October 31,
1995................................ 16.50 0.01 1.46 - - - 17.97
B SHARES
June 1, 1998 to May 31, 1999.......... 23.70 (0.06) (0.49) (0.03) (0.46) - 22.66
June 1, 1997 to May 31, 1998.......... 21.55 (0.09) 2.31 (0.07) - - 23.70
June 1, 1996 to May 31, 1997.......... 19.71 (0.06) 1.93 (0.03) - - 21.55
November 1, 1995 to May 31, 1996...... 17.91 0.25 1.83 (0.28) - - 19.71
May 12, 1995(g) to October 31, 1995... 17.20 0.01 0.70 - - - 17.91
I SHARES
June 1, 1998 to May 31, 1999.......... 23.85 0.10 (0.48) (0.21) (0.46) - 22.80
June 1, 1997 to May 31, 1998.......... 21.67 0.09 2.29 (0.20) - - 23.85
June 1, 1996 to May 31, 1997.......... 19.84 0.09 1.94 (0.20) - - 21.67
November 1, 1995 to May 31, 1996...... 17.99 0.14 2.04 (0.33) - - 19.84
November 11, 1994(g) to October 31,
1995................................ 17.28 0.09 0.62 - - - 17.99
</TABLE>
[LOGO]
See Notes to Financial Highlights and Notes to Financial Statements
46
<PAGE>
SELECTED DATA FOR A SHARE OUTSTANDING DURING EACH PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS
------------------------------------------------------ PORTFOLIO NET ASSETS AT
NET INVESTMENT NET GROSS TOTAL TURNOVER END OF PERIOD
INCOME (LOSS) EXPENSES EXPENSES(a) RETURN(b) RATE (000'S OMITTED)
----------------- --------------- ---------------- ------------ --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
SMALL CAP OPPORTUNITIES FUND
- ------------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31,
1999................. (0.47%)(d) 1.25%(d) 1.49%(d) (13.03%) 238.84%(f) $ 4,698
June 1, 1997 to May 31,
1998................. (0.43%)(d) 1.27%(d) 1.86%(d) 21.97% 54.98%(f) 6,870
October 9, 1996(g) to
May 31, 1997......... (0.18%)(c)(d) 1.25%(c)(d) 10.51%(c)(d) 11.37% 34.45%(f) 522
B SHARES
June 1, 1998 to May 31,
1999................. (1.28%)(d) 2.06%(d) 2.51%(d) (13.74%) 238.84%(f) 4,187
June 1, 1997 to May 31,
1998................. (1.21%)(d) 2.01%(d) 3.05%(d) 21.03% 54.98%(f) 6,140
November 8, 1996(g) to
May 31, 1997......... (0.99%)(c)(d) 2.06%(c)(d) 27.27%(c)(d) 13.53% 34.45%(f) 158
I SHARES
June 1, 1998 to May 31,
1999................. (0.47%)(d) 1.25%(d) 1.35%(d) (13.02%) 238.84%(f) 201,816
June 1, 1997 to May 31,
1998................. (0.40%)(d) 1.25%(d) 1.38%(d) 21.95% 54.98%(f) 284,828
August 15, 1996(g) to
May 31, 1997......... (0.16%)(c)(d) 1.25%(c)(d) 1.89%(c)(d) 11.42% 34.45%(f) 77,174
INTERNATIONAL FUND
- ------------------------------------------------------------------------------------------------------------------------------------
A SHARES
June 1, 1998 to May 31,
1999................. 0.37%(d) 1.50%(d) 1.80%(d) (1.36%) N/A(h) 2,866
June 1, 1997 to May 31,
1998................. 0.44%(d) 1.47%(d) 1.72%(d) 11.20% N/A(h) 3,342
June 1, 1996 to May 31,
1997................. 0.42%(d) 1.43%(d) 1.72%(d) 10.33% 48.23%(f) 2,240
November 1, 1995 to May
31, 1996............. 0.92%(c)(d) 1.50%(c)(d) 2.51%(c)(d) 12.31% 14.12%(f) 1,080
April 12, 1995(g) to
October 31, 1995..... 0.26%(c)(d) 1.32%(c)(d) 20.95%(c)(d) 8.91% 29.41%(f) 216
B SHARES
June 1, 1998 to May 31,
1999................. (0.30%)(d) 2.25%(d) 2.89%(d) (2.08%) N/A(h) 1,973
June 1, 1997 to May 31,
1998................. (0.29%)(d) 2.22%(d) 2.81%(d) 10.39% N/A(h) 2,245
June 1, 1996 to May 31,
1997................. (0.34%)(d) 2.18%(d) 2.76%(d) 9.44% 48.23%(f) 1,667
November 1, 1995 to May
31, 1996............. (0.02%)(c)(d) 2.25%(c)(d) 3.11%(c)(d) 11.79% 14.12%(f) 995
May 12, 1995(g) to
October 31, 1995..... 0.17%(c)(d) 1.27%(c)(d) 14.57%(c)(d) 4.30% 29.41%(f) 395
I SHARES
June 1, 1998 to May 31,
1999................. 0.44%(d) 1.50%(d) 1.61%(d) (1.32%) N/A(h) 271,240
June 1, 1997 to May 31,
1998................. 0.45%(d) 1.47%(d) 1.50%(d) 11.19% N/A(h) 279,667
June 1, 1996 to May 31,
1997................. 0.40%(d) 1.43%(d) 1.44%(d) 10.27% 48.23%(f) 228,552
November 1, 1995 to May
31, 1996............. 0.60%(c)(d) 1.50%(c)(d) 1.52%(c)(d) 12.31% 14.12%(f) 143,643
November 11, 1994(g) to
October 31, 1995..... 0.54%(c)(d) 1.50%(c)(d) 1.66%(c)(d) 4.11% 29.41%(f) 91,401
</TABLE>
[LOGO]
47
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(a) During each period, various fees and expenses were waived and reimbursed.
The ratio of Gross Expenses to Average Net Assets reflects the expense
ratio in the absence of any waivers and reimbursements (Note 3).
(b) Total return calculations do not include any sales charges, and would have
been lower had certain expenses not been waived or reimbursed during the
period shown (Note 3).
(c) Annualized.
(d) Includes expenses allocated from the Portfolio(s) in which the Fund invests.
(e) Adjusted for a five to one stock split.
(f) Portfolio turnover rate represents the activity from the Fund's investment
in a single Portfolio.
(g) Commencement of operations.
(h) Portfolio turnover rate is not applicable as the Fund invested in more than
one Portfolio.
(i) Actual dividends per share were less than $0.01.
[LOGO]
48
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Norwest Advantage Funds (the "Trust") is organized as a Delaware business trust
and is registered as an open-end management investment company under the
Investment Company Act of 1940 (the "Act"). The Trust currently has thirty-nine
separate investment portfolios. These financial statements relate to seventeen
of those portfolios (individually, a "Fund" and, collectively, the "Funds"),
each of which is a diversified portfolio, with the exception of Colorado
Tax-Free Fund, and Minnesota Tax-Free Fund. The classes of each Fund and their
respective dates of commencement of operations are as follows:
<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES I SHARES
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Stable Income Fund...................... May 2, 1996 May 17, 1996 N/A November 11, 1994
Intermediate Government Income Fund..... May 2, 1996 May 17, 1996 N/A November 11, 1994
Income Fund............................. June 9, 1987 August 5, 1993 N/A August 2, 1993
Total Return Bond Fund.................. December 31, 1993 December 31, 1993 N/A December 31, 1993
Tax-Free Income Fund.................... August 1, 1989 August 6, 1993 N/A August 2, 1993
Colorado Tax-Free Fund.................. June 1, 1993 August 2, 1993 N/A August 23, 1993
Minnesota Tax-Free Fund................. January 12, 1988 August 6, 1993 N/A August 2, 1993
Growth Balanced Fund.................... October 14, 1998 October 1, 1998 October 1, 1998 November 11, 1994
Income Equity Fund...................... May 2, 1996 May 2, 1996 October 1, 1998 November 11, 1994
ValuGrowth Stock Fund................... January 8, 1988 August 5, 1993 N/A August 2, 1993
Diversified Equity Fund................. May 2, 1996 May 6, 1996 October 1, 1998 November 11, 1994
Growth Equity Fund...................... May 2, 1996 May 6, 1996 October 1, 1998 November 11, 1994
Large Company Growth Fund............... October 6, 1998 October 1, 1998 N/A November 11, 1994
Diversified Small Cap Fund.............. October 6, 1998 October 1, 1998 N/A December 31, 1997
Small Company Stock Fund................ December 31, 1993 December 31, 1993 N/A December 31, 1993
Small Cap Opportunities Fund............ October 9, 1996 November 8, 1996 N/A August 15, 1996
International Fund...................... April 12, 1995 May 12, 1995 N/A November 11, 1994
</TABLE>
Each share of each class represents an undivided, proportionate interest in a
Fund. A Shares are sold with a front-end sales charge to the general public. B
and C Shares are sold to the general public with a contingent deferred sales
charge ("CDSC") imposed on most redemptions made within six years and one year
of purchase, respectively. After six years (four years in the case of Stable
Income Fund), B Shares automatically convert to A Shares. A Shares of certain
Funds and B and C Shares incur distribution expenses.
MASTER-FEEDER ARRANGEMENT--Stable Income Fund, Total Return Bond Fund, Income
Equity Fund, Large Company Growth Fund, Small Company Stock Fund and Small Cap
Opportunities Fund each seek to achieve its investment objective by investing
all its investable assets in a separate diversified portfolio (individually, a
"Portfolio", and, collectively, the "Portfolios"), which has the same investment
objective and substantially similar investment policies as the Fund, of Core
Trust (Delaware) ("Core Trust") or Schroder Capital Funds ("Schroder Core"),
registered open-end investment companies. Growth Balanced Fund, Diversified
Equity Fund, Growth Equity Fund, Diversified Small Cap Fund and International
Fund each seeks to achieve its investment objective by investing all its assets
in two or more Portfolios of Core Trust and Schroder Core. These arrangements
are commonly referred to as master-feeder structures.
Each Portfolio directly acquires portfolio securities, and a Fund investing in
the Portfolio acquires an indirect interest in those securities. The Funds
account for their investment in a Portfolio as a partnership investment, and
record daily their share of the Portfolio's income, expenses and realized and
unrealized gain and loss. In addition, each Fund incurs its own expenses. Each
Fund may withdraw its investment from its corresponding Portfolio at any time if
the Trust's Board of Trustees determines that it is in the best interest of the
Funds and its shareholders to do so. The financial statements of the Portfolios
are in this report and should be read in conjunction with the Funds' financial
statements.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements are prepared in accordance with generally accepted
accounting principles, which require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increase and decrease in net assets from
operations during the fiscal period. Actual results could differ from those
estimates. The following summarizes the significant accounting policies of the
Funds:
SECURITY VALUATION--Each Fund determines its net asset value at 4:00 PM, Eastern
Time, on each Fund business day. Short-term securities that mature in sixty days
or less are valued at amortized cost. Equity securities for which market
quotations are readily available are valued using the last reported sales price
provided by independent pricing services. If no sales are reported, the mean of
the last bid and ask price is used. If no mean price is available, the last bid
price is used. Fixed income and other securities, for which market quotations
are readily available, are valued using the mean of the last bid and ask price
provided by independent pricing services. If no mean price is available, the
last bid price is used. In the absence of readily available market quotations,
securities are valued at fair value determined in accordance with procedures
adopted by the Board of Trustees. Each Fund investing in a Portfolio records its
investment at value. Valuation of securities held in the Portfolios is discussed
in the Notes to Financial Statements of the Portfolios, which are included
elsewhere in this report.
[LOGO]
49
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
SECURITY TRANSACTIONS AND INVESTMENT INCOME--Investment transactions are
accounted for on the trade date. Dividend income is recorded on the ex-dividend
date. With respect to dividends on foreign securities, certain instances may
arise where a Fund is not notified of a dividend until after the ex-dividend
date has passed. In these instances, a dividend is recorded as soon as a Fund is
informed of the dividend. Dividend income is recorded net of unrecoverable
withholding tax. Interest income is recorded on the accrual basis and includes
amortization of premiums and accretion of discounts. Except for Stable Income
Fund, Tax-Free Income Fund, Colorado Tax-Free Fund and Minnesota Tax-Free Fund,
the premium or discount (other than original issue discount) on the purchase of
fixed income investments with a maturity greater than sixty days is not
amortized or accreted. Identified cost of investments sold is used to determine
realized gains and losses for both financial statement and federal income tax
purposes.
DISTRIBUTIONS TO SHAREHOLDERS--Distributions to shareholders of net investment
income, if any, are declared daily and paid monthly by Income Fund, Total Return
Bond Fund, Tax-Free Income Fund, Colorado Tax-Free Fund and Minnesota Tax-Free
Fund; are declared and paid monthly by Stable Income Fund and Intermediate
Government Income Fund; are declared and paid quarterly by each other Fund. Net
capital gains if any, are distributed to shareholders at least annually.
Distributions are based on amounts calculated in accordance with applicable
federal income tax regulations, which may differ from generally accepted
accounting principles. These differences are due primarily to differing
treatments of income and gain on various investment securities held by each Fund
or Portfolio, timing differences and differing characterizations of
distributions made by the Fund.
FEDERAL TAXES--Each Fund intends to qualify each year as a regulated investment
company and distribute all its taxable income. In addition, by distributing in
each calendar year substantially all its net investment income, capital gain and
certain other amounts, if any, each Fund will not be subject to a federal excise
tax. Therefore, no federal income or excise tax provision is required.
EXPENSE ALLOCATION--The Trust accounts separately for the assets and liabilities
and operations of each Fund. Expenses that are directly attributable to more
than one Fund are allocated among the respective Funds. Expenses that are
directly attributable to a class of shares are allocated to that class. Expenses
of the Funds investing in the Portfolios and Schroder Core include their
pro-rata share of expenses from the Portfolios and Schroder Core.
ORGANIZATION COSTS--The costs incurred by certain Funds in connection with their
organization and registration of shares have been capitalized and are being
amortized using the straight-line method over a five-year period beginning on
the commencement of the Funds' operations.
REPURCHASE AGREEMENTS--Each Fund may invest in repurchase agreements. The Funds,
through their custodian, receive delivery of the underlying collateral, whose
market value must always exceed the repurchase price. In the event of default, a
Fund may have difficulties with the disposition of the collateral.
SECURITY LOANS--The Funds may receive fees or retain a portion of interest on
the investment securities or cash received as collateral for lending securities.
A Fund also continues to receive interest or dividends on the securities loaned.
Security loans are secured by collateral whose market value must always exceed
the market value of the securities loaned plus accrued interest. Gain or loss in
the market price of the securities loaned that may occur during the term of the
loan are reflected in the value of the Fund.
NOTE 3. ADVISORY, SERVICING FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Refer to the Table at the end of this Note for a detailed listing of service
fees and related fee waivers and expense reimbursements.
INVESTMENT ADVISERS--The investment adviser of each Fund and each Portfolio
(other than Schroder U.S. Smaller Companies Portfolio, Schroder EM Portfolio,
International Portfolio and International Equity Portfolio) is Norwest
Investment Management, Inc. ("Adviser"), a wholly owned subsidiary of Norwest
Bank Minnesota, N.A. ("Norwest"). Norwest is a subsidiary of Wells Fargo &
Company. The investment adviser of Schroder U.S. Smaller Companies Portfolio and
Schroder EM Portfolio of Schroder Core and International Portfolio of Core Trust
is Schroder Capital Management Inc. ("Schroder"). Schroder is a wholly owned
U.S. subsidiary of Schroder Incorporated, which is a wholly owned U.S.
subsidiary of Schroder PLC. The investment adviser of International Equity
Portfolio of Core Trust is Wells Fargo Bank, N.A. ("WFB"). WFB is a wholly owned
subsidiary of Wells Fargo & Company. The Adviser, Schroder and WFB each receives
an advisory fee from its advised Fund based on an annualized percentage of
average daily net assets of the Fund.
The Adviser and WFB have retained the services of certain of their affiliates as
investment subadvisers (Galliard Capital Management, Inc., Peregrine Capital
Management, Inc., Smith Asset Management Group, L.P. and Wells Capital
Management Incorporated ("WCM"), referred to individually as a "Subadviser" and
collectively as the "Subadvisers", on selected Portfolios. The fees related to
subadvisor services are borne directly by the Adviser and WFB and do not
increase the overall fees paid by the Portfolios to the Adviser and WFB.
Each Fund that invests in a Portfolio managed by the Adviser, Schroder or WFB
has retained the Adviser, Schroder or WFB as its investment adviser. Similarly,
in the event that a Fund withdraws its investment from a Portfolio, advised by
Schroder or a Subadviser, the Fund has retained Schroder or that Subadviser as
an investment subadviser. Under these "dormant" investment advisory
arrangements, none of the Adviser, Schroder, WFB or any Subadviser receives any
advisory fees with respect to a Fund as long as the Fund remains completely
invested in a Portfolio(s) or any other investment companies. If a Fund invests
in more than one Portfolio, Adviser, Schroder or WFB receives an investment
advisery fee from each of those Portfolios. In addition, the Adviser receives
from each Fund that invests in more than one Portfolio a fee for the "asset
allocation services" of determining the Funds' investments in the Portfolios and
how much of the Fund's assets to invest in each Portfolio.
[LOGO]
50
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 3. ADVISORY, SERVICING FEES AND OTHER TRANSACTIONS WITH
AFFILIATES (CONTINUED)
MANAGEMENT, ADMINISTRATION AND DISTRIBUTION SERVICES--Forum Financial Services,
Inc. ("FFSI") supervises the overall management of the Trust other than
investment advisory services. Forum Administrative Services, LLC ("FAdS"), an
affiliate of FFSI, is the administrator of the Trust. For their services, FFSI
and FAdS each receive a fee with respect to Intermediate Government Income Fund,
Income Fund, each of the three Tax-Free Fixed Income Funds, ValuGrowth Stock
Fund and International Fund at an annual rate of 0.05% of the Fund's average
daily net assets, and, with respect to each other Fund, at an annual rate of
0.025% of the Fund's average daily net assets.
Norwest receives a fee with respect to Small Cap Opportunities Fund and
International Fund at an annual rate of 0.25% of each Fund's average daily net
assets. Under this agreement, Norwest is responsible for compiling data and
preparing communications between each Fund and its shareholders, maintaining
requisite information flows between each Fund and Schroder and monitoring and
reporting to the Board on the performance of the applicable Portfolio. FFSI also
acts as the distributor of the Shares of each Fund but receives no fees for
these services.
TRANSFER AGENT, SHAREHOLDER SERVICING AGENT, DIVIDEND DISBURSING AGENT AND
CUSTODIAN--Norwest serves as the Trust's transfer agent and dividend disbursing
agent. For these services, Norwest receives a fee at an annual rate of 0.25% of
the average daily net assets attributable to each class of each Fund's shares
(except for the A share class of Growth Balanced Fund, Large Company Growth Fund
and Diversified Small Cap Fund, for which Norwest receives a fee at an annual
rate of 0.14%). The Trust has adopted a shareholder servicing plan with respect
to the Growth Balanced Fund, Large Company Growth Fund and Diversified Small Cap
Fund under which the Trust pays Norwest a shareholder servicing fee at an annual
rate of up to 0.25% of the average daily net assets of the shares owned by
investors for which the shareholder servicing agent maintained a servicing
relationship. Norwest may pay any or all amounts of these payments to various
institutions that provide shareholder servicing to their clients. Norwest also
serves as the Trust's custodian and may appoint subcustodians for foreign
securities and other assets held in foreign countries. For its custody services,
Norwest receives a fee at an annual rate of 0.02% for the first $100 million of
average net assets of each Fund, declining to 0.01% of the average net assets of
each Fund in excess of $200 million.
DISTRIBUTION PLAN--The Trust has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act with respect to the A Shares of Growth
Balanced Fund, Large Company Growth Fund and Diversified Small Cap Fund and the
B and C Shares of each Fund currently offering B and C Shares. The Plan
authorizes the payment to FFSI of a distribution service fee at an annual rate
of 0.10% of the average daily net assets attributable to A Shares and 0.75% of
the average daily net assets attributable to B and C Shares. The Plan also
authorizes payment of a maintenance fee at an annual rate of 0.25% of the
average daily net assets attributable to B Shares. No Fund incurred any
maintenance fees during the year ended May 31, 1999. The distribution payments
are used to compensate FFSI for general distribution expenses of A Shares or
primarily to reimburse FFSI for commissions to brokers and interest thereon with
respect to B Shares and C Shares. The Plan may, with respect to each share
class, be terminated by vote of a majority of the Share class' shareholders or
by vote of a majority of the Board of Trustees who do not have any direct or
indirect financial interest in the Plan. In the event that the Plan is
terminated or not continued, at the discretion of the Board of Trustees, the
Fund will continue to pay distribution service fees to FFSI (but only with
respect to sales of B Shares and C Shares that occurred prior to the termination
or discontinuance of the Plan) until the earlier of (a) four years after the
date of termination or discontinuance or (b) such time as there exists no
unreimbursed distribution charges attributable to that Fund under the Plan, as
calculated pursuant to the Plan. The respective unreimbursed distribution
charges at May 31, 1999, were as follows:
<TABLE>
<CAPTION>
UNREIMBURSED
DISTRIBUTION
CHARGES
-----------
<S> <C>
Stable Income Fund............ $ 19,737
Intermediate Government Income
Fund......................... 144,884
Income Fund................... 182,097
Total Return Bond Fund........ 39,814
Tax-Free Income Fund.......... 368,197
Colorado Tax-Free Fund........ 146,358
Minnesota Tax-Free Fund....... 450,080
Growth Balanced Fund.......... 375,644
Income Equity Fund............ 2,799,438
ValuGrowth Stock Fund......... 101,123
Diversified Equity Fund....... 3,091,827
Growth Equity Fund............ 535,516
Large Company Growth Fund..... 6,982,832
Diversified Small Cap Fund.... 19,448
Small Company Stock Fund...... 100,274
Small Cap Opportunities
Fund......................... 222,021
International Fund............ 54,024
</TABLE>
OTHER SERVICE PROVIDERS--Forum Accounting Services, LLC ("FAcS"), an affiliate
of FFSI, provides portfolio accounting services to each Fund.
FEE RATES AND WAIVERS--The following table provides fee rates for certain
services. The table also contains fee waivers for each service provider. The
Adviser, Norwest, FFSI and FAdS have voluntarily waived a portion of their fees
so that total expenses would not exceed specific expense limitations
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51
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 3. ADVISORY, SERVICING FEES AND OTHER TRANSACTIONS WITH
AFFILIATES (CONTINUED)
established for each Fund. The Adviser, Norwest, FFSI and FAdS may, at their
discretion, revise or discontinue the voluntary fee waivers and expense
reimbursements at any time.
<TABLE>
<CAPTION>
FEES WAIVED BY
FEES/RATES ------------------------------------
-------------------------------- CUSTODIAN EXPENSES
ASSET CUSTODIAN AND AND REIMBURSED
ALLOCATION/ TRANSFER TRANSFER BY
ADVISORY AGENT ADVISER AGENT FFSI/FADS FFSI/FADS
---------------- ------------- ----------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Stable Income Fund...................... - 0.25% $ - $107,966 $ 13,887 $ 19,678
Intermediate Government Income Fund..... 0.33% 0.25% - - 223,232 26,280
Income Fund............................. 0.50% 0.26%(c) - 565,161 49,209 14,880
Total Return Bond Fund.................. - 0.25% - 191,212 11,544 15,371
Tax-Free Income Fund.................... 0.50% 0.26%(c) 19,399 903,466 269,369 17,466
Colorado Tax-Free Fund.................. 0.50%(a) 0.27%(c) 70,194 221,175 93,847 541
Minnesota Tax-Free Fund................. 0.50%(a) 0.27%(c) 81,990 197,177 105,767 -
Growth Balanced Fund.................... 0.25% 0.25% 823,243 47,834 315,767 15,736
Income Equity Fund...................... - 0.25% - 106,872 402,542 32,202
ValuGrowth Stock Fund................... 0.80%(b) 0.26%(c) 203 505,429 326,092 14,315
Diversified Equity Fund................. 0.25% 0.25% 1,122,346 457,800 823,786 59,379
Growth Equity Fund...................... 0.25% 0.25% - 434,271 380,736 24,107
Large Company Growth Fund............... - 0.25% - 311,038 280,450 -
Diversified Small Cap Fund.............. 0.25% 0.25% 87,077 51,167 7,667 8,568
Small Company Stock Fund................ - 0.25% - 90,408 37,537 16,656
Small Cap Opportunities Fund............ - 0.25% - 157,453 98,591 11,478
International Fund...................... 0.25% 0.25% - - 10,361 6,670
<CAPTION>
TOTAL FEES
WAIVED AND
EXPENSES
REIMBURSED
----------
<S> <C>
Stable Income Fund...................... $ 141,531
Intermediate Government Income Fund..... 249,512
Income Fund............................. 629,250
Total Return Bond Fund.................. 218,127
Tax-Free Income Fund.................... 1,209,700
Colorado Tax-Free Fund.................. 385,757
Minnesota Tax-Free Fund................. 384,934
Growth Balanced Fund.................... 1,202,580
Income Equity Fund...................... 541,616
ValuGrowth Stock Fund................... 846,039
Diversified Equity Fund................. 2,463,311
Growth Equity Fund...................... 839,114
Large Company Growth Fund............... 591,488
Diversified Small Cap Fund.............. 154,479
Small Company Stock Fund................ 144,601
Small Cap Opportunities Fund............ 267,522
International Fund...................... 17,031
</TABLE>
(a) For the first $300 million of average net assets of the Fund, declining to
0.42% for average net assets in excess of $700 million.
(b) For the first $300 million of average net assets of the Fund, declining to
0.72% for average net assets in excess of $700 million.
(c) In addition to the transfer agent fee, the custody fee is 0.02 for the first
$100 million of average net assets of the Fund, declining to 0.01% for
average net assets in excess of $200 million.
NOTE 4. SECURITIES TRANSACTIONS
The following table presents the cost of purchases and proceeds from sales
(including maturities) of securities (excluding short-term investments) during
the year ended May 31, 1999, as well as the federal tax cost basis of
investments, related gross unrealized appreciation and depreciation for federal
income tax purposes, and the capital loss carryovers (which expire in various
years through 2007) available to offset future capital gains, as of May 31,
1999:
<TABLE>
<CAPTION>
UNREALIZED
COST OF PROCEEDS --------------------------------------------- TAX
PURCHASES FROM SALES APPRECIATION (DEPRECIATION) NET COST BASIS
------------ ------------ ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Stable Income Fund............ $ - $ - $ - $ (663,452) $ (663,452) $ 191,625,870
Intermediate Government Income
Fund......................... 244,702,973 426,942,718 1,751,298 (10,166,195) (8,414,897) 450,490,357
Income Fund................... 753,140,051 677,265,759 997,739 (9,303,437) (8,305,698) 373,838,888
Total Return Bond Fund........ - - - (2,602,757) (2,602,757) 93,045,325
Tax-Free Income Fund.......... 404,018,965 368,246,021 12,332,997 (2,343,691) 9,989,306 350,668,431
Colorado Tax-Free Fund........ 88,531,007 64,154,683 2,557,666 (311,650) 2,246,016 95,784,886
Minnesota Tax-Free Fund....... 48,962,699 37,531,670 2,546,076 (322,611) 2,223,465 84,500,449
Growth Balanced Fund.......... - - 222,039,396 - 222,039,396 639,211,882
Income Equity Fund............ - - 537,929,530 - 537,929,530 1,194,087,388
ValuGrowth Stock Fund......... 341,750,970 710,477,368 84,776,453 (8,264,102) 76,512,351 149,725,986
Diversified Equity Fund....... - - 781,773,715 - 781,773,715 1,029,230,259
Growth Equity Fund............ - - 301,958,214 - 301,958,214 656,811,863
Large Company Growth Fund..... - - 187,836,112 - 187,836,112 804,262,869
Diversified Small Cap Fund.... - - 3,405,644 - 3,405,644 58,522,658
Small Company Stock Fund...... - - - (5,950,884) (5,950,884) 35,549,955
Small Cap Opportunities
Fund......................... - - 19,323,081 - 19,323,081 191,309,526
International Fund............ - - 29,684,340 - 29,684,340 247,347,381
<CAPTION>
CAPITAL
LOSS
CARRYOVERS
------------
<S> <C>
Stable Income Fund............ $ 6,920,052
Intermediate Government Income
Fund......................... 17,108,871
Income Fund................... 8,539,713
Total Return Bond Fund........ 106,887
Tax-Free Income Fund.......... -
Colorado Tax-Free Fund........ -
Minnesota Tax-Free Fund....... -
Growth Balanced Fund.......... -
Income Equity Fund............ -
ValuGrowth Stock Fund......... -
Diversified Equity Fund....... -
Growth Equity Fund............ -
Large Company Growth Fund..... -
Diversified Small Cap Fund.... 3,478,563
Small Company Stock Fund...... 23,208,632
Small Cap Opportunities
Fund......................... 27,299,061
International Fund............ -
</TABLE>
[LOGO]
52
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
- --------------------------------------------------------------------------------
NOTE 5. PORTFOLIO SECURITIES LOANED
As of May 31, 1999, certain Funds had loaned securities in return for securities
and cash collateral, which was invested in various short-term, fixed income
securities such as repurchase agreements, commercial paper and government and
corporate notes and bonds. The risks to the Portfolio from securities lending
are that the borower may not provide additional collateral when required or
return the securities when due or when called for by the Portfolio. The value of
the securities on loan and the value of the related collateral were as follows:
<TABLE>
<CAPTION>
SECURITIES COLLATERAL
------------- -------------
<S> <C> <C>
Intermediate Government Income
Fund............................... $ 127,286,089 $ 130,937,161
Income Fund......................... 41,124,743 42,553,748
ValuGrowth Stock Fund............... 21,620,481 23,829,038
</TABLE>
NOTE 6. CONCENTRATION OF CREDIT RISK
Colorado Tax-Free Fund, and Minnesota Tax-Free Fund invest substantially all
their assets in debt obligations of issuers located in the states of Colorado
and Minnesota, respectively. The issuers' abilities to meet their obligations
may be affected by Colorado and Minnesota economic or political developments.
NOTE 7. COMMON TRUST FUND CONVERSIONS AND FUND MERGER
On September 12, 1997, ValuGrowth Stock Fund, Small Company Stock Fund and
Income Equity Fund acquired all the net assets of Norwest Common Trust ("CTF")
ValuGrowth Stock Fund, Crestone Aggressive Stock Fund and CTF Income Stock Fund,
respectively. The net assets and unrealized gain associated with the acquired
fund immediately prior to acquisition, and the shares issued as a result of the
acquisition were as follows:
<TABLE>
<CAPTION>
PRIOR TO ACQUISITION
-----------------------------
UNREALIZED
NET ASSETS GAINS SHARES ISSUED
------------- ------------- -------------
<S> <C> <C> <C>
CTF ValuGrowth Stock Fund........... $ 415,801,386 $127,653,625 16,645,372
Crestone Aggressive Stock Fund...... 44,432,702 6,745,994 2,892,754
CTF Income Stock Fund............... 477,132,068 190,138,062 13,451,708
</TABLE>
The net assets of ValuGrowth Stock Fund, Small Company Stock Fund and Income
Equity Fund immediately after the acquisition were $629,624,407, $243,467,085
and $1,067,643,271, respectively.
On September 15, 1997, ValuGrowth Stock Fund acquired all the net assets of CTF
ValuGrowth Stock Fund. The net assets and unrealized gain associated with the
acquired fund immediately prior to acquisition, and the shares issued as a
result of the acquisition were $27,822,429, $7,567,930 and 1,116,022,
respectively. The net assets of ValuGrowth Stock Fund immediately after the
acquisition were $656,450,216.
On October 10, 1998, Income Fund, Income Equity Fund and International Fund
acquired all the net assets of Founders Trust Income Fund, Victoria Bank & Trust
("VB&T") Income Fund, Fort Worth Stock Fund, VB&T Income Equity Fund and
Founders Trust International Fund, respectively. The net assets and unrealized
gain associated with the acquired fund immediately prior to acquisition were
$20,822,516, $629,513, $30,884,547, $8,432,265, $1,767,537 and ($43,988),
respectively. The shares issued as a result of the acquisition for Income Fund,
Income Equity Fund and International Fund were 2,096,930, 833,816 and 91,630,
respectively. The net assets of Income Fund, Income Equity Fund and
International Fund immediately after the acquisition were $347,650,896,
$1,314,016,504 and $234,522,476, respectively.
Pursuant to an Agreement and Plan of Consolidation, shareholders of the Growth
Stock Fund of MasterWorks Funds Inc. voted on November 24, 1998, to merge the
net asets of the MasterWorks Growth Stock Fund into Norwest Advantage Large
Company Growth Fund. On December 11, 1998, Large Company Growth Fund acquired
all the net assets of Masterworks Growth Stock Fund. The net assets, unrealized
gain and shares associated with the acquired fund immediately prior to
acquisition were $169,603,833, $2,637,408 and 3,418,054, respectively. The net
assets of Large Company Growth Fund immediately after the acquisition were
$545,142,430.
NOTE 8. FUND REORGANIZATIONS
On March 25, 1999, the Board of Trustees of Norwest Advantage Funds approved the
reorganization of each Norwest Advantage Fund into a new portfolio of Wells
Fargo Funds Trust. The reorganizations are part of a plan to consolidate the
Stagecoach and Norwest Advantage fund families following last November's merger
of Wells Fargo & Company and Norwest Corporation. Norwest Advantage Funds will
present each proposed fund reorganization to the fund's shareholders for their
approval at a special shareholders' meeting that is planned for August 1999.
If shareholders approve the reorganizations, each Norwest Advantage Fund will
reorganize into a corresponding Wells Fargo Funds Trust portfolio that has
substantially similar investment objectives and, except as noted below,
investment policies. In general, the Wells Fargo Funds Trust portfolios will not
combine with other funds of the Stagecoach or Norwest Advantage fund families.
The reorganizations contemplate, however, that each of the following Norwest
Advantage Funds will reorganize into a portfolio of Wells Fargo Funds Trust that
may have somewhat different investment policies from those of the fund and may
combine with other Stagecoach or Norwest Advantage funds:
<TABLE>
<CAPTION>
WELLS FARGO FUNDS
NORWEST ADVANTAGE FUNDS TRUST
- ------------------------- ----------------------
<S> <C> <C>
Valugrowth Stock Fund -- Growth Fund
Small Company Stock Fund -- Small Cap Fund
Total Return Bond Fund -- Income Fund
</TABLE>
[LOGO]
53
<PAGE>
SUPPLEMENTARY INFORMATION (UNAUDITED)
- --------------------------------------------------------------------------------
FEDERAL TAX STATUS OF DIVIDENDS DECLARED
The amounts of 20% rate gain dividends paid during the period are presented
below. For federal income tax purposes, dividends from short-term capital gains
are classified as ordinary income. All net investment income dividends were
ordinary income, except for those Funds noted below that paid exempt income
dividends. The percentage of qualifying dividends eligible for the corporate
dividends received deduction are also listed below for the applicable Funds.
<TABLE>
<CAPTION>
TAX EXEMPT
INCOME QUALIFYING
20% RATE GAIN DIVIDENDS DIVIDENDS
------------------- -------------- --------------
<S> <C> <C> <C>
Tax-Free Income Fund.......... $ 1,244 99.98% -
Colorado Tax-Free Fund........ 299,304 99.84% -
Minnesota Tax-Free Fund....... 39,613 100.00% -
Growth Balanced Fund.......... 22,068,524 - 22.12%
Income Equity Fund............ 8,246,637 - 100.00%
ValuGrowth Stock Fund......... 50,134,888 - 100.00%
Diversified Equity Fund....... 30,945,093 - 100.00%
Growth Equity Fund............ 45,638,230 - -
Large Company Growth Fund..... 8,260,616 - -
Small Cap Opportunities
Fund......................... 293,955 - -
International Fund............ 5,992,888 - -
</TABLE>
SPECIAL 1999 TAX INFORMATION
The International Fund intends to elect to pass through the credit for taxes
paid in foreign countries during its fiscal year ended May 31, 1999. In
accordance with current tax laws, the foreign income and foreign tax per share
(for a share outstanding on May 31, 1999) is as follows:
<TABLE>
<CAPTION>
COUNTRY DIVIDENDS FOREIGN TAX
- --------------------------------------- ----------- -------------
<S> <C> <C>
Argentina.............................. 0.0001 -
Australia.............................. 0.0053 0.0008
Austria................................ 0.0020 0.0002
Belgium................................ 0.0066 0.0010
Botswana............................... 0.0001 -
Brazil................................. 0.0011 0.0001
Chile.................................. 0.0002 0.0001
China.................................. 0.0002 -
France................................. 0.0644 0.0115
Germany................................ 0.0156 0.0016
Greece................................. 0.0002 -
Holland................................ 0.0040 0.0006
Hong Kong.............................. 0.0001 -
Hungary................................ 0.0002 -
India.................................. 0.0001 -
Indonesia.............................. 0.0004 0.0001
Ireland................................ 0.0025 0.0008
<CAPTION>
COUNTRY DIVIDENDS FOREIGN TAX
- --------------------------------------- ----------- -------------
<S> <C> <C>
Israel................................. 0.0004 0.0001
Italy.................................. 0.0108 0.0016
Japan.................................. 0.0251 0.0038
Mexico................................. 0.0008 -
Netherlands............................ 0.0294 0.0044
Philippines............................ 0.0001 -
Poland................................. 0.0001 -
Portugal............................... 0.0108 0.0019
Singapore.............................. 0.0068 0.0018
South Africa........................... 0.0009 -
South Korea............................ 0.0003 0.0001
Spain.................................. 0.0187 0.0028
Sweden................................. 0.0053 0.0008
Switzerland............................ 0.0222 0.0033
Taiwan................................. 0.0001 -
Turkey................................. 0.0002 -
United Kingdom......................... 0.1493 0.0215
</TABLE>
The pass through of foreign tax credit will affect only those shareholders of
the Fund who are holders on the dividend record date in December 1999.
Accordingly, shareholders will receive more detailed information along with
their form 1099-DIV in January 2000.
[LOGO]
54
<PAGE>
SCHEDULES OF INVESTMENTS MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
STABLE INCOME FUND
- -----------------------------------------------------------------
N/A Stable Income Portfolio of Core Trust
(Delaware)(e) $ 190,962,418
---------------
TOTAL INVESTMENTS (100.0%) (COST $191,625,870) $ 190,962,418
---------------
---------------
- -----------------------------------------------------------------
INTERMEDIATE GOVERNMENT INCOME FUND
- -----------------------------------------------------------------
GOVERNMENT AGENCY BONDS & NOTES (7.0%)
FHLB (3.1%)
7,000,000 FHLB, 5.13%, 2/26/02# $ 6,881,420
7,000,000 FHLB, 6.44%, 12/12/11# 7,020,720
---------------
TOTAL FHLB (COST $13,628,510) 13,902,140
---------------
FHLMC (1.0%)
4,000,000 FHLMC, 8.07%, 1/27/05 (cost $4,583,750) 4,362,760
---------------
FNMA (2.6%)
11,500,000 FNMA, 6.00%, 5/15/08 (cost $12,018,820) 11,327,845
---------------
SLMA (0.3%)
1,000,000 SLMA, 9.15%, 12/1/04 (cost $1,171,875) 1,141,210
---------------
TOTAL GOVERNMENT AGENCY BONDS & NOTES
(COST $31,402,955) 30,733,955
---------------
MORTGAGE BACKED SECURITIES (22.5%)
FHLMC (4.9%)
6,750,000 Gold Pool 26620, 6.50%, 8/22/08 6,608,655
9,996,485 Gold Pool C22339, 6.50%, 3/11/07 9,787,159
5,202,828 Gold Pool C80461, 7.00%, 8/10/04 5,217,448
---------------
TOTAL FHLMC (COST $21,877,307) 21,613,262
---------------
FNMA (8.0%)
9,472,204 Pool 429182, 6.50%, 10/21/06 9,264,952
10,350,770 Pool 449466, 6.50%, 2/22/07 10,124,295
11,951,537 Pool 454390, 6.00%, 5/30/08 11,372,604
4,954,917 Pool 455607, 6.00%, 8/8/08 4,714,901
---------------
TOTAL FNMA (COST $36,560,056) 35,476,752
---------------
GNMA (9.6%)
9,896,913 Pool 158794, 7.00%, 2/11/07 9,912,353
12,377,724 Pool 445071, 7.50%, 10/18/03 12,667,858
9,983,570 Pool 470148, 7.00%, 8/22/08 9,999,144
9,974,286 Pool 491192, 7.00%, 3/8/07 9,989,845
---------------
TOTAL GNMA (COST $42,813,194) 42,569,200
---------------
TOTAL MORTGAGE BACKED SECURITIES (COST $101,250,557) 99,659,214
---------------
U.S. TREASURY NOTES (68.2%)
9,000,000 5.88%, 9/30/02 9,068,040
13,000,000 6.13%, 8/15/07# 13,262,990
18,000,000 6.25%, 2/15/03# 18,348,840
12,300,000 6.25%, 2/15/07# 12,631,116
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INTERMEDIATE GOVERNMENT INCOME FUND (continued)
- -----------------------------------------------------------------
</TABLE>
U.S. TREASURY NOTES (continued)
<TABLE>
<C> <S> <C>
25,000,000 6.25%, 8/31/02 $ 25,459,000
5,000,000 6.38%, 3/31/01# 5,084,300
7,500,000 6.50%, 8/15/05# 7,765,650
24,000,000 6.63%, 5/15/07# 25,222,512
16,000,000 6.88%, 5/15/06# 16,962,880
26,000,000 7.00%, 7/15/06# 27,781,260
20,000,000 7.25%, 8/15/04# 21,340,400
19,500,000 7.50%, 11/15/01# 20,387,640
12,500,000 7.50%, 2/15/05 13,531,000
11,000,000 7.50%, 5/15/02 11,567,380
35,000,000 7.88%, 11/15/04 38,421,250
11,000,000 8.00%, 5/15/01 11,518,980
19,000,000 8.13%, 8/15/19# 23,355,370
---------------
TOTAL U.S. TREASURY NOTES (COST $307,795,428) 301,708,608
---------------
SHORT-TERM HOLDINGS (2.3%)
299,351 Dreyfus Treasury Cash Management A
Series Fund 299,351
9,674,332 Norwest U.S. Government Fund 9,674,332
---------------
TOTAL SHORT-TERM HOLDINGS (COST $9,973,683) 9,973,683
---------------
TOTAL INVESTMENTS (100.0%) (COST $450,422,623) $ 442,075,460
---------------
---------------
- -----------------------------------------------------------------
INCOME FUND
- -----------------------------------------------------------------
ASSET BACKED SECURITIES (3.9%)
4,240,681 First Plus Home Loan Trust, Series
1996-2 A5, 7.47%, 11/3/99 $ 4,320,067
2,514,713 First USA Consumer Trust, Class A,
6.50%, 9/15/02+ 2,517,857
7,000,000 Green Tree Financial Corp., Series
1997-6 A7, 7.14%, 5/24/05 7,237,720
---------------
TOTAL ASSET BACKED SECURITIES (COST $13,748,708) 14,075,644
---------------
CORPORATE BONDS & NOTES (57.6%)
6,000,000 AMBAC, Inc., 9.38%, 8/1/11 7,325,340
6,000,000 American Home Products Corp., 7.25%,
3/1/23 6,171,540
3,000,000 Ashland, Inc., 6.86%, 5/1/09 2,934,570
4,500,000 Banc One Corp., 8.00%, 4/29/27 4,970,880
3,500,000 Bank United, 8.00%, 3/15/09 3,434,445
4,500,000 BankBoston Corp., 6.875%, 7/15/03 4,572,630
3,000,000 Bankers Trust New York Co., 7.38%,
5/1/08 3,079,380
3,000,000 Bayerische Landesbank, New York, 6.20%,
2/9/06 2,916,750
3,550,000 Clear Channel Communications, Inc.,
7.25%, 10/15/27 3,437,785
4,500,000 Coastal Corp., 6.95%, 6/1/28 4,358,520
3,000,000 Comcast Cellular, 9.50%, 5/1/07 3,363,750
5,000,000 Computer Associates International, Inc.,
6.50%, 4/15/08 4,710,600
</TABLE>
[LOGO]
See Notes to Schedules of Investments
55
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INCOME FUND (continued)
- -----------------------------------------------------------------
</TABLE>
CORPORATE BONDS & NOTES (continued)
<TABLE>
<C> <S> <C>
5,000,000 Connecticut Light & Power, Series A,
7.88%, 6/1/01 $ 5,124,800
4,000,000 CSC Holdings, Inc., 7.63%, 7/15/18 3,918,880
5,700,000 Dell Computer Corp., 7.10%, 4/15/28 5,603,214
4,800,000 Dillard Department Stores, Inc., 9.13%,
8/1/11 5,518,416
4,500,000 Dresdner Funding Trust I, 8.15%,
6/30/31+ 4,535,955
4,500,000 EOP Operating LP, 7.50%, 4/19/29 4,338,900
5,000,000 Federal-Mogul Corp., 7.75%, 7/1/06 4,864,850
4,500,000 First Data Corp., 6.375%, 12/15/07 4,431,735
1,500,000 Flowers Industries, Inc., 7.15%, 4/15/28 1,396,605
3,000,000 Ford Motor Co., 6.38%, 2/1/29 2,694,690
6,000,000 General Electric Capital Corp., 8.70%,
2/15/03 6,490,320
3,000,000 Goldman Sachs Group, Inc., 6.65%,
5/15/09 2,963,430
3,000,000 Gruma SA de CV, 7.63%, 10/15/07 2,656,080
4,500,000 Hertz Corp., 6.50%, 5/15/06 4,411,395
5,000,000 Key Bank NA, 6.50%, 4/15/08 4,980,100
3,000,000 Korea Dev Bank, 7.13%, 4/22/04 2,915,130
2,000,000 Korea Development Bank, 6.63%, 11/21/03# 1,914,140
4,500,000 Korea Electric Power, 6.00%, 12/1/26 4,337,145
4,500,000 LCI International, Inc. (Qwest), 7.25%,
6/15/07 4,475,565
5,000,000 Lehman Brothers Holdings, Inc., 8.50%,
8/1/15 5,327,050
6,800,000 Merck & Co., Inc., 6.40%, 3/1/28 6,507,124
4,000,000 Merrill Lynch & Co., Inc., 6.88%,
11/15/18 3,864,840
250,000 Midland Bank plc, 6.95%, 3/15/11 247,590
1,000,000 National Rural Utilities, 5.70%, 1/15/10 932,710
5,000,000 NationsBank Corp., 7.80%, 9/15/16 5,380,900
3,000,000 News America Holdings, 8.88%, 4/26/23 3,414,600
5,000,000 Oracle Corp., 6.72%, 2/15/04 4,995,350
585,000 Pennsylvania Power & Light Co., 6.88%,
3/1/04 597,098
5,000,000 PNC Bank Corp., 6.50%, 5/1/08 4,910,350
4,500,000 Providian National Bank, 6.65%, 2/1/04 4,420,260
4,500,000 Rouse Co., 8.50%, 1/15/03 4,553,370
5,000,000 Saks, Inc., 7.50%, 12/1/10 5,069,100
2,500,000 Society Corp., 8.13%, 6/15/02 2,617,800
1,200,000 Southwest Airlines Co., 7.88%, 9/1/07 1,283,316
5,000,000 Spieker Properties LP, 7.25%, 5/1/09 4,920,000
3,000,000 Sprint Capital Corp., 6.13%, 11/15/08 2,828,490
4,500,000 Staples, Inc., 7.13%, 8/15/07 4,536,765
2,000,000 Tosco Corp., 7.80%, 1/1/27 2,038,720
5,000,000 Tyco International Group S.A., 6.88%,
1/15/29 4,731,650
5,000,000 Union Pacific Resources, 6.50%, 5/15/05 4,760,950
1,000,000 Valero Energy Corp., 7.38%, 3/15/06 987,560
3,000,000 Yorkshire Power Finance, 6.15%, 2/25/03 2,937,690
---------------
TOTAL CORPORATE BONDS & NOTES (COST $216,577,469) 210,710,823
---------------
GOVERNMENT AGENCY BONDS & NOTES (0.1%)
100,000 FHLMC, 7.05%, 6/8/05 100,503
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INCOME FUND (continued)
- -----------------------------------------------------------------
</TABLE>
GOVERNMENT AGENCY BONDS & NOTES (continued)
<TABLE>
<C> <S> <C>
205,000 FHLMC, 7.13%, 7/21/99 $ 205,547
---------------
TOTAL GOVERNMENT AGENCY BONDS & NOTES (COST $303,738) 306,050
---------------
MORTGAGE BACKED SECURITIES (10.9%)
FHLMC (3.6%)
6,750,000 Gold Pool 26620, 6.50%, 5/1/29 6,608,655
6,503,535 Gold Pool C80461, 7.00%, 10/10/04 6,521,810
---------------
TOTAL FHLMC (COST $12,993,145) 13,130,465
---------------
FNMA (6.0%)
1,773 Pool 303414, 6.50%, 4/4/01 1,782
8,858,944 Pool 398325, 6.00%, 12/22/07 8,429,816
4,966,121 Pool 449466, 6.50%, 2/22/07 4,857,462
4,898,171 Pool 454390, 6.00%, 5/30/08 4,660,903
3,963,934 Pool 455607, 6.00%, 8/8/08 3,771,921
---------------
TOTAL FNMA (COST $22,347,571) 21,721,884
---------------
GNMA (1.3%)
4,855,116 Pool 491192, 7.00%, 6/8/07 (cost
$4,936,288) 4,862,690
---------------
TOTAL MORTGAGE BACKED SECURITIES (COST $40,277,004) 39,715,039
---------------
MUNICIPAL NOTES (1.1%)
4,000,000 Denver, CO, City and County SD #1,
Educational Facilities RV Taxable
Pension, School Facilities Lease,
AMBAC insured, 6.49%, 12/15/02 (cost
$4,000,000) 4,051,320
---------------
SHORT-TERM HOLDINGS (1.1%)
4,109,552 Norwest Cash Investment Fund
(cost $4,109,552) 4,109,552
---------------
U.S. TREASURY BONDS (11.3%)
6,500,000 10.75%, 5/15/03# 7,644,520
4,000,000 11.88%, 11/15/03 4,948,680
10,800,000 5.25%, 11/15/28 9,782,748
5,000,000 7.50%, 11/15/16 # 5,727,700
3,000,000 8.13%, 8/15/19# 3,687,690
2,000,000 8.88%, 8/15/17 2,596,960
5,000,000 9.88%, 11/15/15# 6,936,200
---------------
TOTAL U.S. TREASURY BONDS (COST $42,338,489) 41,324,498
---------------
U.S. TREASURY NOTES (14.0%)
1,000,000 4.75%, 11/15/08# 930,580
7,500,000 5.63%, 5/15/08 7,429,650
11,000,000 6.00%, 8/15/00# 11,096,799
4,000,000 6.25%, 10/31/01 4,069,400
3,000,000 6.25%, 2/15/03 3,058,140
7,500,000 7.00%, 7/15/06# 8,013,825
4,000,000 7.25%, 8/15/04 4,268,080
2,000,000 7.50%, 11/15/16 2,291,080
3,000,000 7.50%, 2/15/05# 3,247,440
</TABLE>
[LOGO]
See Notes to Schedules of Investments
56
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INCOME FUND (continued)
- -----------------------------------------------------------------
</TABLE>
MUNICIPAL NOTES (continued)
U.S. TREASURY NOTES (continued)
<TABLE>
<C> <S> <C>
6,500,000 7.50%, 5/15/02 $ 6,835,270
---------------
TOTAL U.S. TREASURY NOTES (COST $52,189,453) 51,240,264
---------------
TOTAL INVESTMENTS (100.0%) (COST $373,544,413) $ 365,533,190
---------------
---------------
- -----------------------------------------------------------------
TOTAL RETURN BOND FUND
- -----------------------------------------------------------------
N/A Strategic Value Bond Portfolio of Core
Trust (Delaware)(e) $ 90,442,568
---------------
TOTAL INVESTMENTS (100.0%) (COST $93,045,325) $ 90,442,568
---------------
---------------
- -----------------------------------------------------------------
TAX-FREE INCOME FUND
- -----------------------------------------------------------------
MUNICIPAL BONDS (97.7%)
ARIZONA (1.0%)
3,000,000 Maricopa County, AZ, Union SD #48, GO
Bonds, School Improvements, 9.00%,
7/1/05 $ 3,756,630
---------------
CALIFORNIA (2.8%)
1,910,000 Los Angeles, CA, Community Redevelopment
Agency Housing RV, Monterey Hills
Redevelopment Project, Series A,
8.20%, 12/1/13 2,174,764
7,000,000 Metropolitan Water District, Southern
California, Waterworks RV RIBS, 7.96%
V/R, 8/10/18 8,102,500
---------------
10,277,264
---------------
COLORADO (9.6%)
3,075,000 Adams County, CO, SFM RV, Series A-2,
8.70%, 6/1/01 3,281,917
1,750,000 Arapahoe County, CO, Utilities RV, Water
& Wastewater Authority, 6.25%, 12/1/20 1,883,508
2,000,000 Black Hawk, CO, Business Improvements
District, Special Assessment Bonds,
Series No. 98-1, 7.00%, 12/1/11 2,026,200
1,000,000 Colorado HFA, GO Bonds, Series A, 7.40%,
5/1/11 1,050,530
1,320,000 Colorado HFA, SFM RV, Series A-2, 7.15%,
5/1/06 1,484,828
1,850,000 Colorado HFA, SFM RV, Series B-2, 7.50%,
6/1/05 2,066,468
2,090,000 Colorado HFA, SFM RV, Series C, 7.90%,
12/1/04 2,272,750
1,720,000 Colorado HFA, SFM RV, Series D-1,
remarketed 7/15/94, 8.00%, 12/1/04 1,863,775
1,370,000 Colorado HFA, SFM RV, Series D-2,
remarketed 11/15/94, 8.13%, 12/1/04 1,476,970
4,500,000 Denver, CO, City & County, Airport RV,
Series B, 5.00%, 11/15/25 4,343,130
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
TAX-FREE INCOME FUND (continued)
- -----------------------------------------------------------------
</TABLE>
MUNICIPAL BONDS (continued)
COLORADO (continued)
<TABLE>
<C> <S> <C>
5,200,000 Denver, CO, Urban Renewal Authority, Tax
Increment RV, remarketed 6/15/94,
9.13%, 9/1/04 $ 6,042,192
3,500,000 El Paso County, CO, GO Bonds, SD #11,
Colorado Springs, 7.10%, 12/1/17 4,339,335
345,000 Logan County, CO, SFM RV, Series A,
8.50%, 11/1/01 366,155
985,000 Northern Metropolitan District, CO, RV,
Adams County, 6.50%, 12/1/16 1,047,055
650,000 Vail, CO, SFM RV, Series 1992 A, 8.13%,
6/1/02 696,800
---------------
34,241,613
---------------
FLORIDA (2.7%)
3,000,000 Lakeland, FL, Electric & Water RV, First
Lien, Series B, FSA insured, 6.05%,
10/1/14 3,380,970
2,500,000 Lakeland, FL, Electric & Water RV,
Series A, MBIA insured, 5.00%, 10/1/36 2,396,000
2,825,000 Palm Beach County, FL, HFA RV,
John F. Kennedy Memorial Hospital,
Inc., Project, collateralized by U.S.
Government Securities, 9.50%, 8/1/13 3,800,868
---------------
9,577,838
---------------
GEORGIA (1.7%)
3,650,000 Georgia Municipal Electric Authority
Power RV, Series BB, MBIA insured,
5.25%, 1/1/25 3,678,069
1,000,000 Georgia State, Private Colleges &
Universities Authority RV, Mercer
University Project, Series A, 5.25%,
10/1/25 970,090
1,500,000 Houston County, GA, Development
Authority, MFHR RV, Emerald Coast
Housing, Series A, 7.00%, 8/1/28 1,477,800
---------------
6,125,959
---------------
HAWAII (2.1%)
7,250,000 Hawaii State Department of Budget &
Finance, Special Purpose Revenue,
Health Care RV, The Queens Health
Systems, Series A, 5.75%, 7/1/26 7,485,190
---------------
IDAHO (0.1%)
500,000 Pocatello, ID, IDA RV, Allocation Tax
Increment Bonds, Series B, 7.25%,
12/1/08 516,800
---------------
ILLINOIS (9.3%)
25,000,000 Illinois Development Finance Authority,
Retirement Housing RV, Regency Park,
Series A, remarketed 4/1/92, ETM,
0.00% (7.00% effective yield), 7/15/23 6,053,000
</TABLE>
[LOGO]
See Notes to Schedules of Investments
57
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
TAX-FREE INCOME FUND (continued)
- -----------------------------------------------------------------
</TABLE>
MUNICIPAL BONDS (continued)
ILLINOIS (continued)
<TABLE>
<C> <S> <C>
1,770,000 Illinois Development Financial Authority
RV, Community Rehabilitation
Providers, Series A, 7.88%, 2/1/05 $ 2,119,433
975,000 Illinois Development Financial Authority
RV, Community Rehabilitation
Providers, Series A, 7.88%, 7/1/20 1,078,555
4,940,000 Illinois Educational Facilities
Authority RV, Capital Appreciation,
refunded, ETM, 0.00% (5.95% effective
yield), 7/1/14 1,990,129
1,120,000 Illinois Health Facilities Authority
Revenue, Health Care RV, Edgewater
Medical Center, Series A, 9.25%,
7/1/04 1,404,278
1,000,000 Illinois State, Toll Highway Authority
RV, Series A, FSA insured, 5.50%,
1/1/14 1,057,160
1,025,000 Lake County, IL, Community Unit SD #116,
Educational Facilities RV, Rund Lake,
7.60%, 2/1/13 1,263,395
7,350,000 Regional Transportation Authority, IL,
Sales Tax RV, Series D, FGIC insured,
7.75%, 6/1/19 9,680,318
8,000,000 Regional Transportation Authority, IL,
Transportation RV, FGIC insured,
6.00%, 6/1/23 8,901,280
---------------
33,547,548
---------------
INDIANA (0.8%)
2,900,000 Indiana Transportation Financial
Authority Highway RV, Series A, AMBAC
insured, 5.25%, 6/1/15 2,984,071
---------------
KANSAS (2.2%)
3,175,000 Kansas State, DOT, Highway RV, Series A,
7.25%, 9/1/08 3,819,176
3,755,000 Sedgwick & Shawnee Counties, KS, SFM RV,
Mortgage Backed Securities, Series
A-2, Step Coupon, COLL by GNMA, 6.70%,
6/1/29 4,202,145
---------------
8,021,321
---------------
LOUISIANA (0.8%)
5,000,000 Rapides Parish, LA, Housing & Mortgage
Finance Authority, Capital
Appreciation RV, Series C, 0.00%,
(7.45% effective yield), 7/10/14 1,795,850
2,900,000 St. Bernard Parish, LA, Housing Mortgage
Agency, SFM RV, Series 1992 C, 0.00%,
(7.65% effective yield), 7/10/14 949,141
---------------
2,744,991
---------------
MASSACHUSETTS (5.3%)
5,325,000 Massachusetts Bay Transportation
Authority, Transportation RV, Series
B, 6.20%, 3/1/16 6,027,634
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
TAX-FREE INCOME FUND (continued)
- -----------------------------------------------------------------
</TABLE>
MUNICIPAL BONDS (continued)
MASSACHUSETTS (continued)
<TABLE>
<C> <S> <C>
2,500,000 Massachusetts State College Building
Authority, Educational Facilities RV,
Series A, 7.50%, 5/1/14 $ 3,162,375
2,500,000 Massachusetts State Industrial Finance
Agency RV, Nursing Home RV, FHA-
University Commons Nursing Home,
Series A, FHA insured, 6.65%, 2/1/08 2,752,000
7,000,000 Massachusetts State Turnpike Authority,
Metropolitan Highway System RV, Series
A, MBIA insured, 5.00%, 1/1/37 6,577,760
490,000 New Bedford, MA, IDA RV, Aerovox Inc.
Project, Series 1982, 7.42%, 7/1/02 490,858
---------------
19,010,627
---------------
MICHIGAN (2.9%)
6,030,000 Michigan State, Hospital Finance
Authority RV, Harper-Grace Hospitals,
ETM, 7.13%, 5/1/09 6,830,845
2,760,000 Wayland, MI, Unified SD, GO Bonds, FGIC
insured, 8.00%, 5/1/10 3,524,327
---------------
10,355,172
---------------
MISSISSIPPI (1.7%)
1,500,000 Mississippi Development Bank, Special
Obligation, Capital Projects &
Equipment Acquisition, Series A1,
5.88%, 7/1/24 1,617,765
3,600,000 Mississippi Development Bank, Special
Obligation, Capital Projects &
Equipment Acquisition, Series B,
5.55%, 7/1/24 3,592,548
2,000,000 Mississippi Home Corp., Residual Capital
Appreciation RV, Series 1992 II, 0.00%
(7.38% effective yield), 4/15/12 800,740
---------------
6,011,053
---------------
NEBRASKA (0.3%)
1,000,000 Nebraska Investment Finance Authority,
Hospital RV, Great Plains Regional
Medical Center Project, 5.45%,
11/15/17 1,005,120
---------------
NEW HAMPSHIRE (0.3%)
1,095,000 New Hampshire HEHFA RV, New London
Hospital Association Project, 7.00%,
6/1/00 1,114,108
---------------
NEW JERSEY (2.1%)
1,570,000 New Jersey Health Care Facilities,
Financing Authority RV, Englewood
Hospital & Medical Center, 6.50%,
7/1/04 1,703,481
6,000,000 New Jersey State, Housing & Mortgage
Finance Agency RV, Regional Savrs-Crs,
Series 1, 3.45% V/R, 11/1/07 6,000,000
---------------
7,703,481
---------------
NEW MEXICO (4.2%)
5,295,000 Bernalillo County, NM, Gross Receipts
Tax RV, Series B, 5.70%, 4/1/27 5,733,532
</TABLE>
[LOGO]
See Notes to Schedules of Investments
58
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
TAX-FREE INCOME FUND (continued)
- -----------------------------------------------------------------
</TABLE>
MUNICIPAL BONDS (continued)
NEW MEXICO (continued)
<TABLE>
<C> <S> <C>
875,000 Hobbs, NM, SFM RV, 8.75%, 7/1/02 $ 960,453
1,000,000 New Mexico State Hospital Equipment Loan
Council, Hospital RV, New Medical
Center Inc. Project, 4.85%, 6/1/08 993,950
6,585,000 Santa Fe County, NM, Correctional
Systems RV, FSA insured, 6.00%, 2/1/27 7,389,424
---------------
15,077,359
---------------
NEW YORK (6.0%)
10,000,000 Metropolitan Transportation Authority,
NY, Transportation Facilities RV,
Series A, MBIA insured, 5.63%, 7/1/07 10,478,000
1,200,000 New York State Dorm Authority, Health
Care RV, Good Samaritan Hospital--
Suffern, 5.50%, 7/1/10 1,262,568
6,670,000 New York State, COP, Commercial General
Services Executive Department, 4.75%,
8/1/00 6,771,117
1,480,000 New York, NY, GO Bonds, Series B-1,
7.30%, 8/15/10, P/R 8/15/04 @ 101 1,713,277
1,340,000 New York, NY, GO Bonds, Series B-1,
7.38%, 8/15/13, P/R 8/15/04 @ 101 1,555,887
---------------
21,780,849
---------------
NORTH CAROLINA (0.4%)
1,500,000 Cumberland County, NC, Hospital
Facilities RV, Cumberland County
Hospital Systems Inc., 5.25%, 10/1/29 1,435,260
---------------
OHIO (0.3%)
1,000,000 Pike County, OH, Hospital Facilities RV,
Pike Health Services, Inc. Project,
6.35%, 7/1/07 1,049,060
---------------
OKLAHOMA (0.4%)
1,245,000 Tulsa, OK, IDA RV, University of Tulsa,
Series A, MBIA insured, 6.00%, 10/1/16 1,382,784
---------------
OREGON (1.9%)
1,000,000 Columbia County, OR, GO Bonds, SD #502,
FGIC insured, 0.00% (3.70% effective
yield), 6/1/01 927,880
1,000,000 Columbia County, OR, GO Bonds, SD #502,
FGIC insured, 0.00% (4.00% effective
yield), 6/1/03 852,200
5,000,000 Klamath Falls, OR, Electric RV, Lien-
Klamath Cogen, 6.00%, 1/1/25 5,003,800
---------------
6,783,880
---------------
PENNSYLVANIA (1.7%)
1,600,000 Allentown, PA, Area Hospital Authority,
Health Care RV, Sacred Heart Hospital
- Allentown, Series A, ACA insured,
5.00%, 7/1/12 1,555,760
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
TAX-FREE INCOME FUND (continued)
- -----------------------------------------------------------------
</TABLE>
MUNICIPAL BONDS (continued)
PENNSYLVANIA (continued)
<TABLE>
<C> <S> <C>
4,230,000 Cumberland County, PA, Municipal
Authority RV, Carlisle Hospital &
Health, 6.80%, 11/15/04 $ 4,552,368
---------------
6,108,128
---------------
SOUTH CAROLINA (6.9%)
10,625,000 Connector 2000 Association, Inc., SC,
Toll Road RV, Southern Connector
Project, Series A, 5.38%, 1/1/38 9,594,056
8,000,000 Piedmont Municipal Power Agency, SC,
Electric RV, Series A, 5.25%, 1/1/21 7,588,960
2,100,000 Piedmont Municipal Power Agency, SC,
Electric RV, Series A, MBIA insured,
5.25%, 1/1/12 2,173,353
2,420,000 Piedmont, SC, Municipal Power Agency,
Electric RV, Series A, 6.60%, 1/1/21 2,425,614
3,170,000 Piedmont, SC, Municipal Power Agency,
Electric RV, Series A, 6.55%, 1/1/16 3,177,291
---------------
24,959,274
---------------
SOUTH DAKOTA (1.1%)
3,500,000 South Dakota State, HEHFA RV, Huron
Regional Medical Center, 7.30%, 4/1/16 4,136,616
---------------
TENNESSEE (1.1%)
14,250,000 Metropolitan Governments of Nashville &
Davidson County, TN, Health &
Educational Facilities RV, Volunteer
Health Care, ETM, 0.00% (5.72%
effective yield), 6/1/21 4,105,568
---------------
TEXAS (15.5%)
415,000 Baytown, TX, Housing Finance Corp., SFM
RV, Series 1992 A, 8.50%, 9/1/11 459,837
1,855,000 Beaumont, TX, Housing Finance Corp. RV,
9.20%, 9/1/01 2,033,581
16,500,000 Brazos River Authority, TX, Utilities
RV, Houston Industries, Inc. Project,
Series D, MBIA insured, 4.90%, 10/1/15 16,161,088
2,840,000 Chapel Hill, TX, ISD Public Facilities
Corp. Lease Revenue, Educational
Facilities RV, 5.75%, 8/15/23 2,769,114
1,550,000 Corpus Christi, TX, Housing Finance
Authority, Housing RV, Series A, MBIA
insured, 7.70%, 7/1/11 1,678,185
2,395,000 De Soto, TX, Housing Finance Corp., MFHR
Bonds, Windsor Foundation Project,
Series A, 7.00%, 2/1/05 2,764,141
210,000 El Paso, TX, Housing Finance Corp., SFM
RV, Series A, 8.75%, 4/1/01 228,698
285,000 Galveston County, TX, Property Finance
Authority, Inc., SFM RV Series A,
8.50%, 9/1/01 304,508
1,300,000 Grape Creek-Pulliam, TX, ISD Public
Facilities Corp. GO Bonds, 7.25%,
5/15/21 1,457,170
</TABLE>
[LOGO]
See Notes to Schedules of Investments
59
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
TAX-FREE INCOME FUND (continued)
- -----------------------------------------------------------------
</TABLE>
MUNICIPAL BONDS (continued)
TEXAS (continued)
<TABLE>
<C> <S> <C>
1,115,000 Harlandale, TX, ISD Public Facilites
Corp. Lease RV, Educational Facilities
RV, 5.50%, 10/15/12 $ 1,141,057
2,245,000 Hereford, TX, ISD, Educational
Facilities RV, Public Facilities Corp.
Lease RV, 5.25%, 8/15/18 2,193,051
9,750,000 Houston, TX, Housing Finance Corp., SFM
RV, Series A-1, 8.00%, 12/1/06 10,269,968
5,950,000 Houston, TX, Housing Finance Corp., SFM
RV, Series B-1, 8.00%, 12/1/06 6,267,314
1,180,000 Port Arthur, TX, Housing Finance Corp.,
SFM RV, 8.70%, 9/1/02 1,282,695
4,180,000 San Antonio, TX, HEHFA RV, 7.13%,
11/1/15 4,573,631
2,200,000 Texas State Department of Housing &
Community Affairs, SFM RV, Series A,
8.10%, 9/1/04 2,482,788
---------------
56,066,826
---------------
UTAH (3.5%)
750,000 Salt Lake County, UT, EFA RV,
Westminister College Project, 5.75%,
10/1/27 759,938
12,500,000 Weber County, UT, Hospital RV, IHC
Health Services Inc., AMBAC insured,
5.00%, 8/15/30 11,739,625
---------------
12,499,563
---------------
VIRGINIA (0.9%)
3,000,000 Fairfax County, VA, Redevelopment &
Housing Authority, MFHR Bonds, Burke
Shire Commons, 7.60%, 10/1/36 3,262,260
---------------
WASHINGTON (7.5%)
1,748,000 Kitsap County, WA, Housing Authority RV,
MFHR Bonds, Low Income Housing,
collaterized by GNMA, 7.10%, 8/20/08 2,051,767
2,750,000 Washington Public Power Supply System,
Power RV, Nuclear Project #2, Series
A, 6.00%, 7/1/07 3,006,575
4,000,000 Washington Public Power Supply System,
Power RV, Nuclear Project #1, Series
A, 6.00%, 7/1/06 4,393,040
9,230,000 Washington State, University of
Washington Education Lease RV, 4225
Roosevelt Project, Series A, 5.38%,
6/1/29 9,041,431
3,500,000 Washington State Housing Finance
Commission, Nonprofit Housing RV, VA
Mason Research Center Project, Series
A, U.S. Bank of Washington, LOC,
5.70%, 1/1/24 3,585,085
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
TAX-FREE INCOME FUND (continued)
- -----------------------------------------------------------------
</TABLE>
MUNICIPAL BONDS (continued)
WASHINGTON (continued)
<TABLE>
<C> <S> <C>
1,620,000 Washington State Housing Finance
Commission, Nonprofit Housing RV, VA
Mason Research Center Project, Series
A, U.S. Bank of Washington, LOC,
5.65%, 1/1/19 $ 1,652,902
3,000,000 Yakima County, WA, SD #007, GO Bonds,
MBIA insured, 6.75%, 12/1/06 3,443,520
---------------
27,174,320
---------------
WISCONSIN (0.3%)
1,100,000 Wisconsin State, Health & Educational
Facilities Authority RV, Mercy
Hospital of Janesville Inc., 6.60%,
8/15/02 1,178,980
---------------
WYOMING (0.3%)
1,000,000 Green River, WY, PCR Bonds, Series B,
Joint Powers Board RV, 4.50%, 3/1/14 990,890
---------------
TOTAL MUNICIPAL BONDS (COST $341,459,081) 352,470,403
---------------
SHORT-TERM HOLDINGS (2.3%)
4,364,874 Federated Tax-Free Obligations Money
Market Fund 4,364,874
209,424 Fidelity Tax Exempt Money Market Fund 209,424
3,613,036 US Bank Corp., Series 1998 B, Class A,
4.40% V/R, 8/11/99 3,613,036
---------------
TOTAL SHORT-TERM HOLDINGS (COST $8,187,334) 8,187,334
---------------
TOTAL INVESTMENTS (100.0%) (COST $349,646,415) $ 360,657,737
---------------
---------------
- -----------------------------------------------------------------
COLORADO TAX-FREE FUND
- -----------------------------------------------------------------
MUNICIPAL BONDS (96.3%)
AIRPORT REVENUE (4.1%)
1,500,000 Denver, CO, City & County, Airport RV,
Series A, MBIA insured, 5.50%,
11/15/25 $ 1,537,215
1,000,000 Denver, CO, City & County, Airport RV,
Series A, MBIA insured, 5.60%,
11/15/20 1,037,130
1,500,000 Denver, CO, City & County, Airport RV,
Series B, 5.00%, 11/15/25 1,447,710
---------------
4,022,055
---------------
CERTIFICATES OF PARTICIPATION & LEASE REVENUE (8.1%)
430,000 Englewood, CO, COP, Civic Center
Project, MBIA insured, 4.40%, 6/1/08 422,686
100,000 Garfield County, CO, Roaring Fork SD,
COP, Lease Purchase Declaration Trust,
5.50%, 6/15/18 100,315
1,210,000 Montrose County, CO, COP, Series A,
6.40%, 12/1/12 1,329,282
980,000 Northern Metropolitan District, CO, RV,
Adams County, 6.50%, 12/1/16 1,041,740
</TABLE>
[LOGO]
See Notes to Schedules of Investments
60
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
COLORADO TAX-FREE FUND (continued)
- -----------------------------------------------------------------
</TABLE>
MUNICIPAL BONDS (continued)
CERTIFICATES OF PARTICIPATION & LEASE REVENUE (continued)
<TABLE>
<C> <S> <C>
335,000 Pueblo, CO, COP, Public Parking-Lease,
Purchase & Sublease, 6.90%, 7/1/15 $ 367,696
1,525,000 Teller County, CO, COP, 5.75%, 12/1/07 1,586,854
2,000,000 Teller County, CO, COP, Bank N.A., LOC,
5.88%, 12/3/07 2,086,980
1,000,000 Westminster, CO, COP, MBIA insured,
5.00%, 12/1/25 973,500
---------------
7,909,053
---------------
EDUCATION FACILITIES REVENUE (2.9%)
2,000,000 Colorado Educational & Cultural
Facilities, RV, Alexander Dawson
School, 5.30%, 2/15/29 1,957,360
1,385,000 Colorado School of Mines, Auxiliary
Facilities RV, Capital Appreciation-
Enterprise, MBIA insured, 0.00%,
(5.29% effective yield), 12/1/19 467,161
1,385,000 Colorado School of Mines, Auxiliary
Facilities RV, Capital Appreciation-
Enterprise, MBIA insured, 0.00%,
(5.31% effective yield), 12/1/20 442,134
---------------
2,866,655
---------------
ESCROWED IN TREASURIES (5.2%)
20,000,000 Dawson Ridge Metropolitan District No.1,
CO, GO Bonds, Series B, ETM, 0.00%
(6.10% effective yield), 10/1/22 5,130,000
---------------
GENERAL OBLIGATION (21.0%)
1,560,000 Aurora Centretech Metropolitan District,
CO, GO Bonds, Series C, Banque
Nationale de Paris, LOC, 4.88%,
12/1/28 1,545,851
850,000 Boulder, Larimer & Weld Counties, CO,
St. Vrain Valley School District
RE-1J, GO Bonds, FGIC insured, 5.00%,
12/15/22 828,733
500,000 Centennial 25 Metropolitan District, CO,
GO Bonds, Arapahoe County, 6.38%,
12/1/16 545,950
1,000,000 Central Platte Valley, CO, Metropolitan
District, GO Bonds, ACA insured,
5.15%, 12/01/13 978,020
390,000 Denver West Metropolitan District, CO,
GO Bonds, Series B, 5.60%, 12/1/12 410,916
1,500,000 Denver, CO, City & County SD #1, GO
Bonds, FGIC insured, 5.25%, 12/1/09 1,513,005
500,000 Denver, CO, City & County SD #1, GO
Bonds, Series A, 6.50%, 6/1/10 577,825
2,000,000 Eagle Garfield & Routt Counties, CO, SD
#50J, GO Bonds, FGIC insured, 4.80%,
12/1/18 1,911,860
115,000 El Paso County, CO, GO Bonds, SD #11,
Colorado Springs, 6.50%, 12/1/07 132,518
2,500,000 El Paso County, CO, GO Bonds, SD #11,
Colorado Springs, 7.10%, 12/1/17 3,099,525
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
COLORADO TAX-FREE FUND (continued)
- -----------------------------------------------------------------
</TABLE>
MUNICIPAL BONDS (continued)
GENERAL OBLIGATION (continued)
<TABLE>
<C> <S> <C>
1,060,000 El Paso County, CO, GO Bonds, SD #3,
Widefield, MBIA insured, 0.00% (4.65%
effective yield), 12/15/08 $ 674,584
1,100,000 Highlands Ranch, CO, Metropolitan
District #2, GO Bonds, FSA insured,
6.50%, 6/15/12 1,277,991
1,000,000 Highlands Ranch, CO, Metropolitan
District #2, UTGO Bonds, FSA insured,
6.50%, 6/15/11 1,157,610
350,000 Highlands Ranch, CO, Metropolitan
District #4, UTGO Bonds, Series A,
6.10%, 12/1/07 370,349
800,000 Highlands Ranch, CO, Metropolitan
District #4, UTGO Bonds, Series A,
6.30%, 12/1/07 854,552
2,000,000 Jefferson County, CO, SD #R-001, GO
Bonds, MBIA insured, 6.25%, 12/15/08 2,261,700
2,500,000 Metex Metropolitan District, CO, GO
Bonds, Series A, 5.80%, 12/1/16 2,672,825
---------------
20,813,814
---------------
HEALTH CARE REVENUE (12.6%)
1,000,000 Boulder County, CO, Hospital RV,
Longmont United Hospital Project,
5.60%, 12/1/27 995,760
705,000 Colorado Health Facilities Authoriry RV,
National Jewish Medical & Research,
Series B, 5.25%, 1/1/18 669,651
1,250,000 Colorado Health Facilities Authority RV,
Sisters of Charity, Series A, AMBAC
insured, 6.25%, 5/15/11 1,426,350
1,000,000 Colorado Health Facilities Authority RV,
Catholic Health Initiatives, Series A,
5.00%, 12/1/28 949,060
1,000,000 Colorado Health Facilities Authority RV,
Catholic Health Initiatives, Series A,
5.00%, 12/1/18 965,440
1,000,000 Colorado Health Facilities Authority RV,
National Jewish Medical & Research
Center, 5.38%, 1/1/28 953,000
2,500,000 Colorado Health Facilities Authority RV,
Parkview Medical Center Inc. Project,
5.30%, 9/1/25 2,403,900
1,250,000 Colorado Health Facilities Authority RV,
Steamboat Springs Health Project,
5.70%, 9/15/23 1,227,313
1,500,000 Colorado Health Facilities Authority RV,
Steamboat Springs Health, 5.75%,
9/15/22 1,501,005
220,000 Colorado Health Facilities Authority RV,
Weld County, General Hospital Project,
ETM, 9.38%, 7/1/09 274,754
1,000,000 Denver, CO, Health & Hospital RV, Series
A, 5.38%, 12/1/28 959,340
---------------
12,325,573
---------------
</TABLE>
[LOGO]
See Notes to Schedules of Investments
61
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
COLORADO TAX-FREE FUND (continued)
- -----------------------------------------------------------------
</TABLE>
MUNICIPAL BONDS (continued)
<TABLE>
<C> <S> <C>
INDUSTRIAL DEVELOPMENT REVENUE (2.2%)
2,000,000 Fort Collins, CO, PCR Bonds, Anheuser
Busch Project, 6.00%, 9/1/31 $ 2,123,360
---------------
MULTI-FAMILY HOUSING REVENUE (2.0%)
300,000 Aurora, CO, Housing Authority Finance
Corp., MFHR Bonds, Mountainview Place,
FHA insured, 7.13%, 3/1/02 318,270
1,500,000 San Miguel County, CO, HFA, MFHR Bonds,
Telluride Village Apartments Project,
6.40%, 7/1/23 1,599,900
---------------
1,918,170
---------------
OTHER REVENUE (10.5%)
1,470,000 Black Hawk, CO, Business Improvements
District Special Assignment RV,
District # 97-1, 6.00%, 12/1/09 1,484,068
1,000,000 Black Hawk, CO, Business Improvements
District, Special Assessment Bonds,
Series # 98-1, 7.00%, 6/1/99 1,013,100
3,000,000 Denver, CO, City & County RV, Helen G.
Bonfils Foundation Project, Series B,
5.13%, 12/1/17 2,950,710
4,075,000 Ironwood Trust II, Series 1998-A, Class
A, 4.90%, 1/1/04 4,121,740
600,000 Summit County, CO, Sports Facilities RV,
Keystone Resorts Management Project,
guaranteed by Ralston Purina Corp.,
7.38%, 9/1/10 708,792
---------------
10,278,410
---------------
SALES TAX REVENUE (0.3%)
140,000 Blackhawk, CO, Device Tax RV, 5.60%,
12/1/04 146,391
145,000 Blackhawk, CO, Device Tax RV, 5.70%,
12/1/05 152,494
---------------
298,885
---------------
SINGLE FAMILY HOUSING REVENUE (17.1%)
805,000 Adams County, CO, SFM RV, Series A-2,
8.70%, 6/1/01 859,169
5,890,000 Colorado HFA, SFM RV, Series B-2, 7.45%,
5/1/06 6,582,071
290,000 Colorado HFA, SFM RV, Series B-2, 7.50%,
6/1/05 323,933
1,750,000 Colorado HFA, SFM RV, Series B-3, 6.55%,
5/1/08 1,944,670
2,085,000 Colorado HFA, SFM RV, Series C-2, 7.45%,
6/1/05 2,229,366
785,000 Colorado HFA, SFM RV, Series D-1,
remarketed 7/15/94, 8.00%, 12/1/04 850,618
1,345,000 Colorado HFA, SFM RV, Series D-2, 7.10%,
12/1/05 1,508,794
1,460,000 Colorado HFA, SFM RV, Series D-2,
remarketed 11/15/94, 8.13%, 12/1/04 1,573,997
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
COLORADO TAX-FREE FUND (continued)
- -----------------------------------------------------------------
</TABLE>
MUNICIPAL BONDS (continued)
SINGLE FAMILY HOUSING REVENUE (continued)
<TABLE>
<C> <S> <C>
1,990,000 Larimer County, CO, SFM RV, Capital
Accumulator A, remarketed 2/15/94,
ETM, 0.00 (5.50% effective yield),
8/1/15 $ 878,446
---------------
16,751,064
---------------
TOLL ROAD REVENUE (1.7%)
1,490,000 Arapahoe County, CO, Capital
Improvements & Transportation Highway
RV, Series E-470, MBIA insured,
remarketed 8/31/95, 6.15%, 8/31/26 1,630,254
---------------
WATER & SEWER REVENUE (8.6%)
1,250,000 Arapahoe County, CO, Utilities RV, Water
& Wastewater Authority, 6.25%, 12/1/20 1,345,362
1,500,000 Colorado Springs, CO, Utilities RV,
Series A, 5.38%, 11/15/26 1,515,195
1,810,000 Colorado Water Reserve & Power
Development Authority, Drinking Water
RV, Series A, 4.88%, 9/1/17 1,754,524
1,000,000 E-470 Business Metropolitan District,
CO, Water & Sewer RV, MBIA insured,
5.00%, 9/1/21 971,800
1,600,000 E-470 Business Metropolitan District,
CO, Water & Sewer RV, U.S. Bank N.A.,
LOC, 5.30%, 12/1/18 1,585,600
500,000 E-470 Business Metropolitan District,
CO, Water & Sewer RV, U.S. Bank N.A.,
LOC, 5.13%, 12/1/17 483,750
725,000 Johnstown, CO, Water Activity RV, 5.50%,
12/1/18 727,581
---------------
8,383,812
---------------
TOTAL MUNICIPAL BONDS (COST $91,779,535) 94,451,105
---------------
SHORT-TERM HOLDINGS (3.7%)
1,543,693 Federated Tax-Free Obligations Money
Market Fund 1,543,693
321,104 Fidelity Tax Exempt Money Market Fund 321,104
1,715,000 Ironwood Trust II, Series 1998-A, Class
A, 3.79% V/R, 1/3/00 1,715,000
---------------
TOTAL SHORT-TERM HOLDINGS (COST $3,579,797) 3,579,797
---------------
TOTAL INVESTMENTS (100.0%) (COST $95,359,332) $ 98,030,902
---------------
---------------
- -----------------------------------------------------------------
MINNESOTA TAX-FREE FUND
- -----------------------------------------------------------------
MUNICIPAL BONDS (92.5%)
AIRPORT REVENUE (3.5%)
2,000,000 Minneapolis & St. Paul, MN, Airport RV,
Series A, AMBAC insured, 5.00%, 1/1/22 $ 1,956,200
</TABLE>
[LOGO]
See Notes to Schedules of Investments
62
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
MINNESOTA TAX-FREE FUND (continued)
- -----------------------------------------------------------------
</TABLE>
MUNICIPAL BONDS (continued)
AIRPORT REVENUE (continued)
<TABLE>
<C> <S> <C>
1,150,000 Minneapolis & St. Paul, MN, Airport RV,
Series A, AMBAC insured, 5.00%, 1/1/30 $ 1,112,349
---------------
3,068,549
---------------
CERTIFICATES OF PARTICIPATION & LEASE REVENUE (3.0%)
1,290,000 Lino Lakes, MN, EDA, Lease RV, Series A,
5.35%, 2/1/19 1,267,567
205,000 Savage, MN, EDA RV, Lease Revenue,
5.40%, 2/1/14 207,247
210,000 Savage, MN, EDA RV, Lease Revenue,
5.50%, 2/1/16 212,274
220,000 Savage, MN, EDA RV, Lease Revenue,
5.45%, 2/1/15 222,343
115,000 St. Cloud, MN, COP, 5.40%, 12/1/08 118,036
120,000 St. Cloud, MN, COP, 5.50%, 12/1/09 123,131
400,000 St. Cloud, MN, COP, 5.90%, 12/1/17 410,520
---------------
2,561,118
---------------
EDUCATION FACILITIES REVENUE (16.4%)
500,000 Minnesota State HEFA RV, University of
St. Thomas, Series 4-M, 5.35%, 4/3/17 505,225
135,000 Minnesota State HEFA RV, College of St.
Benedict, Series 3W, 6.00%, 3/1/07 142,601
1,345,000 Minnesota State HEFA R/V, College at St.
Benedict, Series 4T, 5.35%, 3/1/20 1,308,093
1,510,000 Minnesota State HEFA RV, Augsburg
College, Series 4Y, 5.20%, 10/1/16 1,477,822
600,000 Minnesota State HEFA RV, Northwest
College, Series 4Z, 5.20%, 10/1/13 590,730
2,250,000 Minnesota State HEFA RV, St. Johns
University, Series 4L, 5.40%, 10/1/22 2,267,100
5,500,000 University of Minnesota, Educational
Facilities RV, Series A, 5.50%, 7/1/21 5,808,106
2,000,000 University of Minnesota, Educational
Facilities RV, Series A, 5.75%, 7/1/17 2,173,380
---------------
14,273,057
---------------
ELECTRIC REVENUE (7.7%)
500,000 North Branch, MN, Electric Systems RV,
5.40%, 5/1/18 496,875
1,000,000 Northern Minnesota Municipal Power
Agency, Electric RV, FSA insured,
5.25%, 1/1/17 1,007,630
1,135,000 Northern Minnesota Municipal Power
Agency, Electric System RV, Series B,
AMBAC insured, 5.50%, 1/1/18 1,162,603
1,000,000 Puerto Rico, Electric Power Authority
RV, Series X, 5.50%, 7/1/25 1,019,360
6,690,000 Southern Minnesota Municipal Power
Agency, Power Supply System RV, Series
A, MBIA insured, 0.00% (6.70%
effective yield), 1/1/24 1,844,701
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
MINNESOTA TAX-FREE FUND (continued)
- -----------------------------------------------------------------
</TABLE>
MUNICIPAL BONDS (continued)
ELECTRIC REVENUE (continued)
<TABLE>
<C> <S> <C>
3,000,000 Southern Minnesota Municipal Power
Agency, Power Supply System RV, MBIA
insured, 0.00% (6.67% effective
yield), 1/1/21 $ 971,670
200,000 Western Minnesota Municipal Power
Agency, Power RV, Series A, 5.50%,
1/1/15 200,148
---------------
6,702,987
---------------
ESCROWED IN TREASURIES (8.1%)
200,000 Bemidji, MN, Hospital Facilities, First
Mortgage RV, North Country Health
Services Project, Series 1991 A,
7.00%, 9/1/11, P/R 9/1/01 @ 102 217,316
210,000 Bloomington, MN, Tax Increment GO Bonds,
9.75%, 2/1/07 P/R 2/1/05 @100 267,433
2,530,000 Burnsville, MN, Hospital System RV,
Fairview Community Hospitals, ETM,
0.00% (5.90% effective yield), 5/1/12 1,197,324
500,000 Chaska, MN, Independent SD #112, GO
Bonds, State Credit Enhancement
Program, Series B, 6.00%, 2/1/13, C/O
2/1/06 @ 100 547,015
1,000,000 Edina, MN, Hospital System RV Bonds,
Fairview Hospital, Series A, ETM,
7.13%, 7/1/06, P/R 7/1/99 @ 102 1,023,310
800,000 Mankato, MN, Hospital Facilities RV,
Immanuel St. Joseph's Hospital, Series
A, 6.30%, 8/1/22, P/R 8/1/02 @ 102 872,048
600,000 Minneapolis & St. Paul, MN, Housing &
Redevelopment Authority Health Care
System, HealthOne Obligated Group
Project, Series A, MBIA insured,
7.40%, 8/15/11, P/R 8/15/00 @ 102 639,576
365,000 Minnesota HEFA RV, College of St.
Benedict, Series 3W, 6.00%, 3/1/07 P/R
3/1/04 @ 100 392,798
1,000,000 Minnesota PFA, Water PCR Bonds, Series
A, 6.50%, 3/1/14, P/R 3/1/02 @ 100 1,087,610
750,000 Moorhead, MN, EDA, MFHR Bonds, Eventide
Lutheran Home Project, Series A,
8.00%, 9/1/11, P/R 9/1/00 @ 102 805,013
---------------
7,049,443
---------------
GENERAL OBLIGATION--POLITICAL SUBDIVISION (5.7%)
100,000 Bloomington, MN, Tax Increment GO Bonds,
9.70%, 2/1/04 123,259
1,900,000 Minneapolis, MN, GO Bonds, Series D,
5.00%, 12/1/15 1,904,978
2,650,000 Minneapolis, MN, GO Bonds, Sports Arena
Project, 5.20%, 10/1/24 2,661,925
245,000 Waconia, MN, GO Bonds, 6.00%, 6/1/03 258,892
---------------
4,949,054
---------------
</TABLE>
[LOGO]
See Notes to Schedules of Investments
63
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
MINNESOTA TAX-FREE FUND (continued)
- -----------------------------------------------------------------
</TABLE>
MUNICIPAL BONDS (continued)
<TABLE>
<C> <S> <C>
GENERAL OBLIGATION--SCHOOL DISTRICTS (5.1%)
1,650,000 Minnetonka, MN, Independent SD #276, GO
Bonds, State Credit Enhancement
Program, Series B, 5.75%, 2/1/22 $ 1,735,520
500,000 Park Rapids, MN, ISD 309, GO Bonds,
4.75%, 2/1/17 476,660
2,200,000 Wayzata, MN, Independent SD #284, GO
Bonds, Series A, 5.35%, 2/1/15 2,251,656
---------------
4,463,836
---------------
GENERAL OBLIGATION--STATES, TERRITORIES (1.8%)
1,500,000 Minnesota State, GO Bonds, 5.25%, 8/1/15 1,523,985
---------------
HEALTH CARE REVENUE (23.9%)
1,435,000 Bemidji, MN, Hospital Facilities, First
Mortgage RV, North Country Health
Services Project, 5.63%, 9/1/21 1,452,421
1,000,000 Brainerd, MN, Health Care Facilities RV,
Benedictine Health-St. Joseph's Health
Center, Series 1993 E, Connie Lee
insured, 6.00%, 2/15/20 1,057,940
1,000,000 Cuyuna Range Hospital District, MN,
Health Facilities Gross RV Bonds,
Series A, 6.00%, 6/1/19 987,280
500,000 Duluth, MN, EDA, Hospital Facilities RV,
St. Luke's Hospital of Duluth, Series
B, Connie Lee insured, 6.40%, 5/1/18 537,020
500,000 Glencoe, MN, Health Care RV, 6.40%,
12/1/15 523,165
690,000 Glencoe, MN, Hospital RV, 6.63%, 4/1/11 737,058
1,000,000 Hibbing, MN, Health Care Facilities RV,
Duluth Clinic Ltd., FSA insured,
5.50%, 11/1/16, P/R 11/1/13 @ 100 1,065,240
500,000 Minneapolis & St. Paul, MN, Housing &
Redevelopment Authority Health Care
System, Group Health Plan, Inc.
Project, 6.75%, 12/1/13 533,410
1,000,000 Minneapolis & St. Paul, MN, Housing &
Redevelopment Authority Health Care
System, Childrens Health Care R/V,
Series A, FSA insured, 5.70%, 8/15/16 1,039,160
2,500,000 Minnesota Agriculture & Economic
Development Board, Health Care RV,
Fairview Hospital, Series A, MBIA
insured, 5.50%, 11/15/08 2,579,225
3,800,000 Minnesota Agriculture & Economic
Development Board, Health Care RV,
Fairview Hospital, Series A, MBIA
insured, 5.75%, 11/15/26 3,987,264
500,000 Minnesota Agriculture & Economic
Development RV, Benedictine Health,
Series A, MBIA insured, 4.75%, 2/15/16 480,710
2,545,000 Minnesota Agriculture & Economic
Development RV, Benedictine Health,
Series A, MBIA insured, 5.00%, 2/15/23 2,477,584
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
MINNESOTA TAX-FREE FUND (continued)
- -----------------------------------------------------------------
</TABLE>
MUNICIPAL BONDS (continued)
HEALTH CARE REVENUE (continued)
<TABLE>
<C> <S> <C>
825,000 Monticello-Big Lake, MN, Community
Hospital District Gross Revenue,
Health Care RV, Series A, 5.45%,
12/1/12 $ 834,735
115,000 Red Wing, MN, Health Care Facilities RV,
River Region Obligated Group, Series
1993 B, 6.35%, 9/1/07 122,216
1,000,000 Rochester, MN, Health Care Facilities
RV, Mayo Medical Center, Series F,
6.25%, 11/15/21 1,075,850
1,260,000 Roseau, MN, Roseau Area Hospital
District, Health Facilities RV, 5.75%,
10/1/08 1,242,032
---------------
20,732,310
---------------
INDUSTRIAL DEVELOPMENT REVENUE (0.6%)
500,000 St. Paul, MN, HRA, District Cooling RV,
Series J, Credit Local de France, LOC,
5.35%, 3/1/18 497,905
---------------
MULTI-FAMILY HOUSING REVENUE (2.4%)
570,000 Minnesota State HFA, Housing Development
RV, 6.25%, 2/1/20 577,268
550,000 Minnesota State, HFA, Housing
Development RV Series A, 6.85%, 2/1/01 580,976
470,000 Minnesota State, HFA, Rental Housing RV,
Series B, 6.25%, 8/1/22 475,654
405,000 Minnesota State, HFA, Rental Housing RV,
Series D, MBIA insured, 5.90%, 2/1/06 424,286
---------------
2,058,184
---------------
NURSING HOME REVENUE (4.6%)
250,000 Duluth, MN, EDA, Health Care Facilities
RV, BSM Properties Inc. Project,
Series A, 5.63%, 12/1/18 243,930
750,000 Duluth, MN, EDA, Health Care Facilities
RV, BSM Properties Inc. Project,
Series A, 5.88%, 12/1/28 738,630
500,000 Minneapolis, MN, Health Care Facilities
RV, Ebenezer Society Project, Series
A, 7.20%, 7/1/23 519,620
1,000,000 Minneapolis, MN, RV, Walker Methodist
Senior Services, Series A, 5.88%,
11/15/18 995,960
1,000,000 New Hope, MN, Housing & Health Care
Facilities RV, Minnesota Masonic Home
North Ridge, 5.90%, 3/1/19 995,280
500,000 Waconia, MN, Housing & Redevelopment
Authority RV, The Evangelical Lutheran
Project, Series A, 5.85%, 6/1/05 529,105
---------------
4,022,525
---------------
SINGLE FAMILY HOUSING REVENUE (5.5%)
1,500,000 Minnesota State HFA, RV, Rental Housing,
Series A, 5.38%, 8/1/28 1,523,190
940,000 Minnesota State, HFA, SFM RV, remarketed
8/12/92, 6.25%, 1/1/03 981,285
</TABLE>
[LOGO]
See Notes to Schedules of Investments
64
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
MINNESOTA TAX-FREE FUND (continued)
- -----------------------------------------------------------------
</TABLE>
MUNICIPAL BONDS (continued)
SINGLE FAMILY HOUSING REVENUE (continued)
<TABLE>
<C> <S> <C>
670,000 Minnesota State, HFA, SFM RV, Series Q,
6.25%, 1/1/04 $ 688,083
550,000 Minnesota State, HFA, SFM RV, Series A,
5.95%, 1/1/17 580,817
655,000 St. Paul, MN, Housing & Redevelopment
Authority, SFM RV, FNMA Mortgage
Backed Securities Program, FNMA
insured, 6.25%, 9/1/14 696,665
260,000 Vadnais Heights, MN, SFM RV, 6.00%,
11/1/09 274,422
---------------
4,744,462
---------------
SPORTS REVENUE (2.0%)
250,000 Duluth, MN, Gross RV, Spirit Mountain
Recreation Area, Series 1992, 6.40%,
2/1/03 256,283
460,000 Eagan, MN, Ice Arena Gross RV, Series B,
5.50%, 4/1/19 460,534
920,000 Minnesota State Iron Range Resources &
Rehabilitation Gross RV, Giants Ridge
Recreational Area, 7.25%, 10/1/11 975,255
---------------
1,692,072
---------------
WATER & SEWER REVENUE (2.2%)
2,000,000 Minnesota Public Facilities Authority,
Water PCR Bonds, Series B, 4.75%,
3/1/19 1,907,360
---------------
TOTAL MUNICIPAL BONDS (COST $77,915,896) 80,246,847
---------------
SHORT-TERM HOLDINGS (7.5%)
2,100,000 Cohasset, MN, IDR RV, Minnesota Power &
Light Co., Project A, ABN Amro Bank
N.V., LOC, 3.30% V/R, 6/1/20 2,100,000
200,000 Cohasset, MN, Power RV, Minnesota Power
& Light Co., Project C, ABN Amro Bank
N.V., LOC, 3.30% V/R, 6/1/13 200,000
600,000 Cohasset, MN, Power RV, Minnesota Power
& Light Co., Project B, ABN Amro Bank
N.V., LOC, 3.30% V/R, 6/1/13 600,000
1,100,000 Cottage Grove, MN, Environmental Control
RV, Minnesota Mining & Manufacturing,
3.73% V/R, 8/1/12 1,100,000
100,000 Duluth, MN, EDA, Health Care Facilities
RV, Miller Dwan Medical Center
Project, Credit Local de France, LOC,
3.30% V/R, 6/1/19 100,000
750,000 Fridley, MN, Commercial Development RV
Bonds, River Road Investors, US Bank,
LOC, 3.35% V/R, 11/1/14 750,000
1,100,000 Mankato, MN, GO Bonds, Series E, First
Bank, LOC, 3.25% V/R, 2/1/18 1,100,000
100,000 New Brighton, MN, IDR Bonds, Unicare
Homes Inc. Project, Banque Paribas,
LOC, 3.55% V/R, 12/1/14 100,000
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
MINNESOTA TAX-FREE FUND (continued)
- -----------------------------------------------------------------
</TABLE>
SHORT-TERM HOLDINGS (continued)
<TABLE>
<C> <S> <C>
127,067 Norwest Municipal Money Market Fund $ 127,067
300,000 St. Paul, MN, Housing & Redevelopment
Authority, Utilities RV, Remarketed
1/3/94, Credit Local De France, LOC,
3.40% V/R, 12/1/12 300,000
---------------
TOTAL SHORT-TERM HOLDINGS (COST $6,477,067) 6,477,067
---------------
TOTAL INVESTMENTS (100.0%) (COST $84,392,963) $ 86,723,914
---------------
---------------
- -----------------------------------------------------------------
GROWTH BALANCED FUND
- -----------------------------------------------------------------
N/A Managed Fixed Income Portfolio of Core
Trust (Delaware)(e) $ 140,880,422
N/A Positive Return Bond Portfolio of Core
Trust (Delaware)(e) 94,144,558
N/A Strategic Value Bond Portfolio of Core
Trust (Delaware)(e) 47,090,186
N/A Index Portfolio of Core Trust
(Delaware)(e) 143,130,076
N/A Income Equity Portfolio of Core Trust
(Delaware)(e) 145,678,325
N/A Disciplined Growth Portfolio of Core
Trust (Delaware)(e) 29,219,466
N/A Large Company Growth Portfolio of Core
Trust (Delaware)(e) 114,602,498
N/A Small Cap Index Portfolio of Core Trust
(Delaware)(e) 12,061,715
N/A Small Company Stock Portfolio of Core
Trust (Delaware)(e) 9,372,095
N/A Small Cap Value Portfolio of Core Trust
(Delaware)(e) 9,802,602
N/A Small Company Value Portfolio of Core
Trust (Delaware)(e) 15,013,925
N/A Small Company Growth Portfolio of Core
Trust (Delaware)(e) 14,669,690
N/A International Portfolio of Core Trust
(Delaware)(e) 65,260,655
N/A Schroder EM Core Portfolio of Schroder
Capital Funds(e) 1,066,820
N/A International Equity Portfolio of Core
Trust (Delaware)(e) 19,258,245
---------------
TOTAL INVESTMENTS (100.0%) (COST $639,211,882) $ 861,251,278
---------------
---------------
</TABLE>
<TABLE>
<C> <S> <C>
- -----------------------------------------------------------------
INCOME EQUITY FUND
- -----------------------------------------------------------------
N/A Income Equity Portfolio of Core Trust
(Delaware)(e) $ 1,732,016,918
---------------
TOTAL INVESTMENTS (100.0%) (COST $1,194,087,388) $ 1,732,016,918
---------------
---------------
</TABLE>
[LOGO]
See Notes to Schedules of Investments
65
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
VALUGROWTH STOCK FUND
- -----------------------------------------------------------------
COMMON STOCKS (98.4%)
AMUSEMENT & RECREATION SERVICES (0.1%)
50,000 Patriot American Hospitality, Inc.(*) $ 259,375
---------------
BUSINESS SERVICES (12.3%)
139,600 Ecolab, Inc. 5,933,000
50,000 IMS Health, Inc. 1,231,250
61,500 Microsoft Corp.(*) 4,962,281
168,000 Sun Microsystems, Inc.(*)# 10,037,994
150,000 Unisys Corp.(*) 5,690,625
---------------
27,855,150
---------------
CHEMICALS & ALLIED PRODUCTS (8.9%)
132,000 American Home Products Corp. 7,606,500
100,000 Gillette Co. 5,100,000
110,000 Merck & Co., Inc. 7,425,000
---------------
20,131,500
---------------
COMMUNICATIONS (4.2%)
45,000 GTE Corp. 2,837,813
131,800 SBC Communications, Inc. 6,738,275
---------------
9,576,088
---------------
DEPOSITORY INSTITUTIONS (8.2%)
69,999 Bank of America Corp. 4,528,125
116,580 First Union Corp. 5,369,967
70,000 State Street Corp. 5,337,500
100,000 U.S. Bancorp 3,250,000
---------------
18,485,592
---------------
ELECTRIC, GAS & SANITARY SERVICES (1.8%)
70,000 Consolidated Natural Gas Co. 4,160,626
---------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS,
EXCEPT COMPUTER EQUIPMENT (14.4%)
116,400 American Power Conversion Corp.(*) 4,532,325
60,300 Ascend Communications, Inc.(*) 5,589,056
80,000 General Electric Co. 8,135,000
130,800 Intel Corp. 7,071,375
81,500 Koninklijke (Royal) Philips Electronics
NV(*)# 7,009,000
---------------
32,336,756
---------------
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY &
TRANSPORTATION EQUIPMENT (2.3%)
130,000 Newell Rubbermaid, Inc.# 5,265,000
---------------
FEDERAL AGENCIES & INSTRUMENTALITIES (3.4%)
111,600 Fannie Mae 7,588,800
---------------
FOOD & KINDRED PRODUCTS (2.3%)
100,000 International Home Foods, Inc.(*) 1,600,000
100,000 PepsiCo, Inc. 3,581,251
---------------
5,181,251
---------------
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
VALUGROWTH STOCK FUND (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
<TABLE>
<C> <S> <C>
INDUSTRIAL & COMMERCIAL MACHINERY &
COMPUTER EQUIPMENT (13.2%)
80,000 Black & Decker Corp. $ 4,555,000
80,000 Cisco Systems, Inc.(*) 8,710,000
197,000 Compaq Computer Corp. 4,666,438
60,600 EMC Corp.(*) 6,037,275
50,000 IBM Corp. 5,815,625
---------------
29,784,338
---------------
INSURANCE CARRIERS (4.8%)
300,000 Allstate Corp. 10,931,250
---------------
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS;
PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS (12.7%)
83,400 Baxter International, Inc. 5,384,513
125,420 Guidant Corp. 6,271,000
50,000 Honeywell, Inc. 4,731,251
78,000 Medtronic, Inc. 5,538,000
122,000 Xerox Corp.# 6,854,876
---------------
28,779,640
---------------
MOTOR FREIGHT TRANSPORTATION & WAREHOUSING (0.5%)
25,000 CNF Transportation, Inc. 1,037,500
---------------
OIL & GAS EXTRACTION (2.1%)
80,000 Schlumberger Ltd. 4,815,000
---------------
PETROLEUM REFINING & RELATED INDUSTRIES (3.1%)
30,000 Mobil Corp. 3,037,500
70,000 Royal Dutch Petroleum Co. - NY
Registered Shares 3,959,375
---------------
6,996,875
---------------
TRANSPORTATION EQUIPMENT (1.8%)
102,000 Lockheed Martin Corp. 4,124,625
---------------
WHOLESALE TRADE-DURABLE GOODS (1.0%)
25,500 Johnson & Johnson 2,361,938
---------------
WHOLESALE TRADE-NONDURABLE GOODS (1.3%)
85,000 McKesson HBOC, Inc.# 2,895,313
---------------
TOTAL COMMON STOCKS (COST $146,062,396) 222,566,617
---------------
SHORT-TERM HOLDINGS (1.6%)
1,885,860 Dreyfus Cash Management Fund 1,885,860
1,785,860 Provident Money Market Fund 1,785,860
---------------
TOTAL SHORT-TERM HOLDINGS (COST $3,671,721) 3,671,720
---------------
TOTAL INVESTMENTS (100.0%) (COST $149,734,117) $ 226,238,337
---------------
---------------
</TABLE>
[LOGO]
See Notes to Schedules of Investments
66
<PAGE>
SCHEDULES OF INVESTMENTS (CONCLUDED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
DIVERSIFIED EQUITY FUND
- -----------------------------------------------------------------
N/A Index Portfolio of Core Trust
(Delaware)(e) $ 450,523,498
N/A Income Equity Portfolio of Core Trust
(Delaware)(e) 463,250,661
N/A Disciplined Growth Portfolio of Core
Trust (Delaware)(e) 90,957,684
N/A Large Company Growth Portfolio of Core
Trust (Delaware)(e) 350,155,174
N/A Small Cap Index Portfolio of Core Trust
(Delaware)(e) 37,572,689
N/A Small Company Stock Portfolio of Core
Trust (Delaware)(e) 28,396,918
N/A Small Cap Value Portfolio of Core Trust
(Delaware)(e) 29,270,758
N/A Small Company Value Portfolio of Core
Trust (Delaware)(e) 46,651,036
N/A Small Company Growth Portfolio of Core
Trust (Delaware)(e) 45,345,434
N/A International Portfolio of Core Trust
(Delaware)(e) 205,783,060
N/A Schroder EM Core Portfolio of Schroder
Capital Funds(e) 3,426,386
N/A International Equity Portfolio of Core
Trust (Delaware)(e) 59,670,676
---------------
TOTAL INVESTMENTS (100.0%) (COST $1,029,230,259) $ 1,811,003,974
---------------
---------------
- -----------------------------------------------------------------
GROWTH EQUITY FUND
- -----------------------------------------------------------------
N/A Large Company Growth Portfolio of Core
Trust (Delaware)(e) $ 325,894,230
N/A Small Cap Index Portfolio of Core Trust
(Delaware)(e) 68,917,329
N/A Small Company Stock Portfolio of Core
Trust (Delaware)(e) 54,123,981
N/A Small Cap Value Portfolio of Core Trust
(Delaware)(e) 55,205,390
N/A Small Company Value Portfolio of Core
Trust (Delaware)(e) 84,863,270
N/A Small Company Growth Portfolio of Core
Trust (Delaware)(e) 83,763,264
N/A International Equity Portfolio of Core
Trust (Delaware)(e) 64,600,170
N/A International Portfolio of Core Trust
(Delaware)(e) 217,966,935
N/A Schroder EM Core Portfolio of Schroder
Capital Funds(e) 3,435,508
---------------
TOTAL INVESTMENTS (100.0%) (COST $656,811,863) $ 958,770,077
---------------
---------------
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
LARGE COMPANY GROWTH FUND
- -----------------------------------------------------------------
N/A Large Company Growth Portfolio of Core
Trust (Delaware)(e) $ 992,098,981
---------------
TOTAL INVESTMENTS (100.0%) (COST $804,262,869) $ 992,098,981
---------------
---------------
- -----------------------------------------------------------------
DIVERSIFIED SMALL CAP FUND
- -----------------------------------------------------------------
N/A Small Cap Index Portfolio of Core Trust
(Delaware)(e) $ 12,317,236
N/A Small Company Stock Portfolio of Core
Trust (Delaware)(e) 9,875,503
N/A Small Cap Value Portfolio of Core Trust
(Delaware)(e) 9,955,954
N/A Small Company Value Portfolio of Core
Trust (Delaware)(e) 14,876,402
N/A Small Company Growth Portfolio of Core
Trust (Delaware)(e) 14,903,207
---------------
TOTAL INVESTMENTS (COST $58,522,658) $ 61,928,302
---------------
---------------
- -----------------------------------------------------------------
SMALL COMPANY STOCK FUND
- -----------------------------------------------------------------
N/A Small Company Stock Portfolio of Core
Trust (Delaware)(e) $ 29,599,071
---------------
TOTAL INVESTMENTS (100.0%) (COST $35,549,955) $ 29,599,071
---------------
---------------
- -----------------------------------------------------------------
SMALL CAP OPPORTUNITIES FUND
- -----------------------------------------------------------------
N/A Schroder U.S. Smaller Companies
Portfolio of Schroder Capital Funds(e) $ 210,632,607
---------------
TOTAL INVESTMENTS (100.0%) (COST $191,309,526) $ 210,632,607
---------------
---------------
- -----------------------------------------------------------------
INTERNATIONAL FUND
- -----------------------------------------------------------------
N/A International Portfolio of Core Trust
(Delaware)(e) $ 273,723,543
N/A Schroder EM Core Portfolio of Schroder
Capital Funds(e) 3,308,178
---------------
TOTAL INVESTMENTS (100.0%) (COST $247,347,381) $ 277,031,721
---------------
---------------
</TABLE>
[LOGO]
See Notes to Schedules of Investments
67
<PAGE>
NOTES TO SCHEDULES OF INVESTMENTS MAY 31, 1999
- --------------------------------------------------------------------------------
* Non-income producing security.
+ Securities that may be resold to "qualified institutional buyers" under rule
144A or securities offered pursuant to 4(2) of the Securities Act of 1933, as
amended. These securities had been determined to be liquid pursuant to
procedures adopted by the Board of Trustees.
# Part or all of this investment is on loan. See Note 5 of Notes to Financial
Statements.
(e) The following percentages represent each Fund's ownership percentage of the
respective Portfolio's net assets as of May 31, 1999:
<TABLE>
<CAPTION>
TOTAL
STABLE RETURN GROWTH INCOME
INCOME BOND BALANCED EQUITY DIVERSIFIED
FUND FUND FUND FUND EQUITY FUND
-------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C>
Stable Income Portfolio............ 61.75% N/A N/A N/A N/A
Managed Fixed Income Portfolio..... N/A N/A 33.03% N/A N/A
Positive Return Bond Portfolio..... N/A N/A 33.05% N/A N/A
Strategic Value Bond Portfolio..... N/A 37.28% 19.41% N/A N/A
Index Portfolio.................... N/A N/A 7.82% N/A 24.61%
Income Equity Portfolio............ N/A N/A 6.02% 71.61% 19.15%
Disciplined Growth Portfolio....... N/A N/A 15.46% N/A 48.13%
Large Company Growth Portfolio..... N/A N/A 6.20% N/A 18.95%
Small Cap Index Portfolio.......... N/A N/A 8.82% N/A 27.48%
Small Company Stock Portfolio...... N/A N/A 6.89% N/A 20.88%
Small Cap Value Portfolio.......... N/A N/A 7.79% N/A 23.27%
Small Company Value Portfolio...... N/A N/A 8.90% N/A 27.66%
Small Company Growth Portfolio..... N/A N/A 2.00% N/A 6.18%
Schroder U.S. Smaller Companies
Portfolio........................ N/A N/A N/A N/A N/A
International Portfolio............ N/A N/A 8.19% N/A 25.81%
Schroder Global Growth Portfolio... N/A N/A N/A N/A N/A
Schroder EM Core Portfolio......... N/A N/A 7.66% N/A 24.61%
International Equity Portfolio..... N/A N/A 12.46% N/A 38.60%
</TABLE>
<TABLE>
<CAPTION>
LARGE SMALL
GROWTH COMPANY DIVERSIFIED COMPANY SMALL CAP
EQUITY GROWTH SMALL STOCK OPPORTUNITIES INTERNATIONAL
FUND FUND CAP FUND FUND FUND FUND
-------- --------- -------- -------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Stable Income Portfolio............ N/A N/A N/A N/A N/A N/A
Managed Fixed Income Portfolio..... N/A N/A N/A N/A N/A N/A
Positive Return Bond Portfolio..... N/A N/A N/A N/A N/A N/A
Strategic Value Bond Portfolio..... N/A N/A N/A N/A N/A N/A
Index Portfolio.................... N/A N/A N/A N/A N/A N/A
Income Equity Portfolio............ N/A N/A N/A N/A N/A N/A
Disciplined Growth Portfolio....... N/A N/A N/A N/A N/A N/A
Large Company Growth Portfolio..... 17.64% 53.70% N/A N/A N/A N/A
Small Cap Index Portfolio.......... 50.40% N/A 9.01% N/A N/A N/A
Small Company Stock Portfolio...... 39.80% N/A 7.26% 21.77% N/A N/A
Small Cap Value Portfolio.......... 43.89% N/A 7.92% N/A N/A N/A
Small Company Value Portfolio...... 50.32% N/A 8.82% N/A N/A N/A
Small Company Growth Portfolio..... 11.42% N/A 2.03% N/A N/A N/A
Schroder U.S. Smaller Companies
Portfolio........................ N/A N/A N/A N/A 80.64% N/A
International Portfolio............ 27.34% N/A N/A N/A N/A 34.34%
Schroder EM Core Portfolio......... 24.64% N/A N/A N/A N/A 23.76%
International Equity Portfolio..... 41.80% N/A N/A N/A N/A N/A
</TABLE>
[LOGO]
68
<PAGE>
NOTES TO SCHEDULES OF INVESTMENTS (CONCLUDED) MAY 31, 1999
- --------------------------------------------------------------------------------
ABBREVIATIONS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ACA American Capital Access Corporation
ADR American Depositary Receipts
AMBAC American Municipal Bond Assurance Corporation
AMBAC-TCRS American Municipal
Bond Assurance
Corporation - Transferable
Custodial Receipts
AMBS Agriculture Mortgage Backed Securities
BIG Bond Insurance Group
C/O Crossover refunding
COLL Collateralized
COP Certificate of Participation
DOT Department of Transportation
EDA Economic Development Authority
EFA Education Finance Authority
ETM Escrowed to Maturity
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Authority
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FSA Financial Security Assurance, Inc.
GNMA Government National Mortgage Association
GO General Obligation
GTD Guaranteed
HEFA Higher Education Facilities Authority
HEHFA Higher Education & Health Facilities Authority
HFA Housing Finance Authority
IDA Industrial Development Authority
IDR Industrial Development Revenue
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
MFHR Multi Family Housing Revenue
PCR Pollution Control Revenue
PFA Public Finance Authority
P/R Pre-refunded
RV Revenue Bonds
SD School District
SFM Single Family Mortgage
SLMA Student Loan Marketing Association
TVA Tennessee Valley Authority
USG United States Government
UTGO Unlimited Tax General Obligation
VA Veterans' Administration
V/R Variable rate--These securities are deemed to have a maturity
remaining until the next adjustment of the interest rate or the
longer of the demand period or readjustment. The interest rate shown
reflects the rate in effect on May 31, 1999.
</TABLE>
[LOGO]
69
<PAGE>
(This page has been left blank intentionally.)
70
<PAGE>
ANNUAL REPORT
MAY 31, 1999
STABLE INCOME PORTFOLIO
MANAGED FIXED INCOME PORTFOLIO
POSITIVE RETURN BOND PORTFOLIO
STRATEGIC VALUE BOND PORTFOLIO
INDEX PORTFOLIO
INCOME EQUITY PORTFOLIO
DISCIPLINED GROWTH PORTFOLIO
LARGE COMPANY GROWTH PORTFOLIO
SMALL CAP INDEX PORTFOLIO
SMALL COMPANY STOCK PORTFOLIO
SMALL CAP VALUE PORTFOLIO
SMALL COMPANY VALUE PORTFOLIO
SMALL COMPANY GROWTH PORTFOLIO
INTERNATIONAL PORTFOLIO
INTERNATIONAL EQUITY PORTFOLIO
CORE TRUST (DELAWARE)
<PAGE>
(This page has been left blank intentionally.)
72
<PAGE>
INDEPENDENT AUDITORS' REPORT MAY 31, 1999
- --------------------------------------------------------------------------------
To the Board of Trustees and Partners
Core Trust (Delaware)
We have audited the accompanying statements of assets
and liabilities of fifteen portfolios of Core Trust
(Delaware), Stable Income Portfolio, Managed Fixed Income
Portfolio, Positive Return Bond Portfolio, Strategic Value
Bond Portfolio, Index Portfolio, Income Equity Portfolio,
Disciplined Growth Portfolio, Large Company Growth
Portfolio, Small Cap Index Portfolio, Small Company Stock
Portfolio, Small Cap Value Portfolio, Small Company Value
Portfolio, Small Company Growth Portfolio, International
Portfolio and International Equity Portfolio (collectively
the "Portfolios"), including the schedules of investments,
as of May 31, 1999, and the related statements of
operations for the year then ended, except for
International Equity Portfolio, which is for the period
from February 12, 1999 (commencement of operations) to May
31, 1999, and the statements of changes in net assets and
financial highlights for each of the years or periods in
the two-year period then ended for Stable Income
Portfolio, Managed Fixed Income Portfolio, Positive Return
Portfolio, Strategic Value Bond Portfolio, Income Equity
Portfolio, Disciplined Growth Portfolio, Large Company
Growth Portfolio, Small Cap Index Portfolio, and Small Cap
Value Portfolio, and for the year or period ended May 31,
1999 for Index Portfolio, Small Company Stock Portfolio,
Small Company Growth Portfolio, Small Company Value
Portfolio, International Portfolio and International
Equity Portfolio. These financial statements and financial
highlights are the responsibility of the Portfolios'
management. Our responsibility is to express an opinion on
these financial statements and financial highlights based
on our audits. The statements of changes in net assets and
the financial highlights for all periods ending prior to
June 1, 1998 for Index Portfolio, Small Company Stock
Portfolio, Small Company Value Portfolio, Small Company
Growth Portfolio and International Portfolio were audited
by other auditors, whose report dated July 21, 1998
expressed an unqualified opinion on those financial
statements and financial highlights.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and
financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures
included confirmation of securities owned as of May 31,
1999, by correspondence with the custodian and brokers. An
audit also includes assessing the accounting principles
used and significant estimates made by management, as well
as evaluating the overall financial statement
presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of the
Portfolios as of May 31, 1999, the results of their
operations, changes in their net assets, and financial
highlights for each of the periods indicated in the first
paragraph above, in conformity with generally accepted
accounting principles.
/s/ KPMG LLP
Boston, Massachusetts
July 16, 1999
CORE TRUST (DELAWARE)
73
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STRATEGIC
STABLE MANAGED FIXED POSITIVE VALUE
INCOME INCOME RETURN BOND BOND INDEX
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments (Note 2)
Investments at cost........ $ 302,414,324 $431,056,476 $155,445,666 $ 245,852,884 $ 1,058,670,021
Repurchase agreements at
cost................... 9,626,349 15,740,368 130,519,632 5,166,334 -
Net unrealized appreciation
(depreciation)......... (1,047,135) (7,671,927) (1,979,267) (4,665,136) 771,746,997
------------- ------------- ------------- ------------- ---------------
TOTAL INVESTMENTS AT VALUE... 310,993,538 439,124,917 283,986,031 246,354,082 1,830,417,018
Collateral for securities
loaned (Notes 2 and 6)... 40,353,991 47,785,832 35,662,519 27,776,778 170,332,749
Receivable from daily
variation margin......... - - - - 474,950
Receivable for investments
sold..................... - - - - 122,435
Receivable for dividends, and
interest and other
receivables.............. 4,077,055 5,159,099 997,323 3,197,599 3,005,438
Organization costs, net of
amortization (Note 2).... 6,719 6,672 6,672 - 2,749
------------- ------------- ------------- ------------- ---------------
TOTAL ASSETS.................. 355,431,303 492,076,520 320,652,545 277,328,459 2,004,355,339
------------- ------------- ------------- ------------- ---------------
LIABILITIES
Payable for investments
purchased................ 5,718,843 17,660,615 - 6,849,264 3,105,409
Payable for securities loaned
(Notes 2 and 6).......... 40,353,991 47,785,832 35,662,519 27,776,778 170,332,749
Payable for forward foreign
currency contracts....... - - - - -
Payable to custodian (Note
3)....................... 3,908 4,903 3,695 3,345 17,076
Payable to investment adviser
and affiliates (Note
3)....................... 79,024 127,008 84,722 103,546 237,027
Payable to administrator
(Note 3)................. 2,010 2,742 2,472 2,334 4,436
Accrued expenses and other
liabilities.............. 8,768 9,197 6,914 8,678 17,235
------------- ------------- ------------- ------------- ---------------
TOTAL LIABILITIES............. 46,166,544 65,590,297 35,760,322 34,743,945 173,713,932
------------- ------------- ------------- ------------- ---------------
NET ASSETS.................... $ 309,264,759 $426,486,223 $284,892,223 $ 242,584,514 $ 1,830,641,407
------------- ------------- ------------- ------------- ---------------
------------- ------------- ------------- ------------- ---------------
</TABLE>
See Notes to Financial Statements
CORE TRUST (DELAWARE)
74
<PAGE>
MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LARGE SMALL SMALL SMALL
INCOME DISCIPLINED COMPANY CAP COMPANY CAP
EQUITY GROWTH GROWTH INDEX STOCK VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------- ------------- --------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments (Note
2)
Investments at
cost......... $ 1,306,018,686 $ 151,972,731 $ 987,687,972 $ 153,232,133 $ 130,862,157 $ 109,171,495
Repurchase
agreements at
cost......... 27,836,112 1,363,697 63,992,038 - 597,042 1,565,562
Net unrealized
appreciation
(depreciation)... 1,080,143,065 35,589,125 796,442,200 (16,578,172) 3,453,576 14,925,967
--------------- ------------- --------------- ------------- ------------- -------------
TOTAL INVESTMENTS
AT VALUE....... 2,413,997,863 188,925,553 1,848,122,210 136,653,961 134,912,775 125,663,024
Collateral for
securities
loaned (Notes 2
and 6)......... 154,020,259 15,040,148 155,815,110 7,068,031 14,122,412 17,139,329
Receivable from
daily variation
margin......... - - - 40,225 - -
Receivable for
investments
sold........... - - - 392,166 1,146,454 193,217
Receivable for
dividends, and
interest and
other
receivables.... 5,709,009 218,176 376,128 79,012 50,140 25,413
Organization costs,
net of
amortization
(Note 2)....... 8,877 - 8,765 - 1,047 -
--------------- ------------- --------------- ------------- ------------- -------------
TOTAL ASSETS........ 2,573,736,008 204,183,877 2,004,322,213 144,233,395 150,232,828 143,020,983
--------------- ------------- --------------- ------------- ------------- -------------
LIABILITIES
Payable for
investments
purchased...... - - - 369,146 - -
Payable for
securities
loaned (Notes 2
and 6)......... 154,020,259 15,040,148 155,815,110 7,068,031 14,122,412 17,139,329
Payable for forward
foreign
currency
contracts...... - - - - - -
Payable to
custodian (Note
3)............. 22,122 2,858 17,026 2,190 2,198 2,033
Payable to
investment
adviser and
affiliates
(Note 3)....... 1,042,379 145,982 960,099 29,422 106,397 101,865
Payable to
administrator
(Note 3)....... 60,717 2,447 64,825 5,702 627 2,817
Accrued expenses
and other
liabilities.... 12,758 7,779 11,322 12,780 10,667 6,829
--------------- ------------- --------------- ------------- ------------- -------------
TOTAL LIABILITIES... 155,158,235 15,199,214 156,868,382 7,487,271 14,242,301 17,252,873
--------------- ------------- --------------- ------------- ------------- -------------
NET ASSETS.......... $ 2,418,577,773 $ 188,984,663 $ 1,847,453,831 $ 136,746,124 $ 135,990,527 $ 125,768,110
--------------- ------------- --------------- ------------- ------------- -------------
--------------- ------------- --------------- ------------- ------------- -------------
<CAPTION>
SMALL SMALL
COMPANY COMPANY INTERNATIONAL
VALUE GROWTH INTERNATIONAL EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- --------------- -------------
<S> <C> <C> <C> <C>
ASSETS
Investments (Note
2)
Investments at
cost......... $ 159,815,116 $ 581,814,580 $ 684,495,777 $141,935,384
Repurchase
agreements at
cost......... 2,713,461 26,008,407 - 8,358,679
Net unrealized
appreciation
(depreciation)... 5,579,449 126,503,766 98,322,915 5,209,005
------------- ------------- --------------- -------------
TOTAL INVESTMENTS
AT VALUE....... 168,108,026 734,326,753 782,818,692 155,503,068
Collateral for
securities
loaned (Notes 2
and 6)......... 9,872,873 - 7,961,515 -
Receivable from
daily variation
margin......... - - - -
Receivable for
investments
sold........... 2,836,595 12,738,685 14,722,620 53,625
Receivable for
dividends, and
interest and
other
receivables.... 160,621 192,763 3,883,371 638,085
Organization costs,
net of
amortization
(Note 2)....... 964 979 2,749 -
------------- ------------- --------------- -------------
TOTAL ASSETS........ 180,979,079 747,259,180 809,388,947 156,194,778
------------- ------------- --------------- -------------
LIABILITIES
Payable for
investments
purchased...... 2,312,198 12,941,912 3,649,209 1,449,637
Payable for
securities
loaned (Notes 2
and 6)......... 9,872,873 - 7,961,515 -
Payable for forward
foreign
currency
contracts...... - - 145,345 -
Payable to
custodian (Note
3)............. 2,572 7,494 43,915 6,956
Payable to
investment
adviser and
affiliates
(Note 3)....... 128,852 559,817 263,973 161,722
Payable to
administrator
(Note 3)....... 3,557 29,542 104,065 -
Accrued expenses
and other
liabilities.... 11,329 12,209 15,275 24,333
------------- ------------- --------------- -------------
TOTAL LIABILITIES... 12,331,381 13,550,974 12,183,297 1,642,648
------------- ------------- --------------- -------------
NET ASSETS.......... $ 168,647,698 $ 733,708,206 $ 797,205,650 $154,552,130
------------- ------------- --------------- -------------
------------- ------------- --------------- -------------
</TABLE>
CORE TRUST (DELAWARE)
75
<PAGE>
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MANAGED
STABLE FIXED POSITIVE STRATEGIC
INCOME INCOME RETURN BOND VALUE BOND INDEX
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend income.............. $ - $ - $ - $ - $ 21,699,973
Interest income.............. 16,518,500 24,695,129 13,813,058 15,884,448 1,826,068
Securities lending income
(Note 2)................. 55,203 49,876 133,414 35,450 412,363
------------ ------------ ------------ ------------ -------------
TOTAL INVESTMENT INCOME....... 16,573,703 24,745,005 13,946,472 15,919,898 23,938,404
------------ ------------ ------------ ------------ -------------
EXPENSES
Advisory (Note 3)............ 864,254 1,307,275 871,345 1,203,467 2,351,029
Administration (Note 3)...... 144,042 186,754 124,478 120,347 783,676
Custody (Note 3)............. 43,808 52,351 39,896 39,069 171,735
Accounting (Note 3).......... 93,500 87,500 62,000 83,500 153,500
Legal........................ 1,054 1,379 921 802 5,734
Audit........................ 17,728 18,207 17,233 15,500 36,331
Trustees..................... 549 707 472 466 2,934
Pricing...................... 6,413 7,116 348 5,662 28,971
Amortization of organization
costs (Note 2)........... 2,232 2,220 2,220 - 6,072
Miscellaneous................ 1,504 1,900 1,263 1,280 35,927
------------ ------------ ------------ ------------ -------------
TOTAL EXPENSES................ 1,175,084 1,665,409 1,120,176 1,470,093 3,575,909
Fees waived (Note 4)........ (142,032) (184,012) (122,006) (118,013) (779,240)
------------ ------------ ------------ ------------ -------------
NET EXPENSES.................. 1,033,052 1,481,397 998,170 1,352,080 2,796,669
------------ ------------ ------------ ------------ -------------
NET INVESTMENT INCOME
(LOSS).................... 15,540,651 23,263,608 12,948,302 14,567,818 21,141,735
------------ ------------ ------------ ------------ -------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net Realized Gain (Loss) from
Securities................. 206,974 1,034,541 14,832,978 21,552 21,545,068
Foreign currency
transactions............ - - - - -
Financial futures
transactions............ - - - - 4,808,254
------------ ------------ ------------ ------------ -------------
Net Realized Gain (Loss) from
Investments.............. 206,974 1,034,541 14,832,978 21,552 26,353,322
Net Change in Unrealized
Appreciation
(Depreciation) of
Securities................. (1,386,571) (12,930,678) (13,325,007) (6,494,735) 248,662,572
Foreign currency
transactions............ - - - - -
Financial futures
transactions............ - - - - (1,352,724)
------------ ------------ ------------ ------------ -------------
Net Change in Unrealized
Appreciation
(Depreciation) of
Investments.............. (1,386,571) (12,930,678) (13,325,007) (6,494,735) 247,309,848
------------ ------------ ------------ ------------ -------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS............... (1,179,597) (11,896,137) 1,507,971 (6,473,183) 273,663,170
------------ ------------ ------------ ------------ -------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS................ $ 14,361,054 $11,367,471 $14,456,273 $ 8,094,635 $ 294,804,905
------------ ------------ ------------ ------------ -------------
------------ ------------ ------------ ------------ -------------
(a) Net of foreign withholding
taxes of $2,251,666
(b) Net of foreign withholding
taxes of $175,078
(c) Beginning of period,
February 12, 1999
</TABLE>
See Notes to Financial Statements
CORE TRUST (DELAWARE)
76
<PAGE>
FOR THE YEAR ENDED MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME DISCIPLINED LARGE COMPANY SMALL CAP SMALL COMPANY SMALL CAP
EQUITY GROWTH GROWTH INDEX STOCK VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- -------------- ------------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend income.............. $ 41,679,387 $ 1,604,613 $ 5,071,653 $ 965,070 $ 1,083,770 $ 533,700
Interest income.............. 2,004,284 195,273 1,723,786 426,748 602,247 329,352
Securities lending income
(Note 2)................. 286,152 44,687 399,953 66,961 54,948 52,810
-------------- -------------- ------------- -------------- ------------- --------------
TOTAL INVESTMENT INCOME....... 43,969,823 1,844,573 7,195,392 1,458,779 1,740,965 915,862
-------------- -------------- ------------- -------------- ------------- --------------
EXPENSES
Advisory (Note 3)............ 10,582,022 1,481,103 9,043,943 303,388 1,455,580 1,021,928
Administration (Note 3)...... 1,058,202 82,284 695,688 60,678 80,866 53,786
Custody (Note 3)............. 226,640 29,685 154,138 23,188 29,113 21,017
Accounting (Note 3).......... 84,500 67,500 81,500 146,500 71,500 64,000
Legal........................ 7,832 518 4,925 407 765 357
Audit........................ 33,176 14,649 25,506 15,350 22,815 14,625
Trustees..................... 4,025 299 2,528 232 342 201
Pricing...................... 3,035 2,338 2,252 34,335 4,717 3,458
Amortization of organization
costs (Note 2)........... 2,964 - 2,916 - 2,088 -
Miscellaneous................ 10,424 799 5,914 2,948 854 506
-------------- -------------- ------------- -------------- ------------- --------------
TOTAL EXPENSES................ 12,012,820 1,679,175 10,019,310 587,026 1,668,640 1,179,878
Fees waived (Note 4)........ (425,107) (79,837) (137,320) (54,976) (80,239) (50,969)
-------------- -------------- ------------- -------------- ------------- --------------
NET EXPENSES.................. 11,587,713 1,599,338 9,881,990 532,050 1,588,401 1,128,909
-------------- -------------- ------------- -------------- ------------- --------------
NET INVESTMENT INCOME
(LOSS).................... 32,382,110 245,235 (2,686,598) 926,729 152,564 (213,047)
-------------- -------------- ------------- -------------- ------------- --------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net Realized Gain (Loss) from
Securities................. 10,703,154 (3,141,344) 181,443,136 2,836,817 (44,032,289) (30,465,857)
Foreign currency
transactions............ - - - - - -
Financial futures
transactions............ - - - (368,383) - -
-------------- -------------- ------------- -------------- ------------- --------------
Net Realized Gain (Loss) from
Investments.............. 10,703,154 (3,141,344) 181,443,136 2,468,434 (44,032,289) (30,465,857)
Net Change in Unrealized
Appreciation
(Depreciation) of
Securities................. 273,274,958 24,845,328 267,110,572 (10,222,537) (12,472,166) 9,548,982
Foreign currency
transactions............ - - - - - -
Financial futures
transactions............ - - - 621,911 - -
-------------- -------------- ------------- -------------- ------------- --------------
Net Change in Unrealized
Appreciation
(Depreciation) of
Investments.............. 273,274,958 24,845,328 267,110,572 (9,600,626) (12,472,166) 9,548,982
-------------- -------------- ------------- -------------- ------------- --------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS............... 283,978,112 21,703,984 448,553,708 (7,132,192) (56,504,455) (20,916,875)
-------------- -------------- ------------- -------------- ------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS................ $ 316,360,222 $ 21,949,219 $445,867,110 $ (6,205,463) $(56,351,891) $ (21,129,922)
-------------- -------------- ------------- -------------- ------------- --------------
-------------- -------------- ------------- -------------- ------------- --------------
(a) Net of foreign withholding
taxes of $2,251,666
(b) Net of foreign withholding
taxes of $175,078
(c) Beginning of period,
February 12, 1999
<CAPTION>
SMALL INTER-
COMPANY SMALL COMPANY NATIONAL
VALUE GROWTH INTERNATIONAL EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO(c)
------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend income.............. $ 2,218,558 $ 3,134,738 $ 12,099,251(a) $ 1,089,495(b)
Interest income.............. 270,560 2,205,073 4,278,287 393,937
Securities lending income
(Note 2)................. 40,894 - 261,711 -
------------ ------------- ------------- -------------
TOTAL INVESTMENT INCOME....... 2,530,012 5,339,811 16,639,249 1,483,432
------------ ------------- ------------- -------------
EXPENSES
Advisory (Note 3)............ 1,297,868 6,579,692 3,937,758 536,814
Administration (Note 3)...... 72,104 365,538 1,312,586 22,367
Custody (Note 3)............. 26,631 88,108 562,901 27,215
Accounting (Note 3).......... 74,500 88,500 129,500 29,286
Legal........................ 547 2,854 6,556 8,173
Audit........................ 21,572 26,633 38,507 20,000
Trustees..................... 277 1,450 1,695 3,385
Pricing...................... 5,468 5,701 41,274 885
Amortization of organization
costs (Note 2)........... 1,920 1,944 6,072 -
Miscellaneous................ 710 3,620 4,507 179
------------ ------------- ------------- -------------
TOTAL EXPENSES................ 1,501,597 7,164,040 6,041,356 648,304
Fees waived (Note 4)........ (68,547) (1,559) (717,860) (22,367)
------------ ------------- ------------- -------------
NET EXPENSES.................. 1,433,050 7,162,481 5,323,496 625,937
------------ ------------- ------------- -------------
NET INVESTMENT INCOME
(LOSS).................... 1,096,962 (1,822,670) 11,315,753 857,495
------------ ------------- ------------- -------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net Realized Gain (Loss) from
Securities................. (4,559,162) (77,753,826) 87,310,735 (121,711)
Foreign currency
transactions............ - - (3,237,271) 1,902
Financial futures
transactions............ - - - -
------------ ------------- ------------- -------------
Net Realized Gain (Loss) from
Investments.............. (4,559,162) (77,753,826) 84,073,464 (119,809)
Net Change in Unrealized
Appreciation
(Depreciation) of
Securities................. (9,541,409) (15,097,262) (104,592,618) 5,209,005
Foreign currency
transactions............ - - (1,919,141) (12,932)
Financial futures
transactions............ - - - -
------------ ------------- ------------- -------------
Net Change in Unrealized
Appreciation
(Depreciation) of
Investments.............. (9,541,409) (15,097,262) (106,511,759) 5,196,073
------------ ------------- ------------- -------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS............... (14,100,571) (92,851,088) (22,438,295) 5,076,264
------------ ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS................ $(13,003,609) $(94,673,758) $(11,122,542) $ 5,933,759
------------ ------------- ------------- -------------
------------ ------------- ------------- -------------
(a) Net of foreign withholding
taxes of $2,251,666
(b) Net of foreign withholding
taxes of $175,078
(c) Beginning of period,
February 12, 1999
</TABLE>
CORE TRUST (DELAWARE)
77
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STRATEGIC
STABLE MANAGED FIXED POSITIVE VALUE
INCOME INCOME RETURN BOND BOND INDEX
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
NET ASSETS, MAY 31, 1997...... $ - $ - $ - $ - $ 455,992,618
------------- ------------- ------------- ------------- ---------------
OPERATIONS
Net investment income
(loss)................... 13,556,855 18,213,362 11,929,000 7,290,368 18,212,835
Net realized gain (loss) from
investments.............. 423,040 2,891,576 6,562,062 67,326 40,577,843
Net change in unrealized
appreciation
(depreciation) of
investments.............. 333,836 5,029,200 13,771,972 1,829,598 232,315,725
------------- ------------- ------------- ------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS................ 14,313,731 26,134,138 32,263,034 9,187,292 291,106,403
------------- ------------- ------------- ------------- ---------------
TRANSACTIONS IN INVESTORS'
BENEFICIAL INTERESTS
Contributions (Note 8)....... 329,276,657 374,891,352 255,480,588 254,050,881 791,000,962
Withdrawals.................. (84,881,467) (65,362,303) (63,633,906) (26,360,998) (152,820,060)
------------- ------------- ------------- ------------- ---------------
Net increase from
transactions in
investors' beneficial
interest................. 244,395,190 309,529,049 191,846,682 227,689,883 638,180,902
------------- ------------- ------------- ------------- ---------------
NET INCREASE IN NET ASSETS.... 258,708,921 335,663,187 224,109,716 236,877,175 929,287,305
------------- ------------- ------------- ------------- ---------------
NET ASSETS, MAY 31, 1998...... 258,708,921 335,663,187 224,109,716 236,877,175 1,385,279,923
------------- ------------- ------------- ------------- ---------------
OPERATIONS
Net investment income
(loss)................... 15,540,651 23,263,608 12,948,302 14,567,818 21,141,735
Net realized gain (loss) from
investments.............. 206,974 1,034,541 14,832,978 21,552 26,353,322
Net change in unrealized
appreciation
(depreciation) of
investments.............. (1,386,571) (12,930,678) (13,325,007) (6,494,735) 247,309,848
------------- ------------- ------------- ------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS................ 14,361,054 11,367,471 14,456,273 8,094,635 294,804,905
------------- ------------- ------------- ------------- ---------------
TRANSACTIONS IN INVESTORS'
BENEFICIAL INTERESTS
Contributions (Note 8)....... 169,711,858 131,264,423 99,726,877 54,726,275 338,399,367
Withdrawals.................. (133,517,074) (51,808,858) (53,400,643) (57,113,571) (187,842,788)
------------- ------------- ------------- ------------- ---------------
Net increase (decrease) from
transactions in
investors' beneficial
interest................. 36,194,784 79,455,565 46,326,234 (2,387,296) 150,556,579
------------- ------------- ------------- ------------- ---------------
NET INCREASE IN NET ASSETS.... 50,555,838 90,823,036 60,782,507 5,707,339 445,361,484
------------- ------------- ------------- ------------- ---------------
NET ASSETS, MAY 31, 1999...... $ 309,264,759 $426,486,223 $284,892,223 $ 242,584,514 $ 1,830,641,407
------------- ------------- ------------- ------------- ---------------
------------- ------------- ------------- ------------- ---------------
(a) Beginning of Period....... Jun 1, 1997 Jun 1, 1997 Jun 1, 1997 Oct 1, 1997 Jun 1, 1997
</TABLE>
See Notes to Financial Statements
CORE TRUST (DELAWARE)
78
<PAGE>
FOR THE YEARS OR PERIODS(a) ENDED
MAY 31, 1998 AND MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LARGE SMALL
INCOME DISCIPLINED COMPANY SMALL CAP COMPANY
EQUITY GROWTH GROWTH INDEX STOCK
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------- ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
NET ASSETS, MAY 31, 1997...... $ - $ - $ - $ - $ -
--------------- ------------- --------------- ------------- --------------
OPERATIONS
Net investment income
(loss)................... 27,302,997 418,520 (254,889) 190,716 (903,690)
Net realized gain (loss) from
investments.............. 21,124,145 (4,466,320) 103,483,455 (31,860) 75,015,565
Net change in unrealized
appreciation
(depreciation) of
investments.............. 331,743,519 11,172,163 175,686,535 (6,730,568) (41,102,519)
--------------- ------------- --------------- ------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS................ 380,170,661 7,124,363 278,915,101 (6,571,712) 33,009,356
--------------- ------------- --------------- ------------- --------------
TRANSACTIONS IN INVESTORS'
BENEFICIAL INTERESTS
Contributions (Note 8)....... 1,656,178,203 127,393,238 1,039,939,974 130,179,195 462,417,317
Withdrawals.................. (80,546,731) (3,752,382) (236,856,954) (1,115,038) (270,557,970)
--------------- ------------- --------------- ------------- --------------
Net increase from
transactions in
investors' beneficial
interest................. 1,575,631,472 123,640,856 803,083,020 129,064,157 191,859,347
--------------- ------------- --------------- ------------- --------------
NET INCREASE IN NET ASSETS.... 1,955,802,133 130,765,219 1,081,998,121 122,492,445 224,868,703
--------------- ------------- --------------- ------------- --------------
NET ASSETS, MAY 31, 1998...... 1,955,802,133 130,765,219 1,081,998,121 122,492,445 224,868,703
--------------- ------------- --------------- ------------- --------------
OPERATIONS
Net investment income
(loss)................... 32,382,110 245,235 (2,686,598) 926,729 152,564
Net realized gain (loss) from
investments.............. 10,703,154 (3,141,344) 181,443,136 2,468,434 (44,032,289)
Net change in unrealized
appreciation
(depreciation) of
investments.............. 273,274,958 24,845,328 267,110,572 (9,600,626) (12,472,166)
--------------- ------------- --------------- ------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS................ 316,360,222 21,949,219 445,867,110 (6,205,463) (56,351,891)
--------------- ------------- --------------- ------------- --------------
TRANSACTIONS IN INVESTORS'
BENEFICIAL INTERESTS
Contributions (Note 8)....... 299,593,165 56,556,716 761,913,767 38,398,557 98,950,579
Withdrawals.................. (153,177,747) (20,286,491) (442,325,167) (17,939,415) (131,476,864)
--------------- ------------- --------------- ------------- --------------
Net increase (decrease) from
transactions in
investors' beneficial
interest................. 146,415,418 36,270,225 319,588,600 20,459,142 (32,526,285)
--------------- ------------- --------------- ------------- --------------
NET INCREASE IN NET ASSETS.... 462,775,640 58,219,444 765,455,710 14,253,679 (88,878,176)
--------------- ------------- --------------- ------------- --------------
NET ASSETS, MAY 31, 1999...... $ 2,418,577,773 $ 188,984,663 $ 1,847,453,831 $ 136,746,124 $ 135,990,527
--------------- ------------- --------------- ------------- --------------
--------------- ------------- --------------- ------------- --------------
(a) Beginning of Period....... Jun 1, 1997 Oct 1, 1997 Jun 1, 1997 Apr 9, 1998 Jun 1, 1997
<CAPTION>
SMALL SMALL INTER-
SMALL CAP COMPANY COMPANY NATIONAL
VALUE VALUE GROWTH INTERNATIONAL EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
NET ASSETS, MAY 31, 1997...... $ - $ - $ - $ 539,296,879 $ -
------------- ------------- -------------- -------------- -------------
OPERATIONS
Net investment income
(loss)................... (103,303) 1,194,736 (3,539,839) 10,517,288 -
Net realized gain (loss) from
investments.............. (2,328,929) 49,410,647 157,449,385 18,785,716 -
Net change in unrealized
appreciation
(depreciation) of
investments.............. 5,377,263 1,904,286 (8,948,010) 78,979,779 -
------------- ------------- -------------- -------------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS................ 2,945,031 52,509,669 144,961,536 108,282,783 -
------------- ------------- -------------- -------------- -------------
TRANSACTIONS IN INVESTORS'
BENEFICIAL INTERESTS
Contributions (Note 8)....... 109,215,794 182,821,915 893,179,444 406,915,054 -
Withdrawals.................. (7,890,976) (87,806,139) (144,077,860) (103,309,130) -
------------- ------------- -------------- -------------- -------------
Net increase from
transactions in
investors' beneficial
interest................. 101,324,818 95,015,776 749,101,584 303,605,924 -
------------- ------------- -------------- -------------- -------------
NET INCREASE IN NET ASSETS.... 104,269,849 147,525,445 894,063,120 411,888,707 -
------------- ------------- -------------- -------------- -------------
NET ASSETS, MAY 31, 1998...... 104,269,849 147,525,445 894,063,120 951,185,586 -
------------- ------------- -------------- -------------- -------------
OPERATIONS
Net investment income
(loss)................... (213,047) 1,096,962 (1,822,670) 11,315,753 857,495
Net realized gain (loss) from
investments.............. (30,465,857) (4,559,162) (77,753,826) 84,073,464 (119,809)
Net change in unrealized
appreciation
(depreciation) of
investments.............. 9,548,982 (9,541,409) (15,097,262) (106,511,759) 5,196,073
------------- ------------- -------------- -------------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS................ (21,129,922) (13,003,609) (94,673,758) (11,122,542) 5,933,759
------------- ------------- -------------- -------------- -------------
TRANSACTIONS IN INVESTORS'
BENEFICIAL INTERESTS
Contributions (Note 8)....... 56,411,434 58,867,576 87,802,760 138,115,465 154,175,553
Withdrawals.................. (13,783,251) (24,741,714) (153,483,916) (280,972,859) (5,557,182)
------------- ------------- -------------- -------------- -------------
Net increase (decrease) from
transactions in
investors' beneficial
interest................. 42,628,183 34,125,862 (65,681,156) (142,857,394) 148,618,371
------------- ------------- -------------- -------------- -------------
NET INCREASE IN NET ASSETS.... 21,498,261 21,122,253 (160,354,914) (153,979,936) 154,552,130
------------- ------------- -------------- -------------- -------------
NET ASSETS, MAY 31, 1999...... $ 125,768,110 $ 168,647,698 $ 733,708,206 $ 797,205,650 $154,552,130
------------- ------------- -------------- -------------- -------------
------------- ------------- -------------- -------------- -------------
(a) Beginning of Period....... Oct 1, 1997 Jun 1, 1997 Jun 1, 1997 Jun 1, 1997 Feb 12, 1999
</TABLE>
CORE TRUST (DELAWARE)
79
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS(a)
-------------------------------------------
NET
INVESTMENT PORTFOLIO
INCOME NET GROSS TURNOVER
(LOSS) EXPENSES EXPENSES(c) RATE
---------- ----------- -------------- --------
<S> <C> <C> <C> <C>
STABLE INCOME PORTFOLIO
- -------------------------------------------------------------------------------------------------
June 1, 1998 to May 31, 1999.......... 5.39% 0.36% 0.41% 29.46%
June 1, 1997 (b) to May 31, 1998...... 5.96% 0.37% 0.43% 37.45%
MANAGED FIXED INCOME PORTFOLIO
- -------------------------------------------------------------------------------------------------
June 1, 1998 to May 31, 1999.......... 6.23% 0.40% 0.45% 50.87%
June 1, 1997 (b) to May 31, 1998...... 6.53% 0.41% 0.46% 91.59%
POSITIVE RETURN BOND PORTFOLIO
- -------------------------------------------------------------------------------------------------
June 1, 1998 to May 31, 1999.......... 5.20% 0.40% 0.45% 130.81%
June 1, 1997 (b) to May 31, 1998...... 5.74% 0.41% 0.47% 68.18%
STRATEGIC VALUE BOND PORTFOLIO
- -------------------------------------------------------------------------------------------------
June 1, 1998 to May 31, 1999.......... 6.05% 0.56% 0.61% 48.43%
October 1, 1997 (b) to May 31, 1998... 6.06% 0.58% 0.62% 134.56%
INDEX PORTFOLIO
- -------------------------------------------------------------------------------------------------
June 1, 1998 to May 31, 1999.......... 1.35% 0.18% 0.23% 3.61%
June 1, 1997 to May 31, 1998.......... 1.60% 0.19% 0.24% 6.68%
June 1, 1996 to May 31, 1997.......... 2.03% 0.11% 0.31% 7.29%
November 1, 1995 to May 31, 1996...... 2.35% 0.17% 0.32% 7.21%
November 11, 1994 (b) to October 31,
1995................................ 2.42% 0.17% 0.33% 7.73%
INCOME EQUITY PORTFOLIO
- -------------------------------------------------------------------------------------------------
June 1, 1998 to May 31, 1999.......... 1.53% 0.55% 0.57% 3.21%
June 1, 1997 (b) to May 31, 1998...... 1.76% 0.52% 0.57% 3.49%
DISCIPLINED GROWTH PORTFOLIO
- -------------------------------------------------------------------------------------------------
June 1, 1998 to May 31, 1999.......... 0.15% 0.97% 1.02% 90.39%
October 1, 1997 (b) to May 31, 1998... 0.55% 1.01% 1.06% 68.08%
LARGE COMPANY GROWTH PORTFOLIO
- -------------------------------------------------------------------------------------------------
June 1, 1998 to May 31, 1999.......... (0.19%) 0.71% 0.72% 28.15%
June 1, 1997 (b) to May 31, 1998...... (0.03%) 0.67% 0.73% 13.03%
SMALL CAP INDEX PORTFOLIO
- -------------------------------------------------------------------------------------------------
June 1, 1998 to May 31, 1999.......... 0.76% 0.44% 0.48% 26.48%
April 9, 1998 (b) to May 31, 1998..... 1.04% 0.52% 0.54% 2.25%
SMALL COMPANY STOCK PORTFOLIO
- -------------------------------------------------------------------------------------------------
June 1, 1998 to May 31, 1999.......... 0.09% 0.98% 1.03% 183.61%
June 1, 1997 (b) to May 31, 1998...... (0.27%) 0.95% 1.01% 166.16%
SMALL CAP VALUE PORTFOLIO
- -------------------------------------------------------------------------------------------------
June 1, 1998 to May 31, 1999.......... (0.20%) 1.05% 1.10% 107.50%
October 1, 1997 (b) to May 31, 1998... (0.17%) 1.08% 1.13% 79.43%
SMALL COMPANY VALUE PORTFOLIO
- -------------------------------------------------------------------------------------------------
June 1, 1998 to May 31, 1999.......... 0.76% 0.99% 1.04% 96.62%
June 1, 1997 (b) to May 31, 1998...... 0.69% 0.99% 1.04% 99.08%
SMALL COMPANY GROWTH PORTFOLIO
- -------------------------------------------------------------------------------------------------
June 1, 1998 to May 31, 1999.......... (0.25%) 0.98% 0.98% 153.90%
June 1, 1997 (b) to May 31, 1998...... (0.41%) 0.93% 0.98% 123.36%
INTERNATIONAL PORTFOLIO
- -------------------------------------------------------------------------------------------------
June 1, 1998 to May 31, 1999.......... 1.29% 0.61% 0.69% 97.03%
June 1, 1997 to May 31, 1998.......... 1.23% 0.66% 0.68% 36.96%
June 1, 1996 to May 31, 1997.......... 1.53% 0.19% 0.67% 53.32%
November 1, 1995 to May 31, 1996...... 1.75% 0.23% 0.68% 17.58%
November 11, 1994 (b) to October 31,
1995................................ 1.94% 0.25% 0.70% 28.19%
INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------------------------
February 12, 1999 (b) to May 31,
1999................................ 1.92% 1.40% 1.45% 12.46%
</TABLE>
- ----------------------------------
(a) Ratios for periods of less than one year are annualized.
(b) Commencement of operations.
(c) During each period, various fees and expenses were waived and reimbursed.
The ratio of Gross Expenses to Average Net Assets reflects the expense ratio
in the absence of any waivers and reimbursements (Note 4).
See Notes to Financial Statements
CORE TRUST (DELAWARE)
80
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Core Trust (Delaware) ("Core Trust") is organized as a Delaware business trust
and is registered as an open-end management investment company under the
Investment Company Act of 1940 (the "Act"). Core Trust currently has twenty-two
separate investment portfolios. These financial statements relate to fifteen
diversified portfolios (individually, a "Portfolio" and, collectively, the
"Portfolios"), which commenced operations on the following dates:
<TABLE>
<S> <C>
Stable Income Portfolio................. June 1, 1997
Managed Fixed Income Portfolio.......... June 1, 1997
Positive Return Bond Portfolio.......... June 1, 1997
Strategic Value Bond Portfolio.......... October 1, 1997
Index Portfolio......................... November 11, 1994
Income Equity Portfolio................. June 1, 1997
Disciplined Growth Portfolio............ October 1, 1997
Large Company Growth Portfolio.......... June 1, 1997
Small Cap Index Portfolio............... April 9, 1998
Small Company Stock Portfolio........... June 1, 1997
Small Cap Value Portfolio............... October 1, 1997
Small Company Value Portfolio........... June 1, 1997
Small Company Growth Portfolio.......... June 1, 1997
International Portfolio................. November 11, 1994
International Equity Portfolio.......... February 12, 1999
</TABLE>
Interests in the Portfolios are sold in private placement transactions without
any sales charges to qualified investors, including open-end management
investment companies.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements are prepared in accordance with generally accepted
accounting principles, which require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increase and decrease in net assets from
operations during the fiscal period. Actual results could differ from those
estimates. The following summarizes the significant accounting policies of the
Portfolios:
SECURITIES VALUATION---Each Portfolio determines its net asset value at 4:00 PM,
Eastern Time, on each Portfolio business day. Short-term securities that mature
in sixty days or less are valued at amortized cost. Equity securities for which
market quotations are readily available are valued using the last reported sales
price provided by independent pricing services. If no sales are reported, the
mean of the last bid and ask price is used. If no mean price is available, the
last bid price is used. Fixed income and other securities, for which market
quotations are readily available, are valued using the mean of the last bid and
ask price provided by independent pricing services. If no mean price is
available, the last bid price is used. In the absence of readily available
market quotations, securities are valued at fair value determined in accordance
with procedures adopted by the Board of Trustees.
SECURITY TRANSACTIONS AND INVESTMENT INCOME---Investment transactions are
accounted for on the trade date. Dividend income is recorded on the ex-dividend
date. With respect to dividends on foreign securities, certain instances may
arise where a Portfolio is not notified of a dividend until after the ex-
dividend date has passed. In these instances, a dividend is recorded as soon as
the Portfolio is informed of the dividend. Dividend income is recorded net of
unrecoverable withholding tax. Interest income is recorded on the accrual basis
and includes amortization of premiums and accretion of discounts. Identified
cost of investments sold is used to determine realized gains and losses for both
financial statement and federal income tax purposes. Foreign dividend and
interest income amounts and realized capital gains and losses are converted to
U.S. dollars using foreign exchange rates in effect at the date of the
transactions.
Foreign currency amounts are translated into U.S. dollars at the mean of the bid
and ask price of such currencies against U.S. dollars as follows: (i) assets and
liabilities at the rate of exchange at the end of the respective period; and
(ii) purchases and sales of securities and income and expenses at the rate of
exchange prevailing on the dates of such transactions. The portion of the
results of operations arising from changes in the exchange rates and the portion
due to fluctuations arising from changes in the market prices of securities are
not isolated. Such fluctuations are included with the net realized and
unrealized gain or loss on investments.
International Portfolio may enter into forward contracts to purchase or sell
foreign currencies to protect against the effect on the U.S. dollar value of the
underlying portfolio of possible adverse movements in foreign exchange rates.
Risks associated with such contracts include the movement in value of the
foreign currency relative to the U.S. dollar and the ability of the counterparty
to perform. Fluctuations in the value of such contracts are recorded as
unrealized gain or loss; realized gain or loss includes net gain or loss on
contracts that have terminated by settlement or by the Portfolio entering into
offsetting commitments.
FUTURES CONTRACTS--Each Portfolio may invest in futures contracts to enhance
return and hedge against a decline in the value of securities. A futures
contract is an agreement between two parties to buy and sell a security at a set
price on a future date. Upon entering into such a contract, the Portfolio is
CORE TRUST (DELAWARE)
81
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
required to pledge to the broker an amount of cash or securities equal to the
minimum "initial margin" requirements of the exchange on which the contract is
traded. Pursuant to the contract, the Portfolio agrees to receive from, or pay
to, the broker an amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as "variation margin" and are
recorded by the Portfolio as unrealized gain or loss. When the contract is
closed, the Portfolio records a realized gain or loss equal to the difference
between the value of the contract at the time it was opened and the value at the
time it was closed. The potential risk to the Portfolio is that the change in
value of the underlying securities may not correlate to the change in value of
the contracts.
FEDERAL TAXES--The Portfolios are not required to pay federal income taxes on
their net investment income and net capital gain as they are treated as
partnerships for federal income tax purposes. All interest, dividends, gain and
loss of the Portfolios are deemed to have been "passed through" to the
interestholders in proportion to their holdings of the Portfolios regardless of
whether such interest, dividends or gain have been distributed by the
Portfolios.
EXPENSE ALLOCATION--Core Trust accounts separately for the assets and
liabilities and operations of each Portfolio. Expenses that are directly
attributable to more than one Portfolio are allocated among the respective
Portfolios.
ORGANIZATION COSTS--The costs incurred by certain Portfolios in connection with
their organization have been capitalized and are being amortized using the
straight-line method over a five-year period beginning on the commencement of
the Portfolios' operations.
REPURCHASE AGREEMENTS--Each Portfolio may invest in repurchase agreements. The
Portfolios, through their custodian, receive delivery of the underlying
collateral, whose market value must always exceed the repurchase price. In the
event of default, a Portfolio may have difficulties with the disposition of the
collateral.
SECURITY LOANS--The Portfolios may receive fees or retain a portion of interest
on the investment securities or cash received as collateral for lending
securities. A Portfolio also continues to receive interest or dividends on the
securities loaned. Security loans are secured by collateral whose market value
must always exceed the market value of the securities loaned plus accrued
interest. Gain or loss in the market price of the securities loaned that may
occur during the term of the loan are reflected in the value of the Portfolio.
NOTE 3. ADVISORY, SERVICING FEES AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISER--The investment adviser of each Portfolio, except
International Portfolio and International Equity Portfolio, is Norwest
Investment Management, Inc. ("Adviser"), a wholly owned subsidiary of Norwest
Bank Minnesota, N.A. ("Norwest"). Norwest is a subsidiary of Wells Fargo &
Company. The investment adviser of International Portfolio is Schroder Capital
Management International Inc. ("Schroder"). Schroder is a wholly owned U.S.
subsidiary of Schroder Inc., which is a wholly owned U.S. subsidiary of Schroder
PLC. The investment adviser of International Equity Portfolio of Core Trust is
Wells Fargo Bank, N.A. ("WFB"). WFB is a wholly owned subsidiary of Wells Fargo
& Company. The Adviser and WFB have retained the services of certain of their
affiliates as investment subadvisers (Galliard Capital Management, Inc.,
Peregrine Capital Management, Inc., Smith Asset Management Group, L.P. and Wells
Capital Management Inc. ("WCM")) on selected Portfolios. The fees related to
subadvisor services are borne directly by the Adviser and WFB and do not
increase the overall fees paid by the Portfolios to the Adviser and WFB. The
investment advisory fee and the associated subadviser is as follows:
<TABLE>
<CAPTION>
INVESTMENT
ADVISORY FEE SUBADVISER
-------------- ----------------------------------------
<S> <C> <C>
Stable Income Portfolio................. 0.30% Galliard Capital Management, Inc.
Managed Fixed Income Portfolio.......... 0.35% Galliard Capital Management, Inc.
Positive Return Bond Portfolio.......... 0.35% Peregrine Capital Management, Inc.
Strategic Value Bond Portfolio.......... 0.50% Galliard Capital Management, Inc.
Index Portfolio......................... 0.15% -
Income Equity Portfolio................. 0.50% -
Disciplined Growth Portfolio............ 0.90% Smith Asset Management Group, L.P.
Large Company Growth Portfolio.......... 0.65% Peregrine Capital Management, Inc.
Small Cap Index Portfolio............... 0.25% -
Small Company Stock Portfolio........... 0.90% Wells Capital Management Inc.
Small Cap Value Portfolio............... 0.95% Smith Asset Management Group, L.P.
Small Company Value Portfolio........... 0.90% Peregrine Capital Management, Inc.
Small Company Growth Portfolio.......... 0.90% Peregrine Capital Management, Inc.
International Portfolio................. 0.45% -
International Equity Portfolio.......... 1.20% Wells Capital Management Inc.
</TABLE>
ADMINISTRATION AND OTHER SERVICE PROVIDERS--Forum Administrative Services, LLC
("FAdS") is the administrator to Core Trust and receives a fee with respect to
each Portfolio (other than International Portfolio) at an annual rate of 0.05%
of each Portfolio's average daily net assets. With respect to International
Portfolio, FAdS receives a fee at an annual rate of 0.15% of the Portfolio's
average daily net assets.
CORE TRUST (DELAWARE)
82
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 3. ADVISORY, SERVICING FEES AND OTHER TRANSACTIONS WITH
AFFILIATES (CONTINUED)
Norwest serves as the custodian for each Portfolio and may appoint subcustodians
for foreign securities and other assets held in foreign countries. For its
custody services, Norwest receives a fee with respect to each Portfolio (other
than International Portfolio and International Equity Portfolio) at an annual
rate of 0.02% of the first $100 million of each Portfolio's average daily net
assets, declining to 0.01% of the average daily net assets of each Portfolio in
excess of $200 million. With respect to International Portfolio and
International Equity Portfolio, Norwest receives a fee at an annual rate of
0.07% of the Portfolio's average daily net assets. Norwest also receives
transaction fees for providing services in connection with the securities
lending program.
Forum Accounting Services, LLC, an affiliate of FAdS, provides portfolio
accounting and interestholder recordkeeping services to each Portfolio.
NOTE 4. WAIVERS
For the year ended May 31, 1999, fees waived by the Portfolios' service
providers were as follows:
<TABLE>
<CAPTION>
FEES WAIVED
BY FAdS
--------------
<S> <C>
Stable Income Portfolio................. $ 142,032
Managed Fixed Income Portfolio.......... 184,012
Positive Return Bond Portfolio.......... 122,006
Strategic Value Bond Portfolio.......... 118,013
Index Portfolio......................... 779,240
Income Equity Portfolio................. 425,107
Disciplined Growth Portfolio............ 79,837
Large Company Growth Portfolio.......... 137,320
Small Cap Index Portfolio............... 54,976
Small Company Stock Portfolio........... 80,239
Small Cap Value Portfolio............... 50,969
Small Company Value Portfolio........... 68,547
Small Company Growth Portfolio.......... 1,559
International Equity Portfolio.......... 22,637
</TABLE>
Schroder waived investment advisory fees of $717,860 for International
Portfolio.
NOTE 5. SECURITIES TRANSACTIONS
The following table presents the cost of purchases and proceeds from sales
(including maturities) of securities (excluding short-term investments) during
the year ended May 31, 1999, as well as the federal tax cost basis of
investments and related gross unrealized appreciation and depreciation for
federal income tax purposes as of May 31, 1999:
<TABLE>
<CAPTION>
COST OF PROCEEDS TAX UNREALIZED UNREALIZED
PURCHASES FROM SALES COST BASIS APPRECIATION DEPRECIATION
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Stable Income Portfolio........................... $ 219,483,063 $ 79,916,965 $ 312,040,673 $ 750,169 $ 1,797,304
Managed Fixed Income Portfolio.................... 315,387,092 187,876,028 446,800,000 1,694,969 9,370,052
Positive Return Bond Portfolio.................... 245,376,726 242,922,012 285,965,298 25,332 2,004,599
Strategic Value Bond Portfolio.................... 138,548,332 111,261,550 251,237,870 657,452 5,541,240
Index Portfolio................................... 208,621,074 55,255,404 1,059,195,734 807,923,181 36,701,897
Income Equity Portfolio........................... 204,190,270 66,188,047 1,333,856,677 1,086,475,233 6,334,047
Disciplined Growth Portfolio...................... 160,928,780 144,621,644 153,336,428 41,280,092 5,690,967
Large Company Growth Portfolio.................... 635,306,952 381,966,535 1,052,935,827 840,873,759 45,687,375
Small Cap Index Portfolio......................... 57,133,442 30,458,668 153,430,358 13,612,528 30,388,924
Small Company Stock Portfolio..................... 279,229,225 302,820,065 132,008,232 12,559,628 9,655,085
Small Cap Value Portfolio......................... 157,962,228 110,659,107 110,737,057 20,533,902 5,607,935
Small Company Value Portfolio..................... 171,376,287 135,736,066 163,694,289 18,185,906 13,772,169
Small Company Growth Portfolio.................... 1,071,763,968 1,150,267,944 611,372,097 146,193,731 23,239,075
International Portfolio........................... 653,087,812 801,606,226 685,926,760 137,043,545 40,152,122
International Equity Portfolio.................... 160,714,572 18,657,476 150,899,606 12,273,025 7,669,562
<CAPTION>
NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
-------------
<S> <C>
Stable Income Portfolio........................... $ (1,047,135)
Managed Fixed Income Portfolio.................... (7,675,083)
Positive Return Bond Portfolio.................... (1,979,267)
Strategic Value Bond Portfolio.................... (4,883,788)
Index Portfolio................................... 771,221,284
Income Equity Portfolio........................... 1,080,141,186
Disciplined Growth Portfolio...................... 35,589,125
Large Company Growth Portfolio.................... 795,186,384
Small Cap Index Portfolio......................... (16,776,396)
Small Company Stock Portfolio..................... 2,904,543
Small Cap Value Portfolio......................... 14,925,967
Small Company Value Portfolio..................... 4,413,737
Small Company Growth Portfolio.................... 122,954,656
International Portfolio........................... 96,891,423
International Equity Portfolio.................... 4,603,463
</TABLE>
CORE TRUST (DELAWARE)
83
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 6. PORTFOLIO SECURITIES LOANED
As of May 31, 1999, certain Portfolios had loaned portfolio investments in
return for securities and cash collateral, which were invested in various
short-term fixed income securities. The risks to the Portfolio from securities
lending are that the borower may not provide additional collateral when required
or return the securities when due or when called for by the Portfolio. The value
of the securities on loan and the value of the related collateral were as
follows:
<TABLE>
<CAPTION>
SECURITIES COLLATERAL
------------- -------------
<S> <C> <C>
Stable Income Portfolio................. $ 38,371,174 $ 40,353,991
Managed Fixed Income Portfolio.......... 44,529,691 47,785,832
Positive Return Bond Portfolio.......... 34,456,345 35,662,519
Strategic Value Bond Portfolio.......... 25,745,865 27,776,778
Index Portfolio......................... 158,451,323 170,332,749
Income Equity Portfolio................. 145,615,760 154,020,259
Disciplined Growth Portfolio............ 14,603,027 15,040,148
Large Company Growth Portfolio.......... 147,193,745 155,815,110
Small Cap Index Portfolio............... 6,723,619 7,068,031
Small Company Stock Portfolio........... 12,732,939 14,122,412
Small Cap Value Portfolio............... 16,794,055 17,139,329
Small Company Value Portfolio........... 8,586,566 9,872,873
International Portfolio................. 7,566,480 7,961,515
</TABLE>
NOTE 7. CONCENTRATION OF CREDIT RISK
International Portfolio and International Equity Portfolio invest in countries
which may involve greater risks. The consequences of political, social and
economic events in these markets may have disruptive effects on the market
prices of the Portfolios' investments.
NOTE 8. CONTRIBUTION OF SECURITIES
After the close of business on May 31, 1997, International Portfolio (prior to
June 1, 1997, named International Portfolio II) merged with a former portfolio
of Core Trust. In that transaction, International Portfolio acquired the assets
and assumed the liabilities of the former portfolio in exchange for an interest
in International Portfolio equal in value to the net assets of the former
portfolio. The former portfolio had the same investment objective and investment
policies as International Portfolio. The merger, which was not subject to
interestholder approval, was accomplished without the recognition of gain or
loss. The former portfolio contributed net assets with a value of $232,334,610
and the net assets of International Portfolio immediately after the transaction
were $771,507,344.
Also after the close of business on May 31, 1997, Small Company Portfolio (a
former Portfolio of Core Trust) divided into three portfolios-Small Company
Stock Portfolio, Small Company Growth Portfolio and Small Company Value
Portfolio. The assets of Small Company Portfolio (and the related liabilities)
were divided in accordance with the investment style to which the assets had
been allocated. This transaction, which was not subject to interestholder
approval, was accomplished without the recognition of gain or loss. Small
Company Portfolio's net assets were divided as follows: Small Company Stock
Portfolio, $178,533,353; Small Company Growth Portfolio, $167,525,486; and Small
Company Value Portfolio, $165,287,781.
In connection with the merger and divisions, and the contemporaneous
commencement of operations of certain portfolios on June 1, 1997, certain
investors contributed all or a portion of their net assets to the portfolios
listed in the following table:
<TABLE>
<CAPTION>
INVESTOR CONTRIBUTIONS
-----------------------------
NET UNREALIZED
PORTFOLIO ASSETS GAIN/(LOSS)
- ---------------------------------------- ------------- -------------
<S> <C> <C>
Stable Income Portfolio................. $ 205,865,654 $ 5,601
Managed Fixed Income Portfolio.......... 186,226,721 229,550
Positive Return Bond Portfolio.......... 186,707,645 (2,426,230)
Index Portfolio......................... 512,437,536 115,520,269
Income Equity Portfolio................. 955,691,053 110,368,720
Large Company Growth Portfolio.......... 615,745,586 276,554,260
Small Company Stock Portfolio........... 355,894,495 50,282,300
Small Company Value Portfolio........... 165,287,781 13,216,619
Small Company Growth Portfolio.......... 756,220,600 150,549,039
International Portfolio................. 232,334,610 33,714,226
</TABLE>
CORE TRUST (DELAWARE)
84
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONCLUDED) MAY 31, 1999
- --------------------------------------------------------------------------------
NOTE 8. CONTRIBUTION OF SECURITIES (CONTINUED)
Additionally, on September 15, 1997, certain investors contributed net assets to
the portfolios listed in the following table:
<TABLE>
<CAPTION>
INVESTOR CONTRIBUTIONS
-----------------------------
NET UNREALIZED
PORTFOLIO ASSETS GAIN
- ---------------------------------------- ------------- -------------
<S> <C> <C>
Income Equity Portfolio................. $ 477,132,067 $190,138,062
Small Company Stock Portfolio........... 45,144,489 6,745,993
Small Company Growth Portfolio.......... 140,475,014 40,180,322
</TABLE>
NOTE 9. PORTFOLIO REORGANIZATIONS
On April 22, 1999, the Board of Trustees of Core Trust approved the
reorganization of each Portfolio managed by the Adviser (except Money Market
Portfolio, Prime Money Market Portfolio and Small Company Stock Portfolio) or
Schroder (the "Norwest Portfolios") into separate portfolios of Wells Fargo Core
Trust, another open-end registered management investment company. Each Wells
Fargo Core Trust portfolio will have substantially similar investment objectives
and policies as its corresponding Norwest Portfolio. The reorganization is part
of a plan to centralize the management of the Norwest Portfolios and Norwest
Advantage Funds, the principal interestholder, under a common Board of Trustees.
Pursuant to Core Trust's Trust Instrument, the reorganization does not require
interestholder approval.
NOTE 10. CHANGES IN CERTIFYING ACCOUNTANT
On November 10, 1998, PricewaterhouseCoopers LLP ("Coopers") resigned as auditor
for Index Portfolio, Small Company Stock Portfolio, Small Company Value
Portfolio, Small Company Growth Portfolio, and International Portfolio (the
"Portfolios"), five series of Core Trust (Delaware) (the "Trust").
The Board of Trustees accepted the resignation of Coopers and approved KPMG LLP
("KPMG") as the new auditors of the Portfolios at its November 10, 1998 meeting.
The decision to replace Coopers with KPMG was motivated by the fact that KPMG
already serves as independent auditor for sixteen other series of the Trust.
Coopers' principal accountant's report on the Portfolios' financial statements
for the past two fiscal years contained no adverse opinion or disclaimer of
opinion, nor was it qualified or modified as to uncertainty, audit scope or
accounting principles. There were no disagreements with Coopers during the past
two fiscal years, or through the date of its resignation, on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure.
CORE TRUST (DELAWARE)
85
<PAGE>
SCHEDULES OF INVESTMENTS MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
STABLE INCOME PORTFOLIO
- -----------------------------------------------------------------
ASSET BACKED SECURITIES (23.2%)
3,500,000 Aesop Funding II LLC, Series 1997-1 A1, 6.22% V/R, 10/20/01+ $ 3,527,528
688,314 AFC Home Equity Loan Trust,
Series 1995-2 A1, 7.04% V/R, 7/25/26 691,756
5,000,000 Chase Credit Card Master Trust,
Series 1998-6 A, 5.16% V/R, 9/15/04 5,022,925
5,000,000 Chevy Chase Master Credit Card Trust, Series 1998, Class A, 5.27% V/R, 10/15/06 5,014,675
1,092,924 Commercial Loan Funding Trust, Series I, Class A, 5.20% V/R, 8/15/05+ 1,085,410
3,770,000 Deutsche Floorplan Receivables Master Trust, Series 1996-1, Class A, 5.12% V/R, 10/15/01 3,775,523
2,500,000 Discover Master Card Trust I, Series 1997-4, 4.97% V/R, 4/16/03 2,500,438
4,000,000 DreamWorks Firm Trust, 5.22% V/R, 10/17/05+ 3,992,500
1,500,000 EQCC Home Equity Loan Trust,
Series 1995-3 A4, 7.10%, 2/15/12 1,527,023
4,667,950 EQCC Home Equity Loan Trust,
Series 1998-4 A1F, 5.34% V/R, 1/15/29 4,687,252
168,081 First Merchants Auto Receivables Corp., Series 1996-A, Class A2, 6.70%, 7/17/00+ 168,313
577,382 First Merchants Grantor Trust,
Series 1996-2 A, 6.85%, 11/15/01+ 582,125
5,000,000 First USA Credit Card Master Trust,
Series 1995-5 A, 5.11% V/R, 4/15/03 5,007,225
5,000,000 First USA Credit Card Master Trust,
Series 1999-1 B, 5.30% V/R, 10/19/06 5,005,725
3,500,000 Fremont Small Business Loan Master Trust, Series C, Class A, 5.24% V/R, 5/15/02 3,502,538
2,016,050 Green Tree Financial Corp.,
Series 1993-4 A3, 6.25%, 1/15/19 2,023,882
499,575 Green Tree Financial Corp.,
Series 1994-1 A3, 6.90%, 4/15/19 502,715
4,500,000 Household Consumer Loan Trust,
Series 1997-1, Class A3, 5.25% V/R, 3/15/07 4,483,778
5,000,000 Household Consumer Loan Trust,
Series 1997-2, Class A3, 5.33% V/R, 11/15/07 4,960,156
2,400,000 Keystone Home Improvement Loan Trust, Series 1997-P2, Class IA3, 6.99%, 4/25/14+ 2,401,500
750,000 Loop Funding Master Trust I,
Series 1997-AER, Class B1, 5.37% V/R, 12/26/07+ 745,781
4,500,000 Loop Funding Master Trust I,
Series 1997-A144, Class B1, 5.37% V/R, 12/26/07+ 4,474,688
4,000,000 Premier Auto Trust, Series 1997-1, Class B, 6.55%, 9/6/03 4,046,661
2,308,282 Sequoia Mortgage Trust, Series 2, Class A1, 6.04% V/R, 10/25/24 2,302,511
---------------
TOTAL ASSET BACKED SECURITIES (COST $71,984,589) 72,032,628
---------------
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
STABLE INCOME PORTFOLIO (continued)
- -----------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS (21.3%)
2,870,836 AMBS, Series CS-1012 1, 7.06% V/R, 7/25/02 $ 2,908,964
1,223,928 DLJ Mortgage Acceptance Corp.,
Series 1998-STF1, Class A1, 5.16% V/R, 2/8/00+ 1,223,090
5,000,000 FHLMC, Series 2091 NA, 5.50%, 3/15/04 4,950,925
5,000,000 FHLMC, Series 2091 PC, 6.00%, 6/15/16 4,903,775
3,635,838 FNMA, Series 1994 M2 A, 6.63% V/R, 2/25/01 3,663,889
7,100,000 FNMA, Series 1999-19 LA, 6.50%, 4/1/14 7,136,241
6,200,000 FNMA, Series 1999-19 PB, 6.00%, 4/1/29 6,158,987
2,305,724 Ford Motor Credit Auto Owner Trust,
Series 1994 X, Class A2, 7.78% V/R, 1/25/25 2,399,069
2,877,411 GMAC, Series 1996 C1 A1, 5.73% V/R, 10/16/28 2,869,829
1,049,831 Independent National Mortgage Corp.,
Series 1994 V, Class M, 7.43% V/R , 12/25/24 1,070,708
4,417,637 Independent National Mortgage Corp.,
Series 1995 E, Class A1, 6.69% V/R, 4/25/25 4,498,210
291,076 Merrill Lynch Mortgage Investors, Inc.,
Series 1983-I A2, 5.34% V/R, 11/15/23 291,281
373,418 Merrill Lynch Mortgage Investors, Inc.,
Series 1994-I, 7.25% V/R, 1/25/05 370,646
237,347 MLCC Mortgage Investors, Inc.,
Series 1994 A Class A2, 5.34% V/R, 7/15/19 237,004
3,000,000 MLCC Mortgage Investors, Inc.,
Series 1994 A Class A3, 5.74% V/R, 7/15/19 3,020,146
365,401 MLCC Mortgage Investors, Inc.,
Series 1994-B, 5.38% V/R, 12/15/19 365,659
5,000,000 Nationslink Funding, 5.25% V/R, 9/10/07 5,000,000
436,830 Residential Funding Mortgage Security, Adjustable Rate Mortgage, Series 1989-5A, 7.01% V/R,
10/25/19 431,298
163,670 Residential Funding Mortgage Security, Adjustable Rate Mortgage,
Series 1991 21 BA,6.75% V/R, 8/25/21 165,112
26,384 RTC, Series 1991 M6 A3, 8.35% V/R, 6/25/21 26,351
260,166 RTC, Series 1991-6 E, 11.55% V/R, 5/25/24 259,486
1,439,205 RTC, Series 1992-18P A4, 5.89% V/R, 4/25/28+ 1,438,754
416,617 RTC, Series 1992-4 A2, 7.04% V/R, 7/25/28 415,391
303,290 RTC, Series 1992-C3, Class A3, 6.15% V/R, 8/25/23 303,195
5,616,188 RTC, Series 1994-1, Class A5, 5.59% V/R, 9/25/29 5,640,646
985,953 RTC, Series 1995-1 A3, 6.73% V/R, 10/25/28 1,005,568
8,282 RTC, Series 1995-2 A1B, 7.15%, 5/25/29 8,258
5,375,000 Vendee Mortgage Trust, Series 1993-1,
Class E, 7.00%,1/15/16 5,428,454
---------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(COST $66,585,177) 66,190,936
---------------
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
86
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
STABLE INCOME PORTFOLIO (continued)
- -----------------------------------------------------------------
CORPORATE BONDS & NOTES (23.3%)
1,600,000 Bausch & Lomb, Inc., 6.15%, 8/1/01 $ 1,590,162
4,037,000 Chase Manhattan Corp., 10.13%, 11/1/00 4,262,786
2,500,000 Corestates Capital Corp., 9.63%, 2/15/01 2,641,340
3,250,000 First Data Corp., 6.82%, 9/18/01 3,294,730
2,775,000 Firstar Bank Milwaukee, 6.25%, 12/1/02 2,765,898
3,900,000 Ford Capital BV, 9.38%, 5/15/01 4,132,335
3,200,000 General Electric Capital Corp., 6.29%, 12/15/01 3,203,894
5,000,000 Main Place Real Estate Investment,
5.17% V/R,5/28/02 4,998,438
4,000,000 McDonald's Corp., 6.00%, 6/23/02 3,979,392
2,750,000 Merrill Lynch & Co., Inc., 5.01% V/R, 5/30/01 2,748,936
3,100,000 Monsanto Co., 5.38%, 12/1/01+ 3,036,292
3,475,000 Newell Co., 6.18%, 7/11/00 3,486,586
2,400,000 Philip Morris Cos., Inc., 8.75%, 6/1/01 2,508,175
4,000,000 Raytheon Co., 6.45%, 8/15/02 4,010,156
3,875,000 Rite Aid Corp., 6.70%, 12/15/01 3,874,248
1,000,000 Tenneco, Inc., 10.08%, 2/1/01 1,053,129
1,000,000 Transamerica Financial, 6.36%, 6/26/00 1,004,499
1,500,000 Transamerica Financial, 6.41%, 6/20/00 1,507,475
4,750,000 Tyco International Ltd., 6.50%, 11/1/01 4,768,416
2,650,000 US Bank NA, North Dakota, 4.92% V/R, 6/20/01 2,649,796
2,000,000 USAA Capital Corp., 5.97%, 8/4/99+ 2,001,704
3,400,000 V.F. Corp., 9.50%, 5/1/01 3,601,236
5,350,000 Whitman Corp., 7.50%, 8/15/01 5,469,567
---------------
TOTAL CORPORATE BONDS & NOTES (COST $72,901,854) 72,589,190
---------------
GOVERNMENT AGENCY BONDS & NOTES (2.8%)
3,000,000 FHLB, 5.57%, 8/17/00 3,004,689
2,000,000 FHLB, 7.11%, 7/8/99 2,004,056
1,000,000 FNMA, 8.70%, 6/10/99 1,000,878
2,720,000 TVA, 6.23%, 7/15/45 2,768,239
---------------
TOTAL GOVERNMENT AGENCY BONDS & NOTES
(COST $8,778,351) 8,777,862
---------------
MORTGAGE BACKED SECURITIES (7.5%)
FHLMC (0.3%)
84,505 Pool 410220, 7.31% V/R, 10/1/25 85,898
648,906 Pool 845151, 7.32% V/R, 6/1/22 664,337
220,052 Pool 846367, 7.25%, 4/1/29 226,517
---------------
TOTAL FHLMC (COST $973,585) 976,752
---------------
FNMA (4.7%)
1,123,219 Pool 155506, 6.57% V/R, 4/1/22 1,143,380
6,071,099 Pool 160334, 6.93%, 3/1/01 6,144,116
2,147,997 Pool 190815, 4.66% V/R, 7/1/17 2,060,638
373,870 Pool 220706, 7.24% V/R, 6/1/23 380,143
368,837 Pool 318464, 6.95%, 4/1/25 376,795
624,676 Pool 321051, 7.47% V/R, 8/1/25 639,556
206,876 Pool 331866, 6.72%, 12/1/25 210,844
3,415,015 Pool 459495, 6.00%, 2/3/14 3,337,870
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
STABLE INCOME PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
MORTGAGE BACKED SECURITIES (continued)
FNMA (continued)
<TABLE>
<C> <S> <C>
205,581 Pool 46698, 5.64% V/R, 12/1/15 $ 210,770
---------------
TOTAL FNMA (COST $14,716,847) 14,504,112
---------------
SBA (2.5%)
104,526 Pool 500025, 7.63% V/R, 12/25/10 107,221
53,993 Pool 500276, 9.63% V/R, 5/25/07 57,679
118,712 Pool 500299, 9.63% V/R, 6/25/07 123,312
83,643 Pool 500569, 9.63% V/R, 6/25/08 88,243
483,425 Pool 500664, 7.63% V/R, 3/25/04 491,019
311,958 Pool 500806, 6.25% V/R, 2/25/14 313,628
351,138 Pool 500957, 8.00% V/R, 7/25/14 365,065
47,210 Pool 501017, 6.13% V/R, 9/25/14 47,404
386,746 Pool 501224, 6.50% V/R, 6/25/15 389,839
48,643 Pool 501973, 9.38% V/R, 12/25/01 49,861
72,781 Pool 502083, 7.63% V/R, 11/25/04 74,027
113,985 Pool 502241, 7.63% V/R, 4/25/03 114,982
212,582 Pool 502583, 8.98% V/R, 9/25/03 219,574
77,276 Pool 502966, 8.98% V/R, 5/25/15 82,964
86,955 Pool 502974, 8.38% V/R, 1/25/10 90,860
624,104 Pool 503405, 8.13% V/R, 5/25/16 663,890
1,940,074 Pool 503611, 7.63% V/R, 12/27/21 2,002,058
1,237,390 Pool 503658, 8.88% V/R, 9/27/10 1,314,097
1,017,500 Pool 503664, 8.23% V/R, 1/25/13 1,064,038
---------------
TOTAL SBA (COST $7,974,332) 7,659,761
---------------
TOTAL MORTGAGE BACKED SECURITIES (COST $23,664,764) 23,140,625
---------------
MUNICIPAL NOTES (6.5%)
3,300,000 Connecticut State, GO Bonds, Taxable
Series A, 5.70%, 1/15/01 3,310,425
2,740,000 Cow Creek Bank Umpqua Tribe of Indians, AMBAC insured, 6.20%, 7/1/03+ 2,738,827
3,145,000 Denver, CO, City and County SD #1, Educational Facilities RV Taxable Pension, School Facilities
Lease, AMBAC insured, 6.34%, 12/15/00 3,178,652
4,000,000 New York State, GO Bonds, Series C, 6.13%, 3/1/02 4,063,284
5,000,000 New York, NY, GO Bonds, 6.10%, 8/1/01 5,061,265
1,870,000 Washington State, GO Bonds, State Housing Trust Fund, Series T, 6.60%, 1/1/01 1,892,870
---------------
TOTAL MUNICIPAL NOTES (COST $20,042,668) 20,245,323
---------------
U.S. TREASURY OBLIGATIONS (12.3%)
37,500,000 U.S. Treasury Notes, 8.50%, 2/15/00
(cost $38,456,921)# 38,390,625
REPURCHASE AGREEMENTS (3.1%)
9,626,349 Bear, Stearns & Cos., Inc., 4.90%, 6/1/99 (cost $9,626,349)** 9,626,349
---------------
TOTAL INVESTMENTS (100.0%) (COST $312,040,673) $ 310,993,538
---------------
---------------
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
87
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
MANAGED FIXED INCOME PORTFOLIO
- -----------------------------------------------------------------
ASSET BACKED SECURITIES (12.1%)
4,000,000 Chevy Chase Master Credit Card Trust, Series 1998, Class A, 5.27% V/R, 10/15/06 $ 4,011,740
1,800,000 ContiMortgage Home Equity Loan Trust, Series 1997-4, Class A7, 6.63%, 9/15/16 1,758,303
2,441,000 EQCC Home Equity Loan Trust,
Series 1996-2 A4, 7.50%, 6/15/21 2,514,096
4,900,000 EQCC Home Equity Loan Trust,
Series 1997-2 A9, 6.81%, 7/15/28 4,905,341
487,435 First Merchants Auto Receivables Corp., Series 1996-A, Class A2, 6.70%, 7/17/00+ 488,106
1,499,556 First Plus Home Loan Trust,
Series 1996-2 A6, 7.85%, 8/20/13 1,515,354
1,000,000 GE Capital Mortgage Services, Inc.,
Series 1997 HE-2, Class A7, 7.12%, 6/25/27 1,008,450
9,597,276 Green Tree Financial Corp.,
Series 1997-7 A8, 6.86%, 9/15/16 9,508,549
136,432 Green Tree Home Improvement Loan Trust, Series 1995-F A4, 6.15%, 1/15/21 136,592
3,000,000 Keystone Home Improvement Loan Trust, Series 1997-P2, Class IA3, 6.99%, 4/25/14+ 3,001,875
2,300,000 Keystone/Lehman Title I Loan Trust, 1996-2, 7.45%, 11/25/10 2,366,483
3,300,000 Loop Funding Master Trust,
Series 1997-A144, Class B1, 5.37% V/R, 12/26/07+ 3,281,438
6,693,000 Oakwood Mortgage Investors, Inc.,
Series 1995-A, Class A3, 7.10% V/R, 9/15/20 6,842,154
5,518,000 Rental Car Finance Corp., Series 1997-1 B3, 6.70% V/R, 9/25/07+ 5,336,078
6,500,000 Van Kampen, CLO-I, 5.30% V/R, 10/5/07+ 6,585,215
---------------
TOTAL ASSET BACKED SECURITIES (COST $53,308,820) 53,259,774
---------------
COLLATERALIZED MORTGAGE OBLIGATIONS (10.2%)
2,631,600 AMBS, Series CS-1012 1, 7.06% V/R, 7/25/02 2,666,551
1,123,635 American Housing Trust, Series VI, Class I-I, 9.15%, 5/25/20 1,201,992
1,500,000 Asset Securitization Corp., Series 1997-D4, Class A1C, 7.42%, 4/14/29 1,566,832
1,245,772 CMC Securities Corp. II, Series 1993-2I A2, 6.13% V/R, 9/25/23 1,252,049
5,000,000 FHLMC, Series 2146 VB, 6.00%, 12/15/14 4,777,475
260,307 FNMA, Series 1988-5 Z, 9.20%, 3/25/18 270,576
2,000,000 FNMA, Series 1998-M6, Class A2,
6.32% V/R, 8/15/08 1,980,630
1,868,946 Independent National Mortgage Corp.,
Series 1994 V, Class M, 7.43% V/R#, 12/25/24 1,906,112
1,074,025 L.F. Rothschild Mortgage Trust, Series 2, Class Z, 9.95%, 8/1/17 1,157,401
458,286 Merrill Lynch Mortgage Investors, Inc.,
Series 1994-I, 7.25% V/R, 1/25/05 454,883
5,000,000 Merrill Lynch Mortgage Investors, Inc.,
Series 1997-CI, Class A3, 7.12%, 6/18/29 5,119,325
176,418 RTC, Series 1991-M5 A, 9.00%, 3/25/17 177,662
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
MANAGED FIXED INCOME PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COLLATERALIZED MORTGAGE OBLIGATIONS (continued)
<TABLE>
<C> <S> <C>
1,166,529 RTC, Series 1992-4 A2, 7.04% V/R, 7/25/28 $ 1,163,092
885,727 RTC, Series 1995 1 class A2C, 7.50%, 10/25/28 886,837
1,000,000 RTC, Series 1995 1 Class A2D, 7.50%, 10/25/28 1,000,872
750,000 Series 1832 D, 6.50% V/R, 6/15/08 751,309
1,000,000 RTC, Series 1995-2 A1C, 7.45%, 5/25/29 1,011,065
291,800 Vendee Mortgage Trust, Series 1992-2,
Class 2D, 7.75%, 12/15/14 293,170
4,072,241 Vendee Mortgage Trust, Series 1992-2,
Class G, 7.25%, 2/15/19 4,162,424
3,250,000 Vendee Mortgage Trust, Series 1995-1C, Class 3E, 8.00%, 7/15/18 3,312,709
5,500,000 Vendee Mortgage Trust, Series 1996-2,
Class 1E, 6.75%, 5/15/20 5,501,183
3,000,000 Vendee Mortgage Trust, Series 1997-1,
Class 2C, 7.50%, 9/15/17 3,042,476
1,500,000 Vendee Mortgage Trust, Series 1997-1,
Class 2D, 7.50%, 1/15/19 1,525,646
---------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(COST $45,561,638) 45,182,271
---------------
CORPORATE BONDS & NOTES (34.4%)
3,000,000 AmSouth Bancorp, 6.13%, 3/1/09 2,831,892
2,400,000 Applied Materials Inc., 7.00%, 9/6/05 2,390,686
3,000,000 Applied Materials Inc., 7.00%, 9/6/05 2,988,357
600,000 Applied Materials, 6.70%, 9/6/05 585,668
5,000,000 BankAmerica Corp., 5.57% V/R, 1/15/27 4,862,690
1,700,000 Bausch & Lomb, Inc., 6.56%, 8/12/26 1,698,703
3,600,000 Cargill, Inc., 8.35%, 2/12/11+ 3,879,000
2,000,000 Charles Schwab Corp., 6.25%, 1/23/03 1,987,807
2,000,000 Charles Schwab Corp., 6.88%, 9/2/03 2,031,358
700,000 Charles Schwab Corp., 7.19%, 5/31/01 712,374
5,000,000 Chase Capital, 5.62% V/R, 8/1/28 4,877,460
3,400,000 Citicorp, 9.50%, 2/1/02 3,650,539
1,500,000 Colonial Pipeline, 7.13%, 8/15/02+ 1,536,640
2,234,332 Continental Airlines, 6.80%, 7/2/07 2,203,979
2,236,331 Continental Airlines, Series 972A, 7.15%, 6/30/07 2,266,488
750,000 Corestates Capital Corp., 5.65% V/R, 1/15/27+ 752,008
2,175,000 Corestates Capital Corp., 5.88%, 10/15/03+ 2,126,234
3,000,000 Dayton Hudson Co., 5.90%, 6/15/37 3,000,699
3,445,000 Dell Computer Corp., 7.10%, 4/15/28 3,333,110
1,000,000 El Paso Natural Gas, 7.75%, 1/15/02 1,024,700
2,916,090 Federal Express, Series 97-B, 7.52%, 1/15/18 3,044,617
200,000 First Bank N.A., 6.00%, 10/15/03 197,422
1,300,000 First Bank Systems, Inc., 7.63%, 5/1/05 1,365,517
2,500,000 First Bank Systems, Inc., 8.00%, 7/2/04# 2,668,230
2,500,000 First Data Corp., 5.80%, 12/15/08 2,321,768
3,000,000 Florida Residential Property & Casualty, 7.25%, 7/1/02+ 3,037,848
1,700,000 Hyundai Semiconductor, 8.25%, 5/15/04 1,445,065
2,000,000 IMC Global, Inc., 7.63%, 11/1/05 2,042,426
2,500,000 Lehman Brothers, Inc., 7.50%, 8/1/26 2,428,960
5,065,000 Levi Strauss & Co., 6.80%, 11/1/03+ 4,753,650
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
88
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
MANAGED FIXED INCOME PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
CORPORATE BONDS & NOTES (continued)
<TABLE>
<C> <S> <C>
1,500,000 Lucky Goldstar-Caltex Oil, 7.88%, 7/1/6+ $ 1,441,535
2,500,000 Lincoln National Corp., 7.25%, 5/15/05 2,543,010
2,512,766 Minnesota, Mining & Manufacturing, 5.62%, 7/15/09+ 2,394,910
1,060,000 Nabisco, Inc., 6.00%, 2/15/11 1,052,246
1,000,000 Northwest Airlines Corp., 6.81%, 2/1/20 977,105
1,750,000 Old Kent Financial Corp., 6.63%, 11/15/05 1,728,946
5,635,000 Oracle Corp., 6.72%, 2/15/04 5,629,759
2,650,000 Paine Webber Group, Inc., 6.45%, 12/1/03 2,610,345
1,250,000 Paine Webber Group, Inc., 6.90%, 8/15/03 1,257,900
5,000,000 Pep Boys, 6.71%, 11/3/04 4,692,495
1,305,000 Petroliam Nasional Berhad, 6.63%, 10/18/01+# 1,266,717
2,750,000 Philip Morris Cos., Inc., 7.63%, 5/15/02 2,827,456
2,709,000 Philips Electronics, 6.75%, 8/15/03 2,707,953
2,000,000 Potomac Capital Investment Corp., 7.32%, 4/14/00+ 2,020,960
2,450,000 Prudential Insurance Co., 7.65%, 7/1/07+ 2,556,600
2,000,000 R&B Falcon Corp., 6.75%, 4/15/05 1,640,000
5,200,000 Reinsurance Group of America, 7.25%, 4/1/06+ 5,311,504
4,000,000 Reliastar Financial Corp., 7.13%, 3/1/03 4,065,852
2,500,000 Reynolds & Reynolds, 7.00%, 12/15/06 2,520,617
1,750,000 Royal Carribbean Cruises, 7.13%, 9/18/02 1,759,772
3,325,000 Scholastic Corp., 7.00%, 12/15/03 3,334,945
2,500,000 Sprint Capital Corp., 5.70%, 11/15/03 2,421,190
3,000,000 Susa Partnership LP, 8.20%, 6/1/17 2,947,491
2,200,000 Terra Nova (U.K.) Holdings, 7.20%, 8/15/07 2,159,370
3,000,000 Texas Utilities Co., 6.20%, 10/1/02 2,980,527
3,000,000 Tommy Hilfiger, 6.50%, 6/1/03 2,924,550
1,500,000 Toro Co., 7.13%, 6/15/07 1,402,593
2,500,000 Tyco International Ltd., 6.38%, 1/15/04 2,485,965
750,000 Tyco International Ltd., 6.50%, 11/1/01 752,908
885,000 United Missouri Bancshares, 7.30%, 2/24/03 907,778
1,000,000 Universal Corp., 9.25%, 2/15/01 1,042,955
250,000 Vastar Resources, Inc., 6.95%, 11/8/06 248,616
1,970,000 Whitman Corp., 7.29%, 9/15/26 2,036,606
2,350,000 Whitman Corp., 7.50%, 2/1/03 2,419,220
---------------
TOTAL CORPORATE BONDS & NOTES (COST $153,538,815) 151,116,291
---------------
GOVERNMENT AGENCY BONDS & NOTES (3.1%)
9,000,000 FNMA, 6.16%, 8/7/28# 8,579,259
5,000,000 FNMA, 6.25%, 5/15/29# 4,933,150
---------------
TOTAL GOVERNMENT AGENCY BONDS & NOTES
(COST $14,161,553) 13,512,409
---------------
MORTGAGE BACKED SECURITIES (25.1%)
FHLMC (0.5%)
240,535 Pool 410425, 7.48% V/R, 9/1/26 246,542
124,446 Pool 410464, 7.38% V/R, 11/1/26 126,289
934,534 Pool 606279, 6.88%, 2/1/15 953,103
660,156 Pool 846367, 7.25%, 4/1/29 679,551
---------------
TOTAL FHLMC (COST $1,999,786) 2,005,485
---------------
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
MANAGED FIXED INCOME PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
MORTGAGE BACKED SECURITIES (continued)
<TABLE>
<C> <S> <C>
FNMA (21.8%)
15,000,000 6.00%, 4/1/05 $ 14,639,047
5,000,000 Pool 252494, 6.00%, 6/1/14 4,885,000
137,144 Pool 342042, 6.78%, 6/1/25 140,000
425,074 Pool 344689, 6.99%, 11/1/25 434,324
369,245 Pool 344692, 6.88% V/R, 10/1/25 377,058
177,213 Pool 347712, 7.38% V/R, 6/1/26 181,376
4,914,627 Pool 375168, 7.13%, 6/1/04 5,062,749
4,959,409 Pool 380268, 6.18%, 8/1/08 4,881,904
5,208,575 Pool 408118, 6.50%, 1/1/28 5,101,695
4,652,169 Pool 415414, 6.50%, 2/1/28 4,553,589
8,398,457 Pool 415714, 6.00%, 4/1/28 7,994,743
4,450,461 Pool 417648, 6.00%, 2/1/13 4,349,925
9,061,374 Pool 446118, 6.00%, 12/1/28 8,625,794
2,609,912 Pool 482516, 6.00%, 1/1/14 2,550,954
4,946,417 Pool 483920, 6.00%, 11/1/27 4,708,643
9,919,377 Pool 484776, 6.00%, 3/1/14 9,691,231
12,688,580 Pool 486524, 6.50%, 2/1/29 12,419,709
1,447,541 Pool 73272, 6.48%, 12/1/05 1,451,808
3,424,522 Pool 73919, 6.80%, 1/1/04 3,478,363
---------------
TOTAL FNMA (COST $97,356,208) 95,527,912
---------------
GNMA (2.8%)
691 Pool 2218, 6.50%, 12/15/02 696
2,596,456 Pool 473917, 7.00%, 4/15/28 2,604,038
43 Pool 665, 7.50%, 5/15/01 44
9,870,713 Pool 780626, 7.00%, 8/15/27 9,902,991
---------------
TOTAL GNMA (COST $12,707,093) 12,507,769
---------------
TOTAL MORTGAGE BACKED SECURITIES (COST $112,063,087) 110,041,166
---------------
MUNICIPAL BONDS (2.6%)
3,805,000 Hudson County, NJ, Import Authority Facilities, Leasing RV, FSA insured, 7.40%, 12/1/25 4,064,098
7,500,000 New York State, GO Bonds, Series B, 6.13%, 3/15/07 7,380,795
---------------
TOTAL MUNICIPAL BONDS (COST $11,396,102) 11,444,893
---------------
MUNICIPAL NOTES (1.8%)
3,500,000 Denver, CO, City and County SD #1, Educational Facilities RV Taxable Pension, School Facilities
Lease, AMBAC insured, 6.67%, 12/15/04 3,549,840
4,450,000 Philadelphia, PA, IDR, Pension Funding, Retirement System, Series A, MBIA insured, 5.69%,
4/15/07 4,253,808
---------------
TOTAL MUNICIPAL NOTES (COST $7,950,000) 7,803,648
---------------
U.S. TREASURY OBLIGATIONS (7.1%)
2,000,000 U.S. Treasury Bonds, 7.00%, 7/15/06** 2,134,376
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
89
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
MANAGED FIXED INCOME PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
U.S. TREASURY OBLIGATIONS (continued)
<TABLE>
<C> <S> <C>
26,550,000 U.S. Treasury Bonds, 6.75%, 8/15/26** $ 28,889,721
---------------
TOTAL U.S. TREASURY OBLIGATIONS (COST $33,076,461) 31,024,097
---------------
REPURCHASE AGREEMENTS (3.6%)
15,740,368 Bear, Stearns & Cos., Inc., 4.90%, 6/1/99 (cost $15,740,368)** 15,740,368
---------------
TOTAL INVESTMENTS (100.0%) (COST $446,796,844) $ 439,124,917
---------------
---------------
- -----------------------------------------------------------------
POSITIVE RETURN BOND PORTFOLIO
- -----------------------------------------------------------------
ASSET BACKED SECURITIES (24.3%)
4,100,000 Capital Automotive Receivables Asset Trust, Series 1999-1, Class A2, 5.58%, 6/15/02 $ 4,090,263
5,587,445 CIT Marine Trust, Series 1999-A, Class A1, 5.45%, 9/15/06 5,596,525
12,337,000 First Chicago Master Trust II, Series 1997-T, Class A, 4.97% V/R, 10/15/02 12,339,406
12,100,000 First Union Master Credit Card Trust,
Series 1996-1 A, 9/15/03 12,121,236
4,600,000 Fleet Credit Card Master Trust,
Series 1995-A, Class A, 5.12% V/R, 1/1/03 4,605,405
5,628,560 Ford Credit Auto Owner Trust,
Series 1998-C, Class A3, 5.73%, 11/15/00 5,642,378
12,700,000 Ford Motor Credit Auto Owner Trust,
Series 1998-B, Class A3, 5.85%, 10/15/01 12,746,292
12,125,000 Household Credit Card Master Trust I,
Series 1995-1, Class A, 5.10% V/R, 12/15/02 12,054,493
---------------
TOTAL ASSET BACKED SECURITIES (COST $69,299,563) 69,195,998
---------------
CORPORATE BONDS & NOTES (3.7%)
10,375,000 Merrill Lynch & Co., 5.05% V/R, 9/25/00 (cost $10,366,700) 10,373,589
---------------
GOVERNMENT AGENCY BONDS & NOTES (12.6%)
8,006,000 FHLB, 4.82%, 11/17/99 7,825,225
13,400,000 FNMA, 4.70%, 10/21/99 13,146,298
15,275,000 FNMA, 4.82%, 2/1/00 14,768,741
---------------
TOTAL GOVERNMENT AGENCY BONDS & NOTES
(COST $35,750,629) 35,740,264
---------------
U.S. TREASURY OBLIGATIONS (13.4%)
15,000,000 U.S. Treasury Note, 5.38%, 1/31/00# 15,037,500
1,650,000 U.S. Treasury Bond, 6.13%, 11/15/27# 1,667,531
14,150,000 U.S. Treasury Bond, 6.38%, 8/15/27# 14,742,530
6,250,000 U.S. Treasury Bond, 6.63%, 2/15/27# 6,708,987
---------------
TOTAL U.S. TREASURY OBLIGATIONS (COST $40,028,774) 38,156,548
---------------
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
POSITIVE RETURN BOND PORTFOLIO (continued)
- -----------------------------------------------------------------
REPURCHASE AGREEMENTS (46.0%)
10,000,000 Banc America, 4.90%, 6/1/99, collateralized by $9,934,502 U.S. Government Agency Securities,
7.50%, 5/1/12, with an aggregate market value of $10,215,450 $ 10,000,000
55,000,000 Banc One Capital Markets Agency, 4.87%, 6/1/99, collateralized by $56,386,000
U.S. Government Agency Securities, 6/24/99--7/30/99, with an aggregate market value of
$56,141,731 55,000,000
35,247,159 Bear, Stearns & Cos., Inc., 4.90%, 6/1/99** 35,247,159
10,000,000 Credit Suisse First Boston, 4.93%, 6/1/99, collateralized by $10,306,785
U.S. Government Agency Securities,
6.00%--6.50%, 11/15/07--3/15/29, with an aggregate market value of $10,250,649 10,000,000
10,000,000 Lehman Brothers Inc., 4.82%, 6/1/99, collateralized by $10,721,494
U.S. Government Obligations, with an aggregate market value of $10,201,494 10,000,000
272,473 Merrill Lynch & Co., 4.68%, 6/1/99, collateralized by $702,742
U.S. Government Securities, Securities, 3.38%, 1/15/07--6/1/17, with an aggregate market
value of $277,928 272,473
10,000,000 Salomon Smith Barney Holdings, 4.90%, 6/1/99, collateralized by $10,970,804
U.S. Government Agency Securities,
5.50%--10.50%, 2/1/00--5/1/31, with an aggregate market value of $10,217,094 10,000,000
---------------
TOTAL REPURCHASE AGREEMENTS (COST $130,519,632) 130,519,632
---------------
TOTAL INVESTMENTS (100.0%) (COST $285,965,298) $ 283,986,031
---------------
---------------
- -----------------------------------------------------------------
STRATEGIC VALUE BOND PORTFOLIO
- -----------------------------------------------------------------
ASSET BACKED SECURITIES (6.6%)
3,000,000 Aesop Funding II LLC, Series 1998-1 A, 6.14% V/R, 5/20/06+ $ 2,965,035
3,500,000 Chevy Chase Master Credit Card Trust, Series 1998, Class A, 5.27% V/R, 10/16/06 3,510,273
2,879,183 Green Tree Financial Corp.,
Series 1997-7 A8, 6.86%, 9/15/16 2,852,565
2,000,000 Loop Funding Master Trust I,
Series 1997-AER, Class B1, 5.37% V/R, 12/26/07+ 1,988,750
2,000,000 Oakwood Mortgage Investors, Inc.,
Series 1995-A, Class A3, 7.10% V/R, 9/15/20 2,044,570
2,000,000 Rental Car Finance Corp., Series 1997-1 B3, 6.70% V/R, 9/25/07 1,934,063
989,264 Sequoia Mortgage Trust, Series 2, Class A1, 6.04% V/R, 10/25/24 986,791
---------------
TOTAL ASSET BACKED SECURITIES (COST $16,400,346) 16,282,047
---------------
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
90
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
STRATEGIC VALUE BOND PORTFOLIO (continued)
- -----------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS (7.9%)
1,913,891 AMBS, Series CS-1012 1, 7.06% V/R, 7/25/02 $ 1,939,310
2,300,000 GNMA, Series 1998-14, Class PD, 6.00%, 6/20/23 2,240,361
4,000,000 Merrill Lynch Mortgage Investors, Inc.,
Series 1997-CI, Class A3, 7.12%, 6/18/29 4,095,460
1,500,000 Saco I, Inc.,
Series 1997-2, Class 1A2, 7.00% V/R, 8/25/36 1,504,922
1,628,896 Vendee Mortgage Trust, Series 1992-2,
Class G, 7.25%, 2/15/19 1,664,970
4,500,000 Vendee Mortgage Trust, Series 1994-1,
Class 2E, 6.50%, 1/15/17 4,468,703
3,500,000 Vendee Mortgage Trust, Series 1996-2,
Class 1E, 6.75%, 5/15/20 3,500,753
---------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(COST $19,650,305) 19,414,470
---------------
CORPORATE BONDS & NOTES (45.2%)
750,000 AK Steel Corp., 9.13%, 12/15/06 781,875
1,250,000 American Standard Cos. Inc., 7.13%, 2/15/03 1,209,375
2,000,000 AmSouth Bancorp, 6.13%, 3/1/09 1,887,928
2,500,000 Applied Materials Inc., 7.00%, 9/6/05 2,490,298
525,000 Aramark Corp., 6.75%, 8/2/04 515,537
1,000,000 Atlas Air, Inc., 9.25%, 4/15/08 975,000
3,000,000 BankAmerica Corp., 5.57% V/R, 1/15/27 2,917,614
1,000,000 Barrett Resources Corp., 7.55%, 2/1/07 947,090
2,000,000 Bausch & Lomb, Inc., 6.75%, 12/15/04 1,974,646
500,000 Buckeye Technologies Inc., 8.50%, 12/15/05 505,000
1,000,000 Calenergy Co., Inc., 7.23%, 9/15/05 1,001,760
500,000 Calpine Corp., 7.63%, 4/15/06 491,250
500,000 Chancellor Media Group, 9.38%, 10/1/04 516,250
3,000,000 Charles Schwab Corp., 6.88%, 9/2/03 3,047,037
1,000,000 Charter Comm. Holdings LLC, 8.63%, 4/1/09+ 980,000
3,000,000 Chase Capital, 5.62% V/R, 8/1/28 2,926,476
2,681,198 Continental Airlines, 6.80%, 7/2/07 2,644,774
500,000 CSC Holdings, Inc., 7.25%, 7/15/08 494,375
3,000,000 Dell Computer Corp., 7.10%, 4/15/28 2,902,563
3,000,000 Equitable Life Assurance Society, 6.95%, 12/1/05+ 3,035,919
2,000,000 Farmers Exchange Capital, 7.20%, 7/15/48+ 1,872,822
1,944,060 Federal Express, Series 97-B, 7.52%, 1/15/18 2,029,745
500,000 Federal-Mogul Corp., 7.50%, 7/1/04 490,318
2,500,000 First Bank Systems, Inc., 8.00%, 7/2/04 2,668,230
2,000,000 Genfinance Luxembourg SA, 5.69% V/R, 5/29/49 1,970,000
500,000 Golden State Holdings, 7.13%, 8/1/05 486,293
1,000,000 Gulf Canada Resources Ltd., 8.35%, 8/1/06 997,500
500,000 HMH Properties, Series A, 7.88%, 8/1/05 476,250
1,000,000 Hyundai Semiconductor, 8.25%, 5/15/04 850,038
500,000 Imax Corp., 7.88%, 12/1/05 487,500
2,000,000 IMC Global, Inc., 7.63%, 11/1/05 2,042,426
500,000 Level 3 Communications, Inc., 9.13%, 5/1/08# 490,000
2,000,000 Levi Strauss & Co., 6.80%, 11/1/03+ 1,877,058
2,500,000 Lincoln National Corp., 7.00%, 3/15/18 2,444,310
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
STRATEGIC VALUE BOND PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
CORPORATE BONDS & NOTES (continued)
<TABLE>
<C> <S> <C>
500,000 Lyondell Chemical Co., 9.63%, 5/1/07+** $ 507,500
1,000,000 Mallinckrodt, Inc., 6.30%, 3/15/01+ 989,074
4,700,000 Massachusetts Institute of Technology, 7.25%, 11/2/96 4,877,735
750,000 MGM Grand Inc., 6.95%, 2/1/05 704,200
1,000,000 Nabisco, Inc., 6.00%, 2/15/11 992,685
500,000 Nextel Communications, 9.75%, 2/15/02 512,500
500,000 Niagara Mohawk Power, 7.38%, 7/1/03 501,137
700,000 Northwest Airlines Corp., 6.81%, 2/1/20 683,974
1,000,000 Northwest Airlines Corp., 8.38%, 3/15/04 990,458
2,225,000 Old Kent Financial Corp., 6.63%, 11/15/05 2,198,231
2,500,000 Oracle Corp., 6.72%, 2/15/04 2,497,675
750,000 Outdoor Systems, Inc., 8.88%, 6/15/05 787,500
1,000,000 Owens-Illnois, Inc., 7.85%, 5/15/04 1,011,549
750,000 Packaging Resources, Inc., 11.63%, 5/1/02 768,750
2,000,000 Pep Boys, 6.71%, 11/3/04 1,876,998
1,400,000 Potomac Capital Investment, 7.05%, 10/2/01+ 1,399,475
1,250,000 Premier Parks, Inc., 9.25%, 4/1/06 1,275,000
1,750,000 Prudential Insurance Co., 7.65%, 7/1/07+ 1,826,143
750,000 Qwest Communications International, Inc., 7.50%, 11/1/08 753,750
1,000,000 R&B Falcon Corp., 6.75%, 4/15/05 820,000
500,000 Randall's Food Markets, 9.38%, 7/1/07 541,250
1,000,000 Regal Cinemas, Inc., 9.50%, 6/1/08 952,500
2,500,000 Reinsurance Group of America, 7.25%, 4/1/06+ 2,499,625
2,500,000 Reliastar Financial Corp., 7.13%, 3/1/03 2,541,158
3,000,000 Royal Carribbean Cruises, 7.13%, 9/18/02 3,016,749
500,000 Special Devices, Inc., 11.38%, 12/15/07 505,000
2,500,000 Susa Partnership LP, 8.20%, 6/1/17 2,456,243
1,000,000 Teekay Shipping Corp., 8.32%, 2/1/08 966,250
1,000,000 Tenet Healthcare Corp., 7.88%, 1/15/03 990,000
2,500,000 Tenneco, Inc., 10.08%, 2/1/01 2,632,823
2,500,000 Terra Nova (U.K.) Holdings, 7.20%, 8/15/07 2,453,830
1,875,000 Texas Utilities Co., 6.20%, 10/1/02 1,862,829
1,400,000 Tommy Hilfiger, 6.50%, 6/1/03 1,364,790
1,500,000 Toro Co., 7.13%, 6/15/07 1,402,593
1,250,000 Tricon Global Restaurant, 7.65%, 5/15/08 1,246,488
1,000,000 Triton Energy Ltd. Corp., 8.75%, 4/15/02 990,000
3,500,000 Van Kampen, CLO-I, 5.30% V/R, 10/8/07 3,545,885
2,000,000 Whitman Corp., 7.29%, 9/15/26 2,067,620
2,000,000 Williams Cos., Inc., 6.13%, 2/15/02 1,970,524
---------------
TOTAL CORPORATE BONDS & NOTES (COST $113,951,230) 111,407,748
---------------
GOVERNMENT AGENCY BONDS & NOTES (4.4%)
7,350,000 FNMA, 6.16%, 8/7/28# 7,006,395
4,000,000 FNMA, 6.25%, 5/15/29# 3,946,520
---------------
TOTAL GOVERNMENT AGENCY BONDS & NOTES
(COST $10,823,842) 10,952,915
---------------
INVESTMENT IN LIMITED PARTNERSHIP (0.3%)
743,000 PPM America CBO II*** 847,167
---------------
TOTAL INVESTMENT IN LIMITED PARTNERSHIP (COST $743,000) 847,167
---------------
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
91
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
STRATEGIC VALUE BOND PORTFOLIO (continued)
- -----------------------------------------------------------------
MORTGAGE BACKED SECURITIES (24.2%)
FNMA (13.2%)
5,000,000 6.00%, 5/18/29 $ 4,879,688
2,479,705 Pool 380268, 6.18%, 8/1/08 2,440,952
2,969,267 Pool 380268, 6.20%, 5/2/05 2,953,215
1,965,851 Pool 380581, 7.13%, 6/1/04 2,025,099
1,894,027 Pool 408118, 6.50%, 1/3/28 1,855,162
2,423,005 Pool 415414, 6.50%, 2/1/28 2,371,661
3,813,220 Pool 415714, 6.00%, 4/1/28 3,629,918
2,848,295 Pool 417648, 6.00%, 2/1/13 2,783,952
5,005,310 Pool 421825, 6.00%, 6/1/28 4,763,498
2,945,828 Pool 486524, 6.50%, 2/1/29 2,883,406
1,956,870 Pool 73919, 6.80%, 1/1/04 1,987,636
---------------
TOTAL FNMA (COST $33,077,972) 32,574,187
---------------
GNMA (11.0%)
2,694,835 Pool 345066, 6.50%, 10/15/23 2,650,451
2,742,933 Pool 346960, 6.50%, 12/15/23 2,697,757
2,450,434 Pool 354692, 6.50%, 11/15/23 2,410,075
3,045,270 Pool 361398, 6.50%, 1/15/24 2,991,034
3,198,405 Pool 366641, 6.50%, 11/15/23 3,145,727
3,333,622 Pool 473918, 7.00%, 4/15/28 3,343,356
9,870,713 Pool 780626, 7.00%, 3/23/29 9,902,984
---------------
TOTAL GNMA (COST $27,608,427) 27,141,384
---------------
TOTAL MORTGAGE BACKED SECURITIES (COST $60,686,399) 59,715,571
---------------
MUNICIPAL BONDS & NOTES (3.4%)
2,000,000 Hudson County, NJ, Import Authority Facilities, Leasing RV FSA insured, 7.40%, 12/1/25 2,136,188
3,160,000 New York, NY, GO Bonds, 6.10%, 8/1/01 3,198,719
1,045,000 Washington State, GO Bonds, State Housing Trust Fund, Series T, 6.60%, 1/1/03 1,065,590
2,010,000 Western Minnesota, Power Agency RV,
Series A, AMBAC insured, 6.33%, 1/1/02 2,021,698
---------------
TOTAL MUNICIPAL BONDS & NOTES (COST $8,287,371) 8,422,195
---------------
U.S. TREASURY OBLIGATIONS (5.7%)
13,000,000 U.S. Treasury Bonds, 6.75%, 8/15/26# 14,145,626
---------------
TOTAL U.S. TREASURY OBLIGATIONS (COST $15,310,391) 14,145,626
---------------
REPURCHASE AGREEMENTS (2.3%)
5,166,334 Bear, Stearns & Cos., Inc., 4.90%, 6/1/99 (cost $5,166,334)** 5,166,334
---------------
TOTAL INVESTMENTS (100.0%) (COST $251,019,218) $ 246,354,082
---------------
---------------
- -----------------------------------------------------------------
INDEX PORTFOLIO
- -----------------------------------------------------------------
COMMON STOCKS (96.7%)
AGRICULTURAL PRODUCTION--CROPS (0.1%)
39,700 Pioneer Hi-Bred International, Inc. $ 1,488,750
---------------
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INDEX PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
<TABLE>
<C> <S> <C>
AMUSEMENT & RECREATION SERVICES (0.6%)
21,000 Harrah's Entertainment, Inc.# $ 454,131
340,800 Walt Disney Co.# 9,925,806
---------------
10,379,937
---------------
APPAREL & ACCESSORY STORES (0.6%)
94,500 Gap, Inc. 5,912,156
37,500 Limited, Inc. 1,832,817
23,600 Nordstrom, Inc.# 837,800
53,500 TJX Cos., Inc. 1,605,000
---------------
10,187,773
---------------
APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS (0.1%)
10,700 Liz Claiborne, Inc.# 385,200
19,900 V.F. Corp. 915,400
---------------
1,300,600
---------------
AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS (0.1%)
24,900 Autozone, Inc.* 720,549
8,700 Pep Boys--Manny, Moe & Jack 164,219
---------------
884,768
---------------
AUTOMOTIVE REPAIR, SERVICES & PARKING (0.0%)
11,900 Ryder System, Inc. 285,600
---------------
BUILDING CONSTRUCTION--GENERAL CONTRACTORS & OPERATIVE
BUILDERS (0.0%)
9,900 Centex Corp.# 366,922
8,000 Kaufman & Broad Home Corp. 193,006
7,200 Pulte Corp. 171,454
---------------
731,382
---------------
BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS (1.0%)
244,400 Home Depot, Inc. 13,900,255
67,984 Lowe's Cos., Inc. 3,530,925
---------------
17,431,180
---------------
BUSINESS SERVICES (7.7%)
59,500 3Com Corp.* 1,636,250
10,100 Adobe Systems, Inc. 748,666
170,300 America Online, Inc.# 20,329,563
9,800 Autodesk, Inc. 270,731
102,100 Automatic Data Processing, Inc. 4,205,249
39,100 BMC Software, Inc.* 1,933,006
28,500 Cabletron Systems, Inc.* 423,942
127,400 Cendant Corp. 2,348,941
23,700 Ceridian Corp. 782,100
89,301 Computer Associates International, Inc. 4,225,008
26,300 Computer Sciences Corp.* 1,701,288
60,900 Compuware Corp.* 1,891,707
81,700 Electronic Data Systems Corp. 4,595,625
24,400 Equifax, Inc. 878,400
73,400 First Data Corp. 3,298,417
52,800 IMS Health, Inc. 1,300,200
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
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COMMON STOCKS (continued)
BUSINESS SERVICES (continued)
<TABLE>
<C> <S> <C>
23,100 Interpublic Group of Cos., Inc. $ 1,749,828
45,922 McKesson HBOC, Inc.# 1,564,217
836,800 Microsoft Corp.* 67,518,113
56,000 Novell, Inc.* 1,316,000
27,900 Omnicom Group, Inc. 1,953,000
238,625 Oracle Corp.* 5,920,884
44,400 Parametric Technology Co.* 616,052
38,600 PeopleSoft, Inc.* 624,838
4,400 Shared Medical Systems Corp.# 289,300
127,600 Sun Microsystems, Inc.* 7,624,100
30,900 US Trust, Inc. 942,450
---------------
140,687,875
---------------
CHEMICALS & ALLIED PRODUCTS (11.5%)
251,600 Abbott Laboratories 11,369,183
38,000 Air Products and Chemicals, Inc. 1,558,000
9,500 Alberto Culver Co. 251,159
10,900 Allergan, Inc.# 1,013,700
16,500 ALZA Corp.*# 588,846
43,600 Avon Products, Inc. 2,155,481
47,400 Baxter International, Inc. 3,060,267
329,400 Bristol-Myers Squibb Co. 22,605,076
19,500 Clorox Co. 1,968,285
48,500 Colgate-Palmolive Co. 4,843,939
36,700 Dow Chemical Co. 4,459,050
186,600 E.I. du Pont de Nemours & Co. 12,210,642
13,100 Eastman Chemical Co. 663,194
21,500 Ecolab, Inc. 913,750
182,300 Eli Lilly & Co. 13,023,060
5,400 FMC Corp. 357,417
12,300 Goodrich (B.F.) Co.# 498,150
9,800 Great Lakes Chemical Corp. 442,841
16,600 Hercules, Inc.# 579,965
17,500 International Flavors & Fragrances, Inc. 719,693
222,900 Johnson & Johnson 20,646,119
11,800 Mallinckrodt, Inc. 408,582
395,000 Merck & Co., Inc. 26,662,500
103,900 Monsanto Co.# 4,311,850
20,100 Morton International, Inc. 783,900
10,900 Nalco Chemical Co. 365,150
215,200 Pfizer, Inc. 23,026,400
84,200 Pharmacia & Upjohn, Inc. 4,667,841
29,100 PPG Industries, Inc. 1,766,008
26,100 Praxair, Inc. 1,274,010
220,100 Procter & Gamble Co. 20,551,840
27,800 Rohm & Haas Co.# 1,115,479
243,600 Schering-Plough Corp.# 10,977,226
28,500 Sherwin-Williams Co. 878,163
16,600 Sigma Aldrich 531,200
22,000 Union Carbide Corp.# 1,128,878
12,200 W.R. Grace & Co.* 217,314
136,200 Warner-Lambert Co. 8,444,400
15,800 Watson Pharmaceuticals, Inc.* 605,338
---------------
211,643,896
---------------
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COMMON STOCKS (continued)
<TABLE>
<C> <S> <C>
COMMUNICATIONS (9.6%)
94,900 Airtouch Communications, Inc.* $ 9,537,450
45,600 Alltel Corp. 3,268,953
182,200 Ameritech Corp. 11,991,044
521,661 AT&T Corp. # 28,951,854
257,374 Bell Atlantic Corp. 14,091,230
323,300 BellSouth Corp. 15,255,723
117,100 CBS Corp. 4,888,925
22,800 CenturyTel, Inc. 873,525
53,600 Clear Channel Communications, Inc.# 3,540,952
122,600 Comcast Corp.--Class A# 4,720,100
28,400 Frontier Corp. 1,494,553
160,000 GTE Corp. 10,090,004
11,900 King World Productions, Inc. 397,164
303,895 MCI Worldcom, Inc.*# 26,248,937
100,600 MediaOne Group, Inc.* 7,431,833
47,700 Nextel Communications, Inc.*# 1,758,940
324,300 SBC Communications, Inc. 16,579,840
74,100 Sprint Corp. (FON Group) 8,354,775
72,900 Sprint Corp. (PCS Group)* 3,280,500
83,419 US West, Inc. 4,509,841
---------------
177,266,143
---------------
DEPOSITORY INSTITUTIONS (6.8%)
29,550 AmSouth Bancorp. 838,482
286,874 Bank of America Corp. 18,557,171
126,100 Bank of New York Co., Inc. 4,508,075
194,938 Bank One Corp. 11,026,182
49,100 BankBoston Corp. 2,326,114
15,800 Bankers Trust Corp. 1,462,490
51,500 BB&T Corp.# 1,879,750
140,300 Chase Manhattan Corp. 10,171,750
25,800 Comerica, Inc. 1,559,289
44,100 Fifth Third Bancorp 3,007,069
164,286 First Union Corp. 7,567,430
114,300 Firstar Corp.# 3,293,268
94,200 Fleet Financial Group, Inc. 3,873,976
9,500 Golden West Financial Corp. 901,320
34,930 Huntington Bancshares, Inc. 1,209,453
28,900 J.P. Morgan & Co., Inc. 4,026,134
75,400 KeyCorp 2,620,150
86,600 Mellon Bank Corp. 3,090,540
26,100 Mercantile Bancorp 1,525,220
54,100 National City Corp. 3,580,747
18,500 Northern Trust Corp. 1,671,939
49,900 PNC Bank Corp. 2,856,775
36,700 Regions Financial Corp. 1,390,015
17,700 Republic New York Corp. 1,202,499
27,400 SouthTrust Corp. 1,066,888
26,600 State Street Corp. 2,028,250
28,700 Summit Bancorp# 1,174,907
53,100 Suntrust Banks, Inc. 3,584,250
44,250 Synovus Financial Corp. 890,532
120,778 U.S. Bancorp 3,925,288
22,800 Union Planters Corp. 941,926
33,600 Wachovia Corp. 2,965,200
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
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COMMON STOCKS (continued)
DEPOSITORY INSTITUTIONS (continued)
<TABLE>
<C> <S> <C>
98,336 Washington Mutual, Inc. $ 3,755,214
272,600 Wells Fargo & Co. 10,904,000
---------------
125,382,293
---------------
EATING & DRINKING PLACES (0.6%)
22,800 Darden Restaurants, Inc. 485,926
224,400 McDonald's Corp. 8,639,400
25,350 Tricon Global Restaurants, Inc.* 1,476,641
20,700 Wendy's International, Inc. 564,075
---------------
11,166,042
---------------
ELECTRIC, GAS & SANITARY SERVICES (3.1%)
31,600 AES Corp.# 1,572,100
22,800 Ameren Corp. 933,378
31,800 American Electric Power Co. 1,379,332
26,200 Browning-Ferris Industries 1,087,300
25,100 Carolina Power & Light Co. 1,098,125
35,300 Central & Southwest Corp. 908,975
26,300 CINergy Corp. 897,493
19,500 CMS Energy Corp.# 906,750
35,300 Coastal Corp. 1,361,260
13,850 Columbia Energy Group 740,975
38,600 Consolidated Edison Co. 1,874,514
15,900 Consolidated Natural Gas Co. 945,059
24,700 Constellation Energy Group 770,334
32,400 Dominion Resources, Inc. 1,399,278
24,000 DTE Energy Co. 1,045,502
60,000 Duke Energy Corp. 3,618,751
3,700 Eastern Enterprises 128,347
58,500 Edison International 1,608,750
58,200 Enron Corp. 4,154,037
40,800 Entergy Corp.# 1,323,451
39,300 FirstEnergy Corp. 1,250,234
29,900 FPL Group, Inc. 1,739,810
21,200 GPU, Inc. 923,527
54,800 Laidlaw, Inc. 383,600
19,000 New Century Energies, Inc. 768,314
31,100 Niagara Mohawk Holdings, Inc. 462,618
7,900 Nicor, Inc. 297,241
25,300 Northern States Power Co.# 659,387
5,200 Oneok, Inc. 156,000
49,300 PacifiCorp 896,647
37,100 Peco Energy Co. 1,815,583
5,800 People's Energy Corp. 223,300
63,400 PG&E Corp. 2,139,750
25,100 PP&L Resources, Inc. 753,000
37,000 Public Service Enterprise Group, Inc. 1,551,688
47,224 Reliant Energy, Inc. 1,440,335
39,850 Sempra Energy# 856,781
18,300 Sonat, Inc. 648,511
115,600 Southern Co. 3,280,159
46,822 Texas Utilities Co. 2,106,990
99,267 Waste Management, Inc. 5,248,478
<CAPTION>
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- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
ELECTRIC, GAS & SANITARY SERVICES (continued)
<TABLE>
<C> <S> <C>
70,900 Williams Cos., Inc. $ 3,673,507
---------------
59,029,171
---------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT (8.5%)
24,000 Advanced Micro Devices, Inc. 444,000
13,700 Andrew Corp.* 212,351
36,000 Ascend Communications, Inc.* 3,336,751
15,700 Cooper Industries, Inc. 778,134
72,500 Emerson Electric Co. 4,630,939
543,300 General Electric Co. 55,246,827
27,700 General Instrument Corp.* 1,071,646
13,100 Harris Corp. 495,347
9,300 Honeywell, Inc. 880,014
552,800 Intel Corp. 29,885,753
23,500 LSI Logic Corp.* 870,970
438,200 Lucent Technologies, Inc.# 24,922,630
14,900 Maytag Corp. 1,051,382
41,000 Micron Technology, Inc. 1,555,438
99,500 Motorola, Inc. 8,239,848
27,700 National Semiconductor Corp.* 536,691
6,900 National Service Industries 254,009
109,980 Nortel Networks Corp.# 8,248,500
12,800 Raychem Corp. 444,800
12,500 Scientific-Atlanta, Inc. 441,407
64,400 Tellabs, Inc.* 3,767,400
64,600 Texas Instruments, Inc.# 7,065,627
9,400 Thomas & Betts Corp.# 402,441
12,600 Whirlpool Corp. 812,700
---------------
155,595,605
---------------
ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT & RELATED SERVICES (0.1%)
27,400 Dun & Bradstreet Corp. 959,000
7,500 EG&G, Inc. 222,659
40,650 Paychex, Inc. 1,204,257
---------------
2,385,916
---------------
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT (0.8%)
5,100 Ball Corp. 248,312
11,350 Crane Co. 341,209
20,300 Crown Cork & Seal Co., Inc. 636,916
22,200 Danaher Corp. 1,341,714
28,300 Fortune Brands, Inc. 1,156,770
183,900 Gillette Co. 9,378,900
17,950 Parker-Hannifin Corp. 784,194
10,900 Snap-On, Inc. 394,447
14,700 Stanley Works 478,673
---------------
14,761,135
---------------
FOOD & KINDRED PRODUCTS (4.5%)
6,100 Adolph Coors Co. 289,750
79,300 Anheuser-Busch Cos., Inc. 5,793,863
98,077 Archer Daniels Midland Co. 1,471,157
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
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COMMON STOCKS (continued)
FOOD & KINDRED PRODUCTS (continued)
<TABLE>
<C> <S> <C>
47,400 Bestfoods, Inc. $ 2,370,000
11,400 Brown-Forman Corp. 760,241
73,700 Campbell Soup Co.# 3,252,014
408,700 Coca-Cola Co.# 27,919,325
70,400 Coca-Cola Enterprises, Inc. 2,552,000
81,200 ConAgra, Inc.# 2,116,280
25,400 General Mills, Inc. 2,041,530
60,000 Heinz (H.J.) Co. 2,898,753
23,700 Hershey Foods Corp. 1,285,725
67,200 Kellogg Co. 2,331,006
243,200 PepsiCo, Inc. 8,709,603
22,600 Quaker Oats Co. 1,493,016
54,400 Ralston-Ralston Purina Group 1,482,400
53,800 RJR Nabisco Holdings Corp. 1,664,439
151,100 Sara Lee Corp. 3,626,400
66,100 Seagram Co. Ltd.# 3,433,070
94,824 Unilever NV--NY Shares# 6,193,023
19,300 Wrigley (Wm) Jr. Co.# 1,680,310
---------------
83,363,905
---------------
FOOD STORES (0.7%)
40,700 Albertson's, Inc.# 2,177,450
45,600 American Stores Co. 1,504,800
6,400 Great Atlantic & Pacific Tea Co. 209,600
68,200 Kroger Co.*# 3,993,970
80,600 Safeway, Inc.*# 3,747,900
24,600 Winn-Dixie Stores, Inc.# 880,992
---------------
12,514,712
---------------
FURNITURE & FIXTURES (0.1%)
56,300 Masco Corp. 1,608,074
---------------
GENERAL MERCHANDISE STORES (3.0%)
18,100 Consolidated Stores Corp.* 622,190
36,200 Costco Cos., Inc.* 2,624,501
73,100 Dayton Hudson Corp. 4,605,300
17,700 Dilliards, Inc. 621,717
36,689 Dollar General Corp. 974,511
34,800 Federated Department Stores, Inc.*# 1,896,600
11,800 Harcourt General, Inc.# 580,415
43,700 J.C. Penney Co., Inc. 2,258,746
81,700 KMart Corp. 1,256,143
26,200 Kohl's Corp.* 1,786,513
58,050 May Department Stores Co. 2,514,293
63,500 Sears, Roebuck and Co. 3,036,097
737,200 Wal-Mart Stores, Inc.# 31,423,150
---------------
54,200,176
---------------
HEALTH SERVICES (0.3%)
107,000 Columbia HCA Healthcare Corp. 2,521,190
18,400 HCR Manor Care, Inc.* 492,200
70,200 HEALTHSOUTH Corp.*# 938,928
5,631 Lifepoint Hospitals, Inc.* 56,310
51,400 Tenet Healthcare Corp.* 1,259,300
<CAPTION>
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- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
HEALTH SERVICES (continued)
<TABLE>
<C> <S> <C>
5,631 Triad Hospitals, Inc.* $ 57,018
---------------
5,324,946
---------------
HEAVY CONSTRUCTION OTHER THAN BUILDING CONSTRUCTION-- CONTRACTORS (0.1%)
12,500 Fluor Corp. 465,625
6,800 Foster Wheeler Corp. 93,500
44,900 Halliburton Co. 1,857,738
---------------
2,416,863
---------------
HOLDING & OTHER INVESTMENT OFFICES (0.1%)
53,183 Conseco, Inc.# 1,625,409
---------------
HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES (0.1%)
16,600 Circuit City Stores 1,192,091
---------------
HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGING PLACES (0.2%)
43,300 Hilton Hotels Corp. 595,375
40,200 Marriott International--Class A 1,530,115
32,600 Mirage Resorts, Inc.* 668,300
---------------
2,793,790
---------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT (8.3%)
22,600 Apple Computer, Inc.*# 995,814
61,200 Applied Materials, Inc.* 3,362,180
54,270 Baker Hughes, Inc. 1,689,160
14,500 Black & Decker Corp. 825,597
3,900 Briggs & Stratton Corp. 243,750
15,200 Brunswick Corp. 364,800
12,300 Case Corp. 578,100
59,500 Caterpillar, Inc. 3,265,066
6,400 Cincinnati Milacron, Inc. 136,400
261,800 Cisco Systems, Inc.* 28,503,477
279,693 Compaq Computer Corp. 6,625,232
7,000 Cummins Engine Co., Inc. 354,381
8,300 Data General Corp.* 108,944
39,500 Deere & Co. 1,503,469
421,800 Dell Computer Corp.*# 14,525,738
37,000 Dover Corp. 1,394,442
83,200 EMC Corp.* 8,288,804
25,900 Gateway 2000, Inc.*# 1,575,045
28,000 Halliburton Co. 1,158,504
7,900 Harnischfeger Industries, Inc. 56,783
168,300 Hewlett-Packard Co. 15,872,797
306,000 IBM Corp. 35,591,627
27,200 Ingersoll-Rand Co. 1,732,302
9,800 McDermott International, Inc. 251,130
20,700 Pall Corp. 415,296
45,200 Pitney Bowes, Inc. 2,881,500
40,400 Seagate Technology, Inc.* 1,219,576
31,100 Silicon Graphics, Inc.* 384,869
41,700 Solectron Corp.* 2,283,075
16,400 Tandy Corp. 1,353,000
28,200 Tenneco, Inc. 657,415
10,300 Timken Co. 211,798
136,801 Tyco International Ltd.# 11,952,993
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
95
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
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</TABLE>
COMMON STOCKS (continued)
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT (continued)
<TABLE>
<C> <S> <C>
43,300 Unisys Corp.* $ 1,642,699
---------------
152,005,763
---------------
INSURANCE AGENTS, BROKERS & SERVICE (0.3%)
42,300 Aon Corp. 1,818,900
27,700 Humana, Inc. 347,982
42,650 Marsh & McLennan Cos., Inc. 3,102,790
---------------
5,269,672
---------------
INSURANCE CARRIERS (4.7%)
23,700 Aetna Life & Casualty, Inc. 2,152,259
44,000 AFLAC, Inc. 2,244,000
136,000 Allstate Corp. 4,955,503
41,700 American General Corp. 3,012,825
203,607 American International Group, Inc. 23,274,711
27,000 Chubb Corp. 1,891,694
34,200 CIGNA Corp. 3,189,150
27,700 Cincinnati Financial Corp. 1,140,896
374,341 Citigroup, Inc. 24,799,967
38,700 Hartford Financial Services Group 2,447,775
17,550 Jefferson-Pilot Corp. 1,187,917
16,700 Lincoln National Corp. 1,699,225
18,900 Loews Corp. 1,536,809
16,400 MBIA, Inc. 1,120,330
18,100 MGIC Investment Corp. 871,065
12,000 Progressive Corp. 1,684,502
22,400 Provident Companies, Inc. 875,001
23,450 Providian Financial Corp. 2,249,738
22,600 Safeco Corp. 992,990
39,156 St. Paul Cos., Inc.# 1,392,492
23,300 Torchmark Corp. 777,640
30,900 United Healthcare Corp. 1,799,925
23,000 Unum Corp. 1,237,690
---------------
86,534,104
---------------
LUMBER & WOOD PRODUCTS, EXCEPT FURNITURE (0.0%)
18,000 Louisiana-Pacific Corp. 364,500
---------------
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS (1.9%)
8,900 Bard (C.R.), Inc. 406,622
9,300 Bausch & Lomb, Inc. 710,294
41,200 Becton, Dickinson and Co. 1,596,500
18,700 Biomet, Inc. 746,835
65,100 Boston Scientific Corp.*# 2,469,737
53,700 Eastman Kodak Co. 3,631,469
49,900 Guidant Corp. 2,495,000
11,600 Honeywell, Inc. 1,097,653
14,100 Johnson Controls, Inc. 889,186
14,500 KLA-Tencor Corp.* 659,750
96,800 Medtronic, Inc. 6,872,800
7,300 Millipore Corp. 243,644
4,150 PE Corp--Celera Genomics Group* 70,550
8,300 PE Corp--PE Biosystems Group 927,009
7,300 Polaroid Corp. 154,218
<CAPTION>
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<C> <S> <C>
- -----------------------------------------------------------------
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- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL & OPTICAL
GOODS (continued)
<TABLE>
<C> <S> <C>
55,900 Raytheon Co., Class B $ 3,804,695
13,900 St. Jude Medical, Inc. 469,996
7,750 Tektronix, Inc. 179,703
26,300 Thermo Electron Corp. 502,992
108,700 Xerox Corp.# 6,107,590
---------------
34,036,243
---------------
METAL MINING (0.2%)
61,800 Barrick Gold Corp.# 1,066,050
38,100 Battle Mountain Gold Co. 92,870
15,100 Cyprus Amax Minerals Co. 189,697
27,400 Freeport-McMoRan Copper & Gold, Inc., Class B 387,031
43,100 Homestake Mining Co.# 336,720
27,700 Newmont Mining Corp. 493,407
71,780 Placer Dome, Inc.# 798,559
---------------
3,364,334
---------------
MISCELLANEOUS MANUFACTURING INDUSTRIES (0.2%)
32,600 Hasbro, Inc. 933,175
15,100 ITT Industries, Inc. 570,025
5,800 Jostens, Inc. 122,531
69,100 Mattel, Inc.# 1,826,837
1,300 NACCO Industries, Inc. 97,016
---------------
3,549,584
---------------
MISCELLANEOUS RETAIL (0.6%)
64,600 CVS Corp. 2,971,600
6,500 Longs Drug Stores, Inc. 226,284
42,900 Rite Aid Corp. 1,072,500
76,400 Staples, Inc.* 2,196,501
41,600 Toys "R" Us, Inc.* 959,403
165,500 Walgreen Co.# 3,847,875
---------------
11,274,163
---------------
MOTION PICTURES (0.1%)
36,000 Unicom Corp. 1,523,252
---------------
NONDEPOSITORY CREDIT INSTITUTIONS (2.4%)
75,000 American Express Co. 9,089,067
120,694 Associates First Capital Corp. 4,948,454
10,900 Capital One Financial Corp. 1,642,495
18,700 Countrywide Credit Industries, Inc. 769,040
171,900 Fannie Mae 11,689,200
112,500 Federal Home Loan Mortgage Corp. 6,560,157
80,106 Household International, Inc. 3,474,602
132,902 MBNA Corp. 3,671,365
27,400 SLM Holding Corp. 1,137,100
20,700 Transamerica Corp. 1,518,863
---------------
44,500,343
---------------
OIL & GAS EXTRACTION (0.6%)
21,000 Anadarko Petroleum Corp. 787,500
18,400 Apache Corp. 662,400
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
96
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
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- -----------------------------------------------------------------
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- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
OIL & GAS EXTRACTION (continued)
<TABLE>
<C> <S> <C>
29,452 Burlington Resources, Inc. $ 1,264,596
8,200 Helmerich & Payne, Inc. 191,164
57,400 Occidental Petroleum Corp. 1,212,583
13,900 Rowan Cos., Inc. 234,570
90,500 Schlumberger Ltd. 5,446,975
41,600 Union Pacific Resources Group, Inc.# 579,802
---------------
10,379,590
---------------
PAPER & ALLIED PRODUCTS (1.3%)
19,300 Avery Dennison Corp. 1,155,590
8,700 Bemis Co., Inc. 328,425
9,400 Boise Cascade Corp. 372,482
15,800 Champion International Corp. 809,750
36,500 Fort James Corp. 1,336,819
14,600 Georgia-Pacific Group 1,261,988
24,500 IKON Office Solutions, Inc. 341,473
67,979 International Paper Co.# 3,398,950
89,800 Kimberly-Clark Corp. 5,270,145
16,800 Mead Corp. 627,903
66,700 Minnesota Mining and Manufacturing Co. 5,719,525
9,200 Temple-Inland, Inc. 616,400
16,600 Westvaco Corp. 474,141
33,000 Weyerhaeuser Co. 2,048,064
18,400 Willamette Industries, Inc. 779,703
---------------
24,541,358
---------------
PERSONAL SERVICES (0.1%)
16,200 H&R Block, Inc. 780,641
45,300 Service Corp. International# 869,197
---------------
1,649,838
---------------
PETROLEUM REFINING & RELATED INDUSTRIES (5.1%)
15,000 Amerada Hess Corp. 899,066
12,300 Ashland, Inc. 501,225
54,000 Atlantic Richfield Co. 4,519,130
108,200 Chevron Corp. 10,028,792
403,000 Exxon Corp. 32,189,629
14,336 Kerr-McGee Corp. 666,629
129,300 Mobil Corp. 13,091,625
42,200 Phillips Petroleum Co. 2,212,867
355,400 Royal Dutch Petroleum Co.--NY Registered Shares 20,102,313
15,500 Sunoco, Inc. 471,783
88,600 Texaco, Inc.# 5,803,300
40,000 Unocal Corp. 1,590,000
51,000 USX-Marathon Group, Inc. 1,526,817
---------------
93,603,176
---------------
PHARMACEUTICAL PREPARATIONS (1.0%)
218,500 American Home Products Corp. 12,591,063
84,400 Amgen, Inc.* 5,338,300
---------------
17,929,363
---------------
PRIMARY METAL INDUSTRIES (0.5%)
37,700 Alcan Aluminum Ltd. 1,055,600
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INDEX PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
PRIMARY METAL INDUSTRIES (continued)
<TABLE>
<C> <S> <C>
60,900 Alcoa, Inc.# $ 3,349,500
32,600 Allegheny Teledyne, Inc. 666,264
6,600 ASARCO, Inc. 106,013
21,600 Bethlehem Steel Corp.* 179,551
20,800 Engelhard Corp. 421,200
30,000 Inco Ltd. 427,500
14,500 Nucor Corp. 724,096
9,600 Phelps Dodge Corp. 497,402
10,700 Reynolds Metals Co. 569,108
14,600 USX-U.S. Steel Group, Inc. 393,292
15,300 Worthington Industries, Inc. 196,035
---------------
8,585,561
---------------
PRINTING, PUBLISHING & ALLIED INDUSTRIES (1.6%)
11,600 American Greetings Corp. 332,056
13,300 Deluxe Corp. 479,633
15,500 Dow Jones & Co., Inc. 813,750
46,700 Gannett Co., Inc. 3,374,075
13,000 Knight-Ridder, Inc.# 684,941
32,700 McGraw-Hill Cos., Inc. 1,696,313
8,700 Meredith Corp. 303,961
30,200 New York Times Co. 1,030,575
22,300 R.R. Donnelley & Sons Co. 808,375
203,400 Time Warner, Inc.# 13,843,919
12,000 Times Mirror Co. 707,251
19,700 Tribune Co. 1,555,072
115,400 Viacom, Inc.--Class B* 4,442,900
---------------
30,072,821
---------------
RAILROAD TRANSPORTATION (0.5%)
77,700 Burlington Northern Santa Fe Corp. 2,408,700
36,000 CSX Corp. 1,689,754
18,200 Kansas City Southern Industries, Inc. 1,023,750
62,800 Norfolk Southern Corp. 2,056,700
41,000 Union Pacific Corp. 2,339,564
---------------
9,518,468
---------------
RUBBER & MISCELLANEOUS PLASTICS PRODUCTS (0.6%)
6,700 Armstrong World Industries 390,275
12,600 Cooper Tire and Rubber Co. 299,250
25,800 Goodyear Tire & Rubber Co. 1,539,943
41,400 Illinois Tool Works, Inc.# 3,177,450
46,528 Newell Rubbermaid, Inc. 1,884,390
46,900 Nike, Inc.--Class B 2,857,972
9,400 Reebok International Ltd. 186,829
13,853 Sealed Air Corp.*# 860,619
9,600 Tupperware Corp. 213,600
---------------
11,410,328
---------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES &
SERVICES (1.4%)
18,410 Bear Stearns Cos., Inc. 816,944
66,475 Charles Schwab Corp. 7,033,886
41,800 Franklin Resources, Inc. 1,818,300
18,900 Lehman Brothers Holding, Inc. 1,032,413
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
97
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INDEX PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES &
SERVICES (continued)
<TABLE>
<C> <S> <C>
58,800 Merrill Lynch & Co., Inc $ 4,939,200
95,800 Morgan Stanley Dean Witter & Co. 9,244,703
---------------
24,885,446
---------------
STONE, CLAY, GLASS & CONCRETE PRODUCTS (0.2%)
40,500 Corning, Inc. 2,212,319
9,000 Owens Corning 354,382
25,700 Owens-Illinois, Inc.* 783,850
---------------
3,350,551
---------------
TEXTILE MILL PRODUCTS (0.0%)
12,000 Fruit of the Loom, Inc.* 123,750
5,900 Russell Corp. 138,285
2,900 Springs Industries, Inc.--Class A 114,918
---------------
376,953
---------------
TOBACCO PRODUCTS (0.9%)
403,600 Philip Morris Cos., Inc. 15,563,826
---------------
TRANSPORTATION BY AIR (0.5%)
30,200 AMR Corp.* 1,964,895
23,500 Delta Airlines, Inc.# 1,348,313
49,000 FDX Corp.* 2,698,068
55,750 Southwest Airlines Co. 1,787,486
14,500 US Airways Group, Inc. 704,157
---------------
8,502,919
---------------
TRANSPORTATION EQUIPMENT (2.8%)
92,400 Allied-Signal, Inc. 5,364,981
155,520 Boeing Co.# 6,570,726
27,492 Dana Corp. 1,419,280
93,698 Delphi Automotive Systems Corp.* 1,838,818
11,800 Eaton Corp. 1,028,817
5,700 Fleetwood Enterprises, Inc. 144,999
200,600 Ford Motor Co. 11,446,742
21,000 General Dynamics Corp. 1,380,750
108,500 General Motors Corp. 7,486,500
65,000 Lockheed Martin Corp.# 2,628,443
11,000 Navistar International Corp.* 543,131
11,400 Northrop Grumman Corp. 769,500
12,900 PACCAR, Inc. 726,436
31,500 Rockwell International Corp. 1,738,408
26,200 Textron, Inc. 2,333,442
19,900 TRW, Inc. 996,249
74,800 United Technologies Corp. 4,642,280
---------------
51,059,502
---------------
WATER TRANSPORTATION (0.2%)
98,700 Carnival Corp. 4,046,700
---------------
WHOLESALE TRADE--DURABLE GOODS (0.1%)
29,800 Genuine Parts Co. 1,003,889
15,700 Grainger (W.W.), Inc. 833,085
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INDEX PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
WHOLESALE TRADE--DURABLE GOODS (continued)
<TABLE>
<C> <S> <C>
4,800 Potlatch Corp. $ 189,004
---------------
2,025,978
---------------
WHOLESALE TRADE--NONDURABLE GOODS (0.3%)
45,100 Cardinal Health, Inc. 2,722,913
19,900 Supervalu, Inc. 482,575
55,200 Sysco Corp. 1,638,755
---------------
4,844,243
---------------
TOTAL COMMON STOCKS (COST $998,685,912) 1,770,416,611
---------------
CORPORATE NOTES (0.2%)
2,000,000 NationsBank Corp., 5.12% V/R, 7/1/04 2,012,006
2,000,000 Spintab AB, 5.50% V/R, 12/20/04 2,000,000
---------------
TOTAL CORPORATE NOTES (COST $3,991,069) 4,012,006
---------------
UNIT INVESTMENT TRUST (0.0%)
1,100 Standard and Poor's Depository Receipts (cost $141,212) 143,223
---------------
U.S. TREASURY BILLS (0.2%)
2,130,000 3.96%--4.55% yield, 9/16/99 2,100,247
265,000 4.46%--4.79% yield, 11/12/99 259,229
785,000 4.44% yield, 4/27/00 749,706
---------------
TOTAL U.S. TREASURY BILLS (COST $3,115,832) 3,109,182
---------------
TIME DEPOSITS (2.9%)
52,735,996 Societe Generale, Grand Cayman, 4.50%, 6/1/99 (cost $52,735,996) 52,735,996
---------------
TOTAL INVESTMENTS (100.0%) (COST $1,058,670,021) $ 1,830,417,018
---------------
---------------
FINANCIAL FUTURES CONTRACTS++
</TABLE>
<TABLE>
<CAPTION>
UNREALIZED
POSITION CONTRACTS INDEX GAIN (LOSS)
- --------- ------------- ------------------------------------- -----------
<S> <C> <C> <C>
Long 162 S&P 500 Futures, Expiring June 18,
1999 (notional value $52,536,600) $(935,700)
</TABLE>
<TABLE>
<C> <S> <C>
- -----------------------------------------------------------------
INCOME EQUITY PORTFOLIO
- -----------------------------------------------------------------
COMMON STOCK (98.8%)
BUSINESS SERVICES (1.8%)
1,717,800 IMS Health, Inc. $ 42,300,826
---------------
CHEMICALS & ALLIED PRODUCTS (13.5%)
1,050,500 E.I. du Pont de Nemours & Co. 68,742,100
520,750 Johnson & Johnson 48,234,470
574,800 Merck & Co., Inc.# 38,799,000
1,604,800 Morton International, Inc. 62,587,200
530,400 Pfizer, Inc. 56,752,800
554,800 Procter & Gamble Co. 51,804,450
---------------
326,920,020
---------------
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
98
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INCOME EQUITY PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCK (continued)
<TABLE>
<C> <S> <C>
COMMUNICATIONS (5.9%)
1,669,800 AT&T Corp.# $ 92,673,901
782,600 GTE Corp. 49,352,721
---------------
142,026,622
---------------
DEPOSITORY INSTITUTIONS (4.2%)
470,650 J.P. Morgan & Co., Inc. 65,567,439
1,067,850 U.S. Bancorp 34,705,125
---------------
100,272,564
---------------
EATING & DRINKING PLACES (1.9%)
1,205,500 McDonald's Corp. 46,411,750
---------------
ELECTRIC, GAS & SANITARY SERVICES (6.5%)
543,000 Consolidated Natural Gas Co. 32,274,572
740,600 PG&E Corp.# 24,995,251
604,100 Public Service Enterprise Group, Inc. 25,334,454
876,350 Texas Utilities Co. 39,435,750
679,832 Waste Management, Inc.# 35,946,124
---------------
157,986,151
---------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT (8.1%)
777,000 Emerson Electric Co. 49,630,876
550,978 General Electric Co. 56,027,582
1,566,292 Lucent Technologies, Inc.# 89,082,870
---------------
194,741,328
---------------
ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT & RELATED
SERVICES (2.3%)
1,563,600 Dun & Bradstreet Corp. 54,726,000
---------------
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT (3.4%)
2,036,600 Fortune Brands, Inc. 83,246,029
---------------
FOOD & KINDRED PRODUCTS (4.7%)
1,962,640 PepsiCo, Inc. 70,287,049
1,754,500 Sara Lee Corp. 42,108,000
---------------
112,395,049
---------------
GENERAL MERCHANDISE STORES (8.5%)
965,800 Dayton Hudson Corp. 60,845,400
1,138,400 J.C. Penney Co., Inc.# 58,841,059
1,094,250 May Department Stores Co. 47,394,713
773,830 Sears, Roebuck and Co.# 36,998,752
---------------
204,079,924
---------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT (8.8%)
1,206,200 Hewlett-Packard Co. 113,759,571
1,128,647 Tyco International Ltd.# 98,615,534
---------------
212,375,105
---------------
INSURANCE CARRIERS (3.8%)
686,750 American General Corp. 49,617,688
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INCOME EQUITY PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCK (continued)
INSURANCE CARRIERS (continued)
<TABLE>
<C> <S> <C>
1,200,000 St. Paul Cos., Inc.# $ 42,675,001
---------------
92,292,689
---------------
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC,
MEDICAL & OPTICAL GOODS (3.7%)
544,050 Eastman Kodak Co. 36,791,390
567,600 Honeywell, Inc. 53,709,153
---------------
90,500,543
---------------
NONDEPOSITORY CREDIT INSTITUTIONS (4.9%)
412,300 American Express Co. 49,965,611
941,800 Transamerica Corp. 69,104,576
---------------
119,070,187
---------------
OIL & GAS EXTRACTION (1.1%)
440,100 Schlumberger Ltd. 26,488,523
---------------
PAPER & ALLIED PRODUCTS (2.0%)
564,458 Minnesota Mining & Manufacturing Co. 48,402,275
---------------
PETROLEUM REFINING & RELATED INDUSTRIES (7.7%)
538,200 Atlantic Richfield Co. 45,040,618
458,750 Chevron Corp. 42,520,402
541,102 Exxon Corp. 43,220,523
305,900 Mobil Corp. 30,972,376
440,600 Royal Dutch Petroleum Co.--NY Registered Shares# 24,921,439
---------------
186,675,358
---------------
PHARMACEUTICAL PREPARATIONS (2.2%)
937,800 American Home Products Corp. 54,040,726
---------------
TOBACCO PRODUCTS (1.9%)
1,176,550 Philip Morris Cos., Inc. 45,370,719
---------------
TRANSPORTATION EQUIPMENT (1.9%)
738,600 United Technologies Corp.# 45,839,363
---------------
TOTAL COMMON STOCK (COST $1,306,018,686) 2,386,161,751
---------------
REPURCHASE AGREEMENTS (1.2%)
27,836,112 Bear, Stearns & Cos., Inc., 4.90%, 6/1/99 (cost $27,836,112)** 27,836,112
---------------
TOTAL INVESTMENTS (100.0%) (COST $1,333,854,798) $ 2,413,997,863
---------------
---------------
- -----------------------------------------------------------------
DISCIPLINED GROWTH PORTFOLIO
- -----------------------------------------------------------------
COMMON STOCKS (99.3%)
APPAREL & ACCESSORY STORES (2.4%)
97,300 Ross Stores, Inc. $ 4,469,723
---------------
APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS (3.1%)
76,830 Tommy Hilfiger Corp.* 5,767,054
---------------
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
99
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
DISCIPLINED GROWTH PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
<TABLE>
<C> <S> <C>
BUSINESS SERVICES (10.7%)
95,185 BMC Software, Inc.*# $ 4,705,710
59,450 Microsoft Corp.* 4,796,872
177,750 Oracle Corp.* 4,410,422
168,310 Unisys Corp.* 6,385,260
---------------
20,298,264
---------------
CHEMICALS & ALLIED PRODUCTS (2.2%)
91,600 Schering-Plough Corp. 4,127,726
---------------
COMMUNICATIONS (5.0%)
120,720 BellSouth Corp. 5,696,477
98,130 CenturyTel, Inc. 3,759,605
---------------
9,456,082
---------------
DEPOSITORY INSTITUTIONS (5.7%)
147,315 AmSouth Bancorp. 4,180,064
52,300 Chase Manhattan Corp. 3,791,750
141,020 Dime Bancorp, Inc. 2,873,284
---------------
10,845,098
---------------
EATING & DRINKING PLACES (2.8%)
252,145 Darden Restaurants, Inc. 5,373,842
---------------
ELECTRIC, GAS & SANITARY SERVICES (2.4%)
183,180 IPALCO Enterprises, Inc.# 4,522,257
---------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT (2.7%)
89,160 Lucent Technologies, Inc. 5,070,976
---------------
FOOD & KINDRED PRODUCTS (6.6%)
59,000 Anheuser-Busch Cos., Inc. 4,310,688
155,810 IBP, Inc. 3,340,177
73,190 Quaker Oats Co. 4,835,114
---------------
12,485,979
---------------
FORESTRY (2.7%)
81,430 Weyerhaeuser Co. 5,053,750
---------------
GENERAL MERCHANDISE STORES (5.5%)
91,050 Dayton Hudson Corp. 5,736,150
154,450 TJX Cos., Inc. 4,633,500
---------------
10,369,650
---------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT (15.4%)
80,400 Apple Computer, Inc.*# 3,542,625
43,110 EMC Corp.* 4,294,835
67,890 Hewlett-Packard Co. 6,402,851
71,930 Ingersoll-Rand Co. 4,581,042
46,230 Lexmark International Group, Inc.* 6,293,059
133,000 Seagate Technology, Inc.* 4,014,938
---------------
29,129,350
---------------
INSURANCE CARRIERS (4.8%)
68,300 Jefferson-Pilot Corp. 4,623,056
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
DISCIPLINED GROWTH PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
INSURANCE CARRIERS (continued)
<TABLE>
<C> <S> <C>
52,020 PacifiCare Health Systems, Inc., Class B* $ 4,493,227
---------------
9,116,283
---------------
NONDEPOSITORY CREDIT INSTITUTIONS (2.5%)
67,990 Fannie Mae 4,623,320
---------------
PETROLEUM REFINING & RELATED INDUSTRIES (2.4%)
57,350 Exxon Corp. 4,580,833
---------------
PHARMACEUTICAL PREPARATIONS (3.0%)
89,280 Amgen, Inc.* 5,646,960
---------------
PRINTING & PUBLICATIONS (2.2%)
80,100 Knight-Ridder, Inc.# 4,220,269
---------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES (2.7%)
53,600 Morgan Stanley Dean Witter & Co. 5,172,400
---------------
TRANSPORTATION (2.9%)
97,740 FDX Corp.* 5,381,809
---------------
TRANSPORTATION EQUIPMENT (7.1%)
72,740 Ford Motor Co. 4,150,727
72,780 General Dynamics Corp. 4,785,287
78,695 PACCAR, Inc. 4,431,512
---------------
13,367,526
---------------
WATER TRANSPORTATION (2.1%)
101,340 Royal Caribbean Cruises Ltd. 3,964,929
---------------
WHOLESALE TRADE--DURABLE GOODS (2.4%)
74,520 Martin Marietta Materials, Inc. 4,517,776
---------------
TOTAL COMMON STOCKS (COST $151,972,731) 187,561,856
---------------
REPURCHASE AGREEMENTS (0.7%)
1,363,697 Bear, Stearns & Cos., Inc., 4.90%, 6/1/99 (cost $1,363,697)** 1,363,697
---------------
TOTAL INVESTMENTS (100.0%) (COST $153,336,428) $ 188,925,553
---------------
---------------
- -----------------------------------------------------------------
LARGE COMPANY GROWTH PORTFOLIO
- -----------------------------------------------------------------
COMMON STOCK (96.5%)
AMUSEMENT & RECREATION SERVICES (1.0%)
647,590 Walt Disney Co.# $ 18,861,078
---------------
APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS (2.2%)
628,300 Cintas Corp.# 39,897,050
---------------
BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME
DEALERS (4.7%)
161,200 Fastenal Co.# 8,261,500
1,368,378 Home Depot, Inc.# 77,826,520
---------------
86,088,020
---------------
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
100
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
LARGE COMPANY GROWTH PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCK (continued)
<TABLE>
<C> <S> <C>
BUSINESS SERVICES (17.3%)
720,400 Automatic Data Processing, Inc. $ 29,671,477
338,000 DST Systems, Inc.* 18,252,000
424,700 First Data Corp. 19,084,972
775,313 Fiserv, Inc.* 29,074,243
2,180,000 IMS Health, Inc. 53,682,501
1,960,760 Microsoft Corp.* 158,208,655
450,000 Sungard Data Systems, Inc.*# 15,750,000
---------------
323,723,848
---------------
CHEMICALS & ALLIED PRODUCTS (8.1%)
724,600 Merck & Co., Inc.# 48,910,500
686,900 Pfizer, Inc. 73,498,300
428,400 Warner-Lambert Co. 26,560,800
---------------
148,969,600
---------------
DEPOSITORY INSTITUTIONS (1.3%)
313,300 State Street Corp.# 23,889,125
---------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT (18.1%)
1,768,600 Intel Corp. 95,614,940
1,425,200 Lucent Technologies, Inc.# 81,058,250
1,594,600 Solectron Corp.*# 87,304,350
2,617,800 Telefonaktiebolaget LM Ericsson, Series B ADR# 70,517,008
---------------
334,494,548
---------------
ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT & RELATED
SERVICES (2.2%)
406,600 Gartner Group, Inc.* 9,351,800
1,052,199 Paychex, Inc. 31,171,400
---------------
40,523,200
---------------
FOOD & KINDRED PRODUCTS (2.2%)
582,300 Coca-Cola Co. 39,778,389
---------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT (6.3%)
1,076,475 Cisco Systems, Inc.*# 117,201,224
---------------
INSURANCE CARRIERS (4.6%)
739,843 American International Group, Inc. 84,573,302
---------------
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC,
MEDICAL & OPTICAL GOODS (4.3%)
1,109,100 Medtronic, Inc. 78,746,100
---------------
MISCELLANEOUS RETAIL (5.3%)
242,100 MSC Industrial Direct Co., Inc. 4,569,640
1,504,150 Office Depot, Inc.* 31,399,147
2,146,175 Staples, Inc.* 61,702,537
---------------
97,671,324
---------------
MOTION PICTURES (0.0%)
615 Iwerks Entertainment, Inc.* 557
---------------
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
LARGE COMPANY GROWTH PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCK (continued)
<TABLE>
<C> <S> <C>
OIL & GAS EXTRACTION (0.7%)
222,500 Schlumberger Ltd.# $ 13,391,721
---------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES (16.7%)
1,386,275 Charles Schwab Corp. 146,685,225
1,278,600 Franklin Resources, Inc. 55,619,100
1,318,500 T. Rowe Price# 50,927,065
828,100 The Goldman Sachs Group, Inc.*# 56,259,044
---------------
309,490,434
---------------
WHOLESALE TRADE--NONDURABLE GOODS (1.5%)
444,400 Cardinal Health, Inc. 26,830,652
---------------
TOTAL COMMON STOCK (COST $987,687,972) 1,784,130,172
---------------
REPURCHASE AGREEMENTS (3.5%)
63,992,038 Bear, Stearns & Cos., Inc., 4.90%, 6/1/99 (cost $63,992,038)** 63,992,038
---------------
WARRANTS (0.0%)
1,229 Iwerks Entertainment, Inc. (cost $0) 0
---------------
TOTAL INVESTMENTS (100.0%) (COST $1,051,680,010) $ 1,848,122,210
---------------
---------------
- -----------------------------------------------------------------
SMALL CAP INDEX PORTFOLIO
- -----------------------------------------------------------------
COMMON STOCKS (98.0%)
ADMINISTRATION OF ENVIRONMENTAL QUALITY & HOUSING PROGRAMS (0.1%)
7,400 Dames & Moore, Inc. $ 116,550
---------------
AGRICULTURAL PRODUCTION--CROPS (0.5%)
26,300 Chiquita Brands International, Inc. 212,044
15,400 Delta & Pine Land Co. 451,413
---------------
663,457
---------------
AGRICULTURAL PRODUCTION--LIVESTOCK & ANIMAL SPECIALTIES (0.1%)
8,500 Michael Foods, Inc. 199,750
---------------
AMUSEMENT & RECREATION SERVICES (0.7%)
4,900 Anchor Gaming* 219,275
10,400 Family Golf Centers, Inc.*# 94,576
10,400 Hollywood Park, Inc.* 150,150
12,900 Players International, Inc.* 83,850
11,600 Westwood One, Inc.* 403,100
---------------
950,951
---------------
APPAREL & ACCESSORY STORES (1.5%)
10,300 AnnTaylor Stores Corp.* 444,832
5,700 Ashworth, Inc.* 27,788
11,000 Cato Corp. 144,376
8,000 Dress Barn, Inc.* 117,500
8,900 Footstar, Inc.* 345,432
13,400 Goody's Family Clothing, Inc.* 145,726
9,700 Gymboree Corp.* 119,432
5,700 J. Baker, Inc. 41,325
12,600 Just For Feet, Inc.*# 96,076
8,300 Pacific Sunwear of California, Inc.* 311,250
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
101
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL CAP INDEX PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
APPAREL & ACCESSORY STORES (continued)
<TABLE>
<C> <S> <C>
6,700 St. John Knits, Inc. $ 191,788
---------------
1,985,525
---------------
APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS (1.0%)
9,300 Authentic Fitness Corp. 152,870
6,200 Cyrk, Inc.* 41,077
3,100 Haggar Corp. 39,139
14,100 Hartmarx Corp.* 69,621
11,200 Kellwood Co. 266,000
15,100 Nautica Enterprises, Inc.* 244,432
7,300 Oshkosh B'Gosh, Inc. 143,264
11,000 Phillips-Van Heusen Corp. 96,250
5,700 Pillowtex Corp. 92,625
8,900 Quiksilver, Inc.* 253,650
---------------
1,398,928
---------------
AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS (0.4%)
6,700 Discount Auto Parts, Inc.* 165,825
8,800 O'Reilly Automotive, Inc.* 387,750
---------------
553,575
---------------
AUTOMOTIVE REPAIR, SERVICES & PARKING (0.5%)
14,900 Breed Technologies, Inc.*# 49,357
12,300 Central Parking Corp.# 399,750
23,500 Rollins Truck Leasing Corp. 255,564
---------------
704,671
---------------
BUILDING CONSTRUCTION--GENERAL CONTRACTORS & OPERATIVE
BUILDERS (1.1%)
25,900 D.R. Horton, Inc. 440,300
7,400 MDC Holdings, Inc. 146,150
5,900 Ryland Group, Inc. 164,094
5,100 Southern Energy Homes, Inc.* 23,748
11,900 Standard Pacific Corp. 156,188
14,900 Toll Brothers, Inc.* 325,007
5,400 U.S. Home Corp.* 186,300
---------------
1,441,787
---------------
BUSINESS SERVICES (9.0%)
8,700 ABM Industries, Inc. 237,618
31,400 Acxiom Corp.* 847,800
9,000 ADVO, Inc.* 178,313
16,900 American Management Systems, Inc.* 536,575
9,100 Analysts International Corp. 145,031
10,000 Aspen Technology, Inc.* 104,375
10,800 BISYS Group, Inc.* 592,988
7,400 Catalina Marketing Corp.* 655,363
13,200 Cerner Corp.*# 265,652
23,500 Ciber, Inc.*# 503,784
16,100 Cognex Corp.* 432,689
8,400 Computer Task Group, Inc. 139,651
9,400 Dendrite International, Inc.*# 310,200
16,000 Epicor Software Corp.* 113,001
6,100 FactSet Research Systems, Inc. 260,775
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL CAP INDEX PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
BUSINESS SERVICES (continued)
<TABLE>
<C> <S> <C>
5,700 Fair, Isaac and Co., Inc. $ 186,675
12,800 FileNet Corp.* 126,402
9,100 Gerber Scientific, Inc. 212,714
16,700 Harbinger Corp.* 185,267
8,000 Henry (Jack) & Associates 282,500
10,400 HNC Software, Inc.*# 281,450
12,200 Hyperion Solutions Corp.* 189,862
18,000 Inacom Corp.* 199,125
4,500 Insurance Auto Auctions, Inc.* 57,938
19,100 Interim Services, Inc.* 416,619
5,100 Kronos, Inc.* 188,779
6,100 Lason, Inc.* 233,707
16,600 Macromedia, Inc.* 636,507
14,200 Mercury Interactive Corp.* 466,826
15,200 Midway Games, Inc.* 161,500
12,600 National Computer Systems, Inc. 393,750
13,600 National Data Corp. 640,050
13,300 National Instruments Corp.* 506,232
8,600 Network Equipment Technologies, Inc.* 89,225
10,500 Norrell Corp. 194,906
8,500 Primark Corp.* 230,032
6,900 Progress Software Corp.* 179,831
20,600 S3, Inc.* 138,407
16,500 Security Dynamics Technologies, Inc.* 313,500
19,200 System Software Associates, Inc.* 39,002
9,100 TCSI Corp.* 24,174
16,600 Technology Solutions, Inc.* 154,587
18,100 True North Communications, Inc. 423,090
10,500 Vantive Corp.*# 114,188
6,000 Volt Information Sciences, Inc.* 103,500
4,000 Wall Data, Inc.* 40,751
---------------
12,734,911
---------------
CHEMICALS & ALLIED PRODUCTS (4.2%)
15,900 Advanced Tissue Sciences, Inc.*# 61,614
13,400 Alliance Pharmaceutical Corp.* 39,782
10,800 Alpharma, Inc. 288,227
9,200 Barr Laboratories, Inc.* 303,025
9,000 Biomatrix, Inc.*# 275,625
9,900 Cambrex Corp. 222,750
7,600 ChemFirst, Inc. 180,974
9,400 Geon Co. 283,176
8,100 IDEC Pharmaceuticals Corp.* 408,544
9,400 Immune Response Corp.*# 59,927
11,600 Jones Pharma, Inc. 412,526
9,300 Lilly Industries, Inc., Class A 177,281
15,400 Liposome Company, Inc.* 220,413
10,100 Macdermid, Inc. 406,525
4,200 McWhorter Technologies, Inc.* 58,276
10,500 Mississippi Chemical Corp. 101,064
7,300 Natures Sunshine Product, Inc. 88,969
27,400 NBTY, Inc.* 172,108
12,900 North American Vaccine, Inc.*# 69,339
8,600 Noven Pharmaceuticals, Inc.* 52,676
9,500 OM Group, Inc. 355,063
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
102
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL CAP INDEX PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
CHEMICALS & ALLIED PRODUCTS (continued)
<TABLE>
<C> <S> <C>
10,000 Parexel International Corp.* $ 239,376
3,000 Penford Corp. 39,470
7,500 Protein Design Labs, Inc.* 147,188
3,500 Quaker Chemical Corp. 60,814
12,700 Roberts Pharmaceutical Corp.* 241,300
7,400 Scotts Co.* 325,600
5,600 USA Detergents, Inc.*# 29,051
10,200 Vertex Pharmaceuticals, Inc.*# 204,638
9,100 W.H. Brady Co. 228,069
---------------
5,753,390
---------------
COMMUNICATIONS (0.6%)
21,100 Brightpoint, Inc.* 120,007
20,000 General Communications, Inc.* 98,751
6,700 Metro Networks, Inc.* 372,688
19,700 TALK.com, Inc.*# 204,389
---------------
795,835
---------------
CONSTRUCTION--SPECIAL TRADE CONTRACTORS (0.7%)
11,100 Apogee Enterprises, Inc. 132,507
3,800 Chemed Corp. 123,263
9,000 Dycom Industries, Inc.* 434,250
10,700 Insituform Technologies, Class A* 179,225
7,000 Service Experts, Inc.* 129,938
---------------
999,183
---------------
CONSUMER PRODUCTS (0.0%)
3,200 Swiss Army Brands, Inc.* 25,800
---------------
DEPOSITORY INSTITUTIONS (7.1%)
7,300 Anchor Bancorp Wisconsin, Inc. 120,450
9,300 Banknorth Group, Inc. 248,194
9,000 Carolina First Corp. 246,937
10,700 Centura Banks, Inc. 623,944
11,000 Commerce Bancorp, Inc. 442,750
24,500 Commercial Federal Corp. 558,907
10,800 Cullen/Frost Bankers, Inc. 607,500
11,300 Downey Financial Corp. 248,600
12,000 First Bancorp/Puerto Rico 288,000
11,700 First Midwest Bancorp, Inc. 453,375
35,900 FirstMerit Corp. 980,520
16,000 Hudson United Bancorp 490,001
3,900 JSB Financial, Inc. 199,875
10,200 MAF Bancorp, Inc. 235,237
10,000 Premier Bancshares, Inc. 208,126
10,290 Provident Bankshares Corp. 237,957
8,600 Queens County Bancorp, Inc. 271,976
12,400 Riggs National Corp. 208,475
8,300 Silicon Valley Bancshares* 159,775
16,800 St. Paul Bancorp, Inc. 435,750
14,400 Susquehanna Bancshares, Inc. 261,901
10,800 TrustCo Bank Corp NY 302,400
17,200 UST Corp. 414,950
7,500 U.S. Trust Corp. 657,659
17,300 United Bankshares, Inc. 461,695
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL CAP INDEX PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
DEPOSITORY INSTITUTIONS (continued)
<TABLE>
<C> <S> <C>
9,400 Whitney Holding Corp. $ 383,050
---------------
9,748,004
---------------
EATING & DRINKING PLACES (2.2%)
12,100 Applebee's International, Inc. 356,950
7,300 CEC Entertainment, Inc.* 276,032
8,000 Cheesecake Factory, Inc.* 221,001
20,900 CKE Restaurants, Inc. 384,038
10,700 Consolidated Products, Inc.* 197,952
15,300 Foodmaker, Inc.* 413,100
8,000 IHOP Corp.* 191,000
12,200 Landry's Seafood Restaurants, Inc.* 111,325
9,200 Luby's, Inc. 156,400
13,200 Ruby Tuesday, Inc. 245,025
16,100 Ryan's Family Steak Houses, Inc.* 188,169
7,600 Sonic Corp.* 209,238
5,400 Taco Cabana, Inc., Class A* 57,714
9,200 TCBY Enterprises, Inc. 60,952
---------------
3,068,896
---------------
EDUCATIONAL SERVICES (0.5%)
27,900 DeVry, Inc.* 620,775
---------------
ELECTRIC, GAS & SANITARY SERVICES (4.9%)
3,600 American States Water Co. 96,075
4,550 Aquarion Co. 141,333
12,400 Atmos Energy Corp. 317,752
3,000 Bangor Hydro-Electric Co.* 42,376
4,400 Cascade Natural Gas Corp. 73,975
6,800 Central Hudson Gas & Electric Corp. 286,876
4,600 Central Vermont Public Service Corp. 54,913
5,400 CILCORP, Inc.# 329,064
8,600 Commonwealth Energy System 364,426
4,200 Connecticut Energy Corp. 157,762
8,300 Eastern Utilities Associates 239,663
11,900 Energen Corp. 227,588
2,200 Green Mountain Power Corp. 22,826
7,300 New Jersey Resources Corp. 275,575
10,000 Northwest Natural Gas Co. 240,000
5,400 Orange & Rockland Utilities, Inc. 314,214
4,200 Pennsylvania Enterprises, Inc. 121,800
16,300 Philadelphia Suburban Corp. 358,600
12,400 Piedmont Natural Gas Co. 419,275
8,300 Public Service Co. of North Carolina, Inc. 240,700
12,500 Sierra Pacific Resources 454,688
12,200 Southwest Gas Corp. 344,650
10,100 Southwestern Energy Co. 95,319
13,000 Superior Services, Inc.* 278,687
5,300 TNP Enterprises, Inc. 197,757
5,800 United Illuminating Co. 254,114
15,100 United Water Resources, Inc. 328,425
15,100 Wicor, Inc. 385,050
---------------
6,663,483
---------------
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
103
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL CAP INDEX PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
<TABLE>
<C> <S> <C>
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT (9.6%)
5,900 Adaptive Broadband Corp.* $ 93,664
11,000 Allen Group, Inc.* 114,813
6,400 Alpha Industries, Inc.* 222,800
20,600 Aspect Telecommunications Corp.* 175,100
14,900 Baldor Electric Co. 286,825
4,700 Benchmark Electronics, Inc.* 141,000
10,900 BMC Industries, Inc. 109,682
14,900 Burr-Brown Corp.* 476,800
5,000 C&D Technologies, Inc. 136,563
3,600 C-Cor Electronics, Inc.* 85,051
15,100 C-Cube Microsystems, Inc.*# 378,445
11,300 Cable Design Technologies Corp.* 159,614
2,600 Centigram Communications Corp.* 25,026
12,600 Checkpoint Systems, Inc.* 114,976
5,400 CTS Corp. 302,400
6,000 Customtracks Corp.*# 360,000
11,500 Dallas Semiconductor Corp. 500,250
24,800 Digital Microwave Corp.* 313,102
9,000 Dionex Corp.* 368,438
15,400 DSP Communications, Inc.* 473,550
5,000 Electro Scientific Industries, Inc.* 187,500
8,500 Etec Systems, Inc.* 227,907
14,900 General Semiconductor, Inc.* 115,475
5,300 HADCO Corp.* 164,300
7,100 Harman International Industries, Inc. 315,064
4,200 Harmon Industries, Inc. 87,677
9,000 Helix Technology Corp. 153,562
9,900 Hutchinson Technology, Inc.*# 230,175
6,000 Innovex, Inc. 80,252
10,500 Inter-Tel, Inc. 155,532
20,900 International Rectifier Corp.* 227,289
11,300 InterVoice, Inc.* 125,713
5,900 Itron, Inc.*# 49,045
7,500 Juno Lighting, Inc. 172,031
15,800 Kemet Corp.* 253,788
9,400 Lattice Semiconductor Corp.* 461,777
14,300 Methode Electronics, Inc. 263,657
8,000 Micrel, Inc.* 448,000
3,000 National Presto Industries, Inc. 111,938
15,600 Novellus Systems, Inc.* 761,476
7,000 Oak Industries, Inc.* 337,312
19,700 P-COM, Inc.* 86,803
4,200 Park Electrochemical Corp. 100,538
9,700 Photronics, Inc. 191,575
15,500 Picturetel Corp.* 137,564
6,900 Plantronics, Inc.* 422,625
6,100 Plexus Corp.* 186,431
7,800 Powerwave Technologies, Inc.* 180,375
19,800 Read-Rite Corp.* 130,557
8,100 Royal Appliance Manufacturing Co.* 36,450
13,300 Silicon Valley Group* 182,875
11,700 SpeedFam International, Inc.* 153,563
6,200 Standard Microsystems Corp.* 47,276
6,100 SymmetriCom, Inc.* 38,888
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL CAP INDEX PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT
(continued)
<TABLE>
<C> <S> <C>
6,500 Technitrol, Inc. $ 193,375
6,400 Thomas Industries, Inc. 129,600
3,000 Three-Five Systems, Inc.* 40,313
12,800 Unitrode Corp.* 266,401
10,800 Valence Technology, Inc.*# 80,325
16,900 Vicor Corp.* 278,850
18,400 VLSI Technology, Inc.* 385,251
2,600 Watkins-Johnson Co. 64,350
---------------
13,101,554
---------------
ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT & RELATED
SERVICES (3.2%)
13,200 American Oncology Resources, Inc.* 134,063
15,000 Billing Information Concepts Corp.* 187,500
20,900 Bio-Technology General Corp.* 147,607
15,000 Blount International, Inc., Class A 418,126
7,700 CDI Corp.* 249,289
11,600 Cephalon, Inc.* 156,600
9,800 COR Therapeutics, Inc.* 139,038
8,500 Franklin Covey Co.* 82,875
11,200 Incyte Pharmaceuticals, Inc.* 291,200
13,000 MedQuist, Inc.* 477,750
8,600 NFO Worldwide, Inc.* 122,013
11,900 Organogenesis, Inc.*# 131,644
9,400 Pharmaceutical Product Development, Inc.*# 251,450
1,750 Quintiles Transnational Corp.* 71,096
12,500 Regeneron Pharmaceuticals, Inc.* 89,063
5,200 Stone & Webster, Inc. 127,400
12,000 Tetra Tech, Inc.* 255,000
10,900 The Profit Recovery Group International, Inc.* 401,256
10,900 U.S. Bioscience, Inc.* 87,880
20,600 Whittman-Hart, Inc.* 584,525
---------------
4,405,375
---------------
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT (1.4%)
4,300 Alliant Techsystems, Inc.* 365,500
14,500 AptarGroup, Inc. 398,750
3,000 Butler Manufacturing Co. 84,376
12,200 Griffon Corp.* 97,600
3,400 Insteel Industries, Inc. 29,326
18,600 Mascotech, Inc. 290,625
6,300 Material Sciences Corp.* 70,090
10,900 Sturm, Ruger & Co., Inc. 121,944
18,600 Tower Automotive, Inc.* 425,475
---------------
1,883,686
---------------
FINANCIAL SERVICES (0.2%)
9,300 Jefferies Group, Inc. 228,432
---------------
FOOD & KINDRED PRODUCTS (1.6%)
7,300 Canandaigua Brands, Inc.* 363,175
3,400 Coca-Cola Bottling Co. 184,876
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
104
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL CAP INDEX PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
FOOD & KINDRED PRODUCTS (continued)
<TABLE>
<C> <S> <C>
14,400 Corn Products International, Inc. $ 424,800
17,200 Earthgrains Co. 403,126
3,600 J&J Snack Foods Corp.* 74,700
12,600 Ralcorp Holdings, Inc.* 237,826
16,800 Smithfield Foods, Inc.* 448,351
---------------
2,136,854
---------------
FOOD STORES (0.4%)
4,900 Panera Bread Co., Class A* 34,300
10,700 Whole Foods Market, Inc.* 444,050
---------------
478,350
---------------
FURNITURE & FIXTURES (0.8%)
5,100 Bassett Furniture Industries, Inc. 122,400
16,500 Ethan Allen Interiors, Inc. 525,938
21,100 LA-Z-BOY, Inc. 419,364
---------------
1,067,702
---------------
GENERAL MERCHANDISE STORES (1.1%)
11,100 Ames Department Stores, Inc.* 455,100
21,200 Casey's General Stores, Inc. 284,875
3,100 GC Companies, Inc.* 111,989
5,100 Gottschalks, Inc.* 42,075
10,500 Shopko Stores, Inc.* 372,750
18,300 Stein Mart, Inc.* 168,132
---------------
1,434,921
---------------
HEALTH CARE (0.9%)
24,400 VISX, Inc.* 1,266,981
---------------
HEALTH SERVICES (3.1%)
23,700 Coventry Health Care, Inc.* 314,025
5,100 Curative Health Services, Inc.* 34,744
10,000 Enzo Biochem, Inc.* 107,500
13,500 Express Scripts, Inc.* 946,688
14,200 Genesis Health Ventures, Inc. 63,013
15,500 Idexx Laboratories, Inc.* 395,250
21,300 Integrated Health Services, Inc.* 125,139
12,800 Magellan Health Services, Inc.* 103,200
29,500 Mariner Post-Acute Network* 66,375
19,300 Orthodontic Centers of America, Inc.* 232,807
6,100 Pediatrix Medical Group, Inc.*# 137,633
30,600 PhyCor, Inc.* 213,245
17,600 Renal Care Group, Inc.* 488,400
10,900 Sierra Health Services, Inc.* 166,225
4,400 Syncor International Corp.* 149,600
13,200 Universal Health Services, Inc.* 658,350
---------------
4,202,194
---------------
HEAVY CONSTRUCTION OTHER THAN BUILDING CONSTRUCTION--
CONTRACTORS (0.2%)
21,400 Morrison Knudsen Corp.* 212,664
---------------
HOLDING & OTHER INVESTMENT OFFICES (0.2%)
7,400 DBT Online, Inc.* 266,400
---------------
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL CAP INDEX PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
<TABLE>
<C> <S> <C>
HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES (1.4%)
15,000 Bombay Co., Inc.* $ 91,877
15,700 Linens 'N Things, Inc.* 626,039
8,200 MicroAge, Inc.* 45,869
39,200 Pier 1 Imports, Inc. 433,651
22,500 Williams-Sonoma, Inc.* 670,782
---------------
1,868,218
---------------
HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGING PLACES (0.4%)
18,300 Aztar Corp.* 123,525
12,600 Marcus Corp. 158,288
21,100 Prime Hospitality Corp.* 220,232
---------------
502,045
---------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT (4.0%)
14,400 Anixter International, Inc.* 254,700
17,000 Applied Magnetics Corp.*# 51,000
15,500 Applied Power, Inc. 375,875
7,600 Astec Industries, Inc.* 284,051
10,400 Auspex Systems, Inc.* 113,101
7,900 BancTec, Inc.* 127,388
6,600 Dialogic Corp.* 220,276
7,900 Electroglas, Inc.* 114,550
9,100 Exabyte Corp.* 50,050
14,800 Fedders Corp. 84,176
5,900 Flow International Corp.* 58,263
6,500 Gardner Denver, Inc.* 111,313
8,800 Global Industrial Technologies, Inc.* 109,451
8,100 Graco, Inc. 264,770
21,500 Komag, Inc.* 81,969
9,400 Kulicke & Soffa Industries, Inc.* 198,576
5,300 Lindsay Manufacturing Co. 93,413
10,350 Manitowoc Co., Inc. 351,900
6,500 Micro Systems, Inc.* 203,125
19,300 Paxar Corp.* 174,907
4,400 Robbins & Myers, Inc. 105,051
7,200 Scott Technologies, Inc.* 135,901
5,100 SPS Technologies, Inc.* 216,113
6,500 Telxon Corp. 67,438
5,100 Toro Co. 171,170
8,500 Ultratech Stepper, Inc.*# 111,564
10,100 Valmont Industries, Inc. 166,966
12,000 Varian Medical Systems, Inc. 225,751
3,500 Walbro Corp.* 68,469
11,200 Watsco, Inc. 216,300
9,600 Xircom, Inc.* 242,400
12,600 Zebra Technologies Corp.* 404,777
---------------
5,454,754
---------------
INSURANCE AGENTS, BROKERS & SERVICE (0.3%)
6,900 Arthur J. Gallagher & Co. 335,944
5,300 Hilb, Rogal, and Hamilton Co. 107,989
---------------
443,933
---------------
INSURANCE CARRIERS (4.3%)
17,300 American Bankers Insurance Group, Inc. 927,713
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
105
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL CAP INDEX PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
INSURANCE CARRIERS (continued)
<TABLE>
<C> <S> <C>
12,800 Capital Re Corp. $ 208,800
9,200 CMAC Investment Corp. 465,176
4,100 Compdent Corp.* 59,450
8,364 Delphi Financial Group, Class A* 290,126
15,100 Enhance Financial Services Group, Inc.# 295,395
4,400 Executive Risk, Inc. 375,100
11,600 Fidelity National Financial, Inc. 196,476
24,200 First American Financial Corp. 397,789
28,100 Fremont General Corp. 595,370
14,900 Frontier Insurance Group, Inc. 256,094
16,100 Mutual Risk Management Ltd. 587,650
7,400 NAC Re Corp. 403,763
10,900 Orion Capital Corp. 318,144
11,300 Selective Insurance Group, Inc. 213,289
4,500 Trenwick Group, Inc. 141,750
6,900 Zenith National Insurance Corp. 156,975
---------------
5,889,060
---------------
LEATHER & LEATHER PRODUCTS (0.8%)
7,300 Brown Shoe Company, Inc. 138,700
10,600 Justin Industries 142,437
4,300 K-Swiss, Inc. 246,713
4,600 Timberland Co.* 297,850
16,500 Wolverine World Wide, Inc. 222,750
---------------
1,048,450
---------------
LEGAL SERVICES (0.2%)
9,400 Pre-Paid Legal Services, Inc.* 249,688
---------------
LOCAL & SUBURBAN TRANSIT & INTERURBAN HIGHWAY PASSENGER TRANSPORTATION (0.0%)
5,800 Rural/Metro Corp.* 43,863
---------------
LUMBER & WOOD PRODUCTS, EXCEPT FURNITURE (0.7%)
19,400 Champion Enterprises, Inc.* 396,488
18,900 Oakwood Homes Corp. 236,250
3,600 Skyline Corp. 112,275
6,300 TJ International, Inc. 173,250
---------------
918,263
---------------
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC,
MEDICAL & OPTICAL GOODS (3.1%)
8,300 ADAC Laboratories* 66,919
3,700 Amcast Industrial Corp. 62,206
5,100 Analogic Corp. 166,069
12,400 Ballard Medical Products 294,500
9,600 Coherent, Inc.* 154,802
5,800 Cooper Cos., Inc. 131,588
8,900 Cygnus, Inc.* 101,239
7,000 Daniel Industries 147,000
6,100 Datascope Corp.* 153,454
5,600 Diagnostic Products Corp. 127,400
6,900 Esterline Technologies Corp.* 103,069
7,600 Hanger Orthopedic Group, Inc.* 124,450
5,400 Hologic, Inc.* 41,176
20,300 Input/Output, Inc.* 172,550
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL CAP INDEX PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC,
MEDICAL & OPTICAL GOODS (continued)
<TABLE>
<C> <S> <C>
5,000 Intermagnetics General Corp.* $ 39,063
12,000 Invacare Corp. 299,251
6,500 Ionics, Inc.* 203,532
5,800 Maxxim Medical, Inc.* 92,076
9,800 Mentor Corp. 156,188
7,500 Molecular Biosystems, Inc.* 18,750
2,500 Nashua Corp.* 28,439
8,300 ReSound Corp.* 63,807
12,800 Respironics, Inc.* 206,401
12,100 Roper Industries, Inc. 390,225
10,000 Sola International, Inc.* 166,875
3,700 SpaceLabs Medical, Inc.* 57,350
17,100 Summit Technology, Inc.* 337,725
9,000 Sunrise Medical, Inc.* 74,813
8,900 Trimble Navigation Ltd.* 111,250
4,500 Whittaker Corp.* 120,939
8,500 X-Rite, Inc. 59,500
---------------
4,272,606
---------------
METAL MINING (0.5%)
6,600 Brush Wellman, Inc. 111,788
8,800 Coeur D'Alene Mines Corp.*# 36,851
22,200 Hecla Mining Co.* 54,113
13,700 Stillwater Mining Co.* 437,544
---------------
640,296
---------------
MINING & QUARRYING OF NONMETALLIC MINERALS, EXCEPT FUELS (0.3%)
10,900 AMCOL International Corp. 154,644
7,600 Florida Rock Industries, Inc. 303,051
---------------
457,695
---------------
MISCELLANEOUS MANUFACTURING INDUSTRIES (0.3%)
6,700 Cross (A.T.) Co. 41,875
11,400 Jan Bell Marketing, Inc.* 34,913
6,700 K2, Inc. 66,582
6,300 Lydall, Inc.* 75,994
9,000 Russ Berrie & Co., Inc. 231,187
---------------
450,551
---------------
MISCELLANEOUS RETAIL (1.0%)
7,100 Books-A-Million, Inc.*# 58,575
10,100 Cash America International, Inc. 128,144
2,600 Damark International, Inc., Class A* 25,513
7,900 Hancock Fabrics, Inc. 44,932
7,700 Jo-Ann Stores, Inc.* 129,456
3,600 Lillian Vernon Corp. 46,351
11,500 Michaels Stores, Inc.* 307,625
12,800 Sports Authority, Inc.* 64,000
14,500 Zale Corp.* 559,157
---------------
1,363,753
---------------
MOTION PICTURES (0.2%)
9,900 Avid Technology, Inc.* 160,875
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
106
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL CAP INDEX PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
MOTION PICTURES (continued)
<TABLE>
<C> <S> <C>
4,500 Carmike Cinemas, Inc.* $ 79,032
---------------
239,907
---------------
MOTOR FREIGHT TRANSPORTATION & WAREHOUSING (1.3%)
12,700 American Freightways Corp.* 222,250
7,900 Arkansas Best Corp.* 70,114
6,700 Frozen Food Express Industries, Inc. 46,063
12,100 Heartland Express, Inc.* 185,282
4,200 Landstar System, Inc.* 158,026
5,000 M.S. Carriers, Inc.* 158,126
10,500 USFreightways Corp. 413,439
19,100 Werner Enterprises, Inc. 368,870
10,300 Yellow Corp.* 175,100
---------------
1,797,270
---------------
NONDEPOSITORY CREDIT INSTITUTIONS (0.3%)
25,400 AmeriCredit Corp.* 404,813
---------------
OIL & GAS EXTRACTION (2.6%)
11,900 Benton Oil & Gas Co.* 41,650
10,000 Cabot Oil and Gas Corp. 178,751
18,400 Cross Timbers Oil Co. 198,952
13,000 Devon Energy Corp.# 451,750
605 Eagle Geophysical, Inc.* 2,042
7,500 HS Resources, Inc.* 90,000
16,300 Newfield Exploration Co.* 413,614
9,100 Oceaneering International, Inc.* 140,482
6,800 Plains Resources, Inc.* 116,875
16,100 Pogo Producing Co. 294,831
8,500 Pool Energy Services Co.* 143,438
20,300 Pride International, Inc.* 211,882
8,600 Remington Oil & Gas Corp.* 35,475
5,100 SEACOR SMIT, Inc.* 253,088
9,400 Seitel, Inc.* 148,638
4,400 St. Mary Land & Exploration Co. 88,000
6,000 Stone Energy Corp.* 226,125
5,400 Tetra Technologies, Inc. 45,900
18,000 Tuboscope Vetco International Corp.* 240,752
21,400 Vintage Petroleum, Inc. 240,750
---------------
3,562,995
---------------
PAPER & ALLIED PRODUCTS (0.5%)
14,300 Buckeye Technologies, Inc.* 233,269
5,400 Pope & Talbot, Inc. 54,000
4,800 Republic Group, Inc. 85,801
6,500 Schweitzer-Mauduit International, Inc. 99,532
11,000 Shorewood Packaging Corp.* 188,376
---------------
660,978
---------------
PERSONAL SERVICES (0.7%)
3,500 Angelica Corp. 59,282
4,100 CPI Corp. 129,150
8,300 G & K Services, Inc. 392,175
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL CAP INDEX PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
PERSONAL SERVICES (continued)
<TABLE>
<C> <S> <C>
15,300 Regis Corp. $ 369,114
---------------
949,721
---------------
PETROLEUM REFINING & RELATED INDUSTRIES (0.3%)
5,200 Elcor Corp. 209,950
6,200 WD-40 Co. 159,263
---------------
369,213
---------------
PHARMACEUTICAL PREPARATIONS (0.1%)
18,700 Dura Pharmaceuticals, Inc.* 194,013
---------------
PRIMARY METAL INDUSTRIES (2.0%)
9,800 Belden, Inc. 230,912
11,900 Birmingham Steel Corp. 60,989
6,500 Commonwealth Industries, Inc. 69,875
19,800 CommScope, Inc.* 519,750
6,700 IMCO Recycling, Inc. 112,225
10,300 Intermet Corp. 142,914
14,400 Mueller Industries, Inc.* 417,600
5,700 Quanex Corp. 148,914
8,400 RTI International Metals, Inc.*# 111,826
4,500 Steel Technologies, Inc. 40,500
8,500 Texas Industries, Inc. 309,188
14,700 Tredegar Corp. 315,132
7,100 WHX Corp.* 53,250
5,700 Wolverine Tube, Inc.* 135,732
---------------
2,668,807
---------------
PRINTING, PUBLISHING & ALLIED INDUSTRIES (1.7%)
14,900 Bowne & Co., Inc. 249,575
5,800 Consolidated Graphics, Inc.* 267,527
6,400 Gibson Greetings, Inc.* 46,400
12,500 John H. Harland Co. 223,438
6,500 Merrill Corp. 98,313
5,800 New England Business Service, Inc. 157,689
5,900 Thomas Nelson, Inc. 57,895
22,950 Valassis Communications, Inc.* 798,947
15,400 World Color Press, Inc.* 392,700
---------------
2,292,484
---------------
RAILROAD TRANSPORTATION (0.0%)
3,700 RailTex, Inc.* 49,950
---------------
RUBBER & MISCELLANEOUS PLASTICS PRODUCTS (0.4%)
6,200 O'Sullivan Corp. 55,026
22,000 Safeskin Corp.* 275,000
6,500 Standard Products Co. 145,032
8,400 Titan International, Inc. 78,751
---------------
553,809
---------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES (2.4%)
19,700 Amresco Inc.* 135,439
5,000 Dain Rauscher Corp. 260,313
14,400 Eaton Vance Corp. 441,001
9,700 Hambrecht & Quist Group* 348,594
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
107
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL CAP INDEX PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES (continued)
<TABLE>
<C> <S> <C>
22,700 Legg Mason, Inc. $ 767,546
10,400 Pioneer Group, Inc.* 183,301
19,300 Raymond James Financial, Inc. 427,013
7,100 SEI Investments Co. 724,200
---------------
3,287,407
---------------
STONE, CLAY, GLASS & CONCRETE PRODUCTS (1.1%)
28,900 Gentex Corp.* 867,904
6,500 Libbey, Inc. 194,594
8,200 Lone Star Industries, Inc.# 292,125
5,200 Standex International Corp. 135,851
---------------
1,490,474
---------------
TECHNOLOGY (0.2%)
10,600 Varian Semiconductor Equipment Associates, Inc.* 131,838
10,600 Varian, Inc.* 106,000
---------------
237,838
---------------
TEXTILE MILL PRODUCTS (0.5%)
10,200 Cone Mills Corp.* 63,113
9,800 Delta Woodside Industries, Inc. 69,213
4,800 Galey & Lord, Inc.* 19,801
9,300 Guilford Mills, Inc. 93,000
21,100 Interface, Inc. 163,525
3,300 Oxford Industries, Inc. 91,575
4,500 The Dixie Group, Inc. 41,063
10,200 Triarc Cos., Inc.* 207,826
---------------
749,116
---------------
TRANSPORTATION BY AIR (0.4%)
11,500 Mesa Air Group, Inc.* 76,188
8,600 Offshore Logistics, Inc.* 97,288
7,800 Pittston BAX Group 84,338
9,800 SkyWest, Inc. 227,850
---------------
485,664
---------------
TRANSPORTATION EQUIPMENT (2.5%)
9,400 A. O. Smith Corp. 229,127
11,100 AAR Corp. 219,225
11,000 Arctic Cat, Inc. 91,437
9,900 BE Aerospace, Inc.* 176,964
10,100 Clarcor, Inc. 185,588
6,700 Coachmen Industries, Inc. 147,400
11,600 Halter Marine Group, Inc.* 85,551
4,800 Huffy Corp. 64,501
17,800 JLG Industries, Inc. 343,763
8,300 Kroll-O'Gara Co.* 166,778
14,900 Orbital Sciences Corp.* 337,114
10,300 Polaris Industries, Inc. 443,543
8,400 Regal-Beloit Corp. 195,300
7,400 Simpson Industries, Inc. 74,463
5,100 Spartan Motors, Inc. 29,325
5,200 Standard Motor Products, Inc. 123,826
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL CAP INDEX PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
TRANSPORTATION EQUIPMENT (continued)
<TABLE>
<C> <S> <C>
4,900 Thor Industries, Inc. $ 128,932
9,300 Wabash National Corp. 177,281
9,000 Winnebago Industries, Inc. 148,500
---------------
3,368,618
---------------
TRANSPORTATION SERVICES (0.8%)
13,600 Air Express International Corp. 340,000
10,000 Expeditors International of Washington, Inc. 556,252
14,600 Fritz Companies, Inc.* 156,950
---------------
1,053,202
---------------
WATER TRANSPORTATION (0.1%)
8,400 Kirby Corp.* 158,550
---------------
WHOLESALE TRADE--DURABLE GOODS (2.9%)
8,700 Applied Industrial Technologies, Inc. 147,357
5,000 Aviation Sales Co.* 192,500
8,000 Barnes Group, Inc. 184,500
3,900 Bell Industries, Inc.* 39,975
5,100 Building Materials Holding Corp.* 58,650
5,700 Castle (A.M.) & Co. 87,639
5,900 Commercial Metals Co. 138,282
7,200 Department 56, Inc.* 238,950
5,900 Digi International, Inc.* 49,414
18,000 Ha-Lo Industries, Inc.* 217,125
9,700 Hughes Supply, Inc. 261,294
10,100 Insight Enterprises, Inc.*# 256,288
9,500 Kaman Corp., Class A 125,875
11,200 Kent Electronics Corp.* 146,301
4,300 Lawson Products, Inc. 106,425
6,700 Marshall Industries* 118,088
13,100 Owens & Minor, Inc. Holding Co. 142,464
13,400 Patterson Dental Co.* 490,776
10,700 Pioneer-Standard Electronics, Inc. 104,994
7,400 Reliance Steel & Aluminum Co. 263,626
4,700 Simpson Manufacturing Co., Inc.* 208,563
8,500 TBC Corp.* 60,031
8,400 Universal Forest Products, Inc. 151,200
5,000 Vital Signs, Inc. 95,939
7,600 Wynn's International, Inc. 137,275
---------------
4,023,531
---------------
WHOLESALE TRADE--NONDURABLE GOODS (1.9%)
12,800 Barrett Resources Corp.* 432,801
8,900 Bindley Western Industries, Inc. 268,114
10,100 Caraustar Industries, Inc. 266,388
17,900 DIMON, Inc.# 93,975
15,400 Fleming Cos., Inc. 158,814
14,100 Men's Wearhouse, Inc.* 359,992
7,400 Myers Industries, Inc. 169,277
4,500 Nash-Finch Co. 42,188
8,200 NCS HealthCare, Inc.* 112,750
7,500 Priority Healthcare Corp.* 255,938
19,200 Richfood Holdings, Inc. 246,001
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
108
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL CAP INDEX PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
WHOLESALE TRADE--NONDURABLE GOODS (continued)
<TABLE>
<C> <S> <C>
18,700 Stride Rite Corp. $ 195,183
---------------
2,601,421
---------------
TOTAL COMMON STOCKS (COST $150,489,579) 133,913,540
---------------
U.S. TREASURY BILLS (0.7%)
250,000 3.96%--4.55% yield, 9/16/99 246,508
595,000 4.46%--4.79% yield, 11/12/99 582,041
150,000 4.67% yield, 4/27/00 143,256
---------------
971,805
---------------
TOTAL U.S. TREASURY BILLS (COST $973,938) 971,805
---------------
TIME DEPOSITS (1.3%)
1,768,616 Societe Generale, 4.50%, 6/1/99 (cost $1,768,616) 1,768,616
TOTAL INVESTMENTS (100.0%) (COST $153,232,133) $ 136,653,961
---------------
---------------
FINANCIAL FUTURES CONTRACTS ##
</TABLE>
<TABLE>
<CAPTION>
UNREALIZED
POSITION CONTRACTS INDEX GAIN (LOSS)
- --------- --------------- ----------------------------------- -------------
<S> <C> <C> <C>
Long 11 Russell 2000 Index, Expiring June
18, 1999, (notional value
$2,424,675) $ 247,175
</TABLE>
<TABLE>
<C> <S> <C>
- -----------------------------------------------------------------
SMALL COMPANY STOCK PORTFOLIO
- -----------------------------------------------------------------
COMMON STOCKS (99.6%)
AGRICULTURAL SERVICES (0.2%)
22,729 Veterinary Centers of America, Inc.* $ 316,786
---------------
AMUSEMENT & RECREATION SERVICES (0.5%)
19,100 Westwood One, Inc.* 663,725
---------------
APPAREL & ACCESSORY STORES (1.2%)
19,210 American Eagle Outfitters, Inc.* 784,008
37,056 Just For Feet, Inc.*# 282,553
13,700 Pacific Sunwear of California, Inc.* 513,750
---------------
1,580,311
---------------
AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS (0.8%)
17,559 CSK Auto Corp.* 491,652
13,900 O'Reilly Automotive, Inc.* 612,469
---------------
1,104,121
---------------
AUTOMOTIVE REPAIR, SERVICES & PARKING (1.0%)
21,179 Avis Rent A Car, Inc.* 607,573
19,300 Central Parking Corp.# 627,250
16,447 United Road Services, Inc.* 127,465
---------------
1,362,288
---------------
BUILDING CONSTRUCTION--GENERAL CONTRACTORS & OPERATIVE
BUILDERS (0.2%)
11,715 Lennar Corp. 265,052
---------------
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL COMPANY STOCK PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
<TABLE>
<C> <S> <C>
BUSINESS SERVICES (20.9%)
13,100 ABM Industries, Inc. $ 357,794
50,700 Acxiom Corp.* 1,368,900
21,464 Administaff, Inc.* 343,424
27,400 American Management Systems, Inc.* 869,950
16,505 Axent Technologies, Inc.* 205,281
6,203 Bindview Development Corp.* 123,285
17,500 BISYS Group, Inc.* 960,861
12,420 BMC Software, Inc.*# 614,014
9,122 Cambridge Technology Partners, Inc.* 155,074
12,000 Catalina Marketing Corp.* 1,062,751
35,100 Ciber, Inc.*# 752,456
8,372 CMGI, Inc.*# 867,549
26,200 Cognex Corp.* 704,126
12,883 Cognizant Technology Solutions Corp.* 323,685
9,692 Com21, Inc.* 174,456
38,397 Convergys Corp.* 676,747
20,553 Cotelligent, Inc.* 274,897
5,725 CSG Systems International, Inc.* 182,843
13,255 Documentum, Inc.*# 185,570
8,524 Excite, Inc.* 1,133,692
9,300 Fair, Isaac and Co., Inc. 304,575
12,500 Henry (Jack) & Associates 441,407
16,900 HNC Software, Inc.*# 457,356
10,148 IMRglobal Corp.* 212,474
8,937 International Network Services*# 334,021
16,105 International Telecommunication Data Systems, Inc.* 201,313
2,065 Lamar Advertising Co.* 70,468
10,000 Lason, Inc.* 383,126
12,799 Legato Systems, Inc.* 700,745
2,879 Lycos, Inc.* 289,340
26,200 Macromedia, Inc.* 1,004,608
1,140 MarketWatch.com, Inc.*# 59,137
23,200 Mercury Interactive Corp.* 762,700
24,971 Metamor Worldwide, Inc.* 683,581
7,110 Micromuse, Inc.* 283,512
2,992 MindSpring Enterprises, Inc.* 221,408
20,400 National Computer Systems, Inc. 637,500
37,879 National Data Corp. 1,782,681
21,600 National Instruments Corp.* 822,150
26,424 NOVA Corp.* 587,934
13,250 Policy Management Systems Corp.* 481,969
7,839 PSINet, Inc.* 348,836
5,878 RealNetworks, Inc.* 416,603
18,186 Security Dynamics Technologies, Inc.* 345,534
17,063 SEI Investments Co. 1,740,426
12,485 StaffMark, Inc.* 135,774
29,500 True North Communications, Inc. 689,563
4,517 USWeb Corp.* 114,619
9,435 Verio, Inc.* 511,849
9,721 VeriSign, Inc.* 1,151,939
7,747 Vignette Corp.* 459,010
---------------
27,973,513
---------------
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
109
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL COMPANY STOCK PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
<TABLE>
<C> <S> <C>
CHEMICALS & ALLIED PRODUCTS (7.7%)
8,360 ALZA Corp.*# $ 298,348
14,600 Barr Laboratories, Inc.* 480,888
15,200 Biomatrix, Inc.*# 465,500
17,074 Cambrex Corp. 384,165
8,437 Coulter Pharmaceutical, Inc.*# 219,362
23,659 Invitrogen Corp.* 461,351
34,905 Jones Pharma, Inc. 1,241,309
16,400 Macdermid, Inc. 660,100
17,345 Medicis Pharmaceutical Corp.* 463,979
40,739 MedImmune, Inc.* 2,591,973
35,014 Parexel International Corp.* 838,148
24,315 Pharmacyclics, Inc.* 454,387
12,200 Scotts Co.* 536,800
3,591 Sepracor, Inc.*# 228,926
18,529 Serologicals Corp.* 147,074
14,414 Warner-Lambert Co. 893,675
---------------
10,365,985
---------------
COMMUNICATIONS (1.7%)
34,200 Brightpoint, Inc.* 194,513
1,494 Covad Communications Group, Inc.* 76,007
16,675 Emmis Communications Corp.* 779,556
20,069 ITC DeltaCom, Inc.* 479,148
11,100 Metro Networks, Inc.* 617,438
3,364 Voicestream Wireless Corp.* 91,879
3,364 Western Wireless Corp.* 82,418
---------------
2,320,959
---------------
CONSTRUCTION--SPECIAL TRADE CONTRACTORS (0.6%)
15,965 Dycom Industries, Inc.* 770,312
---------------
DEPOSITORY INSTITUTIONS (9.3%)
17,700 Centura Banks, Inc. 1,032,131
5,105 CNB Bancshares, Inc. 220,153
17,800 Commerce Bancorp, Inc. 716,450
25,284 Commercial Federal Corp. 576,792
23,403 Community First Bankshares, Inc. 495,852
17,500 Cullen/Frost Bankers, Inc. 984,375
19,900 First Bancorp/Puerto Rico 477,600
19,400 First Midwest Bancorp, Inc. 751,750
27,337 FirstFed Financial Corp.* 515,986
54,600 FirstMerit Corp. 1,491,263
37,707 Hudson United Bancorp 1,154,778
13,900 Queens County Bancorp, Inc. 439,588
3,849 Silicon Valley Bancshares* 74,094
17,900 TrustCo Bank Corp NY 501,200
12,200 U.S. Trust Corp. 1,069,788
27,900 UST Corp. 673,088
28,100 United Bankshares, Inc. 749,919
15,300 Whitney Holding Corp. 623,475
---------------
12,548,282
---------------
EATING & DRINKING PLACES (0.9%)
24,971 CKE Restaurants, Inc. 458,842
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL COMPANY STOCK PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
EATING & DRINKING PLACES (continued)
<TABLE>
<C> <S> <C>
25,600 Foodmaker, Inc.* $ 691,200
---------------
1,150,042
---------------
EDUCATIONAL SERVICES (0.7%)
44,500 DeVry, Inc.* 990,125
---------------
ELECTRIC, GAS & SANITARY SERVICES (0.3%)
18,500 Philadelphia Suburban Corp. 407,000
---------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT (10.6%)
13,824 Applied Micro Circuits Corp.* 817,344
24,100 Baldor Electric Co. 463,925
24,100 Burr-Brown Corp.* 771,200
24,500 C-Cube Microsystems, Inc.*# 614,032
17,730 Celestica, Inc.* 702,552
16,675 DII Group, Inc.* 549,233
14,500 Dionex Corp.* 593,594
3,120 L-3 Communications Holdings, Inc.* 153,660
20,096 Level One Communications, Inc.* 909,344
14,764 Maxwell Technologies, Inc.* 332,190
13,100 Micrel, Inc.* 733,600
10,148 Network Appliance, Inc.* 478,542
30,267 Novellus Systems, Inc.*# 1,477,409
21,094 NVIDIA Corp.*# 359,916
10,800 Plantronics, Inc.* 661,500
16,646 PMC-Sierra, Inc.* 808,372
9,721 Power Integrations, Inc.* 472,077
3,905 Rambus, Inc.*# 302,638
9,441 Sanmina Corp.*# 707,928
66 SDL, Inc.* 6,138
42,600 Vitesse Semiconductor Corp.* 2,340,338
---------------
14,255,532
---------------
ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT & RELATED
SERVICES (2.8%)
24,200 Blount International, Inc., Class A 674,576
18,100 Incyte Pharmaceuticals, Inc.* 470,600
21,200 MedQuist, Inc.* 779,100
14,935 Metzler Group, Inc.* 489,121
15,300 Pharmaceutical Product Development, Inc.*# 409,275
33,400 Whittman-Hart, Inc.* 947,726
---------------
3,770,398
---------------
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT (0.8%)
7,300 Alliant Techsystems, Inc.* 620,500
30,100 Mascotech, Inc. 470,313
---------------
1,090,813
---------------
FINANCIAL SERVICES (0.2%)
13,700 Jefferies Group, Inc. 336,506
---------------
FOOD & KINDRED PRODUCTS (0.4%)
18,386 American Italian Pasta Co.* 505,616
---------------
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
110
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL COMPANY STOCK PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
<TABLE>
<C> <S> <C>
FOOD STORES (0.5%)
17,300 Whole Foods Market, Inc.*# $ 717,950
---------------
FURNITURE & FIXTURES (0.6%)
27,000 Ethan Allen Interiors, Inc. 860,625
---------------
GENERAL MERCHANDISE STORES (1.6%)
14,368 99 Cents Only Stores*# 677,092
23,574 Ames Department Stores, Inc.* 966,534
3,658 BJ's Wholesale Club, Inc.* 95,108
34,400 Casey's General Stores, Inc. 462,250
---------------
2,200,984
---------------
HEALTH SERVICES (4.3%)
28,392 Covance, Inc.*# 601,556
22,000 Express Scripts, Inc.* 1,542,750
2,192 Healtheon Corp.*# 195,088
25,300 Idexx Laboratories, Inc.* 645,150
31,200 Orthodontic Centers of America, Inc.* 376,350
16,440 Quintiles International* 667,875
26,500 Renal Care Group, Inc.* 735,375
21,300 Universal Health Services, Inc.* 1,062,338
---------------
5,826,482
---------------
HOLDING & OTHER INVESTMENT OFFICES (0.2%)
10,928 Golf Trust of America, Inc. 266,371
---------------
HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES (1.9%)
14,134 Cost Plus, Inc.* 528,258
25,500 Linens 'N Things, Inc.* 1,016,813
36,300 Williams-Sonoma, Inc.* 1,082,194
---------------
2,627,265
---------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT (2.5%)
31,309 Applied Power, Inc. 759,243
16,950 Manitowoc Co., Inc. 576,300
16,105 Metris Cos., Inc. 939,123
15,100 Xircom, Inc.* 381,275
20,400 Zebra Technologies Corp.* 655,350
---------------
3,311,291
---------------
INSURANCE AGENTS, BROKERS & SERVICE (0.4%)
11,300 Arthur J. Gallagher & Co. 550,169
---------------
INSURANCE CARRIERS (2.5%)
14,000 American Bankers Insurance Group, Inc. 750,751
14,800 CMAC Investment Corp. 748,325
39,200 First American Financial Corp. 644,350
2,901 MONY Group, Inc. 80,140
26,200 Mutual Risk Management Ltd.# 956,300
5,689 Reinsurance Group of America, Inc.# 221,871
---------------
3,401,737
---------------
LEGAL SERVICES (0.3%)
15,400 Pre-Paid Legal Services, Inc.* 409,063
---------------
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL COMPANY STOCK PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
<TABLE>
<C> <S> <C>
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC,
MEDICAL & OPTICAL GOODS (3.5%)
19,900 Ballard Medical Products $ 472,625
10,719 Cymer, Inc.* 196,292
19,500 Invacare Corp. 486,281
11,545 Maxxim Medical, Inc.* 183,277
19,698 Ocular Sciences, Inc.* 600,790
20,500 Roper Industries, Inc. 661,125
39,800 VISX, Inc.* 2,067,113
---------------
4,667,503
---------------
METAL MINING (0.5%)
22,100 Stillwater Mining Co.* 705,819
---------------
MISCELLANEOUS RETAIL (0.4%)
15,104 Zale Corp.* 582,448
---------------
MOTION PICTURES (0.2%)
16,000 Avid Technology, Inc.* 260,000
---------------
NONDEPOSITORY CREDIT INSTITUTIONS (0.7%)
29,076 AmeriCredit Corp.* 463,399
12,771 HealthCare Financial Partners, Inc.* 431,021
---------------
894,420
---------------
OIL & GAS EXTRACTION (2.1%)
22,577 B.J. Services Co.*# 622,279
25,000 Delta & Pine Land Co. 732,813
20,922 ENSCO International, Inc. 371,366
26,400 Newfield Exploration Co.* 669,901
21,322 Veritas DGC, Inc.* 389,127
---------------
2,785,486
---------------
PERSONAL SERVICES (1.4%)
13,500 G & K Services, Inc. 637,875
53,870 Regis Corp. 1,299,614
---------------
1,937,489
---------------
PRIMARY METAL INDUSTRIES (1.9%)
32,200 CommScope, Inc.* 845,250
23,400 Mueller Industries, Inc.* 678,600
17,745 Superior TeleCom, Inc.# 525,696
22,200 Tredegar Corp. 475,913
---------------
2,525,459
---------------
PRINTING, PUBLISHING & ALLIED INDUSTRIES (1.3%)
9,300 Consolidated Graphics, Inc.* 428,963
37,350 Valassis Communications, Inc.* 1,300,247
---------------
1,729,210
---------------
REAL ESTATE (0.3%)
24,885 Stewart Enterprises, Inc. 458,817
---------------
RUBBER & MISCELLANEOUS PLASTICS PRODUCTS (0.3%)
35,600 Safeskin Corp.* 445,000
---------------
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
111
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL COMPANY STOCK PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
<TABLE>
<C> <S> <C>
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES (3.3%)
34,378 E*TRADE Group, Inc.*# $ 1,529,821
23,400 Eaton Vance Corp. 716,625
13,700 Investment Technology Group, Inc. 607,081
36,300 Legg Mason, Inc. 1,227,394
12,429 Waddell & Reed Financial, Inc.--Class A 304,511
---------------
4,385,432
---------------
STONE, CLAY, GLASS & CONCRETE PRODUCTS (1.3%)
16,362 Dal-Tile International, Inc.* 160,552
47,000 Gentex Corp.* 1,411,471
29,895 Media Arts Group, Inc.*# 207,399
---------------
1,779,422
---------------
TEXTILE MILL PRODUCTS (0.8%)
37,400 Mohawk Industries, Inc.* 1,089,275
---------------
TRANSPORTATION BY AIR (1.2%)
63,900 Comair Holdings, Inc. 1,210,106
15,900 SkyWest, Inc. 369,675
---------------
1,579,781
---------------
TRANSPORTATION EQUIPMENT (1.5%)
28,700 JLG Industries, Inc. 554,269
13,500 Kroll-O'Gara Co.* 271,267
24,100 Orbital Sciences Corp.* 545,263
16,700 Polaris Industries, Inc. 719,144
---------------
2,089,943
---------------
TRANSPORTATION SERVICES (0.7%)
16,100 Expeditors International of Washington, Inc. 895,563
---------------
WHOLESALE TRADE--DURABLE GOODS (0.6%)
869 Martin Marietta Materials, Inc. 52,683
21,800 Patterson Dental Co.* 798,425
---------------
851,108
---------------
WHOLESALE TRADE--NONDURABLE GOODS (2.0%)
31,014 AmeriSource Health Corp.* 916,851
10,034 Barrett Resources Corp.* 339,275
16,300 Caraustar Industries, Inc. 429,913
13,939 Henry Schein, Inc.* 420,784
23,400 Men's Wearhouse, Inc.* 597,432
---------------
2,704,255
---------------
TOTAL COMMON STOCKS (COST $130,862,157) 134,315,733
---------------
REPURCHASE AGREEMENTS (0.4%)
597,042 Bear, Stearns & Cos., Inc., 4.90%, 6/1/99 (cost $597,042)** 597,042
---------------
TOTAL INVESTMENTS (100.0%) (COST $131,459,199) $ 134,912,775
---------------
---------------
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL CAP VALUE PORTFOLIO
- -----------------------------------------------------------------
COMMON STOCK (98.8%)
APPAREL & ACCESSORY STORES (5.7%)
52,270 AnnTaylor Stores Corp.*# $ 2,257,411
49,750 Intimate Brands, Inc.# 2,577,672
72,600 Talbots, Inc. 2,305,051
---------------
7,140,134
---------------
APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS (1.6%)
139,440 Columbia Sportswear Co.* 2,039,311
---------------
BUILDING CONSTRUCTION--GENERAL CONTRACTORS & OPERATIVE
BUILDERS (4.8%)
52,600 Centex Corp.# 1,949,487
41,910 NVR, Inc.* 2,016,919
72,780 Ryland Group, Inc. 2,024,195
---------------
5,990,601
---------------
BUSINESS SERVICES (11.6%)
71,970 AVT Corp.* 2,401,999
55,660 Check Point Software Technologies Ltd.*# 2,462,955
36,480 FactSet Research Systems, Inc. 1,559,522
47,090 InfoCure Corp.* 1,736,444
51,040 Kronos, Inc.* 1,889,277
124,400 Mastech Corp.* 2,386,925
91,940 THQ, Inc.*# 2,166,337
---------------
14,603,459
---------------
CHEMICALS & ALLIED PRODUCTS (4.7%)
71,870 ChiRex Inc.* 2,169,577
81,900 King Pharmaceuticals, Inc.* 1,945,126
129,200 Liposome Company, Inc.* 1,849,176
---------------
5,963,879
---------------
CONSTRUCTION--SPECIAL TRADE CONTRACTORS (1.3%)
99,400 Insituform Technologies, Class A* 1,664,951
---------------
DEPOSITORY INSTITUTIONS (4.8%)
114,900 FirstFed Financial Corp.* 2,168,739
72,660 Flagstar Bancorp, Inc. 1,707,510
109,100 Staten Island Bancorp, Inc. 2,100,178
---------------
5,976,427
---------------
EATING & DRINKING PLACES (5.3%)
90,870 Foodmaker, Inc.* 2,453,490
103,400 Ruby Tuesday, Inc. 1,919,363
81,525 Sonic Corp.* 2,244,490
---------------
6,617,343
---------------
ELECTRIC, GAS & SANITARY SERVICES (2.3%)
52,530 Calpine Corp.*# 2,846,432
---------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT (7.4%)
88,000 C-Cube Microsystems, Inc.*# 2,205,502
62,430 DII Group, Inc.* 2,056,288
146,850 InterVoice, Inc.* 1,633,707
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
112
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL CAP VALUE PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCK (continued)
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT
(continued)
<TABLE>
<C> <S> <C>
93,640 Melita International Corp.* $ 1,363,632
61,580 SLI, Inc.* 1,993,653
---------------
9,252,782
---------------
ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT & RELATED
SERVICES (2.5%)
63,300 AHL Services, Inc.* 1,677,450
97,640 RCM Technologies, Inc.* 1,434,088
---------------
3,111,538
---------------
FOOD & KINDRED PRODUCTS (1.4%)
35,530 Canandaigua Brands, Inc.* 1,767,619
---------------
FURNITURE & FIXTURES (3.6%)
118,640 LA-Z-BOY, Inc. 2,357,970
68,500 Winsloew Furniture, Inc.* 2,192,000
---------------
4,549,970
---------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT (8.7%)
90,570 Cybex Computer Products Corp.* 2,054,807
89,710 Detroit Diesel Corp. 2,225,931
50,470 Pentair, Inc. 2,226,990
76,590 Terex Corp.* 2,369,503
82,720 Xircom, Inc.* 2,088,681
---------------
10,965,912
---------------
INSURANCE AGENTS, BROKERS & SERVICE (2.0%)
39,350 E.W. Blanch Holdings, Inc. 2,518,400
---------------
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC,
MEDICAL & OPTICAL GOODS (7.8%)
159,550 Colorado MEDtech, Inc.* 2,253,645
61,910 Ocular Sciences, Inc.* 1,888,255
36,400 Orbotech Ltd.* 1,556,101
36,640 Pinnacle Systems, Inc.* 1,898,410
55,000 Xomed Surgical Products, Inc.* 2,241,250
---------------
9,837,661
---------------
MISCELLANEOUS MANUFACTURING INDUSTRIES (2.1%)
94,400 JAKKS Pacific, Inc.*# 2,613,701
---------------
MISCELLANEOUS RETAIL (0.8%)
65,130 Micro Warehouse, Inc.* 1,009,515
---------------
MOTOR FREIGHT TRANSPORTATION & WAREHOUSING (3.7%)
137,650 American Freightways Corp.* 2,408,875
68,950 M.S. Carriers, Inc.* 2,180,547
---------------
4,589,422
---------------
PRINTING, PUBLISHING & ALLIED INDUSTRIES (1.7%)
59,260 McClatchy Co. 2,181,509
---------------
STONE, CLAY, GLASS & CONCRETE PRODUCTS (1.8%)
62,960 Lone Star Industries, Inc.# 2,242,950
---------------
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL CAP VALUE PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCK (continued)
<TABLE>
<C> <S> <C>
TRANSPORTATION EQUIPMENT (8.6%)
82,290 A. O. Smith Corp. $ 2,005,821
49,900 Arvin Industries, Inc. 1,958,576
53,760 Cordant Technologies, Inc. 2,607,360
96,320 Kellstrom Industries, Inc.* 1,745,801
81,531 Monaco Coach Corp.* 2,445,900
---------------
10,763,458
---------------
WHOLESALE TRADE--DURABLE GOODS (3.2%)
69,680 AptarGroup, Inc. 1,916,200
92,400 Tower Automotive, Inc.*# 2,113,651
---------------
4,029,851
---------------
WHOLESALE TRADE--NONDURABLE GOODS (1.4%)
71,310 Men's Wearhouse, Inc.* 1,820,637
---------------
TOTAL COMMON STOCK (COST $109,171,495) 124,097,462
---------------
REPURCHASE AGREEMENTS (1.2%)
1,565,562 Bear, Stearns & Cos., Inc., 4.90%, 6/1/99 (cost $1,565,562) 1,565,562
---------------
TOTAL INVESTMENTS (100.0%) (COST $110,737,057) $ 125,663,024
---------------
---------------
- -----------------------------------------------------------------
SMALL COMPANY VALUE PORTFOLIO
- -----------------------------------------------------------------
COMMON STOCK (98.4%)
AEROSPACE (2.4%)
89,500 BE Aerospace, Inc.* $ 1,599,813
159,700 LMI Aerospace, Inc.* 778,539
171,852 TriStar Aerospace Co.* 1,589,631
---------------
3,967,983
---------------
APPAREL & ACCESSORY STORES (1.7%)
218,000 Genesco, Inc.* 2,915,752
---------------
APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS (1.0%)
188,762 Phillips-Van Heusen Corp. 1,651,668
---------------
BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS (2.9%)
79,927 M/I Schottenstein Homes, Inc. 1,548,588
137,500 Standard Pacific Corp. 1,804,689
43,900 U.S. Home Corp.* 1,514,550
---------------
4,867,827
---------------
BUSINESS SERVICES (8.9%)
266,100 Acclaim Entertainment, Inc.* 1,721,348
4,625 Grey Advertising, Inc. 1,392,125
110,200 Huffy Corp. 1,480,815
161,200 Mail-Well, Inc.*# 2,387,776
165,200 Midway Games, Inc.* 1,755,251
87,900 Ogden Corp.# 2,192,007
99,384 Powerhouse Technologies, Inc.* 1,838,604
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
113
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL COMPANY VALUE PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCK (continued)
BUSINESS SERVICES (continued)
<TABLE>
<C> <S> <C>
84,864 Symantec Corp.* $ 2,079,169
---------------
14,847,095
---------------
CHEMICALS & ALLIED PRODUCTS (2.9%)
163,900 Agrium, Inc. 1,475,100
85,700 Crompton & Knowles Corp. 1,547,956
67,800 Cytec Industries, Inc.* 1,860,263
---------------
4,883,319
---------------
DEPOSITORY INSTITUTIONS (11.6%)
53,700 Andover Bancorp, Inc. 1,564,014
61,866 Banknorth Group, Inc. 1,651,050
53,041 BSB Bancorp, Inc. 1,349,232
88,175 Commercial Federal Corp. 2,011,493
98,500 Commonwealth Bancorp, Inc. 1,600,625
60,401 Community Bank System, Inc. 1,419,427
78,800 First Republic Bank* 2,058,653
126,600 FirstFed Financial Corp.* 2,389,578
79,011 Medford Bancorp, Inc. 1,283,930
67,200 Reliance Bancorp, Inc. 1,890,001
78,000 Webster Financial Corp. 2,266,877
---------------
19,484,880
---------------
ELECTRIC, GAS & SANITARY SERVICES (13.1%)
108,900 Avista Corp. 1,967,008
50,200 BEC Energy 2,208,800
45,662 Calpine Corp.*# 2,474,309
195,200 Central Vermont Public Service Corp. 2,330,203
307,200 El Paso Electric Co.* 2,630,401
111,400 MCN Energy Group, Inc. 2,228,000
97,300 Public Service Co. of New Mexico 2,018,977
58,000 Rochester Gas & Electric Corp. 1,620,376
58,600 TNP Enterprises, Inc. 2,186,515
73,925 WPS Resources Corp. 2,365,600
---------------
22,030,189
---------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT (4.9%)
56,600 Harman International Industries, Inc. 2,511,628
247,400 HMT Technology Corp.* 997,345
129,700 Microsemi Corp. 1,248,366
138,500 Powell Industries, Inc.* 1,385,000
100,300 Vishay Intertechnology, Inc.* 2,087,494
---------------
8,229,833
---------------
GENERAL MERCHANDISE STORES (2.7%)
72,400 Ames Department Stores, Inc.*# 2,968,400
43,300 Shopko Stores, Inc.* 1,537,151
---------------
4,505,551
---------------
HEALTH SERVICES (1.5%)
119,800 RehabCare Group, Inc.* 2,575,700
---------------
HOLDING & OTHER INVESTMENT OFFICES (2.0%)
37,894 Storage USA, Inc. 1,264,713
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL COMPANY VALUE PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCK (continued)
HOLDING & OTHER INVESTMENT OFFICES (continued)
<TABLE>
<C> <S> <C>
215,700 Winston Hotels, Inc. $ 2,062,630
---------------
3,327,343
---------------
HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGING PLACES (1.2%)
342,808 Boyd Gaming Corp.* 2,035,422
---------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT (2.9%)
143,561 Chart Industries, Inc. 1,516,364
132,500 Data General Corp.* 1,739,063
92,160 Gleason Corp. 1,543,685
---------------
4,799,112
---------------
INSURANCE CARRIERS (8.7%)
102,700 Acceptance Insurance Cos., Inc.* 1,611,107
58,500 Berkley W.R. Corp. 1,484,438
66,600 Farm Family Holdings, Inc.* 2,297,700
137,700 Frontier Insurance Group, Inc. 2,366,719
101,178 Harleysville Group, Inc. 1,960,325
120,500 HCC Insurance Holdings, Inc. 2,681,125
75,120 MONY Group, Inc. 2,075,190
8,147 Nymagic, Inc. 101,838
---------------
14,578,442
---------------
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC,
MEDICAL & OPTICAL GOODS (5.3%)
69,700 CONMED Corp.* 2,369,800
135,800 Cooper Cos., Inc. 3,080,873
87,677 Empi, Inc.* 2,148,088
58,000 Tech-Sym Corp.* 1,272,377
---------------
8,871,138
---------------
MISCELLANEOUS RETAIL (2.0%)
99,700 Micro Warehouse, Inc.* 1,545,351
163,600 OfficeMax, Inc.* 1,881,400
---------------
3,426,751
---------------
MOTOR FREIGHT TRANSPORTATION & WAREHOUSING (0.8%)
110,500 Covenant Transportation, Inc.* 1,326,000
---------------
OIL & GAS EXTRACTION (1.8%)
130,300 Pride International, Inc.* 1,360,006
32,600 SEACOR SMIT, Inc.* 1,617,778
---------------
2,977,784
---------------
PAPER & ALLIED PRODUCTS (1.0%)
113,955 FiberMark, Inc.* 1,630,982
---------------
PETROLEUM REFINING & RELATED INDUSTRIES (0.9%)
126,950 Tesoro Petroleum Corp. 1,499,597
---------------
PRIMARY METAL INDUSTRIES (6.0%)
82,900 AK Steel Holding Corp.# 1,989,600
298,222 Armco, Inc.* 1,919,805
93,050 Chase Industries, Inc.* 779,294
140,100 Intermet Corp. 1,943,890
235,458 National Steel Corp. 1,795,370
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
114
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL COMPANY VALUE PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCK (continued)
PRIMARY METAL INDUSTRIES (continued)
<TABLE>
<C> <S> <C>
47,800 Texas Industries, Inc. $ 1,738,728
---------------
10,166,687
---------------
PRINTING, PUBLISHING & ALLIED INDUSTRIES (1.0%)
104,900 Bowne & Co., Inc. 1,757,076
---------------
REAL ESTATE INVESTMENT TRUST (3.4%)
54,100 Franchise Finance Corp. of America 1,332,213
121,400 Glenborough Realty Trust, Inc. 2,223,137
102,800 Healthcare Realty Trust, Inc. 2,223,052
---------------
5,778,402
---------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES (0.9%)
146,600 Ragen Mackezie Group, Inc.* 1,539,300
---------------
TRANSPORTATION BY AIR (1.1%)
92,900 America West Airlines, Inc.* 1,811,550
---------------
TRANSPORTATION EQUIPMENT (1.8%)
92,300 Johnstown American Industries, Inc.* 1,453,725
64,700 Meritor Automotive, Inc. 1,577,063
---------------
3,030,788
---------------
WHOLESALE TRADE - DURABLE GOODS (0.7%)
150,000 Griffon Corp.* 1,200,000
---------------
WHOLESALE TRADE-DURABLE GOODS (0.8%)
100,800 Associated Materials Inc.* 1,423,801
---------------
WHOLESALE TRADE-NONDURABLE GOODS (2.5%)
141,800 Merkert American Corp.* 1,506,627
81,600 Richfood Holdings, Inc. 1,045,501
267,053 Standard Commercial Corp. 1,702,465
---------------
4,254,593
---------------
TOTAL COMMON STOCK (COST $159,815,116) 165,394,565
---------------
REPURCHASE AGREEMENTS (1.6%)
2,713,461 Bear, Stearns & Cos., Inc., 4.90%, 6/1/99 (cost $2,713,461)** 2,713,461
---------------
TOTAL INVESTMENTS (100.0%) (COST $162,528,577) $ 168,108,026
---------------
---------------
- -----------------------------------------------------------------
SMALL COMPANY GROWTH PORTFOLIO
- -----------------------------------------------------------------
COMMON STOCK (96.5%)
APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS (3.3%)
332,900 Jones Apparel Group, Inc.* $ 10,236,675
184,500 Tommy Hilfiger Corp.* 13,849,032
---------------
24,085,707
---------------
AUTO PARTS & EQUIPMENT (2.5%)
128,500 Dura Automotive Systems, Inc.* 3,822,875
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL COMPANY GROWTH PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCK (continued)
AUTO PARTS & EQUIPMENT (continued)
<TABLE>
<C> <S> <C>
619,400 Tower Automotive, Inc.* $ 14,168,777
---------------
17,991,652
---------------
AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS (0.5%)
268,800 Sonic Automotive, Inc.* 3,494,400
---------------
AUTOMOTIVE REPAIR, SERVICES & PARKING (1.1%)
263,700 CSK Auto Corp.* 7,383,600
44,400 Dollar Thrifty Automotive Group, Inc.* 943,500
---------------
8,327,100
---------------
BUSINESS SERVICES (14.5%)
318,600 ABR Information Services, Inc.* 8,044,650
332,000 Avant! Corp.* 4,046,250
371,500 BEA Systems, Inc.* 7,569,314
301,600 Citrix Systems, Inc.* 14,910,351
230,900 IMRglobal Corp.* 4,834,470
76,100 National Computer Systems, Inc. 2,378,125
50,700 Nextera Enterprises, Inc.* 427,781
293,264 Rent-Way, Inc.* 7,368,259
393,700 Rental Service Corp.* 9,399,589
378,600 Snyder Communications, Inc. 9,252,039
156,700 SoftNet Systems, Inc.* 4,074,200
235,400 Sykes Enterprises, Inc.* 7,326,827
345,100 Synopsys, Inc.* 15,313,814
179,100 THQ, Inc.* 4,220,045
171,000 Visio Corp.* 5,621,625
---------------
104,787,339
---------------
CHEMICALS & ALLIED PRODUCTS (15.2%)
286,400 Abgenix, Inc.* 4,152,800
404,200 Alkermes, Inc.* 10,003,950
228,200 Barr Laboratories, Inc.* 7,516,339
210,800 Biovail Corp. International* 8,049,926
273,600 Centocor, Inc.* 11,884,501
350,800 Genzyme Corp.* 14,229,329
440,400 ICN Pharmaceuticals, Inc. 14,478,152
132,000 ImClone Systems, Inc.* 2,607,000
474,700 IVAX Corp. 6,378,780
159,300 Millennium Pharmaceuticals, Inc.* 6,033,488
356,000 Teva Pharmaceutical Industries Ltd. ADR 17,488,502
489,200 Triangle Pharmaceuticals, Inc.* 9,050,200
---------------
111,872,967
---------------
COMMUNICATIONS (3.5%)
232,400 Globalstar Telecommunications Ltd.* 4,110,575
285,700 ITC DeltaCom, Inc.* 6,821,088
150,000 Time Warner Telecom, Inc.* 3,843,750
147,500 United International Holdings, Inc.--
Class A* 10,620,000
---------------
25,395,413
---------------
COMPUTER DISTRIBUTION (0.9%)
263,700 Insight Enterprises, Inc.* 6,691,388
---------------
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
115
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL COMPANY GROWTH PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCK (continued)
<TABLE>
<C> <S> <C>
CONSUMER SERVICES (1.6%)
637,800 Stewart Enterprises, Inc. $ 11,759,438
---------------
DEPOSITORY INSTITUTIONS (4.2%)
30,000 Bank United Corp. 1,241,250
164,800 Golden State Bancorp, Inc. 4,047,900
260,200 Riggs National Corp. 4,374,614
529,900 Roslyn Bancorp, Inc. 9,604,440
313,500 UnionBanCal Corp. 11,589,719
---------------
30,857,923
---------------
EATING & DRINKING PLACES (2.8%)
166,000 Cheesecake Factory, Inc.* 4,585,752
403,600 Foodmaker, Inc.* 10,897,200
129,900 Papa John's International, Inc.* 5,131,050
---------------
20,614,002
---------------
ELECTRIC, GAS & SANITARY SERVICES (1.3%)
405,000 Republic Services, Inc.* 9,517,500
---------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT (7.9%)
284,100 3DFX Interactive, Inc.* 5,504,439
375,500 Adaptec, Inc.* 11,593,563
91,400 American Power Conversion Corp.* 3,558,888
266,600 Artesyn Technologies, Inc.* 5,631,926
346,400 Atmel Corp.* 6,841,400
129,800 Micrel, Inc.* 7,268,800
129,500 Pinnacle Systems, Inc.* 6,709,719
184,200 Xilinx, Inc.* 8,185,389
113,900 Xircom, Inc.* 2,875,975
---------------
58,170,099
---------------
ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT & RELATED
SERVICES (2.5%)
549,300 ACNielson Corp.* 15,483,396
88,400 Metzler Group, Inc.* 2,895,100
---------------
18,378,496
---------------
EQUIPMENT--SEMICONDUCTOR (0.7%)
293,200 Cymer, Inc.* 5,369,227
---------------
FOOD & KINDRED PRODUCTS (1.6%)
227,400 American Italian Pasta Co.* 6,253,500
438,600 Del Monte Foods Co.* 5,455,088
---------------
11,708,588
---------------
FURNITURE & FIXTURES (0.6%)
166,800 Furniture Brands International, Inc.* 4,044,900
---------------
GENERAL MERCHANDISE STORES (1.0%)
361,900 Stein Mart, Inc.* 3,324,958
380,000 Venator Group, Inc. 4,156,250
---------------
7,481,208
---------------
HEALTH CARE--MEDICAL PRODUCTS (0.3%)
63,000 Ocular Sciences, Inc.* 1,921,500
---------------
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL COMPANY GROWTH PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCK (continued)
<TABLE>
<C> <S> <C>
HEALTH SERVICES (2.4%)
340,700 American Retirement Corp.* $ 5,770,607
63,400 Orthodontic Centers of America, Inc.* 764,763
112,700 Renal Care Group, Inc.* 3,127,425
220,900 Sunrise Assisted Living, Inc.* 8,173,300
---------------
17,836,095
---------------
HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES (0.4%)
357,300 Musicland Stores Corp.* 3,171,038
---------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT (2.9%)
395,200 Pentair, Inc. 17,438,203
213,800 Watsco, Inc. 4,129,013
---------------
21,567,216
---------------
INSURANCE CARRIERS (3.4%)
274,700 Annuity and Life Re (Holdings) Ltd.* 7,073,525
225,800 CMAC Investment Corp. 11,417,015
202,000 Everest Reinsurance Holdings, Inc.* 6,640,751
---------------
25,131,291
---------------
LEATHER & LEATHER PRODUCTS (0.6%)
219,400 Brown Shoe Company, Inc. 4,168,600
---------------
LUMBER & WOOD PRODUCTS, EXCEPT FURNITURE (0.9%)
321,600 Louisiana-Pacific Corp. 6,512,400
---------------
MISCELLANEOUS CONSUMER (0.3%)
177,500 The Boyds Collection Ltd.* 2,307,500
---------------
MISCELLANEOUS RETAIL (2.3%)
17,000 eToys, Inc.* 1,031,688
1,078,700 Petsmart, Inc.* 9,708,300
262,900 Regis Corp. 6,342,463
---------------
17,082,451
---------------
MOTOR FREIGHT TRANSPORTATION & WAREHOUSING (2.3%)
398,075 Swift Transportation, Inc.* 7,277,328
252,400 USFreightways Corp. 9,938,252
---------------
17,215,580
---------------
NONDEPOSITORY CREDIT INSTITUTIONS (2.2%)
403,500 American Capital Strategies Ltd. 7,843,032
263,500 Heller Financial, Inc. 7,839,125
45,000 Resource America, Inc. 649,688
---------------
16,331,845
---------------
OIL & GAS EXTRACTION (0.5%)
1,109,900 Key Energy Services, Inc.* 3,537,807
---------------
PRINTING, PUBLISHING & ALLIED INDUSTRIES (1.8%)
371,250 Valassis Communications, Inc.* 12,924,141
---------------
REAL ESTATE (2.7%)
547,600 Intrawest Corp. 8,727,375
441,000 Newhall Land & Farming Co. 11,080,129
---------------
19,807,504
---------------
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
116
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL COMPANY GROWTH PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCK (continued)
<TABLE>
<C> <S> <C>
REAL ESTATE INVESTMENT TRUST (0.4%)
244,900 Capital Automotive REIT $ 3,168,394
---------------
TRANSPORTATION BY AIR (2.2%)
357,500 Northwest Airlines Corp.* 11,886,875
196,400 SkyWest, Inc. 4,566,300
---------------
16,453,175
---------------
TRANSPORTATION EQUIPMENT (3.3%)
334,800 Gulfstream Aerospace Corp.* 20,673,837
158,900 Heico Corp. 3,734,150
---------------
24,407,987
---------------
WATER TRANSPORTATION (1.0%)
215,300 Sea Containers Ltd. 7,266,375
---------------
WHOLESALE TRADE--NONDURABLE GOODS (0.9%)
400,200 Handleman Co. 4,727,362
150,100 School Specialty, Inc.* 2,232,738
---------------
6,960,100
---------------
TOTAL COMMON STOCK (COST $581,814,580) 708,318,346
---------------
REPURCHASE AGREEMENTS (3.5%)
26,008,407 Bear, Stearns & Cos., Inc., 4.90%, 6/1/99 (cost $26,008,407)** 26,008,407
---------------
TOTAL INVESTMENTS (100.0%) (COST $607,822,987) $ 734,326,753
---------------
---------------
- -----------------------------------------------------------------
INTERNATIONAL PORTFOLIO
- -----------------------------------------------------------------
STOCKS & WARRANTS (90.3%)
BELGIUM (0.9%)
COMMON STOCKS
24,350 Grupo Bruxelles Lambert SA* $ 4,251,928
51,000 KBC Bancassurance Holding 3,108,917
---------------
7,360,845
---------------
DENMARK (1.4%)
COMMON STOCKS
59,200 Den Danske Bank Group 6,365,128
89,980 International Service System A/S* 4,533,370
---------------
10,898,498
---------------
FRANCE (16.3%)
COMMON STOCKS
28,340 Accor SA 6,969,596
90,570 AGF (Assurances Generales de France) 4,502,088
35,400 Alcatel 4,219,671
57,040 Axa SA 6,590,407
52,020 Bouygues SA 13,793,995
29,670 Canal Plus 8,608,965
115,663 Elf Aquitaine SA 16,786,269
42,410 Etablissements Economiques du Casino Guichard-Perrachon SA 4,035,340
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INTERNATIONAL PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
FRANCE (continued)
COMMON STOCKS (continued)
<TABLE>
<C> <S> <C>
35,710 Groupe Danone $ 9,857,442
50,520 Lafarge SA 4,564,020
88,880 Sanofi* 3,754,532
51,240 STMicroelectronics NV 5,947,064
86,770 Suez Lyonnaise des Eaux 14,416,636
55,620 Total SA, B Shares* 6,775,282
211,494 Vivendi 15,700,984
WARRANTS
55,391 Vivendi Warrants* 119,890
---------------
126,642,181
---------------
GERMANY (5.6%)
COMMON STOCKS
36,930 BASF AG 1,440,319
135,618 DaimlerChrysler AG 11,734,262
135,290 Hoechst AG 6,040,376
112,910 Mannesmann AG 15,465,863
156,010 RWE AG 6,989,945
110,010 Thyssen Krupp AG* 2,174,025
---------------
43,844,790
---------------
INDONESIA (0.1%)
COMMON STOCKS
1,811,500 PT Telekomunikasi Indonesia 840,357
---------------
IRELAND (1.8%)
COMMON STOCKS
353,460 Bank of Ireland 6,560,079
140,820 Elan Corp. plc ADR*# 7,604,280
---------------
14,164,359
---------------
ITALY (5.4%)
COMMON STOCKS
1,991,000 Banca di Roma 2,914,538
1,415,390 ENI SpA 8,864,891
810,780 Italgas SpA 3,484,298
623,240 Olivetti SpA* 1,948,485
228,830 San Paolo--IMI SpA 3,098,512
1,256,180 Telecom Italia Mobile SpA 7,408,008
1,236,032 Telecom Italia SpA 14,216,508
---------------
41,935,240
---------------
JAPAN (16.6%)
COMMON STOCKS
336,000 Amada Metrecs Co. Ltd. 1,854,924
258,000 Arcland Sakamoto 2,882,803
263,000 Bridgestone Corp. 6,900,428
182,650 Credit Saison Co. Ltd. 3,703,794
239,000 Dai-Dan Co. Ltd. 1,681,426
1,122,000 Dai-Tokyo Fire & Marine Insurance Co. Ltd. 3,835,342
319,000 Daiwa House Industry Co. Ltd. 3,442,939
847 East Japan Railway Co. 4,907,299
237,000 Fuji Photo Film Co. 8,474,093
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
117
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INTERNATIONAL PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
JAPAN (continued)
COMMON STOCKS (continued)
<TABLE>
<C> <S> <C>
667,000 Hanshin Electric Railway Co. Ltd. $ 2,467,710
520,000 Hitachi Ltd. 3,826,187
564,000 Kuraray Co. Ltd. 6,143,221
294,000 Matsushita Electric Industrial Co. Ltd. 5,329,083
1,219,000 Mitsui & Co. Ltd. 7,799,097
101,000 Murata Manufacturing Co. Ltd. 5,575,815
68,200 Nagaileben Co. Ltd. 1,704,719
275 Nippon Telegraph & Telephone Corp. 2,685,814
70,000 Nitto Denko Corp. 1,404,982
260,000 Nomura Securities Co. Ltd. 2,595,265
149 NTT Mobile Communications Network, Inc. 8,151,712
263,000 Omron Corp. 3,635,241
66,900 Promise Co. Ltd. 3,278,001
147,000 Sekisui House 1,596,292
337,000 Showa Shell Sekiyu 1,899,494
31,300 SMC Corp. 2,854,874
64,200 Sony Corp. 6,036,351
4,020,000 Sumitomo Metal Industries Ltd. 5,290,349
213,000 Takeda Chemical Industries 9,467,056
681,000 Toppan Printing Co. Ltd. 7,637,435
62,000 Toyota Motor Corp. 1,693,428
161,000 Yasuda Fire & Marine Insurance Co. Ltd. 912,804
---------------
129,667,978
---------------
NETHERLANDS (8.0%)
COMMON STOCKS
36,370 Akzo Nobel NV 1,513,550
204,350 Internationale Nederlanden Group NV 10,950,626
220,220 Koninklijke Ahold NV 7,702,352
151,080 Koninklijke Philips Electronics NV* 12,993,118
87,049 Oce NV 2,402,914
184,590 Royal Dutch Petroleum Co. 10,306,705
365,610 TNT Post Group NV 9,213,096
125,620 United Pan-Europe Communications NV* 7,716,798
---------------
62,799,159
---------------
NEW ZEALAND (0.7%)
COMMON STOCKS
1,673,000 Carter Holt Harvey Ltd. 1,919,481
836,500 Telecom Corp of New Zealand Ltd. 3,614,723
---------------
5,534,204
---------------
PHILIPPINES (0.3%)
COMMON STOCKS
2,508,500 Ayala Land, Inc. 807,598
227,500 Manila Electric Co., B Shares 783,245
39,000 Philippine Long Distance Telephone Co. 1,096,713
---------------
2,687,556
---------------
PORTUGAL (1.2%)
COMMON STOCKS
345,590 Electricidade de Portugal SA 6,305,611
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INTERNATIONAL PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
PORTUGAL (continued)
COMMON STOCKS (continued)
<TABLE>
<C> <S> <C>
177,750 Semapa--Sociedade de Investimento e Gestao SGPS SA $ 2,899,376
---------------
9,204,987
---------------
SINGAPORE (0.9%)
COMMON STOCKS
326,000 City Developments Ltd. 1,946,861
229,200 Development Bank of Singapore Ltd.-- Foreign Shares 2,365,455
215,827 Singapore Press Holdings Ltd. 2,953,248
---------------
7,265,564
---------------
SPAIN (2.3%)
COMMON STOCKS
28,000 Bankinter SA 1,105,212
520,625 Endesa SA 11,110,625
119,768 Telefonica SA* 5,758,133
---------------
17,973,970
---------------
SWEDEN (2.4%)
COMMON STOCKS
223,730 Electrolux AB, Series B 4,344,993
226,980 Securitas AB, B Shares 3,243,204
426,790 Telefonaktiebolaget LM Ericsson, B Shares 11,424,771
---------------
19,012,968
---------------
SWITZERLAND (4.4%)
COMMON STOCKS
3,568 ABB AG 5,058,577
5,878 Novartis AG--Registered Shares 8,551,121
840 Roche Holding AG 8,909,851
40,872 UBS AG--Registered Shares 11,857,631
---------------
34,377,180
---------------
THAILAND (0.2%)
COMMON STOCKS
179,000 Electricity Generating Public Co. Ltd. 380,697
99,000 PTT Exploration and Production Public Co. Ltd.* 804,899
370,000 Siam Commercial Bank Public Co. Ltd.* 430,811
---------------
1,616,407
---------------
UNITED KINGDOM (21.8%)
COMMON STOCKS
1,098,290 Airtours plc 9,025,647
762,570 Allied Domecq plc 7,313,324
366,550 ARM Holdings plc* 3,582,894
1,789,360 ASDA Group plc 5,075,069
847,990 BP Amoco plc 15,178,010
860,480 British Airways plc 6,177,173
476,430 British Energy plc 4,256,131
716,610 British Land Co. plc 6,315,628
861,000 British Sky Broadcasting Group plc 8,181,422
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
118
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INTERNATIONAL PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
UNITED KINGDOM (continued)
COMMON STOCKS (continued)
<TABLE>
<C> <S> <C>
444,370 British Telecommunications plc $ 7,412,529
574,040 Cable & Wireless plc 7,082,782
911,140 David S. Smith Holdings plc 1,956,415
1,092,020 Electrocomponents plc 8,828,008
385,820 Glaxo Wellcome plc 10,831,529
559,330 Imperial Chemical Industries plc 6,166,340
571,495 Kingfisher plc 7,184,166
2,495,530 LASMO plc* 5,278,466
858,240 Lloyds TSB Group plc 11,345,760
472,690 Marks & Spencer plc 2,984,307
209,530 Pearson plc 3,995,435
55,000 Rio Tinto plc 806,408
255,810 RMC Group plc 3,414,550
1,807,510 Rolls-Royce plc* 7,602,928
411,770 Shell Transport & Trading Co. plc 2,980,738
226,405 Tibbett and Britten Group plc 1,904,654
561,340 Vodafone Group plc 10,694,951
873,173 Williams plc 5,110,464
---------------
170,685,728
---------------
TOTAL STOCKS & WARRANTS (COST $608,189,056) 706,511,971
---------------
SHORT-TERM INVESTMENTS (6.6%)
11,035,005 Business Class Plus 11,035,005
41,013,524 Norwest Treasury Fund 41,013,524
---------------
TOTAL SHORT-TERM INVESTMENTS (COST $52,048,529) 52,048,529
---------------
TIME DEPOSITS (3.1%)
23,200,000 Euro Dollar Time Deposit (cost $24,258,192) 24,258,192
---------------
TOTAL INVESTMENTS (100.0%) (COST $684,495,777) $ 782,818,692
---------------
---------------
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
</TABLE>
<TABLE>
<CAPTION>
EXPIRATION UNDERLYING FACE UNREALIZED
DATE CURRENCY UNITS AMOUNT OF VALUE DEPRECIATION
- ---------- ------------ ------------ --------------- ------------
<C> <S> <C> <C> <C>
8/18/99 Japanese Yen 2,843,147,000 $23,638,719 $ (145,345)
</TABLE>
<TABLE>
<C> <S> <C>
- -----------------------------------------------------------------
INTERNATIONAL EQUITY PORTFOLIO
- -----------------------------------------------------------------
AUSTRALIA (2.0%)
COMMON STOCK
375,000 News Corp. Ltd. $ 3,104,045
---------------
3,104,045
---------------
BRAZIL (1.6%)
COMMON STOCK
75,000 Aracruz Celulose SA ADR 1,443,750
PREFERRED STOCK
9,087,945 Telecomunicacoes de Sao Paulo SA 1,099,968
---------------
2,543,718
---------------
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INTERNATIONAL EQUITY PORTFOLIO (continued)
- -----------------------------------------------------------------
CANADA (0.7%)
COMMON STOCK
20,000 Potash Corp. of Saskatchewan, Inc. (CAD) $ 1,089,736
---------------
1,089,736
---------------
FINLAND (1.9%)
COMMON STOCK
42,000 Nokia Corp. ADR 2,982,000
---------------
2,982,000
---------------
FRANCE (13.8%)
COMMON STOCK
26,000 Axa SA 3,004,042
10,000 Canal Plus 2,901,573
20,000 Equant NV--NY Registered Shares* 1,658,751
105,000 Groupe Air France* 1,786,271
8,500 Groupe Danone 2,346,353
36,000 STMicroelectronics NV 4,178,257
18,000 Suez Lyonnaise des Eaux 2,990,659
20,000 Total SA, B Shares* 2,436,276
---------------
21,302,182
---------------
GERMANY (6.0%)
COMMON STOCK
7,500 Allianz AG--Registered 2,054,627
51,111 Deutsche Bank AG 2,672,113
22,500 Fresenius Medical Care AG 1,129,260
28,000 Metro AG 1,771,266
23,000 Sixt AG 1,695,459
---------------
9,322,725
---------------
GREECE (0.8%)
COMMON STOCK
60,000 Hellenic Telecommunication Organization SA 1,301,894
---------------
1,301,894
---------------
HONG KONG (1.8%)
COMMON STOCK
220,000 Cheung Kong (Holdings) Ltd. 1,787,351
30,000 HSBC Holdings plc 982,656
---------------
2,770,007
---------------
HUNGARY (1.5%)
COMMON STOCK
430,000 Magyar Tavkozlesi RT 2,408,036
---------------
2,408,036
---------------
IRELAND (2.4%)
COMMON STOCK
21,000 Elan Corp. plc ADR* 1,134,000
60,000 Ryanair Holdings plc ADR* 2,640,000
---------------
3,774,000
---------------
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
119
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INTERNATIONAL EQUITY PORTFOLIO (continued)
- -----------------------------------------------------------------
ISRAEL (0.9%)
COMMON STOCK
67,000 Koor Industries Ltd. ADR $ 1,444,689
---------------
1,444,689
---------------
ITALY (3.6%)
COMMON STOCK
230,000 ENI SpA 1,440,539
150,000 San Paolo--IMI SpA 2,031,101
210,000 Telecom Italia SpA 2,169,435
---------------
5,641,075
---------------
JAPAN (15.3%)
COMMON STOCK
65,000 Canon, Inc. 1,640,870
65,000 Honda Motor Co. Ltd. 2,668,432
100,000 Marui Co. Ltd. 1,503,889
240 Nippon Telegraph & Telephone Corp. 2,343,983
30,000 Secom Co. Ltd. 2,855,488
30,000 Seven-Eleven Japan Co. Ltd. 2,604,701
35,000 Sony Corp. 3,290,846
130,000 Sumitomo Bank Ltd. 1,574,160
50,000 Takeda Chemical Industries 2,222,313
35,000 Takefuji Corp. 3,085,168
---------------
23,789,850
---------------
KOREA, REPUBLIC OF (0.2%)
COMMON STOCK--ADR
12,000 Korea Telecom Corp. ADR* 381,750
---------------
381,750
---------------
MEXICO (2.1%)
COMMON STOCK
650,000 Grupo Elektra SA de CV--CPO 350,458
750,000 Telefonos de Mexico SA de CV Series L 2,945,064
---------------
3,295,522
---------------
NETHERLANDS (7.4%)
COMMON STOCK
43,000 Koninklijke Ahold NV 1,503,956
30,000 Koninklijke Philips Electronics NV* 2,580,047
34,000 Royal Dutch Petroleum Co.--NY Registered Shares 1,923,126
44,643 Unilever NV--CVA 2,975,792
40,000 United Pan-Europe Communications NV* 2,457,188
---------------
11,440,109
---------------
NEW ZEALAND (0.2%)
COMMON STOCK
160,000 Tranz Rail Holdings Ltd. 290,800
---------------
290,800
---------------
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INTERNATIONAL EQUITY PORTFOLIO (continued)
- -----------------------------------------------------------------
NORWAY (1.0%)
COMMON STOCK
100,000 Petroleum Geo-Services ASA* $ 1,616,576
---------------
1,616,576
---------------
SINGAPORE (3.3%)
COMMON STOCK
300,000 Development Bank of Singapore Ltd.-- Foreign Shares 3,096,145
150,000 Singapore Press Holdings Ltd. 2,052,501
---------------
5,148,646
---------------
SPAIN (3.6%)
COMMON STOCK
70,000 Banco Santander Central Hispano SA 1,463,856
55,000 Superdiplo SA* 1,258,289
61,200 Telefonica SA* 2,942,327
---------------
5,664,472
---------------
SWEDEN (2.5%)
COMMON STOCK
75,000 OM Gruppen AB 949,165
110,000 Telefonaktiebolaget LM Ericsson, Series B ADR 2,963,125
---------------
3,912,290
---------------
SWITZERLAND (4.5%)
COMMON STOCK
700 Nestle SA--Registered Shares 1,261,218
1,900 Novartis AG--Registered Shares 2,763,587
10,500 UBS AG--Registered Shares 3,046,222
---------------
7,071,027
---------------
UNITED KINGDOM (17.5%)
COMMON STOCK
340,000 Amvescap plc 3,105,451
91,600 ARM Holdings plc ADR* 2,673,575
100,000 Bass plc 1,475,810
175,000 Boots Co. plc 2,288,227
150,000 BP Amoco plc 2,684,821
195,000 British Aerospace plc 1,286,587
85,000 British Telecommunications plc 1,417,884
34,000 Glaxo Wellcome plc ADR 1,912,500
230,000 Select Appointments Holdings plc 2,819,423
30,000 Smithkline Beecham plc ADR 1,968,750
460,000 TeleWest Communications plc* 1,977,281
170,000 Vodafone Group plc 3,238,931
---------------
26,849,240
---------------
REPURCHASE AGREEMENTS (5.4%)
8,358,679 Bear, Stearns & Cos., Inc., 4.90%, 6/1/99# 8,358,679
---------------
TOTAL INVESTMENTS (100.0%) (COST $150,294,063) $ 155,503,068
---------------
---------------
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
120
<PAGE>
NOTES TO SCHEDULES OF INVESTMENTS MAY 31, 1999
- --------------------------------------------------------------------------------
* Non-income producing security.
+ Securities that may be resold to "qualified institutional buyers" under rule
144A or securities offered pursuant to 4(2) of the Securities Act of 1933, as
amended. These securities had been determined to be liquid pursuant to
procedures adopted by the Board of Trustees.
# Part or all of this investment is on loan. See Note 6 of Notes to Financial
Statements.
** The Portfolios have invested in a joint repurchase agreement. The following
represents the collateral on the Bear Stearns Cos., Inc. joint repurchase
agreement: collateralized by $214,593,114 U.S. Government Agency Securities,
6.00% - 6.50%, 1/1/22 - 3/1/29; with a total market value of $210,016,043.
++ At May 31, 1999, $3,180,000 of U.S. Treasury Bills, 9/16/99 - 4/27/00, with a
market value of $3,109,182 were pledged to cover margin requirements for open
futures contracts.
## At May 31, 1999, $150,000 of U.S. Treasury Bills, 4/27/00, with a market
value of $143,256 were pledged to cover margin requirements for open futures
contracts.
*** Priced at fair value as determined by the Investment Adviser and approved by
the Board of Trustees.
ABBREVIATIONS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance Corporation
BIG Bond Insurance Group
CLO Collateralized Loan Obligation
C/O Crossover refunding
COLL Collateralized
COP Certificate of Participation
DOT Department of Transportation
EDA Economic Development Authority
EFA Education Finance Authority
ETM Escrowed to Maturity
FAMC Federal Agricultural Mortgage Corporation
FFCB Federal Farm Credit Bank
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Authority
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FSA Financial Security Assurance, Inc.
GNMA Government National Mortgage Association
GO General Obligation
HEFA Higher Education Facilities Authority
HEHFA Higher Education & Health Facilities Authority
HFA Housing Finance Authority
HRA Housing & Redevelopment Authority
HUD Department of Housing and Urban Development
IDA Industrial Development Authority
ISD Independent School District
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
MFHR Multi Family Housing Revenue
PCR Pollution Control Revenue
PFA Public Finance Authority
PILOT Payment in Lieu of Taxes
P/R Prerefunded
RV Revenue Bonds
SCEP State Credit Enhancement Program
SD School District
SFM Single Family Mortgage
SLMA Student Loan Marketing Association
TVA Tennessee Valley Authority
USG United States Government
UTGO Unlimited Tax General Obligation
VA Veterans' Administration
V/R Variable Rate - These securities are deemed to have a maturity
remaining until the next adjustment of the interest rate or the
longer of the demand period or readjustment. The interest rates
shown reflect the rate in effect on May 31, 1999.
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
CORE TRUST (DELAWARE)
121
<PAGE>
(This page has been left blank intentionally.)
122
<PAGE>
SCHRODER CAPITAL FUNDS
ANNUAL REPORT
MAY 31, 1999
SCHRODER U.S. SMALLER COMPANIES PORTFOLIO
SCHRODER GLOBAL GROWTH PORTFOLIO
SCHRODER EM CORE PORTFOLIO
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS MAY 31, 1999
- --------------------------------------------------------------------------------
To Trustees and Investors of Schroder Capital Funds
In our opinion, the accompanying statements of assets
and liabilities, including the schedules of investments,
and related statements of operations and of changes in net
assets and the financial highlights present fairly, in all
material respects, the financial position of three
portfolios of Schroder Capital Funds: Schroder U.S.
Smaller Companies Portfolio, Schroder Global Growth
Portfolio and Schroder EM Core Portfolio (collectively the
"Portfolios"), at May 31, 1999, the results of their
operations, the changes in their net assets and the
financial highlights for each of the periods indicated
therein, in conformity with generally accepted accounting
principles. These financial statements and financial
highlights (herein referred to as "financial statements")
are the responsibility of the Portfolios' management; our
responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of
these financial statements in accordance with generally
accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting
principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits, which included
confirmation of securities at May 31, 1999, by
correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
July 15, 1999
SCHRODER CAPITAL FUNDS
124
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SCHRODER SCHRODER
U.S. SMALLER GLOBAL SCHRODER
COMPANIES GROWTH EM CORE
PORTFOLIO PORTFOLIO PORTFOLIO
------------ ---------- -----------
<S> <C> <C> <C>
ASSETS
Investments (Note 2)
Investments at cost................. $239,483,956 $2,688,728 $11,392,476
Net unrealized appreciation......... 23,961,048 413,348 1,908,320
------------ ---------- -----------
TOTAL INVESTMENTS AT VALUE............ 263,445,004 3,102,076 13,300,796
Cash.................................. - 444,663 477,235
Foreign currency (cost $22,659)....... - - 22,665
Receivable for forward foreign
currency contracts (Note 2)......... - - 29,296
Receivable for investments sold....... 2,616,709 - 53,793
Receivable from investment adviser
(Note 3)............................ - 40,012 52,325
Receivable for dividends and
interest............................ 98,722 6,882 56,128
Receivable for tax reclaims........... - 5,272 -
Organization costs, net of
amortization (Note 2)............... 11,060 673 665
Other assets.......................... 23,506 259 854
------------ ---------- -----------
TOTAL ASSETS............................ 266,195,001 3,599,837 13,993,757
------------ ---------- -----------
LIABILITIES
Payable for investments purchased..... 4,798,442 - 20,323
Payable for forward foreign currency
contracts (Note 2).................. - 661 -
Due to investment adviser (Note 3).... 135,546 - -
Accrued expenses and other
liabilities......................... 73,153 27,466 48,232
------------ ---------- -----------
TOTAL LIABILITIES....................... 5,007,141 28,127 68,555
------------ ---------- -----------
NET ASSETS.............................. $261,187,860 $3,571,710 $13,925,202
------------ ---------- -----------
------------ ---------- -----------
</TABLE>
See Notes to Financial Statements SCHRODER CAPITAL FUNDS
125
<PAGE>
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SCHRODER SCHRODER
U.S. SMALLER GLOBAL
COMPANIES GROWTH
PORTFOLIO PORTFOLIO
------------- -----------
<S> <C> <C>
INVESTMENT INCOME
Dividend income(a).............................................................................. $ 1,606,034 $ 41,475
Interest income................................................................................. 726,966 23,195
------------- -----------
TOTAL INVESTMENT INCOME........................................................................... 2,333,000 64,670
------------- -----------
EXPENSES
Investment advisory (Note 3).................................................................... 1,803,074 17,416
Administration (Note 3)......................................................................... - 5,225
Subadministration (Note 3)...................................................................... 225,384 25,000
Interestholder recordkeeping.................................................................... 12,125 12,096
Custody......................................................................................... 43,602 46,051
Accounting...................................................................................... 43,000 68,000
Legal........................................................................................... 66,639 1,220
Audit........................................................................................... 60,593 18,630
Pricing Services................................................................................ 6,773 9,963
Trustees........................................................................................ 32,769 369
Amortization of organization costs (Note 2)..................................................... 5,018 195
Miscellaneous................................................................................... 24,457 272
------------- -----------
TOTAL EXPENSES.................................................................................... 2,323,434 204,437
Fees waived and expenses reimbursed (Note 6).................................................... - (174,835)
------------- -----------
NET EXPENSES...................................................................................... 2,323,434 29,602
------------- -----------
NET INVESTMENT INCOME............................................................................. 9,566 35,068
------------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
Net Realized Loss from
Securities...................................................................................... (36,405,203) (40,543)
Foreign currency transactions................................................................... - (10,838)
------------- -----------
Net Realized Loss from Investments and Foreign Currency Transactions.............................. (36,405,203) (51,381)
------------- -----------
Net Change in Unrealized Appreciation (Depreciation) of
Securities...................................................................................... (15,329,451) 196,771
Foreign currency transactions................................................................... - (7,531)
------------- -----------
Net Change in Unrealized Appreciation (Depreciation) of Investments and Foreign Currency
Transactions..................................................................................... (15,329,451) 189,240
------------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS.......... (51,734,654) 137,859
------------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................... $(51,725,088) $ 172,927
------------- -----------
------------- -----------
(a) Net of unrecoverable foreign withholding taxes of............................................. $ - $ 6,036
<CAPTION>
SCHRODER
EM CORE
PORTFOLIO
----------
<S> <C>
INVESTMENT INCOME
Dividend income(a).............................................................................. $ 242,305
Interest income................................................................................. 64,910
----------
TOTAL INVESTMENT INCOME........................................................................... 307,215
----------
EXPENSES
Investment advisory (Note 3).................................................................... 131,766
Administration (Note 3)......................................................................... 13,177
Subadministration (Note 3)...................................................................... 25,000
Interestholder recordkeeping.................................................................... 12,254
Custody......................................................................................... 141,091
Accounting...................................................................................... 78,000
Legal........................................................................................... 2,745
Audit........................................................................................... 25,519
Pricing Services................................................................................ 13,652
Trustees........................................................................................ 1,573
Amortization of organization costs (Note 2)..................................................... 194
Miscellaneous................................................................................... 939
----------
TOTAL EXPENSES.................................................................................... 445,910
Fees waived and expenses reimbursed (Note 6).................................................... (255,027)
----------
NET EXPENSES...................................................................................... 190,883
----------
NET INVESTMENT INCOME............................................................................. 116,332
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
Net Realized Loss from
Securities...................................................................................... (2,565,114)
Foreign currency transactions................................................................... (40,084)
----------
Net Realized Loss from Investments and Foreign Currency Transactions.............................. (2,605,198)
----------
Net Change in Unrealized Appreciation (Depreciation) of
Securities...................................................................................... 4,254,694
Foreign currency transactions................................................................... 25,516
----------
Net Change in Unrealized Appreciation (Depreciation) of Investments and Foreign Currency
Transactions..................................................................................... 4,280,210
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS.......... 1,675,012
----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................... $1,791,344
----------
----------
(a) Net of unrecoverable foreign withholding taxes of............................................. $ 19,329
</TABLE>
See Notes to Financial Statements SCHRODER CAPITAL FUNDS
126
<PAGE>
FOR THE PERIOD ENDED MAY 31, 1988 AND
STATEMENTS OF CHANGES IN NET ASSETS THE YEAR ENDED MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SCHRODER SCHRODER
U.S. SMALLER GLOBAL SCHRODER
COMPANIES GROWTH EM CORE
PORTFOLIO PORTFOLIO(a) PORTFOLIO(b)
-------------- ------------ ------------
<S> <C> <C> <C>
NET ASSETS, MAY 31, 1997................ $ 103,385,258 $ - $ -
-------------- ------------ ------------
OPERATIONS
Net investment income................. 234,568 19,344 210,351
Net realized gain (loss) from
investments......................... 6,355,034 (30,332 ) (518,984 )
Net change in unrealized appreciation
(depreciation) from investments..... 28,258,572 223,207 (2,346,562 )
-------------- ------------ ------------
Net increase (decrease) in net assets
resulting from operations........... 34,848,174 212,219 (2,655,195 )
-------------- ------------ ------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS
Contributions......................... 228,163,060 3,070,201 39,419,804
Withdrawals........................... (10,593,071 ) (119,888 ) (10,034,574 )
-------------- ------------ ------------
Net increase from transactions in
investors' beneficial interest...... 217,569,989 2,950,313 29,385,230
-------------- ------------ ------------
Net increase in net assets............ 252,418,163 3,162,532 26,730,035
-------------- ------------ ------------
NET ASSETS, MAY 31, 1998................ 355,803,421 3,162,532 26,730,035
-------------- ------------ ------------
OPERATIONS
Net investment income................. 9,566 35,068 116,332
Net realized loss from investments.... (36,405,203 ) (51,381 ) (2,605,198 )
Net change in unrealized appreciation
(depreciation) on investments....... (15,329,451 ) 189,240 4,280,210
-------------- ------------ ------------
Net increase (decrease) in net assets
resulting from operations........... (51,725,088 ) 172,927 1,791,344
-------------- ------------ ------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS
Contributions......................... 62,305,395 605,384 8,838,138
Withdrawals........................... (105,195,868 ) (369,133 ) (23,434,315 )
-------------- ------------ ------------
Net increase (decrease) from
transactions in investors'
beneficial interest................. (42,890,473 ) 236,251 (14,596,177 )
-------------- ------------ ------------
Net increase (decrease) in net
assets.............................. (94,615,561 ) 409,178 (12,804,833 )
-------------- ------------ ------------
NET ASSETS, MAY 31, 1999................ $ 261,187,860 $ 3,571,710 $13,925,202
-------------- ------------ ------------
-------------- ------------ ------------
(a) Commenced operations on October 15,
1997
(b) Commenced operations on October 30,
1997
</TABLE>
See Notes to Financial Statements SCHRODER CAPITAL FUNDS
127
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIO TO AVERAGE
NET ASSETS(a)
-------------------------------------------
NET PORTFOLIO
INVESTMENT NET GROSS TURNOVER
INCOME EXPENSES EXPENSES RATE
---------- ----------- -------------- --------
<S> <C> <C> <C> <C>
SCHRODER U.S. SMALLER COMPANIES PORTFOLIO
- -------------------------------------------------------------------------------------------------
June 1, 1998 to May 31, 1999.......... 0.00% 0.77% 0.77% 119%
June 1, 1997 to May 31, 1998.......... 0.10% 0.75% 0.75% 55%
November 1, 1996 to May 31, 1997...... 0.22% 0.85% 0.95% 34%
August 15, 1996(b) to October 31,
1996................................ 0.50% 0.85% 1.31% 17%
SCHRODER GLOBAL GROWTH PORTFOLIO
- -------------------------------------------------------------------------------------------------
June 1, 1998 to May 31, 1999.......... 1.01% 0.85% 5.87% 89%
October 15, 1997(b) to May 31, 1998... 1.18% 0.85% 6.81% 14%
SCHRODER EM CORE PORTFOLIO
- -------------------------------------------------------------------------------------------------
June 1, 1998 to May 1, 1999........... 0.88% 1.45% 3.38% 177%
October 30, 1997(b) to May 31, 1998... 1.35% 1.45% 2.38% 23%
</TABLE>
- ------------------------------
(a) Ratios for periods of less than one year are annualized.
(b) Commencement of operations.
See Notes to Financial Statements SCHRODER CAPITAL FUNDS
128
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Schroder Capital Funds ("Schroder Core") was organized as a Delaware business
trust on September 7, 1995. As of May 31, 1999, Schroder Core, which is
registered as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "Act"), had eight investment portfolios.
Included in this report are Schroder U.S. Smaller Companies Portfolio, Schroder
Global Growth Portfolio and Schroder EM Core Portfolio (each, a "Portfolio" and,
collectively, the "Portfolios"). Schroder U.S. Smaller Companies Portfolio is a
diversified portfolio that commenced operations on August 15, 1996 and,
effective May 31, 1997, changed its fiscal year end to May 31 from October 31.
Schroder Global Growth Portfolio and Schroder EM Core Portfolio are
non-diversified portfolios that commenced operations on October 15, 1997 and
October 30, 1997, respectively. Following the close of business on May 31, 1999,
the Schroder U.S. Smaller Companies Portfolio distributed all its net assets to
shareholders in complete liquidation and ceased investment operations. Under its
Trust Instrument, Schroder Core is authorized to issue an unlimited number of
interests without par value. Interests in the Portfolios are sold without any
sales charges in private placement transactions to qualified investors,
including open-end management investment companies.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
These financial statements are prepared in accordance with generally accepted
accounting principles, which require management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of increase and decrease in net assets from
operations during the fiscal period. Actual results could differ from those
estimates. The following summarizes the significant accounting policies of the
Portfolios:
SECURITY VALUATION---Portfolio securities listed on recognized stock exchanges
are valued at the last reported sale price on the exchange on which the
securities are principally traded. Listed securities traded on recognized stock
exchanges where last sale prices are not available are valued at the last sale
price on the preceding trading day or at the mean of the closing bid and ask
prices ("mid-market price"). Securities traded in over-the-counter markets, or
listed securities for which no trade is reported on the valuation date,
generally are valued at the most recent reported mid-market price. Prices used
for valuations may be provided by independent pricing services. Domestic
short-term investments, having a maturity of 60 days or less, are valued at
amortized cost, which approximates market value. Foreign short-term investments
are valued at the current market price, then marked to market to recognize any
gain or loss on the transaction. Other securities and assets for which market
quotations are not readily available are valued at fair value as determined in
good faith using methods approved by the Schroder Core Board of Trustees. Fair
valued securities represented approximately 1.10% and 1.09% of the Schroder EM
Core Portfolio's and Schroder Global Growth Portfolio's net assets at May 31,
1999, respectively.
SECURITY TRANSACTIONS AND INVESTMENT INCOME---Investment transactions are
accounted for on the trade date. Dividend income is recorded on ex-dividend
date, except that certain dividends from foreign securities where the
ex-dividend date may have passed are recorded as soon as the Portfolio is
informed of the ex-dividend date. Dividend income is recorded net of
unrecoverable withholding tax. Interest income is recorded as earned. Identified
cost of investments sold is used to determine realized gain and loss for both
financial statement and federal income tax purposes. Foreign dividend and
interest income amounts and realized capital gain or loss are converted to U.S.
dollar equivalents using foreign exchange rates in effect on the date of the
transactions.
Foreign currency amounts are translated into U.S. dollars at the mean of the bid
and asked prices of such currencies against U.S. dollars as follows: (i) assets
and liabilities at the rate of exchange at the end of the respective period; and
(ii) purchases and sales of securities and income and expenses at the rate of
exchange prevailing on the dates of such transactions. The portion of the
results of operations arising from changes in the exchange rates and the portion
due to fluctuations arising from changes in the market prices of securities are
not isolated. Such fluctuations are included with the net realized and
unrealized gain or loss on investments.
The Schroder Global Growth Portfolio and Schroder EM Core Portfolio may enter
into forward contracts to purchase or sell foreign currencies. Risks associated
with such contracts include the movement in value of the foreign currency
relative to the U.S. dollar and the ability of the counterparty to perform.
Fluctuations in the value of such contracts are recorded daily as unrealized
gain or loss; realized gain or loss includes net gain or loss on contracts that
have terminated by settlement or by the Portfolios entering into offsetting
commitments.
REPURCHASE AGREEMENTS---The Portfolios may invest in repurchase agreements. The
Portfolios, through their custodian, receive delivery of the underlying
collateral whose market value must always equal or exceed the repurchase price.
The investment adviser is responsible for determining the value of the
underlying collateral at all times. In the event of default, the Portfolios may
have difficulties with the disposition of any securities held as collateral.
EXPENSE ALLOCATION---Schroder Core accounts separately for the assets and
liabilities and operation of each portfolio. Expenses that are directly
attributable to more than one portfolio are allocated among the respective
portfolios in proportion to each portfolio's net assets.
ORGANIZATION COSTS---Costs incurred by each Portfolio in connection with its
organization are amortized on a straight line basis over a five-year period.
Unamortized organization costs at May 31, 1999 for the U.S. Smaller Companies
Portfolio are being reimbursed by the investment adviser.
SCHRODER CAPITAL FUNDS
129
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 3. INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER---Schroder Investment Management North America Inc. ("SIMNA")
serves as investment adviser to Schroder Global Growth Portfolio and Schroder EM
Core Portfolio pursuant to an Investment Advisory Agreement. Until July 1, 1999,
Schroder Capital Management International Inc. ("SCMI") served as investment
adviser Schroder Global Growth Portfolio and Schroder EM Core Portfolio, and
through May 31, 1999 to Schroder U.S. Smaller Companies Portfolio. On July 1,
1999, SCMI was merged into SIMNA, and SIMNA commenced serving as investment
adviser to Schroder Global Growth Portfolio and Schroder EM Core Portfolio. SCMI
was, and SIMNA is, a wholly owned subsidiary of Schroder U.S. Holdings, Inc.
SCMI was entitled to receive an annual fee, payable monthly, of 0.60% of the
average daily net assets of Schroder U.S. Smaller Companies Portfolio. Pursuant
to the Investment Advisory Agreement, SIMNA is entitled to receive from Schroder
Global Growth Portfolio and Schroder EM Core Portfolio an annual fee, payable
monthly, of 0.50% and 1.00%, respectively, of each Portfolio's average daily net
assets.
ADMINISTRATOR AND SUBADMINISTRATOR---The administrator of the Portfolios is
Schroder Fund Advisors Inc. ("Schroder Advisors"). For its services, Schroder
Advisors is entitled to receive from Schroder Global Growth Portfolio and
Schroder EM Core Portfolio compensation at an annual rate, payable monthly, of
0.15% and 0.10%, respectively, of the average daily net assets of each
Portfolio. Through May 31, 1999, Schroder Global Growth Portfolio and Schroder
EM Core Portfolio paid subadministration fees to Forum Administrative Services,
LLC ("FAdS") at an annual rate, payable monthly, of 0.075% of the average daily
net assets of each Portfolio, subject to an annual minimum of $25,000. Until its
liquidation, FAdS was entitled to receive compensation from Schroder U.S.
Smaller Companies Portfolio at an annual rate, payable monthly, of 0.075% of
it's average daily net assets subject to an annual minimum of $25,000. Effective
June 1, 1999, Schroder Core has entered into a Sub-Administration Agreement with
State Street Bank and Trust Company ("State Street") and Schroder Advisors.
Under the Agreement, Schroder Global Growth Portfolio and Schroder EM Core
Portfolio, together with other mutual funds managed by SIMNA and certain related
entities, pay fees to State Street based on the combined average daily net
assets of all of the funds in the Schroder complex, according to the following
annual rates: 0.06% of the first $1.7 billion of such assets, 0.04% of the next
$1.7 billion, and 0.02% of the assets in excess of $3.4 billion, subject to
certain minimum requirements.
NOTE 4. PURCHASES AND SALES OF SECURITIES
The cost of securities purchased and the proceeds from sales of securities
(excluding short-term securities) for the period ended May 31, 1999, were as
follows:
<TABLE>
<CAPTION>
COST OF PROCEEDS
PURCHASES FROM SALES
-------------- --------------
<S> <C> <C>
Schroder U.S. Smaller Companies
Portfolio.............................. $ 334,692,836 $ 364,897,846
Schroder Global Growth Portfolio........ 2,920,789 2,525,104
Schroder EM Core Portfolio.............. 20,183,299 32,699,783
</TABLE>
For federal income tax purposes, the tax basis of investment securities owned,
the aggregate gross unrealized appreciation and the aggregate gross unrealized
depreciation as of May 31, 1999, were as follows:
<TABLE>
<CAPTION>
NET
TAX UNREALIZED UNREALIZED APPRECIATION
BASIS APPRECIATION DEPRECIATION (DEPRECIATION)
-------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Schroder U.S. Smaller Companies
Portfolio.............................. $ 239,874,239 $35,863,481 $12,292,716 $23,570,765
Schroder Global Growth Portfolio........ 2,689,340 520,585 107,849 412,736
Schroder EM Core Portfolio.............. 11,632,298 2,453,973 785,475 1,668,498
</TABLE>
NOTE 5. FEDERAL TAXES
The Portfolios are not required to pay federal income taxes on their net
investment income and net capital gain because they are treated as partnerships
for federal income tax purposes. All interest, dividends, gain and loss of the
Portfolios are deemed to have been "passed through" to the Portfolios' interest
holders in proportion to their holdings of the Portfolios, regardless of whether
such interest, dividends or gain have been distributed by the Portfolios.
Under the applicable foreign tax law, a withholding tax may be imposed on
interest, dividends, and capital gains at various rates.
NOTE 6. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
SIMNA is contractually obligated to reduce its compensation for the current
fiscal year (and, if necessary, to pay certain other expenses) until December
31, 1999, to the extent that Schroder EM Core Portfolio's expenses exceed 1.45%
and Schroder Global Growth Portfolio's expenses exceed 0.85% of each
SCHRODER CAPITAL FUNDS
130
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
- --------------------------------------------------------------------------------
NOTE 6. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES (CONTINUED)
respective Portfolio's average daily net assets. SIMNA and Schroder Advisors may
voluntarily waive all or a portion of their fees, from time to time. For the
period ended May 31, 1999, Schroder Core's service providers voluntarily waived
and/or reimbursed the following fees or expenses:
<TABLE>
<CAPTION>
EXPENSES
FEES WAIVED REIMBURSED
---------------------------------- ------------
SCHRODER SCHRODER
SCMI ADVISORS FADS ADVISORS
--------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Schroder Global Growth Portfolio........ $ 17,416 $ 5,225 $ 22,388 $ 129,806
Schroder EM Core Portfolio.............. 131,766 13,177 15,117 94,967
</TABLE>
NOTE 7. CONCENTRATION OF RISK
Schroder Global Growth Portfolio and Schroder EM Core Portfolio may invest more
than 25% of their total assets in issuers located in any one country. To the
extent that they do so, Schroder Global Growth Portfolio and Schroder EM Core
Portfolio are susceptible to a range of factors that could adversely affect that
country, including political and economic developments and foreign exchange-rate
fluctuations. As a result of investing substantially in one country, the value
of a Portfolio's assets may fluctuate more widely than the value of shares of a
comparable fund with a lesser degree of geographic concentration. Schroder
Global Growth Portfolio and Schroder EM Core Portfolio invest in countries with
limited or developing capital markets. Investments in these markets may involve
greater risks than investments in more developed markets.
SCHRODER CAPITAL FUNDS
131
<PAGE>
SCHEDULE OF INVESTMENTS MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SCHRODER U.S. SMALLER COMPANIES PORTFOLIO
- -----------------------------------------------------------------
COMMON STOCKS (95.8%)
BASIC MATERIALS (6.4%)
69,000 Cambrex Corp. $ 1,552,500
246,100 Dal-Tile International, Inc.* 2,414,857
43,000 Elcor Corp. 1,736,126
43,800 Ferro Corp. 1,272,937
189,100 Ivex Packaging Corp.* 3,640,174
141,700 Mueller Industries, Inc.* 4,109,300
81,200 Spartech Corp. 1,979,250
---------------
16,705,144
---------------
CAPITAL GOODS/CONSTRUCTION (4.8%)
73,100 CTS Corp. 4,093,600
165,000 Hussmann International, Inc. 2,640,000
83,500 SLI, Inc. 2,703,312
121,100 Sybron International Corp.* 3,042,637
---------------
12,479,549
---------------
CONSUMER CYCLICALS (16.3%)
88,800 Ames Department Stores, Inc.* 3,640,800
47,100 Blyth Industries, Inc.* 1,318,800
120,000 CEC Entertainment, Inc.* 4,537,501
3,200 Chattem, Inc. 115,200
43,800 Duane Reade, Inc.* 1,396,125
115,500 Fairfield Communities, Inc.* 1,833,562
115,700 Family Dollar Stores, Inc. 2,581,556
49,650 Fossil, Inc.* 2,082,197
219,500 Goody's Family Clothing, Inc.* 2,387,062
110,600 Hollywood Entertainment Corp.* 2,847,950
74,200 Papa John's International, Inc.* 2,930,900
87,900 Regis Corp. 2,120,587
22,700 Ruby Tuesday, Inc. 421,369
148,300 Shopko Stores, Inc.* 5,264,650
99,275 Sonic Corp.* 2,733,169
94,900 Sunglass Hut International, Inc.* 1,447,225
119,300 Tent-A-Center, Inc.* 3,079,432
57,300 WestPoint Stevens, Inc. 1,812,112
---------------
42,550,197
---------------
CONSUMER STAPLES (4.9%)
68,100 American Italian Pasta Co.* 1,872,750
122,000 Aurora Foods, Inc.* 2,074,000
185,700 Foodmaker, Inc.* 5,013,900
164,100 Richfood Holdings, Inc. 2,102,531
49,900 Suiza Foods Corp.* 1,827,588
---------------
12,890,769
---------------
ENERGY (7.1%)
99,600 B.J. Service Co.* 2,745,226
57,800 Cooper Cameron Corp.* 2,091,637
505,300 El Paso Electric Co.* 4,326,631
129,000 Hanover Compressor Co.* 3,579,750
44,700 Montana Power Co.* 3,302,212
78,600 Weatherford International, Inc.* 2,593,800
---------------
18,639,256
---------------
FINANCIAL (13.0%)
105,500 Affiliated Managers Group, Inc.* 3,085,875
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SCHRODER U.S. SMALLER COMPANIES PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
FINANCIAL (continued)
<TABLE>
<C> <S> <C>
149,200 AmerUs Life Holdings, Inc. $ 3,851,225
49,800 Bank United Corp. 2,060,476
222,800 Catellus Development Corp.* 3,425,550
189,500 Colonial BancGroup, Inc. 2,439,812
64,300 Cullen/Frost Bankers, Inc. 3,616,875
73,700 Duff & Phelps Credit Rating Co. 4,537,156
101,300 Fremont General Corp. 2,146,295
143,200 Heller Financial, Inc. 4,260,200
70,550 North Fork BanCorp, Inc. 1,503,596
40,000 Stancorp Financial Group, Inc.* 997,500
54,800 Sun Communities, Inc. 2,003,625
---------------
33,928,185
---------------
HEALTH CARE (9.9%)
92,600 Amerisource Health Corp.* 2,737,488
200,900 Haemonetics Corp.* 3,817,100
141,700 HCR Manor Care, Inc.* 3,790,475
74,800 Henry Schein, Inc.* 2,258,026
20,200 InfoCure Corp.* 744,875
116,200 Invacare Corp. 2,897,738
132,300 Pharmaceutical Product Development,
Inc.* 3,539,025
69,000 Province Healthcare Co.* 1,492,125
118,800 Quest Diagnostics, Inc.* 3,036,825
86,300 Roberts Pharmaceutical Corp.* 1,639,700
---------------
25,953,377
---------------
TECHNOLOGY (8.5%)
121,600 Antec Corp.* 3,564,401
68,200 Benchmark Electronics, Inc.* 2,046,000
42,500 Dallas Semiconductor Corp. 1,848,750
114,400 EG&G, Inc. 3,396,250
88,400 Nielsen Media Research, Inc. 2,364,700
29,700 Symbol Technologies, Inc. 1,485,000
66,800 Thomas & Betts Corp. 2,859,875
85,500 Unitrode Corp.* 1,779,468
84,100 Zebra Technologies Corp.* 2,701,712
---------------
22,046,156
---------------
TRANSPORTATION/SERVICES/MISCELLANEOUS (24.9%)
109,100 ACNielsen Corp.* 3,075,257
57,900 Apria Healthcare Group, Inc.* 1,194,187
136,300 Coach USA, Inc.* 3,969,738
17,000 Cox Radio, Inc.* 908,437
15,700 General Nutrition Cos., Inc.* 260,031
206,100 Group Maintenance America Corp.* 2,808,114
500 Inet Technologies, Inc.* 8,531
131,300 J.B. Hunt Transport Services, Inc. 2,215,687
9,600 Lincare Holdings, Inc.* 236,400
218,300 Mail-Well, Inc.* 3,233,568
120,000 Manufactured Home Communities, Inc. 3,105,000
147,600 Mesaba Holdings, Inc.* 2,195,550
620 Metrocall, Inc.* 1,801
126,200 NOVA Corp.* 2,807,950
139,300 Ocular Sciences, Inc.* 4,248,650
134,500 Penton Media, Inc. 2,698,407
62,300 Pinnacle Holdings, Inc.* 1,133,081
</TABLE>
See Notes to Financial Statements SCHRODER CAPITAL FUNDS
132
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SCHRODER U.S. SMALLER COMPANIES PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCKS (continued)
TRANSPORTATION/SERVICES/MISCELLANEOUS (continued)
<TABLE>
<C> <S> <C>
10,100 Radio One, Inc.* $ 406,525
79,700 Remedy Corp.* 1,514,300
83,900 RemedyTemp, Inc.* 1,132,650
96,900 Rent-Way, Inc.* 2,434,612
299,500 Safety Kleen Corp. 4,698,406
168,200 School Specialty, Inc.* 2,501,975
101,600 SkyWest, Inc. 2,362,200
148,400 Superior Services, Inc.* 3,181,325
55,200 SPX Corp. 4,284,900
23,700 Time Warner Telecom, Inc.* 607,312
91,100 True North Communications, Inc. 2,129,463
75,450 Valassis Communications, Inc.* 2,626,603
78,000 Young & Rubicam, Inc. 2,983,500
---------------
64,964,160
---------------
TOTAL COMMON STOCKS
(COST $226,195,745) 250,156,793
---------------
<CAPTION>
PRINCIPAL
AMOUNT
- -------------
<C> <S> <C>
SHORT TERM INVESTMENTS (5.1%)
12,456,995 Dreyfus Cash Management 12,456,995
831,216 Federated Prime Obligations Fund 831,216
---------------
TOTAL SHORT TERM INVESTMENTS
(COST $13,288,211) 13,288,211
---------------
TOTAL INVESTMENTS (100.9%)
(COST $239,483,956) 263,445,004
OTHER ASSETS LESS LIABILITIES (-0.9%) (2,257,144)
---------------
TOTAL NET ASSETS (100.00%) $ 261,187,860
---------------
---------------
- -----------------------------------------------------------------
SCHRODER GLOBAL GROWTH PORTFOLIO
- -----------------------------------------------------------------
BELGIUM (0.6%)
COMMON STOCK
69 Grupo Bruxelles Lambert SA* $ 12,048
160 KBC Bancassurance Holding 9,753
---------------
21,801
---------------
DENMARK (0.9%)
COMMON STOCK
174 Den Danske Bank Group 18,708
290 International Service System A/S* 14,611
---------------
33,319
---------------
FINLAND (0.1%)
COMMON STOCK
430 Stora Enso Oyj 4,397
---------------
FRANCE (10.0%)
COMMON STOCK
98 Accor SA 24,101
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SCHRODER GLOBAL GROWTH PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
FRANCE (continued)
COMMON STOCK (continued)
<TABLE>
<C> <S> <C>
210 AGF - Assurances General de France $ 10,439
70 Air Liquide 10,569
81 Alcatel Alsthom 9,655
159 AXA 18,371
133 Bouygues SA 35,267
85 Canal Plus 24,663
363 Elf Aquitaine SA 52,683
119 Etablissements Economiques du Casino
Guichard--Perrachon SA 11,323
40 Groupe Danone 11,042
160 Lafarge SA 14,455
280 Sanofi SA* 11,828
130 STMicroelectronics NV 15,088
262 Suez Lyonnaise des Eaux 43,531
166 Total SA, B Shares* 20,221
597 Vivendi 44,320
---------------
357,556
---------------
GERMANY (3.2%)
COMMON STOCK
160 BASF AG 6,240
313 DaimlerChrysler AG 27,082
360 Hoechst AG 16,073
267 Mannesmann AG 36,572
400 RWE AG 17,921
490 Thyssen Krupp AG 9,683
---------------
113,571
---------------
GREECE (0.3%)
COMMON STOCK
170 Siemens AG 11,466
---------------
INDONESIA (0.1%)
COMMON STOCK
8,000 PT Telekomunikasi Indonesia 3,711
---------------
ITALY (3.0%)
COMMON STOCK
5,110 Banca di Roma 7,480
4,164 ENI SpA 26,080
770 Istituto Bancario San Paolo di Torino 10,426
1,720 Olivetti SpA* 5,377
3,284 Telecom Italia Mobile SpA 19,367
3,394 Telecom Italia SpA(a) 39,037
---------------
107,767
---------------
JAPAN (9.9%)
COMMON STOCK
1,000 Bridgestone Corp. 26,237
1,000 Credit Saison Co. Ltd. 20,278
1,000 Fuji Photo Film Co. 35,756
1,000 Kuraray Co. Ltd. 10,892
1,000 Matsushita Electric Industrial Co. Ltd. 18,126
2,000 Mitsui Fudosan Co. Ltd. 16,703
1 Nippon Telegraph & Telephone Corp. 9,767
2 NTT Mobile Communications Network, Inc. 109,418
</TABLE>
See Notes to Financial Statements SCHRODER CAPITAL FUNDS
133
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SCHRODER GLOBAL GROWTH PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
JAPAN (continued)
COMMON STOCK (continued)
<TABLE>
<C> <S> <C>
100 Promise Co. Ltd. $ 4,900
2,000 Sekisui House Ltd. 21,718
200 Sony Corp. 18,805
10,000 Sumitomo Metal Industries Ltd. 13,160
2,000 Teijin Ltd. 7,714
1,000 Toppan Printing Co. Ltd. 11,215
5,000 Yasuda Fire & Marine Insurance Co. Ltd. 28,348
---------------
353,037
---------------
KOREA, REPUBLIC OF (0.6%)
COMMON STOCK
500 Kookmin Bank 7,568
175 Samsung Electronics Co. 12,175
RIGHTS
14 Samsung Electronics Co.* 149
---------------
19,892
---------------
NETHERLANDS (4.7%)
COMMON STOCK
160 Akzo Nobel NV 6,658
556 ING Groep NV 29,820
555 Koninklijke Ahold NV 19,443
424 Koninklijke (Royal) Philips Electronics
NV* 36,464
460 Royal Dutch Petroleum Co. 25,685
1,255 TNT Post Group NV 31,625
274 United Pan-Europe Communications NV* 16,832
---------------
166,527
---------------
NEW ZEALAND (0.7%)
COMMON STOCK
7,500 Carter Holt Harvey Ltd. 8,605
3,700 Telecom Corp. of New Zealand Ltd. 15,988
---------------
24,593
---------------
PHILIPPINES (0.5%)
COMMON STOCK
19,000 Ayala Land, Inc. 6,117
1,500 Manila Electric Co., B Shares 5,164
300 Philippine Long Distance Telephone Co. 8,436
---------------
19,717
---------------
PORTUGAL (0.7%)
COMMON STOCK
1,330 Electricidade de Portugal, SA 24,267
---------------
SINGAPORE (1.0%)
COMMON STOCK
2,100 Development Bank of Singapore Ltd. 21,673
896 Singapore Press Holdings Ltd. 12,260
---------------
33,933
---------------
SPAIN (1.6%)
COMMON STOCK
440 Bankinter SA 17,368
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SCHRODER GLOBAL GROWTH PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
SPAIN (continued)
COMMON STOCK (continued)
<TABLE>
<C> <S> <C>
1,114 Endesa SA $ 23,774
326 Telefonica SA* 15,693
---------------
56,835
---------------
SWEDEN (1.2%)
COMMON STOCK
480 Electrolux AB, Series B 9,322
1,204 Telefonaktiebolaget LM Ericsson, B
Shares 32,230
---------------
41,552
---------------
SWITZERLAND (2.5%)
COMMON STOCK
8 ABB AG 11,342
16 Novartis AG 23,272
1 Roche Holding AG 10,606
158 UBS AG 45,838
---------------
91,058
---------------
THAILAND (0.3%)
COMMON STOCK
1,000 Electricity Generating Public Co. Ltd. 2,127
500 PTT Exploration and Production Public
Co. Ltd. 4,065
3,000 Siam Commercial Bank Public Co. Ltd. 3,493
---------------
9,685
---------------
UNITED KINGDOM (14.3%)
COMMON STOCK
3,091 Airtours plc 25,402
2,120 Allied Domecq plc 20,331
1,660 ARM Holdings plc* 16,226
2,780 BP Amoco plc 49,759
2,770 British Airways plc 19,885
1,185 British Energy plc 10,586
1,950 British Land Co. plc 17,186
2,890 British Sky Broadcasting Group plc 27,461
1,860 British Telecommunications plc 31,027
2,250 Cable & Wireless plc 27,762
3,080 David S. Smith Holdings plc 6,614
5,730 Electrocomponents plc 46,322
1,320 Glaxo Wellcome plc 37,057
2,110 Imperial Chemical Industries plc 23,262
1,810 Kingfisher plc 22,753
8,170 LASMO plc* 17,281
1,830 Lloyds TSB Group plc 24,192
2,220 Marks & Spencer plc 14,015
500 Pearson plc 9,534
180 Rio Tinto plc 2,639
750 RMC Group plc 10,011
6,494 Rolls-Royce plc 27,315
1,820 Shell Transport & Trading Co. plc 13,175
2,140 Williams plc 12,525
---------------
512,320
---------------
</TABLE>
See Notes to Financial Statements SCHRODER CAPITAL FUNDS
134
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SCHRODER GLOBAL GROWTH PORTFOLIO (continued)
- -----------------------------------------------------------------
UNITED STATES OF AMERICA (30.7%)
COMMON STOCK
860 Allied Signal, Inc. $ 49,934
477 American International Group, Inc. 54,528
555 Ameritech Corp. 36,526
660 Anheuser-Busch Cos., Inc. 48,221
670 Bristol-Myers Squibb Co. 45,980
245 Capital One Financial Corp. 36,918
732 Cisco Systems, Inc.* 79,697
420 Computer Sciences Corp.* 27,169
600 Costco Cos., Inc.* 43,500
369 Elan Corp. plc, ADR* 19,926
823 Federal Home Loan Mortgage Corp. 47,991
1,047 Gap, Inc. 65,503
425 General Electric Co. 43,217
672 Guidant Corp. 33,600
510 Kroger Co.* 29,867
640 Lowe's Cos., Inc. 33,240
1,100 McGraw-Hill Cos., Inc. 57,064
380 Medtronic, Inc. 26,980
550 Microsoft Corp.* 44,378
255 Pfizer, Inc. 27,285
450 Procter & Gamble Co. 42,020
1,630 Sun Microsystems, Inc.* 97,393
840 United Technologies Corp. 52,133
1,220 Wal-Mart Stores, Inc. 52,002
---------------
1,095,072
---------------
TOTAL INVESTMENTS (86.9%)
(COST $2,688,728) 3,102,076
OTHER ASSETS LESS LIABILITIES (13.1%) 469,634
---------------
TOTAL NET ASSETS (100.0%) $ 3,571,710
---------------
---------------
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
CONTRACT TO SELL
</TABLE>
<TABLE>
<CAPTION>
CONTRACT UNDERLYING FACE UNREALIZED
DATE CURRENCY UNITS AMOUNT OF VALUE DEPRECIATION
- --------- ------------- --------- --------------- -----------------
<C> <S> <C> <C> <C>
8/18/99 Japanese Yen 12,933,000 $ 108,189 $ 661
--------------- -----
</TABLE>
<TABLE>
<C> <S> <C>
- -----------------------------------------------------------------
SCHRODER EM CORE PORTFOLIO
- -----------------------------------------------------------------
ARGENTINA (3.8%)
COMMON STOCK
2,200 Banco de Galicia y Buenos Aires SA de CV
ADR $ 46,063
6,400 Perez Companc SA "B" Shares 38,237
2,000 Telecom Argentina ADR 57,000
2,500 Telefonica de Argentina SA, ADR 80,938
7,200 YPF Sociedad Anonima ADR 303,300
---------------
525,538
---------------
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SCHRODER EM CORE PORTFOLIO (continued)
- -----------------------------------------------------------------
BOTSWANA (0.3%)
COMMON STOCK
37,700 Sechaba Breweries Ltd. $ 41,073
---------------
BRAZIL (11.5%)
COMMON STOCK
2,000 Companhia Brasileira de Distribuicao
Grupo Pao de Acucar ADR 36,250
10,700 Companhia Cervejaria Brahma ADR 109,675
8,069 Companhia Energetica de Minas Gerais--
CEMIG ADR 169,284
1,638,000 Companhia Paulista de Forca e Luz--CPFL 109,995
8,600 Companhia Vale do Rio Doce 116,086
4,700 Tele Celular Sul Participacoes SA ADR 88,419
PREFERRED STOCK
123,000 Banco Itau SA 63,023
7,500 Companhia Vale do Rio Doce 133,140
17,700 Petroleo Brasileiro SA--Petrobras 248,919
3,200 Tele Centro Sul Participacoes SA 172,800
1,792,000 Telecomunicacoes de Sao Paulo SA -
Telesp 216,897
6,000 Telesp Participacoes SA 131,250
---------------
1,595,738
---------------
CHILE (2.0%)
COMMON STOCK
1,600 Banco Santander Chile ADR 25,802
3,900 Chilectra SA 88,818
4,000 Distribucion y Servicio D&S SA ADR 67,500
2,000 Embotella Andina SA 31,250
1 Enersis SA ADR 19
952 Quimica y Minera de Chile SA ADR 33,208
3,300 Quinenco SA ADR 34,650
---------------
281,247
---------------
CHINA (1.6%)
COMMON STOCK
284,000 Yanzhou Coal Mining Co. Ltd. 71,782
880,000 Yizheng Chemical Fibre Co. Ltd. 131,640
102,000 Zhenhai Refining & Chemical Co. Ltd. 20,257
---------------
223,679
---------------
CZECH REPUBLIC (1.0%)
COMMON STOCK
4,200 Ceska Sporitelna AS* 19,558
4,400 Komercni Banka AS GDR* 26,180
5,440 SPT Telekom AS 90,402
---------------
136,140
---------------
EGYPT (0.9%)
COMMON STOCK
6,270 Oriental Weavers Co. 128,606
---------------
GREECE (2.5%)
COMMON STOCK
1,653 Alpha Credit Bank 112,384
</TABLE>
See Notes to Financial Statements SCHRODER CAPITAL FUNDS
135
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SCHRODER EM CORE PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
GREECE (continued)
COMMON STOCK (continued)
<TABLE>
<C> <S> <C>
2,960 Hellenic Bottling Co. SA $ 86,587
6,918 Hellenic Telecommunication Organization
SA 150,108
---------------
349,079
---------------
HONG KONG (0.5%)
COMMON STOCK
28,000 China Merchants Holdings International
Co. Ltd. 18,054
24,000 Cosco Pacific Ltd. 14,160
19,000 New World Infrastructure Ltd.* 30,505
90,000 Zhehuang Expressway Co. Ltd. 13,115
---------------
75,834
---------------
HUNGARY (1.3%)
COMMON STOCK
3,340 Matav RT ADR 93,520
3,800 Mol Magyar Olaj RT GDR 92,720
---------------
186,240
---------------
INDIA (6.5%)
COMMON STOCK
900 Infosys Technologies Ltd. 44,775
7,100 ITC Ltd. GDR 187,263
7,500 Larsen & Toubro Ltd. GDR 93,563
4,300 Mahanagar Telephone GDR 38,915
24,000 Mahindra & Mahindra Ltd. GDR 114,000
6,700 Pentafour Software & Exports Ltd. GDR
(a) 153,162
24,400 Reliance Industries Ltd. 210,450
6,300 State Bank of India 66,308
---------------
908,436
---------------
INDONESIA (2.3%)
COMMON STOCK
795,000 PT Bank Internasional Indonesia 21,982
13,000 PT Gudang Garam Tbk 25,081
42,000 PT Hanjaya Mandala Sampoerna Tbk 67,612
60,000 PT Indofoods Sukses Makmur Tbk 59,355
17,000 PT Indosat (Persero) Tbk 34,470
249,000 PT Telekomunikasi Indonesia 115,515
---------------
324,015
---------------
ISRAEL (3.4%)
COMMON STOCK
19,110 Bank Hapoalim Ltd. 48,478
35,000 Bank Leumi Le-Israel 65,910
2,780 ECI Telecommunications Ltd. 96,258
1,700 Gilat Satellite Networks Ltd.* 89,675
800 Koor Industries Ltd. 86,503
1,840 Teva Pharmaceutical Industries Ltd. ADR 90,390
---------------
477,214
---------------
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SCHRODER EM CORE PORTFOLIO (continued)
- -----------------------------------------------------------------
KOREA, REPUBLIC OF (12.8%)
COMMON STOCK
4,240 Daewoo Securities Co. $ 4,756
11,500 Kookmin Bank GDR 174,074
6,900 Korea Electric Power Corp. ADR 211,216
546 Korea Exchange Bank 2,473
4,632 L.G. Chemical Ltd. 91,011
3,600 Pohang Iron & Steel Co. Ltd. 335,569
4,466 Samsung Electronics Co. 310,702
2,500 Shinsegae Department Store Co. 111,734
5,898 SK Corp. 123,844
3 SK Telecom Co. Ltd. 3,799
RIGHTS
357 Samsung Electronics Co.* 3,793
WARRANTS
1,000 Korea Telecom* 49,460
1,000 Pohang Iron & Steel Co. Ltd.* 78,780
250 SK Telecom Co. Ltd.* 276,806
---------------
1,778,017
---------------
LUXEMBOURG (0.4%)
COMMON STOCK
5,000 Quilmes Industrial SA ADR 56,562
---------------
MAURITIUS (0.3%)
COMMON STOCK
58,700 State Bank of Mauritius Ltd.* 37,321
---------------
MEXICO (14.5%)
COMMON STOCK
10,000 Alfa SA de CV 35,046
19,000 ARA SA de CV* 64,751
38,200 Cemex SA de CV 166,129
147,400 Cifra SA de CV 238,419
49,400 Fomento Economico Mexicano SA de CV 161,065
39,000 Grupo Financiero Banamex Accival SA de
CV 77,841
43,842 Grupo Industrial Bimbo SA de CV 83,938
17,400 Grupo Industrial Saltillo SA de CV 54,164
56,100 Grupo Modelo SA de CV 142,675
12,000 Grupo Sanborns SA* 20,020
2,700 Grupo Televisa SA GDR 112,894
37,400 Industrias Penoles SA* 95,497
30,900 Kimberly-Clarke de Mexico SA de CV 99,646
8,300 Telefonos de Mexico SA ADR 663,481
---------------
2,015,566
---------------
PERU (1.0%)
COMMON STOCK
3,500 CPT Telefonica del Peru SA ADS 50,750
7,370 Credicorp Ltd. 81,070
---------------
131,820
---------------
PHILIPPINES (3.0%)
COMMON STOCK
160,600 Ayala Corp. 51,704
</TABLE>
See Notes to Financial Statements SCHRODER CAPITAL FUNDS
136
<PAGE>
SCHEDULE OF INVESTMENTS (CONCLUDED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SCHRODER EM CORE PORTFOLIO (continued)
- -----------------------------------------------------------------
</TABLE>
PHILIPPINES (continued)
COMMON STOCK (continued)
<TABLE>
<C> <S> <C>
99,000 Far East Bank & Trust Co. $ 149,606
130,000 First Philippine Holdings Corp. 163,995
22,000 San Miguel Corp. 49,435
---------------
414,740
---------------
POLAND (1.6%)
COMMON STOCK
2,500 Bank Rozwoju Eksportu SA 67,160
4,750 Elektrim Spolka Akcyjna SA 55,454
1,200 KGHM Polska Miedz SA 14,550
14,060 Telekomunikacja Polska SA* 84,712
---------------
221,876
---------------
RUSSIA (1.6%)
COMMON STOCK
810 Lukoil Holding ADR 30,132
11,265 RAO Unified Energy Systems GDR 65,901
16,360 Surgutneftegaz ADR 125,808
---------------
221,841
---------------
SOUTH AFRICA (8.8%)
COMMON STOCK
17,500 ABSA Group Ltd. 80,240
4,655 Anglo American plc* 214,377
21,936 Barlow Ltd. 101,987
1 Edgar Stores Ltd. 6
17,100 Ellerine Holdings Ltd. 58,531
88,100 First Rand Ltd. 82,767
25,441 LA Retail Stores Ltd. 34,628
7,776 Liberty Life Association of Africa Ltd. 104,719
102,900 Malbak Ltd. 52,791
26,400 Nampak Ltd. 52,906
9,000 Rembrandt Group Ltd. 63,847
86,376 Sanlam Ltd.* 83,086
18,400 Sappi Ltd. 112,095
19,900 Sasol Ltd. 113,258
8,975 South African Breweries Ltd.* 72,087
---------------
1,227,325
---------------
TAIWAN (7.7%)
COMMON STOCK
8,000 Asustek Computer, Inc. 92,594
13,000 Cathay Life Insurance Co. 44,465
236,000 Cheng Loong Co.* 123,964
46,650 Compal Electronics, Inc. 124,656
67,000 Formosa Chemicals & Fibre Corp. 69,567
13,000 Synnex Technology International Corp. 71,858
131,000 Taishin International Bank 90,014
62,000 Taiwan Semiconductor Manufacturing Co.* 222,476
174,000 United World Chinese Commercial Bank 230,086
---------------
1,069,680
---------------
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SCHRODER EM CORE PORTFOLIO (continued)
- -----------------------------------------------------------------
THAILAND (3.1%)
COMMON STOCK
8,000 Bangkok Bank Public Co. Ltd. $ 24,768
19,000 Electricity Generating Public Co. Ltd. 40,409
5,500 PTT Exploration and Production Public
Co. Ltd. 44,716
3,800 Siam Cement Public Co. Ltd. 98,619
38,000 Thai Airways International Public Co.
Ltd. 64,450
163,000 Thai Petrochemical Industry Public Co.
Ltd. 55,949
24,000 Total Access Communication Public Co.
Ltd. 82,080
PREFERRED STOCK
19,500 Siam Commercial Bank Public Co. Ltd. 19,949
WARRANTS
19,500 Siam Commercial Bank Public Co. Ltd.* 6,824
---------------
437,764
---------------
TURKEY (2.3%)
COMMON STOCK
5,270,070 Akbank TAS 86,819
3,083,074 Haci Omer Sabanci Holding 75,807
1,600,000 KOC Holding AS 123,924
31,210 Migros Turk TAS 39,905
---------------
326,455
---------------
ZIMBABWE (0.8%)
COMMON STOCK
1,080,000 Econet Wireless Holdings* 108,990
---------------
TOTAL INVESTMENTS (95.5%)
(COST $11,392,476) 13,300,796
OTHER ASSETS LESS LIABILITIES (4.5%) 624,406
---------------
TOTAL NET ASSETS (100.0%) $ 13,925,202
---------------
---------------
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
CONTRACTS TO SELL
</TABLE>
<TABLE>
<CAPTION>
UNREALIZED
CONTRACT UNDERLYING FACE APPRECIATION/
DATE CURRENCY UNITS AMOUNT OF VALUE (DEPRECIATION)
- -------- ------------------ ------------ ------------------- ------------------
<C> <S> <C> <C> <C>
06/16/99 Brazilian Cruzeiro 136,380 $ 78,900 $ 21,099
06/22/99 Brazilian Cruzeiro 84,000 48,401 11,598
01/21/00 Hong Kong Dollar 1,220,000 156,270 (3,401)
-------- -------
$ 283,571 $ 29,296
-------- -------
</TABLE>
(a) Fair valued security.
(*) Non-income producing security.
ADR--American Depository Receipts
GDR--Global Depository Receipts
See Notes to Financial Statements SCHRODER CAPITAL FUNDS
137
<PAGE>
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<PAGE>
Norwest Advantage Funds
510 Marquette Avenue
Minneapolis, MN 55479-0040
Shareholder Services
Minneapolis/St. Paul 1-612-667-8833
Elsewhere 1-800-338-1348
Norwest Investment Management, Inc.
Investment Adviser
Norwest Bank Minnesota, N.A.
Transfer Agent
Custodian
Forum Financial Services, Inc.
Manager and Distributor
- -c- 1999 NORWEST ADVANTAGE FUNDS
NW R AR (7/99)
This report is for distribution only to shareholders and may
be distributed to others only if preceded or accompanied
by current prospectuses of the Norwest Advantage Funds.
[Logo] NORWEST
ADVANTAGE FUNDS-R-
