<PAGE>
EXECUTIVE INVESTORS LOGO
The words "EXECUTIVE INVESTORS FUNDS" in a rectangular blue box across the top
of the page.
BLUE CHIP
HIGH YIELD
INSURED TAX EXEMPT
ANNUAL REPORT
December 31, 1999
<PAGE>
MARKET OVERVIEW
EXECUTIVE INVESTORS TRUST
Dear Investor:
We are pleased to present this Market Overview for the annual report for the
Executive Investors Trust for the year ended December 31, 1999. Included are the
annual reports for the Blue Chip Fund, High Yield Fund and Insured Tax Exempt
Fund.
THE ECONOMY
The U.S. economy, in its ninth year of expansion, continued to show remarkable
strength during 1999. The domestic economy grew at a rate of 4.2% during the
reporting period. The unemployment rate fell to 4.1% -- a 29-year low -- and 2.6
million new jobs were created. Despite rapid growth and near full employment,
inflation remained benign. As measured by the consumer price index, inflation
increased slightly, from 1.6% to a still low 2.7%, primarily due to higher oil
prices. Rising personal income, high consumer confidence, wealth from stock
market gains and home price appreciation, and improvement in the economies of
U.S. trading partners were all factors that contributed to economic growth.
THE EQUITY MARKET
Despite a great deal of volatility, particularly during the summer months, the
performance of the U.S. stock market was once again solid. Supported by the
healthy economy, strong corporate profits and mild inflation, most sectors of
the stock market reached record highs. The big story of the year was the
explosive growth of technology stocks, as high-flying Internet stocks led the
equity rally. Propelled by the ongoing Internet phenomenon, many prominent
technology companies, including hardware, software and telecommunication service
providers, posted strong gains. The Nasdaq Composite Index, which is meant to be
a broad Nasdaq stock market indicator but is increasingly being driven by
technology stocks, was up an unprecedented 85.6% for the year. Standard & Poor's
500 Index ("S&P 500 Index") was up 19.5% -- the fifth consecutive year of
double-digit growth. The powerful momentum of technology stocks is exemplified
by the fact that when technology stocks are removed from the S&P 500 Index, it
is up only mid-single digits for the year.
Large capitalization stocks continued their winning streak, as indicated by the
S&P 500 Index. However, it is important to note that while the S&P 500 Index
soared, the majority of individual stocks included in the index actually
declined (256 stocks fell in price, 3 remained unchanged and 241 rose.) In a
stunning reversal of fortune, small capitalization stocks, which had lagged for
several years, rebounded as the Russell 2000 Index (the small-cap benchmark)
rose 19.6%.
In the international marketplace, stock markets around the world roared back to
life in 1999. Buoyed by stabilizing economies, many emerging markets staged a
dramatic comeback, while more established countries also posted respectable
results.
THE BOND MARKET
Interest rates moved steadily and substantially higher during the year, causing
bond prices to decline. The yield on the benchmark 30-year U.S. Treasury bond
rose from
1
<PAGE>
MARKET OVERVIEW (continued)
EXECUTIVE INVESTORS TRUST
5.10% to 6.48%, the highest yield in over two years. Early in the year, the
market was hurt by a reversal of the "flight to safety," which had benefited
bonds during the financial market crisis in the fall of 1998. As the year
progressed, the market became increasingly concerned about the strength of the
U.S. economy and likely Federal Reserve action. In fact, the Fed, concerned with
the rapid expansion of the of economy, raised the federal funds rate by 25 basis
points (1/4 of 1%) three times during the year, thus undoing its three easing
moves that were initiated in response to 1998's financial market crisis.
Among the various bond sectors, U.S. corporate high yield bonds had the best
performance due to their high coupon income. Mortgage-backed bonds were the
second best sector due to reduced prepayment risk and a decrease in supply.
Corporate investment grade bonds underperformed in part because of heavy
issuance, particularly in the first half of the year. The worst performing bond
sector was Treasury securities, which are the most sensitive to changes in
interest rates.
LOOKING AHEAD
Going forward, our long-term outlook for the equity market remains optimistic,
although, we are concerned about excessive valuations and record-high share
prices of some stocks. As demonstrated in the past, the stock market is
inherently volatile, and significant short-term corrections are part of its
nature. However, in general, we are encouraged by the healthy fundamentals of
the domestic economy, sustained corporate earnings and subdued inflation.
We anticipate that the bond market will continue to face a challenging
environment in the months ahead. Given the economy's considerable momentum, the
Federal Reserve is likely to continue to raise short-term rates. In addition,
long-term rates are likely to continue to rise during the first few months of
2000. If the economy starts to slow due to higher interest rates, improvement in
the bond market is possible by mid-year.
Because it is impossible to predict the future direction of the markets, even
over the short term, there are certain basic investment principles that we
encourage our shareholders to follow to reduce exposure to risk.* First, we
encourage shareholders to take a long-term view, and to avoid trying to time the
market. Attempting to time the market is extremely difficult, even for
professional investors. Second, we encourage our shareholders to diversify their
portfolios among stock, bond and money market funds. Third, we encourage our
shareholders to follow a regular investment plan. This may help you to avoid
getting caught up in the excitement of a rising market and will reduce the risk
of buying at high points.
Of course, no financial plan or program, no matter how well-designed, is
guaranteed to be successful. In addition, nothing eliminates the risk associated
with overall market trends. However, utilizing these various strategies may help
to minimize the risk by reducing the extent to which an investor may be affected
by a decline in any one security or segment of the market. If you use dollar
cost averaging, you should consider your ability to continue purchases through
periods of declining prices.
2
<PAGE>
Thank you for placing your trust in Executive Investors. As always, we
appreciate the opportunity to serve your investment needs.
Sincerely,
/s/ Patricia D. Poitra
Patricia D. Poitra
Director of Equities
Executive Investors Management Company, Inc.
/s/ Clark D. Wagner
Clark D. Wagner
Chief Investment Officer
Executive Investors Management Company, Inc.
January 31, 2000
*There are a variety of risks associated with investing in all stock mutual
funds including market risk (the risk that the entire stock market will decline
because of an event such as a deterioration in the economy or a rise in
interest rates). There are special risks associated with investing in certain
types of stock mutual funds, such as small-cap funds and global funds. For the
bond funds, the risks include interest rate risk and credit risk. Interest rate
risk is the risk that bonds will decrease in value as interest rates rise. As a
general matter, longer-term bonds fluctuate more than shorter-term bonds in
reaction to changes in interest rates. Credit risk is the risk that bonds will
decline in value as the result of a decline in the credit rating of the bonds
or the economy as a whole. You should consult your prospectus for a precise
explanation of the risks associated with your fund.
OUR PORTFOLIO MANAGERS' LETTERS DISCUSS HOW FUNDS PERFORMED RELATIVE TO THEIR
LIPPER INC. ("LIPPER") PEER GROUPS. DURING 1999, LIPPER INSTITUTED A NEW
CLASSIFICATION SYSTEM FOR EQUITY MUTUAL FUNDS. LIPPER IS CURRENTLY CONTINUING TO
PUBLISH INFORMATION BASED ON BOTH THE OLD AND NEW CLASSIFICATIONS. BECAUSE THE
NEW CLASSIFICATIONS WERE NOT IN PLACE WHEN THE FISCAL YEAR BEGAN AND THEY
CONTINUED TO BE REFINED DURING THE YEAR, WE HAVE DECIDED TO CONTINUE TO RELY ON
THE OLD CLASSIFICATIONS. THUS, WHEN WE REFER TO LIPPER PEER GROUPS IN THIS
ANNUAL REPORT, WE ARE USING THE PREVIOUS CLASSIFICATION STRUCTURE.
3
<PAGE>
PORTFOLIO MANAGERS' LETTER
EXECUTIVE INVESTORS BLUE CHIP FUND
Dear Investor:
We are pleased to present the annual report for the Executive Investors Blue
Chip Fund for the fiscal year ended December 31, 1999. During the period, the
Fund's return on a net asset value basis was 25.6%, compared to an average
return of 13.8% for its Lipper peer group. During the period, the Fund declared
dividends from net investment income of 3.0 cents per share. The Fund also
declared a capital gains distribution of $2.685 per share.
The primary factors driving the Fund's performance were the performance of large
capitalization stocks, as well as the Fund's sector allocations. The Fund
benefited from the equity markets' continued upward trend, which was supported
by persistent gains in productivity. This in turn led to an improving corporate
earnings environment. Concerns about inflation and rising interest rates
returned mid-year and effectively cooled the markets. Fears soon subsided, and
the market resumed its march upward through the year-end. In general, the
performance of the major indices was driven by large-cap technology issues. The
economy and financial markets are still debating the possible emergence of a
"new paradigm" created by massive leaps forward in computer technologies. These
technologies have made possible a heightened level of productivity, which some
believe may render the historically perceived trade-off between inflation and
unemployment invalid. However, the debate on this topic continues.
Technology was the reigning theme for the year, and the Fund benefited from the
strong performance of a number of holdings in this sector. In the handset and
wireless communications markets, Ericsson and Lucent Technologies were two solid
stocks. As the semiconductor market improved, the stocks of Intel and LSI Logic
generated outperforming returns, as did Applied Materials, a semiconductor
capital equipment company.
In the consumer staples area, several cable providers added to the Fund's
performance. AT&T/Liberty Media's focus on cable helped it become one of the
year's solid performers. Time Warner, another major cable company, was also a
good performer thanks to its improving programming content.
A number of holdings in the capital goods sector helped the Fund's performance
during the reporting period. One company in particular that contributed to the
performance of the Fund was General Electric, a well-managed, industrial company
that benefited from continuing strength in the domestic economy, as well as the
recent re-invigoration of the world economies.
4
<PAGE>
The Fund's holdings in the consumer cyclicals sector also helped performance.
Solid advertising and classified revenue helped propel Tribune's newspaper
business. Its television station ratings also fared well, due to solid
demographic perspectives. The big box retailers, Home Depot, Wal-Mart and
Costco, continued to generate positive returns for the Fund by providing the
consumer with solid shopping value and a good in-store experience.
The Fund's holdings in some sectors did not benefit performance. For example, in
the health care sector, the Federal Reserve's decision to raise interest rates
had a significant impact on some of the major pharmaceutical companies with
higher price-to-earnings multiples. The stocks of companies such as Eli Lilly,
Schering-Plough, and Pfizer all underperformed.
In the consumer cyclicals area, select sellers of hard goods were hurt by the
rising interest-rate environment, though their fundamentals remained solid. An
example of this situation was the underperformance of the stock of Ford Motor
Company, a leading automobile manufacturer.
In the financial services sector, concerns about merger integration, potential
Year 2000 computer glitches, rising interest rates, exposure to Latin America
and declining revenues in the capital markets wreaked havoc. In this
environment, some of the Fund's holdings underperformed. In the insurance
industry, pricing pressures continued to depress the stocks of companies like
Hartford Insurance Group.
At a meeting of the Board of Trustees of the Trust held on October 21, 1999, the
Board approved a plan to merge the Executive Investors Blue Chip Fund into the
First Investors Series Fund -- Blue Chip Fund. The reorganization is subject to
the approval of the Executive Investors Blue Chip Fund shareholders. A
shareholders meeting was scheduled for February 25, 2000.
5
<PAGE>
PORTFOLIO MANAGERS' LETTER (continued)
EXECUTIVE INVESTORS BLUE CHIP FUND
Thank you for placing your trust in Executive Investors. As always, we
appreciate the opportunity to serve your investment needs.
Sincerely,
/s/ Dennis T. Fitzpatrick
Dennis T. Fitzpatrick
Vice President
and Co-Portfolio Manager
/s/ Andrew Wedeck
Andrew Wedeck
Co-Portfolio Manager*
January 31, 2000
* Effective November 15, 1999, Mr. Wedeck serves as Co-Portfolio Manager of the
Fund.
6
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
EXECUTIVE INVESTORS BLUE CHIP FUND
Comparison of change in value of $10,000 investment in the Executive Investors
Blue Chip Fund and the Standard & Poor's 500 Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1999
<S> <C> <C>
Executive Investors S&P
Blue Chip 500 Index
May-90 $9,525 $10,000
Dec-90 9,215 9,531
Dec-91 11,774 12,435
Dec-92 12,259 13,383
Dec-93 13,256 14,729
Dec-94 13,096 14,923
Dec-95 17,849 20,532
Dec-96 21,530 25,246
Dec-97 27,253 33,669
Dec-98 32,108 43,211
Dec-99 40,332 52,302
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
One Year 25.62% 19.64%
Five Years 25.23% 24.01%
Since Inception (5/17/90) 16.16% 15.58%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE EXECUTIVE INVESTORS BLUE CHIP
FUND BEGINNING 5/17/90 (INCEPTION DATE) WITH A THEORETICAL INVESTMENT IN THE
STANDARD & POOR'S 500 INDEX. THE STANDARD & POOR'S 500 INDEX IS AN UNMANAGED
CAPITALIZATION-WEIGHTED INDEX OF 500 STOCKS DESIGNED TO MEASURE PERFORMANCE
OF THE BROAD DOMESTIC ECONOMY THROUGH CHANGES IN THE AGGREGATE MARKET VALUE
OF SUCH STOCKS, WHICH REPRESENT ALL MAJOR INDUSTRIES. IT IS NOT POSSIBLE TO
INVEST DIRECTLY IN THIS INDEX. IN ADDITION, THE INDEX DOES NOT TAKE INTO
ACCOUNT FEES AND EXPENSES THAT AN INVESTOR WOULD INCUR IN PURCHASING
SECURITIES IN THE INDEX. FOR PURPOSES OF THE GRAPH AND THE ACCOMPANYING
TABLE, UNLESS OTHERWISE INDICATED, IT HAS BEEN ASSUMED THAT THE MAXIMUM SALES
CHARGE WAS DEDUCTED FROM THE INITIAL $10,000 INVESTMENT IN THE FUND AND ALL
DIVIDENDS AND DISTRIBUTIONS WERE REINVESTED.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 12/31/99) INCLUDE
THE REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE "S.E.C. STANDARDIZED" RETURNS SHOWN ARE
BASED ON THE MAXIMUM SALES CHARGE OF 4.75%. DURING THE PERIODS SHOWN, SOME OR
ALL OF THE EXPENSES OF THE FUND WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD
BEEN PAID BY THE FUND, THE "S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN
FOR ONE YEAR, FIVE YEARS AND SINCE INCEPTION WOULD HAVE BEEN 18.70%, 22.71%
AND 13.56%, RESPECTIVELY. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT
INDICATE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THE ORIGINAL COST. STANDARD & POOR'S 500 INDEX FIGURES
FROM STANDARD & POOR'S AND ALL OTHER FIGURES FROM EXECUTIVE INVESTORS
MANAGEMENT COMPANY, INC.
7
<PAGE>
PORTFOLIO OF INVESTMENTS
EXECUTIVE INVESTORS BLUE CHIP FUND
December 31, 1999
<TABLE>
- ------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
NET
SHARES SECURITY VALUE ASSETS
- ------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--99.4%
BASIC MATERIALS--3.1%
900 Alcoa, Inc. $ 74,700 $ 132
2,200 * Bethlehem Steel Corporation 18,425 33
500 Ecolab, Inc. 19,562 35
1,400 Mead Corporation 60,812 108
- ------------------------------------------------------------------------------------
173,499 308
- ------------------------------------------------------------------------------------
CAPITAL GOODS--7.3%
1,200 Deere & Company 52,050 92
1,400 General Electric Company 216,650 383
1,300 Ingersoll-Rand Company 71,581 127
800 Tyco International, Ltd. 31,100 55
600 United Technologies Corporation 39,000 69
- ------------------------------------------------------------------------------------
410,381 726
- ------------------------------------------------------------------------------------
COMMUNICATION SERVICES--5.6%
300 ALLTEL Corporation 24,806 44
1,600 Bell Atlantic Corporation 98,500 174
500 * Covad Communications Group, Inc. 27,969 49
700 GTE Corporation 49,394 87
1,350 * MCI WorldCom, Inc. 71,634 127
900 * NorthPoint Communications Group, Inc. 21,600 38
600 * Qwest Communications International, Inc. 25,800 46
- ------------------------------------------------------------------------------------
319,703 565
- ------------------------------------------------------------------------------------
CONSUMER CYCLICALS--10.2%
600 * Best Buy Company, Inc. 30,112 53
700 Circuit City Stores-Circuit City Group 31,544 56
1,200 * Costco Wholesale Corporation 109,500 194
1,050 Home Depot, Inc. 71,991 127
1,200 Masco Corporation 30,450 54
1,100 McGraw-Hill Companies, Inc. 67,787 120
1,600 Tribune Company 88,100 156
2,100 Wal-Mart Stores, Inc. 145,162 257
- ------------------------------------------------------------------------------------
574,646 1,017
- ------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
NET
SHARES SECURITY VALUE ASSETS
- ------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER STAPLES--11.1%
3,000 * AT&T Corporation-Liberty Media Group - Class
"A" $ 170,250 $ 301
600 Bestfoods 31,537 56
600 * Clear Channel Communications, Inc. 53,550 95
1,600 General Mills, Inc. 57,200 101
600 * Getty Images, Inc. 29,325 52
2,300 PepsiCo, Inc. 81,075 143
600 Procter & Gamble Company 65,737 116
1,200 Time Warner, Inc. 86,925 154
400 Unilever NV - NY Shares (ADR) 21,775 39
500 * Viacom, Inc. - Class "B" 30,219 53
- ------------------------------------------------------------------------------------
627,593 1,110
- ------------------------------------------------------------------------------------
ENERGY--4.9%
300 Chevron Corporation 25,987 46
1,364 Exxon Mobil Corporation 109,887 194
1,000 Halliburton Company 40,250 71
1,300 Royal Dutch Petroleum Company - NY Shares (ADR) 78,569 139
900 USX-Marathon Group 22,219 39
- ------------------------------------------------------------------------------------
276,912 489
- ------------------------------------------------------------------------------------
FINANCIAL--12.4%
921 American International Group, Inc. 99,583 176
1,100 Capital One Financial Corporation 53,006 94
600 Charles Schwab Corporation 23,025 41
600 Chase Manhattan Corporation 46,612 82
500 CIGNA Corporation 40,281 71
1,400 Citigroup, Inc. 77,788 138
2,100 Conseco, Inc. 37,537 66
500 Fannie Mae 31,219 55
1,000 Finova Group, Inc. 35,500 63
800 Freddie Mac 37,650 67
300 Jefferson-Pilot Corporation 20,475 36
1,500 MBNA Corporation 40,875 72
400 Morgan Stanley Dean Witter & Company 57,100 101
700 SLM Holding Corporation 29,575 52
1,000 SunTrust Banks, Inc. 68,812 122
- ------------------------------------------------------------------------------------
699,038 1,236
- ------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
EXECUTIVE INVESTORS BLUE CHIP FUND
December 31, 1999
<TABLE>
- ------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
NET
SHARES SECURITY VALUE ASSETS
- ------------------------------------------------------------------------------------
<C> <S> <C> <C>
HEALTHCARE--7.9%
600 Abbott Laboratories $ 21,787 $ 39
800 Allergan, Inc. 39,800 70
900 Bristol-Myers Squibb Company 57,769 102
1,600 Columbia HCA Healthcare Corporation 46,900 83
700 Eli Lilly and Company 46,550 82
600 Johnson & Johnson 55,875 99
1,500 Medtronic, Inc. 54,656 97
1,100 Merck & Company, Inc. 73,769 130
600 Warner-Lambert Company 49,163 87
- ------------------------------------------------------------------------------------
446,269 789
- ------------------------------------------------------------------------------------
TECHNOLOGY--35.2%
900 * Altera Corporation 44,606 79
600 * Applied Materials, Inc. 76,013 134
1,000 * Atmel Corporation 29,563 52
700 Autodesk, Inc. 23,625 42
3,800 * Cadence Design Systems, Inc. 91,200 161
1,400 * CIENA Corporation 80,500 142
1,500 * Cisco Systems, Inc. 160,688 284
1,600 Compaq Computer Corporation 43,300 77
800 * Compuware Corporation 29,800 53
1,500 * Cypress Semiconductor Corporation 48,563 86
600 * EMC Corporation 65,550 116
400 * Entrust Technologies, Inc. 23,975 42
600 * Fairchild Semiconductor International, Inc. -
Class "A" 17,850 32
900 * Harbinger Corporation 28,631 51
100 Hewlett-Packard Company 11,394 20
1,100 Intel Corporation 90,544 160
500 International Business Machines Corporation 54,000 96
1,000 * Jabil Circuit, Inc. 73,000 129
1,400 * LSI Logic Corporation 94,500 167
1,200 Lucent Technologies, Inc. 89,775 159
600 * Micron Electronics, Inc. 6,675 12
500 * Micron Technology, Inc. 38,875 69
1,000 * Microsoft Corporation 116,750 207
400 Motorola, Inc. 58,900 104
100 Nokia Corporation (ADR) - Class "A" 19,000 34
1,200 * Oracle Corporation 134,475 238
500 * Ramp Networks, Inc. 7,625 13
- ------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
NET
SHARES SECURITY VALUE ASSETS
- ------------------------------------------------------------------------------------
<C> <S> <C> <C>
TECHNOLOGY (continued)
1,200 * Sun Microsystems, Inc. $ 92,925 $ 164
2,600 * Symantec Corporation 152,425 270
200 Telefonaktiebolaget L.M. Ericsson (ADR) - Class
"B" 13,138 23
1,000 * Tellabs, Inc. 64,188 114
1,300 * Teradyne, Inc. 85,800 152
200 W.W. Grainger, Inc. 9,563 17
600 Xerox Corporation 13,613 24
- ------------------------------------------------------------------------------------
1,991,029 3,523
- ------------------------------------------------------------------------------------
UTILITIES--1.7%
2,200 Enron Corporation 97,625 173
- ------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL VALUE OF COMMON STOCKS (cost $3,403,469) 99.4% 5,616,695 9,936
OTHER ASSETS, LESS LIABILITIES .6 36,415 64
- ---------------------------------------------------------------------------------------
NET ASSETS 100.0% $5,653,110 $ 10,000
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
11
<PAGE>
PORTFOLIO MANAGER'S LETTER
EXECUTIVE INVESTORS HIGH YIELD FUND
Dear Investor:
We are pleased to present the annual report for the Executive Investors High
Yield Fund for the year ended December 31, 1999. During the period, the Fund's
return on a net asset value basis was 6.1%, compared to an average return of
4.5% for its Lipper peer group. During the period, the Fund declared dividends
from net investment income in the amount of 70.1 cents per share.
The primary factors that drove the Fund's performance during the fiscal year
were the rising interest-rate environment and credit developments -- both
positive and negative -- within the portfolio.
Early in 1999, investor comfort with sustainable growth turned into a fear of
rising interest rates. This enabled higher-risk investments such as high yield
bonds to outperform Treasury securities. Widespread concerns about emerging
markets began to be relieved as Brazil devalued its currency and took some steps
toward fiscal reform. The improved performance of emerging markets removed a
large concern overhanging all markets. This spurred the high yield market, and
caused both the aggressiveness and volume of domestic high yield bond issues to
grow.
As the reporting period progressed, the prospect of accelerating domestic growth
and tight employment conditions fueled inflation worries. Markets thus began to
expect Federal Reserve tightening and the resulting demand for higher yields
caused new issue activity to slow appreciably. After the Fed raised interest
rates in June, investors showed an increasing preference for larger,
higher-rated, more-liquid bond issues. Issues not meeting these criteria
underperformed and became difficult to trade. This contrasted sharply with the
outperformance of more aggressive transactions earlier in the year.
As the year progressed, concerns continued to mount regarding additional
interest rate hikes. Ultimately, the rapid pace of growth led the Fed to raise
interest rates again in August and a third time in October. Market liquidity
became problematic as pent-up demand for capital collided with investor
defensiveness and demands for higher yields. On top of year 2000 uncertainty,
investors also became less tolerant of incipient credit problems as more have
occurred.
During 1999, the default rate of high yield bonds more than doubled from the
1998 level, to about 4%. However, late in the year, premiums available in the
high yield market -- the DLJ High Yield Index began October at an unusually high
6.11% more than Treasuries -- partially overcame Y2K fears. Thus, selective new
deals from large, liquid, widely-followed issuers were completed, performed well
and aroused hopes for 2000.
12
<PAGE>
Throughout the reporting period, a number of other factors stand out as having
had an impact on the Fund's returns. Performance was aided by the Fund's
emerging-markets holdings and several of its telecommunications companies, which
as a group have proven to be dynamic drivers of economic growth. The Fund also
benefited from premiums paid on some repurchases and calls of successful
credits. Although the U.S. enjoyed strong economic growth, company and
management-specific problems still affected some holdings. The Fund's
performance was negatively impacted by the fact that it had few holdings in the
growing European high yield community of issuers, which began to outperform as
Euro currency-based investors began to commit. Holdings in the U.S. health care
sector, usually viewed as defensive, also hurt the Fund. A number of long-term
care companies suffered because of difficulties in adjusting to new Medicare
reimbursement rules enacted under the Balanced Budget Act of 1997. The energy
sector began the year weakly, but most companies rebounded thanks to improved
pricing of oil and natural gas.
The Fund will continue to focus on uncovering companies whose strong
managements, market positions, strategies and results are likely to provide us
with value improvement in the high yield market.
At a meeting of the Board of Trustees of the Trust held on October 21, 1999, the
Board approved a plan to merge the Executive Investors High Yield Fund into the
First Investors Fund For Income, Inc. The reorganization is subject to the
approval of the Executive Investors High Yield Fund shareholders. A shareholders
meeting was scheduled for February 25, 2000.
Thank you for placing your trust in Executive Investors. As always, we
appreciate the opportunity to serve your investment needs.
Sincerely,
/s/ Nancy W. Jones
Nancy W. Jones
Vice President
and Portfolio Manager*
January 31, 2000
* Effective January 1, 2000, Ms. Jones serves as Portfolio Manager of the Fund.
13
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
EXECUTIVE INVESTORS HIGH YIELD FUND
Comparison of change in value of $10,000 investment in the Executive Investors
High Yield Fund and the CS First Boston High Yield Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1999
<S> <C> <C>
Executive Investors CS First Boston
High Yield Fund High Yield Index
Jan-90 $9,525 $10,000
Dec-90 8,330 9,362
Dec-91 11,293 13,458
Dec-92 13,069 15,700
Dec-93 15,295 18,669
Dec-94 14,940 18,488
Dec-95 17,790 21,701
Dec-96 20,226 24,396
Dec-97 22,660 27,477
Dec-98 22,854 27,637
Dec-99 24,245 28,261
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
One Year 6.09% 1.09%
Five Years 10.17% 9.10%
Ten Year 9.80% 9.26%
S.E.C. 30-Day Yield 9.05%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE EXECUTIVE INVESTORS HIGH YIELD
FUND BEGINNING 1/1/90 WITH A THEORETICAL INVESTMENT IN THE CS FIRST BOSTON
HIGH YIELD INDEX. THE CS FIRST BOSTON HIGH YIELD INDEX IS DESIGNED TO MEASURE
THE PERFORMANCE OF THE HIGH YIELD BOND MARKET. THE INDEX CONSISTS OF 1,493
DIFFERENT ISSUES, 1,290 OF WHICH ARE CASH PAY, 160 ARE ZERO-COUPON, 9 ARE
STEP BONDS, 12 ARE PAYMENT-IN-KIND BONDS AND THE REMAINING 22 ARE IN DEFAULT.
THE BONDS INCLUDED IN THE INDEX HAVE AN AVERAGE LIFE OF 7.7 YEARS, AN AVERAGE
MATURITY OF 7.8 YEARS, AN AVERAGE DURATION OF 4.8 YEARS AND AN AVERAGE COUPON
OF 10.1%. IT IS NOT POSSIBLE TO INVEST DIRECTLY IN THIS INDEX. IN ADDITION,
THE INDEX DOES NOT TAKE INTO ACCOUNT FEES AND EXPENSES THAT AN INVESTOR WOULD
INCUR IN PURCHASING SECURITIES IN THE INDEX. FOR PURPOSES OF THE GRAPH AND
THE ACCOMPANYING TABLE, UNLESS OTHERWISE INDICATED, IT HAS BEEN ASSUMED THAT
THE MAXIMUM SALES CHARGE WAS DEDUCTED FROM THE INITIAL $10,000 INVESTMENT IN
THE FUND AND ALL DIVIDENDS AND DISTRIBUTIONS WERE REINVESTED.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 12/31/99) INCLUDE
THE REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE "S.E.C. STANDARDIZED" RETURNS SHOWN ARE
BASED ON THE MAXIMUM SALES CHARGE OF 4.75%. DURING THE PERIODS SHOWN, SOME OR
ALL OF THE EXPENSES OF THE FUND WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD
BEEN PAID BY THE FUND, THE "S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN
FOR ONE YEAR, FIVE YEARS AND TEN YEARS WOULD HAVE BEEN .49%, 8.46% AND 8.40%,
RESPECTIVELY AND THE S.E.C. YIELD FOR DECEMBER 1999 WOULD HAVE BEEN 8.46%.
RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE RESULTS.
INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT
AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE
ORIGINAL COST. THE UNUSUALLY HIGH CURRENT YIELDS OFFERED REFLECT THE
SUBSTANTIAL RISKS ASSOCIATED WITH INVESTMENTS IN HIGH YIELD BONDS. THE ISSUERS
OF THE BONDS PAY HIGHER INTEREST RATES BECAUSE THEY HAVE A GREATER LIKELIHOOD
OF FINANCIAL DIFFICULTY, WHICH COULD RESULT IN THEIR INABILITY TO REPAY THE
BONDS FULLY WHEN DUE. PRICES OF HIGH YIELD BONDS ARE ALSO SUBJECT TO GREATER
FLUCTUATIONS. CS FIRST BOSTON HIGH YIELD INDEX FIGURES FROM CS FIRST BOSTON
CORPORATION AND ALL OTHER FIGURES FROM EXECUTIVE INVESTORS MANAGEMENT COMPANY,
INC.
14
<PAGE>
PORTFOLIO OF INVESTMENTS
EXECUTIVE INVESTORS HIGH YIELD FUND
December 31, 1999
<TABLE>
- ------------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
PRINCIPAL NET
AMOUNT SECURITY VALUE ASSETS
- ------------------------------------------------------------------------------------------
<C> <S> <C> <C>
CORPORATE BONDS--89.6%
APPAREL/TEXTILES--2.2%
$ 350M Polymer Group, Inc., 9%, 2007 $ 341,250 $ 215
- ------------------------------------------------------------------------------------------
AUTOMOTIVE--4.8%
500M Cambridge Industries, Inc., 10.25%, 2007++ 202,500 128
250M Cooperative Computing, Inc., 9%, 2008 138,750 87
200M Exide Corp., 10%, 2005 191,500 121
300M Special Devices, Inc., 11.375%, 2008 235,500 148
- ------------------------------------------------------------------------------------------
768,250 484
- ------------------------------------------------------------------------------------------
BUILDING MATERIALS--.6%
350M American Architectural Products Corp., 11.75%,
2007 100,625 63
- ------------------------------------------------------------------------------------------
CHEMICALS--4.3%
250M Huntsman ICI Chemicals, LLC, 10.125%, 2009 + 257,500 162
400M Huntsman Polymers Corp., 11.75%, 2004 420,000 265
- ------------------------------------------------------------------------------------------
677,500 427
- ------------------------------------------------------------------------------------------
CONSUMER PRODUCTS--4.0%
400M AKI, Inc., 10.50%, 2008 358,000 226
350M Corning Consumer Products, Co., 9.625%, 2008 278,250 175
- ------------------------------------------------------------------------------------------
636,250 401
- ------------------------------------------------------------------------------------------
CONTAINERS/PACKAGING--5.4%
400M Radnor Holdings, Corp., 10%, 2003 402,000 253
250M Tekni-Plex, Inc., 9.25%, 2008 255,000 161
200M U.S. Can Corp., 10.125%, 2006 205,000 129
- ------------------------------------------------------------------------------------------
862,000 543
- ------------------------------------------------------------------------------------------
DURABLE GOODS MANUFACTURING--1.6%
300M Columbus McKinnon Corp., 8.50%, 2008 259,500 164
- ------------------------------------------------------------------------------------------
ENERGY--1.5%
250M Giant Industries, Inc., 9.75%, 2003 244,375 154
- ------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
EXECUTIVE INVESTORS HIGH YIELD FUND
December 31, 1999
<TABLE>
- ------------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
PRINCIPAL NET
AMOUNT SECURITY VALUE ASSETS
- ------------------------------------------------------------------------------------------
<C> <S> <C> <C>
ENTERTAINMENT/LEISURE--5.4%
$ 350M Carmike Cinemas, Inc., 9.375%, 2009 $ 304,500 $ 192
300M Loews Cineplex Entertainment Corp., 8.875%, 2008 265,500 167
400M Outboard Marine Corp., 10.75%, 2008 290,000 183
- ------------------------------------------------------------------------------------------
860,000 542
- ------------------------------------------------------------------------------------------
GAMING/LODGING--1.6%
250M Hollywood Park, Inc., 9.25%, 2007 249,063 157
- ------------------------------------------------------------------------------------------
HEALTHCARE--1.2%
200M Tenet Healthcare Corp., 8.625%, 2007 195,000 123
- ------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY/OFFICE EQUIPMENT--1.8%
275M ChipPac International, Ltd., 12.75%, 2009 + 289,781 183
- ------------------------------------------------------------------------------------------
MEDIA (CABLE TV/BROADCASTING)--8.1%
500M Diva Systems Corp., 0%-12.625%, 2008 197,500 125
400M Echostar DBS Corp., 9.375%, 2009 403,000 254
300M Grupo Televisa, SA, 11.875%, 2006 323,250 204
350M Rogers Communications, Inc., 9.125%, 2006 354,375 223
- ------------------------------------------------------------------------------------------
1,278,125 806
- ------------------------------------------------------------------------------------------
MEDIA (OTHER)--3.9%
200M Garden State Newspapers, Inc., 8.75%, 2009 187,000 118
200M Garden State Newspapers, Inc., 8.625%, 2011 184,000 116
250M Mail-Well I Corp., 8.75%, 2008 238,750 151
- ------------------------------------------------------------------------------------------
609,750 385
- ------------------------------------------------------------------------------------------
MINING/METALS--10.6%
400M CSN Iron, SA, 9.125%, 2007 + 335,250 211
400M Euramax International PLC, 11.25%, 2006 412,000 260
250M WCI Steel, Inc., 10%, 2004 255,625 161
300M Wells Aluminum Corp., 10.125%, 2005 290,250 183
400M Wheeling-Pittsburgh Corp., 9.25%, 2007 380,000 240
- ------------------------------------------------------------------------------------------
1,673,125 1,055
- ------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
PRINCIPAL NET
AMOUNT SECURITY VALUE ASSETS
- ------------------------------------------------------------------------------------------
<C> <S> <C> <C>
MISCELLANEOUS--5.5%
$ 300M Allied Waste NA, Inc., 10%, 2009 + $ 268,500 $ 169
300M Kindercare Learning Centers, Inc., 9.50%, 2009 294,000 185
286M Pierce Leahy Corp., 11.125%, 2006 304,590 192
- ------------------------------------------------------------------------------------------
867,090 546
- ------------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--7.2%
300M Packaging Corporation of America, 9.625%, 2009 307,500 194
350M Riverwood International Corp., 10.25%, 2006 358,313 226
417M S.D. Warren Co., Inc., 14%, 2006 471,379 297
- ------------------------------------------------------------------------------------------
1,137,192 717
- ------------------------------------------------------------------------------------------
REAL ESTATE/CONSTRUCTION--1.3%
400M Cathay International, Ltd., 13%, 2008 + 208,000 131
- ------------------------------------------------------------------------------------------
RETAIL - GENERAL MERCHANDISE--1.9%
300M Big 5 Corp., 10.875%, 2007 297,000 187
- ------------------------------------------------------------------------------------------
TELECOMMUNICATIONS--16.7%
500M 21st Century Telecom Group, Inc., 0%-12.25%, 2008 336,250 212
450M E. Spire Communications, Inc., 0%-13%, 2005 234,000 148
300M Level 3 Communications, Inc., 9.125%, 2008 283,500 179
300M McCaw International, Ltd., 0%-13%, 2007 207,000 131
250M Netia Holdings BV, 10.25%, 2007 213,125 134
250M Netia Holdings BV, 0%-11.25%, 2007 163,125 103
250M Pac-West Telecommunications, Inc., 13.50%, 2009 260,000 164
200M Powertel, Inc., 0%-12%, 2006 175,000 110
200M Qwest Communications International, Inc.,
0%-9.47%, 2007 161,500 102
300M RCN Corp., 0%-11%, 2008 198,000 125
250M VoiceStream Wirelesss Corp., 0%-11.875%, 2009 + 151,875 96
300M World Access, Inc., 13.25%, 2008 271,500 171
- ------------------------------------------------------------------------------------------
2,654,875 1,675
- ------------------------------------------------------------------------------------------
14,208,751 8,958
TOTAL VALUE OF CORPORATE BONDS (cost $15,822,162)
- ------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
EXECUTIVE INVESTORS HIGH YIELD FUND
December 31, 1999
<TABLE>
- ------------------------------------------------------------------------------------------
AMOUNT
INVESTED
SHARES, FOR EACH
WARRANTS $10,000
OR OF
PRINCIPAL NET
AMOUNT SECURITY VALUE ASSETS
- ------------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--2.6%
MEDIA (CABLE TV/BROADCASTING)--2.5%
4,000 * Echostar Communications Corp. - Class "A" $ 390,000 $ 246
- ------------------------------------------------------------------------------------------
TELECOMMUNICATIONS--.1%
943 * World Access, Inc. 18,153 11
- ------------------------------------------------------------------------------------------
408,153 257
TOTAL VALUE OF COMMON STOCKS (cost $14,935)
- ------------------------------------------------------------------------------------------
WARRANTS--.5%
MEDIA (CABLE TV/BROADCASTING)--.1%
1,500 * Diva Systems Corp. (expiring 3/1/08) + 12,000 7
- ------------------------------------------------------------------------------------------
MINING/METALS--.0%
200 * Gulf State Steel Acquisition Corp. (expiring
4/15/03) + 2 --
- ------------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--.3%
9,000 * S.D. Warren Co., Inc. (expiring 12/15/06) + 45,000 28
- ------------------------------------------------------------------------------------------
TELECOMMUNICATIONS--.1%
450 * E. Spire Communications, Inc. (expiring
11/1/05) 18,450 12
400 * McCaw International, Ltd. (expiring 4/15/07) + 1,000 1
- ------------------------------------------------------------------------------------------
19,450 13
- ------------------------------------------------------------------------------------------
76,452 48
TOTAL VALUE OF WARRANTS (cost $0)
- ------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--3.2%
$ 500M United States Treasury Note, 7%, 2006
(cost $534,875) 512,344 323
- ------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--1.9%
300M Idaho Power Co., 6.50%, 1/14/00 (cost $299,295) 299,295 189
- ------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL VALUE OF INVESTMENTS (cost $16,671,267) 97.8% 15,504,995 9,775
OTHER ASSETS, LESS LIABILITIES 2.2 356,690 225
- ------------------------------------------------------------------------------------------
NET ASSETS 100.0% $15,861,685 $ 10,000
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
+ See Note 4
++ In default as to principal and/or interest
See notes to financial statements
18
<PAGE>
PORTFOLIO MANAGER'S LETTER
EXECUTIVE INVESTORS INSURED TAX EXEMPT FUND
Dear Investor:
We are pleased to present the annual report for the Executive Investors Insured
Tax Exempt Fund for the year ended December 31, 1999. During the period, the
Fund's return on a net asset value basis was -1.9%, compared to a return of
- -4.7% for its Lipper peer group. During the period, the Fund declared dividends
from net investment income in the amount of 65.2 cents per share. The Fund also
declared a capital gains distribution of 2.6 cents per share.
The key factors affecting the Fund's performance were rising interest rates and
the substantial issuance of municipal bonds as well as decreased demand from
traditional buyers.
Throughout the year, interest rates increased substantially, driving down the
prices of bonds. Long-term municipal bond yields increased from 5.26% to 6.23%,
their highest level in over 3 1/2 years. New issuance was heavy -- the fourth
largest year in the history of the market -- with $225 billion in new bonds
issued. Over the course of the year, institutional demand for municipal bonds
slowed. Property and casualty companies, due to their weak earnings, shunned the
municipal bond market. Also, mutual funds were net sellers, as shareholders sold
municipal bond fund holdings and used their losses to offset gains in the stock
market. In response to this environment, municipal bond yields rose more than
expected, in order to attract buyers.
During the year, the credit profile of the municipal market improved with the
exception of the health care sector. The default of Pennsylvania-based Allegheny
Health, Education and Research Foundation's hospital system on $525 million of
municipal bonds is an example of the difficulties this sector faced. The impact
of the default was that uninsured hospital bonds lost value due to increased
credit risk. This unfortunate situation reaffirms the value of municipal bond
insurance in protecting individual investors. Most bonds in the Executive
Investors Insured Tax Exempt Fund are insured for the timely payment of interest
and principal by independent insurance companies that have received the highest
ratings from independent ratings agencies. Although this insurance reduces
credit risk, it does not protect against market fluctuations. Shares of the Fund
will fluctuate in value, and may be worth more or less than their original cost.
The Fund's performance in 1999 was substantially better than that of its peer
group. For the first half of 1999, the Fund's performance was mixed versus its
peer group, as interest rates rose more than expected. During the second half of
1999, the Fund's performance improved substantially as we shifted strategy,
effectively decreasing the Fund's interest rate sensitivity. We increased the
Fund's
19
<PAGE>
PORTFOLIO MANAGER'S LETTER (continued)
EXECUTIVE INVESTORS INSURED TAX EXEMPT FUND
cash position and bought bonds with relatively shorter maturities (15 years
rather than 20 years). The Fund also benefited from large holdings of
noncallable bonds, as callable bonds tend to decline in price faster than
noncallable bonds. Also the Fund had few holdings of "market discount" bonds.
These bonds are priced below their original issue price, and are very sensitive
to changes in interest rates. The Fund also benefited from trading opportunities
created by access to new issues.
Thank you for placing your trust in Executive Investors. As always, we
appreciate the opportunity to serve your investment needs.
Sincerely,
/s/ Clark D. Wagner
Clark D. Wagner
Vice President
and Portfolio Manager
January 31, 2000
20
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
EXECUTIVE INVESTORS INSURED TAX EXEMPT FUND
Comparison of change in value of $10,000 investment in the Executive Investors
Insured Tax Exempt Fund and the Lehman Brothers Municipal Bond Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1999 EXECUTIVE INVESTORS LEHMAN BROTHERS
INSURED TAX MUNICIPAL BOND
EXEMPT FUND INDEX
<S> <C> <C>
Jul-90 $9,525 $10,000
Dec-90 $9,901 $10,286
Dec-91 $11,188 $11,536
Dec-92 $12,411 $12,552
Dec-93 $14,366 $14,093
Dec-94 $13,798 $13,365
Dec-95 $16,631 $15,716
Dec-96 $17,315 $16,384
Dec-97 $19,098 $17,889
Dec-98 $20,510 $19,048
Dec-99 $20,116 $18,656
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
One Year (1.92%) (6.61%)
Five Years 7.83% 6.79%
Since Inception
(7/26/90 8.24% 7.69%
S.E.C. 30-Day Yield 4.46%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE EXECUTIVE INVESTORS INSURED
TAX EXEMPT FUND BEGINNING 7/26/90 (INCEPTION DATE) WITH A THEORETICAL
INVESTMENT IN THE LEHMAN BROTHERS MUNICIPAL BOND INDEX. THE LEHMAN BROTHERS
MUNICIPAL BOND INDEX IS A TOTAL RETURN PERFORMANCE BENCHMARK FOR THE
LONG-TERM INVESTMENT GRADE TAX EXEMPT BOND MARKET. RETURNS AND ATTRIBUTES FOR
THE INDEX ARE CALCULATED SEMI-MONTHLY USING APPROXIMATELY 21,000 MUNICIPAL
BONDS WHICH ARE PRICED BY MULLER DATA CORP. THE INDEX DOES NOT TAKE INTO
ACCOUNT FEES AND EXPENSES OR COST OF INSURANCE OF BONDS HELD BY AN INSURED
TAX-EXEMPT BOND FUND. IT IS NOT POSSIBLE TO INVEST DIRECTLY IN THE LEHMAN
BROTHERS MUNICIPAL BOND INDEX. FOR PURPOSES OF THE GRAPH AND THE ACCOMPANYING
TABLE, UNLESS OTHERWISE INDICATED, IT HAS BEEN ASSUMED THAT THE MAXIMUM SALES
CHARGE WAS DEDUCTED FROM THE INITIAL $10,000 INVESTMENT IN THE FUND AND ALL
DIVIDENDS AND DISTRIBUTIONS WERE REINVESTED.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 12/31/99) INCLUDE
THE REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE "S.E.C. STANDARDIZED" RETURNS SHOWN ARE
BASED ON THE MAXIMUM SALES CHARGE OF 4.75%. DURING THE PERIODS SHOWN, SOME OR
ALL OF THE EXPENSES OF THE FUND WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD
BEEN PAID BY THE FUND, THE "S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN
FOR ONE YEAR, FIVE YEARS AND SINCE INCEPTION WOULD HAVE BEEN (7.55%), 5.78%
AND 6.40%, RESPECTIVELY, AND THE S.E.C. 30-DAY YIELD FOR DECEMBER 1999 WOULD
HAVE BEEN 3.58%. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE
SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN
THE ORIGINAL COST. LEHMAN BROTHERS MUNICIPAL BOND INDEX FIGURES FROM LEHMAN
BROTHERS, INC. AND ALL OTHER FIGURES FROM EXECUTIVE INVESTORS MANAGEMENT
COMPANY, INC.
21
<PAGE>
PORTFOLIO OF INVESTMENTS
EXECUTIVE INVESTORS INSURED TAX EXEMPT FUND
December 31, 1999
<TABLE>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
PRINCIPAL NET
AMOUNT SECURITY VALUE ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
MUNICIPAL BONDS--99.1%
ALABAMA--6.2%
$ 750M Blount County Water Authority, 5.75%, 8/1/19 $ 723,750 $ 457
250M Coffee County Public Bldg. Authority, 6.10%,
9/1/16 253,125 160
- -------------------------------------------------------------------------------------
976,875 617
- -------------------------------------------------------------------------------------
ARIZONA--2.8%
250M Maricopa County Ind. Dev. Auth. Hosp. Facs. Rev.
(Samaritan Hlth. Svcs.), 7%, 12/1/16 283,750 179
145M Maricopa County Uni. Sch. Dist. Gen. Oblig. #80
(Chandler), 6.25%, 7/1/11 155,331 98
- -------------------------------------------------------------------------------------
439,081 277
- -------------------------------------------------------------------------------------
CALIFORNIA--8.5%
500M San Francisco City & County Redev. Agy. (Moscone
Ctr.), 6.75%, 7/1/15 541,250 342
250M San Francisco Pkg. Auth., 7%, 6/1/05 280,000 177
250M San Jose Redevelopment Agency, 6%, 8/1/15 261,562 165
250M Santa Ana Fin. Auth. Lease Rev., 6.25%, 7/1/15 267,187 169
- -------------------------------------------------------------------------------------
1,349,999 853
- -------------------------------------------------------------------------------------
COLORADO--2.4%
350M Garfield Pitkin & Eagle Ctys. School District #RE
1, 6.60%, 6/15/04* 378,000 239
- -------------------------------------------------------------------------------------
CONNECTICUT--2.7%
400M Connecticut Special Tax Obligation Revenue,
6.10%, 10/1/04* 426,000 269
- -------------------------------------------------------------------------------------
FLORIDA--5.3%
335M Cocoa Water & Sewer Rev., 5.75%, 10/1/07* 353,425 223
500M Florida State Municipal Loan Council Rev.,
5.375%, 11/1/15 483,750 305
- -------------------------------------------------------------------------------------
837,175 528
- -------------------------------------------------------------------------------------
ILLINOIS--10.9%
500M Chicago Board of Education, 6.25%, 12/1/12 535,000 338
500M Chicago General Obligation, 6%, 7/1/05* 533,125 336
- -------------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
<TABLE>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
PRINCIPAL NET
AMOUNT SECURITY VALUE ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
ILLINOIS (continued)
$ 500M Illinois Dev. Fin. Auth. Sch. Dist. (Rockford
School #205), 6.55%, 2/1/09 $ 544,375 $ 344
100M Will County School District General Obligation,
7.10%, 12/1/09 113,625 72
- -------------------------------------------------------------------------------------
1,726,125 1,090
- -------------------------------------------------------------------------------------
MAINE--1.7%
250M Maine Municipal Bond Bank, 6.50%, 11/1/14 265,000 167
- -------------------------------------------------------------------------------------
MASSACHUSETTS--3.2%
500M Mass. Bay Transportation Auth. Gen. Sys. Rev.,
5.80%, 3/1/13 515,000 325
- -------------------------------------------------------------------------------------
MICHIGAN--2.1%
1,000M Howell Public Schools General Obligation, Zero
Coupon, 5/1/06* 330,000 208
- -------------------------------------------------------------------------------------
MISSOURI--4.8%
200M Liberty Sewer System Rev., 6.15%, 2/1/15 204,750 129
500M Missouri State Health & Educational Facilities
Auth. (BJC Health System), 6.75%, 5/15/10 559,375 353
- -------------------------------------------------------------------------------------
764,125 482
- -------------------------------------------------------------------------------------
NEW JERSEY--7.8%
750M Essex County Utility Auth., 5.625%, 10/1/18 728,437 460
485M New Jersey Housing & Mortgage Fin. Rev., 6.55%,
10/1/10 505,006 319
- -------------------------------------------------------------------------------------
1,233,443 779
- -------------------------------------------------------------------------------------
NEW YORK--1.9%
290M New York City Municipal Water Fin. Auth. Rev.,
5.875%, 6/15/01* 301,962 191
- -------------------------------------------------------------------------------------
NORTH CAROLINA--3.9%
195M Fayetteville Pub. Wks. Commn. Rev., 5.50%, 3/1/15 189,881 120
430M North Carolina Central Univ. Hsg. Rev., 5.75%,
11/1/15 426,775 269
- -------------------------------------------------------------------------------------
616,656 389
- -------------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
EXECUTIVE INVESTORS INSURED TAX EXEMPT FUND
December 31, 1999
<TABLE>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
PRINCIPAL NET
AMOUNT SECURITY VALUE ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
OHIO--1.5%
$ 250M Lorain County Hosp. Rev. (Catholic Healthcare
Partners), 5.625%, 9/1/14 $ 247,500 $ 156
- -------------------------------------------------------------------------------------
OKLAHOMA--3.4%
500M Grand River Dam Auth. Rev., 6.25%, 6/1/11 540,625 341
- -------------------------------------------------------------------------------------
OREGON--4.8%
250M Oregon State Dept. Adm. Services (Lottery
Revenue), 5.25%, 4/1/15 237,188 150
500M Oregon State Dept. of Administrative Services
Cert. of Particip., 5.65%, 5/1/07* 521,875 329
- -------------------------------------------------------------------------------------
759,063 479
- -------------------------------------------------------------------------------------
PENNSYLVANIA--5.8%
525M Erie General Obligation, 5.75%, 5/15/07* 547,969 346
350M Philadelphia Water & Wastewater Rev., 6.25%,
8/1/12 374,063 236
- -------------------------------------------------------------------------------------
922,032 582
- -------------------------------------------------------------------------------------
PUERTO RICO--6.3%
400M Puerto Rico Commonwealth Hwy. & Transn. Auth.
Rev., 6.25%, 7/1/14 430,000 271
545M Puerto Rico Indl. Tourist Edl. Med. & Env. Ctl.
Facs., 6.25%, 7/1/16 568,844 359
- -------------------------------------------------------------------------------------
998,844 630
- -------------------------------------------------------------------------------------
RHODE ISLAND--4.6%
500M Cranston General Obligation, 5.875%, 11/15/19 496,250 313
250M Rhode Island St. Hlth. & Edl. Bldg., 5.50%,
9/15/18 237,188 150
- -------------------------------------------------------------------------------------
733,438 463
- -------------------------------------------------------------------------------------
</TABLE>
24
<PAGE>
<TABLE>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
PRINCIPAL NET
AMOUNT SECURITY VALUE ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
TEXAS--8.5%
$ 505M Austin Utility System Rev., 6%, 11/15/13 $ 524,569 $ 331
500M Harris County General Obligation, 6.50%, 8/15/13 550,000 347
250M Houston Water Conveyance System Cert. of Partic.,
6.25%, 12/15/12 267,188 169
- -------------------------------------------------------------------------------------
1,341,757 847
- -------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL VALUE OF MUNICIPAL BONDS
(cost $15,075,916) 99.1% 15,702,700 9,912
OTHER ASSETS, LESS LIABILITIES .9 139,187 88
- ------------------------------------------------------------------------------------
NET ASSETS 100.0% $15,841,887 $ 10,000
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
</TABLE>
* Municipal Bonds which have been prerefunded are shown maturing at the
prerefunded call date.
See notes to financial statements
25
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
EXECUTIVE INVESTORS TRUST
December 31, 1999
<TABLE>
- --------------------------------------------------------------------------------
BLUE CHIP HIGH YIELD INSURED TAX
FUND FUND EXEMPT FUND
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments in securities:
At identified cost................... $3,403,469 $16,671,267 $ 15,075,916
========= ========== ================
At value (Note 1A)................... $5,616,695 $15,504,995 $ 15,702,700
Cash................................... 41,494 121,464 80,590
Receivables:
Interest and dividends............... 2,937 364,308 227,945
Trust shares sold.................... 45,607 83 2,336
Other assets........................... -- 4,966 --
--------- ---------- ----------------
Total Assets........................... 5,706,733 15,995,816 16,013,571
--------- ---------- ----------------
LIABILITIES
Payables:
Trust shares redeemed................ -- 24,001 121,854
Distributions payable................ 43,504 81,939 40,630
Accrued expenses....................... 7,810 21,424 5,118
Accrued advisory fees.................. 2,309 6,767 4,082
--------- ---------- ----------------
Total Liabilities...................... 53,623 134,131 171,684
--------- ---------- ----------------
NET ASSETS............................. $5,653,110 $15,861,685 $ 15,841,887
========= ========== ================
NET ASSETS CONSIST OF:
Capital paid in........................ $3,439,884 $17,197,090 $ 15,197,272
Undistributed net investment income.... -- 284,539 17,831
Accumulated net realized loss on
investment transactions.............. -- (453,672) --
Net unrealized appreciation
(depreciation) in value of
investments.......................... 2,213,226 (1,166,272) 626,784
--------- ---------- ----------------
Total.................................. $5,653,110 $15,861,685 $ 15,841,887
========= ========== ================
SHARES OF BENEFICIAL INTEREST
OUTSTANDING.......................... 198,576 2,197,437 1,164,029
========= ========== ================
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE (Net assets divided by
trust shares outstanding)............ $ 28.47 $ 7.22 $ 13.61
========= ========== ================
MAXIMUM OFFERING PRICE PER SHARE (Net
asset value/.9525)*.................. $ 29.89 $ 7.58 $ 14.29
========= ========== ================
* On purchases of $100,000 or more, the
sales charge is reduced.
</TABLE>
See notes to financial statements
26
<PAGE>
STATEMENT OF OPERATIONS
EXECUTIVE INVESTORS TRUST
Year Ended December 31, 1999
<TABLE>
- -------------------------------------------------------------------------------------
BLUE CHIP HIGH YIELD INSURED TAX
FUND FUND EXEMPT FUND
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Income:
Interest............................. $ 2,592 $1,907,702 $ 927,611
Dividends............................ 51,517 167,412 --
--------- ---------- ---------------------
Total Income........................... 54,109 2,075,114 927,611
--------- ---------- ---------------------
Expenses (Notes 1 and 3):
Advisory fees........................ 51,018 177,935 168,405
Distribution plan expenses........... 25,435 88,713 83,960
Shareholder servicing costs.......... 5,614 20,785 9,384
Professional fees.................... 5,302 15,429 16,848
Custodian fees....................... 6,446 4,377 4,105
Reports and notices to
shareholders....................... 3,258 8,797 4,107
Other expenses....................... 1,768 30 4,098
--------- ---------- ---------------------
Total expenses......................... 98,841 316,066 290,907
Less: Expenses waived or assumed....... (43,417) (106,710) (152,425)
Custodian fees paid indirectly.... (4,488) (2,948) (4,105)
--------- ---------- ---------------------
Net expenses........................... 50,936 206,408 134,377
--------- ---------- ---------------------
Net investment income.................. 3,173 1,868,706 793,234
--------- ---------- ---------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 2):
Net realized gain (loss) on
investments.......................... 487,800 (73,322) 29,405
Net unrealized appreciation
(depreciation) of investments........ 706,820 (776,839) (1,148,959)
--------- ---------- ---------------------
Net gain (loss) on investments......... 1,194,620 (850,161) (1,119,554)
--------- ---------- ---------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............ $1,197,793 $1,018,545 $ (326,320)
========= ========== =====================
</TABLE>
See notes to financial statements
27
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
EXECUTIVE INVESTORS TRUST
<TABLE>
- ---------------------------------------------------------------
BLUE CHIP FUND
----------------------
YEAR ENDED DECEMBER 31 1999 1998
- --------------------------------------- ---------- ----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income................ $ 3,173 $ 21,097
Net realized gain (loss) on
investments........................ 487,800 104,448
Net unrealized appreciation
(depreciation) of investments...... 706,820 608,792
---------- ----------
Net increase (decrease) in net
assets resulting from
operations....................... 1,197,793 734,337
---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income................ (5,908) (22,710)
Net realized gains................... (487,055) (111,862)
---------- ----------
Total distributions................ (492,963) (134,572)
---------- ----------
TRUST SHARE TRANSACTIONS(a)
Proceeds from shares sold............ 535,181 1,201,975
Reinvestment of distributions........ 448,986 123,620
Cost of shares redeemed.............. (913,621) (774,927)
---------- ----------
Net increase (decrease) from trust
share transactions................. 70,546 550,668
---------- ----------
Net increase (decrease) in net
assets........................... 775,376 1,150,433
NET ASSETS
Beginning of year.................... 4,877,734 3,727,301
---------- ----------
End of year+......................... $5,653,110 $4,877,734
========== ==========
+Includes undistributed net
investment income of............... $ -- $ --
========== ==========
(a)TRUST SHARES ISSUED AND REDEEMED
Sold................................. 20,190 53,050
Issued for distributions
reinvested......................... 15,785 5,026
Redeemed............................. (33,808) (33,583)
---------- ----------
Net increase (decrease) in trust
shares outstanding................. 2,167 24,493
========== ==========
</TABLE>
See notes to financial statements
28
<PAGE>
<TABLE>
- -------------------------------------------------------------------------------------------
INSURED TAX
HIGH YIELD FUND EXEMPT FUND
------------------------ ------------------------
1999 1998 1999 1998
- --------------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income................ $ 1,868,706 $ 1,666,951 $ 793,234 $ 754,660
Net realized gain (loss) on
investments........................ (73,322) 126,660 29,405 270,022
Net unrealized appreciation
(depreciation) of investments...... (776,839) (1,643,367) (1,148,959) 157,055
----------- ----------- ----------- -----------
Net increase (decrease) in net
assets resulting from
operations........................ 1,018,545 150,244 (326,320) 1,181,737
----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income................ (1,698,106) (1,691,909) (775,403) (755,255)
Net realized gains................... -- -- (29,405) (270,196)
----------- ----------- ----------- -----------
Total distributions................ (1,698,106) (1,691,909) (804,808) (1,025,451)
----------- ----------- ----------- -----------
TRUST SHARE TRANSACTIONS(a)
Proceeds from shares sold............ 1,694,943 3,991,914 1,636,590 2,842,251
Reinvestment of distributions........ 658,028 702,882 455,722 647,163
Cost of shares redeemed.............. (4,767,412) (3,431,181) (2,028,492) (2,929,454)
----------- ----------- ----------- -----------
Net increase (decrease) from trust
share transactions................. (2,414,441) 1,263,615 63,820 559,960
----------- ----------- ----------- -----------
Net increase (decrease) in net
assets............................ (3,094,002) (278,050) (1,067,308) 716,246
NET ASSETS
Beginning of year.................... 18,955,687 19,233,737 16,909,195 16,192,949
----------- ----------- ----------- -----------
End of year+......................... $15,861,685 $18,955,687 $15,841,887 $16,909,195
=========== =========== =========== ===========
+Includes undistributed net
investment income of............... $ 284,539 $ 113,939 $ 17,831 $ --
=========== =========== =========== ===========
(a)TRUST SHARES ISSUED AND REDEEMED
Sold................................. 229,591 505,647 114,579 194,643
Issued for distributions
reinvested......................... 90,197 89,636 32,373 44,423
Redeemed............................. (653,814) (437,480) (144,597) (200,774)
----------- ----------- ----------- -----------
Net increase (decrease) in trust
shares outstanding................. (334,026) 157,803 2,355 38,292
=========== =========== =========== ===========
</TABLE>
See notes to financial statements
29
<PAGE>
NOTES TO FINANCIAL STATEMENTS
EXECUTIVE INVESTORS TRUST
1. SIGNIFICANT ACCOUNTING POLICIES--Executive Investors Trust (the "Trust"), a
Massachusetts business trust, is registered under the Investment Company Act of
1940 (the "1940 Act") as a diversified, open-end management investment company.
The Trust consists of unlimited shares of beneficial interest of the Blue Chip
Fund, the High Yield Fund and the Insured Tax Exempt Fund (each a "Fund") and
accounts separately for the assets, liabilities and operations of each Fund. The
objective of each Fund is as follows:
BLUE CHIP FUND seeks high total investment return consistent with the
preservation of capital.
HIGH YIELD FUND primarily seeks high current income and secondarily seeks
capital appreciation.
INSURED TAX EXEMPT FUND seeks a high level of interest income that is exempt
from federal income tax and is not a tax preference item for purposes of the
Alternative Minimum Tax.
A. Security Valuation--Except as provided below, a security listed or traded on
an exchange or the Nasdaq Stock Market is valued at its last sale price on the
exchange or market where the security is principally traded, and lacking any
sales, the security is valued at the mean between the closing bid and asked
prices. Securities traded in the over-the-counter ("OTC") market (including
securities listed on exchanges whose primary market is believed to be OTC) are
valued at the mean between the last bid and asked prices prior to the time when
assets are valued based upon quotes furnished by a market maker for such
securities. Securities may also be priced by pricing services. The pricing
service use quotations obtained from investment dealers or brokers, information
with respect to market transactions in comparable securities, and other
available information in determining value. The municipal bonds in which the
Insured Tax Exempt Fund invests are traded primarily in the over-the-counter
markets. Such securities are valued daily at their fair value on the basis of
valuations provided by a pricing service approved by the Board of Trustees. The
pricing services use quotations obtained from investment dealers or brokers for
particular securities being evaluated, information with respect to market
transactions in comparable securities and consider security type, rating, market
condition, yield data and other available information in determining value.
"When-issued securities" are reflected in the assets of the Fund as of the date
the securities are purchased. Short-term debt securities that mature in 60 days
or less are valued at amortized cost. Securities for which market quotations are
not readily available are valued on a consistent basis at fair value as
determined in good faith by or under the
30
<PAGE>
supervision of the Trust's officers in a manner specifically authorized by the
Board of Trustees of the Trust.
The municipal bonds held by the Insured Tax Exempt Fund are insured as to
payment of principal and interest by the issuer or under insurance policies
written by independent insurance companies. The Fund may retain any insured
municipal bond which is in default in the payment of principal or interest until
the default has been cured, or the principal and interest outstanding are paid
by an insurer or issuer of any letter of credit or other guarantee supporting
such municipal bond. In such case, it is the Fund's policy to value the
defaulted bond daily based upon the value of a comparable bond which is insured
and not in default. In selecting a comparable bond, the Fund will consider
security type, rating, market condition and yield. The Fund may invest up to 20%
of its assets in portfolio securities not covered by the insurance feature.
B. Federal Income Taxes--No provision has been made for federal income taxes on
net income or capital gains since it is the policy of Trust to continue to
comply with the special provisions of the Internal Revenue Code applicable to
regulated investment companies and to make sufficient distributions of income
and capital gains (in excess of any available capital loss carryovers), to
relieve it from all, or substantially all, federal income taxes. At December 31,
1999, the High Yield Fund had capital loss carryovers of $415,432 of which
$211,168 expires in 2003, $109,463 expires in 2004, $59,720 expires in 2005, and
$35,081 expires in 2007.
C. Expense Allocation--Expenses directly charged or attributable to a Fund are
paid from the assets of that Fund. General expenses of the Trust are allocated
among and charged to the assets of each Fund on a fair and equitable basis,
which may be based on the relative assets of each Fund or the nature of the
services performed and relative applicability to each Fund.
D. Distributions to Shareholders--Dividends from net investment income to the
shareholders of the High Yield Fund and the Insured Tax Exempt Fund are normally
declared daily and paid monthly. Dividends from net investment income of the
Blue Chip Fund are normally declared and paid quarterly. Distributions from net
realized capital gains, if any, are normally declared and paid annually. Income
dividends and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
capital loss carryforwards and post-October capital losses.
E. Use of Estimates--The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
31
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
EXECUTIVE INVESTORS TRUST
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expense during the reporting period. Actual results could differ
from those estimates.
F. Other--Security transactions are accounted for on the date the securities are
purchased or sold. Cost is determined, and gains and losses are based, on the
identified cost basis for both financial statement and federal income tax
purposes. Interest income and estimated expenses are accrued daily. Dividend
income is recorded on the ex-dividend date. For the year ended December 31,
1999, The Bank of New York, custodian for the Funds, has provided total credits
in the amount of $11,541 against custodian charges based on the uninvested cash
balances of the Funds.
2. SECURITY TRANSACTIONS--For the year ended December 31, 1999, purchases and
sales of securities other than short-term tax exempt investments and short-term
securities, were as follows:
<TABLE>
<CAPTION>
Cost of Proceeds
Fund Purchases of Sales
- ---- ----------- -----------
<S> <C> <C>
Blue Chip Fund......................... $ 4,758,086 $ 5,034,120
High Yield Fund........................ 7,541,180 10,297,702
Insured Tax Exempt Fund................ 33,402,870 34,254,537
</TABLE>
At December 31, 1999, aggregate cost and net unrealized appreciation
(depreciation) of securities for federal income tax purposes were as follows:
<TABLE>
<CAPTION>
Gross Gross Net Unrealized
Aggregate Unrealized Unrealized Appreciation
Fund Cost Appreciation Depreciation (Depreciation)
- ---- ----------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
Blue Chip Fund......................... $ 3,403,469 $ 2,245,995 $ 32,769 $ 2,213,226
High Yield Fund........................ 16,671,267 617,896 1,784,168 (1,166,272)
Insured Tax Exempt Fund................ 15,075,916 667,259 40,475 626,784
</TABLE>
3. ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES--Certain officers and
trustees of the Trust are officers and directors of its investment adviser,
Executive Investors Management Company, Inc. ("EIMCO"), its underwriter,
Executive Investors Corporation ("EIC"), its transfer agent, Administrative Data
Management Corp. ("ADM") and/or First Financial Savings Bank, S.L.A. ("FFS"),
custodian of the Trust's individual retirement accounts ("IRA"). Trustees of the
32
<PAGE>
Trust who are not "interested persons" of the Trust as defined in the 1940 Act
are remunerated by the Funds. For the year ended December 31, 1999, total
trustee fees accrued by the Funds amounted to $900.
The Investment Advisory Agreement provides as compensation to EIMCO an annual
fee, payable monthly, at the rate of 1% on the first $200 million of each Fund's
average daily net assets, .75% on the next $300 million, declining by .03% on
each $250 million thereafter, down to .66% on average daily net assets over $1
billion. For the year ended December 31, 1999, total advisory fees earned by
EIMCO from all Funds was $397,358 of which $232,360 was waived. In addition,
expenses of $30,571 were assumed by EIMCO.
For the year ended December 31, 1999, EIC, as underwriter of the Trust, received
$14,697 in commissions from the sale of Trust shares, after allowing $91,200 to
other dealers. Shareholder servicing costs included $27,538 in transfer agent
fees accrued to ADM and $2,847 in IRA custodian fees accrued to FFS.
Pursuant to a Distribution Plan adopted under Rule 12b-1 of the 1940 Act, each
Fund is authorized to pay a fee equal to .50% of its average daily net assets on
an annualized basis each fiscal year, payable quarterly. The fee consists of a
distribution fee and a service fee. The service fee is paid for the ongoing
servicing of clients who are shareholders of that Fund. For the year ended
December 31, 1999, total distribution plan fees accrued to EIC amounted to
$198,108 (of which $39,621 was waived).
4. RULE 144A SECURITIES--Under Rule 144A, certain restricted securities are
exempt from the registration requirements of the Securities Act of 1933 and may
only be resold to qualified institutional investors. At December 31, 1999, the
High Yield Fund held ten 144A securities with an aggregate value of $1,568,908.
These securities represent 9.9% of the Fund's net assets and are valued as set
forth in Note 1A.
5. CONCENTRATION OF CREDIT RISK--The High Yield Fund's investment in high yield
securities, whether rated or unrated, may be considered speculative and subject
to greater market fluctuations and risk of loss of income and principal than
lower-yielding, higher-rated, fixed-income securities. The risk of loss due to
default by the issuer may be significantly greater for the holders of
high-yielding securities, because such securities are generally unsecured and
are often subordinated to other creditors of the issuer.
33
<PAGE>
FINANCIAL HIGHLIGHTS
EXECUTIVE INVESTORS TRUST
The following table sets forth the per share operating performance data for a
share of beneficial interest outstanding, total return, ratios to average net
assets and other supplemental data for each year indicated.
<TABLE>
- ----------------------------------------------------------------------------------------------------------
P E R S H A R E D A T A
-----------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
---------------------------------------
NET REALIZED LESS DISTRIBUTIONS
NET ASSET AND FROM
VALUE UNREALIZED ----------------------
--------- NET GAIN (LOSS) TOTAL FROM NET NET
BEGINNING INVESTMENT ON INVESTMENT INVESTMENT REALIZED TOTAL
OF YEAR INCOME INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BLUE CHIP FUND
1995........... $ 12.75 $ .30 $ 4.30 $ 4.60 $ .29 $ .74 $ 1.03
1996........... 16.32 .22 3.13 3.35 .24 1.07 1.31
1997........... 18.36 .19 4.68 4.87 .19 1.36 1.55
1998........... 21.68 .11 3.74 3.85 .12 .58 .70
1999........... 24.83 .02 6.34 6.36 .03 2.69 2.72
- ----------------------------------------------------------------------------------------------------------
HIGH YIELD FUND
1995........... $ 6.98 $ .70 $ .58 $ 1.28 $ .67 -- $ .67
1996........... 7.59 .72 .28 1.00 .70 -- .70
1997........... 7.89 .68 .23 .91 .70 -- .70
1998........... 8.10 .67 (.60) .07 .68 -- .68
1999........... 7.49 .79 (.36) .43 .70 -- .70
- ----------------------------------------------------------------------------------------------------------
INSURED TAX EXEMPT FUND
1995........... $ 12.53 $ .72 $ 1.80 $ 2.52 $ .73 $ .28 $ 1.01
1996........... 14.04 .66 (.10) .56 .67 .11 .78
1997........... 13.82 .67 .71 1.38 .67 .12 .79
1998........... 14.41 .66 .39 1.05 .66 .24 .90
1999........... 14.56 .67 (.94) (.27) .65 .03 .68
- ----------------------------------------------------------------------------------------------------------
</TABLE>
* Calculated without sales charges
+ Net of expenses waived or assumed (Note 3)
See notes to financial statements
34
<PAGE>
<TABLE>
- -------------------------------------------------------------------------------------------------------------
R A T I O S / S U P P L E M E N T A L D A T A
---------------------------------------------------------------------------------
---------
RATIO TO AVERAGE NET
ASSETS BEFORE
RATIO TO AVERAGE EXPENSES
NET NET ASSETS+ WAIVED OR ASSUMED
NET ASSET ASSETS --------------------- ---------------------
VALUE TOTAL END OF NET NET PORTFOLIO
--------- RETURN YEAR INVESTMENT INVESTMENT TURNOVER
END * (IN EXPENSES INCOME EXPENSES INCOME RATE
OF YEAR (%) MILLIONS) (%) (%) (%) (%) (%)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BLUE CHIP FUND
1995........... $ 16.32 36.30 $ 1 .50 1.99 2.20 .29 33
1996........... 18.36 20.62 2 .75 1.33 2.28 (.20) 50
1997........... 21.68 26.58 4 .75 .92 2.03 (.36) 163
1998........... 24.83 17.81 5 .92 .49 1.84 (.43) 96
1999........... 28.47 25.62 6 1.00 .06 1.94 (.88) 97
- -------------------------------------------------------------------------------------------------------------
HIGH YIELD FUND
1995........... $ 7.59 19.08 $ 16 1.35 9.52 1.90 8.97 69
1996........... 7.89 13.69 17 1.22 9.38 1.82 8.78 27
1997........... 8.10 12.03 19 1.22 8.68 1.82 8.08 49
1998........... 7.49 .86 19 1.25 8.54 1.83 7.96 41
1999........... 7.22 6.09 16 1.18 10.51 1.78 9.91 44
- -------------------------------------------------------------------------------------------------------------
INSURED TAX EXEMPT FUND
1995........... $ 14.04 20.53 $ 13 .50 5.35 1.74 4.11 147
1996........... 13.82 4.11 15 .75 4.85 1.71 3.89 116
1997........... 14.41 10.30 16 .75 4.80 1.71 3.84 126
1998........... 14.56 7.39 17 .80 4.50 1.73 3.57 172
1999........... 13.61 (1.92) 16 .80 4.72 1.73 3.79 205
- -------------------------------------------------------------------------------------------------------------
</TABLE>
* Calculated without sales charges
+ Net of expenses waived or assumed (Note 3)
See notes to financial statements
35
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Trustees of
Executive Investors Trust
We have audited the accompanying statement of assets and liabilities, including
the portfolios of investments, of the Blue Chip, High Yield and Insured Tax
Exempt Funds (comprising Executive Investors Trust), at December 31, 1999, the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended and
financial highlights for each of the five years in the period then ended. These
financial statements and financial highlights are the responsibility of the
Trust's 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. Our procedures included confirmation of securities owned at
December 31, 1999, by correspondence with the custodian. 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
Blue Chip, High Yield and Insured Tax Exempt Funds at December 31, 1999, and the
results of their operations for the year then ended, changes in their net assets
for each of the two years in the period then ended and financial highlights for
each of the five years in the period then ended, in conformity with generally
accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
January 31, 2000
36
<PAGE>
This page intentionally left blank.
37
<PAGE>
EXECUTIVE INVESTORS TRUST
TRUSTEES
- -------------------------------
JAMES J. COY (Emeritus)
GLENN O. HEAD
KATHRYN S. HEAD
LARRY R. LAVOIE
REX R. REED
HERBERT RUBINSTEIN
NANCY S. SCHAENEN
JAMES M. SRYGLEY
JOHN T. SULLIVAN
ROBERT F. WENTWORTH
OFFICERS
- -------------------------------
GLENN O. HEAD
President
DENNIS T. FITZPATRICK
Vice President
NANCY W. JONES
Vice President
PATRICIA D. POITRA
Vice President
CLARK D. WAGNER
Vice President
CONCETTA DURSO
Vice President and Secretary
JOSEPH I. BENEDEK
Treasurer
MARK S. SPENCER
Assistant Treasurer
CAROL LERNER BROWN
Assistant Secretary
38
<PAGE>
EXECUTIVE INVESTORS TRUST
SHAREHOLDER INFORMATION
- -------------------------------
INVESTMENT ADVISER
EXECUTIVE INVESTORS
MANAGEMENT COMPANY, INC.
95 Wall Street
New York, NY 10005
UNDERWRITER
EXECUTIVE INVESTORS CORPORATION
95 Wall Street
New York, NY 10005
CUSTODIAN
THE BANK OF NEW YORK
48 Wall Street
New York, NY 10286
TRANSFER AGENT
ADMINISTRATIVE DATA MANAGEMENT CORP.
581 Main Street
Woodbridge, NJ 07095-1198
LEGAL COUNSEL
KIRKPATRICK & LOCKHART LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036
AUDITORS
TAIT, WELLER & BAKER
Eight Penn Center Plaza
Philadelphia, PA 19103
It is the Trust's practice to mail only one copy of its annual and semi-annual
reports to any address at which more than one shareholder with the same last
name has indicated that mail is to be delivered. Additional copies of the
reports will be mailed if requested by any shareholder in writing or by calling
800-423-4026. The Trust will ensure that separate reports are sent to any
shareholder who subsequently changes his or her mailing address.
This report is authorized for distribution only to existing shareholders, and,
if given to prospective shareholders, must be accompanied or preceded by the
Trust's prospectus.
39
<PAGE>
NOTES
40
<PAGE>
At the bottom of the back cover page is the EXECUTIVE INVESTORS LOGO and the
address "95 Wall Street, New York, NY 10005."