<PAGE>
Registration No. 33-14737
811-5155
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 23, 1997.
=======================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
_______________________
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO.
POST-EFFECTIVE AMENDMENT NO. 12 /X/
AND/OR
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 13 /X/
_______________________
CHUBB INVESTMENT FUNDS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
ONE GRANITE PLACE
CONCORD, NEW HAMPSHIRE 03301
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
603-226-5000
(REGISTRANT'S TELEPHONE NUMBER)
MICHAEL O'REILLY, PRESIDENT
ONE GRANITE PLACE
CONCORD, NEW HAMPSHIRE 03301
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPIES TO:
THOMAS H. ELWOOD, ESQ. JANE KANTER, ESQ.
Chubb Investment Funds, Inc. Katten Muchin & Zavis
One Granite Place` 1025 Thomas Jefferson Street, N.W.
Concord, NH 03301 Washington, D.C. 20007
Approximate date of proposed public offering: It is proposed that this filing
will become effective on May 1, 1997 pursuant to Rule 485(b).
The Registrant has registered an indefinite number of amount of its shares
of common stock under the Securities Act of 1933 pursuant to Rule 24f-2 under
the Investment Company Act of 1940. The Registrant filed a Rule 24f-2 Notice on
February 27, 1997.
<PAGE>
CHUBB INVESTMENT FUNDS, INC.
CROSS REFERENCE SHEET
Cross reference sheet showing location in the Prospectus of information
require by items in Part A of Form N-1A.
<TABLE>
<CAPTION>
ITEM
NUMBER HEADING IN PROSPECTUS
- ------ ---------------------
<C> <S>
1 Cover Page
2 Fee Table
3 Condensed Financial Information
4 General Description, Investment Objectives and Policies, Special
Investment Practices, Capital Stock
5 Management of the Company, Management Fees and Expenses,
Distribution Plan
6 Capital Stock, Taxes and Dividends, Taxation of Shareholders
7 Purchase of Shares, Reduced Sales Charges, Distribution Plan,
Determination of Net Asset Value, Shareholder Services
8 Redemption or Repurchase
9 (Legal Proceedings)*
</TABLE>
_________
*Indicates inapplicable or negative
<PAGE>
- --------------------------------------------------------------------------------
CHUBB INVESTMENT FUNDS, INC.
ONE GRANITE PLACE
CONCORD, NEW HAMPSHIRE 03301
(603) 226-5000
- --------------------------------------------------------------------------------
Chubb Investment Funds, Inc. (the "Company") was incorporated in Maryland on
April 27, 1987. The Company is an open-end management investment company which
is composed of seven separate funds, each of which is a distinct portfolio
of investments having its own investment objectives and policies. Six of these
funds are diversified companies and one, the Chubb Global Income Fund, is a non-
diversified company. The names and investment objectives of the funds areas
follows:
Chubb Money Market Fund: to seek the highest possible level of current income
as is consistent with the preservation of capital and maintenance of liquidity
by investing primarily in short-term high-grade debt obligations. AN INVESTMENT
IN THE CHUBB MONEY MARKET FUND IS NEITHER INSURED NOR GUARANTEED BY THE UNITED
STATES GOVERNMENT. INVESTMENTS IN THE FUND ARE NOT BANK DEPOSITS AND ARE NOT
SECURED BY, GUARANTEED BY, OBLIGATIONS OF, OR OTHERWISE SUPPORTED BY THE FDICOR
ANY BANK. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE.
Chubb Government Securities Fund: to earn as high a level of income as is
consistent with maintaining safety of principal by investing exclusively in debt
obligations issued, guaranteed or collateralized by the United States
Government, its agencies or its instrumentalities.
Chubb Total Return Fund: to produce the highest total return through a
combination of income and capital appreciation as is consistent with reasonable
risk by investing in a portfolio of income-producing debt and equity securities.
Chubb Tax-Exempt Fund: to provide a stable level of current income which is
exempt from Federal income taxes, consistent with the preservation of capital,
by investing primarily in investment-grade tax-exempt securities.
Chubb Growth and Income Fund: to seek long-term growth by investing primarily
in a wide range of equity issues that the Investment Manager believes will offer
possibilities of capital appreciation and, secondarily, to seek a reasonable
level of current income.
Chubb Capital Appreciation Fund: to seek long term capital appreciation by
investing primarily in equity securities.
Chubb Global Income Fund: to seek high current income and capital
appreciation by investing primarily in debt securities of domestic and foreign
issuers. CERTAIN OF THE FUND'S INVESTMENTS MAY HAVE SPECULATIVE CHARACTERISTICS.
This Prospectus sets forth concisely the information about the Company which a
prospective investor should know before investing. Investors should retain this
Prospectus for future reference. More information about the Company is included
in the Statement of Additional Information, which has been filed with the
Securities and Exchange Commission and is incorporated herein by reference.
A copy of the Statement of Additional Information dated May 1, 1997 is
available upon request and without charge by writing to the Company's
distributor. Chubb Securities Corporation, P.O. Box 20061, One Granite Place,
Concord, NH 03302 Attention: Marketing Department, or by calling 1-800-452-4822.
Inquiries about the Company should be directed to the distributor at the same
address or telephone number
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
THE DATE OF THIS PROSPECTUS IS MAY 1, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
FEE TABLE................................................................. 2
FINANCIAL HIGHLIGHTS...................................................... 4
GENERAL DESCRIPTION....................................................... 11
PERFORMANCE AND YIELD INFORMATION......................................... 11
INVESTMENT OBJECTIVES AND POLICIES........................................ 11
Chubb Money Market Fund................................................. 11
Chubb Government Securities Fund........................................ 12
Chubb Total Return Fund................................................. 13
Chubb Tax-Exempt Fund................................................... 14
Chubb Growth and Income Fund............................................ 15
Chubb Capital Appreciation Fund......................................... 16
Chubb Global Income Fund................................................ 17
SPECIAL INVESTMENT PRACTICES.............................................. 17
Equity Securities....................................................... 18
Repurchase Agreements................................................... 18
Reverse Repurchase Agreements........................................... 18
Foreign Securities, ADRs, EDRs and GDRs................................. 18
Lending of Portfolio Securities......................................... 19
DERIVATIVES............................................................... 19
Forward Foreign Currency Exchange Contracts............................. 19
Cross Currency Hedges................................................... 20
Writing Covered Call Options and Purchasing Put Options................. 20
Swaps, Caps, Floors and Collars......................................... 21
Restricted Securities................................................... 21
ADDITIONAL RISK FACTORS................................................... 22
PORTFOLIO TURNOVER........................................................ 23
MANAGEMENT OF THE COMPANY................................................. 23
MANAGEMENT FEES AND EXPENSES.............................................. 24
CAPITAL STOCK............................................................. 25
TAXES AND DIVIDENDS....................................................... 26
TAXATION OF SHAREHOLDERS.................................................. 26
PURCHASE OF SHARES........................................................ 27
REDUCED SALES CHARGES..................................................... 28
DISTRIBUTION PLAN......................................................... 30
DETERMINATION OF NET ASSET VALUE.......................................... 31
REDEMPTION OR REPURCHASE.................................................. 31
SHAREHOLDER SERVICES...................................................... 33
Automatic Investment Program............................................ 33
Systematic Withdrawal Plan.............................................. 33
Exchange Privilege...................................................... 34
Systematic Exchange Privilege........................................... 34
Checkwriting Privilege.................................................. 34
Individual Retirement Account........................................... 34
</TABLE>
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND IN THE STATEMENT OF ADDITIONAL INFORMATION.
<PAGE>
FEE TABLE
The purpose of this Fee Table and Example is to assist in the understanding of
the various costs and expenses arising from the operations of the Funds. For a
discussion of the services provided to and the expenses paid by the Company
regarding each Fund, see "MANAGEMENT OF THE COMPANY" and "MANAGEMENT FEES AND
EXPENSES" in the Prospectus. See "EXCHANGE PRIVILEGE" in the Prospectus
concerning exchanges between the Funds. For a description of the current range
of sales charge rates and various methods available to reduce the applicable
sales charge, see "PURCHASE OF SHARES" and "REDUCED SALES CHARGES" in the
Prospectus.
The Fee Table, including the Example below, illustrates fees and expenses that
a shareholder of the funds may expect to incur based upon sales arrangements,
and other recurring and nonrecurring expenses applicable to the shares of each
Fund.
Shareholder Transaction Expenses
<TABLE>
<CAPTION>
GROWTH
MONEY GOVERNMENT TOTAL TAX AND CAPITAL GLOBAL
MARKET SECURITIES RETURN EXEMPT INCOME APPRECIATION INCOME
FUND FUND FUND FUND FUND FUND FUND
------ ----------- ------- ------- ------- ------------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Maximum Sales Charge imposed on Purchases
(as a percentage of offering price)........ 0 3.00% 5.00% 3.00% 5.00% 5.00% 3.00%
</TABLE>
Because each Fund may charge an asset-based sales charge of up to 0.25% per
year based on its average daily net asset value, long-term shareholders in the
Funds may pay more than the economic equivalent of the maximum front-end sales
charges currently permitted by the NASD.
Annual Operating Expenses
(Restated After Waivers and Assumptions of Fees and Expenses
and a reduction in 12b-1 fees waived by Chubb Securities Corporation)
(As a Percentage of Average Daily Net Assets)
<TABLE>
<CAPTION>
GROWTH
MONEY GOVERNMENT TOTAL TAX AND CAPITAL GLOBAL
MARKET SECURITIES RETURN EXEMPT INCOME APPRECIATION INCOME
FUND FUND FUND FUND FUND FUND FUND
---------- ---------- ------ ------ ------- ------------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Management Fees & Administrative Fees
(after fee waiver) 0.15% 0.45% 0.45% 0.45% 0.45% 0.45% 0.70%
12b-1 Fees (after fee waiver) 0.15% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Other Expenses 0.20% 0.30% 0.55% 0.30% 0.55% 0.55% 0.80%
Total Fund Operating Expenses
(after fee waiver) 0.50% 1.00% 1.25% 1.00% 1.25% 1.25% 1.75%
</TABLE>
Absent any waiver or assumption of fees and expenses except pursuant to the
most restrictive state expense limitation provision, "Total Fund Operating
Expenses" for the fiscal year ended December 31, 1996 would have been 1.21%,
1.60%, 1.59%, 1.65%, 1.58%, 1.81% and 1.68% for the Money Market Fund, the
Government Securities Fund, the Total Return Fund, the Tax-Exempt Fund, the
Growth and Income Fund, Capital Appreciation Fund and Global Income Fund,
respectively. Such expenses would have been comprised of Management Fees of
0.50%, 0.65%, 0.65%, 0.65%, 0.65%, 0.65% and 0.65%; 12b-1 fees of 0.25%, 0.50%,
0.50%, 0.50%, 0.50%, 0.50% and 0.50%; and Other Expenses of 0.46%; 0.45%; 0.44%;
0.50%; 0.43%; 0.66% and 0.53% for the Money Market Fund; the Government
Securities Fund; the Total Return Fund; the Tax Exempt Fund; the Growth and
Income Fund; Capital Appreciation Fund and Global Income Fund,
respectively.
2
<PAGE>
Example (Restated After Waiver of Fees and Assumption of Expenses)
An investor in each Fund would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2) redemption at the end of each
time period:
<TABLE>
<CAPTION>
FUND 1 YEAR 3YEARS 5 YEARS 10 YEARS
---- ------- ------ ------- --------
<S> <C> <C> <C> <C>
Money Market Fund(1) $ 5 $16 $ 29 $ 64
Government Securities Fund(2) $40 $62 $ 85 $152
Total Return Fund(3) $62 $89 $117 $198
Tax-Exempt Fund(2) $40 $62 $ 85 $152
Growth and Income Fund(3) $62 $89 $117 $198
Capital Appreciation Fund(3) $62 $89 $117 $198
Global Income Fund(2) $48 $85 $125 $236
</TABLE>
_____________
(1) No load
(2) 3.00% sales load
(3) 5.00% sales load
There are no charges imposed upon redemption; however, shareholders who elect
to use a wire transfer to effect payment directly to their bank account will be
charged a fee, currently $12.00, to cover the cost of this transfer.
The Example should not be considered representative of past or future fees and
expenses for each Fund. ACTUAL FEES AND EXPENSES FOR ANY FUND MAY BE GREATER OR
LESS THAN THOSE SHOWN ABOVE. Similarly, the annual rate of return assumed in the
example is not an estimate or guarantee of future investment performance.
3
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables should be read in conjunction with the financial
statements and report of Ernst & Young LLP, independent auditors, which are
available upon request and without charge by calling 1-800-452-4822, and which
are incorporated by reference into the Statement of Additional Information.
For a share outstanding throughout the year (A):
<TABLE>
<CAPTION>
CHUBB MONEY MARKET FUND
-----------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of
year...................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .049 .050 .034 .025 .030 .052 .071 .082
Net realized and
unrealized gains
(losses) on securities... ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total from investment
operations................ .049 .050 .034 .025 .030 .052 .071 .082
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income........ (.049) (.050) (.034) (.025) (.030) (.052) (.071) (.082)
Dividends in excess of net
investment income........
Distributions from capital
gains....................
Distributions in excess
of
capital gains............
Returns of capital........
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total distributions....... (.049) (.050) (.034) (.025) (.030) (.052) (.071) (.082)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of
year...................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========== ========== ========== ========== ========== ========== ========== ==========
Total Return (C)........... 4.86% 5.16% 3.41% 2.50% 3.00% 5.20% 7.10% 8.20%
RATIOS TO AVERAGE NET
ASSET:
Expenses (E).............. .50% .50% .50% .50% .50% .50% .50% --
Net investments income 4.71% 5.05% 3.43% 2.48% 3.06% 5.25% 7.10% 7.88%
Portfolio Turnover Rate (F) N/A N/A N/A N/A N/A N/A N/A N/A
Average Commission Rate Paid (G) N/A
Net Assets, At End of Year. $8,854,016 $7,620,206 $7,494,743 $5,225,178 $4,212,869 $4,410,966 $4,144,116 $2,839,724
<CAPTION>
1988 1987(B)
---------- ----------
<S> <C> <C>
Net asset value, beginning
of
year...................... $ 1.000 $ 1.000
INCOME FROM INVESTMENT
OPERATIONS
Net investment income..... .061 .002
Net realized and
unrealized gains
(losses) on securities... ---------- --------
Total from investment
operations................ .061 .002
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income........ (.061) (.002)
Dividends in excess of net
investment income........
Distributions from capital
gains....................
Distributions in excess
of
capital gains............
Returns of capital........
---------- --------
Total distributions.......
(.061) (.002)
Net asset value, end of ---------- --------
year......................
$ 1.000 $ 1.000
========== ========
Total Return (C)........... 6.10% 0.20%(D)
RATIOS TO AVERAGE NET
ASSET:
Expenses (E).............. -- --
Net investments income 6.75% 3.96%
Portfolio Turnover Rate (F) N/A N/A
Average Commission Rate Paid (G)
Net Assets, At End of Year. $1,456,395 $101,338
</TABLE>
________________
(A) The per share amounts which are shown have been computed based on the
average number of shares outstanding during each year.
(B) Per share data calculated from the date shares of the Money Market Fund
were first sold to the public on December 18, 1987. Ratios to average net
assets have been annualized.
(C) Total return assumes reinvestment of all dividends during the year.
Investment returns and principal values may fluctuate and shares, when
redeemed, may be worth more or less than the original cost.
(D) Not annualized.
(E) A portion of all related party fees of the Fund have been waived for 1996,
1995, 1994, 1993, and 1992. All related party fees have been waived and
all other expenses of the Fund have been assumed in part for 1991 and 1990,
and in their entirety for the prior fiscal periods by Chubb Life. Had the
fees not been waived and expenses not been assumed, the ratios of expenses
to average net assets would have been 1.21% in 1996, 1.31% in 1995, 1.31%
in 1994, 1.50% in 1993, 2.38% in 1992, and 2.50% in 1991, 1990 and 1989,
and 2.00% in 1988 and 1987, pursuant to the most restrictive state
limitation.
(F) There were no purchases and/or sales of securities other than short-term
obligations during the year. Therefore, the portfolio turnover has not been
calculated.
(G) During the year, the fund held less than 10% of the value of average net
assets in equity securities. Therefore, the Average Commission Rate Paid
has not been calculated.
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
CHUBB GOVERNMENT SECURITIES FUND
---------------------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
----------- ----------- ----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net assets value,
beginning of
year...................... $ 10.780 $ 9.750 $ 10.710 $ 10.700 $ 11.160 $ 10.360 $ 10.330
INCOME FROM INVESTMENT
OPERATIONS
Net investment income..... .623 .636 .607 .770 .766 .750 .815
Net realized and
unrealized gains
(losses) on securities... (.300) 1.030 (.960) .199 .021 .838 .049
----------- ----------- ----------- ----------- ---------- ---------- ----------
Total from investment
operations............... .323 1.666 (.353) .969 .787 1.588 .864
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income........ (.623) (.636) (.607) (.770) (.766) (.750) (.815)
Dividends in excess of net
investment incomes.......
Distributions from capital
gains.................... (.170) (.481) (.038) (.019)
Distributions in excess of
capital gains............ (.019)
Returns of capital........
----------- ----------- ----------- ----------- ---------- ---------- ----------
Total distributions....... (.623) (.636) (.607) (.959) (1.247) (.788) (.834)
----------- ----------- ----------- ----------- ---------- ---------- ----------
Net asset value, end of
year...................... $ 10.480 $ 10.780 $ 9.750 $ 10.710 $ 10.700 $ 11.160 $ 10.360
=========== =========== =========== =========== ========== ========== ==========
Total Return (B).......... 3.19% 17.50% (3.34%) 9.29% 7.44% 15.97% 8.90%
RATIOS TO AVERAGE NET
ASSET:
Expenses (D).............. .93% 1.00% 1.00% 1.00% 1.00% 1.00% 1.05%
Net investment income..... 5.94% 6.16% 5.96% 7.04% 6.94% 7.12% 8.05%
Portfolio Turnover Rate 140.94% 276.56% 113.36% 197.08% 310.29% 26.96% 24.78%
Average Commission Rate Paid (E) N/A
Net Assets, At End of Year $12,818,450 $13,886,478 $12,534,640 $14,679,255 $7,392,150 $4,080,963 $2,109,061
<CAPTION>
1989 1988 1987(A)
---------- ---------- ----------
<S> <C> <C> <C>
Net assets value,
beginning of
year...................... $ 9.890 $ 10.000 $ 10.000
INCOME FROM INVESTMENT
OPERATIONS
Net investment income..... .914 .916 .047
Net realized and
unrealized gains
(losses) on securities... .463 (.071)
---------- ---------- ----------
Total from investment
operations............... 1.377 .845 .047
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income........ (.914) (.916) (.047)
Dividends in excess of net
investment incomes.......
Distributions from capital
gains.................... (.006) (0.039)
Distributions in excess of
capital gains............
Returns of capital........ (.017)
---------- ---------- ----------
Total distributions....... (.937) (.955) (0.47)
---------- ---------- ----------
Net asset value, end of
year...................... $ 10.330 $ 9.890 $ 10.000
========== ========== ==========
Total Return (B).......... 14.52% 8.68% 0.47%(C)
RATIOS TO AVERAGE NET
ASSET:
Expenses (D).............. -- -- --
Net investment income..... 9.06% 9.07% 7.52
Portfolio Turnover Rate 5.93% 42.63% --
Average Commission Rate Paid (E)
Net Assets, At End of Year $1,612,229 $1,279,499 $1,105,959
</TABLE>
_________________
(A) Per share data calculated from the date shares of the Government Securities
Fund were first sold to the public on December 10, 1987. Ratios to average
net assets have been annualized.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of sales charge. Investment returns and principal
values will fluctuate and shares, when redeemed, may be worth more or less
than the original cost.
(C) Not annualized.
(D) A portion of all related party fees of the Fund have been waived for 1996,
1995, 1994, 1993 and 1992. All related party fees have been waived and all
other expenses of the Fund have been assumed in part for 1991 and 1990, and
in their entirety for the prior fiscal periods by Chubb Life. Had the fees
not been waived and expenses not been assumed, the ratios of expenses to
average net assets would have been 1.60% in 1996, 1.70% in 1995, 1.71% in
1994, 1.89% in 1993, 2.50% in 1992, 1991, 1990 and 1989, and 2.00% in 1988
and 1987, pursuant to the most restrictive state limitation.
(E) During the year, the fund held less than 10% of the value of average net
assets in equity securities. Therefore, the Average Commission Rate Paid
has not been calculated.
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
FINANCIAL HIGHLIGHTS--(CONTINUED)
<TABLE>
<CAPTION>
For a share outstanding throughout the year:
CHUBB TOTAL RETURN FUND
-------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
----------- ----------- ----------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of year................... $ 15.960 $ 13.230 $ 15.010 $ 13.890 $ 13.850 $ 11.270 $ 12.090
INCOME FROM INVESTMENT
OPERATIONS
Net investment income..... .370 .373 .373 .405 .382 .387 .437
Net realized and
unrealized
gains (losses) on
securities............... 2.321 3.586 (.994) 1.529 .577 2.870 (.493)
----------- ----------- ----------- ----------- ----------- ---------- ----------
Total from investment
operations............... 2.691 3.959 (.621) 1.934 .959 3.257 (.056)
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income........ (.370) (.373) (.373) (.405) (.382) (.387) (.437)
Dividends in excess of net
investment income........
Distributions from capital
gains.................... (.871) (.692) (.786) (.409) (.537) (.290)
Distributions in excess of
capital gains............ (.164)
Returns of capital.
----------- ----------- ----------- ----------- ----------- ---------- ----------
Total distributions....... (1.241) (1.229) (1.159) (.814) (.919) (.677) (.764)
----------- ----------- ----------- ----------- ----------- ---------- ----------
Net asset value, end of
year..................... $ 17.410 $ 15.960 $ 13.230 $ 15.010 $ 13.890 $ 13.850 $ 11.270
=========== =========== =========== =========== =========== ========== ==========
Total Return (B).......... 17.04% 30.13% (4.21%) 14.03% 7.11% 29.23% (.51%)
RATIOS TO AVERAGE NET
ASSET:
Expenses (D).............. 1.08% 1.08% 1.00% 1.00% 1.00% 1.00% 1.02%
Net investment income..... 2.26% 2.45% 2.66% 2.83% 2.97% 3.26% 3.93%
Portfolio Turnover Rate 27.01% 57.62% 37.53% 66.15% 73.89% 106.90% 110.09%
Average Commission Rate Paid $ 0.0700
Net Assets, At End of Year $31,064,099 $22,171,326 $16,431,195 $14,360,086 $10,000,441 $5,259,055 $1,963,120
<CAPTION>
1989 1988 1987(A)
---------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning
of year................... $ 10.510 $ 10.210 $ 10.240
INCOME FROM INVESTMENT
OPERATIONS
Net investment income..... .592 .535 .025
Net realized and
unrealized
gains (losses) on
securities............... 2.020 .308 (.015)
---------- -------- --------
Total from investment
operations............... 2.612 .843 .010
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income........ (.607) (.523) (.040)
Dividends in excess of net
investment income........
Distributions from capital
gains.................... (.327) (.425) (.020)
Distributions in excess of
capital gains............
Returns of capital.
---------- -------- --------
Total distributions....... (1.032) (.543) (.040)
---------- -------- --------
Net asset value, end of
year..................... $ 12.090 $ 10.510 $ 10.210
========== ======== ========
Total Return (B).......... 25.48% 8.31% 0.09%(C)
RATIOS TO AVERAGE NET
ASSET:
Expenses (D).............. -- -- --
Net investment income..... 5.25% 6.22% 4.96%
Portfolio Turnover Rate 105.49% 121.60% --
Average Commission Rate Paid
Net Assets, At End of Year $1,237,868 $797,447 $103,070
</TABLE>
_________________
(A) Per share data calculated from the date shares of the Total Return Fund
were first sold to the public on December 18, 1987. Ratios to average net a
ssets have been annualized.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of sales charge. Investment returns and principal
values will fluctuate and shares, when redeemed, may be worth more or less
than the original cost.
(C) Not annualized.
(D) A portion of all related party fees of the Fund have been waived for 1996,
1995, 1994, and 1993. All related party fees have been waived and all other
expenses of the Fund have been assumed in part for 1992, 1991 and 1990, and
in their entirety for the prior fiscal periods by Chubb Life. Had the fees
not been waived and expenses not been assumed, the ratios of expenses to
average net assets would have been 1.59% in 1996, 1.70% in 1995, 1.73% in
1994, 1.93% in 1993, 2.41% in 1992, 2.50% in 1991, 1990 and 1989, and 2.00%
in 1988 and 1987, pursuant to the most restrictive state limitation.
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
CHUBB TAX-EXEMPT FUND
---------------------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
----------- ----------- ----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of
year...................... $ 12.330 $ 11.220 $ 12.580 $ 11.740 $ 11.380 $ 10.880 $ 11.010
INCOME FROM INVESTMENT
OPERATIONS
Net investment income...... .611 .621 .618 .583 .619 .634 .653
Net realized and unrealized
gains (losses) on
securities............... (.137) 1.132 (1.360) .850 .401 .500 (.115)
----------- ----------- ----------- ----------- ---------- ---------- ----------
Total from investment
operations................ .474 1.753 (.742) 1.433 1.020 1.134 .538
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income........ (.611) (.621) (.618) (.583) (.619) (.634) (.653)
Dividends in excess of net
investment income........
Distributions from capital
gains.................... (.043) (.010) (.004) (.041)
Distributions in excess of
capital gains............ (.012) (.006)
Returns of capital
----------- ----------- ----------- ----------- ---------- ---------- ----------
Total distributions....... (.654) (.643) (.618) (.593) (.660) (.634) (.668)
----------- ----------- ----------- ----------- ---------- ---------- ----------
Net asset value, end of
year...................... $ 12.150 $ 12.330 $ 11.220 $ 12.580 $ 11.740 $ 11.380 $ 10.880
----------- ----------- ----------- ----------- ---------- ---------- ----------
Total Return (B)........... 4.00% 15.88% (5.97%) 12.42% 9.19% 10.71% 5.10%
RATIOS TO AVERAGE NET
ASSET:
Expenses (D).............. .98% 1.00% 1.00% 1.00% 1.00% 1.00% 1.05%
Net investment income..... 5.00% 5.20% 5.21% 4.81% 5.40% 5.80% 6.15%
Portfolio Turnover Rate 16.29% 7.39% 8.37% 1.55% 17.11% 4.41% 26.13%
Average Commission Rate Paid (E) N/A
Net Assets, At End of Year. $15,061,382 $15,259,349 $13,973,939 $16,406,372 $9,250,893 $6,734,020 $4,326,788
<CAPTION>
1989 1988 1987(A)
---------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning
of
year...................... $ 10.680 $ 10.110 $ 10.002
INCOME FROM INVESTMENT
OPERATIONS
Net investment income...... .773 .792 .037
Net realized and unrealized
gains (losses) on
securities............... .426 .571 .108
---------- ---------- ----------
Total from investment
operations................ 1.199 1.363 .145
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income........ (.773) (.792) (.037)
Dividends in excess of net
investment income........
Distributions from capital
gains.................... (.015) (.096) (.001)
Distributions in excess of
capital gains............
Returns of capital
---------- ---------- ----------
Total distributions....... (.869) (.793) (.037)
---------- ---------- ----------
Net asset value, end of
year...................... $ 11.010 $ 10.680 $ 10.110
---------- ---------- ----------
Total Return (B)........... 11.58% 14.06% 1.37%(C)
RATIOS TO AVERAGE NET
ASSET:
Expenses (D).............. -- -- --
Net investment income..... 7.32% 7.70% 5.91%
Portfolio Turnover Rate 14.14% 13.06% --
Average Commission Rate Paid (E)
Net Assets, At End of Year. $3,004,074 $1,569,279 $1,112,656
</TABLE>
________________________
(A) Per share data calculated from the date shares of the Tax-Exempt Fund were
first sold to the public on December 10, 1987. Ratio to average net assets
have been annualized.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of sales charge. Investment returns and principal
values will fluctuate and shares, when redeemed, may be worth more or less
than the original cost.
(C) Not annualized.
(D) A portion of all related party fees of the Fund have been waived for 1996,
1995, 1994 and 1993. All related party fees have been waived and all other
expenses of the Fund have been assumed in part for 1992, 1991 and 1990, and
in their entirety for the prior fiscal periods by Chubb Life. Had the fees
not been waived and expenses not been assumed, the ratios of expenses to
average net assets would have been 1.65% in 1996, 1.79% in 1995, 1.80% in
1994, 1.97% in 1993, 2.42% in 1992, 2.50% in 1991, 1990 and 1989, and 2.00%
in 1988 and 1987, pursuant to the most restrictive state limitation.
(E) During the year, the fund held less than 10% of the value of average net
assets in equity securities. Therefore, the Average Commission Rate Paid
has not been calculated.
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
CHUBB GROWTH AND INCOME FUND
---------------------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of year........................... $ 18.580 $ 14.770 $ 16.700 $ 15.140 $ 14.830 $ 11.950 $ 13.040
INCOME FROM INVESTMENT
OPERATIONS
Net investment income............. .250 .204 .247 .277 .214 .243 .244
Net realized and unrealized
gains (losses) on securities..... 3.931 5.042 (.954) 2.039 .794 3.756 (.664)
----------- ----------- ----------- ----------- ---------- ---------- ----------
Total from investment operations.. 4.181 5.246 (.707) 2.316 1.008 3.999 (.420)
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net investment
income........................... (.250) (.204) (.247) (.277) (.214) (.243) (.244)
Dividends in excess of net
investment income................
Distributions from capital
gains............................ (1.471) (.885) (.976) (.479) (.484) (.876) (.426)
Distributions in excess of
capital gains.................... (.346)
Returns of capital................ (.001)
----------- ----------- ----------- ----------- ---------- ---------- ----------
Total distributions............... (1.721) (1.436) (1.223) (.756) (.698) (1.119) (.670)
----------- ----------- ----------- ----------- ---------- ---------- ----------
Net asset value, end of year....... $ 21.040 $ 18.580 $ 14.770 $ 16.700 $ 15.140 $ 14.830 $ 11.950
=========== =========== =========== =========== ========== ========== ==========
Total Return (B)................... 22.50% 35.52% (4.26%) 15.29% 6.84% 33.48% (3.36%
RATIOS TO AVERAGE NET ASSETS:
Expenses (D)...................... 1.06% 1.08% 1.00% 1.00% 1.00% 1.00% 1.04%
Net investment income............. 1.29% 1.20% 1.66% 2.04% 1.82% 2.34% 2.78%
Portfolio Turnover Rate............ 44.50% 37.59% 46.17% 81.96% 87.87% 152.56% 152.93%
Average Commission Rate Paid....... $ 0.0700
Net Assets, At End of Year......... $40,281,849 $29,144,161 $18,679,228 $14,885,337 $9,457,836 $4,445,996 $1,758,808
<CAPTION>
---------------------------------------
1989 1988 1987(A)
---------------------------------------
<S> <C> <C> <C>
Net asset value, beginning
of year........................... $ 10.830 $ 10.580 $ 10.610
INCOME FROM INVESTMENT
OPERATIONS
Net investment income............. .385 .246 .017
Net realized and unrealized
gains (losses) on securities..... 3.080 .229 (.027)
----------- ----------- -----------
Total from investment operations.. 3.465 .475 (.010)
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net investment
income........................... (.414) (.225) (.020)
Dividends in excess of net
investment income................
Distributions from capital
gains............................ (.841)
Distributions in excess of
capital gains....................
Returns of capital
Total distributions............... (1.255) (.225) (.020)
----------- ----------- -----------
Net asset value, end of year....... $ 13.040 $ 10.830 $ 10.580
=========== =========== ===========
Total Return (B)................... 32.08% 4.43% (0.09)(C)
RATIOS TO AVERAGE NET ASSETS:
Expenses (D)...................... -- -- --
Net investment income............. 3.35% 3.72% 3.27%
Portfolio Turnover Rate............ 135.04% 86.62% --
Average Commission Rate Paid
Net Assets, At End of Year......... $961,395 $655,146 $106,776
</TABLE>
_________________
(A) Per share data calculated from the date shares of the Growth and Income
Fund were first sold to the public on December 18, 1987. Ratios to average
net assets have been annualized.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of sales charge. Investment returns and principal
values will fluctuate and shares, when redeemed, may be worth more or less
than the original cost.
(C) Not annualized.
(D) A portion of all related party fees of the Fund have been waived for 1996,
1995, 1994, and 1993. All related party fees have been waived and all other
expenses of the Fund have been assumed in part for 1992, 1991 and 1990, and
in their entirety for the prior fiscal periods by Chubb Life. Had the fees
not been waived and expenses not been assumed, the ratios of expenses to
average net assets would have been 1.58% in 1996, 1.69% in 1995, 1.71% in
1994, 1.92% in 1993, 2.50% in 1992, 1991, 1990 and 1989, and 2.00% in 1988
and 1987, pursuant to the most restrictive state limitation.
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
CHUBB CAPITAL APPRECIATION FUND
--------------------------------------------------
PERIOD FROM
SEPTEMBER 1,
1995 THROUGH
DECEMBER 31,
1996 1995 (A)
--------------------------------------------------
<S> <C> <C>
Net asset value, beginning of year.................. $ 10.400 $ 10.000
INCOME FROM INVESTMENT OPERATIONS
Net investment income.............................. 0.067 0.037
Net realized and unrealized gains on securities.... 2.796 0.422
---------- ----------
Total from investment operations................... 2.863 0.459
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income............... (.067) (0.037)
Dividends in excess of net investment income ......
Distributions from capital gains................... (.206) (0.022)
Distributions in excess of capital gains...........
Returns of capital.................................
Total distributions................................ (.273) (0.059)
---------- ----------
Net asset value, end of year........................ $ 12.990 $ 10.400
---------- ----------
Total Return (B)................................... 27.53% 4.60%
RATIOS TO AVERAGE NEW ASSETS:
Expenses (D)....................................... 1.13% 1.25%(C)
Net investment income.............................. 0.86% 1.38%(C)
Portfolio Turnover Rate............................. 41.97% 2.73%
Average Commission Rate Paid........................ $ 0.0700
Net Assets, At End of Year.......................... $6,440,571 $1,596,254
</TABLE>
______________
(A) Per share data calculated from the date shares of the Capital Appreciation
Fund were first sold to the public on: September 1, 1995. Ratios to average
net assets have been annualized.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of sales charge. Investment returns and principal
values will fluctuate and shares, when redeemed, may be worth more or less
than the original cost.
(C) Per share data and ratios calculated on an annualized basis.
(D) A portion of all related party fees of the Fund have been waived for 1996
and 1995. Had the fees not been waived and expenses not been assumed, the
ratios of expenses to average net assets would have been 1.81% in 1996 and
2.50% in 1995; pursuant to the most restrictive state limitation.
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
CHUBB GLOBAL INCOME FUND
-------------------------------------------------
PERIOD FROM
SEPTEMBER 1,
1995 THROUGH
DECEMBER 31,
1996 1995 (A)
-------------------------------------------------
<S> <C> <C>
Net asset value, beginning of year..................... $ 10.210 $ 10.000
INCOME FROM INVESTMENT OPERATIONS
Net investment income................................. 0.551 0.116
Net realized and unrealized gains on securities...... 0.030 0.210
----------- -----------
Total from investment operations...................... 0.581 0.326
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income.................. (0.485) (0.116)
Dividends in excess of net investment income.......... (0.066)
Distributions from capital gains......................
Distributions in excess of capital gains..............
Returns of capital....................................
Total distributions................................... (0.551) (0.116)
----------- -----------
Net asset value, end of year........................... $ 10.240 $ 10.210
----------- -----------
Total Return (B)...................................... 5.95% 3.27%
RATIOS TO AVERAGE NET ASSETS:
(ANNUALIZED)
Expenses (D).......................................... 1.23% 1.75%(C)
Net investment income................................. 5.49% 4.48%(C)
Portfolio Turnover Rate................................ 80.70% 14.16%
Average Commission Rate Paid (E)....................... N/A
Net Assets, At End of Year............................. $12,226,878 $10,705,562
</TABLE>
(A) Per share data calculated from the date shares of the Global Income Fund
were first sold to the public on September 1, 1995. Ratios to average net
assets have been annualized.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of sales charge. Investment returns and principal
values will fluctuate and shares, when redeemed, may be worth more or less
than the original cost.
(C) Per share data and ratios calculated on an annualized basis.
(D) A portion of all related party fees of the Fund have been waived for 1996
and 1995. Had the fees not been waived and expenses not been assumed, the
ratios of expenses to average net assets would have been 1.68% in 1996 and
2.14% in 1995; pursuant to the most restrictive state limitation.
(E) During the year, the fund held less than 10% of the value of average net
assets in equity securities. Therefore, the Average Commission Rate Paid
has not been calculated.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
GENERAL DESCRIPTION
Chubb Investment Funds, Inc. (the "Company") is currently composed of seven
separate Funds, namely the Chubb Money Market Fund ("Money Market Fund"), the
Chubb Government Securities Fund ("Government Securities Fund"), the Chubb Total
Return Fund ("Total Return Fund"), the Chubb Tax-Exempt Fund ("Tax-Exempt
Fund"), the Chubb Growth and Income Fund, formerly known as the Chubb Growth
Fund, ("Growth and Income Fund"), the Chubb Capital Appreciation Fund (the
"Capital Appreciation Fund"), the Chubb Global Income Fund (the "Global Income
Fund") (collectively, the "Funds"). Each Fund is a distinct portfolio of
investments having its own investment objectives and policies.
The investment manager with respect to each Fund is Chubb Asset Managers,
Inc. (the "Investment Manager"), a wholly-owned subsidiary of The Chubb
Corporation. The investment administrator with respect to each Fund is Chubb
Investment Advisory Corporation (the "Investment Administrator"), a wholly-owned
subsidiary of Chubb Life Insurance Company of America ("Chubb Life"), which is a
wholly-owned subsidiary of The Jefferson Pilot Corporation, a North Carolina
Corporation.
The distributor of the shares of the Company is Chubb Securities
Corporation (the "Distributor"), a New Hampshire corporation, which is a wholly-
owned subsidiary of Chubb Life. The Distributor is registered as a broker-dealer
with the Securities and Exchange Commission and is a member of the National
Association of Securities Dealers. The Distributor is registered as a broker-
dealer in 50 states, the District of Columbia, the U.S. Virgin Islands, Guam and
Puerto Rico.
PERFORMANCE AND YIELD INFORMATION
From time to time, the Company may advertise the yield and/or the average
total return of some or all of its seven funds; the Tax-Exempt Fund may
advertise tax equivalent yields, as well. These figures are based on historical
information and are not intended to indicate future performance.
The Money Market Fund's yield quotations represent the Fund's investment
income, less expenses, expressed as a percentage of assets on an annualized
basis for a specified seven-day period. The yield is expressed as both a simple
annualized yield and a compound effective yield. The yield for the non-money
market Funds is calculated by dividing the specified Fund's net investment
income per share during a recent 30-day period by the maximum offering price per
share of that Fund on the last day of the period.
The average annual total return quotations of the Funds are determined by
computing the average annual percentage change in value of a $1,000 investment,
made at the maximum current public offering price for certain specified periods.
This computation assumes (i) reinvestment of all dividends and distributions in
shares of the Fund and (ii) all recurring fees are included for applicable
periods and the maximum current sales load is deducted from the initial
investment.
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives of each Fund, and certain fundamental
restrictions which are discussed in the Statement of Additional Information, may
not be changed without the approval of the shareholders of the Fund that is
affected by such change. The investment policies of a Fund used to achieve the
Fund's objectives that are non-fundamental may be changed by the Company's Board
of Directors without the approval of the shareholders.
Each Fund's investments will be subject to market fluctuations and risks
inherent in all securities, and there can be no assurance that a Fund's stated
objectives will be realized.
CHUBB MONEY MARKET FUND
Investment Objectives. The investment objective of the Money Market Fund
is to seek the highest possible level of current income as is consistent with
the preservation of capital and the maintenance of liquidity by investing
primarily in short-term high-grade debt obligations.
Investment Policies. The Money Market Fund invests only in securities with
remaining maturities of 13 months or less that present minimal credit risk and
are "eligible securities" as defined by Rule 2a-7 of the 1940 Act. "Eligible
Securities" must present minimal credit risks and, at the time of acquisition,
must be (1) securities which have been rated in
11
<PAGE>
one of the two highest rating categories by at least two nationally recognized
statistical rating organizations ("NRSROs"), such as Moody's Investors Services,
Inc. ("Moody's") or Standard & Poor's Corporation ("Standard & Poor's"), that
have issued a rating with respect to such securities or issuers of such
securities or by one NRSRO if that security or issuer has been rated only by one
NRSRO ("Requisite NRSRO's") or (2) unrated securities of comparable investment
quality. The Fund will invest at least 95% of its total assets in eligible
securities that are rated or whose issuers are rated within the highest rating
category for short-term debt obligations by the requisite NRSROs or unrated
securities of comparable quality. Such eligible securities include, primarily,
debt obligations that are issued or guaranteed as to the timely payment of
principal and interest by the United States Government (such as U.S. Treasury
bills, notes and bonds), its agencies (such as the Federal Housing
Administration and the Government National Mortgage Association), or its
instrumentalities (such as the Federal Home Loan Bank and the Federal National
Mortgage Association), and short-term corporate debt (such as commercial paper).
The Money Market Fund may also invest in (1) time deposits having remaining
maturities of seven (7) days or less of banks, including foreign branches of
United States banks and United States branches of foreign banks, (2)
certificates of deposit of banks which are members of the Federal Deposit
Insurance Corporation, including foreign branches of United States banks and
United States branches of foreign banks, (3) banker's acceptances, or other bank
obligations that are collateralized by underlying merchandise issued by banks,
and (4) Canadian, German, British or Japanese government treasury bills issued
and guaranteed as to the timely payment of principal and interest by the
respective country's government and payable in United States dollars with
remaining maturities of 13 months or less at the time of purchase. For a
discussion of certain risks involving U.S. dollar-denominated foreign money
market securities, see "SPECIAL INVESTMENT PRACTICES--Foreign Securities" below.
Foreign obligations purchased by the Fund will be limited to 10% of the Fund's
total assets. The Money Market Fund may also enter into repurchase agreements
involving the types of securities listed above. See "SPECIAL INVESTMENT
PRACTICES" below.
The Investment Manager will select investments, taking into consideration
rates, terms, and marketability of obligations as well as the capitalization,
earnings, liquidity, and other indicators of the financial condition of the
issuers. Because the market value of debt obligations fluctuates as an inverse
function of changing interest rates, the Money Market Fund seeks to minimize the
effect of such fluctuations by investing in instruments with remaining
maturities of 13 months or less.
The Money Market Fund's price per share will be determined in accordance
with the amortized cost valuation method, under which the Fund will maintain a
dollar-weighted average portfolio maturity of 90 days or less and will attempt
to maintain a constant net asset value of $1.00 per share.
Risk Factors. The principal risk factors associated with an investment in
the Money Market Fund are the risk of fluctuations in short-term interest rates
and the risk of default among one or more issuers of securities which comprise
the Money Market Fund's assets. Both the financial and market risks of an
investment in the Money Market Fund are expected to be less than those for the
other six Funds.
CHUBB GOVERNMENT SECURITIES FUND
Investment Objectives. The objective of the Government Securities Fund is
to earn as high a level of income as is consistent with maintaining safety of
principal by investing exclusively in debt obligations issued, guaranteed or
collateralized by the United States Government, its agencies or
instrumentalities.
Investment Policies. The Government Securities Fund invests in a variety
of U.S. Treasury obligations, which may differ in their interest rate,
maturities and time of issuance, including U.S. Treasury bills with a maturity
of 1 year or less, U.S. Treasury notes with a maturity of 1 to 10 years and U.S.
Treasury bonds with a maturity in excess of 10 years.
The Government Securities Fund also invests in debt obligations which are
issued, collateralized or guaranteed by the United States Government, its
agencies or instrumentalities, such as: (1) Government National Mortgage
Association ("GNMA") mortgage-backed pass-through certificates ("Ginnie Maes")
that are guaranteed as to timely payment of interest and principal by GNMA and
backed by the full faith and credit of the United States Treasury; (2) mortgage-
backed pass-through securities guaranteed as to the timely payment of interest
and the full return of principal by the Federal Home Loan Mortgage Corporation
("FHLMC"), a corporate instrumentality of the United States Government; (3) debt
of each of the Federal Home Loan Banks, instrumentalities of the United States
Government which have the right to borrow a specific amount from the United
States Treasury; and (4) pass-through debt certificates ("Fannie Maes") issued
and guaranteed as to timely payment of principal and interest by the Federal
National Mortgage Association ("FNMA"), a government-sponsored corporation owned
by private stockholders and supported by FNMA's right to borrow from the U.S.
Treasury, at the discretion of the U.S. Treasury, and (5) other types of
mortgage-backed securities issued by governmental entities, such
12
<PAGE>
as FHLMC and FNMA, including collateralized mortgage obligations ("CMOs") and
real estate mortgage investment conduits ("REMICs"). CMOs are bond-like
securities collateralized by conventional mortgages, issued in multiple classes,
thus providing investors with either short, intermediate or long maturities.
REMICs, created under the Tax Reform Act of 1986, are similar in structure to
CMOs and are used as conduits for holding fixed pool of mortgages secured by
real property. REMICs may issue multiple classes of interests. The Government
Securities Fund will not invest in residual interests of REMICs and CMOs due to
the volatile nature of such investments. Obligations of FHLMC and FNMA are not
backed by the full faith and credit of the United States Treasury. While the
United States Government provides financial support to government-sponsored
agencies and instrumentalities, there can be no assurance that it will continue
to do so since it is not obligated to by law. The Government Securities Fund may
also enter into repurchase agreements collateralized by the securities listed
above. See "SPECIAL INVESTMENT PRACTICES" below.
The Government Securities Fund may enter into agreements with certain
broker-dealers, with respect to no more than 10% of the Fund's total assets, to
buy United States Government securities for future delivery. When such
transactions are negotiated, the price is fixed at the time of commitment, but
delivery and payment for the securities can take place a month or more after the
date of the commitment to purchase. Contracts that provide for the future
delivery of securities on a "forward commitment," "when-issued" or a "delayed
delivery basis" are usually purchased at a price lower than the current market
price for similar mortgage instruments having the same interest rate. The
securities are subject to market fluctuation and no interest accrues to the
purchaser during this period. At the time of delivery of the securities, their
value may be more or less than the purchase price. The Fund will normally
receive a fee for entering into forward commitment contracts. See "DESCRIPTION
OF CERTAIN INVESTMENTS" in the Statement of Additional Information.
In order to enhance current income or reduce market interest rate risks,
the Government Securities Fund may engage in a variety of hedging strategies
involving the use of exchange-traded options and futures transactions. The
Government Securities Fund may, at times, write covered call options or purchase
put options with respect to certain of its portfolio securities, and will
purchase or write such options on interest rate futures contracts and
appropriate securities indexes. The Government Securities Fund may also purchase
or sell interest rate futures contracts. In addition, the Government Securities
Fund may also enter into closing purchase and sale transactions with respect to
such options and futures. See "SPECIAL INVESTMENT PRACTICES" below regarding the
Fund's use of options and futures contracts and risk considerations involving
such instruments.
The Investment Manager anticipates that the Fund's average portfolio
maturity will not exceed 15 years, with the precise term to maturity dependent
upon general market and economic conditions.
Risk Factors. The value of the debt securities held by the Government
Securities Fund will change as interest rates fluctuate. An increase in market
interest rates or prior payment of mortgage-backed securities will generally
reduce the value of this Fund's investments, and a decline in market interest
rates will generally increase the value of this Fund's investments. GNMA
securities and other mortgage-backed securities in which the Fund invests, may
not be an effective means of "locking in" long-term interest rates as the Fund
must reinvest scheduled and unscheduled principal payments. At the time
principal payments or prepayments are received by the Fund and reinvested,
prevailing interest rates may be higher or lower than the Fund's current yield.
As a result, the income or yield of the Government Securities Fund under such
circumstances may vary significantly.
CHUBB TOTAL RETURN FUND
Investment Objectives. The objective of the Total Return Fund is to
produce the highest total return through a combination of income and capital
appreciation as is consistent with reasonable risk by investing in a portfolio
of income-producing debt and equity securities.
Investment Policies. To achieve its objective, the Total Return Fund
intends to invest between 30% and 70% of its assets in equity securities and
bonds, notes, warrants or preferred stocks that can be exchanged for or
converted into common stocks, depending upon market and economic conditions. The
Fund will not restrict its investments in equity securities of companies to any
particular capitalization. In its equity investments, the Fund will emphasize
issues with relatively low price to earnings ratios, above average dividend
yields, and relatively low price to book value ratios, as compared to such
ratios and yields for the market in general. The balance of the Total Return
Fund, except assets invested for defensive or hedging purposes, will be invested
in rated or unrated fixed income securities, including obligations of the United
States Government, and its agencies or instrumentalities, and corporate debt
obligations which are rated Baa or BBB or higher by Moody's, Standard & Poor's
or other NRSROs or, if not rated, are of equivalent quality as determined by the
Fund's Investment
13
<PAGE>
Manager. Debt securities rated Baa or BBB by Moody's or Standard & Poor's are
considered by these rating agencies to be investment-grade obligations and are
regarded as having adequate capacity to pay interest and repay principal,
although adverse economic conditions or changing circumstances are more likely
to lead to a weakening of such capacity than would be the case for higher-grade
bonds. Such bonds may be considered to have certain speculative characteristics.
In the event that the ratings of securities held by the Fund fall below
investment grade, the Fund will not be obligated to dispose of such securities
and may continue to hold such securities if, in the opinion of the Investment
Manager, such investment is considered appropriate under the circumstances. The
Investment Manager anticipates that the average portfolio maturity of the Fund's
fixed income securities will not exceed 15 years, with the precise term to
maturity dependent upon general market and economic conditions.
The Total Return Fund will invest primarily in equity and debt securities
of domestic issuers, as described above. However, when deemed appropriate by the
Investment Manager, the Fund may invest in and hold up to 20% of its total
assets in equity and debt securities of foreign issuers. Such securities may
include exchange-traded and over-the-counter securities of foreign issuers and
Depositary Receipts. Such securities may be traded in the United States or in
foreign markets. For purposes hereof, securities of foreign issuers means
securities of issuers organized or whose principal place of business is outside
the United States, or whose securities are principally traded in securities
markets outside the United States. The Fund's investments in foreign securities
primarily will be in equity securities but also may include investment grade
debt obligations of foreign companies and governments. See "SPECIAL INVESTMENT
PRACTICES" below and "DESCRIPTION OF CERTAIN INVESTMENTS--Foreign Securities"
and "Depositary Receipts" in the Statement of Additional Information.
For hedging purposes, the Total Return Fund may write covered call options
and purchase put options with respect to certain of its portfolio securities,
and will purchase and write such options on interest rate futures contracts,
stock index futures contracts and appropriate securities indexes. The Total
Return Fund may also purchase or sell futures contracts, including stock index
futures contracts or interest rate futures contracts. The Fund may also enter
into closing transactions with respect to such options and futures contracts.
See "SPECIAL INVESTMENT PRACTICES" below regarding the Fund's use of options and
futures contracts and risk considerations involving such instruments.
For temporary or defensive purposes, the Fund may hold a portion of its
assets in cash, high-grade money market instruments or U.S. Treasury bills, or
in repurchase agreements. See "SPECIAL INVESTMENT PRACTICES" below.
Risk Factors. The price of the equity securities in which the Total Return
Fund invests will fluctuate day to day and, as a result, the value of an
investment in the Total Return Fund will vary based upon such market conditions.
The value of the Total Return Fund's investment in fixed income securities will
vary depending on such factors as prevailing interest rates. Moreover, in the
case of debt securities, investments are subject to the ability of the issuer to
make payments of principal and interest when due. Although the Total Return Fund
seeks to reduce both financial and market risks associated with any one
investment medium, performance of the Fund will depend on such additional
factors as timing the mix of investments and the ability of the Investment
Manager to react to changing market conditions.
CHUBB TAX-EXEMPT FUND
Investment Objectives. The objective of the Tax-Exempt Fund is to provide
a stable level of current income which is exempt from Federal income taxes,
consistent with the preservation of capital, by investing primarily in
investment-grade tax-exempt securities.
Investment Policies. It is a fundamental policy of the Tax-Exempt Fund to
invest, under normal market conditions, at least 80% of its assets in tax-exempt
securities. As part of this policy, in determining whether the Fund has invested
at least 80% of its assets in tax-exempt securities, obligations on which the
interest is treated as an item of tax preference for purposes of the alternative
minimum tax are not counted as tax-exempt securities.
To achieve its investment objective, the Fund will invest primarily in: (1)
municipal bonds or notes, which, on the date of investment, have received one of
the four highest ratings issued by Moody's (Aaa, Aa, A and Baa), Standard &
Poor's (AAA, AA, A and BBB), or other NRSROs or, if not rated, are of comparable
quality to obligations so rated in the judgment of the Investment Manager; and
(2) short-term tax-exempt instruments, having a maturity of 13 months or less,
which have received one of the three highest possible ratings issued by either
Moody's or Standard & Poor's (MIG 1, MIG 2, MIG 3 or SP-1, SP-2, SP-3), or, if
not rated, are of comparable quality to obligations so rated in the judgment of
the Investment Manager. Securities rated Baa or BBB by Moody's or Standard &
Poor's are considered to be investment-grade obligations and are regarded as
having adequate capacity to pay interest and repay principal, although adverse
economic conditions or
14
<PAGE>
chang ing circumstances are more likely to lead to a weakening of such capacity
than for higher-grade bonds. Such securities may be considered to have certain
speculative characteristics. In the event that the ratings of securities held by
the Fund fall below investment grade, the Fund will not be obligated to dispose
of such securities and may continue to hold such securities if, in the opinion
of the Investment Manager, such investment is considered appropriate under the
circumstances. The Investment Manager anticipates that, over time, the average
portfolio maturity will approximate 20 years, with the precise time to maturity
dependent upon general market and economic conditions.
Of the amount of the Fund's assets invested in tax-exempt securities, the
Investment Manager expects that under normal market and economic conditions at
least 65% of such assets will be invested in high-grade tax-exempt bonds which
have received one of the three highest ratings by Moody's, Standard & Poor's or
other NRSROs or, if not rated, will be of comparable quality to obligations so
rated in the judgment of the Investment Manager.
The Fund may enter into agreements with banks or broker-dealers to purchase
some securities on a "forward commitment," "when issued" or on a "delayed
delivery" basis. Such agreements involve a commitment to purchase securities at
a price that is fixed at the time of commitment for delivery at a future date,
which may be up to three months in the future. The Fund will not pay for the
securities or begin earning interest on them until the securities are received.
The securities so purchased are subject to market fluctuations so that at the
time of delivery, the value of such securities may be more or less than the
purchase price.
The Tax-Exempt Fund may endeavor to reduce risks to the Fund's assets
resulting from interest rate fluctuations and market volatility by writing
covered call options and purchasing put options with respect to certain of its
portfolio securities and appropriate securities indexes and interest rate
futures contracts. The Tax-Exempt Fund may also purchase and sell municipal bond
futures contracts, including Municipal Bond Index Futures, which involves an
investment in an index composed of the average prices of 40 selected municipal
bonds. The Fund may also enter into closing transactions with respect to such
options and futures contracts. See "SPECIAL INVESTMENTS PRACTICES" below
regarding the Fund's use of options and futures contracts and risk
considerations involving such instruments. The Tax-Exempt Fund may invest up to
20% of its assets in taxable securities for liquidity or for temporary defensive
purposes, although at least 80% of the Fund's income during each year will be
derived from tax-exempt securities. Taxable investments may consist of United
States Government securities, securities of United States Government agencies
and instrumentalities, bank certificates of deposit and banker's acceptances,
short-term corporate debt securities such as commercial paper, and repurchase
agreements. See "DESCRIPTION OF CERTAIN INVESTMENTS" in the Statement of
Additional Information.
Risk Factors. Although dividends to shareholders from the Tax-Exempt Fund
will generally be exempt from Federal income taxes, distributions of income from
investments in taxable securities and capital gains, if any, realized by the
Tax-Exempt Fund would be taxable to the shareholder. Moreover, distributions
paid to shareholders of the Tax-Exempt Fund may be subject to state and local
taxation. The value of the Tax-Exempt Fund's investments will vary inversely
with prevailing interest rates and may vary according to such factors as the
credit quality and maturity of the portfolio.
CHUBB GROWTH AND INCOME FUND
Investment Objectives. The objective of the Growth and Income Fund is to
seek long-term growth by investing primarily in a wide range of equity issues
that the Investment Manager believes will offer possibilities of capital
appreciation and, secondarily, to seek a reasonable level of current income.
Investment Policies. The Growth and Income Fund intends to invest at least
80% of its assets in common stocks and other equity securities such as preferred
stocks and securities convertible into common stock which are either listed on
the New York Stock Exchange, traded over-the-counter or, to a lesser extent,
listed on other national securities exchanges. Securities are selected
principally for potential appreciation, based upon such criteria as relatively
low price to earnings ratio and relatively low price to book value ratio, as
compared to such ratios for the market in general and, secondarily, for current
income and increasing future dividends. While the Growth and Income Fund intends
to invest at least 60% of its assets in securities which have paid dividends or
interest within the preceding 12 months, the Fund may invest in securities not
currently paying dividends where the Investment Manager anticipates that they
will increase in value.
The Growth and Income Fund may also invest for temporary or defensive
purposes in high-grade debt securities and money market securities, including
United States Government securities, commercial paper and bank obligations, and
repurchase agreements.
15
<PAGE>
The Growth and Income Fund will invest primarily in equity securities
issued by United States companies. However, when deemed appropriate by the
Investment Manager, the Fund may invest in and hold up to 20% of its total
assets in equity and debt securities of foreign issuers. Such securities may
include exchange-traded and over-the-counter securities of foreign issuers,
American Depositary Receipts ("ADRs") European Depositary Receipts ("EDRs") and
Global Depositary Receipts ("GDRs") (collectively "Depositary Receipts"). Such
securities may be traded in the United States or in foreign markets. For
purposes hereof, securities of foreign issuers means securities of issuers
organized or whose principal place of business is outside the United States, or
whose securities are principally traded in securities markets outside the United
States. The Fund's investments in foreign securities primarily will be in equity
securities issued by companies organized or located outside the United States,
but may also include investment grade debt obligations issued by foreign
companies and governments. See "SPECIAL INVESTMENT PRACTICES" below and
"DESCRIPTION OF CERTAIN INVESTMENTS--Foreign Securities" and "Depositary
Receipts" in the Statement of Additional Information.
The Growth and Income Fund may write covered call options or purchase put
options with respect to certain of its portfolio securities or purchase stock
index options for hedging purposes or to enhance income. The Growth and Income
Fund may also purchase or write futures contracts, including stock index futures
contracts. The Fund may also enter into closing transactions with respect to
such options and futures contracts. See "SPECIAL INVESTMENT PRACTICES" below
regarding the Fund's use of options and futures contracts and risk
considerations involving such instruments.
Risk Factors. The prices of the securities purchased for the Growth and
Income Fund will tend to fluctuate more than the prices of securities purchased
for the other Funds. As a result, the net asset value of the Growth and Income
Fund may experience greater short-term and long-term variations than such other
Funds.
CHUBB CAPITAL APPRECIATION FUND
Investment Objectives. The objective of the Capital Appreciation Fund is
to seek long-term appreciation by investing primarily in equity securities of
companies that the Investment Manager believes will offer possibilities of
capital appreciation. Investment Policies. The Capital Appreciation Fund intends
to invest at least 80% of its assets in common stocks and other equity
securities such as preferred stocks and securities convertible into common
stock. The Capital Appreciation Fund will only invest in convertible debt
securities rated in the three highest rating categories by any nationally
recognized statistical rating organization ("NRSRO") or comparable unrated
securities. The Capital Appreciation Fund intends to invest at least 65% of its
total assets in securities of companies that at the time of purchase have total
market capitalizations between $500 million and $2.5 billion. In selecting the
Fund's investments, the Investment Manager seeks to identify attractive
investment opportunities that have not become widely recognized by other
analysts or the financial press. Securities are selected principally for their
capital appreciation potential, based upon such criteria as relatively low price
to earnings ratio and relatively low price to book value, as compared to the
market in general. Current income and increasing future dividends are only
incidental or secondary considerations in seeking portfolio securities.
The Capital Appreciation Fund will invest primarily in equity securities
issued by domestic companies. However, when deemed appropriate by the Investment
Manager, the Fund may invest in and hold up to 20% of its total assets in equity
and debt securities of foreign issuers. Such securities may include exchange-
traded and over-the-counter securities of foreign issuers and Depositary
Receipts. Such securities may be traded in the United States or in foreign
markets. For purposes hereof, securities of foreign issuers means securities of
issuers organized or whose principal place of business is outside the United
States, or whose securities are principally traded in securities markets outside
the United States. The Fund's investments in foreign securities primarily will
be in equity securities issued by companies organized or located outside the
United States, but may also include investment grade debt obligations issued by
foreign companies and governments. See "SPECIAL INVESTMENT PRACTICES" below and
"DESCRIPTION OF CERTAIN INVESTMENTS--Foreign Securities" and "Depositary
Receipts" in the Statement of Additional Information.
The Capital Appreciation Fund may write covered call options and purchase
put options with respect to certain of its portfolio securities and purchase
stock index options for hedging purposes only and not for speculation. The
Capital Appreciation Fund may also purchase or write futures contracts,
including stock index futures contracts. The Fund may also enter into closing
transactions with respect to such options and futures contracts. These
investment techniques are considered derivative investing. See "SPECIAL
INVESTMENT PRACTICES" below regarding the Fund's use of derivatives such as
options and futures contracts and risk considerations involving such
instruments.
16
<PAGE>
The Capital Appreciation Fund may also invest for temporary defensive
purposes in high-grade debt securities and money market securities, including
United States Government securities, commercial paper and bank obligations, and
repurchase agreements. For more information regarding the Fund's investments and
risks see "DESCRIPTION OF CERTAIN INVESTMENTS" in the Statement of Additional
Information.
Risk Factors. The prices of the securities purchased for the Capital
Appreciation Fund will tend to fluctuate more than the prices of securities
purchased for certain of the other Funds, including in particular the Money
Market Fund, Government Fund and Tax-Exempt Fund. As a result, the net asset
value of the Capital Appreciation Fund may experience greater short-term and
long-term variations than such other Funds. Derivative securities can be
volatile investments and involve certain risks which may reduce the Fund's
returns.
CHUBB GLOBAL INCOME FUND
Investment Objectives. The objective of the Global Income Fund is to seek
high current income and capital appreciation by investing primarily in debt
securities of domestic and foreign issuers.
Investment Policies. In pursuit of its investment objective, the Global
Income Fund will invest at least 65% of its assets in bonds and debentures. The
Fund may invest in debt securities issued by: (i) domestic and foreign
governments and their agencies and political subdivisions; (ii) corporations and
financial institutions, and (iii) supranational entities such as the
International Bank for Reconstruction and Development ("World Bank"), the Asian
Development Bank, the European Development Bank, and the European Community. At
least 75% of the Fund's debt securities will be rated investment grade by
Standard & Poor's Corporation ("S&P") or Moody's Investors Service, Inc.
("Moody's"), or if unrated, deemed to be of comparable quality in the judgment
of the Investment Manager. No more than 25% of the Fund's total assets may be
invested in debt that is rated lower than investment grade (junk bonds). The
Fund will allocate its assets among debt securities of issuers in three separate
investment areas: (1) the United States, (2) developed foreign countries, and
(3) emerging markets. The Fund considers emerging markets to include all
countries except the United States, Canada, Japan, Australia, New Zealand and
most countries in Western Europe. See "Additional Risk Factors" below. The Fund
will select particular debt securities in each investment area based upon their
relative investment merit. Under normal conditions, the Fund will have at least
65% of its total assets in at least three different countries (one of which may
be the United States). For temporary or defensive purposes, the Fund may invest
substantially all its assets in one or two countries. Certain of the Fund's
investments may have speculative characteristics. See "Additional Risk Factors"
and "Special Investment Practices" below and "DESCRIPTION OF CERTAIN
INVESTMENTS" in the Statement of Additional Information.
The average maturity of debt securities in the Global Income Fund's
portfolio will fluctuate depending on the Investment Manager's judgment as to
future interest rates and market conditions.
The Global Income Fund may also buy and sell derivatives such as financial
futures contracts, bond index futures contracts, and foreign currency futures
contracts. The Global Income Fund may purchase and sell any of these futures
contracts for hedging purposes only and not for speculation. It may engage in
such transactions only if the total contract value of the futures contracts does
not exceed 20% of the Global Income Fund's total assets. In addition, the Global
Income Fund may invest in options on foreign currency exchange contracts,
options on foreign currencies, including cross currency hedges, "when issued"
securities and collateralized mortgage obligations, and lend up to 30% of its
portfolio securities. For more information about derivatives see "Special
Investment Practices" and "Derivatives" below.
For temporary or defensive purposes, the Fund may invest in high quality
domestic money market instruments, high quality domestic short-term debt
securities or may hold the Fund's assets in cash or cash equivalents without
limitation.
The Global Income Fund normally invests in a substantial number of issues;
however, the Global Income Fund is classified as "non-diversified" under the
Investment Company Act of 1940, as amended, (the "1940 Act") and the value of
its shares may fluctuate more than the shares of a diversified fund. (For More
Information See Additional Risk Factors)
SPECIAL INVESTMENT PRACTICES
Unless otherwise specified, each of the investment practices described in
this section is not deemed to be a fundamental objective and may be changed by
the Company's Board of Directors without approval of a majority of the Company's
outstanding shares. For a further explanation of each Fund's investment
practices and restrictions, including the types of
17
<PAGE>
such investments and the risks associated with such investments, see
"DESCRIPTION OF CERTAIN INVESTMENTS" in the Statement of Additional Information.
EQUITY SECURITIES
The Total Return Fund, Growth and Income Fund, Capital Appreciation Fund,
and the Global Income Fund each may invest in equity securities of companies
having various capitalizations, companies, having including small capitalization
companies (i.e., average market capitalizations below $500 million), mid-
capitalization companies (i.e., average market capitalizations below $500
million to $2.5 billion), and large capitalization companies (i.e., above $2.5
billion), although the Capital Appreciation Fund will be invested primarily in
securities of mid-capitalization. The Investment Manager believes that equity
securities of small and mid-capitalization companies may provide greater growth
potential than stocks of large capitalization companies. Nevertheless, small and
mid-capitalization companies often have limited product lines, fewer market or
financial resources, and may be more dependent upon one person or a few key
people for management. In addition, the stocks of such small and mid-
capitalization companies may be subject to greater price volatility than large
capitalization stocks both because such stocks typically trade in lower volume
and because such companies may be more vulnerable to changing economic
conditions than large capitalization companies.
REPURCHASE AGREEMENTS
All the Funds may enter into repurchase agreements, whereby an investor,
such as one of the Funds, purchases securities (referred to as "underlying
securities") from well-established securities broker-dealers or banks, subject
to agreement by the seller to repurchase the securities at a stated price on a
specified date. Repurchase agreements involve certain risks not associated with
direct investment in securities, including the risk that the original seller
will default on its obligations to repurchase, as a result of bankruptcy or
otherwise. To minimize this risk, a Fund will enter into repurchase agreements
only if the repurchase agreement is structured in a manner reasonably designed
to collateralize fully the value of a Fund's investment during the entire term
of the agreement and in accordance with guidelines regarding the
creditworthiness of the seller determined by the Board of Directors of the
Company. Currently, these guidelines require sellers who are broker-dealers to
have a net worth of at least $25,000,000, although this requirement may be
waived by the Board of Directors of the Company on the recommendation of the
Investment Manager and banks to have assets of at least $1,000,000,000. The
underlying security, held as collateral, will be marked to market on a daily
basis, and must be of high-quality. With respect to the Money Market Fund, the
underlying security must be either a United States Government security or a
security rated in the highest rating category by the Requisite NRSROs and must
be determined to present minimal credit risk. Nevertheless, in the event that
the other party to the agreement fails to repurchase the securities subject to
the agreement, a Fund could suffer a loss to the extent proceeds from the sale
of the underlying securities held as collateral were less than the price
specified in the repurchase agreement.
REVERSE REPURCHASE AGREEMENTS
The Global Income Fund may enter into reverse repurchase agreements with
the same parties with which it enters into repurchase agreements. Under a
reverse repurchase agreement, the Fund would sell portfolio securities and agree
to repurchase them at a particular price at a future date. At the time the Fund
enters into the reverse repurchase agreement it will establish and maintain a
segregated amount with the custodian containing cash or liquid securities having
a value not less than the repurchase price, including interest. Reverse
repurchase agreements involve risk that the market value of the securities
retained in lieu of the sale may decline below the price of the securities the
Fund has sold but is obligated to repurchase. In the event the buyer of
securities files for bankruptcy or becomes insolvent, such buyer or its trustee
or receiver may receive an extension of time to determine whether to enforce the
Fund's obligation to repurchase the securities and the Fund's use of the
proceeds of the reverse repurchase agreement may effectively be restricted
pending such decision. Reverse repurchase agreements will be treated as
borrowings for purpose of calculating the Fund's borrowing limitations.
FOREIGN SECURITIES, DEPOSITORY RECEIPTS
Subject to the investment objectives and policies of each Fund, the Money
Market Fund, the Total Return Fund, the Growth and Income Fund, the Capital
Appreciation Fund and the Global Income Fund may invest in foreign securities.
Although investment in foreign securities by the Money Market Fund, the Total
Return Fund, the Growth and Income Fund, the Capital Appreciation Fund are
intended to reduce risk by providing further diversification, such investments,
as well as those of the Global Income Fund, involve certain additional risks,
including the possibility of: (1) adverse foreign political and economic
developments, (2) less publicly available information about foreign issuers, (3)
less comprehensive accounting,
18
<PAGE>
reporting and disclosure requirements, (4) less government regulation and
supervision of foreign stock exchanges, brokers and listed companies, (5)
expropriation or confiscatory taxation that could affect investments, (6)
currency blockages which would prevent cash from being brought back in the
United States, (7) generally higher brokerage and custodial costs than those of
domestic securities, (8) with respect to foreign securities denominated in
foreign currencies, the costs associated with the exchange of currencies and the
possibility of unfavorable changes in currency rates and exchange rate
regulations and (9) settlement of transactions being delayed beyond periods
customary in the United States.
The Total Return Fund, Government Securities, the Growth and Income Fund
and Capital Appreciation Fund may also invest in Depository Receipts, (ADRs,
GDRs and EDRs.) ADRs are certificates issued by a United States bank
representing the right to receive securities of a foreign issuer deposited in a
foreign branch of a United States bank and traded on a United States exchange or
over-the-counter. European Depository Receipts ("EDRs") and Global Depository
Receipts ("GDRs") are typically issued by foreign banks or trust companies,
although they may be by US banks or trust companies, and also evidence ownership
of underlying securities issued by a foreign or U.S. securities market.
Generally, Depository Receipts in registered form are designed for use in the
U.S. securities market and Depository Receipts in bearer form are designed for
use in securities markets outside the United States. Depository Receipts may not
necessarily be denominated in the same currency as the underlying securities in
to which they may be converted. Depository Receipts may be issued pursuant to
sponsored or unsponsored programs. In sponsored programs, an issuer has made
arrangements to have its securities traded in the form of Depository Receipts.
In unsponsored programs the issuer may not be directly involved in the creation
of the program. In some cases it may be easier to obtain financial information
from an issuer that has participated in the creation of the sponsored program.
Accordingly, there may be less information available regarding issuers of
securities underlying unsponsored programs and there may not be a correlation
between such information and the market value of the Securities. Brokerage
commissions will be incurred if ADRs are purchased through brokers on the U.S.
stock exchanges.
Depository Receipts also involve the risks of other investment in foreign
securities, for purposes of each Fund's investment policies, a Fund's investment
in Depository Receipts will be deemed to be investments in the underlying
securities.
LENDING OF PORTFOLIO SECURITIES
The Global Income Fund may seek to increase its income by lending portfolio
securities. Under present regulatory policies such loans may be made to
institutions such as broker dealers, and are required to be secured continuously
by collateral in cash, cash equivalents or U.S. Government securities maintained
on a current basis in an amount at least equal to the market value of the
securities loaned. It is intended that the value of securities loaned would not
exceed 30% of the value of the total assets of the Fund.
DERIVATIVES
A "derivative" is a financial contract whose value depends upon the value
of an underlying instrument or asset--a commodity, bond, mortgage, equity or
currency or a combination of these.
The Government Securities Fund, Total Return Fund, Growth and Income Fund,
Capital Appreciation Fund and Global Income Fund may utilize derivatives in
seeking to meet these investment objectives. The risks of derivative investing
are set forth below.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS AND OPTIONS ON FOREIGN CURRENCIES
The Total Return Fund, Growth and Income Fund, Capital Appreciation Fund
and the Global Income Fund may enter into forward foreign currency exchange
contracts ("forward currency contracts") to attempt to minimize the risk to the
Fund from adverse changes in the relationship between the U.S. dollar and
foreign currencies. A foreign currency contract is an obligation to purchase or
sell a specific currency for an agreed price at a future date which is
individually negotiated and privately traded by currency traders and their
customers. The Total Return Fund, Growth and Income Fund and the Global Income
Fund may enter into a forward exchange contract when for example the Fund enters
into a contract for the purchase or sale of a security denominated in a foreign
currency in order to lock in the U.S. dollar price of the security or the U.S.
dollar equivalent of interest and dividends to be paid on such securities, or to
hedge against the possibility that the currency of a foreign country in which a
Fund has investments may suffer a decline against the U.S. dollar. A forward
contract is an obligation to purchase or sell a specific currency at a future
date, which may be any fixed number of days from the date of
19
<PAGE>
the contract agreed upon by the parties, at a price set at the time of the
contract agreed upon by the parties, at a price set at the time of the contract.
For example, a Fund may purchase a particular security or enter into a forward
currency contract to preserve the U.S. dollar price of securities it intends to
or has contracted to purchase. Alternatively, the Fund might sell a particular
security on either a spot (cash) basis at the rate then prevailing in the
currency exchange market or on a forward basis by entering into a forward
contract to purchase or sell currency, to hedge against an anticipated decline
in the U.S. dollar value of securities it intends or has contracted to sell.
This method of attempting to hedge the value of the Fund's portfolio securities
against a decline in the value of a currency does not eliminate fluctuations in
the underlying prices of the securities. None of the Funds is obligated to
engage in any such currency hedging operations, and there may be no assurance as
to the success of any hedging operations, and there can be no assurance as to
the success of any hedging operations which a Fund may implement. Although the
strategy of engaging in foreign currency transactions could reduce the risk of
loss due to a decline in the value of the hedged currency, it could also limit
the potential gain from an increase in the value of the currency. No Fund,
except the Global Income Fund, intends to maintain a net exposure to such
contracts where the fulfillment of the Fund's obligations under the contracts
would obligate the Fund to deliver an amount of foreign currency in excess of
the value of the Fund's portfolio securities or other assets denominated in that
currency.
CROSS CURRENCY HEDGES
The Global Income Fund may also enter into a form of foreign currency
option transaction known as cross hedges of currencies by entering into
transactions to purchase or sell one or more currencies that are expected to
increase or decline in value relative to other currencies in which the fund has
or which the fund expects to have exposure.
WRITING COVERED CALL OPTIONS AND PURCHASING PUT OPTIONS
In order to earn additional income or to protect partially against declines in
the value of its securities, all the Funds, except the Money Market Fund, may
write (sell) covered call options and purchase call options to the extent
necessary to close out option positions previously written by the Fund. A call
option gives the holder (purchaser) the right to buy and obligates the writer
(seller) to sell, in return for a premium paid, the underlying security at the
exercise price during the option period. The Funds, in keeping with their
individual investment objectives and policies, may write call options with
respect to individual equity securities and bonds, and stock and bond indexes
which correlate with the Fund's particular portfolio securities. The Funds will
write only covered call options which are listed on exchanges, and will not
write a covered call option if, as a result, the aggregate market value of all
portfolio securities covering all call options or subject to put options exceeds
25% of the value of the Fund's total assets. The Funds cover options they have
sold for example, by holding the underlying securities or (the usual practice in
the case of a call) or by other means which would permit timely satisfaction of
the Fund's obligations as writer or the option, such as by depositing in a
separate account liquid high grade debt securities, or cash, equal in value to
the exercise price of the option (the usual practice in the case of a put.)
All Funds, except the Money Market Fund, may also purchase put options with
respect to equity securities and bonds, and stock and bond indexes which
correlate with their portfolio securities, limited to no more than 5% of the
Fund's total assets. As the holder of a put option, the Fund has the right to
sell the underlying security at the exercise price at any time during the option
period.
The Global Income Fund may also purchase and write put and call options on
foreign currencies for the purpose of protecting against declines in the dollar
value of foreign portfolio securities and against the U.S. dollar cost of
foreign securities to be acquired. Use of forward currency contracts, options
and futures involve certain risks and transaction costs which it might not
otherwise be subject, including dependence on the Investment Manager's ability
to predict movements in the prices of currency markets. If the Investment Manger
incorrectly forecasts the currency exchange rates or interest rates in utilizing
a strategy for the Fund it would be in a better position if it had never hedged
at all. In addition certain provisions of the Internal Revenue Code of 1986 have
the effect of limiting the extent to which the Fund may enter into foreward
contracts or futures contracts or engage in options transactions. (see Cross
Currency Hedges above.)
Although these investment practices will be used to generate additional
income or to attempt to reduce the effect of any price decline in the security
subject to the option, they do involve certain risks that are different, in some
respects, from investment risks associated with similar funds which do not
engage in such activities. These risks include the following: writing covered
call options--the inability to effect closing transactions at favorable prices
and the inability to participate in the appreciation of the underlying
securities above the exercise price; and purchasing put options--possible loss
of the entire premium paid. In addition, the effectiveness of hedging through
the purchase of securities index options will depend upon the extent to which
price movement in the portion of the securities portfolios being hedged
correlate with price movements
20
<PAGE>
in the selected securities index. Perfect correlation may not be possible
because (i) the securities held or to be acquired by a Fund may not exactly
match the composition of the securities indexes on which options are written or
(ii) the price movements of the securities underlying the option may not follow
the price movements of the portfolio securities being hedged. If the Investment
Manager's forecasts regarding movements in securities prices or interest rates
or currency prices or other economic factors are incorrect, the Fund's
investment results may have been better without the hedge. A more thorough
description of these investment practices and their associated risks is
contained in the Company's Statement of Additional Information.
Futures Contracts. All the Funds, except the Money Market Fund, may
purchase and sell futures contracts on debt securities and indexes of debt
securities (i.e., interest rate futures contracts) as a hedge against or to
minimize adverse principal fluctuations resulting from anticipated interest rate
changes. The Funds may also, where appropriate, enter into stock index futures
contracts to provide a hedge for a portion of the Fund's equity holdings. Stock
index futures contracts may be used as a way to implement either an increase or
decrease in portfolio exposure to the equity markets in response to changing
market conditions. Each Fund may also write covered call options and purchase
put options on futures contracts of the type which that Fund is permitted to
purchase. The Global Income Fund may buy and sell foreign currency futures
contracts and bond index futures contracts. An index futures contract is an
agreement to take or make delivery of an amount of cash based upon the
difference between the value of the index at the beginning and the end of the
contract period. A futures contract on a foreign currency is an agreement to buy
or sell a specified amount of a currency at a set price on a specified future
date. The Funds will not enter into futures contracts for speculation and will
only enter into futures contracts that are traded on national futures exchanges.
No Fund will enter into futures contracts or options thereon if immediately
thereafter the sum of the amounts of initial margin deposits on the Fund's
existing futures contracts and premiums paid for options on unexpired futures
contracts would exceed 5% of the value of the Fund's total assets.
When a Fund enters into a futures contract it must make an initial deposit
known as initial margin as a partial guarantee of its performance under the
contract, as the value of the contract fluctuates, either party to the contract
is required to make additional margin payments, known as variation margin to
cover any additional obligation it may have under the contract. In addition, the
Fund must deposit in a segregated account additional cash or high quality
securities to ensure the futures contract are unleveraged. The value of assets
held in the segregated account must be equal to the daily market value of all
outstanding futures contracts less any amounts deposited as margin.
SWAPS, CAPS, FLOORS AND COLLARS
The Global Income Fund may enter into interest rate, currency and index
swaps and purchase or sell related caps, floors and collars. The Fund expects to
enter into these transactions primarily to protect against currency
fluctuations, as a technique for managing the portfolio's duration (i.e., the
price sensitivity to changes in interest rates) or to protect against any
increase in the price of securities the Fund anticipates purchasing in the
future. The Fund intends to use these transactions as hedges, and neither will
sell interest rate caps or floors if it does not own the securities or other
instruments providing an income stream roughly equivalent to what the Fund may
be obligated to pay.
Interest rate swaps involve an agreement between the Global Income Fund and
another party to exchange their respective commitments to pay or receive
interest with respect to specified (notional) amount of principal (i.e. an
exchange of floating rate payments by one party for fixed rate payments by the
other. A currency swap is an agreement to exchange cash flows on a notional
amount based on changes in the values of the specified indices.
The purchase of an interest rate cap entitles the purchaser in exchange for
the premium paid to receive payments on a notional amount from the party selling
the cap to the extent that a specified index falls below a predetermined
interest rate or amount. A collar is a combination of a cap and a floor that
preserves a certain return within a predetermined range of interest rates or
values.
RESTRICTED SECURITIES
All of the Funds may also purchase securities that are not registered under
the Securities Act of 1933, as amended (the "1933 Act") ("restricted
securities"), including those that can be offered and sold to "qualified
institutional buyers" under Rule 144A under the 1933 Act ("Rule 144A
securities"). This investment practice could have the effect of increasing the
level of illiquidity in a Fund to the extent that qualified institutional buyers
become for a time uninterested in purchasing Rule 144A securities held in the
Fund's portfolio. Subject to a Fund's limitations on investments in illiquid
investments, a Fund may also invest in restricted securities that may not be
sold under Rule 144A, which presents certain risks. As a result,
21
<PAGE>
a Fund might not be able to sell these securities when the Adviser wishes to do
so, or might have to sell them at less than fair value. In addition, market
quotations are less readily available. Therefore, judgment may at times play a
greater role in valuing these securities than in the case of unrestricted
securities.
ADDITIONAL RISK FACTORS
The Global Income Fund may invest up to 25% of its total assets in high
yield or "junk bonds." High yield securities, although such securities may offer
higher yields than do higher rated securities, such low rated and unrated
securities and investments in emerging market debt securities generally involve
greater volatility of price and risk of principal and income, including the
possibility of default by, or bankruptcy of, the issuers of the securities. The
existence of limited markets for particular high yield bonds or low rated
securities may diminish a Fund's ability to sell the such securities at fair
value either to meet redemption requests or to respond to a specific economic
event such as a deterioration in creditworthiness of the issuer. Reduced
secondary market liquidity for certain low rated or unrated debt securities may
also make it more difficult for a Fund to obtain accurate market quotations for
the purpose of valuing the Fund's portfolio. Market quotations are generally
available on many low rated or unrated securities only from a limited number of
dealers and may not necessarily represent firm bids of such dealers or prices
for actual sales.
Adverse publicity and investor perceptions, whether or not based on
fundamental analysis, may decrease the values and liquidity of low rated
securities, especially in a thinly traded market. Analysis of the
creditworthiness of issuers of debt securities that are low rated securities may
be more complex than for issuers of higher rated securities, and the ability of
a Fund to achieve its investment objective may, to the extent of investment in
low rated securities, be more dependant upon such creditworthiness analysis than
would be the case if the Fund were investing in higher rated securities.
Low rated securities may be more susceptible to real or perceived adverse
economic and competitive industry conditions than investment grade securities.
The prices of low rated securities have been found to be less sensitive to
interest rate changes than higher rated investments, but more sensitive to
adverse economic downturns or individual corporate developments. A projection of
an economic downturn or a period of rising interest rates, for example, could
cause a decline in low rated securities prices because the advent of a recession
could lessen the ability of a highly leveraged company to make principal and
interest payments on its debt securities. If the issuer of low rated securities
defaults, a Fund may incur additional expenses to seek recovery. The low rated
bond market is relatively new, and many of the outstanding low rated bonds have
not endured a major business recession. See "DESCRIPTION OF INVESTMENT RATINGS"
in the Statement of Additional Information.
Certain Funds may invest in debt obligations issued or guaranteed by
foreign governments or their agencies, instrumentalities or political
subdivisions, or by supranational issuers (collectively, "sovereign debt").
Investing in sovereign debt involves special risks. Certain foreign countries,
particularly developing countries, have experienced and may continue to
experience, high rates of inflations and high interest rates; exchange rate
fluctuations; large amounts of external debt, balance of payments and trade
difficulties; and extreme poverty and unemployment. The issuer of the debt or
the governmental authorities that control the repayment of the debt may be
unwilling or unable to repay principal or interest when due in accordance with
the terms of such debt, and the Funds may have limited legal recourse in the
event of default.
The Global Income Fund's participation in the currency, option and futures
markets involves certain risks and transaction costs which are generally greater
for investments in emerging markets; because of the special risks associated
with investing in emerging markets and investment in debt securities rated below
investment grade, certain of the Global Income Fund's investments should be
considered speculative and the Global Income Fund is designed for investors who
wish to accept the risks entailed in such investments which are different from
those associated with a portfolio consisting entirely of U.S. issuers
denominated in U.S. dollars.
The Funds will usually effect currency exchange transactions on a spot
(i.e., cash) basis at the spot rate prevailing in the foreign exchange market.
However, some price spread on currency exchange (to cover service charges) will
be incurred when a Fund converts assets from one currency to another.
There are risks associated with the Fund being non-diversified.
Specifically, since a relatively high percentage of the assets of the Fund may
be invested in the obligations of a limited number of issuers, the value of the
shares of a non-diversified fund may be more susceptible to any single economic,
political or regulatory event than would the shares of a diversified fund.
22
<PAGE>
PORTFOLIO TURNOVER
Portfolio turnover for each Fund may vary from year to year or within a year
depending upon economic, market and business conditions. The annual portfolio
turnover rates for the Funds in 1996 and 1995, respectively, were as follows:
140.94% and 276.56% for the Government Securities Fund, 27.01% (of which the
debt and equity portfolio turnover was 0.00% and 37.60%, respectively) and
57.62% (of which the debt and equity portfolio turnover was 105.80% and 38.21%,
respectively) for the Total Return Fund, 16.29% and 7.39% for the Tax-Exempt
Fund, and 44.50% and 37.59% for the Growth and Income Fund, 41.97% and 2.73% for
the Capital Appreciation Fund and 80.70% and 14.16% the Global Income Fund. A
Fund having a higher portfolio turnover rate may realize larger amounts of gains
or losses and more brokerage commissions or other transaction related costs than
it would with a lower portfolio turnover rate. If there are gains, they are
passed through to the shareholders as long-term capital gain distributions and,
as such, are taxable to the shareholders. See "TAXATION OF SHAREHOLDERS" for
further information. See "PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATIONS" in
the Statement of Additional Information for further information. Excessive
short-term trading may result in excessive "short-short income" under the
Internal Revenue Code which, in turn, could affect either Fund's status as a
regulated investment company.
MANAGEMENT OF THE COMPANY
The Board of Directors of the Company is responsible for the administration of
the affairs of the Company pursuant to the applicable laws of the state of
Maryland. The Company, pursuant to Maryland's indemnification statute, provides
that neither its officers nor directors will be liable to the Company or its
shareholders for monetary damage for breach of fiduciary duty, except for
willful misfeasance, bad faith, gross negligence or reckless disregard of duties
in the conduct of his or her office.
Investment Manager. The Investment Manager with respect to each Fund is Chubb
Asset Managers, Inc., a wholly-owned subsidiary of The Chubb Corporation. The
Chubb Corporation, organized in 1967 as a New Jersey corporation, is a holding
company engaged through subsidiaries in the business of property and casualty
insurance on a worldwide basis, as well as life and health insurance and real
estate development. The Chubb Corporation traces its history back to the
formation of Chubb & Son in 1882 and the founding of its principal property and
casualty subsidiary, Federal Insurance Company, in 1901. Today, the Chubb
Corporation, a Fortune 500 Company with assets exceeding $19 billion, ranks
among the nation's top 25 Stock/Insurance companies by assets and offers
insurance and financial planning tools to clients around the world from 91
branch offices throughout North and South America, Europe and the Pacific
Rim.
The Investment Manager's principal place of business is 15 Mountain View Road,
Warren, New Jersey 07061. The Investment Manager is subject to the overall
authority of the Board of Directors of the Company, responsible for the overall
investment of each Fund's portfolio, consistent with each Fund's investment
objectives, policies and restrictions. The Investment Manager was organized in
August, 1986 as an investment adviser and is registered with the Securities and
Exchange Commission as such under the Investment Advisers Act of 1940. The
Investment Manager has served as the Company's investment manager since
December, 1987 and also serves as the sub-investment manager for the Money
Market Portfolio, the Bond Portfolio and the Growth and Income Portfolio of
Chubb America Fund, Inc., an open-end management investment company organized in
1984. In addition, the principals of the Investment Manager, who are also
investment personnel of Chubb & Son, Inc., currently provide investment advice
to and supervision and monitoring of investment portfolios for The Chubb
Corporation and its affiliates, including general accounts of the insurance
affiliates of The Chubb Corporation totaling $14.3 billion, of which $1.3
billion is invested internationally. In addition, certain investment personnel
employed by the Investment Manager currently provide advice to other investment
portfolios of entities not affiliated with The Chubb Corporation or its
affiliates in their capacity as officers or directors of certain registered
investment advisers not related to the Investment Manager.
The following persons are primarily responsible for the day-to-day management
and implementation of Chubb Asset's process for the respective Funds, (the
inception date of each person's responsibility for a Fund and their business
experience for the past five years are indicated parenthetically): Chubb Money
Market Fund--Thomas J. Swartz, III, Vice-President, (since June 1988/employed by
Chubb Asset since 1988); Chubb Government Securities Fund--Ned I. Gerstman,
Senior Vice President; (since December 1989/employed by Chubb Asset since before
1989) and Paul Geyer, Assistant Portfolio Manager, Vice President (since
1992/employed by Chubb Asset Managers since 1992); Chubb Growth and Income Fund
and Chubb Total Return Fund--Michael O'Reilly, President, (since December
1987/employed by Chubb Asset since before 1989)
23
<PAGE>
and Robert Witkoff, Senior Vice President (since 1988/employed by Chubb Asset
since 1988); Chubb Tax-Exempt Fund--Frederick W. Gaertner, Senior Vice-
President), (since December 1987/employed by Chubb Asset since November 1989,
formerly Vice-President), (since December 1987/employed by Chubb Asset since
November 1989, formerly Vice-President of Salomon Brothers, Inc.). Chubb Capital
Appreciation Fund--Robert Witkoff, Senior Vice President. Chubb Global Income
Fund--Marjorie Raines, Senior Vice President/employed by Chubb Asset Managers
since before 1987, Roger Brookhouse, Senior Vice President, employed by Chubb
Asset Managers since 1995 and President and Chief Investment Officer, Chubb
Investment Services Limited, a subsidiary of Chubb Corporation, since 1993,
previously Managing Director of Credit Suisse Asset Management Ltd. London
1990.
Investment Administrator. The Investment Administrator with respect to each
Fund is Chubb Investment Advisory Corporation, a wholly-owned subsidiary of
Chubb Life. Chubb Life is a wholly-owned subsidiary of Jefferson-Pilot
Corporation, a North Carolina Corporation. The Investment Administrator's
principal place of business is One Granite Place, Concord, New Hampshire 03301.
The Investment Administrator, in addition to providing certain administrative
services and facilities which are necessary for the Company to conduct its
business, will review the investment transactions as executed by broker-dealers
for each Fund to determine compliance with each Fund's objectives, investment
restrictions, and applicable laws and regulations under the Investment Company
Act of 1940. The Investment Administrator also recommends and supervises the
services of auditors, counsel, and custodians, and maintains records not
otherwise maintained by other parties. The Investment Administrator also
provides office space and related utilities, including telephones, necessary for
the Company's operations; prepares and files tax returns and reports and filings
which pertain to Federal and state securities laws; schedules, plans the agenda
for, and conducts the meetings of the Company's Board of Directors; and provides
personnel, data processing services, and supplies requested by the Company. The
Investment Administrator was organized in 1984 as an investment adviser and is
registered with the Securities and Exchange Commission as such under the
Investment Advisers Act of 1940. In addition, the Investment Administrator has
acted as investment adviser for Chubb America Fund, Inc. since 1984.
Transfer Agent. Shareholder services for the Company are provided by the
transfer agent, Firstar Trust Company, P.O. Box 701, Milwaukee, Wisconsin 53201-
0701, or by overnight courier to Firstar Trust Company, 615 East Michigan
Street, Milwaukee, WI 53202-5207. Such services include, but are not limited to,
recording the issuance and redemption of shares of the Company, crediting and
paying dividends, and maintenance of shareholder records.
MANAGEMENT FEES AND EXPENSES
The investment management fees, which compensate both the Investment Manager
and the Investment Administrator, are paid monthly at an annual rate based on a
percentage of the average daily net asset value of each Fund, and are computed
at the annual percentage rates as shown in Table 1 below:
TABLE 1
<TABLE>
<CAPTION>
CHUBB GOVERNMENT SECURITIES,
TOTAL RETURN, TAX-EXEMPT,
GROWTH AND INCOME,
CHUBB MONEY CAPITAL APPRECIATION,
MARKET FUND AND GLOBAL INCOME FUNDS
----------------------------- ------------------------------
INVESTMENT INVESTMENT INVESTMENT INVESTMENT
AVERAGE DAILY NET ASSET VALUE ADMINISTRATOR MANAGER ADMINISTRATOR MANAGER
- ----------------------------- ------------- ------------ ---------------- -----------
<S> <C> <C> <C> <C>
1st $200 Million...................... 0.35% 0.15% 0.45% 0.20%
Next $1.1 Billion..................... 0.31% 0.14% 0.41% 0.19%
Over $1.3 Billion..................... 0.27% 0.13% 0.37% 0.18%
</TABLE>
In addition to investment management and administrative fees, the Company is
responsible for certain expenses relating to the Company's operations which are
not expressly assumed by the Investment Manager, the Investment Administrator,
or the Distributor, including: legal, accounting, transfer agent, custodian and
auditing fees; taxes; portfolio valuation expenses; and preparing, printing, and
distributing Prospectuses, Statements of Additional Information, and shareholder
communications and reports, and other expenses. The Company's expenses are
deducted from total income before dividends are paid. Chubb Life will bear
certain expenses of the Company in excess of applicable limitations under state
securities laws. Pursuant to an agreement dated as of January 25, 1991 ("Expense
Limitation Agreement") between the Company, the Investment Manager,
24
<PAGE>
the Investment Administrator, the Distributor and Chubb Life, the schedule of
waivers and assumptions effective for 1996 included in that agreement, the
Investment Manager waived its investment management fees. For the fiscal year
ended December 31, 1996 the Investment Administrator accepted a reduced fee of
0.15% of the average daily net assets of the Money Market Fund, a reduced fee of
0.25% of the average daily net assets of the Government Securities Fund, Tax-
Exempt Fund, and Capital Appreciation Fund; a reduced fee of 0.35% of the
average daily net assets of the Total Return and the Growth and Income Fund and
a fee of 0.45% of the average daily net assets of the Global Income Fund. Prior
to January 1, 1994, the Distributor waived all of its fees under the
distribution plan adopted by the Company under Rule 12b-1 of the Investment
Company Act of 1940 ("Rule 12b-1 Plan"). For the fiscal year ended December 31,
1994 and for the period from January 1, 1995 to August 31, 1995, the Distributor
waived any amount of its Rule 12b-1 Plan fees in excess of 0.20% of the average
daily net asset value of the Total Return Fund, the Growth and Income Fund, the
Government Securities Fund and the Tax-Exempt Fund and 0.15%, of the average
daily net asset value of the Money Market Fund. For the period September 1, 1995
through December 31, 1996, the Distributor waived its 12b-1 fees in excess 0.25%
of the average daily net assets of the Total Return Fund; Growth and Income
Fund; Capital Appreciation Fund; and Global Income Fund; 0.20% of the average
daily net assets of the Government Securities Fund and Tax-Exempt Fund; and
0.15% of the average daily net assets of the Money Market Fund.
For the fiscal year ended December 31, 1996, pursuant to the Expense
Limitation Agreement, Chubb Life assumed a portion of certain additional
expenses of the Company. Due to the waivers and assumptions of expenses
described above, total expenses for the fiscal year ended December 31, 1996 were
0.50%, 0.93%, 1.08%, 0.98%, 1.06%, 1.13% and 1.23% of the average daily net
assets of the Money Market Fund, the Government Securities Fund, the Total
Return Fund, the Tax-Exempt Fund, the Growth and Income Fund, the Capital
Appreciation Fund and the Global Income Fund, respectively. Pursuant to the
Expense Limitation Agreement, Chubb Life has agreed to assume all expenses for
the year beginning January1, 1997 in excess of an annual rate of 1.75% of the
average daily net assets of the Global Income Fund; 1.25% of the average daily
net assets of the Total Return Fund, the Growth and Income Fund, and the Capital
Appreciation Fund; 1.00% of the average daily net assets of the Government
Securities Fund and the Tax Exempt Fund, and 0.50% of the average daily net
assets of the Money Market Fund. Chubb Life, in its discretion, may assume a
greater percentage of expenses of any Fund.
CAPITAL STOCK
The Company is composed of seven funds, six are open-end diversified
management investment companies and one is a non-diversified company. The
Company was incorporated in Maryland on April 27, 1987. The Company issues a
separate series of capital stock for each Fund. In the future, the Company may
establish additional funds. Each share of capital stock when issued will be
fully paid and non-assessable. Each share of capital stock issued with respect
to a Fund has a pro rata interest in the assets of that Fund and is entitled to
such dividends and distributions of income belonging to that Fund as are
declared by the Board of Directors. Each share of capital stock is entitled to
one vote on all matters submitted to a vote of all shareholders of the Company,
and fractional shares are entitled to a corresponding fractional vote. Shares of
a particular Fund will be voted separately from shares of the other Funds on
matters affecting only that Fund, including approval of the investment
management agreements and changes in the fundamental investment objectives or
restrictions of that Fund. The underlying assets of each Fund are required to be
segregated on the books of account, and are charged with the liabilities of that
particular Fund and a proportionate share of the general liabilities of the
Company based on the average net asset value of the respective Funds for each
quarter. Shareholders of the Company will not be entitled to preemptive rights
or cumulative voting rights. All shares may be redeemed at any time by the
Company.
As a Maryland corporate entity, the Company is not required to hold regular
annual shareholder meetings and, in the normal course, does not expect to hold
such meetings. The Company is, however, required to hold shareholder meetings
for such purposes as, for example: (i) approving certain agreements as required
by the 1940 Act; (ii) changing fundamental investment objectives and
restrictions of the Funds; and (iii) filling vacancies on the Board of Directors
in the event that less than a majority of the directors were elected by
shareholders. The Company expects that there will be no meetings of shareholders
for the purpose of electing directors unless and until such time as less than a
majority of the directors holding office have been elected by shareholders. At
such time, the directors then in office will call a shareholder meeting for the
election of directors. In addition, holders of record of not less than two-
thirds of the outstanding shares of the Company may remove a director from
office by a vote cast in person or by proxy at a shareholder meeting called for
that purpose at the request of holders of 10% or more of the outstanding shares
of the Company. The Company has the obligation to assist in such shareholder
communications. Except as set forth above, directors will continue in office and
may appoint successor directors.
25
<PAGE>
TAXES AND DIVIDENDS
Each Fund intends to continue to qualify as a "regulated investment company"
("RIC") under Subchapter M of the Internal Revenue Code of 1986 (the "Code"). It
is each Fund's policy to comply with the provisions of the Code regarding
distribution of investment income. Under these provisions, a Fund will not be
subject to federal income tax on that portion of its ordinary income and net
capital gains distributed to shareholders. Each Fund expects to declare and
distribute by the end of each calendar year all, or substantially all, ordinary
income and net capital gains, if any, from the sale of its investments. Failure
to distribute substantially all ordinary income and net capital gains, may
subject the Fund to an excise tax.
Dividends from ordinary income will be declared daily and distributed monthly
with respect to the Money Market Fund and the Government Securities Fund,
declared and distributed on a monthly basis with respect to the Tax-Exempt Fund
and the Global Income Fund, declared and distributed on a quarterly basis with
respect to the Total Return Fund, and declared and distributed on an annual
basis with respect to the Growth and Income Fund and the Capital Appreciation
Fund. Each Fund will distribute net capital gains, including net gains from
foreign currency transactions if any, at least annually. All dividends and net
capital gains distributions will be automatically reinvested in additional
shares of the Fund at the Fund's net asset value at the close of business on the
payment date of the dividend or distribution unless the shareholder elects to
receive all dividends and/or distributions either in cash or to invest them,
without the imposition of any sales charge in any other Fund at such other
Fund's net asset value at the close of business on the payment date. Such
notification must be received by the Transfer Agent not less than 3 full
business days prior to the record date. If any dividend or distribution is
returned to the Company because of incomplete delivery, such amounts will be
reinvested in additional shares of the Fund with respect to which the dividend
or distribution was made at the Fund's net asset value next computed after
receipt by the Transfer Agent.
TAXATION OF SHAREHOLDERS
Any dividends which a shareholder receives from the Company, except for the
Tax-Exempt Fund, are subject to Federal income tax, whether a shareholder elects
to receive them in cash or additional shares. Dividends from net investment
income (accrued interest and dividends earned on a Fund's portfolio securities
less expenses) and distributions from realized short-term capital gains are
taxable as ordinary income. Distributions of long-term capital gains are
generally taxable to a shareholder as such, regardless of how long the
shareholder has held shares of the Company. Corporate shareholders may be
entitled to take a deduction for ordinary income dividends received that are
attributable to dividends received from a domestic corporation, provided that
both the corporate shareholder retains its shares in the applicable Fund for
more than 45 days and the Fund retains its shares in the issuer from whom it
received the income dividends for more than 45 days.
A redemption of shares will generally result in the recognition of gain or
loss for income tax purposes equal to the difference between the proceeds of the
redemption and the shareholder's cost basis of the shares redeemed.
It is expected that any dividends paid to shareholders from the Tax-Exempt
Fund will be exempt from Federal income tax to the extent such dividends are
derived from interest earned on municipal securities. Distributions of income
from investments in taxable securities and of capital gains realized by the Tax-
Exempt Fund would be taxable to the shareholder. Income derived from certain
non-essential government issues of tax-exempt securities issued after August 7,
1986, which securities the Tax-Exempt Fund may purchase from time to time, may
subject certain investors to the alternative minimum tax liability. In addition,
certain social security recipients that receive tax-exempt income may be
required to pay taxes on a portion of their social security benefits. The
Company will inform shareholders of the Tax-Exempt Fund of the character of
their dividends and distributions at the time they are paid, and will advise
such shareholders of the tax status of such distributions and dividends promptly
after the close of each calendar year. The Company anticipates that
substantially all of the dividends paid by the Tax-Exempt Fund will be exempt
from Federal income taxes. Dividends and distributions may be subject to state
and local taxes.
Internal Revenue Service regulations require the Company or the securities
dealer effecting the transaction to file an informational return with the
Internal Revenue Service with respect to each sale of Company shares by an
investor. The Internal Revenue Code and the Department of Treasury regulations
thereunder, require the Company, or such broker implementing the transaction, to
withhold 31% of all dividends and redemptions for shareholders unless such
shareholders have provided a social security number or tax identification number
(or the shareholder has applied for such a number and is waiting for it to be
issued) and made the required certifications regarding the withholding
requirement indicated in the application to purchase shares of the Company.
26
<PAGE>
PURCHASE OF SHARES
Shares of the Company are continuously offered by the Distributor and through
securities dealers which have executed a selected dealers agreement with the
Distributor. The Distributor, Chubb Securities Corporation, One Granite Place,
Concord, New Hampshire 03301, is a wholly-owned subsidiary of Chubb Life and is
the principal underwriter of the Company. Chubb Life is a wholly-owned
subsidiary of Jefferson-Pilot Corporation, a North Carolina Corporation.
The minimum initial investment is $250 per Fund and subsequent investments
must be $50 or more per Fund. The minimum for both the initial and subsequent
investment may be waived when the shares are being purchased through plans
providing for regular periodic investments. The Company and the Distributor
reserve the right to refuse any order for the purchase of shares.
An investor may purchase shares in "street name" through a securities dealer
who has executed a selected dealers agreement with the Distributor. When shares
are purchased in "street name", the shares are held in the name of the
securities dealer for the benefit of the investor and usually are registered in
this manner for margin accounts or to facilitate transfers. However, the Company
will not permit investors to transfer these shares after purchase to securities
dealers who have not executed a selected dealers agreement with the Distributor.
In such a situation, the investor may either (1) ask the investor's chosen
securities dealer to execute a selected dealers agreement with the Distributor,
(2) leave the shares at the original securities dealer, (3) transfer the shares
into the investor's own name, or (4) redeem the shares.
In order to transfer shares in "street name" between securities dealers who
have executed selected dealers agreements with the Distributor, the investor's
present securities dealer must make the transfer. The present securities dealer
should contact the Transfer Agent for the appropriate documentation. No fee
currently is charged by the Company or the Transfer Agent for this service,
although either the present or subsequent securities dealer may charge a fee for
making this transfer.
Shares are offered at the public offering price, which is the net asset value
per share of each Fund next computed after an order is physically received in
the offices of the Transfer Agent in good order and accepted by the Transfer
Agent from a shareholder's securities dealer, (or received and accepted by the
Transfer Agent when sent by mail from a shareholder directly), plus a sales
charge which is a variable percentage of the offering price depending upon the
amount of the sale, as shown in Table 2 for the Total Return Fund, Growth and
Income Fund and Capital Appreciation Fund, and Table 3 for the Government
Securities Fund and Tax Exempt Fund and Global Income Fund. However, no sales
charge is applied for the purchase of shares of the Money Market Fund, which are
offered at the Fund's net asset value per share. Set forth below are Table 2 for
the Total Return Fund, Growth and Income Fund and Capital Appreciation Fund, and
Table 3 for the Government Securities Fund, Tax-Exempt Fund and Global Income
Fund. Each table indicates the total sales charges or underwriting commissions
and dealer concessions in connection with the sale of shares of the respective
Funds.
27
<PAGE>
TABLE 2
SALES CHARGES APPLICABLE TO TOTAL RETURN FUND, GROWTH
AND INCOME FUND, AND CAPITAL APPRECIATION FUND
<TABLE>
<CAPTION>
DEALER CONCESSION
AS PERCENTAGE OF AS A PERCENTAGE AS PERCENTAGE OF
SIZE OF TRANSACTION OFFERING PRICE OF NET ASSET VALUE OFFERING PRICE
------------------- ---------------- ------------------- ---------------
<S> <C> <C> <C>
Less than $100,000......................... 5.00% 5.26% 4.50%
$100,000 but less than $250,000............ 4.00% 4.17% 3.50%
$250,000 but less than $500,000............ 3.00% 3.09% 2.50%
$500,000 but less than $1,000,000.......... 2.00% 2.04% 1.75%
$1,000,000 but less than $2,000,000........ 1.00% 1.01% 0.90%
$2,000,000 but less than $5,000,000........ 0.50% 0.50% 0.45%
$5,000,000 and over........................ 0.00% 0.00% 0.00%
</TABLE>
TABLE 3
SALES CHARGES APPLICABLE TO GOVERNMENT SECURITIES FUND,
TAX-EXEMPT FUND, AND GLOBAL INCOME FUND
<TABLE>
<CAPTION>
DEALER CONCESSION
AS PERCENTAGE OF AS PERCENTAGE OF AS PERCENTAGE OF
SIZE OF TRANSACTION PRICE OFFERING PRICE NET ASSET VALUE OFFERING PRICE
------------------------- ----------------- --------------- ------------------
<S> <C> <C> <C>
Less than $100,000......................... 3.00% 3.09% 2.50%
$100,000 but less than $250,000............ 2.50% 2.56% 2.00%
$250,000 but less than $500,000............ 2.00% 2.04% 1.50%
$500,000 but less than $1,000,000.......... 1.50% 1.52% 1.00%
$1,000,000 but less than $2,000,000........ 1.00% 1.01% 0.90%
$2,000,000 but less than $5,000,000........ 0.50% 0.50% 0.45%
$5,000,000 and over........................ 0.00% 0.00% 0.00%
</TABLE>
Because the Money Market Fund invests in instruments that normally require
immediate payment in federal funds (monies credited to a bank's account with a
Federal Reserve Bank), an order to purchase shares of the Money Market Fund will
not become effective until the next business day after receipt of the investor's
check. The Company reserves the right to delay the effectiveness of an order to
purchase shares of the Money Market Fund until the conversion into federal funds
has been verified.
The Distributor will, at its own expense, pay certain other amounts to the
selling securities dealer and will, from time to time, provide promotional
incentives to certain securities dealers whose representatives have sold or are
expected to sell significant amounts of the Company's shares. The incentives
shall include payment for travel expenses, including lodging at luxury resorts,
incurred in connection with trips taken by qualifying registered representatives
and members of their families to locations within or outside of the United
States. Dealers may not use sales of the Company's shares to qualify for the
incentives to the extent such may be prohibited by the laws of any state or the
rules of the NASD. From time to time the Distributor may reallow to certain
securities dealers the full amount of the sales charge. The staff of the
Securities and Exchange Commission is of the opinion that dealers receiving 90%
or more of the sales charge might be considered to be underwriters under the
Securities Act of 1933. In addition to the compensation itemized above, certain
broker-dealers and/or their sales personnel may receive certain additional
compensation for the sale and distribution of the securities or for services to
the Funds or the Company.
REDUCED SALES CHARGES
Sales charges may be reduced or may vary in amount for various classes of
investors. The circumstances in which sales charges will differ from those
listed in the table above are as follows:
1. Rights of Accumulation. The cost or current value (whichever is higher) of
an investor's existing shares of any Fund of the Company, with the exception of
the Money Market Fund, may be combined with the amount of the current purchase
in determining the sales charge to be paid.
28
<PAGE>
To ensure that the reduced sales charge will be applied, the investor or the
investor's dealer must indicate on the application that the purchase of shares
is to be accumulated with other shares held by the investor. Qualification for
the reduced sales charge is subject to the determination by the Company's
Transfer Agent, which will also determine the amount of the Company's shares
held by the investor that may be combined with the current purchases.
2. Letter of Intent. An investor may qualify for a reduced sales charge
immediately by signing a non-binding Letter of Intent in which the investor
states an intention to invest during the next 13 months a specified amount
which, if made at one time, would qualify the investor for a reduced sales
charge. The Letter of Intent may be signed at any time within 90 days after the
first investment which an investor wants included under the Letter of Intent. If
the investor purchases shares which are to be included under the Letter of
Intent before signing the Letter of Intent, the 13-month period begins on the
date of the purchase of shares to be included under the Letter of Intent. After
the Letter of Intent is signed, each additional investment in any Fund, with the
exception of Money Market Fund, will be entitled to the sales charge applicable
to the level of investment indicated in the Letter of Intent. Such reductions,
however, will be effective only after the investor or the investor's dealer
notifies the Transfer Agent that the investment qualified for such a discount.
An investor's ownership of shares in the Company acquired more than 90 days
before the Letter of Intent is signed will be counted toward completion of the
Letter of Intent, but will not be subject to a retroactive downward adjustment
of sales charge.
Any redemptions made by a shareholder during the 13-month period will be
subtracted from the amount of purchases for purposes of determining whether a
shareholder has fulfilled the terms of the Letter of Intent. The Letter of
Intent authorizes the Transfer Agent to escrow shares owned by the investor
having a purchase price of 5% of the dollar amount specified in the Letter of
Intent. If the terms of the Letter of Intent are not met, these escrowed shares
will be redeemed to make an upward adjustment of the sales charge that results
from a difference in the amount intended to be invested from the amount actually
invested. During the Letter of Intent period, the escrowed shares will be held
as part of the investor's account and will receive all dividends and capital
gain distributions.
To ensure that the reduced price will be received on future purchases, the
investor or the investor's securities dealer must inform the Transfer Agent that
this Letter of Intent is in effect each time shares are purchased.
3. Qualified Group Purchases. An individual who is a member of a qualified
group may also purchase shares of the Funds at the reduced sales charge
applicable to the qualified group as a whole. The sales charge is based upon the
aggregate dollar value of shares previously purchased and still owned by the
qualified group, plus the amount of the current purchase. For example, if
members of the qualified group had previously invested in the Total Return Fund
and still held $80,000 of such Fund's shares and now were investing $25,000 in
that same Fund, the sales charge would be 4.00%. Information concerning the
current sales charge applicable to a qualified group may be obtained by
contacting the Distributor.
A "qualified group" is one which (i) has more than 10 members, (ii) has been
in existence for more than six months, (iii) has a purpose other than acquiring
the Fund's shares at a discount and (iv) satisfies uniform criteria which enable
the Distributor to realize economies of scale in its costs of distributing
shares. A qualified group must (i) be available to arrange for group meetings
between representatives of the Company or the Distributor and the members, (ii)
must agree to include sales and other materials related to the Company in its
publications and mailings to members at reduced or no cost to the Distributor,
and (iii) seek to arrange for payroll deduction or other bulk transmission of
investments to the Company.
If a payroll deduction plan is offered by an employer of a qualified group and
if an investor selects such payroll deduction plan as a method of investing in
the Company, subsequent investments will be automatic and will continue until
such time as the investor notifies the Company and the investor's employer to
discontinue further investments. Due to the varying procedures to prepare,
process and forward the payroll deduction information to the Company, there may
be a delay between the time of the payroll deduction and the time the money
reaches the Company. The investment in a Fund will be made at the offering price
per share determined on the day that both the check and payroll deduction data
are received in proper form by the Company.
4. Purchases at Net Asset Value. Shares of the Funds may be purchased at net
asset value by (1) The Chubb Corporation, Chubb Life and their subsidiaries and
affiliate companies, (2) directors and present and retired officers and
employees of the Company, the Investment Manager, the Investment Administrator,
the Distributor and affiliates of such companies and by their close family
members, (3) by registered representatives of broker-dealers which have entered
into a selected dealers agreement with the Distributor and by their close family
members. "Close family members" is defined as parents, grandparents, siblings,
spouse, children, and dependents. Such sales are made upon the written assurance
of the investor that the purchase not subject to a sales charge is made for
investment purposes and that the securities will not
29
<PAGE>
be transferred or resold except through redemption or repurchase by or on behalf
of the Company. All of the above-described investors must obtain a special form
from their employer or from the Distributor in order to qualify.
Shares of the Funds may also be purchased at net asset value by shareholders
where the amounts to be invested represent the redemption proceeds from
investment companies distributed by an entity other than the Distributor,
provided such redemption has occurred no more than 60 days prior to the purchase
of shares of any Fund and the shareholder paid an initial sales charge and was
not subject to a deferred sales charge on the redemption proceeds. Please
contact the Distributor to obtain a special form in order to qualify.
Shares of the Funds may also be purchased at net asset value by accounts which
are a part of a program established by financial institutions, broker dealers or
registered investment advisers that charge an account management fee or
transaction fee, provided that such entity has specifically entered into and
maintains a current arrangement with the Distributor providing for such program.
Provided that sales made under this program are made upon the written assurances
that the shares so acquired will not be resold except to the Funds.
Shares of the Funds also may be purchased at net asset value by employee
benefit plans qualified under Section 401 of the Code, including salary
reduction plans qualified under Section 401(k) of the Code, subject to minimum
requirements with respect to number of employees or amount of purchase, as may
be established from time to time by the Distributor. Currently those criteria
require that the employer establishing the plan have 100 or more employees or
that the amount currently invested in the Company or to be invested in the
Company during the subsequent 13-month period totals at least $1,000,000.
Employee benefit plans not qualified under Section 401 of the Code, such as
those established under Section 403(b) and 457 of the Code, may be afforded the
same privilege if they meet the above requirements as well as the uniform
criteria for qualified groups previously described under Group Purchases, which
may enable the Distributor to realize economies of scale in its sales efforts
and sales related expenses. If investments by employee benefit plans at net
asset value are made through a dealer who has executed a dealer agreement with
respect to the Company, the Distributor or one of its affiliates may make a
payment out of their own resources to such dealer in an amount not to exceed
0.25% of the amount invested. Please contact the Distributor for additional
information.
DISTRIBUTION PLAN
The Company may pay directly for a portion of the distribution expense of the
Company pursuant to the Plan of Distribution pursuant to Rule 12b-1 (the "Plan")
under the Investment Company Act of 1940. Under the Plan, the Company will pay
the lesser of actual distribution expenses incurred under the Plan, as
determined by the Board of Directors of the Company, or 0.50% per annum of the
net asset value of each Fund or, with respect to the Money Market Fund, 0.25%
per annum of the net asset value of such Fund. The Rule 12b-1 expense will be
accrued daily and paid quarterly in arrears. These Rule 12b-1 expenses include
(i) payments to the Distributor and to securities dealers and others engaged in
the sale of shares, (ii) payments of compensation to and expenses of personnel
who engage in or support distribution of shares or who render shareholder
support services not otherwise provided by the Company's Transfer Agent,
including responding to inquiries regarding the Company, (iii) formulation and
implementation of marketing and promotional activities, (iv) preparation,
printing and distribution of sales literature, prospectuses, and statements of
additional information for recipients other than existing shareholders, and (v)
obtaining such information, analyses and reports with respect to marketing and
promotional activities as the Company may, from time to time, deem advisable.
The Board of Directors has determined that the maximum amount payable under
the Plan should be allocated so that (1) 0.25% per annum of the net assets of
each Fund or, with respect to the Money Market Fund, 0.075% per annum of the net
assets of such Fund will be used to finance sales or promotional activities and
will be considered to be an asset-based sales charge and (2) 0.25% per annum of
the net assets of each Fund or, with respect to the Money Market Fund, 0.175%
per annum of the net assets of such Fund will be paid to securities dealers and
others as a service fee. No payment of service fees under the Plan will be made
to a securities dealer unless that dealer has sold shares of the Company,
exclusive of the Money Market Fund, that are outstanding for a minimum of 12
months and that are valued in excess of $1,000,000 or, with respect to the Money
Market Fund, has sold shares of the Company valued in excess of $1,000,000.
For the fiscal year ended December 31, 1996, the Company paid $261,904 in Rule
12b-1 expenses under the terms of the Plan. The Distributor waived payment of
distribution fees for the fiscal year ended December 31, 1996 in excess of 0.25%
of the average daily net assets of the Total Return Fund, the Growth and Income
Fund, the Capital Appreciation Fund, and Global Income Fund; and 0.20% of the
average daily net assets of the Government Securities Fund and the Tax-Exempt
Fund, and 0.15% of the average daily net assets of the Money Market Fund.
30
<PAGE>
As required under Rule 12b-1, the Plan was approved by the Company's Board of
Directors, including a majority of the directors who are not interested persons
of the Company and who have no direct or indirect financial interest in the
operation of the Plan or any agreement relating thereto, and by the shareholders
of the respective Funds. The Board of Directors has determined that there is a
reasonable likelihood that the Plan will benefit each Fund and the shareholders
of each Fund, although it is possible that the Rule 12b-1 expenses paid by one
Fund may, to a certain extent, benefit another Fund.
DETERMINATION OF NET ASSET VALUE
Net asset value per share of each Fund normally will be determined separately
as of the close of regular trading on the New York Stock Exchange (presently
4:00 P.M. New York time) on each day during which the New York Stock Exchange is
open for trading.
Net asset value per share of each Fund is calculated by dividing the value of
all of the Fund's portfolio securities plus the value of its other assets
(including dividends and interest received or accrued), less all liabilities
(including accrued expenses and dividends payable), by the number of outstanding
shares of the Fund. For purposes of determining the value of a Fund's portfolio
securities, cash and receivables will be valued at their face amounts. Interest
will be recorded as accrued and dividends will be recorded on the ex-dividend
date. Foreign securities are valued as of the close of trading on the foreign
exchanges on which they are traded or as of the close of regular trading on the
New York Stock Exchange if that is earlier.
The Money Market Fund's price per share will be determined in accordance with
the amortized cost valuation method. For all the other Funds, short-term debt
instruments with a remaining maturity of 60 days or less are also valued on an
amortized cost basis, unless the Board of Directors determines that such method
does not represent fair value. Options and convertible preferred stocks listed
on a national securities exchange are valued as of their last sale price or, if
there is no sale, at the mean between the closing bid and asked prices. Futures
contracts are valued as of their last sale price or, if there is no sale, at the
mean between the closing bid and asked prices.
All other securities and assets are valued at their market value. Securities
which are traded on a recognized domestic exchange are valued at the last sale
price on the exchange on which such securities are principally traded.
Securities which are primarily traded on foreign exchanges are generally valued
at the representative quoted values of such securities on their respective
exchanges. If market prices are not readily available, then such securities are
valued at fair value as determined in good faith by the Company's Board of
Directors. With the approval of the Board of Directors, the Company may utilize
a pricing service, a bank, or a broker-dealer experienced in such matters to
perform any of the above-described valuation functions.
REDEMPTION OR REPURCHASE
1. Written Requests
A shareholder may sell all or a portion of his/her shares (known as a
liquidation or redemption) by forwarding a written request to the Company's
Transfer Agent, Firstar Trust Company, Mutual Fund Services, Third Floor, P.O.
Box 701, Milwaukee, WI 53201-0701 or by overnight courier to (Fund Name) Firstar
Trust Company, 615 East Michigan Street, Milwaukee, WI 53202-5207. The
shareholder will receive from the Company on his/her redeemed shares the net
asset value per share next determined after the written request, in proper form,
is received by the Transfer Agent. In order to be in proper form, a written
request must be accompanied by stock certificates, if any, which have been
issued to a shareholder, properly endorsed and in good order for transfer,
including information regarding the account number and number of shares. Payment
upon redemption will usually be made in cash, although the Company may, under
certain limited circumstances, make redemptions-in-kind.
31
<PAGE>
For a shareholder's protection, in order for a written request to be
considered to be in proper form, his/her signature must be guaranteed (or, if
there is more than one holder of record, such request must be signed by all
shareholders of record exactly as registered and all signatures must be
guaranteed) if the redemption request involves any of the following:
(1) the proceeds of the redemption are over $50,000;
(2) the proceeds (in any amount) are to be paid to someone other than the
registered owner(s) of the account or a
person or entity designated on the account application; or
(3) the proceeds (in any amount) are to be sent to other than the
shareholder's address of record or the address of
another person or entity designated on the account application; or
(4) share certificates (in any amount).
A notarized signature will not be sufficient for the request to be in proper
form. Signatures must be guaranteed by an "eligible guarantor institution" as
defined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible
guarantor institutions include banks, brokers, credit unions, national
securities exchanges, registered securities associations, clearing agencies and
savings associations. A complete definition of eligible guarantor institutions
is available from the Company's Transfer Agent. Broker-dealers guaranteeing
signatures must be a member of a clearing corporation or maintain net capital of
at least $100,000. Credit unions must be authorized to issue signature
guarantees. Signature guarantees will be accepted from any eligible guarantor
institution which participates in a signature guarantee program.
Liquidation requests for corporate, partnership, trust and custodianship
accounts may require special documentation to be considered in proper form.
Retirement account liquidations also require the completion of certain
additional forms to ensure compliance with Internal Revenue Service regulations
and to be considered in proper form. If you have any questions regarding a
proposed liquidation which fall into these categories, please contact the
Company's Transfer Agent, at P.O. Box 701, Milwaukee WI 53201-0701.
The Company also will accept repurchase orders by telephone from securities
dealers who have signed a selected dealers agreement with the Distributor to
purchase shares of the Company. The only difference between a normal redemption
request in writing and a repurchase order is that if a shareholder chooses to
transact through a securities dealer, an investor's shares will be redeemed at
their net asset value next determined after the Transfer Agent receives the
repurchase order from the shareholder's dealer, rather than after receipt by the
Transfer Agent of the written request in proper form. The 7-day period within
which the proceeds of the redemption or the repurchase will be sent to the
shareholder begins when the Transfer Agent receives a written request in proper
form. Also, a securities dealer may charge the shareholder a fee for handling
the order.
2. Telephone Requests
Shareholders of any of the Funds may redeem or exchange shares by telephone
authorization, provided that either (i) the shareholder has selected the
privilege on the application or, subsequently, by a written authorization
provided to the Transfer Agent or (ii) if the shareholder does not designate
whether he or she has accepted or declined the privilege for telephone exchanges
on the application, the shareholder will receive the privilege for telephone
exchanges automatically. Redemptions which require signature guarantees may not
be made by telephone. (See "Written Requests" above.) The Transfer Agent will
employ procedures that it and the Company believes are reasonable in order to
confirm that instructions communicated by telephone are genuine. These
procedures include (i) any shareholder or registered representative of record
providing instructions by telephone to redeem or exchange shares must be on a
recorded telephone line, (ii) all such shareholders or registered representative
of record must supply the Transfer Agent with personal identification
information at the time of redemption or exchange for verification purposes, and
(iii) all transactions relying on telephone instructions will be verified by a
written confirmation statement sent by the Transfer Agent. If these "reasonable
procedures" or other procedures that may be developed are not employed in order
to confirm that instructions communicated by telephone are genuine, the Company
may be liable for any losses due to unauthorized or fraudulent instructions. The
Transfer Agent has agreed to indemnify the Company from any losses arising from
an act on its part or a failure or omission to act by it that was negligent or
in bad faith or constituted willful misconduct or was in reckless disregard in
the performance of its duties under the Transfer Agency Agreement. Currently, no
fee is charged for this telephone exchange privilege, although shareholders who
elect to use a wire transfer to effect payment directly to their bank account
will be charged a fee, currently $12.00 to cover the cost of this transfer. The
Transfer Agent's shareholder services telephone lines are open from 9 a.m. to 6
p.m. E.T. on each day during which the New York Stock Exchange is open for
trading. Telephone redemption requests made in good order after the close of
regular trading on the New York Stock Exchange, currently 4 p.m. New York Time,
will be executed at the Fund's net asset value next determined after the order
is accepted.
32
<PAGE>
Neither the Company nor the Transfer Agent will be liable to the shareholder
or any third party if the shareholder is unable to reach the Transfer Agent by
telephone. The shareholder may be unable to implement a telephone redemption
during periods of drastic economic or market change.
This telephone redemption privilege may be terminated or modified upon 60 days
written notice to the shareholders. The Telephone Redemption option also permits
you to move money from your fund account to your bank account via Electronic
Funds Transfer ("EFT") at your request. Transfers via EFT generally take up to
three business days to reach your bank account.
3. Other Matters
Normally, payment for redeemed shares will be sent to shareholders within 7
days after receipt of the redemption request by telephone or in proper written
form. There may be up to a 15-day delay in mailing out the redemption proceeds
check for shares purchased by check if the check which the Company received when
a shareholder purchased such shares has not yet cleared or if exchange of
address has occurred without a signature guarantee although the shares redeemed
will be priced for redemption upon receipt of the redemption request. A
shareholder can avoid the inconvenience of this check clearing period by
purchasing shares with federal funds or bank wire.
A shareholder who has held shares for at least 6 months and who has redeemed
shares or has had shares repurchased, has a right to reinvest in any of the
Funds at the then net asset value of the Funds without the payment of a sales
charge, except that a shareholder of the Money Market Fund will be required to
pay the applicable increased sales charge. Such reinvestment must be made within
90 days of the redemption or repurchase, and is limited to no more than the
amount of the redemption or repurchase proceeds. Currently, there is no charge
by the Company with respect to repurchases; however, the Company reserves the
right to charge a fee for this service and to otherwise modify or terminate this
privilege. Redemption or repurchase of shares is a taxable event and gain or
loss normally must be recognized. Reinvestment within a 30-day period in the
same Fund is considered a "wash sale" and results in non-allowance of any loss
for Federal income tax purposes.
The Company reserves the right to liquidate the account of any shareholder
whenever the value of the shareholder's account in any of the Funds falls below
$250 as a result of redemptions. Before the Company liquidates a shareholder's
account, it will give the shareholder 60 days written notice of the proposed
liquidation during which time the shareholder may increase the value of the
account and avoid liquidation.
SHAREHOLDER SERVICES
The Company offers a variety of programs to facilitate the purchase of shares
on a regular basis and to make periodic withdrawals.
Automatic Investment Program
Under this plan, on any business day chosen, a shareholder can make additional
monthly investments automatically in one or more of the Funds by having pre-
authorized checks or electronic drafts drawn on the shareholder's checking
account. Currently, the minimum for these monthly investments is $50 per check
or electronic draft. Participation in this plan is voluntary and may be
discontinued by the shareholder without penalty with 3 days notice prior to the
next scheduled purchase to the Transfer Agent. To qualify for a reduced sales
charge, the investor must use the Automatic Investment Program in combination
with the Letter of Intent.
Systematic Withdrawal Plan
Shareholders with an account valued at not less than $5,000 may enter into a
Systematic Withdrawal Plan which provides for payments of a specified dollar
amount or percentage of a shareholder's account value to be made on a monthly,
quarterly, semi-annual or annual basis, payable as requested by the shareholder
in writing; if the payment will be to a party other than the registered owner or
a person designated on the account application, the written request must be in
proper form and the signature must be guaranteed. No charge is currently
assessed against the account, but a charge could be instituted on 60 days
written notice to the shareholders in the event that the Company ceases to
assume the costs of these services.
The minimum amount which may be withdrawn each period is $50. (This is merely
the minimum amount allowed and should not be construed as a recommended amount.)
The maintenance of a Systematic Withdrawal Plan concurrently with
33
<PAGE>
purchases of additional shares of the particular Fund involved may not be
advantageous because of the sales commission involved in the additional
purchases.
Exchange Privilege
Shareholders of any of the Funds may exchange shares, by telephone, in writing
or through securities dealers, for shares of any of the other Funds. A sales
charge will be assessed to those shareholders who exchange shares of the Money
Market Fund, Government Securities Fund and Tax-Exempt Fund (to the extent
necessary to make up any difference in sales charge) for shares of the other
Funds. No sales charge will be imposed on exchanges between any of the other
Funds. Each exchange order must be in proper form and currently, there is no
charge for this service. This exchange privilege is subject to termination and
its terms are subject to change. For federal income tax purposes, any such
exchange constitutes a sale upon which a gain or loss may be realized, depending
upon whether the value of the shares being exchanged is more or less than the
shareholder's adjusted cost basis.
Any shareholder exchanging shares by telephone must supply the Transfer Agent
with personal identification information at the time of the exchange for
verification purposes. Procedures have been established to reduce the risk of
unauthorized telephone exchanges including refusal of a telephone redemption;
however, some risk still exists and a shareholder assumes such risk when
exchanging shares by telephone.
Systematic Exchange Privilege
Shareholders with an account valued at not less than $5,000 may enter into a
Systematic Exchange Privilege which provides for the monthly exchange of a
specified dollar amount or percentage of such shares for shares of any of the
other Funds. Exchanges are subject to the terms and conditions described under
"Exchange Privilege" above. The minimum amount which may be exchanged each month
is $50. Fund shares may not be held in certificated form to use this privilege.
Checkwriting Privilege
Shareholders in the Money Market Fund, the Government Securities Fund, the
Tax-Exempt Fund and the Global Income Fund only may redeem their shares by
availing themselves of the Checkwriting Privilege service offered by the
Company. Shareholders in any of these four Funds whose accounts have a total
value of not less than $250 in one of these Funds may draw on that account
through the use of checks which will be issued to shareholders. Any check so
drawn may not be less than $250 per check. There may be up to a 15-day waiting
period before a shareholder can draw on the account if the check which the
Company received when a shareholder purchased the shares has not yet cleared.
Currently, there is no service charge for maintenance of this program; however,
this checkwriting privilege is subject to termination and its terms are subject
to change. For federal income tax purposes redemptions made through the
Checkwriting Privilege constitute sales upon which a gain or loss may be
realized.
Individual Retirement Account
The Company has an Individual Retirement Account ("IRA") prototype available
for shareholders who wish to purchase shares of the Funds to fund an IRA. For
further information about this service, please contact the Distributor at the
address or phone number shown on the cover page of this Prospectus.
<PAGE>
[LOGO OF CHUBB INVESTMENT CHUBB INVESTMENT FUNDS INVESTING ACCOUNT
FUNDS APPEARS HERE] APPLICATION
- --------------------------------------------------------------------------------
ACCOUNT PROVISIONS
1. CHUBB INVESTMENT FUNDS ACCOUNT MAY BE OPENED by completing this application
and forwarding it through an authorized investment dealer to Firstar Trust
Company, Inc. or any successor transfer agent, referred to below as the
"Transfer Agent." The Application becomes effective only upon its acceptance by
the Transfer Agent and is to be construed under the laws of Maryland. Acceptance
of this Application by the Transfer Agent does not create an option warrant or
right to purchase shares of the Fund and no penalty is incurred by any party if
the intention declared is not fulfilled.
2. CERTIFICATES will not be issued unless requested, but shares included under
these Accounts will be placed to the credit of the investor on the records books
of Chubb Investment Funds, Inc. and shall entitle him/her to full shareholder
rights. At written request of the investor, certificates will be issued for all
or part of the full shares owned without in any way affecting the continued
operation of the Investor's Chubb Investment Funds, except that no certificate
will be issued to a shareholder whose account has a net asset value of less than
$250.
3. SYSTEMATIC WITHDRAWAL PLAN AND SYSTEMATIC EXCHANGE PRIVILEGE PAYMENTS shall
be made from the proceeds of redeemed shares of the Fund. The Transfer Agent, as
Agent for the Investor, will redeem as many shares as shall be necessary to
obtain the funds needed for the scheduled payment. Such redemption of shares
shall be made at the net asset value in effect at the close of business on the
10th or 25th day as designated by the investor (or, if that day is not a
business day, then the following business day) of each month. Periodic checks of
$50 or more will be sent per the Investor's instructions either monthly,
quarterly, semi-annually or annually (monthly only for the Systematic Exchange
Privilege) on or before the fifth business day following such redemption.
Investors should be cautioned that purchases of shares of the Fund at a time
when the Investor has a Systematic Withdrawal Plan in effect would result in the
payment of unnecessary commissions by the Investor and may not be advantageous
to him/her.
4. SHARES MAY BE REDEEMED at any time upon written or telephone request of the
Investor or the registered representative of record OR upon 60 days' notice to a
shareholder whose account has a net asset value of less than $250 as a result of
redemption, provided such shareholder does not increase his/her record ownership
to the minimum level within 60 days after the notice is mailed.
5. A DISTRIBUTION OPTION MAY BE CHANGED at any time with written notice or
telephone request from an investor or registered representative of record to the
Transfer Agent. Upon receipt by the Transfer Agent of Appropriate evidence of
the Investor(s) death(s), the Distribution Option will automatically be changed
so that dividends are paid in cash and capital gain distributions are reinvested
in additional shares in the Investor(s) account.
6. A CHUBB INVESTMENT FUNDS ACCOUNT WILL BE CLOSED when all shares in the
Account are redeemed or transferred. Upon closing of an Account or termination
of a Withdrawal Plan or Systematic Exchange Privilege, unless otherwise
requested, fractional shares will automatically be redeemed at the net asset
value effective at the time of such closing or termination, and will be
delivered to the Investor or his/her duly appointed legal representative,
together with any cash balance then held.
7. The Transfer Agent will act as Agent for the Dealer in purchasing shares
from the Principal Underwriter, as Agent for the Principal Underwriter in
purchasing shares from the Fund and as Agent for the Fund in repurchasing shares
in certain accounts. In acting as Agent for Dealer, the Transfer Agent shall
incur no liability for any action taken or omitted in good faith and with due
care. The Fund bears the cost of the services which the Transfer Agent renders
to the Investor, and the cost of services which the Transfer Agent renders to
the Dealer is borne by the Principal Underwriter. The Transfer Agent may charge
the Investor for extra services performed at his/her request, as set forth in
the Prospectus.
8. PAYEES EXEMPT FROM BACKUP WITHHOLDING. Payees specifically exempted from
backup withholding on interest and dividend payments include the following:
. A corporation
. A financial institution
. An organization exempt from tax under section 501(a), or an individual
retirement plan
. The United States or any agency or instrumentality thereof
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof
. An international organization or any agency or instrumentality thereof
. A registered dealer in securities or commodities in the U.S. or a
possession of the U.S.
. A real estate investment trust
. A common trust fund operated by a bank under section 584(a)
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1)
. An entity registered at all times under the Investment Company Act of 1940
. A foreign central bank of issue
. A middleman known in the investment community as a nominee or listed in the
most recent publication of the American Society of Corporate Secretaries,
Inc., Nominee List.
<PAGE>
INDIVIDUAL ACCOUNT APPLICATION--(NOT TO BE USED AS AN IRA)
- --------------------------------------------------------------------------------
DEALER AGREEMENT
The Dealer guarantees the signature(s) of the applicant(s); that to the best of
the Dealer's knowledge and belief the Investor is of full age and is legally
competent; that the Dealer may lawfully sell securities in the state which the
Investor has designated in such application as his/her mailing address; and that
in the case of a Systematic Withdrawal Plan, that the Dealer has reviewed with
the applicant(s) the provisions of this Systematic Withdrawal Plan and the rate
of withdrawal, and believes that the withdrawals requested are reasonable in
light of the Investor's circumstances. The Dealer represents that it has entered
into a Selected Dealer Agreement with Chubb Securities Corporation, the
Principal Underwriter, and in signing this Application appoints the Transfer
Agent, Inc. as its Agent to execute the purchase transactions in accordance with
the terms and the Company Account Application executed by the Investor or the
Investor's Withdrawal Plan or Systematic Exchange Privilege and to confirm each
purchase to the Investor and Dealer. With respect to each purchase, the Transfer
Agent will remit semi-monthly to the Dealer the Amount of its concession.
TERMS OF ESCROW
1. From my initial purchase (or from subsequent purchases, if necessary), 5%
for the Total Return and Growth and Income Funds and 3% of the Government
Securities and Total Return Funds, of the minimum dollar amount in the category
specified in my Letter of Intent will be held in escrow by the Transfer Agent
under this Letter of Intent in the form of shares, registered in my name
computed to the nearest full share at the public offering price applicable to
the Initial purchase.
2. All dividends and any capital gains distributions on shares held in escrow
will be paid to me or my order.
3. When I complete the minimum investment in the category specified in my
Letter of Intent, the shares held in Escrow will remain on deposit unless I
instruct that a certificate be delivered to me.
4. If my total purchases within 13 months under this Letter of Intent plus my
credit under the "Right of Accumulation" are
less than the amount I have specified, I will remit to Chubb Investment Funds,
Inc. any difference between the sales charge
on the amount actually purchased and the amount specified in this Letter of
Intent.
5. If I do not pay such difference in sales charge within 20 days after written
request from Chubb Investment Funds, Inc. or
my Dealer, the Transfer Agent, upon instructions from Chubb Investment Funds,
Inc. will redeem the appropriate number of shared held in Escrow to realize such
difference and release any excess.
6. In signing this Agreement, I hereby irrevocably constitute and appoint the
Transfer Agent my attorney to surrender for redemption any or all shares held in
Escrow with full power of substitution in the premises.
LETTER OF INTENT TERMS
1. If my total purchases made under this Letter of Intent plus my credit under
the "Right of Accumulation" are large enough to qualify for a lower sales charge
category than that application to the category I have specified, all
transactions will be recomputed on the expiration date of the Agreement to
effect the lower sales charge. The Dealer, by signing this Letter, agrees to
return to Chubb Investment Funds, Inc. as part of such retroactive price
adjustment the excess of the commission previously allowed or paid to the Dealer
over that which is applicable to the actual amount of the total purchases under
this Letter of Intent plus my credit under the "Right of Accumulation."
2. In retroactive price adjustment, any difference in sales charge will be
either delivered to me in cash or invested in additional shares at the lower
charge, as I so instruct.
3. In order to qualify for the quantity discount under this Agreement, members
of my immediate family include my spouse, children under 21, or any legal
representative of my minor children. Also qualifying for the quantity discount
are purchases made by a trustee or other fiduciary of a single trust estate or
single fiduciary account, including a pension, profit-sharing, or other employee
benefit trusts created pursuant to a plan qualified under Sec. 401 or 406 of the
Internal Revenue Code.
4. A purchase not made pursuant to this Agreement may be included hereunder if
this Agreement is filed within 90 days of the purchase, in which event the 13-
month period will commence on the date of such purchase.
5. Subject to the above terms of Escrow, each purchase will be made at the
current public offering price applicable for the full amount covered by the
Letter of Intent, as described in the Prospectus of the Fund.
6. To ensure that future purchases will receive a quantity discount, I or my
Dealer must inform the Transfer Agent that this statement is in effect each time
I make an investment in shares. Whenever I make an additional investment in
shares of the Fund, I will make reference to this Letter of Intent when each
remittance is forwarded for investment.
TELEPHONE EXCHANGE AND REDEMPTION AUTHORIZATION
1. I understand that all the restrictions which apply to exchanges and
redemptions of shares, as outlined in the current Prospectus, apply to telephone
exchanges and redemptions, including service charges and any sales charges.
2. I understand and agree to notify the Transfer Agent, in writing, or any
changes which would affect this authorization, including cancellation. I further
understand that those changes will become effective within 3 days after receipt
of the written notification.
3. I understand that the Transfer Agent will require, as verification, personal
identification information each time I exchange or redeem shares by telephone.
By signing this application, I further understand that although these procedures
have been established to reduce the risk of unauthorized exchanges and
redemptions, such a risk still exists, and I understand and agree that neither
Chubb Investment Funds nor the Transfer Agent is liable for any loss arising
from any telephone exchange or redemption.
<PAGE>
[LOGO OF CHUBB INVESTMENT NEW ACCOUNT
FUND APPEARS HERE] CHUBB INVESTMENT FUNDS APPLICATION
- --------------------------------------------------------------------------------
Make check payable to and mail with the Chubb Investment Funds
application to: Mutual Funds Service Center
P.O. Box 701
Milwaukee, WI 53201-0701
- --------------------------------------------------------------------------------
YOUR ACCOUNT REGISTRATION (PLEASE PRINT)
- --------------------------------------------------------------------------------
Individual or Joint Tenant
- --------------------------------------------------------------------------------
________________________________________________________________________________
First Name Initial Last
________________________________________________________________________________
Social Security Number DOB
________________________________________________________________________________
Joint Tenant Initial Last
________________________________________________________________________________
Social Security Number DOB
- --------------------------------------------------------------------------------
Your Mailing Address
- --------------------------------------------------------------------------------
________________________________________________________________________________
Street
________________________________________________________________________________
City State Zip Code
( )
- --------------------------------------------------------------------------------
Daytime Phone
________________________________________________________________________________
Existing Account No., If Any
- --------------------------------------------------------------------------------
Gifts to Minors
- --------------------------------------------------------------------------------
________________________________________________________________________________
Custodian's Name (only one can be named)
________________________________________________________________________________
Minor's Name (only one)
________________________________________________________________________________
Social Security Number of Minor
under the __________________________ [_] UGMA [_] UTMA
State of Residence
- --------------------------------------------------------------------------------
Corporation, Trust, or other Entity,
(S)401 Tax-Qualified Plan
- --------------------------------------------------------------------------------
________________________________________________________________________________
Name of Corporation, Trust or 401 Plan
________________________________________________________________________________
Tax ID Number
________________________________________________________________________________
Name of Trustees (Corporate Officer)
- --------------------------------------------------------------------------------
DISTRIBUTION OPTIONS If none of the options below are elected, all distributions
will be reinvested.
[_] Dividends and capital gains in additional shares
[_] Dividends in cash; capital gains in additional shares
[_] Dividends and capital gains in cash Automatic Dividend Diversification
(ADD). Reinvest my dividends and capital gains from ____ portfolio into
________________ portfolio
TELEPHONE EXCHANGE I authorize exchanges between Chubb Investment Funds upon
telephone instruction by the shareholder or the registered representative of
record for the account. [_] Yes [_] No
If neither box is checked, the telephone exchange privilege will be provided.
Call 800-541-2053
- --------------------------------------------------------------------------------
PORTFOLIO ALLOCATION (Minimum $250 per portfolio)
Chubb Money Market $ ______________
Chubb Government $ ______________
Chubb Tax Exempt $ ______________
Chubb Total Return $ ______________
Chubb Growth & Income $ ______________
Chubb Capital Appreciation $ ______________
Chubb Global Income $ ______________
Total Amount Invested $ ______________
- --------------------------------------------------------------------------------
EXPEDITED TELEPHONE REDEMPTIONS
[_] You may redeem your shares of any portfolio by calling 800-541-2053. Shares
will be redeemed and check made payable as account is registered and mailed to
address or wired to the bank account. Maximum telephone redemption is $50,000
per transaction. Telephone redemption cannot be done within 15 days of an
address change over the phone.
PROCEEDS OPTIONS
- ----------------
[_] Wire Payment ($12.00 fee)
[_] Electronic Funds Transfer (no fee) (see prospectus)
[_] Mail
(FOR FEDERAL FUND WIRES OR ELECTRONIC FUNDS TRANSFERS (EFT) ONLY)
________________________________________________________________________________
Name of Bank Account
________________________________________________________________________________
Bamk Account Number
________________________________________________________________________________
Name of Bank
________________________________________________________________________________
Address
IMPORTANT: IF YOU WISH TO HAVE FEDERAL FUND WIRE SERVICE OR EFT SERVICE, ENCLOSE
A VOIDED CHECK FROM THE BANK ACCOUNT IN WHICH YOU WISH TO USE THIS SERVICE, A
CHARGE MAY BE IMPOSED FOR WIRE TRANSFER.
<PAGE>
CIF NEW ACCOUNT APPLICATION (CONTINUED)
- --------------------------------------------------------------------------------
AUTOMATIC INVESTMENT PLAN ($50 minimum initial investment each portfolio)
[_] Beginning on _________ of ______, and every month thereafter, I authorize
Month Year
FIRSTAR Trust Company to debit, on or about the [_] th of each month or the next
business day thereafter, the amount requested from my bank account for
investment in the portfolio indicated.
PLEASE ATTACH A VOIDED CHECK. YOUR BANK MUST BE A
MEMBER OF THE AUTOMATED CLEARING HOUSE (ACH)
________________________________________________________________________________
Bank Name
________________________________________________________________________________
Portfolio Account Number (if assigned) Portfolio Name
________________________________________________________________________________
Amount of Each Monthly Investment ($50 minimum per fund)
________________________________________________________________________________
Depositor's Signature
________________________________________________________________________________
Depositor's Signature (if joint bank account, both must sign)
- --------------------------------------------------------------------------------
CHECK WRITING OPTION (Money Market, Government, Global Income and Tax Exempt)
[_] I have enclosed a signed check writing signature form from the prospectus.
- --------------------------------------------------------------------------------
LETTER OF INTENT (OPTIONAL),
I agree to the Letter of Intent Conditions as outlined in the prospectus. I
intend to invest, within a 13-month period beginning on the date hereof (initial
purchase date) in shares of the Fund purchased hereunder and one or more of the
other funds listed above (the"Funds"), an aggregate amount which, together with
the value of shares of any of the Funds, then owned by me, will equal or exceed
the amount indicated as follows:
[_] $100,000 [_] $250,000 [_] $500,000
[_] $1,000,000 [_] $2,000,000 [_] $5,000,000
RIGHT OF ACCUMULATION
[_]I own shares in the portfolios noted, to be applied for a reduced sales
charge.
________________________________________________________________________________
Portfolio Account Number
________________________________________________________________________________
Portfolio Account Number
- --------------------------------------------------------------------------------
SYSTEMATIC EXCHANGE
Exchange from (check one):
[_] Chubb Money Market [_] Chubb Government
[_] Chubb Tax Exempt [_] Chubb Total Return
[_] Chubb Growth & Income [_] Chubb Capital
[_] Chubb Global Income Appreciation
($50 minimum per portfolio selected)
Exchange to: Monthly Dollar Amount
Chubb Money Market $___________
Chubb Tax Exempt $___________
Chubb Growth & Income $___________
Chubb Government $___________
Chubb Total Return $___________
Chubb Global Income $___________
Chubb Capital Appreciation $___________
- --------------------------------------------------------------------------------
SYSTEMATIC WITHDRAWAL PLAN (Minimum account value: $5,000) Chubb Investment
Funds is authorized to make Systematic Withdrawal payments of:
$____________________ or _____ %
(minimum amount $50)
[_] monthly [_] quarterly [_] semi-annually [_] annually
The [_] th day (or next business day thereafter)
of ___________ of ______.
Month Year
________________________________________________________________________________
Portfolio Name
________________________________________________________________________________
Portfolio Account Number if Existing
[_] Send to account registration
[_] Send to payee(s) noted below
[_] Send to bank account via EFT
________________________________________________________________________________
Payee(s)
________________________________________________________________________________
Street
________________________________________________________________________________
City State Zip Code
- --------------------------------------------------------------------------------
SIGNATURE CERTIFICATION
I am (we are) of legal age and wish to establish an account in accordance with
the terms of the current prospectus, which I acknowledge receiving, I authorize
the establishment of an account in accordance with this application. Under
penalties of perjury I certify (1) that the Social Security or Taxpayer
Identification Number shown on this form is my current Taxpayer Identification
Number, and (2) I am not subject to backup withholding either because I have not
been notified by the Internal Revenue Service (IRS) that I am subject to backup
withholding as a result of a failure to report all interest or dividends, or the
IRS has notified me that I am no longer subject to backup withholding. The IRS
does not require your consent to any provision of this document other than the
certifications required to avoid backup withholding.
________________________________________________________________________________
Signature* Date
________________________________________________________________________________
Signature of Co-Owner, if any Date
DEALER INFORMATION
________________________________________________________________________________
Dealer Name
________________________________________________________________________________
Dealer Address (Main Office)
________________________________________________________________________________
City State Zip Code
________________________________________________________________________________
Dealer Authorized Signature
________________________________________________________________________________
Branch Address
________________________________________________________________________________
City State Zip Code
________________________________________________________________________________
Dealer Branch Office # Branch Phone #
________________________________________________________________________________
Rep #
*If shares are to be registered in (1) joint names, both persons should sign,
(2) a custodian for a minor, the custodian should sign, (3) a trust, the
trustees(s) should sign, or (4) a corporation or other entity, an officer should
sign and print name and title on space provided below.
________________________________________________________________________________
Print name and title of officer signing for a corporation or other entity.
<PAGE>
[LOGO] CHUBB INVESTMENT FUNDS, INC. CHECKING ACCOUNT
("The Company") SIGNATURE CARD
- --------------------------------------------------------------------------------
The Bank and the Company are expressly authorized to honor checks as redemption
instructions hereunder without requiring signature guarantees, and shall not be
liable for any loss or liability resulting from the absence of any such
guarantee.
2. CHECK PAYMENT: The Signatory(s) authorize and direct the Bank to pay each
check presented hereunder, subject to
all laws and Bank rules and regulations pertaining to checking accounts. In
addition, the Signatory(s) agree(s) that:
(a) No check shall be issued or honored, or any redemption effected, in any
amount less than $250;
(b) No check shall be issued or honored, or redemption effected, for any
amounts represented by shares for which certificates have not been
issued;
(c) No check shall be issued or honored, or redemption effected, for any
amounts represented by shares unless payment for such shares has been
made in full and any checks given in such payment have been collected
through normal banking channels;
(d) No checks shall be issued or honored which would result in a termination
of the shareholder's account;
(e) Checks shall be subject to any further limitations set forth in the
Prospectus issued by the Company including without limitation any
additions, amendments and supplements thereto.
3 DUAL OWNERSHIP: If more than one person is indicated as a registered owner of
the shares of the Fund, as by joint ownership, ownership in common, or tenants
by the entireties, then (a) each registered owner must sign this signature card,
(b) each registered owner must sign each check issued hereunder unless the
parties have indicated on the face of this card that only one need sign, in
which case the Bank is authorized to act upon such signature, and (c) each
Signatory guarantees to the Bank the genuineness and accuracy of the signature
of other Signatory(s).
TERMINATION: The Bank and the Company may at any time terminate this account,
related share redemption service and the Bank's agency for the Signatory(s)
hereto without prior notice by the Bank to any of the Signatory(s).
HEIRS AND ASSIGNS: These terms and conditions shall bind the respective heirs,
executors, administrators and assigns of the Signatory(s).
________________________________________________________________________________
PLEASE COMPLETE AND SIGN IF ELECTING REDEMPTION BY CHECK
(Available only for the Money Market Fund, the Government Securities Fund,
Global Income Fund and the Tax-Exempt Fund)
Signature card to establish a check redemption account, which allows you to
write a check against your Company account.
________________________________________________________________________________
NAME(S)
____________________________________ _______________________________________
ADDRESS ACCOUNT NUMBER
ONE
- ------------------------------------ _______________________________________
NUMBER OF SIGNATURES REQUIRED DATE
All registered owner(s) of the Company shares named above must sign below. By
signing his/her card the signatory(s)
agree(s) to all of the terms and conditions set forth on the reverse hereof.
SIGNATURES/NAME (PRINT) SOCIAL SECURITY OR TAX I.D. NUMBER
____________________________________ _______________________________________
____________________________________ _______________________________________
____________________________________ _______________________________________
Form 3-6116 2/97
<PAGE>
Distributor:
Chubb Securities Corporation
PO Box 205
One Granite Place
Concord, NH 03302
<PAGE>
================================================================================
CHUBB INVESTMENT FUNDS, INC.
ONE GRANITE PLACE
CONCORD, NEW HAMPSHIRE 03301
(603) 226-5000
================================================================================
This Statement of Additional Information is not a prospectus but supplements and
should be read in conjunction with the prospectus for Chubb Investment Funds,
Inc. (the "Company"). It is incorporated by reference into the Prospectus. A
copy of the Prospectus may be obtained from the Company at the address and
telephone number above.
The date of the Prospectus to which this Statement of Additional Information
relates is May 1, 1997.
The date of this Statement of Additional Information is May 1, 1997.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
GENERAL INFORMATION AND HISTORY..................................... 3
INVESTMENT OBJECTIVES AND POLICIES.................................. 3
Investment Policies............................................... 3
Investment Restrictions........................................... 3
DESCRIPTION OF CERTAIN INVESTMENTS.................................. 5
Bank Obligations.................................................. 6
Commercial Paper.................................................. 6
United States Dollar Obligations of Foreign
Branches of United States Banks................................... 6
Samurai and Yankee Bonds.......................................... 6
Brady Bonds....................................................... 7
Repurchase Agreements............................................. 7
Reverse Repurchase Agreements..................................... 8
Loan Participations and Other Direct Indebtedness................. 8
Options and Futures............................................... 9
'When-Issued" and "Delayed Delivery Securities"
"Forward Commitments"............................................. 13
Foreign Securities................................................ 13
Depository Receipts............................................... 14
Mortgage-Related Securities....................................... 14
Warrants.......................................................... 15
Investment Companies.............................................. 15
DESCRIPTION OF INVESTMENT RATINGS................................... 15
Moody's - Bond Ratings............................................ 15
Moody's Commercial Paper Ratings.................................. 16
Standard & Poor's - Bond Ratings.................................. 16
Standard & Poor's Commercial Paper Ratings........................ 17
INVESTMENT ADVISORY AND OTHER SERVICES.............................. 18
Investment Management............................................. 18
Transfer Agent.................................................... 20
Independent Auditors.............................................. 20
Custodians........................................................ 20
MANAGEMENT OF THE COMPANY........................................... 20
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATIONS.................... 22
CAPITAL STOCK....................................................... 23
DISTRIBUTION OF THE COMPANY'S SHARES................................ 23
Principal Underwriter............................................. 23
Distribution Plan................................................. 24
OFFERING AND REDEMPTION OF SHARES................................... 25
DETERMINATION OF NET ASSET VALUE.................................... 26
MAINTENANCE OF NET ASSET VALUE PER SHARE FOR THE MONEY MARKET FUND.. 27
TAXES AND DIVIDENDS................................................. 27
PERFORMANCE AND YIELD INFORMATION................................... 28
ADDITIONAL INFORMATION.............................................. 30
Name and Service Mark............................................. 30
FINANCIAL STATEMENTS 30
</TABLE>
S-2
<PAGE>
GENERAL INFORMATION AND HISTORY
Chubb Investment Funds, Inc., (the "Company") is comprised of seven separate
portfolios (the "Funds"). Six portfolios of the Company are open-end,
diversified management investment companies and one portfolio, Chubb Global
Income Fund, is an open-end non-diversified investment company and are
registered as such under the Investment Company Act of 1940 (the "1940 Act").
The Company was incorporated on April 27, 1987 and had no business history prior
to its formation.
INVESTMENT OBJECTIVES AND POLICIES
INVESTMENT POLICIES
The investment objectives and policies of each Fund are described in the
Company's Prospectus under the heading "Investment Objectives and Policies" with
each Fund's policies being described specifically under its own sub-heading.
The following information supplements the discussion of investment objectives
and policies for each Fund contained in the Company's Prospectus. Unless
otherwise specified, the investment policies and restrictions of each Fund are
not fundamental policies and may be changed by the Company's Board of Directors
without shareholder approval. Shareholders will be notified prior to any
material change. The investment objectives of each Fund are fundamental policies
and may be changed only with shareholder approval.
INVESTMENT RESTRICTIONS
Each Fund has adopted the following restrictions relating to the investments of
each Fund. The investment restrictions numbered 1 through 7, 10 and 13 are
fundamental policies of each Fund and may not be changed without approval of a
majority of the outstanding shares of each affected Fund. Each restriction
applies to each Fund of the Company, unless otherwise indicated. A change in
policy affecting only one Fund may be effected with the approval of a majority
of the outstanding shares of that Fund only. (As used in the Prospectus and this
Statement of Additional Information, the term "majority of the outstanding
voting shares" means the lesser of (1) 67% of the shares represented at a
meeting of which more than 50% of the outstanding share are represented or (2)
more than 50% of the outstanding shares.) All other investment restrictions are
operating policies and are subject to change by the Company's Board of Directors
without shareholder approval. No investment restriction which involves a maximum
percentage of securities or assets will be considered to be violated unless the
excess over the percentage occurs immediately after and is caused by an
acquisition or borrowing of securities or assets by the Fund. A Fund will not:
1. Issue securities senior to its common stock, except to the extent that
permissible borrowings may be so construed. For purposes hereof, writing
covered call options and entering into futures contracts, to the extent
permitted by restrictions 8 and 10 below, shall not involve the issuance of
senior securities or borrowings.
2. Buy securities on margin, except that it may: (a) obtain such short-term
credits as may be necessary for the clearance of purchases and sales of
securities, and (b) make margin deposits in connection with futures
contracts, subject to restrictions 10 and 11 below.
3. Borrow money, except each Fund may, as a temporary measure for
extraordinary or emergency purposes, including to cover net redemptions,
and not for investment purposes, borrow from banks and then only in amounts
not exceeding 5% of its total assets. In addition, no Fund may pledge,
mortgage or hypothecate its assets except in connection with permissible
borrowings and then only in amounts not exceeding 10% of the value of its
total assets. A Fund will not pledge, mortgage or hypothecate its assets to
the extent that at any time the percentage of pledged assets plus the sales
commission will exceed 10% of the value of its total assets. This
restriction will not prevent a Fund from (a) purchasing securities on a
"forward commitment", "delayed delivery" or "when-issued" basis or (b)
entering into futures contracts as set forth below in restriction 10 or as
regards the Global Income Fund entering into reverse repurchase agreements,
provided that a segregated account consisting of cash or liquid high grade
debt securities in an amount equal to the total value of the securities
underlying such agreement is established and maintained.
S-3
<PAGE>
4. Act as an underwriter of securities of other issuers except to the extent
that it may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 (a) in reselling securities, such as restricted
securities, acquired in private transactions and subsequently registered
under the Securities Act of 1933, and (b) in connection with the purchase
of government securities directly from the issuer, or (c) with respect to
the Capital Appreciation Fund and Global Income Fund, except to the extent
that the disposition of a security may technically cause it to be
considered an underwriter as that term is defined under the Securities Act
of 1933.
5. Invest 25% or more of the value of the total assets of any Fund, except the
Global Income Fund, in securities of issuers having their principal
business activities in the same industry. With respect to the Money Market
Fund only, debt securities issued by domestic banks will not be subject to
this restriction. This restriction also shall not apply to: (i) securities
issued or guaranteed by the United States Government, its agents or
instrumentalities and (ii) tax-exempt securities issued by governments or
political subdivisions of governments. For purposes of this restriction
industrial development bonds issued by non-governmental issuers will not be
considered to be tax-exempt securities.
6. Invest in real estate, although the Funds may buy securities of companies
which deal in real estate, and securities which are secured by readily
marketable interests in real estate, including interests in real estate
investment trusts, real estate limited partnerships, real estate investment
conduits or mortgage related instruments issued or backed by the United
States Government, its agencies or its instrumentalities. However, as a
matter of operating policy in accordance with state securities law
restrictions, the Funds will not invest in real estate limited partnerships
other than master limited partnerships traded on a national securities
exchange.
7. Make loans, except the Funds may: (a) purchase bonds, debentures, notes and
other debt obligations customarily either publicly distributed or
distributed privately to institutional investors and within the limits
imposed on the acquisition of restricted securities set forth in
restriction 11, and (b) enter into repurchase agreements with respect to
its portfolio securities.
8. Write options, except that all the Funds, except the Money Market Fund, may
write covered call options, and the Global Income Fund may write put
options, provided that as a result of such sale, a Fund's securities
covering all call options or subject to put options would not exceed 25% of
the value of the Fund's total assets.
9. Purchase options, except that all the Funds, except the Money Market Fund,
may purchase put options and the Global Income Fund may purchase put and
call options provided that the total premiums paid for such outstanding
options owned by a Fund does not exceed 5% of its total assets. No Fund,
except the Global Income Fund, may write put options on securities other
than to close out previously purchased put options.
10. Enter into commodity contracts, except that all the Funds, except the Money
Market Fund, may enter into financial futures contracts and the Global
Income Fund may also enter into foreign currency hedging contracts and
stock index futures contracts if, immediately thereafter: (a) the total of
the initial margin deposits required with respect to all open futures
positions at the time such positions were established, plus the sum of the
premiums paid for all unexpired options on futures contracts would not
exceed 5% of the value of a Fund's total assets, and (b) a segregated
account consisting of cash or liquid high-grade debt securities in an
amount equal to the total market value of any futures contract purchased by
a Fund, less the amount of any initial margin, is established.
11. Invest more than 10%, or in the case of the Global Income Fund and Capital
Appreciation Fund 15%, of the net asset value of any Fund in securities
which are not readily marketable, such as repurchase agreements having a
maturity of more than 7 days, restricted securities, time deposits with
maturities of more than 7 days, and other securities which are not
otherwise readily marketable, provided, however, that the Global Income
Fund and Capital Appreciation Fund may invest without limitation in
restricted securities issued under Rule 144A of the Securities Act of 1933
provided the Board of Directors or the Investment Manager under the
direction of the Board of Directors has determined that each such security
is liquid.
12. Invest more than 10% of the value of its total assets in securities of
other open-end and closed-end investment companies, except by purchases in
the open market involving only customary broker's commissions or as part of
a merger, consolidation, or acquisition, or as otherwise permitted by the
1940 Act and rules thereunder.
S-4
<PAGE>
13. Except with respect to the Global Income Fund, make an investment unless,
when considering all its other investments, 75% of the value of the Fund's
total assets would consist of cash, cash items, United States Government
securities, securities of other investment companies, and other securities.
For purposes of this restriction, the purchase of "other securities" is
limited so that (a) no more than 5% of the value of the Fund's total assets
would be invested in any one issuer and (b) no more than 10% of the
issuer's outstanding voting securities would be held by the Company. As a
matter of operating policy, the Money Market Fund will invest no more than
5% of the value of that Fund's total assets in securities, other than
United States Government securities, of any one issuer, except that the
Money Market Fund may invest up to 25% of its total assets in First Tier
Securities (as defined in Rule 2a-7 of the 1940 Act) of a single issuer for
a period of up to three business days after the purchase of such security.
Further, as a matter of operating policy, the Money Market Fund will not
invest more than (i) the greater of 1% of its total assets or $1,000,000 in
Second Tier Securities (as defined in Rule 2a-7 of the 1940 Act) of a
single issuer and (ii) 5% of the Money Market Fund's total assets, when
acquired in Second Tier Securities. As a matter of operating policy, the
Company will not consider repurchase agreements to be subject to this 5%
limitation if all the collateral underlying the repurchase agreements are
United States Government Securities.
14. Invest more than 5% of the value of the total assets of the Fund in
securities of companies having, at the time of purchase, a record of less
than 3 years' continuous operations, including predecessors and
unconditional guarantors.
15. Enter into a repurchase agreement with Chubb Life Insurance Company of
America ("Chubb Life"), The Chubb Corporation, or a subsidiary of either
such corporation.
16. Participate on a joint or joint and several basis in any trading account in
securities, although transactions for the Funds and any other account under
common management may be combined or allocated between the Fund and such
account.
17. Invest in companies for the sole purpose of exercising control or
management.
18. Invest in interests, other than debentures or equity stock interests, in
oil and gas or other mineral exploration or development programs.
19. Invest more than 5% of the value of the total assets of the Fund in
warrants, whether or not the warrants are listed on the New York or
American Stock Exchanges, or more than 2% of the value of the assets of a
Fund in warrants which are not listed on those exchanges. Warrants acquired
in units or attached to securities are not included in this restriction.
20. Invest in securities of foreign issuers, except that the Money Market Fund
may invest up to 10% of the value of its total assets in U.S. dollar
denominated securities of foreign issuers, and the Total Return Fund and
the Growth and Income Fund and the Capital Appreciation Fund may invest up
to 20% of the value of their total assets in securities of foreign issuers
including ADRs. The Global Income Fund may invest an unlimited percentage
of its assets in securities of foreign issuers, developed or undeveloped,
or whether listed on an exchange or unlisted.
21. Invest in securities of any issuer if the officers and directors of the
Company or the Investment Manager or Investment Administrator own
individually more than 1/2 of 1% of such issuer's securities or together
own more than 5% of such issuer's securities.
22. Effect short sales of securities, except short sales against the box.
DESCRIPTION OF CERTAIN INVESTMENTS
The following is a description of certain types of investments which may be made
by the Funds.
S-5
<PAGE>
BANK OBLIGATIONS
All of the Funds may acquire obligations of banks with total assets of at least
$500,000,000. These include certificates of deposit, bankers' acceptances, and
time deposits, all of which are normally limited to $100,000 per Fund from any
one bank. Certificates of deposit are generally short-term, interest-bearing
negotiable certificates issued by commercial banks or savings and loan
associations against funds deposited in the issuing institution. Bankers'
acceptances are time drafts drawn on a commercial bank by a borrower, usually in
connection with an international commercial transaction (to finance the import,
export, transfer or storage of goods). With a bankers' acceptance, the borrower
is liable for payment as is the bank, which unconditionally guarantees to pay
the draft at its face amount on the maturity date. Most bankers' acceptances
have maturities of six months or less and are traded in secondary markets prior
to maturity. Time deposits are generally short-term, interest-bearing negotiable
obligations issued by commercial banks against funds deposited in the issuing
institutions. None of the Funds will invest in time deposits maturing in more
than seven days.
The Money Market Fund will not invest in any security issued by a commercial
bank unless the bank is organized and operating in the United States and is a
member of the Federal Deposit Insurance Corporation ("FDIC"). However, this
limitation shall not prohibit investments in foreign branches of the United
States banks and United States branches of foreign banks which otherwise meet
the foregoing requirements.
COMMERCIAL PAPER
All the Funds may invest in commercial paper. Commercial paper involves an
unsecured promissory note issued by a corporation. It is usually sold on a
discount basis and has a maturity at the time of issuance of 9 months or less.
On the date of investment, with respect to the Money Market Fund, such paper or
its issuer must be rated in one of the two highest commercial paper rating
categories by at least two nationally recognized statistical rating
organizations ("NRSROs") which have issued a rating with respect to such
commercial paper or its issuer or by one NRSRO if that paper or its issuer has
been rated by only one NRSRO ("Requisite NRSROs") or, if not rated, must be of
comparable quality. The Funds, other than the Money Market Fund, may invest in
commercial paper rated within the three highest categories by Moody's, Standard
& Poor's or other NRSROs or, if not rated, which are of equivalent investment
quality in the judgment of the Investment Manager.
UNITED STATES DOLLAR OBLIGATIONS OF FOREIGN BRANCHES OF UNITED STATES BANKS
The Money Market Fund may invest in United States dollar obligations of foreign
branches of FDIC-member United States banks. These instruments represent the
loan of funds actually on deposit in the United States. The Company believes
that the United States bank would be liable in the event that the foreign branch
failed to pay on its United States dollar obligations. Nevertheless, the assets
supporting the liability could be expropriated or otherwise restricted if
located outside the United States. Exchange controls, taxes, or political and
economic developments could affect liquidity or repayment. Because of possibly
conflicting laws or regulations, the issuing bank could maintain that the
liability is solely that of the branch, thus exposing the Fund to a possible
loss. Such United States dollar denominated obligations of foreign branches of
FDIC-member United States banks are not covered by the usual $100,000 FDIC
insurance if they are payable only at an office of such a bank located outside
the United States, the District of Columbia, Puerto Rico, Guam, American Samoa,
and the U.S. Virgin Islands. The Money Market Fund will limit its investment in
foreign U.S. dollar-denominated obligations to no more than 10% of the Fund's
total assets and the Global Income Fund has no such limitation.
SAMURAI AND YANKEE BONDS
All of the Funds except the Money Market Fund may invest in yen-denominated
bonds sold in Japan by non-Japanese issuers ("Samurai bonds") and in U.S. dollar
denominated bonds sold in the United States by non-U.S. issuers ("Yankee
bonds"). As compared to bonds issued in their country of domicile, such bond
normally carry a higher rate of interest, but are less actively traded. It is
the policy of each Fund to invest in Samurai bonds and Yankee bonds only after
taking into account considerations of quality and liquidity as well as yield.
These bonds would be issued by governments which are members of the Organization
for Economic Cooperation and Development or have AAA ratings.
S-6
<PAGE>
BRADY BONDS
All of the Funds, except the Money Market Fund and the Government Securities
Fund may, subject to their investment restrictions, invest in "Brady Bonds",
which are debt restructurings that provide for the exchange of cash and loans
for newly issued bonds. Brady Bonds have been issued by Argentina, Brazil,
Bulgaria, Costa Rica, Dominican Republic, Jordan, Mexico, Nigeria, Philippines,
Poland, Uruguay Venezuela, and are expected to be issued by Ecuador and other
emerging countries. The largest proportion of Brady Bonds outstanding has been
issued by Brazil and Argentina, both nation's issues are rated below investment
grade. However the Company is not aware of any payment defaults on Brady Bonds.
Investors should realize that Brady Bonds are a recent innovation and do not
have a long payment history. Brady Bonds may be collateralized or
uncollateralized and are issued in various currencies (primarily dollars) and
are actively traded in the secondary market for Latin America debt. The Funds
may invest in either collateralized or uncollateralized Brady Bonds. U.S. dollar
denominated collateralized Brady Bonds, which may be fixed rate par bonds or
floating rate discount bonds, are collateralized in full as to principal by U.S.
Treasury zero coupon bonds having the same maturity as the bonds. Interest
payments on such bonds generally are collateralized by cash or securities in an
amount that, in the case of fixed rate bonds is equal to at least one year of
rolling interest payments or, in the case of floating rate bonds is initially
equal to at least one year's rolling interest payments based upon the applicable
interest rate at that time and is adjusted at regular intervals thereafter.
REPURCHASE AGREEMENTS
All of the Funds may invest in repurchase agreements. A repurchase agreement
customarily obligates the seller, at the time it sells securities to a Fund, to
repurchase the securities at a mutually agreed upon time and price. The total
amount received on repurchase would be calculated to exceed the price paid by
the Fund, reflecting an agreed upon market rate of interest for the period from
the time of the repurchase agreement to the settlement date, and would not
necessarily be related to the interest rate on the underlying securities. The
differences between the total amount to be received upon repurchase of the
securities and the price which was paid by the Fund upon their acquisition is
accrued as interest and is included in the Fund's net income declared as
dividends. The underlying securities will consist of high-quality liquid
securities. With respect to the Money Market Fund, the underlying security must
be either a United States Government security or a security rated in the highest
rating category by the Requisite NRSROs and must be determined to present
minimal credit risk. The Fund has the right to sell securities subject to
repurchase agreements but would be required to deliver identical securities upon
maturity of the repurchase agreements unless the seller fails to pay the
repurchase price. It is each Fund's intention not to sell securities subject to
repurchase agreements prior to the agreement's maturity.
During the holding period of a repurchase agreement, the seller must "mark to
market" the collateral on a daily basis and must provide additional collateral
if the market value of the obligation falls below the repurchase price. If a
Fund acquires a repurchase agreement and then the seller defaults at a time when
the value of the underlying securities is less than the obligation of the
seller, the Company could incur a loss. If the seller defaults or becomes
insolvent, a Fund could realize delays, costs, or a loss in asserting its rights
to the collateral in satisfaction of the seller's repurchase agreement. The Fund
will enter into repurchase agreements only with sellers who are believed by the
Investment Manager to present minimal credit risks and whose creditworthiness
has been evaluated by the Investment Manager in accordance with certain
guidelines and is subject to periodic review by the Board of Directors of the
Company. Currently, these guidelines require sellers who are broker-dealers to
have a net worth of at least $25,000,000, although this requirement may be
waived by the Board of Directors of the Company on the recommendation of the
Investment Manager, and sellers who are banks to have assets of at least
$1,000,000,000. The seller also must be considered by the Investment Manager to
be an institution of impeccable reputation and integrity, and the Investment
Manager must be acquainted with and satisfied with the individuals at the seller
with whom it deals.
S-7
<PAGE>
REVERSE REPURCHASE AGREEMENTS
In order to generate additional income the Global Income Fund may engage in
reverse repurchase agreement transactions with banks, broker-dealers and other
financial intermediaries. Reverse repurchase agreements are the same as
repurchase agreements except that the Fund assumes the role of seller/borrower
in the transaction. The Fund will maintain segregated accounts at the custodian
containing liquid, high grade, debt securities that at all times are equal to
its obligations under the repurchase agreements. The Fund will invest the
proceeds in other money market instruments or repurchase agreements maturing not
later than the expiration of the reverse repurchase agreement. Reverse
repurchase agreements involve the risk that the market value of the securities
sold by the Fund may decline below the repurchase price of the securities.
LOAN PARTICIPATIONS AND OTHER DIRECT INDEBTEDNESS
The Funds may purchase loan participations and other direct indebtedness. In
purchasing a loan participation, the Fund acquires some or all of the interest
of a bank or other lending institution in a loan to a corporate borrower. Many
such loans are secured, although some may be unsecured. Such loans may be in
default at the time of purchase. Loans and other direct indebtedness that are
fully secured offer the Fund more protection than an unsecured loan in the event
non-payment of scheduled interest or principal. However, there is no assurance
that liquidation of collateral from a secured loan or other direct indebtedness
would satisfy the corporate borrower's obligation, or that collateral can be
liquidated.
These loans and other direct indebtedness are made generally to finance internal
growth, mergers, acquisitions, stock repurchases, leveraged buy-outs and other
corporate activities. Such loans and other direct indebtedness loans are
generally made by a syndicate of lending institutions, represented by an agent
lending institution, which has negotiated and structured the loan and is
responsible for collecting interest, principal and other amounts due on its own
behalf and on behalf of the others in the syndicate, and for enforcing its and
their other rights against the borrower. Alternatively such loans and other
direct indebtedness may be structured as a novation, pursuant to which the Fund
would assume all of the rights of the lending institution in a loan, or as an
assignment, pursuant to which the Fund would purchase an assignment of a portion
of a lender's interest in a loan or other direct indebtedness either directly
from the lender or through an intermediary. The Fund may also purchase trade or
other claims against companies, which generally represent money owed by the
company to a supplier of goods or services. These claims may also be purchased
at a time when the company is in default.
Certain of the loan participations and other direct indebtedness acquired by the
Fund may involve revolving credit facilities or other standby financing
commitments which obligate the Fund to pay additional cash on a certain date or
on demand. These commitments may have the effect of requiring the Fund to
increase its investment in a company when the Fund might not otherwise decide to
do so (including at a time when the company's financial condition makes it
unlikely that such amounts will be repaid). To the extent that the Fund is
committed to advance additional funds, it will at all times hold and maintain in
a segregated account cash of high grade debt obligations in an amount sufficient
to meet such commitments.
The Fund's ability to receive payment of principal, interest and other amounts
due in connection with these investments will depend primarily on the financial
condition of the borrower. In selecting the loan participations and other direct
indebtedness which the Fund will purchase, the Investment Manager will rely upon
its own (and not upon the original lending institution's) credit analysis of the
borrower. As the Fund may be required to rely upon another institution to
collect and pass on to the Fund amounts payable with respect to the loan and
other direct indebtedness, an insolvency, bankruptcy or reorganization of the
lending institution may delay or prevent the Fund from receiving such amounts.
In such cases the Fund will evaluate as well the creditworthiness of the lending
institution and will treat both the borrower and the lending institution as an
"issuer" of the loan participation for purposes of the certain investment
restrictions pertaining to the diversification of the Fund's portfolio
investments. The highly leveraged nature of many such loans and other direct
indebtedness may make such loans especially vulnerable to adverse changes in
economic or market conditions. Investments in such loans and other direct
indebtedness may involve additional risk to the Fund. For example, if a loan or
other direct indebtedness is foreclosed, the Fund could become part owner of any
collateral, and would bear the costs and liabilities associated with owning and
disposing of the collateral. In addition, it is conceivable that under emerging
legal theories of lender liability, the Fund could be held liable as a co-
lender. It is unclear whether loans and other forms of direct indebtedness offer
securities law protections against fraud and misrepresentation. In the absence
of definitive regulatory guidance, the Fund relies on the Investment Manager's
research in an attempt to avoid situations where fraud and misrepresentation
could adversely affect the Fund. In addition, loan participations and other
direct investments may not be in the form of securities or may be subject to
restrictions on transfer, and only limited opportunities may exist to resell
such investments. As a result, the Fund may be unable to sell such investments
at an opportune time or may have to resell them at less than fair market value.
To the extent that the Investment Manager determines that such investments are
illiquid, the Fund will include them in the investment limitations above.
S-8
<PAGE>
OPTIONS AND FUTURES
CALL OPTIONS. All the Funds, except the Money Market Fund, may write (sell)
covered call options which are traded on national and international securities
exchanges to enhance investment performance or for hedging purposes. A call
option is a contract that gives the holder (buyer) of the option the right to
buy (in return for a premium paid), and the writer of the option (in return for
a premium received) the obligation to sell, the underlying security at a
specified price (the exercise price) at any time before the option expires. A
covered call option is a call in which the writer of the option, for example,
owns the underlying security throughout the option period or has deposited in a
separate account with the Company's custodian liquid high-grade debt obligations
or cash equal in value to the exercise price of the option.
A Fund will write covered call options both to reduce the risks associated with
certain of its investments and to increase total investment return through the
receipt of premiums. In return for the premium income, the Fund will give up the
opportunity to profit from an increase in the market price of the underlying
security above the exercise price so long as its obligations under the contract
continue, except insofar as the premium represents a profit. Moreover, in
writing the call option, the Fund will retain the risk of loss should the price
of the security decline. The premium is intended to offset that loss in whole or
in part. Unlike the situation in which the Fund owns securities not subject to a
call option, the Fund, in writing call options, must assume that the call may be
exercised at any time prior to the expiration of its obligation as a seller, and
that in such circumstances the net proceeds realized from the sale of the
underlying securities pursuant to the call may be substantially below the
prevailing market price, although it must be at the previously agreed to
exercise price.
A Fund may protect itself from loss due to a decline in value of the underlying
security or from the loss of appreciation due to its rise in value by buying an
identical option, in which case the purchase cost of such option may offset the
premium received for the option previously written. In order to do this, the
Fund makes a "closing purchase transaction" on the purchase of a call option on
the same security with the same exercise price and expiration date as the
covered call option that it has previously written. The Fund will realize a gain
or loss from a closing purchase transaction if the amount paid to purchase a
call option is less or more than the amount received from the sale of the
corresponding call option. Also, because increases in the market price of a call
option will generally reflect increases in the market price of the underlying
security, any loss resulting from the exercise or closing out of a call option
is likely to be offset in whole or in part by unrealized appreciation of the
underlying security owned by the Fund.
There is no assurance that a liquid market will exist for any particular option,
at any particular time, and for some options no market may exist. If a Fund is
unable to effect a closing purchase transaction, a Fund will not sell the
underlying security until the option expires or the Fund delivers the underlying
security upon exercise.
PURCHASING PUT OPTIONS. All the Funds, except the Money Market Fund, may
purchase put options and the Global Income Fund may also sell covered put
options. A Fund may purchase put options on securities to protect its holdings
in an underlying or related security against an anticipated decline in market
value. Such hedge protection is provided only during the life of the put option.
Securities are considered related if their price movements generally correlate
with one another. The purchase of put options on securities held by a Fund or
related to such securities will enable a Fund to preserve, at least partially,
unrealized gains in an appreciated security in its portfolio without actually
selling the security. In addition, a Fund will continue to receive interest or
dividend income on the security. A Fund may also sell put options it has
previously purchased, which could result in a net gain or loss depending on
whether the amount received on the sale is more or less than the premium and
other transaction costs paid on the put option which was bought.
OPTIONS ON INDEXES. All the Funds, except the Money Market Fund, may write
covered call options and may purchase put options on appropriate securities
indexes for the purpose of hedging against the risk of unfavorable price
movements adversely affecting the value of a Fund's securities or to enhance
income. Unlike a stock option, which gives the holder the right to purchase or
sell a specified stock at a specified price, an option on a securities index
gives the holder the right to receive a cash settlement amount based upon price
movements in the stock market generally (or in a particular industry or segment
of the market represented by the index) rather than the price movements in
individual stocks.
S-9
<PAGE>
The value of a securities index fluctuates with changes in the market values of
the securities which are contained in the index. For example, some securities
index options are based on a broad market index such as the Standard & Poor's
500 or the NYSE Composite Index, or a narrower market index such as the Standard
& Poor's 100. Indexes may also be based on an industry or market segment such as
the AMEX Oil and Gas Index or the Computer and Business Equipment Index. Options
on stock indexes are traded on exchanges or traded over-the-counter ("OTC
options"). Listed options are third-party contracts (i.e., performance of the
obligations of the purchaser and seller is guaranteed by the exchange or
clearing corporation) and have standardized strike prices and expiration dates.
OTC options are two-party contracts with negotiated strike prices and expiration
dates.
The effectiveness of hedging through the purchase or sale of securities index
options will depend upon the extent to which price movements in the portion of
the securities portfolio being hedged correlate with price movements in the
selected securities index. Perfect correlation is not possible because the
securities held or to be acquired by a Fund will not exactly match the
composition of the securities indexes on which options are purchased or written.
In the purchase of securities index options, the principal risk is that the
premium and transaction costs paid by a Fund in purchasing an option will be
lost as a result of unanticipated movements in the price of the securities
comprising the securities index for which the option has been purchased. In
writing securities index options, the principal risks are the inability to
effect closing transactions at favorable prices and the inability to participate
in the appreciation of the underlying securities.
FUTURES TRANSACTIONS. A futures contract is an agreement to buy or sell a
security (or deliver a final cash settlement price, in the case of a contract
relating to an index or otherwise not calling for physical delivery at the end
of trading in the contracts) for a set price in the future. Futures exchanges
and trading in futures is regulated under the Commodity Exchange Act by the
Commodity Futures Trading Commission ("CFTC").
Positions taken in the futures markets are not normally held until delivery or
cash settlement is required, but are instead liquidated through offsetting
transactions which may result in a gain or a loss. A clearing organization
associated with the exchange on which futures are traded assumes responsibility
for closing-out transactions and guarantees that, as between the clearing
members of an exchange, the sale and purchase obligations will be performed with
regard to all positions that remain open at the termination of the contract.
Upon entering into a futures contract, a Fund will be required to deposit with a
futures commission merchant a certain percentage (usually 1% to 5%) of the
futures contracts market value as initial margin. As a general matter, a Fund
may not commit in the aggregate more than 5% of the market value of its total
assets to initial margin deposits on the Fund's existing futures contracts and
premium paid for options on unexpired futures contracts. Initial margin is in
the nature of a performance bond or good faith deposit on the contract which is
returned upon termination of the futures contract if all contractual obligations
have been satisfied. The initial margin in most cases will consist of cash or
United States Government securities. Subsequent payments, called variation
margin, may be made with the futures commission merchant as a result of marking
the contracts to market on a daily basis as the contract value fluctuates.
FUTURES ON DEBT SECURITIES. A futures contract on a debt security is a binding
contractual commitment which, if held to maturity, will result in an obligation
to make or accept delivery, during a particular future month, of securities
having a standardized face value and rate of return. All of the Funds, except
the Money Market Fund, may buy and sell futures contracts on debt securities. By
purchasing futures on debt securities -assuming a "long" position- a Fund will
legally obligate itself to accept the future delivery of the underlying security
and pay the agreed price. By selling futures on debt securities - assuming a
"short" position - it will legally obligate itself to make the future delivery
of the security against payment of the agreed price. Open future positions on
debt securities will be valued at the most recent settlement price, unless such
price does not appear to the Investment Manager to reflect the fair value of the
contract, in which case the positions will be valued by, or under the direction
of, the Board of Directors.
S-10
<PAGE>
The Funds by hedging through the use of futures on debt securities seek to
establish more certainty with respect to the effective rate of return on their
portfolio securities. A Fund may, for example, take a "short" position in the
futures market by selling contracts for the future delivery of debt securities
held by the Fund (or securities having characteristics similar to those held by
the Fund) in order to hedge against an anticipated rise in interest rates that
would adversely affect the value of the Fund's portfolio securities. When
hedging of this character is successful, any depreciation in the value of
portfolio securities will be substantially offset by appreciation in the value
of the futures position.
On other occasions, a Fund may take a "long" position by purchasing futures on
debt securities. This would be done, for example, when the Fund intends to
purchase particular debt securities, but expects the rate of return available in
the bond market at that time to be less favorable than rates currently available
in the futures markets. If the anticipated rise in the price of the debt
securities contracts should occur (with its concomitant reduction in yield), the
increased cost to the Fund of purchasing the debt securities will be offset, at
least to some extent, by the rise in the value of the futures position in debt
securities taken in anticipation of the subsequent purchase of such debt
securities.
The Fund could accomplish similar results by selling debt securities with long
maturities and investing in debt securities with short maturities when interest
rates are expected to increase or by buying debt securities with long maturities
and selling debt securities with short maturities when interest rates are
expected to decline. However, by using futures contracts as a risk management
technique (to reduce a Fund's exposure to interest rate fluctuations), given the
greater liquidity in the futures market than in the bond market, it might be
possible to accomplish the same result more effectively and perhaps at a lower
cost. See Limitations on Purchase and Sale of Futures Contracts and Options on
Futures Contracts below.
INTEREST RATE AND CURRENCY FUTURES CONTRACTS The Funds, except the Money Market
Fund, may enter into interest rate or currency futures contracts, including
futures contracts on indices of debt securities, as a hedge against changes in
prevailing levels of interest rates or currency exchange rates in order to
establish more definitely the effective rate of return on securities or
currencies held or intended to be acquired. Hedging may include sales of futures
as a hedge against the effect or expected increases in interest rates or
decreases in currency exchange rates, and purchases of futures as an offset
against the effect of expected declines in interest rates or increases in
currency exchange rates.
STOCK INDEX FUTURES CONTRACTS. A stock index futures contract does not require
the physical delivery of securities, but merely provides for profits and losses
resulting from changes in the market value of the futures contract to be
credited or debited at the close of each trading day to the respective accounts
of the parties to the contract. On the contract's expiration date, a final cash
settlement occurs and the futures positions are simply closed out. Changes in
the market value of a particular stock index futures contract reflect changes in
the specified index of equity securities on which the futures contract is based.
The Total Return Fund, the Growth and Income Fund, the Capital Appreciation Fund
and the Global Income Fund may buy and sell stock index futures contracts.
Stock index futures may be used to hedge the equity portion of a Fund's
securities portfolio with regard to market risk (involving the market's
assessment of over-all economic prospects), as distinguished from stock-specific
risk (involving the market's evaluation of the merits of the issuer of a
particular security). By establishing an appropriate "short" position in stock
index futures contracts, a Fund may seek to protect the value of its portfolio
against an overall decline in the market for equity securities. Alternatively,
in anticipation of a generally rising market, a Fund can seek to avoid losing
the benefit of apparently low current prices by establishing a "long" position
in stock index futures contracts and later liquidating that position as
particular equity securities are in fact acquired. To the extent that these
hedging strategies are successful, a Fund will be affected to a lesser degree by
adverse overall market price movements, unrelated to the merits of specific
portfolio equity securities, than would otherwise be the case. See Limitations
on Purchase and Sale of Futures Contracts and Options on Futures Contracts;
below.
OPTIONS ON FUTURES CONTRACTS. For bona fide hedging purposes, all the Funds
except the Money Market Fund may purchase and the Global Income Fund may sell
put options and write call options on futures contracts. These options are
traded on exchanges that are licensed and regulated by the CFTC for the purpose
of options trading. A call option on a futures contract gives the purchaser the
right, in return for the premium paid, to purchase a futures contract (assume a
"long" position) at a specified exercise price at any time before the option
expires. A put option gives the purchaser the right, in return for the premium
paid, to sell a futures contract (assume a "short" position) at a specified
exercise price at any time before the option expires. Upon the exercise of a
call, the writer of the option is obligated to sell the futures contract (to
deliver a "long" position to the option holder) at the option exercise price,
which presumably will be lower than the current market price of the contract in
the futures market. Upon exercise of a put, the writer of the option is
obligated to purchase the futures contract (to deliver a "short" position to the
option holder) at the option exercise price which presumably will be higher than
the current market price of the contract in the futures market.
S-11
<PAGE>
When a Fund, as a purchaser of a put option on a futures contract, exercises
such option and assumes a short futures position, its gain will be credited to
its futures variation margin account. Any loss suffered by the writer of the
option of a futures contract will be debited to its futures variation margin
account. However, as with the trading of futures, most participants in the
options markets do not seek to realize their gains or losses by exercise of
their option rights. Instead, the holder of an option usually will realize a
gain or loss by buying or selling an offsetting option at a market price that
will reflect an increase or a decrease from the premium originally paid as
purchaser or required as a writer.
Options on futures contracts can be used by a Fund to hedge the same risks as
might be addressed by the direct purchase or sale of the underlying futures
contracts themselves. Depending on the pricing of the option, compared to either
the futures contract upon which it is based or upon the price of the underlying
securities themselves, it may or may not be less risky than direct ownership of
the futures contract or the underlying securities.
In contrast to a futures transaction, in which only transaction costs are
involved, benefits received by a Fund as a purchaser in an option transaction
will be reduced by the amount of the premium paid as well as by transaction
costs. In the event of an adverse market movement, however, a Fund which
purchased an option will not be subject to a risk of loss on the option
transaction beyond the price of the premium it paid plus its transaction costs,
and may consequently benefit from a favorable movement in the value of its
portfolio securities that would have been more completely offset if the hedge
had been effected through the use of futures contracts.
If a Fund writes call options on futures contracts, the Fund will receive a
premium but will assume a risk of adverse movement in the price of the
underlying futures contract comparable to that involved in holding a futures
position. If the option is not exercised, the Fund will realize a gain in the
amount of the premium, which may partially offset unfavorable changes in the
value of securities held by, or to be acquired for, the Fund. If the option is
exercised, the Fund will incur a loss in the option transaction, which will be
reduced by the amount of the premium it has received, but which may be partially
offset by favorable changes in the value of its portfolio securities.
While the purchaser or writer of an option on a futures contract may normally
terminate its position by selling or purchasing an offsetting option of the same
series, a Fund's ability to establish and close out options positions at fairly
established prices will be subject to the existence of a liquid market. The
Funds will not purchase or write options on futures contracts unless, in the
Investment Manager's opinion, the market for such options has sufficient
liquidity that the risks associated with such options transactions are not at
unacceptable levels.
FOREIGN CURRENCY EXCHANGE CONTRACTS AND OPTIONS ON FOREIGN CURRENCIES. In order
to hedge against foreign currency exchange rate risks, the Funds may enter into
forward currency exchange contracts ("forward currency contracts"), as well as
purchase put or call options on foreign currencies. A forward currency contract
is an obligation to purchase or sell a specific currency for an agreed price at
a future date which is individually negotiated and privately traded by currency
traders and their customers. In addition, for hedging purposes only, the Global
Income Fund may enter into foreign currency futures contracts. The Global Income
Fund may also conduct their foreign currency exchange transactions on a spot
(i.e., cash) basis at the spot rate prevailing in the currency exchange market.
LIMITATIONS ON PURCHASE AND SALE OF FUTURES CONTRACTS AND OPTIONS ON FUTURES
CONTRACTS. The Funds will engage in transactions in futures contracts and
related options only for bona fide hedging purposes and not for speculation. The
Funds may not purchase or sell futures contracts or related options if
immediately thereafter the sum of the amounts of initial margin deposits on a
Fund's existing futures contracts and premiums paid for unexpired options on
futures contracts would exceed 5% of the value of the Fund's total assets;
provided, however, that in the case of an option that is "in-the-money" at the
time of purchase, the "in-the-money" amount may be excluded in calculating the
5% limitation. In instances involving the purchase or sale of futures contracts
or the writing of covered call options thereon by a Fund, such positions will
always be "covered", as appropriate, by, for example, (i) an amount of cash and
cash equivalents, equal to the market value of the futures contracts purchased
or sold and options written thereon (less any related margin deposits),
deposited in a segregated account with its custodian or (ii) by owning the
instruments underlying the futures contract sold (i.e., short futures positions)
or option written thereon or by holding a separate option permitting the Fund to
purchase or sell the same futures contract or option at the same strike price or
better. At no time may any of the Funds engage in futures contracts if the total
contract value of the futures contracts would exceed 20% of the Fund's total
assets.
S-12
<PAGE>
Positions in futures contracts may be closed but only on an exchange or a board
of trade which provides the market for such futures. Although the Funds intend
to purchase or sell futures only on exchanges or boards of trade where there
appears to be an active market, there is no guarantee that such will exist for
any particular contract or at any particular time. If there is not a liquid
market at a particular time, it may not be possible to close a futures position
at such time, and, in the event of adverse price movements, a Fund would
continue to be required to make daily cash payments of variation margin.
Consequently, where a liquid secondary market does not exist, the Fund will be
unable to control losses from such futures contracts by closing out its
positions.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES AND FORWARD COMMITMENTS. The Funds
may make contracts to buy securities for a fixed price at a future date beyond
customary settlement time. When such transactions are negotiated, the price is
fixed at the time of commitment but delivery and payment for the securities can
take place up to three months after the date of commitment to purchase. Such
agreements involve a risk of loss if the value of the security to be purchased
declines prior to the settlement date, which risk is in addition to the risk of
decline in value of the Government Securities Fund, Tax-Exempt Fund or Global
Income Fund's other assets. Where such purchases are made through dealers, the
Fund relies on the dealer to consummate the sale. The dealer's failure to do so
may result in the loss to the Fund of an advantageous yield or price. Although
the Fund will generally enter into forward commitments with the intention of
acquiring securities for its portfolio or for delivery pursuant to options
contracts it has entered into, the Fund may dispose of a commitment prior to
settlement if the Investment Manager deems it appropriate to do so. The Fund
holds, and maintains until the settlement date in a segregated account, cash or
high-grade debt obligations in an amount sufficient to meet the purchase price
of its total commitments for forward commitment securities. The Fund may realize
short-term profits or losses upon the sale of such forward commitment
contracts.
FOREIGN SECURITIES. Subject to the Money Market Fund's quality and maturity
standards, the Money Market Fund may invest up to 10% of the Fund's total assets
in United States dollar-denominated securities of foreign issuers and in the
securities of foreign branches of United States banks, such as negotiable
certificates of deposit (Eurodollars). The Money Market Fund's investment in
securities of foreign issuers involves certain risks that are different than an
investment in only debt obligations of United States domestic issuers. These
risks are discussed below.
The Growth and Income Fund, the Total Return Fund and the Capital Appreciation
Fund may invest in and hold securities of foreign issuers in an amount, which
together with investments in Depository Receipts, American Depository Receipts
("ADRs") European Depository Receipts ("EDRs") and Global Depository Receipts
("GDRs") will not exceed 20% of the Fund's total assets. The Global Income Fund
has an unlimited right to invest and hold foreign securities. For purposes
hereof, securities of foreign issuers means securities of issuers organized or
whose principal place of business is outside the United States, or whose
securities are principally traded in securities markets outside the United
States.
Investment in foreign securities may involve the following special
considerations: with respect to foreign denominated securities, the risk of
fluctuating exchange rates; restrictions on and costs associated with the
exchange of currencies; the fact that foreign securities and markets are not as
liquid as their domestic counterparts; the imposition of exchange control
restrictions; and the possibility of economic or political instability. Also,
issuers of foreign securities are subject to different and, in some cases, less
comprehensive and non-uniform accounting, reporting and disclosure requirements
than domestic issuers, and settlement of transactions with respect to foreign
securities may be sometimes delayed beyond periods customary in the United
States. Foreign securities also generally have higher brokerage and custodial
costs than those of domestic securities. As a result, the selection of
investments in foreign issues may be more difficult and subject to greater risks
than investments in domestic issues. Since the Growth and Income Fund, the Total
Return Fund, the Capital Appreciation Fund and the Global Income Fund may invest
in businesses located in foreign nations, there is the possibility of
expropriation or confiscatory taxation, political or social instability or
diplomatic developments which could affect investments in those nations and
there may be more difficulty in obtaining and enforcing a court judgment abroad.
S-13
<PAGE>
The Investment Manager will consider these and other factors before investing in
particular securities of foreign issuers and will not make such investments
unless, in its opinion, such investments will comply with the policies and meet
the objectives of the Money Market Fund, the Growth and Income Fund, the Total
Return Fund, the Capital Appreciation Fund and the Global Income Fund. Also, the
Board of Directors will monitor all foreign custody arrangements to ensure
compliance with the 1940 Act and the rules thereunder, and will review and
approve, at least annually, the continuance of such arrangements as is
consistent with the best interests of the Company and its shareholders.
DEPOSITORY RECEIPTS. The Growth and Income Fund, the Total Return Fund, the
Capital Appreciation Fund and the Global Income Fund may invest in "ADRs,"
"GDRs," and EDRs",(collectively "Depository Receipts") which, with the exception
of the Global Income Fund, together with investment in securities of foreign
issuers, will not exceed 20% of the Fund's total assets. ADRs are certificates
issued by a United States bank representing the right to receive securities of a
foreign issuer deposited in a foreign branch of a United States bank and traded
on a United States exchange or over-the-counter. There are no fees imposed on
the purchase or sale of ADRs when purchased from the issuing bank in the initial
underwriting, although the issuing bank may impose charges for the collection of
dividends and the conversion of ADRs into the underlying ordinary shares.
Brokerage commissions will be incurred if ADRs are purchased through brokers on
the domestic stock exchanges. Investments in ADRs have advantages over direct
investments in the underlying foreign securities, including the following: they
are more liquid investments, they are United States dollar-denominated, they are
easily transferable, and market quotations for such securities are readily
available. The risks associated with ownership of Depository Receipts are the
same as those associated with investments in foreign securities except there is
no currency risk.
MORTGAGE-RELATED SECURITIES. Government National Mortgage Association ("GNMA")
certificates are mortgage pass-through securities representing part ownership of
a pool of mortgage loans. These loans, issued by lenders such as mortgage
bankers, commercial banks, and savings and loan associations, are either insured
by the Federal Housing Administration or guaranteed by the Veterans
Administration. A "pool" or group of such mortgages is assembled and, after
being approved by GNMA, is offered to investors through securities dealers. Once
approved by GNMA, the timely payment of interest and principal on each mortgage
is guaranteed by GNMA and backed by the full faith and credit of the United
States Treasury. GNMA certificates differ from bonds in that principal is paid
back monthly by the borrower over the term of the loan rather than returned in a
lump sum at maturity. GNMA certificates are called "pass-through" securities
because both interest and principal payments (including prepayments) are passed
through to the holder of the certificate.
In addition to GNMA certificates, the Government Securities Fund and Global
Income Fund may invest in mortgage pass-through securities issued by Federal
National Mortgage Association ("FNMA") and by Federal Home Loan Mortgage
Corporation ("FHLMC"). FNMA, a federally chartered and privately-owned
corporation, issues mortgage-backed pass-through securities which are guaranteed
as to timely payment of principal and interest by FNMA. FHLMC, a corporate
instrumentality of the United States whose stock is owned by the Federal Home
Loan Banks, issues two types of pass-through securities: mortgage participation
certificates ("PCs") and guaranteed mortgage certificates ("GMCs"). Both PCs and
GMCs represent an undivided interest in a pool of conventional mortgages from
FHLMC's portfolio. With respect to PCs, FHLMC guarantees the timely payment of
interest and the ultimate collection of principal. With respect to GMCs, FHLMC
guarantees that these securities will pay interest semi-annually and return
principal annually in a guaranteed minimum amount. Securities guaranteed by FNMA
and FHLMC are not backed by the full faith and credit of the United States
Treasury. If either fixed or variable rate pass-through securities issued by the
United States Government or its agencies or instrumentalities are developed in
the future, the Funds reserve the right to invest in them.
The Government Securities Fund and the Global Income Fund may also invest in
other types of mortgage-related securities issued by governmental entities.
These other instruments include collateralized mortgage obligations
("CMOs"),mortgage-backed bonds and real estate mortgage investment conduits
("REMICs"). However, the Government Securities Fund and the Global Income Fund
will not invest in residual interests of REMICs or CMOs due to the volatile
nature of such instruments. CMOs are obligations fully collateralized directly
or indirectly by a pool of mortgages on which payment of principal and interest
are passed through to the holders of CMOs on the same schedule as they are
received, although not necessarily on a pro rata basis.
S-14
<PAGE>
Mortgage-backed bonds are direct obligations of their issuers, payable out of
the issuers' general funds and fully collateralized directly or indirectly by a
pool of mortgage loans. The mortgages serve as collateral for the issuer's
payment obligations on the mortgage-backed bonds, but interest and principal
payments on the mortgages are not passed through directly (as with GNMA
certificates and FNMA and FHLMC pass-through securities) or on a modified basis
(as with CMOs). Accordingly, a change in the rate of prepayments on the pool of
mortgages could change the effective maturity of a CMO but not the effective
maturity of a mortgage-backed bond (although, like many bonds, mortgage-backed
bonds may be callable by the issuer prior to maturity).
REMICs were created through provisions in the Tax Reform Act of 1986 in order to
clarify certain ambiguities concerning the tax treatment of mortgage related
securities. A REMIC is an entity that holds a fixed pool of mortgages and issues
multiple classes of interests. If an issuer elects to come under the REMIC
provisions, its sale of "REMIC securities" will be treated as the sale of the
mortgages for tax purposes, regardless of whether such securities are issued in
the form of pass-throughs or collateralized debt and regardless of the financial
accounting treatment used. Investors in REMICs may purchase two types of REMIC
securities: (i) "regular interests", which have the characteristics of pass-
throughs or CMOs (i.e., fixed interest and principal), or (ii) "residual
interests", the value of which are affected by mortgage prepayments or other
contingencies. Again, the Government Securities Fund and Global Income Fund will
not invest in any residual interests of REMICs or CMOs.
In reliance on an SEC interpretation of the Investment Company Act, the
Company's investments in certain qualifying CMOs, including CMOs that have
elected to be treated as REMICs, are not subject to the Investment Company Act's
limitation on acquiring interests in other investment companies. In order to be
able to rely on the SEC's interpretation, the CMOs and REMICs must be unmanaged,
fixed-asset issuers that (i) invest primarily in mortgage-related securities,
(ii) do not issue redeemable securities, (iii) operate under general exemptive
orders exempting them from all provisions of the Investment Company Act, and
(iv) are not registered or regulated under the Investment Company Act as
investment companies. To the extent that a Fund selects CMOs or REMICs that do
not meet the above requirements, the Fund may not invest more than 10% of its
assets in all such entities and may not acquire more than 3% of the voting
securities of any single such entity.
Prepayment of mortgages underlying mortgage-backed securities may reduce their
current yield and total return. Mortgage-related securities may not be an
effective means of "locking-in" long-term interest rates because of the need to
invest and reinvest scheduled and unscheduled principal payments. At the time
principal payments or prepayments are received by the Fund and reinvested,
prevailing interest rates may be higher or lower than the Fund's current yield.
However, the Investment Manager intends to invest in these securities only when
the potential benefits to a Fund are deemed to outweigh the risks. Like other
bond investments, the value of mortgage-related securities will tend to rise
when interest rates fall, and fall when rates rise. Their value may also change
because of changes in the market's perception of the creditworthiness of the
organization that issued or guaranteed them or changes in the value of the
underlying mortgages. In addition, the mortgage securities market in general may
be adversely affected by changes in governmental regulation or tax policies.
WARRANTS. All the Funds except the Money Market Fund may invest in warrants,
which are rights to buy certain securities at set prices during specified time
periods. If, prior to the expiration date, the Fund is not able to exercise a
warrant at a cost lower than the underlying securities, the Fund will suffer a
loss of its entire investment in the warrant. See investment restriction 19 for
additional limitations on the use of warrants.
INVESTMENT COMPANIES. All the Funds may, subject to their respective Investment
Restrictions, under certain circumstances acquire the securities of other open-
end and closed-end investment companies. Such investments often result in
duplicate fees and expenses.
DESCRIPTION OF INVESTMENT RATINGS
MOODY'S - BOND RATINGS
Aaa - Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt-
edge". Interest payments are protected by a large, or by an exceptionally
stable, margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are not likely to impair
the fundamentally strong position of such issues.
S-15
<PAGE>
Aa - Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as high-
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, fluctuation of protective
elements may be of greater amplitude, or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa - Bonds which are rated Baa are considered as medium-grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present, but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well.
RATING REFINEMENTS. Moody's may apply numerical modifiers, 1, 2 and 3, in each
generic rating classification from Aa through B in its municipal bond rating
system. The modifier 1 indicates that the security ranks in the higher end of
its generic category; the modifier 2 indicates a mid-range ranking; and a
modifier 3 indicates that the issue ranks in the lower end of its generic rating
category.
SHORT-TERM NOTES. The four ratings of Moody's for short-term notes are MIG 1,
MIG 2, MIG 3 and MIG 4. MIG 1 denotes "best quality, enjoying strong protection
from established cash flows." MIG 2 denotes "high quality" with "ample margins
of protection." MIG 3 notes are of "favorable quality...but lacking the
undeniable strength of the preceding grades." MIG 4 notes are of "adequate
quality, carrying specific risk but having protection...and not distinctly or
predominantly speculative."
MOODY'S COMMERCIAL PAPER RATINGS
Moody's commercial paper ratings are opinions of the ability of issuers to repay
punctually promissory obligations not having an original maturity in excess of 9
months. Moody's employs the following three designations, all judged to be
investment grade, to indicate the relative repayment capacity of rated issuers:
Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations.
Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations.
Issuers rated Prime-3 (or related supporting institutions) have an acceptable
capacity for repayment of short-term promissory obligations.
Issuers rated Not Prime do not fall within any of the Prime rating categories.
STANDARD & POOR'S - BOND RATINGS
A Standard & Poor's municipal debt rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation. This
assessment may take into consideration obligors such as guarantors, insurers or
lessees.
The debt rating is not a recommendation to purchase, sell or hold a security,
inasmuch as it does not comment as to market price or suitability for a
particular investor.
The ratings are based on current information furnished by the issuer or obtained
by Standard & Poor's from sources Standard & Poor's considers reliable. Standard
& Poor's does not perform an audit in connection with any rating and may, on
occasion, rely on unaudited financial information. The ratings may be changed,
suspended, or withdrawn as a result of changes in, or unavailability of, such
information, or for other reasons.
S-16
<PAGE>
The ratings are based, in varying degrees, on the following considerations:
I. Likelihood of default-capacity and willingness of the obligor as to the
timely payment of interest and repayment of principal in accordance with
the terms of the obligations.
II. Nature of and provisions of the obligations.
III. Protection afforded by, and relative position of, the obligations in the
event of bankruptcy, reorganization, or other arrangement under the laws
of bankruptcy and other laws affecting creditor's rights.
AAA. Debt rated "AAA" has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA. Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the highest-rated issues only in small degree.
A. Debt rated "A" has a strong capacity to pay interest and repay principal
although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher-
rated categories.
BBB. Debt rated "BBB" is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than for debt in
higher-rated categories.
Plus (+) or Minus (-): The ratings from "AA" to "BBB" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
STANDARD & POOR'S COMMERCIAL PAPER RATINGS
A Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days. Ratings are graded into four categories, ranging from "A" for the
highest quality obligations to "D" for the lowest. Ratings are applicable to
both taxable and tax-exempt commercial paper. The four categories are as
follows:
A. Issues assigned this highest rating are regarded as having the greatest
capacity for timely payment. Issues in this category are further refined
with the designation 1, 2, and 3 to indicate the relative degree of
safety.
A-1. This designation indicates that the degree of safety regarding timely
payment is very strong.
A-2. Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as overwhelming as for
issues designated "A-1".
A-3. Issues carrying this designation have a satisfactory capacity or timely
payment. They are, however, somewhat more vulnerable to the adverse
effects of changes in circumstances than obligations carrying the higher
designations.
The Commercial Paper Rating is not a recommendation to purchase or sell a
security. The ratings are based on current information furnished to Standard &
Poor's by the issuer and obtained by Standard & Poor's from other sources it
considers reliable. The ratings may be changed, suspended, or withdrawn as a
result of changes in, or unavailability of, such information.
S-17
<PAGE>
Standard & Poor's rating categories with respect to certain municipal note
issues with a maturity of less than 3 years are as follows:
SP-1. A very strong, or strong, capacity to pay principal and interest. Issues
that possess overwhelming safety characteristics will be given a "+"
designation.
SP-2. A satisfactory capacity to pay principal and interest.
SP-3. A speculative capacity to pay principal and interest. Standard & Poor's
may continue to rate note issues with a maturity greater than 3 years in
accordance with the same rating scale currently employed for municipal
bond ratings.
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT MANAGEMENT
The Company has entered into an Investment Management Agreement with respect to
each Fund with Chubb Investment Advisory Corporation (the "Investment
Administrator") and Chubb Asset Managers, Inc. (the "Investment Manager"). The
agreement for the Money Market Fund, Government Securities Fund, Total Return
Fund, Tax-Exempt Fund, and Growth and Income Fund was approved by a majority of
the shareholders of the appropriate Fund at the meeting of shareholders held
April 21, 1988. The agreements for the Capital Appreciation Fund and Global
Income Fund were approved by the appropriate Fund at a meeting of shareholders
held August 31, 1995. The term of each agreement is one year, but will continue
in effect from year to year if approved at least annually by a vote of a
majority of the Board of Directors of the Company (including a majority of the
directors who are not parties to the contract or interested persons of any such
parties) cast in person at a meeting called for the purpose of voting on such
renewal, or by the vote of a majority of the outstanding shares of a Fund. The
agreements may be terminated, without the payment of any penalty, by any party,
by the vote of the Board of Directors, or by vote of a majority of the
outstanding shares of a Fund, on 60 days written notice to the Investment
Manager and Investment Administrator of the Company, or automatically in the
event of an assignment.
Under the terms of the agreements, the Investment Manager, subject to review by
the Company's Board of Directors, will have the day-to-day responsibility for
making decisions to buy, sell, or hold any particular security for all the
Funds. See "MANAGEMENT OF THE COMPANY" in the Prospectus. The Investment
Administrator, subject to review by the Company's Board of Directors, will act
primarily as administrator of the Company. The Investment Administrator is also
responsible for reviewing the investment transactions as executed by broker-
dealers for each Fund.
For providing investment advisory, management, and administrative services to
the Fund, the Investment Administrator and Investment Manager are entitled to
receive monthly compensation based on a percentage of the average net asset
value of each Fund as described more fully under "MANAGEMENT FEES AND EXPENSES"
in the Prospectus. For the years ended December 31, 1994, December 31, 1995, and
December 31, 1996 no such fees were paid to the Investment Manager. For the year
ended December 31, 1994 the Company paid $9,356, $34,215, $41,974, $39,057 and
$46,851 to the Investment Administrator for the Money Market Fund, the
Government Securities Fund, the Total Return Fund, the Tax Exempt Fund and the
Growth and Income Fund, respectively. For the year ended December 31, 1995, the
Company paid $11,436, $33,954, $49,091, $36,807, $61,946, $1,021 and $12,003 to
the Investment Administrator for the Money Market Fund, the Government
Securities Fund, the Total Return Fund, the Tax-Exempt Fund, the Growth and
Income Fund, Capital Appreciation Fund and Global Income Fund, respectively. For
the year ended December 31, 1996 the Company paid $13,154, $33,818, $92,989,
$38,966, $120,560, $9,401, and $51,455 to the Investment Administrator for the
Money Market Fund, the Government Securities Fund, the Total Return Fund, the
Tax Exempt Fund, the Growth and Income Fund, the Capital Appreciation Fund and
the Global Income Fund respectively.
S-18
<PAGE>
The Distributor waived a portion of the fees payable under the Distribution Plan
for the year ended December 31, 1996 [See "Management fees and Expenses" in the
Prospectus.] Pursuant to the Expense Limitation Agreement, the Investment
Administrator accepted a reduced fee for the year ended December 31, 1996 of
.15% of the average daily net asset of the Money Market Fund, .25% of the
average daily net assets of the Government Securities Fund, Tax-Exempt Fund and
the Capital Appreciation Fund and .35% of the average daily net assets of the
Total Return Fund and the Growth & Income Fund. The Investment Administrator
received its full fee of .45% of the average daily net assets for the Global
Income Fund. In addition, for the year ended December 31, 1996, and pursuant to
the Expense Limitation Agreement, Chubb Life agreed to assume all expenses of
the Company in excess of an annual rate (based on average daily net assets) of
.50% of the Money Market Fund, .93% of the Government Securities Fund, 1.08% of
the Total Return Fund, .98% of the Tax-Exempt Fund, 1.06% of the Growth and
Income Fund, 1.13% of the Capital Appreciation Fund and 1.23% of the Global
Income Fund. Chubb Life, in its discretion, may assume a greater percentage of
expenses.
For the year ending December 31, 1997, pursuant to the Expense Limitation
Agreement, Chubb Life has agreed to assume all expenses of the Company in excess
of an annual rate of 1.75% of the average daily assets of the Global Income
Fund, 1.25% of the average daily net assets of the Total Return Fund, the Growth
and Income Fund, and Capital Appreciation Fund, 1.00% of the average daily net
assets of the Government Securities Fund and the Tax-Exempt Fund, and 0.50% of
the average daily net assets of the Money Market Fund, and, in its discretion,
may assume a greater percentage of expenses.
The Investment Manager and its affiliates may provide investment advice to other
clients, including, but not limited to, mutual funds, individuals, pension funds
and institutional investors. In addition, persons employed by the Investment
Manager, who are also investment personnel of Chubb & Son, Inc., currently
provide investment advice to and supervision and monitoring of investment
portfolios for The Chubb Corporation and its affiliates, including general
accounts of the insurance affiliates of The Chubb Corporation. In addition,
certain investment personnel employed by the Investment Manager currently
provide advice to other investment portfolios of entities not affiliated with
The Chubb Corporation or its affiliates in their capacity as officers or
directors of certain registered investment advisers not related to the
Investment Manager. Some of these investment portfolios, as well as the
portfolios of other clients, may have investment objectives and investment
programs similar to the Funds. Accordingly, occasions may arise when the
Investment Manager and investment personnel of Chubb & Son, Inc. may select
securities for purchase or sale by a Fund that are also held by other advisory
accounts, or that are currently being purchased or sold for other advisory
accounts. It is the practice of the Investment Manager and its investment
personnel, its affiliates, and the investment personnel of Chubb & Son, Inc. to
allocate such purchases or sales insofar as feasible, among their advisory
clients in a manner they deem equitable. It is the policy of the Investment
Manager, its affiliates and the Investment personnel of Chubb & Son, Inc. not to
favor any one account over the other.
On those occasions when such simultaneous investment decisions are made, the
Investment Manager, its affiliates, and the investment personnel of Chubb & Son,
Inc. will allocate purchase and sale transactions in an equitable manner
according to written procedures approved by the Company's Board of Directors.
Specifically, such written procedures provide that, in allocating purchase and
sale transactions made on a combined basis, the Investment Manager, its
affiliates, and the investment personnel of Chubb & Son, Inc. will seek to
achieve the same average unit price of securities for each advisory account and
will seek to allocate, as nearly as practicable, such transactions on a pro-rata
basis substantially in proportion to the amounts ordered to be purchased or sold
by each advisory account. Such procedures may, in certain instances, either
advantageous or disadvantageous to the Funds. While it is conceivable that in
certain instances this procedure could adversely affect the price or number of
shares involved in the Company's transaction, it is believed that the procedure
generally contributes to better overall execution of the Company's portfolio
transactions.
S-19
<PAGE>
TRANSFER AGENT
The Company has contracted with Firstar Trust Company ("Firstar") to act as its
transfer agent, registrar, and dividend disbursing agent. Firstar will service
shareholder accounts, and its duties will include: (i) effecting sales
redemptions and exchanges of Company shares; (ii) distributing dividends and
capital gains associated with Company accounts; and (iii) maintaining account
records and responding to shareholder inquiries. Firstar is compensated monthly
by the Company at the following annual rates per shareholder account: $19.00 for
the Money Market Fund, $16.00 for the Government Securities Fund and the Global
Income Fund, $14.00 for the Total Return Fund, the Tax Exempt Fund, the Growth
and Income Fund, and the Capital Appreciation Fund, in addition to ACH fees, IRA
fees, wire fees and out of pocket expenses. There is a minimum annual fee of
$24,000 for the Money Market Fund and $10,000 for the other Funds. The fees paid
to the Fund transfer agent(s) for the year ended December 31, 1996 were
$212,188.
INDEPENDENT AUDITORS
Ernst & Young LLP 200 Clarendon Street, Boston, Massachusetts 02116 has been
selected as the independent auditors of the Company. The financial statements of
the Fund are incorporated by reference in this Statement of Additional
Information and the related financial highlights included in the Prospectus for
the periods indicated therein have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon incorporated by
reference, and are included in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
CUSTODIANS
Citibank, N.A., 111 Wall Street, New York City, New York 10043, acts as
custodian of the Company's assets. Citibank is responsible for holding all
securities and cash of each Fund, receiving and paying for securities purchased,
delivering against payment securities sold, receiving and collecting income from
investments, making all payments covering expenses of the Company and performing
other administrative duties, all as directed by persons authorized by the
Company. Citibank does not exercise any supervisory function in such matters as
the purchase and sale of portfolio securities, payment of dividends, or payment
of expenses of the Company. The Company, with respect to each Fund, may also
appoint from time to time, with the approval of the Company's Board of
Directors, qualified domestic sub-custodians for all the Funds and foreign sub-
custodians qualified under Rule 17f-5 of the 1940 Act with respect to certain
foreign securities which may be purchased by the Funds.
MANAGEMENT OF THE COMPANY
The directors and officers of the Fund, their addresses, their positions with
the Fund, and their principal occupations for the past five years are set forth
below:
<TABLE>
<CAPTION>
Positions with Occupations for
Name and Address the Company the Past Five Years
- ---------------- -------------- -------------------
<S> <C> <C>
Michael O'Reilly* President and Senior Vice President and Chief Investment
15 Mountain View Rd Director Officer of The Chubb Corporation, Director,
Warren, New Jersey 07061 President and Chief Operating Officer of the
Investment Manager and Senior Vice President
and Director of the Investment Administrator.
Ronald R. Angarella Senior Vice Senior Vice President, Chubb Life; President
One Granite Place President and Director, Chubb America Fund, Inc., the
Concord, N.H. 03301 and Director Investment Administrator, Chairman, the
Distributor, Hampshire Funding, Inc., previously
Chairman and President, Chubb Series Trust.
</TABLE>
S-20
<PAGE>
<TABLE>
<CAPTION>
Positions with Occupations for
Name and Address the Company the Past Five Years
- ---------------- -------------- -------------------
<S> <C> <C>
Charles C. Cornelio Vice President Executive Vice President, Chief Administrative
One Granite Place and General Officer, Counsel and Assistant
Counsel Life, Vice President, General Counsel and
Secretary, Chubb Concord, N.H. 03301
Secretary, Chubb Securities Corporation and
Hampshire Funding, Inc.; Vice President and
General Counsel, Chubb America Fund, Inc.;
Vice President and Secretary, Chubb
Investment Advisory.
Shari J. Lease Secretary Assistant Vice President and Counsel,
Chubb One Granite Place Life; Secretary, Chubb America Fund, Inc.;
Concord, N.H. 03301 Assistant Secretary, Chubb Investment Advisory,
previously Assistant Counsel and Assistant Vice
President, State Bond and Mortgage Company
and affiliated companies.
John A. Weston Treasurer Assistant Vice President of Chubb Life; Treasurer
One Granite Place of Chubb Securities Corporation, Chubb
Concord, N.H. 03301 Investment Advisory, Hampshire Funding, Inc.,
Chubb America Fund, Inc., formerly, Mutual
Fund Accounting Officer for the Fund, Chubb
Investment Funds, Inc. and Chubb Investment
Advisory Corporation and Assistant Treasurer for
Chubb Securities Corporation and Hampshire
Funding, Inc.
Thomas H. Elwood Assistant Assistant Counsel, Chubb Life; Assistant
One Granite Place Secretary Secretary, Chubb America Fund, Inc.,
Concord, N.H. 03301 formerly, Associate Counsel, New York Life
Insurance Company; Secretary New York Life
Institutional Funds, Inc., Assistant Secretary,
Mainstay Funds, and MFA Funds.
Mark D. Landry Assistant Mutual Fund Accounting and Operations Officer,
One Granite Place Treasurer Chubb Life; Assistant Treasurer, Chubb
Concord, N.H. 03301 Investment Advisory; Chubb America Fund, Inc.,
formerly Mutual Fund Accounting and
Operations Manager, Chubb Life, Senior Fund
Accountant for the Fund and Chubb America
Fund, Inc.
James J. Weisbart Director Retired, Director of Chubb America Fund, Inc.,
301 Smithfield Road previously President of Bird Bath Laundromats
Contoocook, N.H. 03329 and President of Solomon's, Inc.
(retail clothing company)
Michael D. Coughlin Director President of Concord Litho Company, Inc.
106 School Street (printing company), Director of Chubb America
Concord, N.H. 03301 Fund, Inc.
Elizabeth S. Hager Director Consultant, Fund Development; Director of
5 Auburn Street Chubb America Fund, Inc., previously, State
Concord, N.H. 03301 Representative, New Hampshire, City
Councilor, City of Concord, N.H.
and Mayor, City of Concord, N.H.
</TABLE>
**Asterisks indicate those directors who are "interested persons" within the
meaning of Section 2(a)(19) of the 1940 Act.
S-21
<PAGE>
Mr. O'Reilly and Mr. Angarella are members of the Company's Executive Committee
and Valuation Committee, and Mr. Weisbart, Mr. Coughlin, and Ms. Hager are
members of the Company's Audit Committee.
The Company pays no salaries or compensation to any of its officers, all of whom
are officers or employees of Chubb Life, the Investment Administrator or
Investment Manager. The Company pays to each director who is not affiliated with
the Investment Manager or Investment Administrator or their affiliates an annual
director's retainer of $2,000 and a payment of $750 plus expenses per meeting
attended.
As of March 11, 1997, the directors and officers of the Company, as a group,
owned .47% of the outstanding shares of the Company and less than 1% of any of
the Funds individually.
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATIONS
Under the Investment Management Agreement, the Investment Manager has the day-
to-day responsibility for selecting broker-dealers through which securities are
to be purchased and sold. The Investment Administrator has the responsibility to
review the investment transactions as executed by the broker-dealers.
The money market securities and other debt securities purchased by the Money
Market Fund, the Government Securities Fund, and the Tax-Exempt Fund usually
will be purchased on a principal basis directly from issuers, underwriters, or
dealers. Accordingly, no brokerage charges are expected to be paid on such
transactions. However, purchases from an underwriter on a principal basis
generally include a concession paid to the underwriter, and transactions with a
dealer usually include the dealer's "mark-up" or "mark-down".
Insofar as known to management, no director or officer of the Company, of the
Investment Manager, or the Investment Administrator or any person affiliated
with any of them has any material direct or indirect interest in any broker
employed by or on behalf of the Company except as officers or directors of the
Distributor.
In selecting broker-dealers to execute transactions with respect to each Fund,
the Investment Manager is obligated to use its best efforts to obtain for each
Fund the most favorable overall price and execution available, considering all
the circumstances. Such circumstances include the price of the security, the
size of the broker-dealer's "spread" or commission, the willingness of the
broker-dealer to position the trade, the reliability, financial strength and
stability and operational capabilities of the broker-dealer, the ability to
effect the transaction at all where a large block is involved, availability of
the broker-dealer to stand ready to execute possibly difficult transactions in
the future, and past experience as to qualified broker-dealers. Such
considerations are judgmental and are weighed by the Investment Manager in
seeking the most favorable overall economic result to the Company.
Subject to the foregoing standards, the Investment Manager has been authorized
by the Company's Board of Directors to allocate brokerage to broker-dealers who
have provided brokerage and research services, as such services are defined in
Section 28(e) of the Securities Exchange Act of 1934. Pursuant to that
authorization, the Investment Manager may cause each Fund to pay any broker-
dealer a commission in excess of the amount another broker-dealer would have
charged for effecting the same transaction if the Investment Manager determines
in good faith that such amount of commission is reasonable in relation to the
value of the brokerage an research services provided by such broker-dealer to
the Investment Manager, viewed in terms of either that particular transaction or
the Investment Manager's overall responsibilities with respect to the Company
and other accounts as to which it exercises investment discretion. Such
brokerage and research services may include, among other things, analyses and
reports concerning issuers, industries, securities, economic factors and trends,
and strategies for the Funds. Such research services may be used by the
Investment Manager in connection with any other advisory accounts managed by it.
Conversely, research services to any other advisory accounts may be used by the
Investment Manager in managing the investments of the Company.
During the year ended December 31, 1996 the Fund paid no commissions to an
affiliated broker/dealer and no commissions were contingent upon the sale of
Fund shares. As of December 31, 1996, the Total Return Fund and the Growth and
Income Fund held the following shares of their regular brokers: 8,800 and 16,800
shares respectively of Merrill Lynch & Company, Inc. and 6,500 shares of Lehman
Brothers Holding Inc. in the Capital Appreciation Fund.
The Investment Manager will use its best efforts to recapture all available
tender offer solicitation fees and similar payments in connection with tenders
of the securities of the Company and to advise the Company of any fees or
payments of whatever type which it may be possible to obtain for the Company's
benefit in connection with the purchase or sale of the Company's securities.
S-22
<PAGE>
As discussed above, the Investment Manager may combine transactions for the
Company with transactions for other accounts managed by it, its affiliates, or
investment personnel of Chubb & Son, Inc., including other investment companies
under the 1940 Act. Transactions will be combined only when the transaction
meets the Company's requirements as to selection of brokers or dealers and
negotiation of prices and commissions which the Investment Manager would
otherwise apply.
For the year ended December 31, 1994, the Company paid $67,358, $33,679 which
was paid for research services received. For the year ended December 31, 1995,
it paid $83,044, $59,792 of which was paid for research services received. For
the year ended December 31, 1996, it paid $123,856, $89,176 of which was paid
for research services received. The increase in brokerage commissions paid over
the past two years is due to increased trading volume of equities by the
Company.
Portfolio turnover for each Fund can vary significantly from year to year or
within a year. The Government Securities Fund's turnover rate was 140.94% for
1996, compared to 276.56% for 1995. This represents an increase from year to
year, the 1995 turnover rate may still be considered high due to the following
factors: (i) the need to restructure the portfolio due to changing market and/or
economic conditions; (ii) The need to rebalance the portfolio as securities age
down the yield curve; (iii) the need to trade securities whose characteristics
are affected by moderate to large changes in interest rates (mortgage-backed
securities); and (iv) value added to trading opportunities.
CAPITAL STOCK
The authorized capital stock of the Company consists of 1,000,000,000 shares of
common stock, par value $.01, which are divided into Seven series: Chubb Money
Market Fund, Chubb Government Securities Fund, Chubb Total Return Fund, Chubb
Tax-Exempt Fund, Chubb Growth and Income Fund, Chubb Capital Appreciation Fund
and Chubb Global Income Fund. Each Fund currently consists of 100,000,000
authorized shares. The Company has the right to issue additional shares without
the consent of the shareholders, and may allocate its issued and reissued shares
to new Funds or to one or more of the seven existing Funds.
The assets received by the Company for the issuance or sale of shares of each
Fund and all income, earnings, profits and proceeds thereof are specifically
allocated to each Fund. They constitute the underlying assets of each Fund, are
required to be segregated on the books of account, and are to be charged with
the expense of such Fund. Any assets which are not clearly allocable to a
particular Fund are allocated among the Funds in proportion to their relative
net assets before adjustment for such unallocated liabilities. Each issued and
outstanding share in a Fund is entitled to participate equally in dividends and
distributions declared with respect to such Fund and in the net assets of such
Fund upon liquidation or dissolution remaining after satisfaction of outstanding
liabilities.
Chubb Life Insurance Company of New Hampshire, a wholly-owned subsidiary of the
Jefferson-Pilot Corporation a North Carolina Corporation, provided the initial
capital for the Company by purchasing shares of each of the original five Funds
valued at $100,000 prior to the date shares of the Company were offered to the
public. On July 1, 1991, Chubb Life Insurance Company of New Hampshire and Chubb
Life Insurance Company of America were merged into an affiliate, The Volunteer
State Life Insurance Company ("Volunteer"), which simultaneously changed its
name to Chubb Life Insurance Company of America ("Chubb Life"). Chubb Life
provided the initial investment for the Capital Appreciation Fund and the Global
Income Fund by purchasing 10,000 shares of each Fund at a cost of $10.00 per
share. Chubb Life intends to withdraw such investment from time to time. As of
February 28, 1997, Chubb Life (a New Hampshire corporation), The Chubb
Corporation (a New Jersey corporation), and its wholly-owned subsidiary, Federal
Insurance Company ("Federal Insurance"), together owned 19% of the outstanding
shares of the Company.
DISTRIBUTION OF THE COMPANY'S SHARES
PRINCIPAL UNDERWRITER
Chubb Securities Corporation, One Granite Place, Concord, New Hampshire 03301,
(603) 226-5000, is the principal underwriter and Distributor of the Company's
shares, and is a wholly-owned subsidiary of Chubb Life. Chubb Life is a wholly-
owned subsidiary of the Jefferson-Pilot Corporation, a North Carolina
Corporation.
S-23
<PAGE>
Under the terms of the Distribution Agreement, the Distributor will use its best
efforts to distribute the Company's shares among investors and broker-dealers
with which it has contracted to sell the Company's shares. The shares are sold
only at the public offering price in effect at the time of the sale ("Offering
Price"), which is determined in the manner set forth in the Prospectus under
"PURCHASE OF SHARES". The Company will receive not less than the full net asset
value of the shares of each Fund sold, which amount is determined in the manner
set forth in this Statement of Additional Information under "DETERMINATION OF
NET ASSET VALUE." The amount between the Offering Price and the net asset value
of each Fund may be retained by the Distributor or it may be reallowed in whole
or in part to broker-dealers effecting sales of the Company's shares. See
"PURCHASE OF SHARES" in the Prospectus.
For the years ended December 31, 1996, December 31, 1995, and December 31, 1994,
the Distributor retained $192,057, $102,066 and $178,576, respectively, of sales
commissions after reallowance to authorized persons of $741,540, $348,575 and
$592,881, respectively.
The Company pays the costs and expenses incident to registering and qualifying
its shares for sale under the Federal securities laws and under the applicable
state Blue Sky laws of the jurisdictions in which the Distributor desires to
distribute such shares and, pursuant to the Distribution Plan, the costs of
preparing, printing, and distributing prospectuses, reports and other marketing
materials to prospective investors.
DISTRIBUTION PLAN
The Company has adopted a plan of distribution pursuant to Rule 12b-1 under the
1940 Act ("Distribution Plan"), which provides that the Company may, directly or
indirectly, engage in activities primarily intended to result in the sale of the
Company's shares.
The maximum expenditure the Company may make under the Distribution Plan will be
the lesser of the actual expenses incurred in distribution related activities
permissible under the Distribution Plan ("Rule 12b-1 activities"), as determined
by the Board of Directors of the Company, or, with respect to the Government
Securities Fund, the Total Return Fund, the Tax-Exempt Fund and the Growth and
Income Fund, the Capital Appreciation Fund and to Global Income Fund 0.50% per
annum of the net asset value of each such Fund. With respect to the Money Market
Fund, the maximum expenditure the Company may make under the Distribution Plan
will be the lesser of the actual expenses incurred in Rule 12b-1 activities, as
determined by the Board of Directors of the Company, or 0.25% per annum of the
net asset value of the Money Market Fund. Payments under the Distribution Plan
will be accrued daily and paid quarterly in arrears.
The National Association of Securities Dealers, Inc. ("NASD") recently adopted
amendments to Article III, Section 26 of its Rules of Fair Practice which, among
other things, (i) impose certain limits on "ASSET BASED SALES CHARGES" paid to
finance sales or sales promotion expenses) in order to regulate such charges
under the maximum sales load limitations applicable to investment companies and
(ii) treat "SERVICE FEES"; payments made for personal shareholder services
and/or maintenance of shareholder accounts) as distinguishable from asset based
sales charges and, therefore, outside the scope of the maximum sales load
limitations. The Company's Distribution Plan contemplates that activities to
both (i) finance the sale of Company shares and (ii) compensate persons who
render shareholder support services are Rule 12b-1 activities within the meaning
of the Distribution Plan.
In light of the NASD rule amendments, the Board of Directors, and separately a
majority of the Disinterested Directors, determined it would be appropriate and
in the best interest of the Company and its shareholders to clearly identify
that portion of the maximum expenditure under the Distribution Plan that should
be considered to be asset based sales charges and that portion should be
considered to be service fees. Consequently, it was determined that 0.25% per
annum of the average daily net asset value of the Chubb Government Securities
Fund, the Chubb Tax-Exempt Fund, the Chubb Total Return Fund, and the Chubb
Growth and Income Fund, Chubb Capital Appreciation Fund and Chubb Global Income
Fund and 0.075% per annum of the average daily net asset value of the Chubb
Money Market Fund be considered to be asset based sales charges, as defined by
Article III, Section 26 of the NASD's Rules of Fair Practice, and 0.25% per
annum of the average daily net asset value of the Chubb Government Securities
Fund, the Chubb Tax-Exempt Fund, the Chubb Total Return Fund, the Chubb Growth
and Income Fund, the Chubb Capital Appreciation Fund and the Chubb Global Income
Fund, and 0.175% per annum of the average daily net asset value of the Chubb
Money Market Fund be considered to be service fees, as defined by Article III,
Section 26 of the NASD's Rules of Fair Practice. No payment of a service fee
will be made to a securities dealer unless that dealer has sold shares of the
Company, exclusive of the Money Market Fund, that are outstanding for a minimum
of 12 months and that are valued in excess of $1,000,000 or, with respect to the
Money Market Fund, has sold shares of the Company valued in excess of
$1,000,000.
S-24
<PAGE>
The Distribution Plan was approved on September 4, 1987 by the Board of
Directors, and separately by all directors who are not interested persons of the
Company and who have no direct or indirect interest in the Distribution Plan or
related arrangements (the "Rule 12b-1 Directors"). The Distribution Plan was
approved by the shareholders of each Fund at the meeting of shareholders held
April 21, 1988. The Distribution Plan will continue in effect from year to year
if approved by the votes of a majority of the Company's Board of Directors and
the Rule 12b-1 Directors, cast in person at a meeting called for the purpose of
voting on such approval. All material amendments to the Distribution Plan must
be likewise approved by the Board of Directors and the Rule 12b-1 Directors. The
Distribution Plan may be terminated, without penalty, at any time by vote of a
majority of the Rule 12b-1 Directors or by vote of a majority of the outstanding
shares of the Company, on 60 days written notice. The Distribution Plan may not
be amended to increase materially the amount of expenditures under the
Distribution Plan unless such amendment is approved by a vote of the voting
securities of each Fund. The Distribution Plan does not provide for any charges
to the Company for excess amounts expended by the Distributor and, if the
Distribution Plan is terminated in accordance with its terms, the obligation of
the Company to make payments to the Distributor pursuant to the Distribution
Plan will cease. The Distribution Plan does not provide for the reimbursement of
the Distributor for any expenses of the Distributor attributable to the
Distributor's "overhead".
For the years ended December 31, 1996, December 31, 1995 and 1994, $261,904,
$186,402 and $134,885 was paid by the Company to the Distributor under the Plan
of Distribution. Prior to the calendar year 1994 no payments had ever been made
under the Distribution Plan.
OFFERING AND REDEMPTION OF SHARES
Shares of the Company are sold only at the Offering Price in effect at the time
of the sale, which is determined in the manner set forth in the Prospectus under
"PURCHASE OF SHARES". Shares of each Fund may also be acquired through special
purchase and redemption plans which provide for reduced sales charges, as
described in the Prospectus under "PURCHASE OF SHARES-REDUCED SALES CHARGES" AND
"SHAREHOLDER SERVICES". The reason for the reduced sales charges in the case of
rights of accumulation, the Letter of Intent, and qualified group purchases is
that expenses associated with such purchases are generally less than other
purchases of the Company's shares. Likewise, the purchase of the Company's
shares by directors and present and retired officers and full time employees of
the Company, the Investment Manager, the Investment Administrator and their
affiliates, and their close family members or certain registered personnel of
broker-dealers and their close family members do not involve the usual expenses
associated with the purchase of the Company's shares.
The Company redeems all full and fractional shares of the Company at the net
asset value per share applicable to each Fund. See "DETERMINATION OF NET ASSET
VALUE" below. Redemptions are normally made in cash, but the Company has
authority, at its discretion, to make full or partial payment by assignment to
shareholders of portfolio securities at their value used in determining the
redemption price. The Company, nevertheless, pursuant to Rule 18f-1 under the
1940 Act, has filed a notification of election on Form N-18f-1, by which the
Company has committed itself to pay to shareholders in cash, all such requests
for redemption made during any 90-day period, up to the lesser of $250,000 or 1%
of the applicable Fund's net asset value at the beginning of such period. The
securities, if any, to be paid in-kind to shareholders will be selected in such
manner as the Board of Directors deems fair and equitable. In such cases, a
shareholder would incur brokerage costs should the shareholder wish to liquidate
these portfolio securities.
The right to redeem shares or to receive payment with respect to any redemption
of shares of any Fund may only be suspended (1) for any period during which
trading on the New York Stock Exchange is restricted or such Exchange is closed,
other than customary weekend and holiday closings, (2) for any period during
which an emergency exists as a result of which disposal of securities or
determination of the net asset value of that series is not reasonably
practicable, or (3) for such other periods as the Securities and Exchange
Commission may by order permit for protection of shareholders of that Fund.
S-25
<PAGE>
DETERMINATION OF NET ASSET VALUE
The net asset value of the shares of each Fund of the Company is normally
determined immediately as of the close of trading on the New York Stock Exchange
(usually 4:00 p.m. New York Time) on each day during which the New York Stock
Exchange is open for trading and at such other times when both the degree of
trading in a Fund's portfolio securities would materially affect the net asset
value of that Fund's shares and shares of that Fund were tendered for redemption
or a repurchase order was received. The New York Stock Exchange is open from
Monday through Friday except on the following national holidays: New Years Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day.
Portfolio securities which are traded on national securities exchanges are
valued at the last quoted sale price as of the close of business of the New York
Stock Exchange or, lacking any quoted sales, at the mean between the closing bid
and asked prices.
Securities traded in the over-the-counter market as part of the NASDAQ National
Market system are valued at the last quoted sale price (at the close of the New
York Stock Exchange) obtained from a readily available market quotation system
or securities pricing services. If no sale took place, such securities are
valued at the mean between the bid and asked prices.
Long-term U.S. Treasury securities and other obligations issued or guaranteed by
the United States Government, its agencies or instrumentalities are valued at
representative quoted prices from bond pricing services.
Long-term publicly traded corporate bonds are valued at prices obtained from a
bond pricing service when such prices are available or, when appropriate, from
over-the-counter exchange quotations or from broker-dealers who make a market in
that security.
Foreign securities denominated in foreign currencies are valued at
representative quoted prices on the principal exchange of the country of origin
and are converted to United States dollar equivalents using that day's current
exchange rate (New York closing spot). Occasionally, events affecting the values
of such securities may occur between the times at which they are determined and
the close of the New York Stock Exchange, which events may not be reflected in
the computation of a Portfolio's net asset value. If, during such periods,
events occur which materially affect the value of the securities of a Portfolio,
and during such periods either shares are tendered for redemption or a purchase
or sale order is received by the Company, such securities will be valued at fair
value as determined in good faith by the Board.
All non-U.S. securities traded in the over-the-counter securities market are
valued at the last sale quote, if market quotations are available, or at the
mean between the closing bid and asked prices, if there is no active trading in
a particular security for a given day. Where market quotations are not readily
available for such non-U.S. over-the-counter securities, then such securities
will be valued in good faith by a method that the Board of Directors, or its
delegates, believes accurately reflects fair value.
With respect to the Money Market Fund, all money market instruments with a
remaining maturity of 13 months or less held by the Fund are valued on an
amortized cost basis, unless the Board of Directors determines that such method
does not represent fair value. In addition, with respect to the other Funds,
short-term debt instruments, including commercial paper and U.S. Treasury
securities, with a remaining maturity of 60 days or less are valued on an
amortized cost basis, unless the Board of Directors determines that such method
does not represent fair value. Under the amortized cost valuation method, the
security is valued at cost on the date of purchase plus a constant proportionate
amortization of any discount or premium calculated until maturity, regardless of
the impact of fluctuating interest rates on the market value of the security.
The amortized cost value of the security may be either more or less than the
market value at any given time. If for any reason the fair market value of any
security is not fairly reflected through the amortized cost method of valuation,
such security will be valued by market quotations, if available, otherwise as
determined in good faith by the Board of Directors.
Options and convertible preferred stocks listed on national securities exchanges
are valued as of their last sale price or, if there is no sale, at the mean
between the closing bid and asked prices.
Futures contracts are valued as of their last sale price or, if there is no
sale, at the mean between the closing bid and asked prices.
S-26
<PAGE>
Securities and assets for which market quotations are not readily available are
valued at fair value as determined in good faith by the Board of Directors of
the Company using its best judgment.
MAINTENANCE OF NET ASSET VALUE PER SHARE
FOR THE MONEY MARKET FUND
It is the policy of the Money Market Fund to attempt to maintain a net asset
value of $1.00 per share by utilizing the amortized cost method of valuation.
Although the Money Market Fund believes that it will be able to maintain its net
asset value at $1.00 per share under most conditions, there can be no absolute
assurance that it will be able to do so on a continuous basis. If the Money
Market Fund's net asset value per share declined, or was expected to decline,
below $1.00 (rounded to the nearest one cent) the Board of Directors of the
Company might temporarily reduce or suspend dividend payments in an effort to
maintain the net asset value at $1.00 per share. As a result of such reduction
or suspension of dividends, an investor would receive less income during a given
period than if such reduction or suspension had not taken place. Such action
could result in an investor receiving no dividend for the period during which
the investor holds his/her shares and in receiving, upon redemption, a price per
share lower than that which the investor paid. On the other hand, if the Money
Market Fund's net asset value per share were to increase, or were anticipated to
increase above $1.00 (rounded to the nearest one cent), the Board of Directors
might supplement dividends in an effort to maintain the net asset value at $1.00
per share.
TAXES AND DIVIDENDS
In order for each Fund to qualify for Federal income tax treatment as a
regulated investment company ("RIC"), at least 90% of its gross income for a
taxable year must be derived from qualifying income, i.e., dividends, interest,
income derived from loans of securities, and gains from the sale of securities.
In addition, gains realized on the sale or the disposition of securities held
for less than three months must be limited to less than 30% of the Company's
annual gross income. It is the Company's policy to comply with the provisions of
the Internal Revenue Code of 1986 (the "Code") regarding distribution of
investment income and capital gains so that each Fund will not be subject to
Federal income tax on amounts distributed or an excise tax on certain
undistributed income or capital gains.
Dividends from ordinary income will be declared daily and distributed monthly
with respect to the Money Market Fund, and the Government Securities Fund,
declared and distributed on a monthly basis with respect to the Tax-Exempt Fund
and the Global Income Fund, declared and distributed on a quarterly basis with
respect to the Total Return Fund, and on an annual basis with respect to the
Growth and Income Fund and the Capital Appreciation Fund. Ordinary income of
each Fund is generally the investment company taxable income, as defined in
Section 852(b) of the Code, determined (1) by excluding the amount of capital
gains, if any, and (2) without allowance of the deduction for dividends paid.
A corporate shareholder may be entitled to take a deduction for income dividends
it receives that are attributable to dividends received from a domestic
corporation, provided that both the corporate shareholder retains its shares in
the applicable Fund for more than 45 days and the Fund retains its shares in the
issuer from whom it received the income dividends for more than 45 days. A
dividend of capital gains net income reflects the Fund's excess of net long-term
gains over its net short-term losses. Each Fund must designate which dividends
are dividends of capital gains net income and must notify shareholders of this
designation within sixty days after the close of the Fund's taxable year. A
corporate shareholder of a Fund cannot use a dividends-received deduction for
these dividends.
If, in any taxable year, a Fund should not qualify as a RIC under the Code: (i)
that Fund would be taxed at normal corporate rates on the entire amount of its
taxable income without deduction for dividends or other distributions to its
shareholders; and (ii) that Fund's distributions to the extent made out of the
Fund's current or accumulated earnings and profits would be taxable to its
shareholders (other than shareholders in tax deferred accounts) as ordinary
dividends (regardless of whether they would otherwise have been considered
capital gains dividends), but may, in certain circumstances, qualify for the
deduction for dividends received by corporations.
S-27
<PAGE>
Certain currency gains or losses realized on disposition of foreign currencies
and debt securities by any Fund, called "Section 988 Transactions," must be
calculated separately. Such gains or losses are generally treated as ordinary
income unless certain elections are made by a Fund. Such gains or losses will be
included in each Fund's annual income dividend, as appropriate.
If a Fund purchases shares in certain foreign investment entities, called
"passive foreign investment companies" ("PFIC"), that Fund may be subject to
U.S. federal income tax on a portion of any "excess distribution" including a
gain from the disposition of the shares even if the income is distributed as a
taxable dividend by the Fund to its shareholders. Additional charges in the
nature of interest may be impose on either the Fund or its shareholders with
respect to deferred taxes arising from the distributions or gain. If a Fund were
to purchase shares in a PFIC and (if the PFIC made the necessary information
available) elected to treat the PFIC as a "qualified electing fund" under the
Code, in lieu of the foregoing requirements, the Fund would be required to
include in income each year a portion of the ordinary earnings and net capital
gains of the PFIC, even if not distributed to the Fund, and the amounts would be
subject to the 90 percent and calendar year distribution requirements described
above.
PERFORMANCE AND YIELD INFORMATION
COMPARISONS OF PERFORMANCE INFORMATION
From time to time, in reports and sale literature: (1) each Fund's performance
or P/E ratio may be compared to: (i) the Standard & Poor's 500 Composite Stock
Price Index ("S&P 500 Index") and Dow Jones Industrial Average so that the
investor may compare that Fund's results with those of a group of unmanaged
securities widely regarded by investors as representative of the United States
stock market in general; (ii) other groups of mutual funds tracked by: (A)
Lipper Analytical Services, Inc., a widely-used independent research firm which
ranks mutual funds by overall performance, investment objectives, and asset
size; (B) Forbes Magazine's Annual Mutual Funds Survey and Mutual Fund Honor
Roll; or (C) other financial or business publications, such as the Wall Street
Journal, Business Week, Money Magazine, and Barron's, which provide similar
information; (iii) indices of stocks comparable to those in which the particular
Fund invests; (2) the Consumer Price Index (measure for inflation) may be used
to assess the real rate of return from an investment in each Fund; (3) other
government statistics such as Gross Domestic Product, and net import and export
figures derived from governmental publications, e.g., The Survey of Current
Business, may be used to illustrate investment attributes of each Fund or the
general economic, business, investment, or financial environment in which each
Fund operates; and (4) the effect of tax-deferred compounding on the particular
Fund's investment returns, or on returns in general, may be illustrated by
graphs, charts, etc. where such graphs or charts would compare, at various
points in time, the return from an investment in the particular Fund (or returns
in general) on a tax-deferred basis (assuming reinvestment of capital gains and
dividends and assuming one or more tax rates) with the return on a taxable
basis.
From time to time advertisements and sales literature may refer to rankings and
ratings of the Investment Manager and/or Jefferson-Pilot Corporation, Chubb
Corporation, Chubb & Sons and Chubb Life Insurance Company of America and Chubb
Service Corporation related to their size, performance, management and/or
service as prepared by various trade publications, such as Dalbar, Pensions and
Investments, SEI, CDA, Bests, and others.
Each Portfolio's performance may also be compared to the performance of other
mutual funds by Morningstar, Inc., which ranks mutual funds on the basis of
historical risk and total return. Morningstar rankings are calculated using the
mutual fund's average annual returns for certain periods and a risk factor that
reflects the mutual fund's performance relative to three-month Treasury bill
monthly returns. Morningstar's rankings range from five stars (highest) to one
star (lowest) and represent Morningstar's assessment of the historical risk
level and total return of a mutual fund as a weighted average for 3, 5, and 10-
year periods. In each category, Morningstar limits its five star rankings to 10%
of the funds it follows and its four star rankings to 22.5% of the funds it
follows. Rankings are not absolute or necessarily predictive of future
performance.
When Lipper's rankings or performance results are used, a Fund will be compared
to Lipper's appropriate fund category by fund objective and portfolio holdings.
For instance, the Growth and Income Fund will be compared to funds within
Lipper's growth and income fund category; the Government Securities Fund will be
compared to funds within Lipper's income fund category; and so on. Rankings may
be listed among one or more of the asset-size classes as determined by Lipper.
Since the assets in the Funds may change, a Fund may be ranked within one Lipper
asset-sized class at one time and in another Lipper asset-size class at some
other time. The Lipper rankings and performance analysis ranks funds on the
basis of total return, assuming reinvestment of distribution, but does
S-28
<PAGE>
not take sales charges or redemption fees into consideration and is prepared
without regard to tax consequences. Lipper also issues a monthly yield analysis
for fixed-income funds. Footnotes in advertisements and other marketing
literature will include the time period and Lipper asset-size class, as
applicable, for the ranking in question.
As noted above, the performance of a Fund may be compared, for example, to the
record of the S&P 500 Index, as well as the Russell 2000 Index, the S&P MidCap
400 Index, the Bear Stearns Foreign Bond Index, the NASDAQ Composite Index and
the Morgan Stanley Capital International's Europe Australia, Far Eastern
("EAFE") Index. The S&P 500 Index is a well known measure of the price
performance of 500 leading larger domestic stocks which represent approximately
80% of the market capitalization of the United States equity market. The Russell
2000 Index, the S&P MidCap 400 Index, the Bear Stearns Foreign Bond Index are
unmanaged indices, the NASDAQ Composite Index and the Morgan Stanley Capital
International's Euro. The NASDAQ Composite Index is comprised of all stocks on
NASDAQ's National Market Systems, as well as other NASDAQ domestic equity
securities. The NASDAQ Composite Index has typically included smaller, less
mature companies representing 10% or 15% of the capitalization of the entire
domestic equity market. The EAFE Index is comprised of more than 900 companies
in Europe, Australia and the Far East. All of these indices are unmanaged and
capitalization weighted. In general, the securities comprising the NASDAQ
Composite Index are more growth oriented and have a somewhat higher beta and P/E
ratio than those in the S&P 500 Index.
The total returns of all indices noted above will show the changes in prices for
the stocks in each index. However, only the performance data for the S&P 500
Index assumes reinvestment of all capital gains distributions and dividends paid
by the stocks in each data base. Tax consequences will not be included in such
illustration, nor will brokerage or other fees or expenses of investing be
reflected in the NASDAQ Composite, S&P 500, EAFE Index.
MONEY MARKET FUND
For the seven days ended December 31, 1996, the yield of the Money Market Fund
expressed as a simple annualized yield was 4.62%; the yield of the Money Market
Fund expressed as a compound effective yield was 4.72%. These figures reflect a
portion of fees and other expenses of the Company which were waived or assumed
during the stated period. Absent any waiver or assumption of fees and expenses,
the yield expressed as a simple annualized yield would have been 3.90% and the
yield expressed as a compound effective yield would have been 3.98%.
The Money Market Fund's yield is its investment income, less expenses, expressed
as a percentage of total assets on an annualized basis for a seven-day period.
The yield is expressed as a simple annualized yield and as a compound effective
yield.
The simple annualized yield is computed by determining the net change (exclusive
of realized gains and losses from the sale of securities and unrealized
appreciation and depreciation) in the value of a hypothetical pre-existing
account having a balance of one share at the beginning of the seven-day period,
and annualizing the resulting quotient (base period return) on a 365-day basis.
The net change in account value reflects the value of additional shares
purchased with dividends from the original shares in the account during the
seven-day period, dividends declared on such additional shares during the
period, and expenses accrued during the period.
The compound effective yield is computed by determining the unannualized base
period return, adding one to the base period return, raising the sum to a power
equal to 365 divided by seven, and subtracting one from the result.
NON-MONEY MARKET FUNDS
The yield for the 30-day period ended December 31, 1996 for Tax-Exempt Fund,
Government Securities Fund and the Global Income Fund was 4.19%, 6.53% and
5.13%, respectively. The tax equivalent yield for the Tax-Exempt Fund for the
same period assuming federal tax brackets of 36%, and 39.6% was 6.55%, and
6.94%, respectively. These figures reflect a portion of fees and other expenses
of the Company which were waived or assumed during the stated period. Absent any
waiver or assumption of fees and expenses the yields the Tax-Exempt Fund,
Government Securities Fund and the Global Income Fund would have been 3.51%,
5.84% and 4.67%, respectively, and the tax equivalent yields for the Tax-Exempt
Fund of 36% and 39.6% tax brackets would have been 5.48%, and 5.81%,
respectively.
This yield figure represents the net annualized yield based on a specified 30-
day (or one month) period assuming a reinvestment and semiannual compounding of
income. Yield is calculated by dividing the average daily net investment income
per share earned during the specified period by the maximum offering price per
share on the last day of the period, and annualizing the net result according to
the following formula:
A-B
---
Yield = 2 ((( CD + 1) 6) - 1)
S-29
<PAGE>
where A equals dividends and interest earned during the period, B equals
expenses accrued for the period (net of reimbursements), C equals the average
daily number of shares outstanding during the period that were entitled to
receive dividends, and D equals the maximum offering price per share on the last
day of the period. A tax equivalent yield is calculated by dividing that portion
of the 30-day yield figure which is tax-exempt by one minus the effective
federal income tax rate and adding the product to that portion, if any, of the
yield of the Fund that is not tax-exempt.
The average annual total return quotations for the Government Securities Fund,
the Total Return Fund, the Tax-Exempt Fund, the Growth and Income Fund, the
Capital Appreciation Fund and the Global Income Fund for the 12 months ended
December 31, 1996 were .12%, 11.19%, .90%, 16.36%, 21.12% and 2.73%,
respectively. The average annual total return quotations for the Government
Securities Fund, the Total Return Fund, the Tax-Exempt Fund and the Growth &
Income Fund for the 5 years ended December 31, 1996 were 5.94%, 11.08%, 6.18%,
and 13.18%, respectively. The average annual total return quotations for these
Funds since the Company's inception on December 1, 1987 through December 31,
1996 were 8.57%, 12.76%, 8.10%, and 14.15%, respectively. Additionally the
Capital Appreciation Fund and the Global Income Funds average total return for
the 12 months ended December 31, 1996 for these funds were 21.12%, 2.73%,
respectively and since inception September 1, 1995 were 19.39% and 4.55%,
respectively. These figures reflect a portion of fees and other expenses of the
Company which were waived or assumed during the stated period.
These average annual total return figures represent the average annual compound
rate of return for the stated period. Average annual total return quotations
reflect the percentage change between the beginning value of a static account in
the specified Fund at the maximum public offering price and the ending value of
that account measured by the then current net asset value of that Fund assuming
that all dividends and capital gains distributions during the stated period were
reinvested in shares of the Fund when paid. Total return is calculated by
finding the average annual compound rates of return of a hypothetical investment
that would compare the initial amount to the ending redeemable value of such
investment according to the following formula:
T = (ERV/P) (1/n) - 1
where T equals average annual total return, where ERV, the ending redeemable
value, is the value, at the end of the applicable period, of a hypothetical
$1,000 payment made at the beginning of the applicable period, where P equals a
hypothetical initial payment of $1,000, and where N equals the number of years.
The Funds also may advertise non-standardized total return quotations,
calculated in the same manner as the quotations stated above, except that the
initial value used is the net asset value. Under this total return calculation,
the average annual total return quotations for the Government Securities Fund,
the Total Return Fund, the Tax-Exempt Fund, the Growth and Income Fund, the
Capital Appreciation Fund and the Global Income Fund for the 12 months ended
December 31, 1996 were 3.19%, 17.04%, 4.00%, 22.50%, 27.53% and 5.95%,
respectively. Under this same calculation, the average annual total return
quotations for the Government Securities Fund, the Total Return Fund, the Tax-
Exempt Fund and the Growth & Income Fund for the 5 years ended December 31, 1996
were 6.59%, 12.23%, 6.82%, and 14.35%, respectively. Under this same
calculation, the average annual total return quotations for these Funds since
the Company's inception on December 1, 1987 through December 31, 1996 are 8.93%,
13.40%, 8.46%, and 14.80%, respectively. In addition under the same calculation
the average annual total return for the Capital Appreciation Fund and the Global
Income Fund since their inception September 1, 1995 through December 31, 1996
are 24.10% and 6.97%, respectively.
FINANCIAL STATEMENTS
The financial statements contained in the Company's December 31, 1996 Annual
Report to shareholders are incorporated herein by reference.
ADDITIONAL INFORMATION
NAME AND SERVICE MARK
The Chubb Corporation has in conjunction with its sale of Chubb Life to
Jefferson-Pilot Corporation granted the Company the right to use the "Chubb"
name and service mark.
S-30
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
Filed as part of this Prospectus:
Financial Highlights
(a) Financial Statements
The financial statements contained in the Company's December 31,
1996 Annual Report to shareholders are incorporated by reference in
the Company's Statement Of Additional Information./9/
(b) Exhibits
1. a. Amended and Restated Articles of Incorporation./2/
b. Articles Supplementary to the Amended and Restated Articles of
Incorporation./6/
c. Articles Supplementary to the Amended and Restated Articles of
Incorporation./8/
2. Amended and Restated By-Laws./4/
3. Not applicable.
4. a. Specimen of Certificate of Stock of the Chubb Money
Market Fund./1/
b. Specimen of Certificate of Stock of the Chubb Government
Securities Fund ./1/
c. Specimen of Certificate of Stock of the Chubb Total Return
Fund./1/
d. Specimen of Certificate of Stock of the Chubb Tax-Exempt Fund./l/
e. Specimen of Certificate of Stock of the Chubb Growth and Income
Fund./5/
f. Specimen of Certificate of Stock of the Chubb Capital
Appreciation Fund./8/
g. Specimen of Certificate of Stock of the Chubb Global Income
Fund./8/
5. a. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc. with
respect to Chubb Money Market Fund./1/
b. Technical Amendment to Investment Management Agreement between
Chubb Investment Funds, Inc., Chubb Investment Advisory Corporation
and Chubb Asset Managers, Inc. with respect to Chubb Money Market
C-1
<PAGE>
Fund./3/
c. Investment Management Agreement between Chubb Investment Funds,
Inc., Chubb Investment Advisory Corporation and Chubb Asset Managers,
Inc. with respect to Chubb Government Securities Fund./l/
d. Technical Amendment to Investment Management Agreement between
Chubb Investment Funds, Inc., Chubb Investment Advisory Corporation
and Chubb Asset Managers, Inc. with respect to Chubb Government
Securities Fund. /3/
e. Investment Management Agreement between Chubb Investment Funds,
Inc., Chubb Investment Advisory Corporation and Chubb Asset Managers,
Inc. with respect to Chubb Total Return Fund./l/
f. Technical Amendment to Investment Management Agreement between
Chubb Investment Funds, Inc., Chubb Investment Advisory Corporation
and Chubb Asset Managers, Inc. with respect to Chubb Total Return
Fund./3/
g. Investment Management Agreement between Chubb Investment Funds,
Inc., Chubb Investment Advisory Corporation and Chubb Asset Managers,
Inc. with respect to Chubb Tax-Exempt Fund./l/
h. Technical Amendment to Investment Management Agreement between
Chubb Investment Funds, Inc., Chubb Investment Advisory Corporation
and Chubb Asset Managers, Inc. with respect to Chubb Tax-Exempt Fund./3/
i. Investment Management Agreement between Chubb Investment Funds,
Inc., Chubb Investment Advisory Corporation and Chubb Asset Managers,
Inc. with respect to Chubb Growth Fund, (now known as the Chubb Growth
and Income Fund)./l/
j. Technical Amendment to Investment Management Agreement between
Chubb Investment Funds, Inc., Chubb Investment Advisory Corporation
and Chubb Asset Managers, Inc. with respect to Chubb Growth Fund./3/
k. Investment Management Agreement between Chubb Investment Funds,
Inc., Chubb Investment Advisory Corporation and Chubb Asset Managers,
Inc. with respect to Chubb Capital Appreciation Fund./8/
1. Investment Management Agreement between Chubb Investment Funds,
Inc., Chubb Investment Advisory Corporation and Chubb Asset Managers,
Inc. with respect to Chubb Global Income Fund./8/
C-2
<PAGE>
6. a. Fund Distribution Agreement between Chubb Investment Funds, Inc. and
Chubb Securities Corporation./1/
b. Specimen Copy of Selected Dealers Agreement./l/
7. Not applicable.
8. Custodial Services Agreement between Chubb Investment Funds, Inc. and
Citibank, N.A./l/
9. a. Shareholder Services Agreement between Chubb Investment Funds, Inc.
and Firstar Trust Company./7/
C-3
<PAGE>
b. Agreement for Waiver of Fees and Assumption of Expenses between Chubb
Investment Funds, Inc., Chubb Investment Advisory Corporation, Chubb Asset
Managers, Inc., Chubb Securities Corporation, and Chubb Life Insurance
Company of New Hampshire./4/
10. Opinion and Consent of Counsel as to legality of the securities being
registered. /1/
a. Opinion and Consent of Counsel as to legality of the securities
being registered./8/
12. Not applicable.
13. Stock Subscription Agreement between Chubb Investment Funds, Inc. and Chubb
Life Insurance Company of America./1/
15. Rule 12b-1 Plan. /1/
16. NA
17. NA
19. Consent of Freedman, Levy, Kroll & Simonds./1/
20. Power of Attorney.*
27.
99.1 Consent of Ernst & Young LLP.*
99.2 Stock Subscription Agreement between Chubb Investment Funds, Inc. and
Chubb Life Insurance Company of America.*
99.3 Fee Table Information and Schedule of Computation Information.
99.4 Diagram of Subsidiaries of The Chubb Corporation.*
99.5 Price Make-up Sheet.*
C-4
<PAGE>
/1/ Incorporated by reference to earlier filing on September 17, 1987, SEC File
No. 33-147367, to the exhibit number indicated on that Form N-lA Registration
Statement.
/2/ Incorporated by reference to earlier filing on April 28, 1988, SEC File No.
33-147367, to the exhibit number indicated on that Form N-lA Registration
Statement.
/3/ Incorporated by reference to earlier filing on April 17, 1989, SEC File No.
33-147367, to the exhibit number indicated on that Form N-lA Registration
Statement.
/4/ Incorporated by reference to earlier filing on April 15, 1991, SEC File No.
33-14737, to the exhibit number indicated on that Form N-lA Registration
Statement.
/5/ Incorporated by reference to earlier filing on April 22, 1992, SEC File No.
33-14737, to the exhibit number indicated on that Form N-1A Registration
Statement.
/6/ Incorporated by reference to earlier filing on April 23, 1994, SEC File No.
33-14737, to the exhibit number indicated on that Form N1-A Registration
Statement.
/7/ Incorporated by reference to earlier filing on April 17, 1995, SEC File No.
33-14737, to the exhibit number indicated on that Form N-lA Registration
Statement.
/8/ Incorporated by reference to earlier filing on June 16, 1995, SEC File No.
33-14737, to the exhibit number indicated on that Form N-lA Registration
Statement.
/9/ Incorporated by reference to Annual Report to Shareholders filed on
February 29, 1996, SEC File No. 33-14737.
*Filed herewith.
Item 25. Persons Controlled by or under Common Control with Registrant
No person is directly or indirectly controlled by Registrant.
The information in the Registrant's Statement of Additional Information dated
April 1, 1996 relating to ownership by Chubb Life Insurance Company of America
("Chubb Life") and its affiliated companies of outstanding shares of the Company
is incorporated herein by reference.
Chubb Life is a wholly-owned subsidiary of The Chubb Corporation, a New Jersey
corporation. Chubb Life owns all of the outstanding shares of Chubb Investment
Advisory Corporation ("Chubb Investment Advisory"), a Tennessee corporation,
which is the Investment Administrator of the Registrant. Chubb Asset Managers,
Inc. ("Chubb Asset"), a Delaware corporation, which is the
C-5
<PAGE>
Investment Manager for the Registrant, is a wholly-owned subsidiary of The Chubb
Corporation. The principal underwriter and Distributor for the Registrant,
Chubb Securities Corporation, a New Hampshire corporation, is a wholly-owned
subsidiary of Chubb Life. A diagram of the subsidiaries of The Chubb
Corporation has been filed herein as Exhibit 17.
Item 26. Number of Holders of Securities
As of March 31, 1997.
<TABLE>
<CAPTION>
(2)
(1) Number of
Title of Class Record Holders
-------------- --------------
<S> <C>
Chubb Money Market Fund; $.01 par value 698
Chubb Government Securities Fund; $.01 par value 637
Chubb Total Return Fund; $.01 par value 2051
Chubb Tax-Exempt Fund; $.01 par value 654
Chubb Growth and Income Fund; $.01 par value 2834
Chubb Capital Appreciation Fund; $.01 par value 704
Chubb Global Income Fund; $.01 par value 119
</TABLE>
Chubb Life is the successor-in-interest to Chubb Life Insurance Company
of New Hampshire, which had provided the initial capital to the Company by
purchasing 100,000 shares of the Chubb Money Market Fund and 10,000 shares each
of the Chubb Government Securities Fund, the Chubb Total Return Fund, the Chubb
Tax-Exempt Fund, the Chubb Growth and Income Fund, the Chubb Capital
Appreciation Fund and the Chubb Global Income Fund, respectively.
Item 27. Indemnification
Reference is made to Article VII, Section 10 of the Registrant's Amended and
Restated Articles of Incorporation filed herein as Exhibit 1 to this
Registration Statement and to Article V of the Registrant's By-Laws filed herein
as Exhibit 2 to this Registration Statement. The Articles of Incorporation
provide that neither an officer nor director of the Registrant will be liable to
the Registrant or its shareholders for monetary damages for breach of fiduciary
duty as an officer or director, except to the extent such limitation of
liability is not otherwise permitted by law. The By-Laws provide that the
Registrant will indemnify its directors and officers to the extent permitted or
required by Maryland law. A resolution of the Board of Directors specifically
approving payment or advancement of expenses to an officer is required by the
By-Laws. Indemnification may not be made if the director or officer has
incurred liability by reason or willful misfeasance, bad faith, gross negligence
or reckless disregard of duties in the conduct of his/her office ("Disabling
Conduct"). The means of determining whether indemnification shall be made are
(1) a final decision by a court or other-body before
C-6
<PAGE>
whom the proceeding is brought that the director or officer was not liable by
reason of Disabling Conduct, or (2) in the absence of such a decision, a
reasonable determination, based on a review of the facts, that the director or
officer was not liable by reason of Disabling Conduct. Such latter
determination may be made either by (a) vote of a majority of directors who are
neither interested persons (as defined in the Investment Company Act of 1940)
nor parties to the proceeding or (b) independent legal counsel in a written
opinion. The advancement of legal expenses may not occur unless the director or
officer agrees to repay the advance (if it is determined that he/she is not
entitled to the indemnification) and one of three other conditions is satisfied:
(1) the director or officer provides security for his/her agreement to repay,
(2) the Registrant is insured against loss by reason of lawful advances, or '(3)
the directors who are not interested persons and are not parties to the
proceedings, or independent counsel in a written opinion, determine that there
is reason to believe that the director or officer will be found entitled to
indemnification.
The directors and officers are currently covered for
liabilities incurred in their capacities as such directors and officers under
the terms of a joint liability insurance policy. This policy also covers the
directors and officers of Chubb Investment Advisory, Chubb Asset and Chubb
America Fund, Inc. The policy also insures the Registrant, Chubb Investment
Advisory, Chubb Asset and Chubb America Fund, Inc. for errors and omissions
liabilities.
Insofar as indemnification for liability arising under the Securities Act
of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of
the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
C-7
<PAGE>
Item 28. Business and Other Connections of Investment Manager
and Investment Administrator
Chubb Investment Advisory was formed in 1984 and, since 1985, has served as
an investment manager to Chubb America Fund, Inc., and to Chubb Series Trust,
One Granite Place, Concord, New Hampshire 03301.
Chubb Asset was formed in 1986 and was not previously engaged in any
business. It also serves as sub-investment manager for the Bond Portfolio, the
Money Market Portfolio, and the Growth and Income Portfolio of Chubb America
Fund, Inc.
Set forth below in the following tables is certain information about the
officers and directors of Chubb Investment Advisory and Chubb Asset.
Chubb Investment Advisory
<TABLE>
<CAPTION>
Name of Positions
Director/Officer of with Chubb Other Business, Profession,
Chubb Investment Vocation or Employment
Investment Advisory Advisory During Past Two Years
- ------------------- ---------- ---------------------------
<S> <C> <C>
Ronald R. Angarella President Senior Vice President,
Chubb Life, Chairman and
President, Chubb Securities
and Hampshire Funding,
Inc.; President and
Director, Hampshire
Syndications, President and
Director, Chubb America
Fund, Inc.; President Chubb
Series Trust
</TABLE>
C-8
<PAGE>
<TABLE>
<CAPTION>
Name of
Director/Officer of Positions
Chubb with Chubb Other Business, Profession,
Investment Investment Vocation or Employment
Advisory Advisory During Past Two Years
- ------------------- ---------- ---------------------------
<S> <C> <C>
Charles C. Cornelio Secretary Vice President and General Counsel
of the Registrant and Chubb America
Fund, Inc.; Vice President General
Counsel and Secretary of Chubb
Securities Corporation and Hampshire
Funding, Inc.; Vice President,
Counsel and Assistant Secretary of
Chubb Life and Chubb America Service
Corporation.
John A. Weston Treasurer Assistant Vice President and Mutual
Fund Accounting Officer of Chubb Life;
Treasurer of the Registrant, Chubb
America Fund, Inc., Chubb Securities
Corporation, Hampshire Funding, Inc.
and Chubb Series Trust; previously,
Financial Reporting Officer of Chubb
Life.
Marjorie D. Raines Director Vice President of The Chubb
Corporation and Chubb Asset; Senior
Vice President of Federal Insurance
Company and Chubb & Son, Inc.
</TABLE>
C-9
<PAGE>
<TABLE>
<CAPTION>
Name of
Director/Officer of Positions
Chubb with Chubb Other Business, Profession,
Investment Investment Vocation or Employment
Advisory Advisory During Past Two Years
- ------------------- ---------- ---------------------------
<S> <C> <C>
Michael O'Reilly Senior Vice President and Director of
President and the Registrant; Senior Vice
Director President and Chief Investment Officer
of The Chubb Corporation; Director,
President and Chief Operating Officer
of Chubb Asset; Senior Vice President
of Federal Insurance Company and Chubb
& Son, Inc.
</TABLE>
C-10
<PAGE>
<TABLE>
<CAPTION>
Name of Positions
Director/Officer of with Chubb Other Business, Profession,
Chubb Investment Vocation or Employment
Investment Advisory Advisory During Past Two Years
- ------------------- ---------- ----------------------------
<S> <C> <C>
Carol R. Hardiman Assistant Vice President, Chubb Securities
Vice Corporation and Hampshire Funding,
President Inc.
Shari J. Lease Assistant Assistant Vice President and Counsel
Secretary of Chubb Life and Secretary of the
Registrant, Chubb America Fund, Inc.
Chubb Series Trust and Chubb Asset
<CAPTION>
Chubb Asset
Positions Other Business, Profession,
Name of with Chubb Vocation or Employment
Director/Officer Asset During Past Two Years
- ---------------- ---------- ---------------------------
<S> <C> <C>
Dean R. O'Hare Director, Director and Chairman of The Chubb
Chairman and Corporation; Managing Director and
Chief Chairman of Chubb & Son Inc.;
Executive Director, Chairman and President of
Officer Federal Insurance Company
</TABLE>
C-11
<PAGE>
<TABLE>
<CAPTION>
Chubb Asset
Positions Other Business, Profession,
Name of with Chubb Vocation or Employment
Director/Officer Asset During Past Two Years
- ---------------- ----------- ----------------------------
<S> <C> <C>
Michael O'Reilly Director, Senior Vice President and
President and Chief Investment Officer of
Chief The Chubb Corporation;
Operating President and Director
Officer of the Registrant; Senior
Vice President of Chubb &
Son Inc., Federal Insurance
Company, and Chubb
Investment Advisory
Marjorie D. Raines Senior Vice Vice President of The Chubb
President Corporation; Vice President
of Federal Insurance
Company and Chubb & Son
Inc.
Ned I. Gerstman Senior Vice Vice President of The Chubb
President Corporation, Chubb & Son
Inc. and Chubb Life
Frederick W. Senior Vice Vice President of The Chubb
Gaernter President Corporation and Chubb & Son
Inc.; formerly, Vice
President of Salomon
Brothers, Inc.
</TABLE>
C-12
<PAGE>
<TABLE>
<S> <C> <C>
Gail Devlin Director Senior Vice President of
The Chubb Corporation
Henry G. Gulick Secretary Vice President and Secretary of The
Chubb Corporation and Federal
Insurance Company, Senior Vice
President and Secretary of Chubb &
Son Inc.
Philip Semplier Treasurer Vice President and Treasurer of The
Chubb Corporation and Federal
Insurance Company; Senior Vice
President and Treasurer of Chubb &
Son Inc.
Robert Witkoff Senior Portfolio Manager for the Chubb
Vice Corporation
President
Thomas J. Swartz Vice Portfolio Manager for the Chubb
President Corporation
William Clarkson Assistant Securities Analyst for the Chubb
Vice Corporation
President
Paul Geyer Assistant Securities Analyst for the Chubb
Vice Corporation
President
</TABLE>
Item 29. Principal Underwriters
The names, principal business addresses, positions and offices with Chubb
Securities Corporation, and positions and offices with the Registrant, of each
director or officer of Chubb Securities
C-13
<PAGE>
Corporation who is a director or officer of the Registrant are:
<TABLE>
<S> <C> <C>
Name and Principal Positions and Positions and Offices
Business Address Offices with with the Registrant
Chubb Securities
Ronald R. Angarella Chairman and Senior Vice President
One Granite Place President and Director
Concord, NH 03301
Charles C. Cornelio Secretary and Vice President and
One Granite Place Counsel General Counsel
Concord, NH 03301
John A. Weston Treasurer Treasurer
One Granite Place
Concord, NH 03301
</TABLE>
Item 30. Location of Accounts and Records
The following entities prepare, maintain and preserve the records required by
Section 31(a) of the 1940 Act for the Registrant. These records include records
relating to activities of these entities required to be maintained under Rules
31a-1 and 31a-2 of the 1940 Act, records relating to applicable federal and
state tax laws, and records under any other law or administrative rules or
procedures applicable to the Company. The services are provided to the
Registrant through written agreements between the parties to the effect that
such services will be provided to the Registrant for such periods prescribed by
the Rules and Regulations of the Securities and Exchange Commission under the
C-14
<PAGE>
1940 Act and such records will be surrendered promptly on request:
Citibank, N.A., 111 Wall Street, New York, New York 10043 (records relating to
activities of the custodian and any subcustodian); Chubb Asset Managers, Inc.,
15 Mountain View Road, Warren, New Jersey 07061 (records relating to activities
of the Investment Manager); Chubb Securities Corporation, One Granite Place,
Concord, New Hampshire 03301 (records relating to activities of the
Distributor); Firstar Trust Company 615 East Michigan Street, Milwaukee,
Wisconsin 53202-5207 (records relating to the activities of the Transfer Agent),
and Chubb Investment Advisory Corporation, One Granite Place, Concord, New
Hampshire 03301 (all books and records not maintained by the Company's
Custodian, Investment Manager, Distributor or Transfer Agent).
Item 31. Management Services
Not applicable
Item 32. Undertakings
Not applicable.
C-15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities' Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Amended Registration Statement pursuant
to Rule 485(b) under the Securities Act of 1933 and has duly caused this Amended
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Warren, and State of New Jersey, on the 21st day
of April 1997.
CHUBB INVESTMENT FUNDS INC.
By *
_______________________________
Michael O'Reilly, President
POWER OF ATTORNEY
Each of the undersigned Officers and Directors of Chubb Investment Funds, Inc.
(the "Company") whose signatures appear below hereby makes, constitutes and
appoints Shari J. Lease, Ronald Angarella and Charles C. Cornelio, and each of
them acting individually, his/her true and lawful attorneys with power to act
without any other and with full power of substitution, to execute, deliver and
file in each of the undersigned Officers' and Directors' capacity or capacities
as shown below, this Registration Statement and any and all documents in support
of this Registration Statement or supplement thereto, and any and all
amendments, including any and all post-effective amendments to the foregoing;
and said Officers and Directors hereby grants to said attorneys, and to any one
or more of them, full power and authority to do and perform each and every act
and thing whatsoever as said attorney or attorneys may deem necessary or
advisable to carry out fully the intent of this Power of Attorney to the same
extent and with the same effect as each of said Officers and Directors might or
could do personally in his/her capacity or capacities as aforesaid, and each of
said Officers and Directors ratifies, confirms and approves all acts and things
which said attorneys or attorney might do or cause to be done by virtue of this
Power of Attorney and his/her signature as the same may be signed by said
attorney or attorneys, or any one or
C-16
<PAGE>
more of them to this Registration Statement and any and all amendments thereto,
including any and all post-effective amendments to the foregoing.
Name Title Date
* President, Principal April 21, 1997
_______________________ Executive Officer
Michael O'Reilly and Director
/s/RONALD R. ANGARELLA Senior Vice President April 21, 1997
-----------------------
Ronald R. Angarella and Director
* Director April 21, 1997
_______________________
James J. Weisbart
* Director April 21, 1997
_______________________
Michael D. Coughlin
* Director April 21, 1997
_______________________
Elizabeth S. Hager
/s/JOHN A. WESTON Treasurer, Principal April 21, 1997
----------------------
John A. Weston Financial Officer
and Principal
Accounting Officer
*By
/s/RONALD R. ANGARELLA Senior Vice President April 21, 1997
----------------------
Ronald R. Angarella,
attorney-in-fact
C-17
<PAGE>
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Description Numbered Page
- ------ ----------- -------------
<S> <C> <C>
Exhibit 27.1 Financial Data Schedules, All Portfolios
99.1 Consent of Ernst & Young LLP
99.2 Schedule of Computation of Performance
99.3 Diagram of Subsidiaries of The Chubb
Corporation
99.4 Price Make-up Sheet.
</TABLE>
C-18
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> CHUBB MONEY MARKET FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 8,724,501
<INVESTMENTS-AT-VALUE> 8,724,501
<RECEIVABLES> 298,214
<ASSETS-OTHER> 137,551
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 9,160,266
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 306,250
<TOTAL-LIABILITIES> 306,250
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 8,854,859
<SHARES-COMMON-STOCK> 8,854,862
<SHARES-COMMON-PRIOR> 7,620,969
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (843)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 8,854,016
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 456,595
<OTHER-INCOME> 0
<EXPENSES-NET> 43,848
<NET-INVESTMENT-INCOME> 412,747
<REALIZED-GAINS-CURRENT> (82)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 412,665
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 412,747
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11,445,668
<NUMBER-OF-SHARES-REDEEMED> 10,605,776
<SHARES-REINVESTED> 394,000
<NET-CHANGE-IN-ASSETS> 1,233,810
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (761)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 13,048
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 106,392
<AVERAGE-NET-ASSETS> 8,698,076
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .05
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> CHUBB GOVERNMENT SECURITIES FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 12,605,865
<INVESTMENTS-AT-VALUE> 12,645,177
<RECEIVABLES> 113,764
<ASSETS-OTHER> 70,959
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 12,829,900
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,450
<TOTAL-LIABILITIES> 11,450
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13,198,822
<SHARES-COMMON-STOCK> 1,222,744
<SHARES-COMMON-PRIOR> 1,287,696
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (419,684)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 39,312
<NET-ASSETS> 12,818,450
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 930,139
<OTHER-INCOME> 0
<EXPENSES-NET> 126,207
<NET-INVESTMENT-INCOME> 803,932
<REALIZED-GAINS-CURRENT> 82,884
<APPREC-INCREASE-CURRENT> (483,663)
<NET-CHANGE-FROM-OPS> 403,153
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 803,932
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 413,101
<NUMBER-OF-SHARES-REDEEMED> 540,335
<SHARES-REINVESTED> 62,283
<NET-CHANGE-IN-ASSETS> (1,068,028)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (502,568)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 26,891
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 216,887
<AVERAGE-NET-ASSETS> 13,417,013
<PER-SHARE-NAV-BEGIN> 10.78
<PER-SHARE-NII> .62
<PER-SHARE-GAIN-APPREC> (.30)
<PER-SHARE-DIVIDEND> .62
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.48
<EXPENSE-RATIO> .93
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> CHUBB TOTAL RETURN FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 24,965,373
<INVESTMENTS-AT-VALUE> 30,065,386
<RECEIVABLES> 320,198
<ASSETS-OTHER> 717,499
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 31,103,083
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 38,984
<TOTAL-LIABILITIES> 38,984
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 25,783,073
<SHARES-COMMON-STOCK> 1,784,176
<SHARES-COMMON-PRIOR> 1,388,932
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 181,013
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,100,013
<NET-ASSETS> 31,064,099
<DIVIDEND-INCOME> 403,160
<INTEREST-INCOME> 474,649
<OTHER-INCOME> 7,628
<EXPENSES-NET> 285,822
<NET-INVESTMENT-INCOME> 599,615
<REALIZED-GAINS-CURRENT> 1,864,506
<APPREC-INCREASE-CURRENT> 1,949,555
<NET-CHANGE-FROM-OPS> 4,413,676
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 599,615
<DISTRIBUTIONS-OF-GAINS> 1,467,709
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 597,305
<NUMBER-OF-SHARES-REDEEMED> 317,920
<SHARES-REINVESTED> 115,858
<NET-CHANGE-IN-ASSETS> 8,892,773
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (80)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 215,704
<GROSS-ADVISORY-FEES> 52,825
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 422,840
<AVERAGE-NET-ASSETS> 26,351,601
<PER-SHARE-NAV-BEGIN> 15.96
<PER-SHARE-NII> .37
<PER-SHARE-GAIN-APPREC> 2.32
<PER-SHARE-DIVIDEND> .37
<PER-SHARE-DISTRIBUTIONS> .87
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.41
<EXPENSE-RATIO> 1.08
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> CHUBB TAX-EXEMPT FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 13,859,222
<INVESTMENTS-AT-VALUE> 14,608,125
<RECEIVABLES> 255,384
<ASSETS-OTHER> 236,176
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 15,099,685
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 38,303
<TOTAL-LIABILITIES> 38,303
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 14,312,516
<SHARES-COMMON-STOCK> 1,239,556
<SHARES-COMMON-PRIOR> 1,237,682
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (37)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 748,903
<NET-ASSETS> 15,061,382
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 931,093
<OTHER-INCOME> 0
<EXPENSES-NET> 152,263
<NET-INVESTMENT-INCOME> 778,830
<REALIZED-GAINS-CURRENT> 67,216
<APPREC-INCREASE-CURRENT> (249,230)
<NET-CHANGE-FROM-OPS> 596,816
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 778,830
<DISTRIBUTIONS-OF-GAINS> 52,975
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 345,568
<NUMBER-OF-SHARES-REDEEMED> 403,013
<SHARES-REINVESTED> 59,320
<NET-CHANGE-IN-ASSETS> (197,967)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 14,278
<GROSS-ADVISORY-FEES> 30,987
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 256,541
<AVERAGE-NET-ASSETS> 15,458,491
<PER-SHARE-NAV-BEGIN> 12.33
<PER-SHARE-NII> .61
<PER-SHARE-GAIN-APPREC> (.14)
<PER-SHARE-DIVIDEND> .61
<PER-SHARE-DISTRIBUTIONS> .04
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.15
<EXPENSE-RATIO> .98
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> CHUBB GROWTH & INCOME FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 31,348,117
<INVESTMENTS-AT-VALUE> 39,790,590
<RECEIVABLES> 328,319
<ASSETS-OTHER> 287,287
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 40,406,196
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 124,347
<TOTAL-LIABILITIES> 124,347
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 31,389,479
<SHARES-COMMON-STOCK> 1,914,289
<SHARES-COMMON-PRIOR> 1,568,900
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 449,897
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 8,442,473
<NET-ASSETS> 40,281,849
<DIVIDEND-INCOME> 769,617
<INTEREST-INCOME> 35,120
<OTHER-INCOME> 6,387
<EXPENSES-NET> 366,148
<NET-INVESTMENT-INCOME> 444,976
<REALIZED-GAINS-CURRENT> 3,562,614
<APPREC-INCREASE-CURRENT> 3,263,516
<NET-CHANGE-FROM-OPS> 7,271,106
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 444,976
<DISTRIBUTIONS-OF-GAINS> 2,606,711
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 632,505
<NUMBER-OF-SHARES-REDEEMED> 428,191
<SHARES-REINVESTED> 141,075
<NET-CHANGE-IN-ASSETS> 11,137,688
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (221)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 505,896
<GROSS-ADVISORY-FEES> 68,489
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 544,610
<AVERAGE-NET-ASSETS> 34,164,940
<PER-SHARE-NAV-BEGIN> 18.58
<PER-SHARE-NII> .25
<PER-SHARE-GAIN-APPREC> 3.93
<PER-SHARE-DIVIDEND> .25
<PER-SHARE-DISTRIBUTIONS> 1.47
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.04
<EXPENSE-RATIO> 1.06
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> CHUBB CAPITAL APPRECIATION FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 5,444,126
<INVESTMENTS-AT-VALUE> 6,308,152
<RECEIVABLES> 39,998
<ASSETS-OTHER> 194,662
<OTHER-ITEMS-ASSETS> 9,808
<TOTAL-ASSETS> 6,552,620
<PAYABLE-FOR-SECURITIES> 79,280
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 32,769
<TOTAL-LIABILITIES> 112,049
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,470,988
<SHARES-COMMON-STOCK> 495,668
<SHARES-COMMON-PRIOR> 153,462
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 105,557
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 864,026
<NET-ASSETS> 6,440,571
<DIVIDEND-INCOME> 59,859
<INTEREST-INCOME> 15,181
<OTHER-INCOME> 0
<EXPENSES-NET> 42,546
<NET-INVESTMENT-INCOME> 32,494
<REALIZED-GAINS-CURRENT> 205,469
<APPREC-INCREASE-CURRENT> 841,609
<NET-CHANGE-FROM-OPS> 1,079,572
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 32,494
<DISTRIBUTIONS-OF-GAINS> 99,912
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 356,581
<NUMBER-OF-SHARES-REDEEMED> 24,388
<SHARES-REINVESTED> 10,013
<NET-CHANGE-IN-ASSETS> 4,844,317
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,475
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 68,151
<AVERAGE-NET-ASSETS> 3,729,771
<PER-SHARE-NAV-BEGIN> 10.40
<PER-SHARE-NII> .07
<PER-SHARE-GAIN-APPREC> 2.80
<PER-SHARE-DIVIDEND> .07
<PER-SHARE-DISTRIBUTIONS> .21
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.99
<EXPENSE-RATIO> 1.13
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> CHUBB GLOBAL INCOME FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 10,476,192
<INVESTMENTS-AT-VALUE> 10,823,476
<RECEIVABLES> 248,924
<ASSETS-OTHER> 1,176,481
<OTHER-ITEMS-ASSETS> 9,808
<TOTAL-ASSETS> 12,258,689
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 31,811
<TOTAL-LIABILITIES> 31,811
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11,888,642
<SHARES-COMMON-STOCK> 1,193,895
<SHARES-COMMON-PRIOR> 1,048,603
<ACCUMULATED-NII-CURRENT> 969
<OVERDISTRIBUTION-NII> 71,480
<ACCUMULATED-NET-GAINS> 80,582
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 339,957
<NET-ASSETS> 12,226,878
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 768,178
<OTHER-INCOME> 0
<EXPENSES-NET> 140,214
<NET-INVESTMENT-INCOME> 627,964
<REALIZED-GAINS-CURRENT> 9,102
<APPREC-INCREASE-CURRENT> 62,138
<NET-CHANGE-FROM-OPS> 699,204
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 556,484
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 89,229
<NUMBER-OF-SHARES-REDEEMED> 6,369
<SHARES-REINVESTED> 62,431
<NET-CHANGE-IN-ASSETS> 1,521,316
<ACCUMULATED-NII-PRIOR> 8,250
<ACCUMULATED-GAINS-PRIOR> (19,073)
<OVERDISTRIB-NII-PRIOR> 29
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 22,735
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 191,457
<AVERAGE-NET-ASSETS> 11,345,420
<PER-SHARE-NAV-BEGIN> 10.21
<PER-SHARE-NII> .55
<PER-SHARE-GAIN-APPREC> .03
<PER-SHARE-DIVIDEND> .55
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.24
<EXPENSE-RATIO> 1.23
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectus and "Independent Auditors" in the Statement of
Additional Information and to the use of our report dated February 14, 1997,
incorporated by reference in Post-Effective Amendment Number 12 to the
Registration Statement (Form N-1A No.33-14737) of Chubb Investment Funds, Inc.
ERNST & YOUNG LLP
Boston, Massachusetts
April 21, 1997
<PAGE>
CHUBB INVESTMENT FUNDS
MONEY MARKET PORTFOLIO
7 DAY YIELD
<TABLE>
<CAPTION>
0.50% NET SHARES DAILY
DATE INCOME EXPENSES INCOME OUTSTANDING YIELD
<S> <C> <C> <C> <C> <C>
12/25/96 1,285.04 125.42 1,159.62 9,138,711.740 0.00012689097
12/26/96 1,285.04 125.42 1,159.62 9,138,711.740 0.00012689097
12/27/96 1,260.09 125.17 1,134.92 8,993,396.810 0.00012619481
12/28/96 1,262.79 123.19 1,139.60 9,022,737.130 0.00012630277
12/29/96 1,262.79 123.19 1,139.60 9,022,737.130 0.00012630277
12/30/96 1,262.79 123.19 1,139.60 9,022,737.130 0.00012630277
12/31/96 1,238.48 123.60 1,114.88 8,820,609.740 0.00012639489
</TABLE>
7 DAY YIELD: 4.62%
7 DAY EFFECTIVE YIELD: 4.72%
FORMULA:
7 DAY YIELD @SUM(L16..L22)/7*365
7 DAY EFFECTIVE YIELD: ((1+@SUM(L16..L22)) (365/7)-1)
<PAGE>
CHUBB INVESTMENT FUNDS
MONEY MARKET PORTFOLIO
7 DAY YIELD
<TABLE>
<CAPTION>
1.21% NET SHARES DAILY
DATE INCOME EXPENSES INCOME OUTSTANDING YIELD
<S> <C> <C> <C> <C> <C>
12/25/96 1,285.04 303.51 981.53 9,138,711.740 0.00010741
12/26/96 1,285.04 303.51 981.53 9,138,711.740 0.00010741
12/27/96 1,256.88 302.93 953.95 8,993,396.810 0.00010608
12/28/96 1,262.79 298.11 964.68 9,022,737.130 0.00010693
12/29/96 1,262.79 298.11 964.68 9,022,737.130 0.00010693
12/30/96 1,262.79 298.11 964.68 9,022,737.130 0.00010693
12/31/96 1,238.48 299.08 939.40 8,820,609.740 0.00010651
</TABLE>
7 DAY YIELD: 3.90%
7 DAY EFFECTIVE YIELD: 3.98%
FORMULA:
7 DAY YIELD @SUM(L16..L22)/7*365
7 DAY EFFECTIVE YIELD: ((1+@SUM(L16..L22)) (365/7)-1)
<PAGE>
Chubb Government Fund
30 Day Yield
12/02/96 - 12/31/96
Calculation without assumed expenses (Actual 1996 Expense Ratio of 1.60%)
Income $81,044.30
Expenses ($17,340.46)
Ave Daily Shares Eligible for Dist. 1,226,811.144
Offering Price at End of Period $10.80
30 Day Yield 5.84%
2*((((81044.3-17340.46)/(1226811.144*10.8)+1)(UP)6)-1)
___________________________________________________________________________
Chubb Government Fund
30 Day Yield
12/02/96 - 12/31/96
0.93% Expense
Income $81,044.30
Expenses ($9,934.57)
Ave Daily Shares Eligible for Dist. 1,226,811.144
Offering Price at End of Period $10.80
30 Day Yield 6.53%
2*((((81044.3-9934.57)/(1226811.144*10.8)+1)(UP)6)-1)
<PAGE>
Chubb Tax-Exempt Fund
30 Day Yield
12/02/96 - 12/31/96
Calculation without assumed expenses (Actual 1996 Expense Ratio)
Income $65,912.07
Expenses ($20,843.87)
Ave Daily Shares Eligible for Dist. 1,238,786.131
Offering Price at End of Period $12.53
30 Day Yield 3.51%
2*((((65912.07-20843.87)/(1238786.131*12.53)+1)(UP)6)-1)
____________________________________________________________________________
Chubb Tax-Exempt Fund
30 Day Yield
12/02/96 - 12/31/96
0.98% Expense
Income $65,912.07
Expenses ($12,206.76)
Ave Daily Shares Eligible for Dist. 1,238,786.131
Offering Price at End of Period $12.53
30 Day Yield 4.19%
2*((((65912.07-12206.76)/(1238786.131*12.53)+1)(UP)6)-1)
<PAGE>
Chubb Tax-Exempt Fund
30 Day Tax-Equivalent Yield
12/02/96 - 12/31/96
<TABLE>
<S> <C> <C>
Tax-Exempt Income $65,117.33
Tax-Exempt Expenses (12,059.59)
---------------
Tax-Exempt Net Income $53,057.74
Tax-Exempt Income / 1 - Tax Rate (.36) = $82,902.73
Taxable Income $794.69
Taxable Expenses (147.17)
---------------
Taxable Net Income $647.52
Total Net Income $83,550.24
Avg Daily Shares Eligible For Dist. 1,238,786.131
Offering Price at End of Period $12.53
</TABLE>
30 Day Yield = 6.55%
2*((((83550.24)/(1238786.131*12.53)+1)(UP)6)-1)
____________________________________________________________________________
Chubb Tax-Exempt Fund
30 Day Tax-Equivalent Yield
12/02/96 - 12/31/96
Calculation without assumed expenses (Actual 1996 Expense Ratio of 1.65%)
<TABLE>
<S> <C> <C>
Tax-Exempt Income $65,117.33
Tax-Exempt Expenses (20,592.55)
---------------
Tax-Exempt Net Income $44,524.78
Tax-Exempt Income / 1 - Tax Rate (.36) = $69,569.96
Taxable Income $794.69
Taxable Expenses (251.31)
---------------
Taxable Net Income $543.38
Total Net Income $70,113.34
Avg Daily Shares Eligible For Dist. 1,238,786.131
Offering Price at End of Period $12.53
</TABLE>
30 Day Yield = 5.48%
2*((((70113.34)/(1238786.131*12.53)+1)(UP)6)-1)
<PAGE>
Chubb Tax-Exempt Fund
30 Day Tax-Equivalent Yield
12/02/96 - 12/31/96
<TABLE>
<S> <C> <C>
Tax-Exempt Income $65,117.33
Tax-Exempt Expenses (12,059.59)
---------------
Tax-Exempt Net Income $53,057.74
Tax-Exempt Income / 1 - Tax Rate (.396) = $87,843.95
Taxable Income $794.69
Taxable Expenses (147.17)
---------------
Taxable Net Income $647.52
Total Net Income $88,491.46
Avg Daily Shares Eligible For Dist. 1,238,786.131
Offering Price at End of Period $12.53
</TABLE>
30 Day Yield = 6.94%
2*((((88491.46)/(1238786.131*12.53)+1)(UP)6)-1)
____________________________________________________________________________
Chubb Tax-Exempt Fund
30 Day Tax-Equivalent Yield
12/02/96 - 12/31/96
Calculation without assumed expenses (Actual 1996 Expense Ratio of 1.65%)
<TABLE>
<S> <C> <C>
Tax-Exempt Income $65,117.33
Tax-Exempt Expenses (20,592.55)
---------------
Tax-Exempt Net Income $44,524.78
Tax-Exempt Income / 1 - Tax Rate (.396) = $73,716.52
Taxable Income $794.69
Taxable Expenses (251.31)
---------------
Taxable Net Income $543.38
Total Net Income $74,259.89
Avg Daily Shares Eligible For Dist. 1,238,786.131
Offering Price at End of Period $12.53
</TABLE>
30 Day Yield = 5.81%
2*((((74259.89)/(1238786.131*12.53)+1)(UP)6)-1)
<PAGE>
Chubb Global Income Fund
30 Day Yield
12/02/96 - 12/31/96
Calculation without assumed expenses (Actual 1996 Expense Ratio of 1.68%)
<TABLE>
<S> <C> <C>
Income $65,372.18
Expenses ($17,019.67)
Ave Daily Shares Eligible for Dist. 1,188,415.184
Offering Price at End of Period $10.56
</TABLE>
30 Day Yield 4.67%
2*((((65372.18-17019.67)/(1188415.184*10.56)+1)(UP)6)-1)
____________________________________________________________________________
Chubb Global Income Fund
30 Day Yield
12/02/96 - 12/31/96
<TABLE>
<S> <C> <C>
1.23% Expense
Income $65,372.18
Expenses ($12,257.69)
Ave Daily Shares Eligible for Dist. 1,188,415.184
Offering Price at End of Period $10.56
</TABLE>
30 Day Yield 5.13%
2*((((65372.18-12257.69)/(1188415.184*10.56)+1)(UP)6)-1)
<PAGE>
CHUBB INVESTMENT FUNDS
GOVERNMENT SECURITIES PORTFOLIO
30 DAY YIELD INCOME CALCULATION
FOR PERIOD 12/02/96 - 12/31/96
<TABLE>
<CAPTION>
SETTLE YTM MARKET INTEREST PREVIOUS
SYMBOL DATE PAR COUPON DUE DATE QUOTE (Monroe) YTM VALUE RECEIVABLE HELD INCOME
- ------ ---- --- ------ -------- ----- -------- --- ----- ---------- ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
N1112 12/02/96 3,125 10.375% 11/15/12 132.1562 .997% .997% 4,129,881.25 13,434.60 30 $24,158.98
N0203 12/05/96 200 6.250% 02/15/03 101.0940 6.034% 6.034% 202,188.00 3,804.35 17 $ 586.95
N0900 12/02/96 550 6.125% 09/30/00 101.2187 5.763% 5.763% 556,702.85 5,645.55 30 2,700.68
N701 12/02/96 200 6.625% 07/31/01 103.2187 5.824% 5.824% 206,437.40 4,370.69 30 1,023.12
N0501 12/02/96 300 8.000% 05/15/01 108.5625 5.790% 5.790% 325,687.50 994.50 30 1,576.24
N0400 12/02/96 200 6.750% 04/30/00 103.0625 5.746% 5.746% 206,125.00 1,118.70 30 992.35
------------ --------- ----------
5,627,022.00 29,368.39 $31,038.33
============ ========= ==========
</TABLE>
MORTGAGE-BACKED SECURITIES
<TABLE>
<CAPTION>
FACE GAINS/LOSS
INTEREST INCOME (adj. for 1 paydown) RATE DAYS INCOME ON PAYDOWN
- --------------- -------------------- ---- ---- ------ ----------
<S> <C> <C> <C> <C> <C>
FHLMC, CMO, 1058-H, 8.00% F1058 707,032 8.000% 30 4,713.55 0.00
MAT: 04/15/2021
FNMA POOL # 29429, 9.00% F2942 28,836 9.000% 30 216.27 24.06
MAT: 7/01/2001
FNMA POOL # 282883, 7.00% F2828 205,450 7.000% 30 1,198.46 212.10
MAT: 5/01/2024
FNMA POOL # 306175, 7.00% F3061 3,149,062 7.000% 30 18,369.53 5,506.20
MAT: 01/01/2025
GNMA POOL # 166009, 9.00% G6009 101,011 9.000% 30 757.58 7.95
MAT: 6/15/2016
GNMA POOL # 402766, 8.000% G4027 1,463,804 8.000% 30 9,758.69 (472.02)
MAT: 08/15/2025
GNMA POOL # 780339, 8.000% G7803 1,358,158 8.000% 30 9,054.39 (497.13)
MAT: 12/15/2023
KPAC, CMO, 20-D, 9.900% K1018 104,398 9.900% 30 861.28 (117.19)
---------- ---------
$44,929.75 $4,663.97
---------- ---------
</TABLE>
<TABLE>
<CAPTION>
DISCOUNT EARNED (Adjusted for 1 Paydown)
----------------------------------------
<S> <C> <C> <C> <C>
F1058 12/2/96-12/31/96 (2.36) 30 (70.80)
F2828 12/2/96-12/31/96 1.13 30 33.90
F2942 12/2/96-12/31/96 0.17 30 5.10
F3061 12/2/96-12/31/96 17.00 30 510.00
G4027 12/2/96-12/31/96 (8.00) 30 (240.00)
G6009 12/2/96-12/31/96 0.62 30 18.60
G7803 12/2/96-12/31/96 (5.52) 30 (165.60)
K1018 12/2/96-12/31/96 (0.69) 30 (20.70)
----------
$70.50
----------
Total Mortgage Backed Securities $49,664.22
==========
See Calculations Above ----------- Bond Income $80,702.55
Sweep Income 341.75
----------
Total Income $81,044.30
==========
</TABLE>
<TABLE>
<CAPTION>
30 DAY YIELD CALCULATION Current Previous
<S> <C> <C>
INCOME $81,044.30 $86,969.06
EXPENSES $9,934.57 $10,765.14
AVG DAILY SHARES ELIGIBLE FOR DIST. 1,226,811.144 1,241,460.500
OFFERING PRICE AT END OF PERIOD $10.80 $10.98
30 DAY YIELD = 6.53% 6.80%
PREPARED BY:_________________________
Formula:
=2*((((75321.74-10418.9)/(1207013.47*10.80)+1)(UP)6)-1) REVIEWED BY:_________________________
</TABLE>
<PAGE>
CHUBB INVESTMENT FUNDS
TAX-EXEMPT PORTFOLIO
30 DAY YIELD
For the Period 12/02/96 - 12/31/96
<TABLE>
<CAPTION>
Settlement Par Call Days Market Interest Adjusted
Date Symbol (1,000s) Coupon Maturity Call Date Price Held Value Recievable Quote OID Cost
<S><C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 12/02/96 AAHOS $ 150 6.750% 10/01/02 10/01/01 102 30 165,450.15 1,659.67 110.3001
2 12/02/96 ATUSP 50 7.300% 05/15/17 11/15/01 100 30 56,660.10 152.10 113.3202
3 12/02/96 ATUSR 10 7.300% 05/15/17 11/15/01 100 30 11,332.02 30.45 113.3202
4 12/02/96 BRAT 60 7.750% 10/01/15 10/01/98 102 30 64,074.90 761.69 106.7915
5 12/02/96 CDPR 250 6.750% 02/01/12 05/01/02 102 30 271,011.50 1,359.52 108.4046
6 12/02/96 CTGO 160 7.000% 09/15/10 09/15/00 102 30 178,402.08 2,333.25 111.5013
7 12/02/96 CCIG 150 7.000% 11/01/99 30 161,644.20 845.93 107.7628
8 12/02/96 DOCR 500 5.875% 06/01/05 30 500,991.50 14,606.40 100.1983
9 12/02/96 DCCP 300 7.300% 01/01/13 01/01/03 102 30 310,318.20 9,063.67 103.4394
10 12/02/96 DCGO 250 5.500% 06/01/06 30 242,096.25 6,836.01 96.8385
11 12/02/96 HTXS 1,150 0.000% .08/15/13 30 464,432.10 0.00 40.3854 459,582,71
12 12/02/96 IHDA 55 7.750% 08/01/23 08/01/00 102 0 57,077.68 1,409.23 103.7776
13 12/02/96 IHDA 0 7.750% 08/01/23 08/01/00 102 30 0.00 0.00 0.0000
14 12/02/96 ISTR 150 6.800% 06/15/14 06/15/00 102 30 165,461.70 4,674.45 110.3078
15 12/02/96 ILTH 350 6.375% 01/01/15 01/01/03 102 30 367,780.70 9,235.02 105.0802
16 12/02/96 IBBR 150 6.000% 02/01/15 02/01/03 102 30 154,670.85 2,974.99 103.1139
17 12/02/96 IBBRA 350 6.000% 02/01/15 02/01/03 102 30 360,898.65 6,941.27 103.1139
18 12/02/96 INSPW 500 5.650% 01/01/16 01/01/14 100 30 502,916.00 11,384.19 100.5832
19 12/02/96 IHFA 150 7.800% 01/01/22 07/01/00 102 30 159,963.90 4,842.50 106.6426
20 12/02/96 IPAU 140 7.200% 07/01/19 07/01/97 102 30 145,192.74 4,172.00 103.7091
21 12/02/96 JSTR 200 6.750% 12/01/06 12/01/02 100 30 219,048.60 6,712.50 109.5243
22 12/02/96 KYT2 20 7.250% 05/15/10 05/15/00 101.5 30 22,212.16 60.45 111.0608
23 12/02/96 KYTA 140 7.250% 05/15/10 05/15/00 101.5 30 155,485.12 422.85 111.0608
24 12/02/96 LCWP 250 7.000% 10/01/22 10/01/01 102 30 283,373.50 2,867.99 113.3494
25 12/02/96 LCRA 100 7.000% 01/01/09 01/01/97 102 30 102,291.20 2,896.56 102.2912
26 12/02/96 MAS 600 6.000% 06/01/11 06/01/01 100 30 642,135.00 17,900.00 107.0225
27 12/02/96 MELA 205 6.950% 12/01/07 12/01/02 102 0 220,911.28 7,106.71 107.7616
28 12/02/96 MELA 15 6.950% 12/01/07 12/01/02 102 30 16,164.24 495.82 107.7616
29 12/02/96 MSAA 250 6.750% 09/01/12 09/01/02 102 30 265,436.75 4,172.32 106.1747
30 12/02/96 MART 100 7.250% 07/01/10 07/01/98 102 30 105,981.60 3,000.86 105.9816
31 12/02/96 MPEAP 345 6.500% 06/15/27 06/15/03 102 30 389,097.21 10,278.76 112.7818
32 12/02/96 MPEAU 5 6.500% 06/15/27 06/15/03 102 30 5,486.47 148.86 109.7294
33 12/02/96 MTNY 100 8.000% 07/01/08 07/01/98 102 30 108,311.40 3,310.78 108.3114
34 12/02/96 MWAA 250 6.500% 10/01/07 10/01/02 102 30 271,451.75 2,663.26 108.5807
35 12/02/96 MHEF 150 7.000% 11/15/13 11/15/01 102 30 170,418.90 437.55 113.6126
36 12/02/96 NLTB 150 6.750% 08/01/07 08/01/99 102 30 163,083.60 3,347.47 108.7224
37 12/02/96 NHTR 200 6.750% 11/01/11 11/01/06 102 30 225,352.80 1,087.50 112.6764
38 12/02/96 NJEDA 650 7.300% 04/01/11 04/01/01 102 30 694,933.20 7,776.79 106.9128
39 12/02/96 NJWT 180 6.875% 06/15/07 06/15/00 101.75 30 195,960.96 5,672.70 108.8672
40 12/02/96 NOR 550 0.000% 06/30/04 30 378,144.25 0.00 70.0402 385,221.13
41 12/02/96 NYCP1 40 6.875% 02/01/02 30 44,425.20 909.07 111.0630
42 12/02/96 NYCU1 210 6.875% 02/01/02 30 226,001.16 4,771.99 107.6196
43 12/02/96 NYGOH 250 5.800% 08/01/04 30 256,349.75 4,793.32 102.5399
44 12/02/96 NYGA 450 5.500% 04/01/21 04/01/03 102 30 442,261.35 4,056.25 98.2803
45 12/02/96 NYMC 100 8.000% 02/15/25 08/15/97 102 30 105,120.10 2,333.10 105.1201
46 12/02/96 NYST 250 5.600% 04/01/10 04/01/05 102 30 256,893.25 2,294.51 102.7573
47 12/02/96 NMPA 100 7.250% 01/01/16 01/01/99 102 30 105,635.10 3,000.86 105.6351
48 12/02/96 OIDA 600 5.000% 06/01/13 06/01/03 102 30 574,629.00 14,916.07 95.7715
49 12/02/96 PPHH 350 5.000% 02/15/21 02/15/03 100 30 319,294.15 5,104.05 91.2269
50 12/02/96 PRPC 110 6.875% 06/01/16 06/01/97 102 30 112,881.12 3,760.69 102.6192
51 12/02/96 SCNJ 650 6.500% 11/15/21 11/15/01 102 28 693,353.70 1,760.40 106.6698
52 12/02/96 THDA 500 5.900% 07/01/18 07/01/03 102 30 506,010.00 12,209.06 101.2020
53 12/02/96 TSPF 140 7.375% 02/01/09 02/01/98 100 30 145,551.84 3,412.92 103.9656
54 12/02/96 VHSD 100 6.700% 07/01/08 01/01/97 102 30 102,076.40 2,772.89 102.0764
55 12/02/96 WHCF 300 6.750% 12/01/11 12/01/00 102 30 319,147.80 10,070.54 106.3826
56 12/02/96 WHC2 500 6.250% 10/01/13 10/01/03 102 30 513,254.50 5,121.79 102.6509
57 12/02/96 WAHF 145 7.100% 07/01/22 07/01/01 102 30 152,519.41 4,261.40 105.1858
<CAPTION>
Yield Calculation Method (Current Month) (Prior Month)
Monroe YTM YTC Coupon Income Income Variance % Variance
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 4.712% 4.712% $ 656.18 $ 674.77 ($18.59) 0.0228%
2 4.286% 4.286% $ 202.91 $ 218.81 ($15.90) 0.0230%
3 4.286% 4.286% $ 40.58 $ 43.77 ($3.19) 0.0240%
4 4.878% 4.878% $ 263.56 $ 271.01 ($7.45) 0.0237%
5 5.268% 5.268% $1,195.71 $1,256.47 ($60.76) 0.0196%
6 4.175% 4.175% $ 628.81 $ 659.35 ($30.54) 0.0219%
7 4.143% 4.143% $ 561.00 $ 591.82 ($30.82) 0.0219%
8 5.845% 5.845% $2,511.39 $2,447.92 $63.47 0.0292%
9 6.867% 6.867% $1,827.66 $1,852.27 ($24.61) 0.0224%
10 5.500% 5.500% $1,145.83 $1,145.83 $0.00 0.0243%
11 5.503% 5.503% $2,129.81 $2,121.91 $7.90 0.0249%
12 7.046% 7.046% $ 343.42 $ 344.62 ($1.20) 0.0242%
13 7.750% 7.750% $ 0.00 $ 0.00 $0.00 0.0243%
14 4.165% 4.165% $ 590.51 $ 619.66 ($29.15) 0.0220%
15 5.155% 5.655% $1,776.69 $1,813.19 ($36.50) 0.0214%
16 5.668% 5.668% $ 744.61 $ 760.66 ($16.05) 0.0230%
17 5.668% 5.668% $1,737.43 $1,774.86 ($37.43) 0.0214%
18 5.596% 5.596% $2,398.35 $2,354.17 $44.18 0.0277%
19 6.207% 6.207% $ 852.46 $ 879.26 ($26.80) 0.0222%
20 4.100% 4.100% $ 510.33 $ 534.08 ($23.75) 0.0224%
21 4.898% 4.898% $ 921.48 $ 940.83 ($19.35) 0.0228%
22 4.184% 4.184% $ 77.66 $ 84.16 ($6.50) 0.0238%
23 4.184% 4.184% $ 543.60 $ 589.14 ($45.54) 0.0207%
24 4.286% 4.286% $1,022.36 $1,067.97 ($45.61) 0.0207%
25 3.217% 3.217% $ 281.99 $ 326.86 ($44.87) 0.0208%
26 4.267% 4.267% $2,346.97 $2,853.04 ($506.07) -0.0150%
27 5.689% 5.689% $1,081.00 $1,182.58 ($101.58) 0.0164%
28 5.689% 5.689% $ 0.00 $1,182.58 ($1,182.58) -0.0674%
29 5.768% 5.768% $1,295.92 $1,336.66 ($40.74) 0.0211%
30 4.518% 4.518% $ 410.32 $ 423.34 ($13.02) 0.0233%
31 4.488% 4.488% $1,493.67 $1,551.07 ($57.40) 0.0198%
32 4.999% 4.999% $ 23.48 $ 23.25 $0.23 0.0243%
33 3.770% 3.770% $ 350.68 $ 364.51 ($13.83) 0.0232%
34 5.078% 5.078% $1,159.96 $1,187.32 ($27.36) 0.0221%
35 4.286% 4.286% $ 610.24 $ 657.11 ($46.87) 0.0206%
36 3.983% 3.983% $ 552.41 $ 588.67 ($36.26) 0.0215%
37 5.249% 5.249% $ 990.49 $1,036.22 ($45.73) 0.0207%
38 5.878% 5.878% $3,442.11 $3,499.37 ($57.26) 0.0198%
39 4.590% 4.590% $ 771.25 $ 792.03 ($20.78) 0.0227%
40 4.755% 4.755% $1,526.44 $1,519.49 $6.95 0.0248%
41 4.451% 4.451% $ 168.15 $ 172.51 ($4.36) 0.0239%
42 5.173% 5.173% $ 994.82 $1,014.66 ($19.84) 0.0227%
43 5.390% 5.390% $1,172.97 $1,195.15 ($22.18) 0.0225%
44 5.500% 5.500% $2,062.50 $2,062.50 $0.00 0.0243%
45 3.390% 3.390% $ 303.56 $ 324.52 ($20.96) 0.0226%
46 5.377% 5.377% $1,161.38 $1,155.75 $5.63 0.0247%
47 5.274% 5.274% $ 477.46 $ 489.67 ($12.21) 0.0233%
48 5.000% 5.000% $2,500.00 $2,500.00 $0.00 0.0243%
49 5.000% 5.000% $1,458.33 $1,458.33 $0.00 0.0243%
50 5.485% 5.485% $ 533.15 $ 547.74 ($14.59) 0.0231%
51 5.308% 5.308% $3,074.72 $3,235.03 ($160.31) 0.0118%
52 5.801% 5.801% $2,505.16 $2,458.33 $46.83 0.0279%
53 3.851% 3.851% $ 478.05 $ 497.19 ($19.14) 0.0228%
54 5.484% 5.484% $ 479.16 $ 506.90 ($27.74) 0.0221%
55 5.408% 5.408% $1,483.68 $1,513.11 ($29.43) 0.0220%
56 6.010% 6.010% $2,596.20 $2,594.62 $1.58 0.0244%
57 6.166% 6.166% $ 805.59 $ 812.21 ($6.62) 0.0238%
</TABLE>
<PAGE>
<TABLE>
<S><C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
58 12/02/96 WPP2 100 7.625% 07/01/10 01/01/01 102 30 114,043.00 3,155.82 114.0430 4.289%
59 12/02/96 WPPS1 600 5.750% 07/01/11 30 605,872.80 14,278.77 100.9788 5.650% 5.650%
60 12/02/96 WPPS 125 7.500% 07/01/18 07/01/00 102 30 140,801.50 3,879.96 112.6412 4.184%
------------- ----------
MARKET VALUE: 14,711,776.34 270,505.53
============= ==========
<CAPTION>
<S> <C> <C> <C> <C> <C>
58 4.289% $ 418.89 $ 438.46 ($19.57) 0.0228%
59 $ 2,919.88 $ 2,929.59 ($9.71) 0.0235%
60 4.184% $ 504.46 $ 529.30 ($24.84) 0.0223%
---------- ---------- -------- -------
30 Days Bond Income $65,117.39 $68,006.20 ($2,888.81) -0.1997%
30 Days Sweep Income 794.69 921.97 ($127.28) 0.0144%
---------- ---------- ----------- -------
Total Income $65,912.08 $68,928.17 ($3,016.09) -0.2096%
========== ========== =========== =======
30 DAY YIELD CALCULATION
Prepared By:________________ INCOME $65,912.08 $68,006.20 ($2,094.12) -0.1381%
EXPENSES $12,206.76 $12,470.52 ($263.76) 0.0038%
AVERAGE DAILY SHARES ELIGIBLE FOR DIST. 1,238,786.131 1,244,702.466 (5,916.335) 0.0448%
OFFERING PRICE AT END OF PERIOD 12.53 12.65 ($0.12) 0.0655%
Reviewed By:________________ UNDIST. INCOME PER SHARE 0 0 0
----------------------------------
30 DAY YIELD = 4.19% 4.25% -0.06% -0.0577%
----------------------------------
Formula:
=2*((((65912.08-12206.76)/(1238786.131*(12.53))+1)(UP)6)-1)
</TABLE>
<PAGE>
CHUBB INVESTMENT FUNDS
GLOBAL INCOME PORTFOLIO
30 DAY YIELD INCOME CALCULATION
For the period 12/2/96 - 12/31/96
<TABLE>
<CAPTION>
LOCAL
SETTLE PAR LOCAL VALUE
SYMBOL DATE (,000) MATURITY COUPON QUOTE YTM - Monroe YTM MARKET
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BEF0305 12/02/96 4,000 3/31/05 6.500% 105.4700 5.665% 5.665% 4,218,800.00
BGB7 12/02/96 5,000 5/15/06 7.000% 108.2600 5.849% 5.849% 5,413,000.00
BTPS0502 12/02/96 700,000 5/1/02 12.000% 121.6000 7.119% 7.119% 851,200,000.00
BTPS9.5 12/02/96 525,000 2/1/06 9.050% 113.0600 7.086% 7.086% 593,565,000.00
CAN0623 12/02/96 300 6/1/23 8.000% 116.3186 6.678% 6.678% 348,955.80
CAN6 12/02/96 225 6/1/04 6.500% 104.5876 5.738% 5.738% 235,322.10
CAN7 12/02/96 210 12/1/06 7.000% 107.4584 5.997% 5.997% 225,662.64
COMTEL 12/02/96 750 9/26/04 10.750% 103.5000 10.086% 10.086% 776,250.00
DAUS 12/02/96 724 11/8/06 6.125% 101.3626 5.941% 5.941% 733,865.22
DKK0503 12/02/96 1,050 5/15/03 8.000% 110.3800 6.033% 6.033% 1,158,990.00
ESP0314 12/02/96 40,000 3/14/05 4.750% 116.8750 2.483% 2.483% 46,750,000.00
ESP0602 12/02/96 24,000 6/15/02 10.300% 117.9516 6.397% 6.397% 28,308,384.00
EXIMBK 12/02/96 50,000 7/28/05 2.875% 103.0000 2.487% 2.487% 51,500,000.00
FRTR1008 12/02/96 1,700 10/25/08 8.500% 123.0200 5.794% 5.794% 2,091,340.00
IBRD0902 12/02/96 1,050 9/27/02 6.125% 105.4500 5.031% 5.031% 1,107,225.00
IBRD1103 12/02/96 1,050 11/10/03 5.875% 103.7500 5.223% 5.223% 1,089,375.00
NLG0207 12/02/96 550 2/15/07 8.250% 119.3500 5.719% 5.719% 656,425.00
NLG0907 12/02/96 550 9/15/07 8.250% 119.8000 5.758% 5.758% 658,900.00
NSWTC 12/02/96 200 6/20/05 9.250% 110.9375 7.493% 7.493% 221,875.00
PORT0605 12/02/96 2,200 6/7/05 7.700% 112.6875 5.791% 5.791% 2,479,125.00
SPBP8.8 12/02/96 28,000 4/30/06 8.800% 110.0500 7.303% 7.303% 30,814,000.00
TB111512 12/02/96 500 11/15/12 10.375% 132.1562 6.997% 6.997% 660,781.00
TEVEC 12/02/96 500 11/26/04 12.625% 102.1566 12.194% 12.194% 510,783.00
TN021503 12/02/96 1,000 2/15/03 6.250% 101.8437 5.889% 5.889% 1,018,437.00
TN103101 12/02/96 500 10/31/01 6.250% 101.7500 5.833% 5.833% 508,750.00
UKT0909 12/02/96 310 9/25/09 8.000% 104.0000 7.506% 7.506% 322,400.00
UKT1110 12/02/96 393 11/25/10 6.250% 89.0312 7.532% 7.532% 349,892.62
-----------------
$1,626,923,538.38
=================
<CAPTION>
LOCAL
INTEREST DAYS LOCAL BASE Previous
SYMBOL RECEIVABLE HELD INCOME ** SPOT INCOME Base Income Variance % Variance
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BEF0305 197,771.81 30 20,849.90 31.6800 658.14 677.67 (19.53) -0.8860%
BGB7 222,513.19 30 27,468.43 31.6800 867.06 714.11 152.95 -0.8691%
BTPS0502 12,836,155.71 30 5,125,894.49 1,514.9201 3,383.61 3,691.71 (308.10) -0.9141%
BTPS9.5 18,652,863.84 30 3,615,146.49 1,514.9201 2,386.36 1,962.55 423.81 -0.8427%
CAN0623 2,241.69 30 1,954.41 0.7421 1,450.37 1,483.19 (32.82) -0.8873%
CAN6 1,366.12 30 1,131.76 0.7421 839.88 884.51 (44.63) -0.8884%
CAN7 1,372.99 30 1,134.61 0.7421 841.99 881.88 (39.89) -0.8879%
COMTEL 0.00 28 6,089.42 1.0000 6,089.42 5,092.31 997.11 -0.7868%
DAUS 6,882.24 30 3,667.32 1.5371 2,385.87 1,626.63 759.24 -0.8100%
DKK0503 53,395.81 30 6,095.27 5.8894 1,034.96 1,059.48 (24.52) -0.8864%
ESP0314 1,529,874.39 30 99,899.11 113.8000 877.85 635.67 242.18 -0.8604%
ESP0602 1,374,838.25 30 158,236.31 129.5000 1,221.90 1,327.40 (105.50) -0.8943%
EXIMBK 622,402.02 30 108,023.68 113.8000 949.24 778.49 170.75 -0.8674%
FRTR1008 28,108.19 30 10,233.40 5.2226 1,959.45 2,019.85 (60.40) -0.8899%
IBRD0902 17,305.58 30 4,714.59 1.5371 3,067.20 3,181.95 (114.75) -0.8952%
IBRD1103 9,231.02 30 4,781.68 1.5371 3,110.85 3,431.12 (320.27) -0.9153%
NLG0207 40,195.40 30 3,319.98 1.7245 1,925.18 1,975.52 (50.34) -0.8890%
NLG0907 13,722.40 30 3,227.47 1.7245 1,871.54 1,915.42 (43.88) -0.8883%
NSWTC 9,962.80 30 1,447.63 0.8145 1,777.33 911.13 866.20 -0.7995%
PORT0605 103,391.62 30 12,462.79 5.2226 2,386.32 2,444.48 (58.16) -0.8897%
SPBP8.8 1,680,920.14 30 197,758.67 129.5000 1,527.09 999.52 527.57 -0.8326%
TB111512 7,165.00 30 3,894.68 1.0000 3,894.68 4,052.95 (158.27) -0.8995%
TEVEC 6,640.54 30 5,257.89 1.0000 5,257.89 693.04 4,564.85 -0.4383%
TN021503 24,116.29 30 5,116.33 1.0000 5,116.33 5,233.30 (116.97) -0.8955%
TN103101 5,519.80 30 2,499.78 1.0000 2,499.78 2,553.67 (53.89) -0.8893%
UKT0909 6,862.78 30 2,059.54 1.6804 3,460.85 3,221.91 238.94 -0.8607%
UKT1110 2,691.92 30 2,213.06 1.6804 3,718.82 3,589.11 129.71 -0.8714%
-------------- ------------- ---------- ---------- -------- -------
$37,457,511.54 $9,434,578.69 $64,559.95 $57,038.57 7,521.38 -0.1491%
============== ============= ========== ========== ======== =======
Base Income $64,559.95 $57,038.57 7,521.38 -0.1491%
Sweep Income $ 812.14 $ 1,373.56 (561.42) -0.9388%
---------- ---------- --------- --------
Total Income $65,372.09 $58,412.13 $6,959.96 -0.2041%
========== ========== ========= ========
30 DAY YIELD CALCULATION
TOTAL INCOME $65,372.09 $58,412.13 $6,959.96 -1.5621%
EXPENSES $12,257.69 $17,205.13 ($4,947.44) -1.3663%
AVG DAILY SHARES ELIGIBLE FOR DISTRIBUTION 1,188,415.184 1,177,384.985 $11,030.20 -0.8460%
OFFERING PRICE AT END OF PERIOD $10.56 $10.62 $0.06 -0.9079%
-----------------------------------------------------------------
30 DAY YIELD = 5.13% 4.87% 0.261% 0.2614%
-----------------------------------------------------------------
</TABLE>
Formula:
=2*((((65372.09-12257.69)/(1188415.184*10.56)+1)(UP)6)-1)
PREPARED BY:_______________________________________
REVIEWED BY:_______________________________________
<PAGE>
NET CIF: GOVERNMENT SECURITIES FUND
RATE OF RETURN
1 YEAR PREPARED ON: 12/31/96
.........
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
95.537333 10.48 1001.2312
PURCHASE DATE: 12/31/95
INITIAL INVESTMENT: $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 11.11 (3% SALES LOAD) 1001.2312 1,000.00 (1.2312)
SHARES PURCHASED: 90.0090009
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(1.2312) 1,000.00 0.0012
</TABLE>
ONE YEAR NET RATE OF RETURN: 0.12%
<TABLE>
<CAPTION>
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/95 10.78 12/31/95 12/31/95 0.0472 10.78 13,837,929 90.009001
01/31/96 10.82 01/31/96 01/31/96 0.0550 10.82 13,837,929 4.950495 0.457532 90.466533
02/28/96 10.57 02/28/96 02/28/96 0.0515 10.57 13,643,057 4.659026 0.440778 90.907311
03/31/96 10.44 03/31/96 03/31/96 0.0482 10.44 15,111,466 4.381732 0.419706 91.327017
04/30/96 10.31 04/30/96 04/30/96 0.0528 10.31 13,450,918 4.819368 0.467446 91.794463
05/31/96 10.21 05/31/96 05/31/96 0.0503 10.21 13,476,477 4.613785 0.451889 92.246352
06/30/96 10.31 06/30/96 06/30/96 0.0423 10.31 13,353,637 3.904499 0.378710 92.625062
07/31/96 10.27 07/31/96 07/31/96 0.0551 10.27 13,353,637 5.104906 0.497070 93.122132
08/31/96 10.20 08/31/96 08/31/96 0.0512 10.20 13,195,847 4.771858 0.467829 93.589961
09/30/96 10.33 09/30/96 09/30/96 0.0524 10.33 12,990,070 4.904114 0.474745 94.064706
10/31/96 10.50 10/31/96 10/31/96 0.0527 10.50 4.960314 0.472411 94.537117
11/30/96 10.65 11/30/96 11/30/96 0.0571 10.65 5.399960 0.507039 95.044155
12/31/96 10.48 12/31/96 12/31/96 0.0544 10.48 5.168501 0.493178 95.537333
</TABLE>
<PAGE>
NET CIF: GOVERNMENT SECURITIES FUND
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/96
ROLLING
.......
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
127.308316 10.48 1334.1911
PURCHASE DATE: 12/31/91
INITIAL INVESTMENT: $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 11.51 (3% SALES LOAD) 1334.1911 1,000.00 (334.1911)
SHARES PURCHASED: 86.88097307
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(334.1911) 1,000.00 0.3342
</TABLE>
NET 5 YEAR RETURN: 33.42%
ANNUALIZED NET 5 YEAR RETURN: 5.94%
<TABLE>
<CAPTION>
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/91 11.16 12/31/91 12/31/91 0.0647 0.0371 11.16 4,080,832 86.880973
01/31/92 10.73 01/31/92 01/31/92 0.0613 0.0136 10.73 4,115,352 6.507385 0.606466 87.487440
02/28/92 10.74 02/28/92 02/28/92 0.0562 10.74 4,421,099 4.916794 0.457802 87.945242
03/31/92 10.59 03/31/92 03/31/92 0.0658 0.0120 10.59 4,668,735 6.842140 0.646094 88.591336
04/30/92 10.60 04/30/92 04/30/92 0.0632 10.60 5,012,444 5.598972 0.528205 89.119541
05/29/92 10.77 05/29/92 05/29/92 0.0632 10.77 5,336,478 5.632355 0.522967 89.642508
06/30/92 10.91 06/30/92 06/30/92 0.0694 10.91 5,868,608 6.221190 0.570228 90.212736
07/31/92 11.14 07/31/92 07/31/92 0.0662 11.14 6,352,601 5.972083 0.536094 90.748830
08/31/92 11.18 08/31/92 08/31/92 0.0667 11.18 6,515,636 6.052947 0.541408 91.290238
09/30/92 11.36 09/30/92 09/30/92 0.0636 11.36 6,903,738 5.806059 0.511097 91.801335
10/31/92 11.16 10/31/92 10/31/92 0.0625 11.16 7,077,273 5.737583 0.514120 92.315455
11/30/92 11.01 11/30/92 11/30/92 0.0648 11.01 7,108,620 5.982042 0.543328 92.858783
12/31/92 10.70 12/31/92 12/31/92 0.0635 0.4549 10.70 7,392,150 48.137993 4.498878 97.357661
01/29/93 10.83 01/29/93 01/29/93 0.0584 0.0270 10.83 9,645,668 8.314344 0.767714 98.125376
02/26/93 10.85 02/26/93 02/26/93 0.0528 10.85 8,888,835 5.181020 0.477513 98.602889
03/31/93 10.85 03/31/93 03/31/93 0.0696 10.85 9,397,484 6.862761 0.632513 99.235401
04/30/93 10.88 04/30/93 04/30/93 0.0597 10.88 10,327,829 5.924353 0.544518 99.779919
05/31/93 10.85 05/31/93 05/31/93 0.0550 10.85 10,747,098 5.487896 0.505797 100.285716
06/30/93 10.99 06/30/93 06/30/93 0.0622 10.99 11,447,493 6.237772 0.567586 100.853302
07/30/93 11.01 07/30/93 07/30/93 0.0582 11.01 12,278,489 5.869662 0.533121 101.386423
08/31/93 11.08 08/31/93 08/31/93 0.0841 11.08 12,794,301 8.526598 0.769549 102.155972
09/30/93 10.89 09/30/93 09/30/93 0.0763 10.89 13,388,587 7.794501 0.715748 102.871720
10/31/93 11.03 10/31/93 10/31/93 0.0726 11.03 14,193,799 7.468487 0.677107 103.548827
11/30/93 10.79 11/30/93 11/30/93 0.0671 10.79 14,355,313 6.948126 0.643941 104.192768
12/31/93 10.71 12/31/93 12/31/93 0.0544 0.1622 10.71 14,423,056 22.568154 2.107204 106.299972
01/31/94 10.80 01/31/94 01/31/94 0.0519 10.80 14,926,943 5.516969 0.510830 106.810802
02/28/94 10.58 02/28/94 02/28/94 0.0507 10.58 14,636,665 5.415308 0.511844 107.322646
03/31/94 10.27 03/31/94 03/31/94 0.0485 10.27 14,364,391 5.205148 0.506830 107.829477
04/30/94 10.15 04/30/94 04/30/94 0.0461 10.15 13,704,395 4.970939 0.489748 108.319224
05/31/94 10.13 05/31/94 05/31/94 0.0528 10.13 13,716,879 5.719255 0.564586 108.883810
06/30/94 10.01 06/30/94 06/30/94 0.0502 10.01 13,685,239 5.465967 0.546051 109.429861
07/29/94 10.20 07/29/94 07/29/94 0.0494 10.20 13,637,392 5.405835 0.529984 109.959845
08/31/94 10.15 08/31/94 08/31/94 0.0530 10.15 13,462,232 5.827872 0.574175 110.534019
09/30/94 9.89 09/30/94 09/30/94 0.0511 9.89 13,074,591 5.648288 0.571111 111.105130
10/31/94 9.80 10/31/94 10/31/94 0.0514 9.80 12,700,367 5.710804 0.582735 111.687865
</TABLE>
<PAGE>
NET CIF: GOVERNMENT SECURITIES FUND
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/96
ROLLING
.......
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
11/30/94 9.72 11/30/94 11/30/94 0.0511 9.72 12,522,598 5.707250 0.587166 112.275031
12/31/94 9.75 12/31/94 12/31/94 0.0510 9.75 12,481,465 5.726027 0.587285 112.862316
01/31/95 9.90 01/31/95 01/31/95 0.0517 9.90 12,729,896 5.834982 0.589392 113.451708
02/28/95 10.12 02/28/95 02/28/95 0.0506 10.12 12,904,684 5.740656 0.567259 114.018966
03/31/95 10.11 03/31/95 03/31/95 0.0513 10.11 12,861,485 5.849173 0.578553 114.597520
04/30/95 10.18 04/30/95 04/30/95 0.0533 10.18 12,861,485 6.108048 0.600005 115.197524
05/31/95 10.42 05/31/95 05/31/95 0.0636 10.42 14,054,764 7.324392 0.702917 115.900441
06/30/95 10.49 06/30/95 06/30/95 0.0592 10.49 14,251,768 6.859737 0.653931 116.554372
07/31/95 10.39 07/31/95 07/31/95 0.0573 10.39 n/a 6.682369 0.643154 117.197526
08/31/95 10.44 08/31/95 08/31/95 0.0514 10.44 14,210,578 6.023953 0.577007 117.774533
09/30/95 10.50 09/30/95 09/30/95 0.0462 10.50 13,898,853 5.441183 0.518208 118.292741
10/31/95 10.58 10/31/95 10/31/95 0.0552 10.58 13,614,184 6.535670 0.617738 118.910479
11/30/95 10.67 11/30/95 11/30/95 0.0456 10.67 13,659,968 5.422318 0.508183 119.418663
12/31/95 10.78 12/31/95 12/31/95 0.0472 10.78 13,837,929 5.636561 0.522872 119.941535
01/31/96 10.82 01/31/96 01/31/96 0.0550 10.82 13,837,929 6.596784 0.609684 120.551219
02/28/96 10.57 02/28/96 02/28/96 0.0515 10.57 13,643,057 6.208388 0.587359 121.138578
03/31/96 10.44 03/31/96 03/31/96 0.0482 10.44 15,111,466 5.838879 0.559280 121.697858
04/30/96 10.31 04/30/96 04/30/96 0.0528 10.31 13,450,918 6.422051 0.622895 122.320753
05/31/96 10.21 05/31/96 05/31/96 0.0503 10.21 13,476,477 6.148101 0.602165 122.922918
06/30/96 10.31 06/30/96 06/30/96 0.0423 10.31 13,353,637 5.202942 0.504650 123.427568
07/31/96 10.27 07/31/96 07/31/96 0.0551 10.27 13,353,637 6.802545 0.662370 124.089939
08/31/96 10.20 08/31/96 08/31/96 0.0512 10.20 13,195,847 6.358741 0.623406 124.713345
09/30/96 10.33 09/30/96 09/30/96 0.0524 10.33 12,990,070 6.534979 0.632621 125.345966
10/31/96 10.50 10/31/96 10/31/96 0.0527 10.50 6.609869 0.629511 125.975477
11/30/96 10.65 11/30/96 11/30/96 0.0571 10.65 7.195719 0.675654 126.651132
12/31/96 10.48 12/31/96 12/31/96 0.0544 10.48 6.887289 0.657184 127.308316
</TABLE>
<PAGE>
NET CIF: GOVERNMENT SECURITIES FUND
RATE OF RETURN
SINCE PREPARED ON: 12/31/96
INCEPTION
.......
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
201.034845 10.48 2106.8452
PURCHASE DATE: 12/10/87
INITIAL INVESTMENT $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.31 (3% SALES LOAD) 2106.8452 1,000.00 (1106.8452)
SHARES PURCHASED 96.993
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(1106.8452) 1,000.00 1.1068
</TABLE>
NET RATE OF RETURN SINCE INCEPTION: 110.68%
ANNUALIZED NET RATE OF RETURN SINCE INCE 8.57%
<TABLE>
<CAPTION>
INCOME CAPITAL SHARES
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV.
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/87 10.00 12/31/87 12/31/87 0.0470 10.00 1,095,573 4.558681 0.455868
01/29/88 10.31 01/29/88 01/29/88 0.0738 10.31 1,142,657 7.191742 0.697550
02/29/88 10.36 02/29/88 02/29/88 0.0828 10.36 1,168,249 8.126541 0.784415
03/31/88 10.17 03/31/88 03/31/88 0.0789 10.17 1,155,055 7.805659 0.767518
04/29/88 10.08 04/29/88 04/29/88 0.0729 10.08 1,194,748 7.268025 0.721034
05/31/88 9.93 05/31/88 05/31/88 0.0790 9.93 1,188,083 7.933148 0.798907
06/30/88 10.09 06/30/88 06/30/88 0.0773 10.09 1,217,116 7.824190 0.775440
07/29/88 10.02 07/29/88 07/29/88 0.0715 10.02 1,222,930 7.292567 0.727801
08/31/88 9.95 08/31/88 08/31/88 0.0766 9.95 1,205,985 7.868486 0.790803
09/30/88 10.12 09/30/88 09/30/88 0.0727 10.12 1,252,663 7.525362 0.743613
10/31/88 10.25 10/31/88 10/31/88 0.0789 10.25 1,278,086 8.225811 0.802518
11/30/88 10.02 11/30/88 11/30/88 0.0760 10.02 1,268,821 7.984460 0.796852
12/30/88 9.89 12/30/88 12/30/88 0.0761 0.0391 9.89 1,269,022 12.194557 1.233019
01/31/89 9.95 01/31/89 01/31/89 0.0813 9.95 1,313,597 8.706299 0.875005
02/28/89 9.84 02/28/89 02/28/89 0.0702 9.84 1,339,978 7.579042 0.770228
03/31/89 9.79 03/31/89 03/31/89 0.0794 9.79 1,342,446 8.633462 0.881865
04/28/89 9.88 04/28/89 04/28/89 0.0737 9.88 1,364,050 8.078673 0.817679
05/31/89 10.05 05/31/89 05/31/89 0.0780 10.05 1,464,643 8.613799 0.857094
06/30/89 10.29 06/30/89 06/30/89 0.0757 10.29 1,555,183 8.424685 0.818725
07/31/89 10.45 07/31/89 07/31/89 0.0771 10.45 1,602,806 8.643615 0.827140
08/31/89 10.19 08/31/89 08/31/89 0.0763 10.19 1,584,495 8.617039 0.845637
09/29/89 10.17 09/29/89 09/29/89 0.0726 10.17 1,563,666 8.260568 0.812249
10/31/89 10.36 10/31/89 10/31/89 0.0796 10.36 1,607,667 9.121696 0.880473
11/30/89 10.38 11/30/89 11/30/89 0.0729 10.38 1,609,719 8.418102 0.810992
12/29/89 10.33 12/29/89 12/29/89 0.0957 10.33 1,597,576 11.128535 1.077303
01/31/90 10.12 01/31/90 01/31/90 0.0670 0.0026 10.12 1,582,259 8.167639 0.807079
02/28/90 10.09 02/28/90 02/28/90 0.0585 10.09 1,583,318 6.912946 0.685128
03/30/90 10.01 03/30/90 03/30/90 0.0735 10.01 1,629,119 8.735853 0.872713
04/30/90 9.81 04/30/90 04/30/90 0.0744 9.81 1,610,432 8.907753 0.908028
05/31/90 10.05 05/31/90 05/31/90 0.0677 10.05 1,659,028 8.167050 0.812642
06/29/90 10.16 06/29/90 06/29/90 0.0661 10.16 1,704,824 8.027748 0.790133
07/31/90 10.24 07/31/90 07/31/90 0.0781 10.24 1,743,768 9.546840 0.932309
08/31/90 10.00 08/31/90 08/31/90 0.0723 10.00 1,780,196 8.905261 0.890526
09/29/90 10.02 09/29/90 09/29/90 0.0572 10.02 1,859,779 7.096318 0.708215
10/31/90 10.09 10/31/90 10/31/90 0.0693 10.09 1,933,758 8.646541 0.856942
11/30/90 10.28 11/30/90 11/30/90 0.0634 10.28 2,003,294 7.964730 0.774779
12/31/90 10.36 12/31/90 12/31/91 0.0678 0.0169 10.36 2,109,061 10.706201 1.033417
01/31/91 10.40 01/31/91 01/31/91 0.0639 0.0010 10.40 2,111,120 8.270522 0.795242
02/28/91 10.40 02/28/91 02/28/91 0.0566 10.40 2,088,553 7.257823 0.697868
03/28/91 10.37 03/28/91 03/28/91 0.0616 10.37 2,251,919 7.941962 0.765859
04/30/91 10.40 04/30/91 04/30/91 0.0679 10.40 2,777,915 8.806210 0.846751
05/31/91 10.37 05/31/91 05/31/91 0.0656 10.37 2,869,434 8.563461 0.825792
06/28/91 10.28 06/28/91 06/28/91 0.0598 10.28 2,898,860 7.855708 0.764174
07/31/91 10.35 07/31/91 07/31/91 0.0678 10.35 3,151,642 8.958450 0.865551
08/30/91 10.55 08/30/91 08/30/91 0.0583 10.55 3,662,341 7.753672 0.734945
09/30/91 10.75 09/30/91 09/30/91 0.0599 10.75 3,832,831 8.010489 0.745162
10/31/91 10.79 10/31/91 10/31/91 0.0617 10.79 3,797,675 8.297181 0.768970
11/29/91 10.82 11/29/91 11/29/91 0.0568 10.82 3,970,984 7.681925 0.709975
12/31/91 11.16 12/31/91 12/31/91 0.0647 0.0371 11.16 4,080,832 13.840233 1.240164
01/31/92 10.73 01/31/92 01/31/92 0.0613 0.0136 10.73 4,115,352 10.275928 0.957682
02/28/92 10.74 02/28/92 02/28/92 0.0562 10.74 4,421,099 7.764198 0.722923
03/31/92 10.59 03/31/92 03/31/92 0.0658 0.0120 10.59 4,668,735 10.804546 1.020259
04/30/92 10.60 04/30/92 04/30/92 0.0632 10.60 5,012,444 8.841438 0.834098
05/29/92 10.77 05/29/92 05/29/92 0.0632 10.77 5,336,478 8.894153 0.825827
06/30/92 10.91 06/30/92 06/30/92 0.0694 10.91 5,868,608 9.823993 0.900458
<CAPTION>
TOTALS ACCOUNT
DATE SHARES VALUE
<S> <C> <C>
12/31/87 97.449079 974.5
01/29/88 98.146629 1,011.9
02/29/88 98.931044 1,024.9
03/31/88 99.698562 1,013.9
04/29/88 100.419596 1,012.2
05/31/88 101.218503 1,005.1
06/30/88 101.993943 1,029.1
07/29/88 102.721745 1,029.3
08/31/88 103.512547 1,029.9
09/30/88 104.256160 1,055.1
10/31/88 105.058678 1,076.9
11/30/88 105.855530 1,060.7
12/30/88 107.088549 1,059.1
01/31/89 107.963554 1,074.2
02/28/89 108.733782 1,069.9
03/31/89 109.615647 1,073.1
04/28/89 110.433327 1,091.1
05/31/89 111.290421 1,118.5
06/30/89 112.109147 1,153.6
07/31/89 112.936287 1,180.2
08/31/89 113.781924 1,159.4
09/29/89 114.594172 1,165.4
10/31/89 115.474645 1,196.3
11/30/89 116.285637 1,207.0
12/29/89 117.362940 1,212.4
01/31/90 118.170019 1,195.9
02/28/90 118.855147 1,199.2
03/30/90 119.727860 1,198.5
04/30/90 120.635888 1,183.4
05/31/90 121.448530 1,220.6
06/29/90 122.238662 1,241.9
07/31/90 123.170971 1,261.3
08/31/90 124.061497 1,240.6
09/29/90 124.769712 1,250.2
10/31/90 125.626654 1,267.6
11/30/90 126.401433 1,299.4
12/31/90 127.434850 1,320.2
01/31/91 128.230093 1,333.6
02/28/91 128.927960 1,340.9
03/28/91 129.693820 1,344.9
04/30/91 130.540571 1,357.6
05/31/91 131.366363 1,362.3
06/28/91 132.130536 1,358.3
07/31/91 132.996087 1,376.5
08/30/91 133.731032 1,410.9
09/30/91 134.476194 1,445.6
10/31/91 135.245164 1,459.3
11/29/91 135.955138 1,471.0
12/31/91 137.195303 1,531.1
01/31/92 138.152985 1,482.4
02/28/92 138.875908 1,491.5
03/31/92 139.896167 1,481.5
04/30/92 140.730265 1,491.7
05/29/92 141.556092 1,524.6
06/30/92 142.456550 1,554.2
</TABLE>
<PAGE>
NET CIF: GOVERNMENT SECURITIES FUND
RATE OF RETURN
SINCE PREPARED ON: 12/31/96
INCEPTION
.........
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/92 11.14 07/31/92 07/31/92 0.0662 11.14 6,352,601 9.430624 0.846555 143.303105 1,596.4
08/31/92 11.18 08/31/92 08/31/92 0.0667 11.18 6,515,636 9.558317 0.854948 144.158052 1,611.7
09/30/92 11.36 09/30/92 09/30/92 0.0636 11.36 6,903,738 9.168452 0.807082 144.965134 1,646.8
10/31/92 11.16 10/31/92 10/31/92 0.0625 11.16 7,077,273 9.060321 0.811857 145.776991 1,626.9
11/30/92 11.01 11/30/92 11/30/92 0.0648 11.01 7,108,620 9.446349 0.857979 146.634970 1,614.5
12/31/92 10.70 12/31/92 12/31/92 0.0635 0.4549 10.70 7,392,150 76.015569 7.104259 153.739229 1,645.0
01/29/93 10.83 01/29/93 01/29/93 0.0584 0.0270 10.83 9,645,668 13.129330 1.212311 154.951540 1,678.1
02/26/93 10.85 02/26/93 02/26/93 0.0528 10.85 8,888,835 8.181441 0.754050 155.705590 1,689.4
03/31/93 10.85 03/31/93 03/31/93 0.0696 10.85 9,397,484 10.837109 0.998812 156.704402 1,700.2
04/30/93 10.88 04/30/93 04/30/93 0.0597 10.88 10,327,829 9.355253 0.859858 157.564260 1,714.3
05/31/93 10.85 05/31/93 05/31/93 0.0550 10.85 10,747,098 8.666034 0.798713 158.362973 1,718.2
06/30/93 10.99 06/30/93 06/30/93 0.0622 10.99 11,447,493 9.850177 0.896285 159.259258 1,750.3
07/30/93 11.01 07/30/93 07/30/93 0.0582 11.01 12,278,489 9.268889 0.841861 160.101119 1,762.7
08/31/93 11.08 08/31/93 08/31/93 0.0841 11.08 12,794,301 13.464504 1.215208 161.316327 1,787.4
09/30/93 10.89 09/30/93 09/30/93 0.0763 10.89 13,388,587 12.308436 1.130251 162.446578 1,769.0
10/31/93 11.03 10/31/93 10/31/93 0.0726 11.03 14,193,799 11.793622 1.069231 163.515809 1,803.6
11/30/93 10.79 11/30/93 11/30/93 0.0671 10.79 14,355,313 10.971911 1.016859 164.532669 1,775.3
12/31/93 10.71 12/31/93 12/31/93 0.0544 0.1622 10.71 14,423,056 35.637776 3.327523 167.860192 1,797.8
01/31/94 10.80 01/31/94 01/31/94 0.0519 10.80 14,926,943 8.711944 0.806661 168.666854 1,821.6
02/28/94 10.58 02/28/94 02/28/94 0.0507 10.58 14,636,665 8.551409 0.808262 169.475115 1,793.0
03/31/94 10.27 03/31/94 03/31/94 0.0485 10.27 14,364,391 8.219543 0.800345 170.275460 1,748.7
04/30/94 10.15 04/30/94 04/30/94 0.0461 10.15 13,704,395 7.849699 0.773369 171.048830 1,736.1
05/31/94 10.13 05/31/94 05/31/94 0.0528 10.13 13,716,879 9.031378 0.891548 171.940377 1,741.8
06/30/94 10.01 06/30/94 06/30/94 0.0502 10.01 13,685,239 8.631407 0.862278 172.802656 1,729.8
07/29/94 10.20 07/29/94 07/29/94 0.0494 10.20 13,637,392 8.536451 0.836907 173.639563 1,771.1
08/31/94 10.15 08/31/94 08/31/94 0.0530 10.15 13,462,232 9.202897 0.906689 174.546252 1,771.6
09/30/94 9.89 09/30/94 09/30/94 0.0511 9.89 13,074,591 8.919313 0.901852 175.448104 1,735.2
10/31/94 9.80 10/31/94 10/31/94 0.0514 9.80 12,700,367 9.018033 0.920207 176.368311 1,728.4
11/30/94 9.72 11/30/94 11/30/94 0.0511 9.72 12,522,598 9.012421 0.927204 177.295515 1,723.3
12/31/94 9.75 12/31/94 12/31/94 0.0510 9.75 12,481,465 9.042071 0.927392 178.222907 1,737.7
01/31/95 9.90 01/31/95 01/31/95 0.0517 9.90 12,729,896 9.214124 0.930720 179.153627 1,773.6
02/28/95 10.12 02/28/95 02/28/95 0.0506 10.12 12,904,684 9.065174 0.895768 180.049395 1,822.1
03/31/95 10.11 03/31/95 03/31/95 0.0513 10.11 12,861,485 9.236534 0.913604 180.962998 1,829.5
04/30/95 10.18 04/30/95 04/30/95 0.0533 10.18 12,861,485 9.645328 0.947478 181.910477 1,851.8
05/31/95 10.42 05/31/95 05/31/95 0.0636 10.42 14,054,764 11.566078 1.109988 183.020465 1,907.1
06/30/95 10.49 06/30/95 06/30/95 0.0592 10.49 14,251,768 10.832334 1.032634 184.053099 1,930.7
07/31/95 10.39 07/31/95 07/31/95 0.0573 10.39 n/a 10.552249 1.015616 185.068715 1,922.9
08/31/95 10.44 08/31/95 08/31/95 0.0514 10.44 14,210,578 9.512532 0.911162 185.979877 1,941.6
09/30/95 10.50 09/30/95 09/30/95 0.0462 10.50 13,898,853 8.592270 0.818311 186.798189 1,961.4
10/31/95 10.58 10/31/95 10/31/95 0.0552 10.58 13,614,184 10.320594 0.975481 187.773670 1,986.6
11/30/95 10.67 11/30/95 11/30/95 0.0456 10.67 13,659,968 8.562479 0.802482 188.576152 2,012.1
12/31/95 10.78 12/31/95 12/31/95 0.0472 10.78 13,837,929 8.900794 0.825677 189.401829 2,041.8
01/31/96 10.82 01/31/96 01/31/96 0.0550 10.82 13,837,929 10.417101 0.962763 190.364592 2,059.7
02/28/96 10.57 02/28/96 02/28/96 0.0515 10.57 13,643,057 9.803776 0.927510 191.292102 2,022.0
03/31/96 10.44 03/31/96 03/31/96 0.0482 10.44 15,111,466 9.220279 0.883169 192.175270 2,006.3
04/30/96 10.31 04/30/96 04/30/96 0.0528 10.31 13,450,918 10.141175 0.983625 193.158895 1,991.5
05/31/96 10.21 05/31/96 05/31/96 0.0503 10.21 13,476,477 9.708577 0.950889 194.109784 1,981.9
06/30/96 10.31 06/30/96 06/30/96 0.0423 10.31 13,353,637 8.216060 0.796902 194.906686 2,009.5
07/31/96 10.27 07/31/96 07/31/96 0.0551 10.27 13,353,637 10.742021 1.045961 195.952647 2,012.4
08/31/96 10.20 08/31/96 08/31/96 0.0512 10.20 13,195,847 10.041202 0.984432 196.937079 2,008.8
09/30/96 10.33 09/30/96 09/30/96 0.0524 10.33 12,990,070 10.319503 0.998984 197.936063 2,044.7
10/31/96 10.50 10/31/96 10/31/96 0.0527 10.50 10.437762 0.994073 198.930135 2,088.8
11/30/96 10.65 11/30/96 11/30/96 0.0571 10.65 11.362889 1.066938 199.997073 2,130.0
12/31/96 10.48 12/31/96 12/31/96 0.0544 10.48 10.875841 1.037771 201.034845 2,106.8
</TABLE>
<PAGE>
GROSS CIF: GOVERNMENT SECURITIES FUND
RATE OF RETURN
1 YEAR PREPARED ON: 12/31/96
.......
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
98.461945 10.48 1031.8812
PURCHASE DATE: 12/31/95
INITIAL INVESTMENT: $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.78 1031.8812 1,000.00 (31.8812)
SHARES PURCHASED: 92.76437848
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(31.8812) 1,000.00 0.0319
</TABLE>
ONE YEAR NET RATE OF RETURN: 3.19%
<TABLE>
<CAPTION>
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/95 10.78 12/31/95 12/31/95 0.0472 10.78 13,837,929 92.764378
01/31/96 10.82 01/31/96 01/31/96 0.0550 10.82 13,837,929 5.102041 0.471538 93.235916
02/28/96 10.57 02/28/96 02/28/96 0.0515 10.57 13,643,057 4.801650 0.454271 93.690188
03/31/96 10.44 03/31/96 03/31/96 0.0482 10.44 15,111,466 4.515867 0.432554 94.122742
04/30/96 10.31 04/30/96 04/30/96 0.0528 10.31 13,450,918 4.966899 0.481756 94.604498
05/31/96 10.21 05/31/96 05/31/96 0.0503 10.21 13,476,477 4.755023 0.465722 95.070220
06/30/96 10.31 06/30/96 06/30/96 0.0423 10.31 13,353,637 4.024025 0.390303 95.460523
07/31/96 10.27 07/31/96 07/31/96 0.0551 10.27 13,353,637 5.261179 0.512286 95.972809
08/31/96 10.20 08/31/96 08/31/96 0.0512 10.20 13,195,847 4.917935 0.482151 96.454960
09/30/96 10.33 09/30/96 09/30/96 0.0524 10.33 12,990,070 5.054240 0.489278 96.944238
10/31/96 10.50 10/31/96 10/31/96 0.0527 10.50 5.112160 0.486872 97.431110
11/30/96 10.65 11/30/96 11/30/96 0.0571 10.65 5.565265 0.522560 97.953670
12/31/96 10.48 12/31/96 12/31/96 0.0544 10.48 5.326721 0.508275 98.461945
</TABLE>
<PAGE>
GROSS CIF: GOVERNMENT SECURITIES FUND
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/96
ROLLING
.........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
131.300960 10.48 1376.0341
PURCHASE DATE: 12/31/91
INITIAL INVESTMENT: $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 11.16 1376.0341 1,000.00 (376.0341)
SHARES PURCHASED: 89.60573477
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(376.0341) 1,000.00 0.3760
GROSS 5 YEAR RETURN: 37.60%
ANNUALIZED GROSS 5 YEAR RETURN: 6.59%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/91 11.16 12/31/91 12/31/91 0.0647 0.0371 11.16 4,080,832 89.605735
01/31/92 10.73 01/31/92 01/31/92 0.0613 0.0136 10.73 4,115,352 6.711470 0.625486 90.231221
02/28/92 10.74 02/28/92 02/28/92 0.0562 10.74 4,421,099 5.070995 0.472160 90.703381
03/31/92 10.59 03/31/92 03/31/92 0.0658 0.0120 10.59 4,668,735 7.056723 0.666357 91.369738
04/30/92 10.60 04/30/92 04/30/92 0.0632 10.60 5,012,444 5.774567 0.544771 91.914509
05/29/92 10.77 05/29/92 05/29/92 0.0632 10.77 5,336,478 5.808997 0.539368 92.453877
06/30/92 10.91 06/30/92 06/30/92 0.0694 10.91 5,868,608 6.416299 0.588112 93.041989
07/31/92 11.14 07/31/92 07/31/92 0.0662 11.14 6,352,601 6.159380 0.552907 93.594895
08/31/92 11.18 08/31/92 08/31/92 0.0667 11.18 6,515,636 6.242780 0.558388 94.153283
09/30/92 11.36 09/30/92 09/30/92 0.0636 11.36 6,903,738 5.988149 0.527126 94.680409
10/31/92 11.16 10/31/92 10/31/92 0.0625 11.16 7,077,273 5.917526 0.530244 95.210653
11/30/92 11.01 11/30/92 11/30/92 0.0648 11.01 7,108,620 6.169650 0.560368 95.771021
12/31/92 10.70 12/31/92 12/31/92 0.0635 0.4549 10.70 7,392,150 49.647697 4.639972 100.410993
01/29/93 10.83 01/29/93 01/29/93 0.0584 0.0270 10.83 9,645,668 8.575099 0.791791 101.202784
02/26/93 10.85 02/26/93 02/26/93 0.0528 10.85 8,888,835 5.343507 0.492489 101.695273
03/31/93 10.85 03/31/93 03/31/93 0.0696 10.85 9,397,484 7.077991 0.652349 102.347623
04/30/93 10.88 04/30/93 04/30/93 0.0597 10.88 10,327,829 6.110153 0.561595 102.909218
05/31/93 10.85 05/31/93 05/31/93 0.0550 10.85 10,747,098 5.660007 0.521660 103.430877
06/30/93 10.99 06/30/93 06/30/93 0.0622 10.99 11,447,493 6.433401 0.585387 104.016264
07/30/93 11.01 07/30/93 07/30/93 0.0582 11.01 12,278,489 6.053747 0.549841 104.566105
08/31/93 11.08 08/31/93 08/31/93 0.0841 11.08 12,794,301 8.794009 0.793683 105.359788
09/30/93 10.89 09/30/93 09/30/93 0.0763 10.89 13,388,587 8.038952 0.738196 106.097984
10/31/93 11.03 10/31/93 10/31/93 0.0726 11.03 14,193,799 7.702714 0.698342 106.796326
11/30/93 10.79 11/30/93 11/30/93 0.0671 10.79 14,355,313 7.166033 0.664137 107.460462
12/31/93 10.71 12/31/93 12/31/93 0.0544 0.1622 10.71 14,423,056 23.275936 2.173290 109.633752
01/31/94 10.80 01/31/94 01/31/94 0.0519 10.80 14,926,943 5.689992 0.526851 110.160604
02/28/94 10.58 02/28/94 02/28/94 0.0507 10.58 14,636,665 5.585143 0.527896 110.688500
03/31/94 10.27 03/31/94 03/31/94 0.0485 10.27 14,364,391 5.368392 0.522726 111.211225
04/30/94 10.15 04/30/94 04/30/94 0.0461 10.15 13,704,395 5.126837 0.505107 111.716333
05/31/94 10.13 05/31/94 05/31/94 0.0528 10.13 13,716,879 5.898622 0.582292 112.298625
06/30/94 10.01 06/30/94 06/30/94 0.0502 10.01 13,685,239 5.637391 0.563176 112.861801
07/29/94 10.20 07/29/94 07/29/94 0.0494 10.20 13,637,392 5.575373 0.546605 113.408406
08/31/94 10.15 08/31/94 08/31/94 0.0530 10.15 13,462,232 6.010646 0.592182 114.000588
09/30/94 9.89 09/30/94 09/30/94 0.0511 9.89 13,074,591 5.825430 0.589022 114.589610
10/31/94 9.80 10/31/94 10/31/94 0.0514 9.80 12,700,367 5.889906 0.601011 115.190621
11/30/94 9.72 11/30/94 11/30/94 0.0511 9.72 12,522,598 5.886241 0.605580 115.796201
12/31/94 9.75 12/31/94 12/31/94 0.0510 9.75 12,481,465 5.905606 0.605703 116.401905
01/31/95 9.90 01/31/95 01/31/95 0.0517 9.90 12,729,896 6.017978 0.607877 117.009781
02/28/95 10.12 02/28/95 02/28/95 0.0506 10.12 12,904,684 5.920695 0.585049 117.594830
03/31/95 10.11 03/31/95 03/31/95 0.0513 10.11 12,861,485 6.032615 0.596698 118.191528
04/30/95 10.18 04/30/95 04/30/95 0.0533 10.18 12,861,485 6.299608 0.618822 118.810350
05/31/95 10.42 05/31/95 05/31/95 0.0636 10.42 14,054,764 7.554099 0.724962 119.535312
06/30/95 10.49 06/30/95 06/30/95 0.0592 10.49 14,251,768 7.074873 0.674440 120.209751
07/31/95 10.39 07/31/95 07/31/95 0.0573 10.39 n/a 6.891942 0.663325 120.873076
08/31/95 10.44 08/31/95 08/31/95 0.0514 10.44 14,210,578 6.212876 0.595103 121.468179
09/30/95 10.50 09/30/95 09/30/95 0.0462 10.50 13,898,853 5.611830 0.534460 122.002639
10/31/95 10.58 10/31/95 10/31/95 0.0552 10.58 13,614,184 6.740642 0.637112 122.639751
11/30/95 10.67 11/30/95 11/30/95 0.0456 10.67 13,659,968 5.592373 0.524121 123.163872
12/31/95 10.78 12/31/95 12/31/95 0.0472 10.78 13,837,929 5.813335 0.539270 123.703142
01/31/96 10.82 01/31/96 01/31/96 0.0550 10.82 13,837,929 6.803673 0.628805 124.331947
02/28/96 10.57 02/28/96 02/28/96 0.0515 10.57 13,643,057 6.403095 0.605780 124.937727
03/31/96 10.44 03/31/96 03/31/96 0.0482 10.44 15,111,466 6.021998 0.576820 125.514547
04/30/96 10.31 04/30/96 04/30/96 0.0528 10.31 13,450,918 6.623459 0.642431 126.156978
05/31/96 10.21 05/31/96 05/31/96 0.0503 10.21 13,476,477 6.340918 0.621050 126.778028
</TABLE>
<PAGE>
GROSS CIF: GOVERNMENT SECURITIES FUND
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/96
ROLLING
..........
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
06/30/96 10.31 06/30/96 06/30/96 0.0423 10.31 13,353,637 5.366117 0.520477 127.298504
07/31/96 10.27 07/31/96 07/31/96 0.0551 10.27 13,353,637 7.015886 0.683144 127.981648
08/31/96 10.20 08/31/96 08/31/96 0.0512 10.20 13,195,847 6.558164 0.642957 128.624605
09/30/96 10.33 09/30/96 09/30/96 0.0524 10.33 12,990,070 6.739929 0.652462 129.277067
10/31/96 10.50 10/31/96 10/31/96 0.0527 10.50 6.817168 0.649254 129.926321
11/30/96 10.65 11/30/96 11/30/96 0.0571 10.65 7.421391 0.696844 130.623165
12/31/96 10.48 12/31/96 12/31/96 0.0544 10.48 7.103288 0.677795 131.300960
</TABLE>
<PAGE>
GROSS CIF: GOVERNMENT SECURITIES FUND
RATE OF RETURN
SINCE PREPARED ON: 12/31/96
INCEPTION
..........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
207.266925 10.48 0 2172.1574
PURCHASE DATE: 12/10/87
INITIAL INVESTMENT $1,000.00 GROSS VALUE - INITIAL INVESTME NET VALUE
INITIAL VALUE 10.00 2172.1574 1,000.00 (1172.1574)
SHARES PURCHASED 100.000
NET VALUE / INITIAL INVESTME GROSS RATE OF RETURN
(1172.1574) 1,000.00 1.1722
GROSS RATE OF RETURN SINCE INCEPTION: 117.22%
ANNUALIZED GROSS RATE OF RETURN SINCE 8.93%
INCOME CAPITAL SHARES TOTALS ACCOUNT
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTION REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/87 10.00 12/31/87 12/31/87 0.0470 10.00 1,095,573 4.700000 0.470000 100.470000 1,005
01/29/88 10.31 01/29/88 01/29/88 0.0738 10.31 1,142,657 7.414686 0.719174 101.189174 1,043
02/29/88 10.36 02/29/88 02/29/88 0.0828 10.36 1,168,249 8.378464 0.808732 101.997906 1,057
03/31/88 10.17 03/31/88 03/31/88 0.0789 10.17 1,155,055 8.047635 0.791311 102.789217 1,045
04/29/88 10.08 04/29/88 04/29/88 0.0729 10.08 1,194,748 7.493334 0.743386 103.532604 1,044
05/31/88 9.93 05/31/88 05/31/88 0.0790 9.93 1,188,083 8.179076 0.823673 104.356277 1,036
06/30/88 10.09 06/30/88 06/30/88 0.0773 10.09 1,217,116 8.066740 0.799479 105.155756 1,061
07/29/88 10.02 07/29/88 07/29/88 0.0715 10.02 1,222,930 7.518637 0.750363 105.906119 1,061
08/31/88 9.95 08/31/88 08/31/88 0.0766 9.95 1,205,985 8.112409 0.815317 106.721436 1,062
09/30/88 10.12 09/30/88 09/30/88 0.0727 10.12 1,252,663 7.758648 0.766665 107.488101 1,088
10/31/88 10.25 10/31/88 10/31/88 0.0789 10.25 1,278,086 8.480811 0.827396 108.315497 1,110
11/30/88 10.02 11/30/88 11/30/88 0.0760 10.02 1,268,821 8.231978 0.821555 109.137052 1,094
12/30/88 9.89 12/30/88 12/30/88 0.0761 0.0391 9.89 1,269,022 12.572588 1.271243 110.408294 1,092
01/31/89 9.95 01/31/89 01/31/89 0.0813 0.0000 9.95 1,313,597 8.976194 0.902130 111.310424 1,108
02/28/89 9.84 02/28/89 02/28/89 0.0702 9.84 1,339,978 7.813992 0.794105 112.104529 1,103
03/31/89 9.79 03/31/89 03/31/89 0.0794 9.79 1,342,446 8.901100 0.909203 113.013732 1,106
04/28/89 9.88 04/28/89 04/28/89 0.0737 9.88 1,364,050 8.329112 0.843028 113.856760 1,125
05/31/89 10.05 05/31/89 05/31/89 0.0780 10.05 1,464,643 8.880827 0.883664 114.740424 1,153
06/30/89 10.29 06/30/89 06/30/89 0.0757 10.29 1,555,183 8.685850 0.844106 115.584530 1,189
07/31/89 10.45 07/31/89 07/31/89 0.0771 10.45 1,602,806 8.911567 0.852782 116.437312 1,217
08/31/89 10.19 08/31/89 08/31/89 0.0763 10.19 1,584,495 8.884167 0.871852 117.309163 1,195
09/29/89 10.17 09/29/89 09/29/89 0.0726 10.17 1,563,666 8.516645 0.837428 118.146592 1,202
10/31/89 10.36 10/31/89 10/31/89 0.0796 10.36 1,607,667 9.404469 0.907767 119.054359 1,233
11/30/89 10.38 11/30/89 11/30/89 0.0729 10.38 1,609,719 8.679063 0.836133 119.890492 1,244
12/29/89 10.33 12/29/89 12/29/89 0.0957 10.33 1,597,576 11.473520 1.110699 121.001191 1,250
01/31/90 10.12 01/31/90 01/31/90 0.0670 0.0026 10.12 1,582,259 8.420836 0.832098 121.833290 1,233
03/30/90 10.01 03/30/90 03/30/90 0.0735 10.01 1,629,119 9.006665 0.899767 123.439424 1,236
04/30/90 9.81 04/30/90 04/30/90 0.0744 9.81 1,610,432 9.183893 0.936177 124.375600 1,220
05/31/90 10.05 05/31/90 05/31/90 0.0677 10.05 1,659,028 8.420228 0.837834 125.213434 1,258
06/29/90 10.16 06/29/90 06/29/90 0.0661 10.16 1,704,824 8.276608 0.814627 126.028061 1,280
07/31/90 10.24 07/31/90 07/31/90 0.0781 10.24 1,743,768 9.842792 0.961210 126.989271 1,300
08/31/90 10.00 08/31/90 08/31/90 0.0723 10.00 1,780,196 9.181324 0.918132 127.907403 1,279
09/29/90 10.02 09/29/90 09/29/90 0.0572 10.02 1,859,779 7.316303 0.730170 128.637573 1,289
10/31/90 10.09 10/31/90 10/31/90 0.0693 10.09 1,933,758 8.914584 0.883507 129.521080 1,307
11/30/90 10.28 11/30/90 11/30/90 0.0634 10.28 2,003,294 8.211636 0.798797 130.319877 1,340
12/31/90 10.36 12/31/90 12/31/90 0.0678 0.0169 10.36 2,109,061 11.038094 1.065453 131.385330 1,361
01/31/91 10.40 01/31/91 01/31/91 0.0639 0.0010 10.40 2,111,120 8.526908 0.819895 132.205225 1,375
02/28/91 10.40 02/28/91 02/28/91 0.0566 10.40 2,088,553 7.482816 0.719502 132.924727 1,382
03/28/91 10.37 03/28/91 03/28/91 0.0616 10.37 2,251,919 8.188163 0.789601 133.714328 1,387
04/30/91 10.40 04/30/91 04/30/91 0.0679 10.40 2,777,915 9.079203 0.873000 134.587328 1,400
05/31/91 10.37 05/31/91 05/31/91 0.0656 10.37 2,869,434 8.828929 0.851391 135.438720 1,404
06/28/91 10.28 06/28/91 06/28/91 0.0598 10.28 2,898,860 8.099235 0.787863 136.226583 1,400
07/31/91 10.35 07/31/91 07/31/91 0.0678 10.35 3,151,642 9.236162 0.892383 137.118966 1,419
08/30/91 10.55 08/30/91 08/30/91 0.0583 10.55 3,662,341 7.994036 0.757729 137.876694 1,455
09/30/91 10.75 09/30/91 09/30/91 0.0599 10.75 3,832,831 8.258814 0.768262 138.644956 1,490
10/31/91 10.79 10/31/91 10/31/91 0.0617 10.79 3,797,675 8.554394 0.792808 139.437764 1,505
11/29/91 10.82 11/29/91 11/29/91 0.0568 10.82 3,970,984 7.920065 0.731984 140.169748 1,517
12/31/91 11.16 12/31/91 12/31/91 0.0647 0.0371 11.16 4,080,832 14.269280 1.278609 141.448357 1,579
01/31/92 10.73 01/31/92 01/31/92 0.0613 0.0136 10.73 4,115,352 10.594482 0.987370 142.435727 1,528
02/28/92 10.74 02/28/92 02/28/92 0.0562 10.74 4,421,099 8.004888 0.745334 143.181061 1,538
03/31/92 10.59 03/31/92 03/31/92 0.0658 0.0120 10.59 4,668,735 11.139487 1.051887 144.232949 1,527
04/30/92 10.60 04/30/92 04/30/92 0.0632 10.60 5,012,444 9.115522 0.859955 145.092903 1,538
05/29/92 10.77 05/29/92 05/29/92 0.0632 10.77 5,336,478 9.169871 0.851427 145.944331 1,572
</TABLE>
<PAGE>
GROSS CIF: GOVERNMENT SECURITIES FUND
RATE OF RETURN
INCEPTION PREPARED ON: 12/31/96
..........
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
06/30/92 10.91 06/30/92 06/30/92 0.0694 10.91 5,868,608 10.128537 0.928372 146.872703 1,602
07/31/92 11.14 07/31/92 07/31/92 0.0662 11.14 6,352,601 9.722973 0.872798 147.745501 1,646
08/31/92 11.18 08/31/92 08/31/92 0.0667 11.18 6,515,636 9.854625 0.881451 148.626952 1,662
09/30/92 11.36 09/30/92 09/30/92 0.0636 11.36 6,903,738 9.452674 0.832102 149.459054 1,698
10/31/92 11.16 10/31/92 10/31/92 0.0625 11.16 7,077,273 9.341191 0.837024 150.296078 1,677
11/30/92 11.01 11/30/92 11/30/92 0.0648 11.01 7,108,620 9.739186 0.884576 151.180654 1,664
12/31/92 10.70 12/31/92 12/31/92 0.0635 0.4549 10.70 7,392,150 78.372051 7.324491 158.505145 1,696
01/29/93 10.83 01/29/93 01/29/93 0.0584 0.0270 10.83 9,645,668 13.536339 1.249893 159.755038 1,730
02/26/93 10.85 02/26/93 02/26/93 0.0528 10.85 8,888,835 8.435066 0.777425 160.532463 1,742
03/31/93 10.85 03/31/93 03/31/93 0.0696 10.85 9,397,484 11.173059 1.029775 161.562238 1,753
04/30/93 10.88 04/30/93 04/30/93 0.0597 10.88 10,327,829 9.645266 0.886513 162.448752 1,767
05/31/93 10.85 05/31/93 05/31/93 0.0550 10.85 10,747,098 8.934681 0.823473 163.272225 1,772
06/30/93 10.99 06/30/93 06/30/93 0.0622 10.99 11,447,493 10.155532 0.924070 164.196295 1,805
07/30/93 11.01 07/30/93 07/30/93 0.0582 11.01 12,278,489 9.556224 0.867959 165.064254 1,817
08/31/93 11.08 08/31/93 08/31/93 0.0841 11.08 12,794,301 13.881904 1.252879 166.317133 1,843
09/30/93 10.89 09/30/93 09/30/93 0.0763 0.0000 10.89 13,388,587 12.689997 1.165289 167.482422 1,824
10/31/93 11.03 10/31/93 10/31/93 0.0726 0.0000 11.03 14,193,799 12.159224 1.102378 168.584800 1,859
11/30/93 10.79 11/30/93 11/30/93 0.0671 0.0000 10.79 14,355,313 11.312040 1.048382 169.633181 1,830
12/31/93 10.71 12/31/93 12/31/93 0.0544 0.1622 10.71 14,423,056 36.742547 3.430677 173.063858 1,854
01/31/94 10.80 01/31/94 01/31/94 0.0519 0.0000 10.80 14,926,943 8.982014 0.831668 173.895526 1,878
02/28/94 10.58 02/28/94 02/28/94 0.0507 0.0000 10.58 14,636,665 8.816503 0.833318 174.728844 1,849
03/31/94 10.27 03/31/94 03/31/94 0.0485 0.0000 10.27 14,364,391 8.474349 0.825156 175.554000 1,803
04/30/94 10.15 04/30/94 04/30/94 0.0461 0.0000 10.15 13,704,395 8.093039 0.797344 176.351343 1,790
05/31/94 10.13 05/31/94 05/31/94 0.0528 0.0000 10.13 13,716,879 9.311351 0.919186 177.270529 1,796
06/30/94 10.01 06/30/94 06/30/94 0.0502 0.0000 10.01 13,685,239 8.898981 0.889009 178.159538 1,783
07/29/94 10.20 07/29/94 07/29/94 0.0494 0.0000 10.20 13,637,392 8.801081 0.862851 179.022389 1,826
08/31/94 10.15 08/31/94 08/31/94 0.0530 0.0000 10.15 13,462,232 9.488187 0.934797 179.957186 1,827
09/30/94 9.89 09/30/94 09/30/94 0.0511 0.0000 9.89 13,074,591 9.195812 0.929809 180.886995 1,789
10/31/94 9.80 10/31/94 10/31/94 0.0514 0.0000 9.80 12,700,367 9.297592 0.948734 181.835729 1,782
11/30/94 9.72 11/30/94 11/30/94 0.0511 0.0000 9.72 12,522,598 9.291806 0.955947 182.791676 1,777
12/31/94 9.75 12/31/94 12/31/94 0.0510 0.0000 9.75 12,481,465 9.322375 0.956141 183.747817 1,792
01/31/95 9.90 01/31/95 01/31/95 0.0517 0.0000 9.90 12,729,896 9.499762 0.959572 184.707389 1,829
02/28/95 10.12 02/28/95 02/28/95 0.0506 0.0000 10.12 12,904,684 9.346194 0.923537 185.630926 1,879
03/31/95 10.11 03/31/95 03/31/95 0.0513 0.0000 10.11 12,861,485 9.522866 0.941925 186.572851 1,886
04/30/95 10.18 04/30/95 04/30/95 0.0533 0.0000 10.18 12,861,485 9.944333 0.976850 187.549701 1,909
05/31/95 10.42 05/31/95 05/31/95 0.0636 0.0000 10.42 14,054,764 11.924627 1.144398 188.694099 1,966
06/30/95 10.49 06/30/95 06/30/95 0.0592 0.0000 10.49 14,251,768 11.168137 1.064646 189.758745 1,991
07/31/95 10.39 07/31/95 07/31/95 0.0573 0.0000 10.39 n/a 10.879369 1.047100 190.805845 1,982
08/31/95 10.44 08/31/95 08/31/95 0.0514 0.0000 10.44 14,210,578 9.807420 0.939408 191.745253 2,002
09/30/95 10.50 09/30/95 09/30/95 0.0462 0.0000 10.50 13,898,853 8.858631 0.843679 192.588933 2,022
10/31/95 10.58 10/31/95 10/31/95 0.0552 0.0000 10.58 13,614,184 10.640533 1.005721 193.594654 2,048
11/30/95 10.67 11/30/95 11/30/95 0.0456 0.0000 10.67 13,659,968 8.827916 0.827359 194.422013 2,074
12/31/95 10.78 12/31/95 12/31/95 0.0472 0.0000 10.78 13,837,929 9.176719 0.851273 195.273285 2,105
01/31/96 10.82 01/31/96 01/31/96 0.0550 0.0000 10.82 13,837,929 10.740031 0.992609 196.265894 2,124
02/28/96 10.57 02/28/96 02/28/96 0.0515 0.0000 10.57 13,643,057 10.107694 0.956262 197.222157 2,085
03/31/96 10.44 03/31/96 03/31/96 0.0482 0.0000 10.44 15,111,466 9.506108 0.910547 198.132703 2,069
04/30/96 10.31 04/30/96 04/30/96 0.0528 0.0000 10.31 13,450,918 10.455552 1.014118 199.146821 2,053
05/31/96 10.21 05/31/96 05/31/96 0.0503 0.0000 10.21 13,476,477 10.009543 0.980367 200.127188 2,043
06/30/96 10.31 06/30/96 06/30/96 0.0423 0.0000 10.31 13,353,637 8.470757 0.821606 200.948794 2,072
07/31/96 10.27 07/31/96 07/31/96 0.0551 0.0000 10.27 13,353,637 11.075023 1.078386 202.027179 2,075
08/31/96 10.20 08/31/96 08/31/96 0.0512 0.0000 10.20 13,195,847 10.352480 1.014949 203.042128 2,071
09/30/96 10.33 09/30/96 09/30/96 0.0524 0.0000 10.33 12,990,070 10.639408 1.029952 204.072081 2,108
10/31/96 10.50 10/31/96 10/31/96 0.0527 0.0000 10.50 0 10.761333 1.024889 205.096970 2,154
11/30/96 10.65 11/30/96 11/30/96 0.0571 0.0000 10.65 0 11.715139 1.100013 206.196983 2,196
12/31/96 10.48 12/31/96 12/31/96 0.0544 0.0000 10.48 0 11.212992 1.069942 207.266925 2,172
</TABLE>
<PAGE>
NET CIF: TOTAL RETURN FUND
RATE OF RETURN
1 YEAR PREPARED ON: 12/31/96
...........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
63.864780 17.41 1111.8858
PURCHASE DATE: 12/31/95
INITIAL INVESTMENT: $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 16.80 (5% SALES LOAD) 1111.8858 1,000.00 (111.8858)
SHARES PURCHASED: 59.52380952
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
1,000.00 0.1119
ONE YEAR NET RATE OF RETURN: 11.19%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/95 15.96 12/31/95 12/31/95 0.0863 0.8560 15.96 20,955,648 59.523810
01/31/96 16.24 01/31/96 01/31/96 16.24 20,955,648 59.523810
02/28/96 16.19 02/28/96 02/28/96 16.19 22,892,971 59.523810
03/31/96 16.17 03/31/96 03/31/96 0.0784 0.0030 16.17 23,580,036 4.845238 0.299644 59.823453
04/30/96 16.47 04/30/96 04/30/96 16.47 25,016,888 59.823453
05/31/96 16.64 05/31/96 05/31/96 16.64 26,250,122 59.823453
06/30/96 16.60 06/30/96 06/30/96 0.0809 16.60 26,809,586 4.842011 0.291687 60.115141
07/31/96 16.15 07/31/96 07/31/96 16.15 26,809,586 60.115141
08/31/96 16.33 08/31/96 08/31/96 16.33 27,280,390 60.115141
09/30/96 16.80 09/30/96 09/30/96 0.0826 16.80 28,244,004 4.965511 0.295566 60.410707
10/31/96 17.23 10/31/96 10/31/96 17.23 60.410707
11/30/96 18.37 11/30/96 11/30/96 18.37 60.410707
12/31/96 17.41 12/31/96 12/31/96 0.1276 0.8678 17.41 60.135415 3.454073 63.864780
</TABLE>
<PAGE>
NET CIF: TOTAL RETURN FUND
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/96
ROLLING
...........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
97.142920 17.41 1691.2582
PURCHASE DATE: 12/31/91
INITIAL INVESTMENT: $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 14.58 (5% SALES LOAD) 1691.2582 1,000.00 (691.2582)
SHARES PURCHASED: 68.58710562
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(691.2582) 1,000.00 0.6913
NET 5 YEAR RETURN: 69.13%
ANNUALIZED NET 5 YEAR RETURN: 11.08%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/91 13.85 12/31/91 01/15/92 0.0865 0.2851 14.01 5,225,792 68.587106
01/31/92 13.77 01/31/92 02/14/92 5,403,579 68.587106
02/28/92 14.02 02/28/92 03/15/92 6,140,736 68.587106
03/31/92 13.57 03/31/92 04/15/92 0.0842 0.1639 13.82 6,531,831 17.016461 1.231292 69.818398
04/30/92 13.70 04/30/92 05/15/92 7,414,267 69.818398
05/29/92 13.73 05/29/92 06/16/92 8,386,706 69.818398
06/30/92 13.49 06/30/92 07/15/92 0.0848 13.54 8,227,266 5.920600 0.437267 70.255665
07/31/92 13.76 07/31/92 08/14/92 70.255665
08/31/92 13.50 08/31/92 09/15/92 8,819,903 70.255665
09/30/92 13.68 09/30/92 10/15/92 0.1063 13.55 8,971,058 7.468177 0.551157 70.806822
10/31/92 13.79 10/31/92 11/13/92 9,153,486 70.806822
11/30/92 14.14 11/30/92 12/15/92 9,184,242 70.806822
12/31/92 13.89 12/31/92 12/31/92 0.1063 0.3733 13.89 9,250,893 33.958952 2.444849 73.251671
01/31/93 14.15 01/29/93 02/12/93 9,645,668 73.251671
02/26/93 14.38 02/26/93 03/15/93 10,594,367 73.251671
03/31/93 14.45 03/31/93 04/15/93 0.0952 0.0010 14.53 10,194,748 7.046811 0.484984 73.736655
04/30/93 14.32 04/30/93 05/14/93 10,582,193 73.736655
05/28/93 14.41 05/28/93 06/15/93 11,342,446 73.736655
06/30/93 14.57 06/30/93 07/15/93 0.0929 14.66 11,547,410 6.850135 0.467267 74.203922
07/30/93 14.67 07/30/93 08/16/93 12,183,663 74.203922
08/31/93 15.06 08/31/93 09/15/93 12,948,117 74.203922
09/30/93 15.05 09/30/93 10/15/93 0.1220 $15.27 13,226,508 9.052878 0.592854 74.796776
10/31/93 15.26 10/31/93 11/15/93 13,842,316 74.796776
11/30/93 15.04 11/30/93 12/15/93 14,134,348 74.796776
12/31/93 15.01 12/31/93 01/14/94 0.0950 0.4076 15.13 14,360,086 37.592860 2.484657 77.281433
01/31/94 15.37 01/31/94 02/15/94 15,977,490 77.281433
02/28/94 15.09 02/28/94 03/15/94 15,962,814 77.281433
03/31/94 14.23 03/31/94 04/15/94 0.0965 0.2699 14.21 16,099,813 28.315917 1.992675 79.274108
04/30/94 14.29 04/30/94 05/15/94 16,926,648 79.274108
05/31/94 14.32 05/31/94 06/15/94 17,098,125 79.274108
06/30/94 14.02 06/30/94 07/15/94 0.0937 14.32 17,069,415 7.427984 0.518714 79.792822
07/29/94 14.39 07/29/94 08/15/94 17,451,492 79.792822
08/31/94 14.80 08/31/94 09/15/94 17,890,446 79.792822
09/30/94 14.23 09/30/94 10/15/94 0.0861 14.33 17,519,760 6.870162 0.479425 80.272247
10/31/94 14.16 10/31/94 11/15/94 17,480,687 80.272247
11/30/94 13.63 11/30/94 12/15/94 17,029,828 80.272247
12/31/94 13.23 12/31/94 01/15/95 0.0963 0.5156 13.42 16,431,195 49.118588 3.660103 83.932351
01/31/95 13.36 01/31/95 02/15/95 17,373,376 83.932351
02/28/95 13.92 02/28/95 03/15/95 17,921,746 83.932351
03/31/95 14.13 03/31/95 04/15/95 0.0996 14.45 18,022,554 8.359662 0.578523 84.510874
04/30/95 14.54 04/30/95 05/15/95 18,022,554 84.510874
05/31/95 15.10 05/31/95 06/15/95 19,522,639 84.510874
06/30/95 15.46 06/30/95 07/15/95 0.1050 15.91 20,061,885 8.873642 0.557740 85.068614
07/31/95 15.96 07/31/95 08/15/95 n/a 85.068614
08/31/95 16.07 08/31/95 09/15/95 20,702,746 85.068614
09/30/95 16.38 09/30/95 10/15/95 0.0819 16.44 21,163,662 6.967119 0.423791 85.492405
10/31/95 16.17 10/31/95 11/15/95 20,916,516 85.492405
11/30/95 16.67 11/30/95 12/15/95 21,656,073 85.492405
12/31/95 15.96 12/31/95 12/31/95 0.0863 0.8560 15.96 20,955,648 80.559493 5.047587 90.539992
01/31/96 16.24 01/31/96 01/31/96 16.24 20,955,648 90.539992
02/28/96 16.19 02/28/96 02/28/96 16.19 22,892,971 90.539992
03/31/96 16.17 03/31/96 03/31/96 0.0784 0.0030 16.17 23,580,036 7.369955 0.455780 90.995771
04/30/96 16.47 04/30/96 04/30/96 16.47 25,016,888 90.995771
05/31/96 16.64 05/31/96 05/31/96 16.64 26,250,122 90.995771
</TABLE>
<PAGE>
NET CIF: TOTAL RETURN FUND
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/96
ROLLING
.......
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
06/30/96 16.60 06/30/96 06/30/96 0.0809 16.60 26,809,586 7.365047 0.443678 91.439449
07/31/96 16.15 07/31/96 07/31/96 16.15 26,809,586 91.439449
08/31/96 16.33 08/31/96 08/31/96 16.33 27,280,390 91.439449
09/30/96 16.80 09/30/96 09/30/96 0.0826 16.80 28,244,004 7.552898 0.449577 91.889026
10/31/96 17.23 10/31/96 10/31/96 17.23 91.889026
11/30/96 18.37 11/30/96 11/30/96 18.37 91.889026
12/31/96 17.41 12/31/96 12/31/96 0.1276 0.8678 17.41 91.470288 5.253894 97.142920
</TABLE>
<PAGE>
NET CIF: TOTAL RETURN FUND
RATE OF RETURN
SINCE PREPARED ON: 12/31/96
INCEPTION
.........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
170.104589 17.41 2961.5209
PURCHASE DATE: 12/18/87
INITIAL INVESTMENT: $1,000. GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.78 (5% SALES LOAD) 2961.5209 1,000.00 (1961.5209)
SHARES PURCHASED 92.764
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(1961.5209) 1,000.00 1.9615
NET RATE OF RETURN SINCE INCEPTION: 196.15%
ANNUALIZED NET RATE OF RETURN SINCE INCE 12.76%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/87 10.21 12/31/87 01/14/88 0.0396 10.34 103,470 3.673469 0.355268 93.119646
01/29/88 10.51 01/29/88 02/12/88 108,560 93.119646
02/29/88 10.76 02/29/88 03/15/88 112,138 93.119646
03/31/88 10.34 03/31/88 04/15/88 0.1392 10.45 130,445 12.965048 1.240674 94.360321
04/29/88 10.50 04/29/88 05/15/88 221,004 94.360321
05/31/88 10.52 05/31/88 06/15/88 489,193 94.360321
06/30/88 10.92 06/30/88 07/15/88 0.0600 10.72 774,433 5.661619 0.528136 94.888457
07/29/88 10.68 07/29/88 08/15/88 769,223 94.888457
08/31/88 10.43 08/31/88 09/15/88 761,510 94.888457
09/30/88 10.49 09/30/88 10/14/88 0.1672 10.52 767,118 15.865350 1.508113 96.396570
10/31/88 10.64 10/31/88 11/15/88 795,701 96.396570
11/30/88 10.56 11/30/88 12/15/88 793,250 96.396570
12/30/88 10.51 12/30/88 01/13/88 0.1564 0.0200 10.73 797,889 17.010814 1.585351 97.981921
01/31/89 10.99 01/31/89 02/15/89 896,603 97.981921
02/28/89 10.75 02/28/89 03/15/89 879,341 97.981921
03/31/89 10.69 03/31/89 04/14/89 0.1819 0.0442 10.85 885,033 22.159591 2.042359 100.024279
04/28/89 11.08 04/28/89 05/15/89 975,301 100.024279
05/31/89 11.51 05/31/89 06/15/89 1,016,910 100.024279
06/30/89 11.32 06/30/89 07/14/89 0.1437 11.66 1,083,180 14.368488 1.232289 101.256568
07/31/89 12.05 07/31/89 08/15/89 1,179,952 101.256568
08/31/89 12.39 08/31/89 09/15/89 1,219,238 101.256568
09/29/89 12.20 09/29/89 10/13/89 0.1451 11.91 1,240,218 14.688278 1.233273 102.489841
10/31/89 11.96 10/31/89 11/15/89 1,207,108 102.489841
11/30/89 12.35 11/30/89 12/15/89 1,266,394 102.489841
12/29/89 12.09 12/29/89 01/15/90 0.1366 0.3807 11.72 1,237,868 53.025681 4.524376 107.014216
01/31/90 11.51 01/31/90 02/15/90 1,219,809 107.014216
02/28/90 11.99 02/28/90 03/15/90 1,327,410 107.014216
03/30/90 11.65 03/30/90 04/12/90 0.1067 0.3262 11.67 1,385,635 46.326454 3.969705 110.983921
04/30/90 11.40 04/30/90 05/15/90 1,435,375 110.983921
05/31/90 12.19 05/31/90 06/15/90 110.983921
06/29/90 12.10 06/29/90 07/13/90 0.1060 12.51 1,617,895 11.764296 0.940391 111.924313
07/31/90 12.33 07/31/90 08/15/90 111.924313
08/31/90 11.47 08/31/90 09/14/90 111.924313
09/29/90 10.98 09/29/90 10/15/90 0.1024 10.74 1,679,538 11.461050 1.067137 112.991449
10/31/90 10.80 10/31/90 11/15/90 112.991449
11/30/90 11.27 11/30/90 12/14/90 112.991449
12/31/90 11.27 12/31/90 01/15/91 0.1215 0.0010 11.00 1,954,642 13.841453 1.258314 114.249763
01/31/91 11.73 01/31/91 02/15/91 2,085,046 114.249763
02/28/91 12.27 02/28/91 03/15/91 2,303,512 114.249763
03/28/91 12.16 03/28/91 04/15/91 0.1009 0.0050 12.39 2,436,913 12.099050 0.976517 115.226281
04/30/91 12.33 04/30/91 05/15/91 2,749,392 115.226281
05/31/91 13.06 05/31/91 06/14/91 3,080,960 115.226281
06/28/91 12.53 06/28/91 07/15/91 0.0920 12.72 3,191,376 10.600818 0.833398 116.059678
07/31/91 12.86 07/31/91 08/15/91 3,727,661 116.059678
08/30/91 13.12 08/30/91 09/14/91 4,145,573 116.059678
09/30/91 13.03 09/30/91 10/15/91 0.1072 13.26 4,359,700 12.441598 0.938280 116.997959
10/31/91 13.27 10/31/91 11/15/91 4,550,728 116.997959
11/29/91 12.94 11/29/91 12/13/91 4,779,963 116.997959
12/31/91 13.85 12/31/91 01/15/92 0.0865 0.2851 14.01 5,225,792 43.476441 3.103243 120.101202
01/31/92 13.77 01/31/92 02/14/92 5,403,579 120.101202
02/28/92 14.02 02/28/92 03/15/92 6,140,736 120.101202
03/31/92 13.57 03/31/92 04/15/92 0.0842 0.1639 13.82 6,531,831 29.797108 2.156086 122.257288
04/30/92 13.70 04/30/92 05/15/92 7,414,267 122.257288
</TABLE>
<PAGE>
NET CIF: TOTAL RETURN FUND
RATE OF RETURN
SINCE PREPARED ON: 12/31/96
INCEPTION
..........
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
05/29/92 13.73 05/29/92 06/16/92 8,386,706 122.257288
06/30/92 13.49 06/30/92 07/15/92 0.0848 13.54 8,227,266 10.367418 0.765688 123.022976
07/31/92 13.76 07/31/92 08/14/92 123.022976
08/31/92 13.50 08/31/92 09/15/92 8,819,903 123.022976
09/30/92 13.68 09/30/92 10/15/92 0.1063 13.55 8,971,058 13.077342 0.965118 123.988094
10/31/92 13.79 10/31/92 11/13/92 9,153,486 123.988094
11/30/92 14.14 11/30/92 12/15/92 9,184,242 123.988094
12/31/92 13.89 12/31/92 12/31/92 0.1063 0.3733 13.89 9,250,893 59.464690 4.281115 128.269209
01/31/93 14.15 01/29/93 02/12/93 9,645,668 128.269209
02/26/93 14.38 02/26/93 03/15/93 10,594,367 128.269209
03/31/93 14.45 03/31/93 04/15/93 0.0952 0.0010 14.53 10,194,748 12.339498 0.849243 129.118452
04/30/93 14.32 04/30/93 05/14/93 10,582,193 129.118452
05/28/93 14.41 05/28/93 06/15/93 11,342,446 129.118452
06/30/93 14.57 06/30/93 07/15/93 0.0929 14.66 11,547,410 11.995104 0.818220 129.936672
07/30/93 14.67 07/30/93 08/16/93 12,183,663 129.936672
08/31/93 15.06 08/31/93 09/15/93 12,948,117 129.936672
09/30/93 15.05 09/30/93 10/15/93 0.1220 $15.27 13,226,508 15.852274 1.038132 130.974804
10/31/93 15.26 10/31/93 11/15/93 13,842,316 130.974804
11/30/93 15.04 11/30/93 12/15/93 14,134,348 130.974804
12/31/93 15.01 12/31/93 01/14/94 0.0950 0.4076 15.13 14,360,086 65.827936 4.350822 135.325626
01/31/94 15.37 01/31/94 02/15/94 15,977,490 135.325626
02/28/94 15.09 02/28/94 03/15/94 15,962,814 135.325626
03/31/94 14.23 03/31/94 04/15/94 0.0965 0.2699 14.21 16,099,813 49.583309 3.489325 138.814951
04/30/94 14.29 04/30/94 05/15/94 16,926,648 138.814951
05/31/94 14.32 05/31/94 06/15/94 17,098,125 138.814951
06/30/94 14.02 06/30/94 07/15/94 0.0937 14.32 17,069,415 13.006961 0.908307 139.723258
07/29/94 14.39 07/29/94 08/15/94 17,451,492 139.723258
08/31/94 14.80 08/31/94 09/15/94 17,890,446 139.723258
09/30/94 14.23 09/30/94 10/15/94 0.0861 14.33 17,519,760 12.030173 0.839510 140.562768
10/31/94 14.16 10/31/94 11/15/94 17,480,687 140.562768
11/30/94 13.63 11/30/94 12/15/94 17,029,828 140.562768
12/31/94 13.23 12/31/94 01/15/95 0.0963 0.5156 13.42 16,431,195 86.010357 6.409118 146.971885
01/31/95 13.36 01/31/95 02/15/95 17,373,376 146.971885
02/28/95 13.92 02/28/95 03/15/95 17,921,746 146.971885
03/31/95 14.13 03/31/95 04/15/95 0.0996 14.45 18,022,554 14.638400 1.013038 147.984923
04/30/95 14.54 04/30/95 05/15/95 18,022,554 147.984923
05/31/95 15.10 05/31/95 06/15/95 19,522,639 147.984923
06/30/95 15.46 06/30/95 07/15/95 0.1050 15.91 20,061,885 15.538417 0.976645 148.961568
07/31/95 15.96 07/31/95 08/15/95 n/a 148.961568
08/31/95 16.07 08/31/95 09/15/95 20,702,746 148.961568
09/30/95 16.38 09/30/95 10/15/95 0.0819 16.44 21,163,662 12.199952 0.742090 149.703657
10/31/95 16.17 10/31/95 11/15/95 20,916,516 149.703657
11/30/95 16.67 11/30/95 12/15/95 21,656,073 149.703657
12/31/95 15.96 12/31/95 12/31/95 0.0863 0.8560 15.96 20,955,648 141.065756 8.838707 158.542364
01/31/96 16.24 01/31/96 01/31/96 16.24 20,955,648 158.542364
02/28/96 16.19 02/28/96 02/28/96 16.19 22,892,971 158.542364
03/31/96 16.17 03/31/96 03/31/96 0.0784 0.0030 16.17 23,580,036 12.905348 0.798104 159.340468
04/30/96 16.47 04/30/96 04/30/96 16.47 25,016,888 159.340468
05/31/96 16.64 05/31/96 05/31/96 16.64 26,250,122 159.340468
06/30/96 16.60 06/30/96 06/30/96 0.0809 16.60 26,809,586 12.896753 0.776913 160.117381
07/31/96 16.15 07/31/96 07/31/96 16.15 26,809,586 160.117381
08/31/96 16.33 08/31/96 08/31/96 16.33 27,280,390 160.117381
09/30/96 16.80 09/30/96 09/30/96 0.0826 16.80 28,244,004 13.225696 0.787244 160.904625
10/31/96 17.23 10/31/96 10/31/96 17.23 160.904625
11/30/96 18.37 11/30/96 11/30/96 18.37 160.904625
12/31/96 17.41 12/31/96 12/31/96 0.1276 0.8678 17.41 160.171383 9.199965 170.104589
</TABLE>
<PAGE>
GROSS CIF: TOTAL RETURN FUND
RATE OF RETURN
1 YEAR PREPARED ON: 12/31/96
.........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
67.226084 17.41 1170.4061
PURCHASE DATE: 12/31/95
INITIAL INVESTMENT: $ 1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 15.96 1170.4061 1,000.00 (170.4061)
SHARES PURCHASED: 62.6566416
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(170.4061) 1,000.00 0.1704
ONE YEAR NET RATE OF RETURN: 17.04%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/95 15.96 12/31/95 12/31/95 0.0863 0.8560 15.96 20,955,648 62.656642
01/31/96 16.24 01/31/96 01/31/96 16.24 20,955,648 62.656642
02/28/96 16.19 02/28/96 02/28/96 16.19 22,892,971 62.656642
03/31/96 16.17 03/31/96 03/31/96 0.0784 0.0030 16.17 23,580,036 5.100251 0.315414 62.972056
04/30/96 16.47 04/30/96 04/30/96 16.47 25,016,888 62.972056
05/31/96 16.64 05/31/96 05/31/96 16.64 26,250,122 62.972056
06/30/96 16.60 06/30/96 06/30/96 0.0809 16.60 26,809,586 5.096854 0.307039 63.279095
07/31/96 16.15 07/31/96 07/31/96 16.15 26,809,586 63.279095
08/31/96 16.33 08/31/96 08/31/96 16.33 27,280,390 63.279095
09/30/96 16.80 09/30/96 09/30/96 0.0826 16.80 28,244,004 5.226853 0.311122 63.590218
10/31/96 17.23 10/31/96 10/31/96 17.23 63.590218
11/30/96 18.37 11/30/96 11/30/96 18.37 63.590218
12/31/96 17.41 12/31/96 12/31/96 0.1276 0.8678 17.41 63.300437 3.635867 67.226084
</TABLE>
<PAGE>
GROSS CIF: TOTAL RETURN FUND
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/96
ROLLING
.......
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
102.263088 17.41 1780.4004
PURCHASE DATE: 12/31/91
INITIAL INVESTMENT: $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 13.85 1780.4004 1,000.00 (780.4004)
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(780.4004) 1,000.00 0.7804
GROSS 5 YEAR RETURN: 78.04%
ANNUALIZED GROSS 5 YEAR RETURN: 12.23%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/91 13.85 12/31/91 01/15/92 0.0865 0.2851 14.01 5,225,792 72.202166
01/31/92 13.77 01/31/92 02/14/92 5,403,579 72.202166
02/28/92 14.02 02/28/92 03/15/92 6,140,736 72.202166
03/31/92 13.57 03/31/92 04/15/92 0.0842 0.1639 13.82 6,531,831 17.913357 1.296191 73.498357
04/30/92 13.70 04/30/92 05/15/92 7,414,267 73.498357
05/29/92 13.73 05/29/92 06/16/92 8,386,706 73.498357
06/30/92 13.49 06/30/92 07/15/92 0.0848 13.54 8,227,266 6.232661 0.460315 73.958672
07/31/92 13.76 07/31/92 08/14/92 73.958672
08/31/92 13.50 08/31/92 09/15/92 8,819,903 73.958672
09/30/92 13.68 09/30/92 10/15/92 0.1063 13.55 8,971,058 7.861807 0.580207 74.538879
10/31/92 13.79 10/31/92 11/13/92 9,153,486 74.538879
11/30/92 14.14 11/30/92 12/15/92 9,184,242 74.538879
12/31/92 13.89 12/31/92 12/31/92 0.1063 0.3733 13.89 9,250,893 35.748846 2.573711 77.112590
01/31/93 14.15 01/29/93 02/12/93 9,645,668 77.112590
02/26/93 14.38 02/26/93 03/15/93 10,594,367 77.112590
03/31/93 14.45 03/31/93 04/15/93 0.0952 0.0010 14.53 10,194,748 7.418231 0.510546 77.623136
04/30/93 14.32 04/30/93 05/14/93 10,582,193 77.623136
05/28/93 14.41 05/28/93 06/15/93 11,342,446 77.623136
06/30/93 14.57 06/30/93 07/15/93 0.0929 14.66 11,547,410 7.211189 0.491896 78.115031
07/30/93 14.67 07/30/93 08/16/93 12,183,663 78.115031
08/31/93 15.06 08/31/93 09/15/93 12,948,117 78.115031
09/30/93 15.05 09/30/93 10/15/93 0.1220 $15.27 13,226,508 9.530034 0.624102 78.739133
10/31/93 15.26 10/31/93 11/15/93 13,842,316 78.739133
11/30/93 15.04 11/30/93 12/15/93 14,134,348 78.739133
12/31/93 15.01 12/31/93 01/14/94 0.0950 0.4076 15.13 14,360,086 39.574288 2.615617 81.354750
01/31/94 15.37 01/31/94 02/15/94 15,977,490 81.354750
02/28/94 15.09 02/28/94 03/15/94 15,962,814 81.354750
03/31/94 14.23 03/31/94 04/15/94 0.0965 0.2699 14.21 16,099,813 29.808380 2.097704 83.452455
04/30/94 14.29 04/30/94 05/15/94 16,926,648 83.452455
05/31/94 14.32 05/31/94 06/15/94 17,098,125 83.452455
06/30/94 14.02 06/30/94 07/15/94 0.0937 14.32 17,069,415 7.819495 0.546054 83.998509
07/29/94 14.39 07/29/94 08/15/94 17,451,492 83.998509
08/31/94 14.80 08/31/94 09/15/94 17,890,446 83.998509
09/30/94 14.23 09/30/94 10/15/94 0.0861 14.33 17,519,760 7.232272 0.504694 84.503203
10/31/94 14.16 10/31/94 11/15/94 17,480,687 84.503203
11/30/94 13.63 11/30/94 12/15/94 17,029,828 84.503203
12/31/94 13.23 12/31/94 01/15/95 0.0963 0.5156 13.42 16,431,195 51.707510 3.853019 88.356222
01/31/95 13.36 01/31/95 02/15/95 17,373,376 88.356222
02/28/95 13.92 02/28/95 03/15/95 17,921,746 88.356222
03/31/95 14.13 03/31/95 04/15/95 0.0996 14.45 18,022,554 8.800280 0.609016 88.965238
04/30/95 14.54 04/30/95 05/15/95 18,022,554 88.965238
05/31/95 15.10 05/31/95 06/15/95 19,522,639 88.965238
06/30/95 15.46 06/30/95 07/15/95 0.1050 15.91 20,061,885 9.341350 0.587137 89.552375
07/31/95 15.96 07/31/95 08/15/95 n/a 89.552375
08/31/95 16.07 08/31/95 09/15/95 20,702,746 89.552375
09/30/95 16.38 09/30/95 10/15/95 0.0819 16.44 21,163,662 7.334339 0.446128 89.998502
10/31/95 16.17 10/31/95 11/15/95 20,916,516 89.998502
11/30/95 16.67 11/30/95 12/15/95 21,656,073 89.998502
12/31/95 15.96 12/31/95 12/31/95 0.0863 0.8560 15.96 20,955,648 84.805589 5.313633 95.312136
01/31/96 16.24 01/31/96 01/31/96 16.24 20,955,648 95.312136
02/28/96 16.19 02/28/96 02/28/96 16.19 22,892,971 95.312136
03/31/96 16.17 03/31/96 03/31/96 0.0784 0.0030 16.17 23,580,036 7.758408 0.479803 95.791938
04/30/96 16.47 04/30/96 04/30/96 16.47 25,016,888 95.791938
</TABLE>
<PAGE>
GROSS CIF: TOTAL RETURN FUND
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/96
ROLLING
.......
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
05/31/96 16.64 05/31/96 05/31/96 16.64 26,250,122 95.791938
06/30/96 16.60 06/30/96 06/30/96 0.0809 16.60 26,809,586 7.753240 0.467063 96.259001
07/31/96 16.15 07/31/96 07/31/96 16.15 26,809,586 96.259001
08/31/96 16.33 08/31/96 08/31/96 16.33 27,280,390 96.259001
09/30/96 16.80 09/30/96 09/30/96 0.0826 16.80 28,244,004 7.950993 0.473273 96.732274
10/31/96 17.23 10/31/96 10/31/96 17.23 96.732274
11/30/96 18.37 11/30/96 11/30/96 18.37 96.732274
12/31/96 17.41 12/31/96 12/31/96 0.1276 0.8678 17.41 96.291466 5.530814 102.263088
</TABLE>
<PAGE>
GROSS CIF: TOTAL RETURN FUND
RATE OF RETURN
SINCE PREPARED ON: 12/31/96
INCEPTION
.........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) = GROSS VALUE
179.074949 17.41 0 3117.6949
PURCHASE DATE: 12/18/87
INITIAL INVESTMENT: $1,000.00 GROSS VALUE - INITIAL INVESTMENT = NET VALUE
INITIAL VALUE: 10.24 3117.6949 1,000.00 (2117.6949)
SHARES PURCHASED: 97.656
NET VALUE / INITIAL INVESTMENT = GROSS RATE OF RETURN
(2117.6949) 1,000.00 2.1177
GROSS RATE OF RETURN SINCE INCEPTION: 211.77%
ANNUALIZED GROSS RATE OF RETURN SINCE INCEPTION: 13.40%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/87 10.21 12/31/87 01/14/88 0.0396 10.34 103,470 3.867188 0.374003 98.030253
01/29/88 10.51 01/29/88 02/12/88 0.0000 0.00 108,560 0.000000 0.000000 98.030253
02/29/88 10.76 02/29/88 03/15/88 0.0000 0.00 112,138 0.000000 0.000000 98.030253
03/31/88 10.34 03/31/88 04/15/88 0.1392 10.45 130,445 13.648752 1.306101 99.336353
04/29/88 10.50 04/29/88 05/15/88 0.0000 0.00 221,004 0.000000 0.000000 99.336353
05/31/88 10.52 05/31/88 06/15/88 0.0000 0.00 489,193 0.000000 0.000000 99.336353
06/30/88 10.92 06/30/88 07/15/88 0.0600 10.72 774,433 5.960181 0.555987 99.892340
07/29/88 10.68 07/29/88 08/15/88 0.0000 0.00 769,223 0.000000 0.000000 99.892340
08/31/88 10.43 08/31/88 09/15/88 0.0000 0.00 761,510 0.000000 0.000000 99.892340
09/30/88 10.49 09/30/88 10/14/88 0.1672 10.52 767,118 16.701999 1.587643 101.479983
10/31/88 10.64 10/31/88 11/15/88 0.0000 0.00 795,701 0.000000 0.000000 101.479983
11/30/88 10.56 11/30/88 12/15/88 0.0000 0.00 793,250 0.000000 0.000000 101.479983
12/30/88 10.51 12/30/88 01/13/88 0.1564 0.0200 10.73 797,889 17.907868 1.668953 103.148936
01/31/89 10.99 01/31/89 02/15/89 0.0000 0.0000 0.00 896,603 0.000000 0.000000 103.148936
02/28/89 10.75 02/28/89 03/15/89 0.0000 0.00 879,341 0.000000 0.000000 103.148936
03/31/89 10.69 03/31/89 04/14/89 0.1819 0.0442 10.85 885,033 23.328163 2.150061 105.298997
04/28/89 11.08 04/28/89 05/15/89 0.0000 0.00 975,301 0.000000 0.000000 105.298997
05/31/89 11.51 05/31/89 06/15/89 0.0000 0.00 1,016,910 0.000000 0.000000 105.298997
06/30/89 11.32 06/30/89 07/14/89 0.1437 11.66 1,083,180 15.126201 1.297273 106.596270
07/31/89 12.05 07/31/89 08/15/89 0.0000 0.00 1,179,952 0.000000 0.000000 106.596270
08/31/89 12.39 08/31/89 09/15/89 0.0000 0.00 1,219,238 0.000000 0.000000 106.596270
09/29/89 12.20 09/29/89 10/13/89 0.1451 11.91 1,240,218 15.462855 1.298309 107.894579
10/31/89 11.96 10/31/89 11/15/89 0.0000 0.00 1,207,108 0.000000 0.000000 107.894579
11/30/89 12.35 11/30/89 12/15/89 0.0000 0.00 1,266,394 0.000000 0.000000 107.894579
12/29/89 12.09 12/29/89 01/15/90 0.1366 0.3807 11.72 1,237,868 55.821958 4.762966 112.657544
01/31/90 11.51 01/31/90 02/15/90 0.0000 0.00 1,219,809 0.000000 0.000000 112.657544
02/28/90 11.99 02/28/90 03/15/90 0.0000 0.00 1,327,410 0.000000 0.000000 112.657544
03/30/90 11.65 03/30/90 04/12/90 0.1067 0.3262 11.67 1,385,635 48.769451 4.179045 116.836589
04/30/90 11.40 04/30/90 05/15/90 0.0000 0.00 1,435,375 0.000000 0.000000 116.836589
05/31/90 12.19 05/31/90 06/15/90 0.0000 0.00 0 0.000000 0.000000 116.836589
06/29/90 12.10 06/29/90 07/13/90 0.1060 12.51 1,617,895 12.384678 0.989982 117.826571
07/31/90 12.33 07/31/90 08/15/90 0.0000 0.00 0 0.000000 0.000000 117.826571
08/31/90 11.47 08/31/90 09/14/90 0.0000 0.00 0 0.000000 0.000000 117.826571
09/29/90 10.98 09/29/90 10/15/90 0.1024 10.74 1,679,538 12.065441 1.123412 118.949983
10/31/90 10.80 10/31/90 11/15/90 0.0000 0.00 0 0.000000 0.000000 118.949983
11/30/90 11.27 11/30/90 12/14/90 0.0000 0.00 0 0.000000 0.000000 118.949983
12/31/90 11.27 12/31/90 01/15/91 0.1215 0.0010 11.00 1,954,642 14.571373 1.324670 120.274653
01/31/91 11.73 01/31/91 02/15/91 0.0000 0.00 2,085,046 0.000000 0.000000 120.274653
02/28/91 12.27 02/28/91 03/15/91 0.0000 0.00 2,303,512 0.000000 0.000000 120.274653
03/28/91 12.16 03/28/91 04/15/91 0.1009 0.0050 12.39 2,436,913 12.737086 1.028013 121.302667
04/30/91 12.33 04/30/91 05/15/91 0.0000 0.00 2,749,392 0.000000 0.000000 121.302667
05/31/91 13.06 05/31/91 06/14/91 0.0000 0.00 3,080,960 0.000000 0.000000 121.302667
06/28/91 12.53 06/28/91 07/15/91 0.0920 12.72 3,191,376 11.159845 0.877346 122.180013
07/31/91 12.86 07/31/91 08/15/91 0 0 3,727,661 0.000000 0.000000 122.180013
08/30/91 13.12 08/30/91 09/14/91 0.0000 0.00 4,145,573 0.000000 0.000000 122.180013
09/30/91 13.03 09/30/91 10/15/91 0.1072 13.26 4,359,700 13.097697 0.987760 123.167773
10/31/91 13.27 10/31/91 11/15/91 0.0000 0.00 4,550,728 0.000000 0.000000 123.167773
11/29/91 12.94 11/29/91 12/13/91 0.0000 0.00 4,779,963 0.000000 0.000000 123.167773
12/31/91 13.85 12/31/91 01/15/92 0.0865 0.2851 14.01 5,225,792 45.769144 3.266891 126.434664
01/31/92 13.77 01/31/92 02/14/92 0.0000 0.00 5,403,579 0.000000 0.000000 126.434664
02/28/92 14.02 02/28/92 03/15/92 0.0000 0.00 6,140,736 0.000000 0.000000 126.434664
03/31/92 13.57 03/31/92 04/15/92 0.0842 0.1639 13.82 6,531,831 31.368440 2.269786 128.704450
04/30/92 13.70 04/30/92 05/15/92 0.0000 0.00 7,414,267 0.000000 0.000000 128.704450
05/29/92 13.73 05/29/92 06/16/92 0.0000 0.00 8,386,706 0.000000 0.000000 128.704450
</TABLE>
<PAGE>
GROSS CIF: TOTAL RETURN FUND
RATE OF RETURN
SINCE PREPARED ON: 12/31/96
INCEPTION
.........
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
06/30/92 13.49 06/30/92 07/15/92 0.0848 13.54 8,227,266 10.914137 0.806066 129.510516
07/31/92 13.76 07/31/92 08/14/92 0.0000 0.00 0 0.000000 0.000000 129.510516
08/31/92 13.50 08/31/92 09/15/92 0.0000 0.00 8,819,903 0.000000 0.000000 129.510516
09/30/92 13.68 09/30/92 10/15/92 0.1063 13.55 8,971,058 13.766968 1.016012 130.526528
10/31/92 13.79 10/31/92 11/13/92 0.0000 0.00 9,153,486 0.000000 0.000000 130.526528
11/30/92 14.14 11/30/92 12/15/92 9,184,242 0.000000 0.000000 130.526528
12/31/92 13.89 12/31/92 12/31/92 0.1063 0.3733 13.89 9,250,893 62.600523 4.506877 135.033406
01/31/93 14.15 01/29/93 02/12/93 9,645,668 0.000000 0.000000 135.033406
02/26/93 14.38 02/26/93 03/15/93 10,594,367 0.000000 0.000000 135.033406
03/31/93 14.45 03/31/93 04/15/93 0.0952 0.0010 14.53 10,194,748 12.990214 0.894027 135.927433
04/30/93 14.32 04/30/93 05/14/93 10,582,193 0.000000 0.000000 135.927433
05/28/93 14.41 05/28/93 06/15/93 11,342,446 0.000000 0.000000 135.927433
06/30/93 14.57 06/30/93 07/15/93 0.0929 14.66 11,547,410 12.627658 0.861368 136.788801
07/30/93 14.67 07/30/93 08/16/93 12,183,663 0.000000 0.000000 136.788801
08/31/93 15.06 08/31/93 09/15/93 0.00 12,948,117 0.000000 0.000000 136.788801
09/30/93 15.05 09/30/93 10/15/93 0.1220 0.0000 $15.27 13,226,508 16.688234 1.092877 137.881678
10/31/93 15.26 10/31/93 11/15/93 0.0000 0.0000 13,842,316 0.000000 0.000000 137.881678
11/30/93 15.04 11/30/93 12/15/93 0.0000 0.0000 14,134,348 0.000000 0.000000 137.881678
12/31/93 15.01 12/31/93 01/14/94 0.0950 0.4076 15.13 14,360,086 69.299331 4.580260 142.461938
01/31/94 15.37 01/31/94 02/15/94 0.0000 0.0000 15,977,490 0.000000 0.000000 142.461938
02/28/94 15.09 02/28/94 03/15/94 0.0000 0.0000 15,962,814 0.000000 0.000000 142.461938
03/31/94 14.23 03/31/94 04/15/94 0.0965 0.2699 14.21 16,099,813 52.198054 3.673332 146.135270
04/30/94 14.29 04/30/94 05/15/94 0.0000 0.0000 16,926,648 0.000000 0.000000 146.135270
05/31/94 14.32 05/31/94 06/15/94 0.0000 0.0000 17,098,125 0.000000 0.000000 146.135270
06/30/94 14.02 06/30/94 07/15/94 0.0937 0.0000 14.32 17,069,415 13.692875 0.956206 147.091477
07/29/94 14.39 07/29/94 08/15/94 0.0000 0.0000 17,451,492 0.000000 0.000000 147.091477
08/31/94 14.80 08/31/94 09/15/94 0.0000 0.0000 17,890,446 0.000000 0.000000 147.091477
09/30/94 14.23 09/30/94 10/15/94 0.0861 0.0000 14.33 17,519,760 12.664576 0.883781 147.975257
10/31/94 14.16 10/31/94 11/15/94 0.0000 0.0000 17,480,687 0.000000 0.000000 147.975257
11/30/94 13.63 11/30/94 12/15/94 0.0000 0.0000 17,029,828 0.000000 0.000000 147.975257
12/31/94 13.23 12/31/94 01/15/95 0.0963 0.5156 13.42 16,431,195 90.546060 6.747098 154.722356
01/31/95 13.36 01/31/95 02/15/95 0.0000 0.0000 17,373,376 0.000000 0.000000 154.722356
02/28/95 13.92 02/28/95 03/15/95 0.0000 0.0000 0.00 17,921,746 0.000000 0.000000 154.722356
03/31/95 14.13 03/31/95 04/15/95 0.0996 0.0000 14.45 18,022,554 15.410347 1.066460 155.788816
04/30/95 14.54 04/30/95 05/15/95 0.0000 0.0000 18,022,554 0.000000 0.000000 155.788816
05/31/95 15.10 05/31/95 06/15/95 0.0000 0.0000 0.00 19,522,639 0.000000 0.000000 155.788816
06/30/95 15.46 06/30/95 07/15/95 0.1050 0.0000 15.91 20,061,885 16.357826 1.028147 156.816963
07/31/95 15.96 07/31/95 08/15/95 0.0000 0.0000 0.00 n/a 0.000000 0.000000 156.816963
08/31/95 16.07 08/31/95 09/15/95 0.0000 0.0000 0.00 20,702,746 0.000000 0.000000 156.816963
09/30/95 16.38 09/30/95 10/15/95 0.0819 0.0000 16.44 21,163,662 12.843309 0.781223 157.598186
10/31/95 16.17 10/31/95 11/15/95 0.0000 0.0000 0.00 20,916,516 0.000000 0.000000 157.598186
11/30/95 16.67 11/30/95 12/15/95 0.0000 0.0000 0.00 21,656,073 0.000000 0.000000 157.598186
12/31/95 15.96 12/31/95 12/31/95 0.0863 0.8560 15.96 20,955,648 148.504771 9.304810 166.902996
01/31/96 16.24 01/31/96 01/31/96 0.0000 0.0000 16.24 20,955,648 0.000000 0.000000 166.902996
02/28/96 16.19 02/28/96 02/28/96 0.0000 0.0000 16.19 22,892,971 0.000000 0.000000 166.902996
03/31/96 16.17 03/31/96 03/31/96 0.0784 0.0030 16.17 23,580,036 13.585904 0.840192 167.743188
04/30/96 16.47 04/30/96 04/30/96 0.0000 0.0000 16.47 25,016,888 0.000000 0.000000 167.743188
05/31/96 16.64 05/31/96 05/31/96 0.0000 0.0000 16.64 26,250,122 0.000000 0.000000 167.743188
06/30/96 16.60 06/30/96 06/30/96 0.0809 0.0000 16.60 26,809,586 13.576855 0.817883 168.561071
07/31/96 16.15 07/31/96 07/31/96 0.0000 16.15 26,809,586 0.000000 0.000000 168.561071
08/31/96 16.33 08/31/96 08/31/96 0.0000 0.0000 16.33 27,280,390 0.000000 0.000000 168.561071
09/30/96 16.80 09/30/96 09/30/96 0.0826 0.0000 16.80 28,244,004 13.923144 0.828759 169.389830
10/31/96 17.23 10/31/96 10/31/96 0.0000 0.0000 17.23 0 0.000000 0.000000 169.389830
11/30/96 18.37 11/30/96 11/30/96 0.0000 0.0000 18.37 0 0.000000 0.000000 169.389830
12/31/96 17.41 12/31/96 12/31/96 0.1276 0.8678 17.41 0 168.617920 9.685119 179.074949
</TABLE>
<PAGE>
NET CIF: TAX-EXEMPT FUND
RATE OF RETURN
1 YEAR PREPARED ON: 12/31/96
.........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
83.041528 12.15 1008.9546
PURCHASE DATE: 12/31/95
INITIAL INVESTMENT: $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 12.71 (3% SALES LOAD) 1008.9546 1,000.00 (8.9546)
SHARES PURCHASED: 78.67820614
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(8.9546) 1,000.00 0.0090
ONE YEAR NET RATE OF RETURN: 0.90%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/95 12.33 12/31/95 12/31/95 0.0498 0.0204 12.33 15,181,292 78.678206
01/31/96 12.35 01/31/96 01/31/96 0.0514 12.35 15,181,292 4.044060 0.327454 79.005660
02/28/96 12.24 02/28/96 02/28/96 0.0511 12.24 15,741,267 4.037189 0.329836 79.335496
03/31/96 12.05 03/31/96 03/31/96 0.0494 12.05 15,628,442 3.919174 0.325243 79.660739
04/30/96 11.94 04/30/96 04/30/96 0.0532 11.94 15,347,660 4.237506 0.354900 80.015639
05/31/96 11.90 05/31/96 05/31/96 0.0504 11.90 15,677,247 4.029097 0.338580 80.354218
06/30/96 11.95 06/30/96 06/30/96 0.0474 11.95 15,714,277 3.812291 0.319020 80.673238
07/31/96 12.02 07/31/96 07/31/96 0.0535 12.02 15,714,277 4.317222 0.359170 81.032408
08/31/96 11.99 08/31/96 08/31/96 0.0499 11.99 15,470,095 4.046638 0.337501 81.369909
09/30/96 12.06 09/30/96 09/30/96 0.0511 12.06 14,909,360 4.158002 0.344776 81.714686
10/31/96 12.12 10/31/96 10/31/96 0.0503 12.12 4.113190 0.339372 82.054058
11/30/96 12.27 11/30/96 11/30/96 0.0514 12.27 4.219548 0.343891 82.397949
12/31/96 12.15 12/31/96 12/31/96 0.0519 0.0430 12.15 7.819483 0.643579 83.041528
</TABLE>
<PAGE>
NET CIF: TAX-EXEMPT FUND
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/96
ROLLING
.......
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
111.075650 12.15 1349.5691
PURCHASE DATE: 12/31/91
INITIAL INVESTMENT: $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 11.73 (3% SALES LOAD) 1349.5691 1,000.00 (349.5691)
SHARES PURCHASED: 85.2514919
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(349.5691) 1,000.00 0.3496
NET 5 YEAR RETURN: 34.96%
ANNUALIZED NET 5 YEAR RETURN: 6.18%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/91 11.38 12/31/91 01/15/92 0.0542 11.46 6,724,553 85.251492
01/31/92 11.37 01/31/92 02/14/92 0.0518 11.30 6,979,104 4.416027 0.390799 85.642291
02/28/92 11.30 02/28/92 03/15/92 0.0487 11.26 7,053,641 4.170780 0.370407 86.012697
03/31/92 11.29 03/31/92 04/15/92 0.0601 11.42 7,118,759 5.169363 0.452659 86.465356
04/30/92 11.35 04/30/92 05/15/92 0.0499 11.46 7,330,710 4.314621 0.376494 86.841850
05/29/92 11.44 05/29/92 06/16/92 0.0499 11.50 7,621,702 4.333408 0.376818 87.218668
06/30/92 11.58 06/30/92 07/15/92 0.0527 11.78 8,084,715 4.596424 0.390189 87.608857
07/31/92 12.00 07/31/92 08/14/92 0.0502 11.94 8,608,385 4.397965 0.368339 87.977196
08/31/92 11.74 08/31/92 09/15/92 0.0516 11.79 8,529,170 4.539623 0.385040 88.362236
09/30/92 11.72 09/30/92 10/15/92 0.0524 11.67 8,637,959 4.630181 0.396759 88.758995
10/31/92 11.47 10/31/92 11/13/92 0.0518 11.64 8,534,470 4.597716 0.394993 89.153988
11/30/92 11.7 11/30/92 12/15/92 0.0496 11.77 9,184,242 4.422038 0.375704 89.529692
12/31/92 11.74 12/31/92 12/31/92 0.0505 0.0413 11.74 9,250,893 8.218826 0.700070 90.229763
01/29/93 11.8 01/29/93 02/12/93 0.0482 0.0074 11.92 9,645,668 5.016775 0.420870 90.650633
02/26/93 12.13 02/26/93 03/15/93 0.0449 12.09 10,246,855 4.070213 0.336660 90.987292
03/31/93 12.09 03/31/93 04/15/93 0.0565 12.19 10,859,516 5.140782 0.421721 91.409014
04/30/93 12.14 04/30/93 05/14/93 0.0497 12.19 11,297,394 4.543028 0.372685 91.781699
05/28/93 12.17 05/28/93 06/15/93 0.0449 12.21 12,303,691 4.120998 0.337510 92.119209
06/30/93 12.3 06/30/93 07/15/93 0.0499 12.35 13,370,158 4.596749 0.372206 92.491415
07/30/93 12.25 07/30/93 08/16/93 0.0461 12.38 14,328,028 4.263854 0.344415 92.835830
08/31/93 12.43 08/31/93 09/15/93 0.0483 12.56 14,328,028 4.483971 0.357004 93.192834
09/30/93 12.59 09/30/93 10/15/93 0.0492 12.71 15,130,849 4.585087 0.360746 93.553580
10/31/93 12.57 10/31/93 11/15/93 0.0469 12.46 15,599,581 4.387663 0.352140 93.905720
11/30/93 12.41 11/30/93 12/15/93 0.0498 12.57 15,907,412 4.676505 0.372037 94.277757
12/31/93 12.58 12/31/93 01/14/94 0.0490 0.0028 12.61 16,406,372 4.883588 0.387279 94.665036
01/31/94 12.66 01/31/94 02/15/94 0.0493 12.55 16,755,110 4.666986 0.371871 95.036907
02/28/94 12.31 02/28/94 03/15/94 0.0502 12.06 16,599,778 4.770853 0.395593 95.432501
03/31/94 11.82 03/31/94 04/15/94 0.0483 11.74 16,375,493 4.609390 0.392623 95.825123
04/30/94 11.73 04/30/94 05/15/94 0.0474 11.69 16,016,440 4.542111 0.388547 96.213670
05/31/94 11.77 05/31/94 06/15/94 0.0528 11.97 15,890,838 5.080082 0.424401 96.638071
06/30/94 11.70 06/30/94 07/15/94 0.0513 11.75 15,741,588 4.957533 0.421918 97.059989
07/29/94 11.82 07/29/94 08/15/94 0.0501 11.74 15,805,744 4.862705 0.414200 97.474189
08/31/94 11.82 08/31/94 09/15/94 0.0541 11.75 15,476,818 5.273354 0.448796 97.922985
09/30/94 11.57 09/30/94 10/15/94 0.0525 11.58 15,144,983 5.140957 0.443951 98.366936
10/31/94 11.33 10/31/94 11/15/94 0.0523 11.05 14,601,995 5.144591 0.465574 98.832510
11/30/94 11.01 11/30/94 12/15/94 0.0533 11.20 13,862,752 5.267773 0.470337 99.302847
12/31/94 11.22 12/31/94 01/15/95 0.0567 11.33 13,973,940 5.630471 0.496952 99.799799
01/31/95 11.39 01/31/95 02/15/95 0.0525 0.0011 11.62 14,027,640 5.349269 0.460350 100.260149
02/28/95 11.71 02/28/95 03/15/95 0.0530 11.79 14,390,550 5.313788 0.450703 100.710852
03/31/95 11.81 03/31/95 04/15/95 0.0511 11.89 14,760,906 5.146325 0.432828 101.143680
04/30/95 11.80 04/30/95 05/15/95 0.0486 11.96 4.915583 0.411002 101.554682
05/31/95 12.05 05/31/95 06/15/95 0.0548 12.05 15,118,186 5.560830 0.461480 102.016162
06/30/95 11.92 06/30/95 07/15/95 0.0518 12.06 15,101,454 5.284437 0.438179 102.454341
07/31/95 11.94 07/31/95 08/15/95 0.0519 12.21 n/a 5.317380 0.435494 102.889835
08/31/95 11.97 08/31/95 09/15/95 0.0523 12.45 14,678,329 5.381138 0.432220 103.322054
09/30/95 11.98 09/30/95 10/15/95 0.0508 12.16 14,692,304 5.248760 0.431641 103.753696
10/31/95 12.11 10/31/95 11/15/95 0.0530 12.18 15,083,403 5.498946 0.451473 104.205169
11/30/95 12.27 11/30/95 12/15/95 0.0517 12.29 15,146,074 5.387407 0.438357 104.643526
12/31/95 12.33 12/31/95 12/31/95 0.0498 0.0204 12.33 15,181,292 7.345976 0.595781 105.239307
01/31/96 12.35 01/31/96 01/31/96 0.0514 12.35 15,181,292 5.409300 0.438000 105.677307
02/28/96 12.24 02/28/96 02/28/96 0.0511 12.24 15,741,267 5.400110 0.441185 106.118492
03/31/96 12.05 03/31/96 03/31/96 0.0494 12.05 15,628,442 5.242254 0.435042 106.553534
04/30/96 11.94 04/30/96 04/30/96 0.0532 11.94 15,347,660 5.668052 0.474711 107.028245
05/31/96 11.90 05/31/96 05/31/96 0.0504 11.90 15,677,247 5.389286 0.452881 107.481127
</TABLE>
<PAGE>
NET CIF: TAX-EXEMPT FUND
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/96
ROLLING
.........
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
06/30/96 11.95 06/30/96 06/30/96 0.0474 11.95 15,714,277 5.099288 0.426719 107.907845
07/31/96 12.02 07/31/96 07/31/96 0.0535 12.02 15,714,277 5.774680 0.480423 108.388268
08/31/96 11.99 08/31/96 08/31/96 0.0499 11.99 15,470,095 5.412749 0.451439 108.839707
09/30/96 12.06 09/30/96 09/30/96 0.0511 12.06 14,909,360 5.561709 0.461170 109.300877
10/31/96 12.12 10/31/96 10/31/96 0.0503 12.12 5.501769 0.453941 109.754818
11/30/96 12.27 11/30/96 11/30/96 0.0514 12.27 5.644032 0.459986 110.214804
12/31/96 12.15 12/31/96 12/31/96 0.0519 0.0430 12.15 10.459275 0.860846 111.075650
</TABLE>
<PAGE>
NET CIF: TAX-EXEMPT FUND
RATE OF RETURN
SINCE PREPARED ON: 12/31/96
INCEPTION
.........
<TABLE>
<CAPTION>
SHARES TO DA X (NAV + NOT REINVESTED) GROSS VALUE
166.689217 12.15 2025.2740
PURCHASE DATE: 12/10/87
INITIAL INVESTMENT: $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.31 (3% SALES LOAD) 2025.2740 1,000.00 (1025.2740)
SHARES PURCHASED 96.993
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(1025.2740) 1,000.00 1.0253
NET RATE OF RETURN SINCE INCEPTION: 102.53%
ANNUALIZED NET RATE OF RETURN SINCE INCEPTION: 8.10%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/87 10.11 12/31/87 01/14/88 0.0369 10.20 1,116,723 3.579049 0.350887 97.344098
01/29/88 10.51 01/29/88 02/12/88 0.0500 10.62 1,168,306 4.867205 0.458306 97.802403
02/29/88 10.57 02/29/88 03/15/88 0.0800 10.42 1,174,346 7.824192 0.750882 98.553285
03/31/88 10.18 03/31/88 04/15/88 0.0688 10.18 1,139,983 6.780466 0.666058 99.219343
04/29/88 10.14 04/29/88 05/15/88 0.0640 10.15 1,150,259 6.350038 0.625620 99.844962
05/31/88 10.08 05/31/88 06/15/88 0.0700 10.37 1,143,877 6.989147 0.673978 100.518940
06/30/88 10.32 06/30/88 07/15/88 0.0600 10.28 1,212,755 6.031136 0.586686 101.105626
07/29/88 10.27 07/29/88 08/15/88 0.0684 10.25 1,212,755 6.915625 0.674695 101.780322
08/31/88 10.29 08/31/88 09/15/88 0.0682 10.52 1,174,677 6.941418 0.659831 102.440152
09/30/88 10.51 09/30/88 10/14/88 0.0685 10.62 1,256,800 7.017150 0.660749 103.100901
10/31/88 10.74 10/31/88 11/15/88 0.0638 10.66 1,386,748 6.577837 0.617058 103.717959
11/30/88 10.52 11/30/88 12/15/88 0.0668 10.51 1,386,748 6.928360 0.659216 104.377175
12/30/88 10.68 12/30/88 01/13/88 0.0635 0.0005 10.78 1,569,279 6.683375 0.619979 104.997154
01/31/89 10.60 01/31/89 02/15/89 0.0591 0.0228 10.60 1,856,583 8.600317 0.811351 105.808504
02/28/89 10.57 02/28/89 03/15/89 0.0575 10.61 2,040,325 6.083989 0.573420 106.381925
03/31/89 10.48 03/31/89 04/14/89 0.0690 10.64 2,117,780 7.340353 0.689883 107.071807
04/28/89 10.81 04/28/89 05/15/89 0.0616 10.96 2,211,555 6.595623 0.601790 107.673598
05/31/89 11.00 05/31/89 06/15/89 0.0724 11.15 2,297,634 7.795568 0.699154 108.372752
06/30/89 11.15 06/30/89 07/14/89 0.0623 11.15 2,423,878 6.751622 0.605527 108.978279
07/31/89 11.16 07/31/89 08/15/89 0.0681 11.02 2,515,366 7.421421 0.673450 109.651729
08/31/89 10.93 08/31/89 09/15/89 0.0670 10.95 2,579,708 7.346666 0.670928 110.322657
09/29/89 10.82 09/29/89 10/13/89 0.0613 11.07 2,611,028 6.762779 0.610910 110.933568
10/31/89 10.92 10/31/89 11/15/89 0.0678 11.03 2,722,479 7.521296 0.681894 111.615462
11/30/89 11.07 11/30/89 12/15/89 0.0634 11.13 1,609,719 7.077536 0.635897 112.251359
12/29/89 11.01 12/29/89 01/15/90 0.0631 0.0739 10.97 3,004,075 15.379671 1.401975 113.653335
01/31/90 10.74 01/31/90 02/15/90 0.0532 10.85 3,029,448 6.046357 0.557268 114.210603
02/28/90 10.76 02/28/90 03/15/90 0.0539 10.76 3,733,981 6.155951 0.572114 114.782717
03/30/90 10.70 03/30/90 04/12/90 0.0535 10.76 3,337,849 6.140875 0.570713 115.353431
04/30/90 10.51 04/30/90 05/15/90 0.0549 10.76 3,411,081 6.332903 0.588560 115.941990
05/31/90 10.75 05/31/90 06/15/90 0.0572 10.83 3,301,132 6.631882 0.612362 116.554353
06/29/90 10.83 06/29/90 07/13/90 0.0495 10.90 3,717,483 5.769440 0.529306 117.083659
07/31/90 10.95 07/31/90 08/15/90 0.0567 10.85 3,820,763 6.638643 0.611857 117.695516
08/31/90 10.58 08/31/90 09/14/90 0.0583 10.67 3,592,358 6.861649 0.643079 118.338594
09/29/90 10.53 09/29/90 10/15/90 0.0496 10.57 3,830,047 5.869594 0.555307 118.893901
10/31/90 10.66 10/31/90 11/15/90 0.0571 10.88 4,038,241 6.788842 0.623974 119.517876
11/30/90 10.89 11/30/90 12/14/90 0.0539 10.96 4,294,259 6.442013 0.587775 120.105651
12/31/90 10.88 12/31/90 01/15/91 0.0547 0.0147 10.87 4,311,013 8.335332 0.766820 120.872470
01/31/91 10.95 01/31/91 02/15/91 0.0550 11.12 4,665,829 6.647986 0.597840 121.470311
02/28/91 10.96 02/28/91 03/15/91 0.0540 10.99 4,655,184 6.559397 0.596851 122.067162
03/28/91 10.94 03/28/91 04/15/91 0.0501 11.04 4,747,680 6.115565 0.553946 122.621108
04/30/91 11.04 04/30/91 05/15/91 0.0572 11.04 4,869,752 7.013927 0.635320 123.256428
05/31/91 11.05 05/31/91 06/14/91 0.0504 10.90 5,318,177 6.212124 0.569920 123.826347
06/28/91 10.95 06/28/91 07/15/91 0.0496 11.03 5,370,829 6.141787 0.556826 124.383173
07/31/91 11.07 07/31/91 08/15/91 0.0561 11.15 5,625,261 6.977896 0.625820 125.008993
08/30/91 11.13 08/30/91 09/14/91 0.0542 11.18 5,689,530 6.775487 0.606036 125.615030
09/30/91 11.21 09/30/91 10/15/91 0.0523 11.26 3,832,831 6.569666 0.583452 126.198482
10/31/91 11.24 10/31/91 11/15/91 0.0526 11.26 6,112,031 6.638040 0.589524 126.788006
11/29/91 11.22 11/29/91 12/13/91 0.0485 11.28 6,508,228 6.149218 0.545143 127.333149
12/31/91 11.38 12/31/91 01/15/92 0.0542 11.46 6,724,553 6.901457 0.602221 127.935370
01/31/92 11.37 01/31/92 02/14/92 0.0518 11.30 6,979,104 6.627052 0.586465 128.521835
02/28/92 11.30 02/28/92 03/15/92 0.0487 11.26 7,053,641 6.259013 0.555863 129.077698
03/31/92 11.29 03/31/92 04/15/92 0.0601 11.42 7,118,759 7.757570 0.679297 129.756995
04/30/92 11.35 04/30/92 05/15/92 0.0499 11.46 7,330,710 6.474874 0.564998 130.321992
05/29/92 11.44 05/29/92 06/16/92 0.0499 11.50 7,621,702 6.503067 0.565484 130.887476
</TABLE>
<PAGE>
NET CIF: TAX-EXEMPT FUND
RATE OF RETURN
SINCE PREPARED ON: 12/31/96
INCEPTION
.........
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
06/30/92 11.58 06/30/92 07/15/92 0.0527 11.78 8,084,715 6.897770 0.585549 131.473026
07/31/92 12.00 07/31/92 08/14/92 0.0502 11.94 8,608,385 6.599946 0.552759 132.025785
08/31/92 11.74 08/31/92 09/15/92 0.0516 11.79 8,529,170 6.812531 0.577823 132.603608
09/30/92 11.72 09/30/92 10/15/92 0.0524 11.67 8,637,959 6.948429 0.595410 133.199017
10/31/92 11.47 10/31/92 11/13/92 0.0518 11.64 8,534,470 6.899709 0.592759 133.791776
11/30/92 11.7 11/30/92 12/15/92 0.0496 11.77 9,184,242 6.636072 0.563812 134.355588
12/31/92 11.74 12/31/92 12/31/92 0.0505 0.0413 11.74 9,250,893 12.333843 1.050583 135.406171
01/29/93 11.8 01/29/93 02/12/93 0.0482 0.0074 11.92 9,645,668 7.528583 0.631593 136.037764
02/26/93 12.13 02/26/93 03/15/93 0.0449 12.09 10,246,855 6.108096 0.505219 136.542982
03/31/93 12.09 03/31/93 04/15/93 0.0565 12.19 10,859,516 7.714679 0.632869 137.175852
04/30/93 12.14 04/30/93 05/14/93 0.0497 12.19 11,297,394 6.817640 0.559281 137.735133
05/28/93 12.17 05/28/93 06/15/93 0.0449 12.21 12,303,691 6.184307 0.506495 138.241629
06/30/93 12.3 06/30/93 07/15/93 0.0499 12.35 13,370,158 6.898257 0.558563 138.800192
07/30/93 12.25 07/30/93 08/16/93 0.0461 12.38 14,328,028 6.398689 0.516857 139.317049
08/31/93 12.43 08/31/93 09/15/93 0.0483 12.56 14,328,028 6.729013 0.535749 139.852798
09/30/93 12.59 09/30/93 10/15/93 0.0492 12.71 15,130,849 6.880758 0.541366 140.394164
10/31/93 12.57 10/31/93 11/15/93 0.0469 12.46 15,599,581 6.584486 0.528450 140.922614
11/30/93 12.41 11/30/93 12/15/93 0.0498 12.57 15,907,412 7.017946 0.558309 141.480923
12/31/93 12.58 12/31/93 01/14/94 0.0490 0.0028 12.61 16,406,372 7.328712 0.581183 142.062106
01/31/94 12.66 01/31/94 02/15/94 0.0493 12.55 16,755,110 7.003662 0.558061 142.620166
02/28/94 12.31 02/28/94 03/15/94 0.0502 12.06 16,599,778 7.159532 0.593659 143.213826
03/31/94 11.82 03/31/94 04/15/94 0.0483 11.74 16,375,493 6.917228 0.589202 143.803027
04/30/94 11.73 04/30/94 05/15/94 0.0474 11.69 16,016,440 6.816263 0.583085 144.386112
05/31/94 11.77 05/31/94 06/15/94 0.0528 11.97 15,890,838 7.623587 0.636891 145.023003
06/30/94 11.70 06/30/94 07/15/94 0.0513 11.75 15,741,588 7.439680 0.633164 145.656168
07/29/94 11.82 07/29/94 08/15/94 0.0501 11.74 15,805,744 7.297374 0.621582 146.277750
08/31/94 11.82 08/31/94 09/15/94 0.0541 11.75 15,476,818 7.913626 0.673500 146.951250
09/30/94 11.57 09/30/94 10/15/94 0.0525 11.58 15,144,983 7.714941 0.666230 147.617480
10/31/94 11.33 10/31/94 11/15/94 0.0523 11.05 14,601,995 7.720394 0.698678 148.316158
11/30/94 11.01 11/30/94 12/15/94 0.0533 11.20 13,862,752 7.905251 0.705826 149.021984
12/31/94 11.22 12/31/94 01/15/95 0.0567 11.33 13,973,940 8.449546 0.745768 149.767751
01/31/95 11.39 01/31/95 02/15/95 0.0525 0.0011 11.62 14,027,640 8.027551 0.690839 150.458591
02/28/95 11.71 02/28/95 03/15/95 0.0530 11.79 14,390,550 7.974305 0.676362 151.134952
03/31/95 11.81 03/31/95 04/15/95 0.0511 11.89 14,760,906 7.722996 0.649537 151.784490
04/30/95 11.80 04/30/95 05/15/95 0.0486 11.96 7.376726 0.616783 152.401273
05/31/95 12.05 05/31/95 06/15/95 0.0548 12.05 15,118,186 8.345036 0.692534 153.093807
06/30/95 11.92 06/30/95 07/15/95 0.0518 12.06 15,101,454 7.930259 0.657567 153.751374
07/31/95 11.94 07/31/95 08/15/95 0.0519 12.21 n/a 7.979696 0.653538 154.404912
08/31/95 11.97 08/31/95 09/15/95 0.0523 12.45 14,678,329 8.075377 0.648625 155.053536
09/30/95 11.98 09/30/95 10/15/95 0.0508 12.16 14,692,304 7.876720 0.647757 155.701293
10/31/95 12.11 10/31/95 11/15/95 0.0530 12.18 15,083,403 8.252169 0.677518 156.378811
11/30/95 12.27 11/30/95 12/15/95 0.0517 12.29 15,146,074 8.084785 0.657834 157.036645
12/31/95 12.33 12/31/95 12/31/95 0.0498 0.0204 12.33 15,181,292 11.023972 0.894077 157.930722
01/31/96 12.35 01/31/96 01/31/96 0.0514 12.35 15,181,292 8.117639 0.657299 158.588021
02/28/96 12.24 02/28/96 02/28/96 0.0511 12.24 15,741,267 8.103848 0.662079 159.250100
03/31/96 12.05 03/31/96 03/31/96 0.0494 12.05 15,628,442 7.866955 0.652859 159.902960
04/30/96 11.94 04/30/96 04/30/96 0.0532 11.94 15,347,660 8.505943 0.712391 160.615350
05/31/96 11.90 05/31/96 05/31/96 0.0504 11.90 15,677,247 8.087604 0.679631 161.294981
06/30/96 11.95 06/30/96 06/30/96 0.0474 11.95 15,714,277 7.652410 0.640369 161.935350
07/31/96 12.02 07/31/96 07/31/96 0.0535 12.02 15,714,277 8.665958 0.720962 162.656311
08/31/96 11.99 08/31/96 08/31/96 0.0499 11.99 15,470,095 8.122815 0.677466 163.333777
09/30/96 12.06 09/30/96 09/30/96 0.0511 12.06 14,909,360 8.346356 0.692069 164.025846
10/31/96 12.12 10/31/96 10/31/96 0.0503 12.12 8.256405 0.681222 164.707068
11/30/96 12.27 11/30/96 11/30/96 0.0514 12.27 8.469896 0.690293 165.397361
12/31/96 12.15 12/31/96 12/31/96 0.0519 0.0430 12.15 15.696044 1.291855 166.689217
</TABLE>
<PAGE>
GROSS CIF: TAX-EXEMPT FUND
RATE OF RETURN
1 YEAR PREPARED ON: 12/31/96
........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
85.600797 12.15 1040.0497
PURCHASE DATE: 12/31/95
INITIAL INVESTMENT: $ 1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 12.33 1040.0497 1,000.00 (40.0497)
SHARES PURCHASED: 81.10300081
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(40.0497) 1,000.00 0.0400
ONE YEAR NET RATE OF RETURN: 4.00%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/95 12.33 12/31/95 12/31/95 0.0498 0.0204 12.33 15,181,292 81.103001
01/31/96 12.35 01/31/96 01/31/96 0.0514 12.35 15,181,292 4.168694 0.337546 81.440547
02/28/96 12.24 02/28/96 02/28/96 0.0511 12.24 15,741,267 4.161612 0.340001 81.780548
03/31/96 12.05 03/31/96 03/31/96 0.0494 12.05 15,628,442 4.039959 0.335266 82.115814
04/30/96 11.94 04/30/96 04/30/96 0.0532 11.94 15,347,660 4.368102 0.365838 82.481652
05/31/96 11.90 05/31/96 05/31/96 0.0504 11.90 15,677,247 4.153270 0.349014 82.830666
06/30/96 11.95 06/30/96 06/30/96 0.0474 11.95 15,714,277 3.929783 0.328852 83.159518
07/31/96 12.02 07/31/96 07/31/96 0.0535 12.02 15,714,277 4.450275 0.370239 83.529757
08/31/96 11.99 08/31/96 08/31/96 0.0499 11.99 15,470,095 4.171352 0.347903 83.877660
09/30/96 12.06 09/30/96 09/30/96 0.0511 12.06 14,909,360 4.286148 0.355402 84.233062
10/31/96 12.12 10/31/96 10/31/96 0.0503 12.12 4.239955 0.349831 84.582893
11/30/96 12.27 11/30/96 11/30/96 0.0514 12.27 4.349591 0.354490 84.937383
12/31/96 12.15 12/31/96 12/31/96 0.0519 0.0430 12.15 8.060473 0.663413 85.600797
</TABLE>
<PAGE>
GROSS CIF: TAX-EXEMPT FUND
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/96
ROLLING
.........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
114.491860 12.15 1391.0761
PURCHASE DATE: 12/31/91
INITIAL INVESTMENT: $ 1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 11.38 1391.0761 1,000.00 (391.0761)
SHARES PURCHASED: 87.87346221
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(391.0761) 1,000.00 0.3911
GROSS 5 YEAR RETURN: 39.11%
ANNUALIZED GROSS 5 YEAR RETURN: 6.82%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/91 11.38 12/31/91 01/15/92 0.0542 11.46 6,724,553 87.873462
01/31/92 11.37 01/31/92 02/14/92 0.0518 11.30 6,979,104 4.551845 0.402818 88.276280
02/28/92 11.30 02/28/92 03/15/92 0.0487 11.26 7,053,641 4.299055 0.381799 88.658079
03/31/92 11.29 03/31/92 04/15/92 0.0601 11.42 7,118,759 5.328351 0.466581 89.124660
04/30/92 11.35 04/30/92 05/15/92 0.0499 11.46 7,330,710 4.447321 0.388073 89.512733
05/29/92 11.44 05/29/92 06/16/92 0.0499 11.50 7,621,702 4.466685 0.388407 89.901141
06/30/92 11.58 06/30/92 07/15/92 0.0527 11.78 8,084,715 4.737790 0.402189 90.303330
07/31/92 12.00 07/31/92 08/14/92 0.0502 11.94 8,608,385 4.533227 0.379667 90.682997
08/31/92 11.74 08/31/92 09/15/92 0.0516 11.79 8,529,170 4.679243 0.396882 91.079880
09/30/92 11.72 09/30/92 10/15/92 0.0524 11.67 8,637,959 4.772586 0.408962 91.488841
10/31/92 11.47 10/31/92 11/13/92 0.0518 11.64 8,534,470 4.739122 0.407141 91.895982
11/30/92 11.7 11/30/92 12/15/92 0.0496 11.77 9,184,242 4.558041 0.387259 92.283242
12/31/92 11.74 12/31/92 12/31/92 0.0505 0.0413 11.74 9,250,893 8.471602 0.721601 93.004843
01/29/93 11.8 01/29/93 02/12/93 0.0482 0.0074 11.92 9,645,668 5.171069 0.433815 93.438658
02/26/93 12.13 02/26/93 03/15/93 0.0449 12.09 10,246,855 4.195396 0.347014 93.785671
03/31/93 12.09 03/31/93 04/15/93 0.0565 12.19 10,859,516 5.298890 0.434692 94.220363
04/30/93 12.14 04/30/93 05/14/93 0.0497 12.19 11,297,394 4.682752 0.384147 94.604510
05/28/93 12.17 05/28/93 06/15/93 0.0449 12.21 12,303,691 4.247743 0.347890 94.952400
06/30/93 12.3 06/30/93 07/15/93 0.0499 12.35 13,370,158 4.738125 0.383654 95.336054
07/30/93 12.25 07/30/93 08/16/93 0.0461 12.38 14,328,028 4.394992 0.355007 95.691062
08/31/93 12.43 08/31/93 09/15/93 0.0483 12.56 14,328,028 4.621878 0.367984 96.059046
09/30/93 12.59 09/30/93 10/15/93 0.0492 12.71 15,130,849 4.726105 0.371841 96.430887
10/31/93 12.57 10/31/93 11/15/93 0.0469 12.46 15,599,581 4.522609 0.362970 96.793857
11/30/93 12.41 11/30/93 12/15/93 0.0498 12.57 15,907,412 4.820334 0.383479 97.177337
12/31/93 12.58 12/31/93 01/14/94 0.0490 0.0028 12.61 16,406,372 5.033786 0.399190 97.576527
01/31/94 12.66 01/31/94 02/15/94 0.0493 12.55 16,755,110 4.810523 0.383309 97.959835
02/28/94 12.31 02/28/94 03/15/94 0.0502 12.06 16,599,778 4.917584 0.407760 98.367595
03/31/94 11.82 03/31/94 04/15/94 0.0483 11.74 16,375,493 4.751155 0.404698 98.772293
04/30/94 11.73 04/30/94 05/15/94 0.0474 11.69 16,016,440 4.681807 0.400497 99.172790
05/31/94 11.77 05/31/94 06/15/94 0.0528 11.97 15,890,838 5.236323 0.437454 99.610244
06/30/94 11.70 06/30/94 07/15/94 0.0513 11.75 15,741,588 5.110006 0.434894 100.045138
07/29/94 11.82 07/29/94 08/15/94 0.0501 11.74 15,805,744 5.012261 0.426939 100.472077
08/31/94 11.82 08/31/94 09/15/94 0.0541 11.75 15,476,818 5.435539 0.462599 100.934676
09/30/94 11.57 09/30/94 10/15/94 0.0525 11.58 15,144,983 5.299070 0.457605 101.392281
10/31/94 11.33 10/31/94 11/15/94 0.0523 11.05 14,601,995 5.302816 0.479893 101.872174
11/30/94 11.01 11/30/94 12/15/94 0.0533 11.20 13,862,752 5.429787 0.484802 102.356976
12/31/94 11.22 12/31/94 01/15/95 0.0567 11.33 13,973,940 5.803641 0.512237 102.869213
01/31/95 11.39 01/31/95 02/15/95 0.0525 0.0011 11.62 14,027,640 5.513790 0.474509 103.343722
02/28/95 11.71 02/28/95 03/15/95 0.0530 11.79 14,390,550 5.477217 0.464565 103.808286
03/31/95 11.81 03/31/95 04/15/95 0.0511 11.89 14,760,906 5.304603 0.446140 104.254426
04/30/95 11.80 04/30/95 05/15/95 0.0486 11.96 5.066765 0.423643 104.678069
05/31/95 12.05 05/31/95 06/15/95 0.0548 12.05 15,118,186 5.731857 0.475673 105.153741
06/30/95 11.92 06/30/95 07/15/95 0.0518 12.06 15,101,454 5.446964 0.451655 105.605397
07/31/95 11.94 07/31/95 08/15/95 0.0519 12.21 n/a 5.480920 0.448888 106.054285
08/31/95 11.97 08/31/95 09/15/95 0.0523 12.45 14,678,329 5.546639 0.445513 106.499798
09/30/95 11.98 09/30/95 10/15/95 0.0508 12.16 14,692,304 5.410190 0.444917 106.944715
10/31/95 12.11 10/31/95 11/15/95 0.0530 12.18 15,083,403 5.668070 0.465359 107.410073
11/30/95 12.27 11/30/95 12/15/95 0.0517 12.29 15,146,074 5.553101 0.451839 107.861912
12/31/95 12.33 12/31/95 12/31/95 0.0498 0.0204 12.33 15,181,292 7.571906 0.614104 108.476017
01/31/96 12.35 01/31/96 01/31/96 0.0514 12.35 15,181,292 5.575667 0.451471 108.927488
02/28/96 12.24 02/28/96 02/28/96 0.0511 12.24 15,741,267 5.566195 0.454754 109.382242
03/31/96 12.05 03/31/96 03/31/96 0.0494 12.05 15,628,442 5.403483 0.448422 109.830664
04/30/96 11.94 04/30/96 04/30/96 0.0532 11.94 15,347,660 5.842377 0.489311 110.319975
05/31/96 11.90 05/31/96 05/31/96 0.0504 11.90 15,677,247 5.555037 0.466810 110.786785
06/30/96 11.95 06/30/96 06/30/96 0.0474 11.95 15,714,277 5.256121 0.439843 111.226628
</TABLE>
<PAGE>
GROSS CIF: TAX-EXEMPT FUND
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/96
ROLLING
...........
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/96 12.02 07/31/96 07/31/96 0.0535 12.02 15,714,277 5.952285 0.495198 111.721826
08/31/96 11.99 08/31/96 08/31/96 0.0499 11.99 15,470,095 5.579222 0.465323 112.187149
09/30/96 12.06 09/30/96 09/30/96 0.0511 12.06 14,909,360 5.732763 0.475354 112.662503
10/31/96 12.12 10/31/96 10/31/96 0.0503 12.12 5.670980 0.467903 113.130405
11/30/96 12.27 11/30/96 11/30/96 0.0514 12.27 5.817618 0.474133 113.604539
12/31/96 12.15 12/31/96 12/31/96 0.0519 0.0430 12.15 10.780957 0.887322 114.491860
</TABLE>
<PAGE>
GROSS CIF: TAX-EXEMPT FUND
RATE OF RETURN
SINCE PREPARED ON: 12/31/96
INCEPTION
............
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) = GROSS VALUE
171.856582 12.15 0 2088.0575
PURCHASE DATE: 12/10/87
INITIAL INVESTMENT: $1,000.00 GROSS VALUE - INITIAL INVESTMENT = NET VALUE
INITIAL VALUE: 10.00 2088.0575 1,000.00 (1088.0575)
SHARES PURCHASED: 100.000
NET VALUE / INITIAL INVESTMENT = GROSS RATE OF RETURN
(1088.0575) 1,000.00 1.0881
GROSS RATE OF RETURN SINCE INCEPTION: 108.81%
ANNUALIZED GROSS RATE OF RETURN SINCE INCEPTION: 8.46%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/87 10.11 12/31/87 01/14/88 0.0369 10.20 1,116,723 3.690000 0.361765 100.361765
01/29/88 10.51 01/29/88 02/12/88 0.0500 10.62 1,168,306 5.018088 0.472513 100.834278
02/29/88 10.57 02/29/88 03/15/88 0.0800 10.42 1,174,346 8.066742 0.774160 101.608437
03/31/88 10.18 03/31/88 04/15/88 0.0688 10.18 1,139,983 6.990660 0.686705 102.295143
04/29/88 10.14 04/29/88 05/15/88 0.0640 10.15 1,150,259 6.546889 0.645014 102.940156
05/31/88 10.08 05/31/88 06/15/88 0.0700 10.37 1,143,877 7.205811 0.694871 103.635027
06/30/88 10.32 06/30/88 07/15/88 0.0600 10.28 1,212,755 6.218102 0.604874 104.239901
07/29/88 10.27 07/29/88 08/15/88 0.0684 10.25 1,212,755 7.130009 0.695611 104.935512
08/31/88 10.29 08/31/88 09/15/88 0.0682 10.52 1,174,677 7.156602 0.680285 105.615797
09/30/88 10.51 09/30/88 10/14/88 0.0685 10.62 1,256,800 7.234682 0.681232 106.297029
10/31/88 10.74 10/31/88 11/15/88 0.0638 10.66 1,386,748 6.781750 0.636187 106.933215
11/30/88 10.52 11/30/88 12/15/88 0.0668 10.51 1,386,748 7.143139 0.679652 107.612867
12/30/88 10.68 12/30/88 01/13/88 0.0635 0.0005 10.78 1,569,279 6.890559 0.639198 108.252066
01/31/89 10.60 01/31/89 02/15/89 0.0591 0.0228 10.60 1,856,583 8.866927 0.836503 109.088568
02/28/89 10.57 02/28/89 03/15/89 0.0575 10.61 2,040,325 6.272593 0.591196 109.679764
03/31/89 10.48 03/31/89 04/14/89 0.0690 10.64 2,117,780 7.567904 0.711269 110.391034
04/28/89 10.81 04/28/89 05/15/89 0.0616 10.96 2,211,555 6.800088 0.620446 111.011479
05/31/89 11.00 05/31/89 06/15/89 0.0724 11.15 2,297,634 8.037231 0.720828 111.732307
06/30/89 11.15 06/30/89 07/14/89 0.0623 11.15 2,423,878 6.960923 0.624298 112.356605
07/31/89 11.16 07/31/89 08/15/89 0.0681 11.02 2,515,366 7.651485 0.694327 113.050932
08/31/89 10.93 08/31/89 09/15/89 0.0670 10.95 2,579,708 7.574412 0.691727 113.742660
09/29/89 10.82 09/29/89 10/13/89 0.0613 11.07 2,611,028 6.972425 0.629849 114.372508
10/31/89 10.92 10/31/89 11/15/89 0.0678 11.03 2,722,479 7.754456 0.703033 115.075542
11/30/89 11.07 11/30/89 12/15/89 0.0634 11.13 1,609,719 7.296940 0.655610 115.731152
12/29/89 11.01 12/29/89 01/15/90 0.0631 0.0739 10.97 3,004,075 15.856441 1.445437 117.176588
01/31/90 10.74 01/31/90 02/15/90 0.0532 10.85 3,029,448 6.233794 0.574543 117.751132
02/28/90 10.76 02/28/90 03/15/90 0.0539 10.76 3,733,981 6.346786 0.589850 118.340982
03/30/90 10.70 03/30/90 04/12/90 0.0535 10.76 3,337,849 6.331243 0.588405 118.929387
04/30/90 10.51 04/30/90 05/15/90 0.0549 10.76 3,411,081 6.529223 0.606805 119.536192
05/31/90 10.75 05/31/90 06/15/90 0.0572 10.83 3,301,132 6.837470 0.631345 120.167538
06/29/90 10.83 06/29/90 07/13/90 0.0495 10.90 3,717,483 5.948293 0.545715 120.713252
07/31/90 10.95 07/31/90 08/15/90 0.0567 10.85 3,820,763 6.844441 0.630824 121.344077
08/31/90 10.58 08/31/90 09/14/90 0.0583 10.67 3,592,358 7.074360 0.663014 122.007091
09/29/90 10.53 09/29/90 10/15/90 0.0496 10.57 3,830,047 6.051552 0.572521 122.579612
10/31/90 10.66 10/31/90 11/15/90 0.0571 10.88 4,038,241 6.999296 0.643318 123.222930
11/30/90 10.89 11/30/90 12/14/90 0.0539 10.96 4,294,259 6.641716 0.605996 123.828926
12/31/90 10.88 12/31/90 01/15/91 0.0547 0.0147 10.87 4,311,013 8.593727 0.790591 124.619517
01/31/91 10.95 01/31/91 02/15/91 0.0550 11.12 4,665,829 6.854073 0.616374 125.235890
02/28/91 10.96 02/28/91 03/15/91 0.0540 10.99 4,655,184 6.762738 0.615354 125.851244
03/28/91 10.94 03/28/91 04/15/91 0.0501 11.04 4,747,680 6.305147 0.571118 126.422363
04/30/91 11.04 04/30/91 05/15/91 0.0572 11.04 4,869,752 7.231359 0.655014 127.077377
05/31/91 11.05 05/31/91 06/14/91 0.0504 10.90 5,318,177 6.404700 0.587587 127.664964
06/28/91 10.95 06/28/91 07/15/91 0.0496 11.03 5,370,829 6.332182 0.574087 128.239051
07/31/91 11.07 07/31/91 08/15/91 0.0561 11.15 5,625,261 7.194211 0.645221 128.884272
08/30/91 11.13 08/30/91 09/14/91 0.0542 11.18 5,689,530 6.985528 0.624824 129.509096
09/30/91 11.21 09/30/91 10/15/91 0.0523 11.26 3,832,831 6.773326 0.601539 130.110634
10/31/91 11.24 10/31/91 11/15/91 0.0526 11.26 6,112,031 6.843819 0.607799 130.718434
11/29/91 11.22 11/29/91 12/13/91 0.0485 11.28 6,508,228 6.339844 0.562043 131.280477
12/31/91 11.38 12/31/91 01/15/92 0.0542 11.46 6,724,553 7.115402 0.620890 131.901367
01/31/92 11.37 01/31/92 02/14/92 0.0518 11.30 6,979,104 6.832491 0.604645 132.506012
02/28/92 11.30 02/28/92 03/15/92 0.0487 11.26 7,053,641 6.453043 0.573094 133.079106
03/31/92 11.29 03/31/92 04/15/92 0.0601 11.42 7,118,759 7.998054 0.700355 133.779461
04/30/92 11.35 04/30/92 05/15/92 0.0499 11.46 7,330,710 6.675595 0.582513 134.361974
05/29/92 11.44 05/29/92 06/16/92 0.0499 11.50 7,621,702 6.704663 0.583014 134.944988
06/30/92 11.58 06/30/92 07/15/92 0.0527 11.78 8,084,715 7.111601 0.603701 135.548689
</TABLE>
<PAGE>
GROSS CIF: TAX-EXEMPT FUND
RATE OF RETURN
SINCE PREPARED ON: 12/31/96
INCEPTION
..........
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/92 12.00 07/31/92 08/14/92 0.0502 11.94 8,608,385 6.804544 0.569895 136.118584
08/31/92 11.74 08/31/92 09/15/92 0.0516 11.79 8,529,170 7.023719 0.595735 136.714320
09/30/92 11.72 09/30/92 10/15/92 0.0524 11.67 8,637,959 7.163830 0.613867 137.328187
10/31/92 11.47 10/31/92 11/13/92 0.0518 11.64 8,534,470 7.113600 0.611134 137.939321
11/30/92 11.7 11/30/92 12/15/92 0.0496 11.77 9,184,242 6.841790 0.581291 138.520611
12/31/92 11.74 12/31/92 12/31/92 0.0505 0.0413 11.74 9,250,893 12.716192 1.083151 139.603762
01/29/93 11.8 01/29/93 02/12/93 0.0482 0.0074 11.92 9,645,668 7.761969 0.651172 140.254934
02/26/93 12.13 02/26/93 03/15/93 0.0449 12.09 10,246,855 6.297447 0.520881 140.775815
03/31/93 12.09 03/31/93 04/15/93 0.0565 12.19 10,859,516 7.953834 0.652488 141.428303
04/30/93 12.14 04/30/93 05/14/93 0.0497 12.19 11,297,394 7.028987 0.576619 142.004922
05/28/93 12.17 05/28/93 06/15/93 0.0449 12.21 12,303,691 6.376021 0.522197 142.527119
06/30/93 12.3 06/30/93 07/15/93 0.0499 12.35 13,370,158 7.112103 0.575879 143.102998
07/30/93 12.25 07/30/93 08/16/93 0.0461 12.38 14,328,028 6.597048 0.532879 143.635877
08/31/93 12.43 08/31/93 09/15/93 0.0483 12.56 14,328,028 6.937613 0.552358 144.188235
09/30/93 12.59 09/30/93 10/15/93 0.0492 0.0000 12.71 15,130,849 7.094061 0.558148 144.746383
10/31/93 12.57 10/31/93 11/15/93 0.0469 0.0000 12.46 15,599,581 6.788605 0.544832 145.291215
11/30/93 12.41 11/30/93 12/15/93 0.0498 0.0000 12.57 15,907,412 7.235503 0.575617 145.866832
12/31/93 12.58 12/31/93 01/14/94 0.0490 0.0028 12.61 16,406,372 7.555902 0.599199 146.466031
01/31/94 12.66 01/31/94 02/15/94 0.0493 0.0000 12.55 16,755,110 7.220775 0.575361 147.041391
02/28/94 12.31 02/28/94 03/15/94 0.0502 0.0000 12.06 16,599,778 7.381478 0.612063 147.653454
03/31/94 11.82 03/31/94 04/15/94 0.0483 0.0000 11.74 16,375,493 7.131662 0.607467 148.260921
04/30/94 11.73 04/30/94 05/15/94 0.0474 0.0000 11.69 16,016,440 7.027568 0.601161 148.862082
05/31/94 11.77 05/31/94 06/15/94 0.0528 0.0000 11.97 15,890,838 7.859918 0.656635 149.518717
06/30/94 11.70 06/30/94 07/15/94 0.0513 0.0000 11.75 15,741,588 7.670310 0.652792 150.171509
07/29/94 11.82 07/29/94 08/15/94 0.0501 0.0000 11.74 15,805,744 7.523593 0.640851 150.812360
08/31/94 11.82 08/31/94 09/15/94 0.0541 0.0000 11.75 15,476,818 8.158949 0.694379 151.506739
09/30/94 11.57 09/30/94 10/15/94 0.0525 0.0000 11.58 15,144,983 7.954104 0.686883 152.193622
10/31/94 11.33 10/31/94 11/15/94 0.0523 0.0000 11.05 14,601,995 7.959726 0.720337 152.913959
11/30/94 11.01 11/30/94 12/15/94 0.0533 0.0000 11.20 13,862,752 8.150314 0.727707 153.641665
12/31/94 11.22 12/31/94 01/15/95 0.0567 0.0000 11.33 13,973,940 8.711482 0.768886 154.410552
01/31/95 11.39 01/31/95 02/15/95 0.0525 0.0011 11.62 14,027,640 8.276406 0.712255 155.122807
02/28/95 11.71 02/28/95 03/15/95 0.0530 0.0000 11.79 14,390,550 8.221509 0.697329 155.820136
03/31/95 11.81 03/31/95 04/15/95 0.0511 0.0000 11.89 14,760,906 7.962409 0.669673 156.489809
04/30/95 11.80 04/30/95 05/15/95 0.0486 0.0000 11.96 7.605405 0.635903 157.125712
05/31/95 12.05 05/31/95 06/15/95 0.0548 0.0000 12.05 15,118,186 8.603733 0.714003 157.839715
06/30/95 11.92 06/30/95 07/15/95 0.0518 0.0000 12.06 15,101,454 8.176097 0.677952 158.517667
07/31/95 11.94 07/31/95 08/15/95 0.0519 0.0000 12.21 n/a 8.227067 0.673797 159.191464
08/31/95 11.97 08/31/95 09/15/95 0.0523 0.0000 12.45 14,678,329 8.325714 0.668732 159.860196
09/30/95 11.98 09/30/95 10/15/95 0.0508 0.0000 12.16 14,692,304 8.120898 0.667837 160.528033
10/31/95 12.11 10/31/95 11/15/95 0.0530 0.0000 12.18 15,083,403 8.507986 0.698521 161.226554
11/30/95 12.27 11/30/95 12/15/95 0.0517 0.0000 12.29 15,146,074 8.335413 0.678227 161.904781
12/31/95 12.33 12/31/95 12/31/95 0.0498 0.0204 12.33 15,181,292 11.365716 0.921794 162.826575
01/31/96 12.35 01/31/96 01/31/96 0.0514 0.0000 12.35 15,181,292 8.369286 0.677675 163.504250
02/28/96 12.24 02/28/96 02/28/96 0.0511 0.0000 12.24 15,741,267 8.355067 0.682604 164.186853
03/31/96 12.05 03/31/96 03/31/96 0.0494 0.0000 12.05 15,628,442 8.110831 0.673098 164.859951
04/30/96 11.94 04/30/96 04/30/96 0.0532 0.0000 11.94 15,347,660 8.769627 0.734475 165.594426
05/31/96 11.90 05/31/96 05/31/96 0.0504 0.0000 11.90 15,677,247 8.338320 0.700699 166.295125
06/30/96 11.95 06/30/96 06/30/96 0.0474 0.0000 11.95 15,714,277 7.889634 0.660220 166.955346
07/31/96 12.02 07/31/96 07/31/96 0.0535 0.0000 12.02 15,714,277 8.934603 0.743311 167.698657
08/31/96 11.99 08/31/96 08/31/96 0.0499 0.0000 11.99 15,470,095 8.374622 0.698467 168.397124
09/30/96 12.06 09/30/96 09/30/96 0.0511 0.0000 12.06 14,909,360 8.605093 0.713523 169.110648
10/31/96 12.12 10/31/96 10/31/96 0.0503 0.0000 12.12 0 8.512354 0.702339 169.812987
11/30/96 12.27 11/30/96 11/30/96 0.0514 0.0000 12.27 0 8.732463 0.711692 170.524679
12/31/96 12.15 12/31/96 12/31/96 0.0519 0.0430 12.15 0 16.182622 1.331903 171.856582
</TABLE>
<PAGE>
NET CIF: GROWTH & INCOME
RATE OF RETURN
1 YEAR PREPARED ON: 12/31/96
.........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
55.306508 21.04 1163.6489
PURCHASE DATE: 12/31/95
INITIAL INVESTMENT: $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 19.56 (5% SALES LOAD) 1163.6489 1,000.00 (163.6489)
SHARES PURCHASED: 51.12474438
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(163.6489) 1,000.00 0.1636
ONE YEAR NET RATE OF RETURN: 16.36%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/95 18.58 12/31/95 12/31/95 0.2040 1.2319 18.58 27,089,752 51.124744
01/31/96 18.95 01/31/96 01/31/96 18.95 27,089,752 51.124744
02/28/96 19.01 02/28/96 02/28/96 19.01 30,769,319 51.124744
03/31/96 19.09 03/31/96 03/31/96 19.09 31,437,641 51.124744
04/30/96 19.81 04/30/96 04/30/96 19.81 34,526,157 51.124744
05/31/96 20.05 05/31/96 05/31/96 20.05 33,885,953 51.124744
06/30/96 19.99 06/30/96 06/30/96 19.99 34,415,097 51.124744
07/31/96 19.14 07/31/96 07/31/96 19.14 34,415,097 51.124744
08/31/96 19.63 08/31/96 08/31/96 19.63 34,483,109 51.124744
09/30/96 20.40 09/30/96 09/30/96 20.40 35,921,220 51.124744
10/31/96 20.96 10/31/96 10/31/96 20.96 51.124744
11/30/96 22.73 11/30/96 11/30/96 22.73 51.124744
12/31/96 21.04 12/31/96 12/31/96 0.2509 1.4701 21.04 87.984305 4.181764 55.306508
</TABLE>
<PAGE>
NET CIF: GROWTH & INCOME
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/96
ROLLING
...........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
88.276595 21.04 1857.3396
PURCHASE DATE: 12/31/91
INITIAL INVESTMENT: $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 15.61 (5% SALES LOAD) 1857.3396 1,000.00 (857.3396)
SHARES PURCHASED: 64.06149904
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(857.3396) 1,000.00 0.8573
NET 5 YEAR RETURN: 85.73%
ANNUALIZED NET 5 YEAR RETURN: 13.18%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/91 14.83 12/31/91 01/15/92 0.2416 0.8650 15.15 4,412,808 64.061499
01/31/92 14.84 01/31/92 02/14/92 4,920,111 64.061499
02/28/92 15.19 02/28/92 03/15/92 4,964,902 64.061499
03/31/92 14.90 03/31/92 04/15/92 0.1750 15.16 6,305,083 11.210762 0.739496 64.800995
04/30/92 15.02 04/30/92 05/15/92 6,434,685 64.800995
05/29/92 15.04 05/29/92 06/16/92 7,157,068 64.800995
06/30/92 14.54 06/30/92 07/15/92 7,179,618 64.800995
07/31/92 14.79 07/31/92 08/14/92 64.800995
08/31/92 14.38 08/31/92 09/15/92 8,819,903 64.800995
09/30/92 14.65 09/30/92 10/15/92 8,062,312 64.800995
10/31/92 14.93 10/31/92 11/13/92 8,544,546 64.800995
11/30/92 15.48 11/30/92 12/15/93 9,093,874 64.800995
12/31/92 15.14 12/31/92 12/31/92 0.2143 0.3092 15.14 9,147,901 33.923321 2.240642 67.041637
01/29/93 15.36 01/29/93 02/15/93 9,786,306 67.041637
02/26/93 15.54 02/26/93 03/15/93 10,398,386 67.041637
03/31/93 15.87 03/31/93 04/15/93 10,667,885 67.041637
04/30/93 15.60 04/30/93 05/14/93 10,457,563 67.041637
05/31/93 15.74 05/31/93 06/15/93 10,953,563 67.041637
06/30/93 16.00 06/30/93 07/15/93 11,814,597 67.041637
07/30/93 16.12 07/30/93 08/16/93 12,656,892 67.041637
08/31/93 16.59 08/31/93 09/15/93 12,948,117 67.041637
09/30/93 16.71 09/30/93 10/15/93 13,810,883 67.041637
10/31/93 17.03 10/31/93 11/15/93 14,246,439 67.041637
11/30/93 16.74 11/30/93 12/15/93 14,525,321 67.041637
12/31/93 16.70 12/31/93 01/14/94 0.2769 0.4786 16.87 14,885,337 50.649957 3.002369 70.044006
01/31/94 17.23 01/31/94 02/15/94 17.08 16,842,517 70.044006
02/28/94 16.91 02/28/94 03/15/94 17.14 17,409,079 70.044006
03/31/94 15.89 03/31/94 04/15/94 0.3311 15.91 17,402,608 23.191570 1.457673 71.501678
04/30/94 16.04 04/30/94 05/15/94 15.78 18,895,175 71.501678
05/31/94 16.02 05/31/94 06/15/94 19,297,751 71.501678
06/30/94 15.71 06/30/94 07/15/94 18,807,308 71.501678
07/29/94 16.22 07/29/94 08/15/94 19,341,831 71.501678
08/31/94 16.93 08/31/94 09/15/94 20,582,231 71.501678
09/30/94 16.26 09/30/94 10/15/94 20,058,711 71.501678
10/31/94 16.14 10/31/94 11/15/94 20,041,734 71.501678
11/30/94 15.31 11/30/94 12/15/94 19,307,467 71.501678
12/31/94 14.77 12/31/94 01/15/95 0.2473 0.6447 15.02 18,679,228 63.779497 4.246305 75.747983
01/31/95 14.88 01/31/95 02/15/95 20,142,290 75.747983
02/28/95 15.60 02/28/95 03/15/95 21,268,096 75.747983
03/31/95 16.01 03/31/95 04/15/95 21,670,677 75.747983
04/30/95 16.56 04/30/95 05/15/95 21,670,677 75.747983
05/31/95 17.21 05/31/95 06/15/95 24,124,532 75.747983
06/30/95 18.05 06/30/95 07/15/95 25,333,506 75.747983
07/31/95 18.91 07/31/95 08/15/95 n/a 75.747983
08/31/95 19.10 08/31/95 09/15/95 27,133,862 75.747983
09/30/95 19.61 09/30/95 10/15/95 27,928,392 75.747983
10/31/95 19.12 10/31/95 11/15/95 27,342,653 75.747983
11/30/95 19.77 11/30/95 12/15/95 28,531,436 75.747983
12/31/95 18.58 12/31/95 12/31/95 0.2040 1.2319 18.58 27,089,752 108.766529 5.853957 81.601941
01/31/96 18.95 01/31/96 01/31/96 18.95 27,089,752 81.601941
02/28/96 19.01 02/28/96 02/28/96 19.01 30,769,319 81.601941
03/31/96 19.09 03/31/96 03/31/96 19.09 31,437,641 81.601941
04/30/96 19.81 04/30/96 04/30/96 19.81 34,526,157 81.601941
05/31/96 20.05 05/31/96 05/31/96 20.05 33,885,953 81.601941
06/30/96 19.99 06/30/96 06/30/96 19.99 34,415,097 81.601941
</TABLE>
<PAGE>
NET CIF: GROWTH & INCOME
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/96
ROLLING
...........
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/96 19.14 07/31/96 07/31/96 19.14 34,415,097 81.601941
08/31/96 19.63 08/31/96 08/31/96 19.63 34,483,109 81.601941
09/30/96 20.40 09/30/96 09/30/96 20.40 35,921,220 81.601941
10/31/96 20.96 10/31/96 10/31/96 20.96 81.601941
11/30/96 22.73 11/30/96 11/30/96 22.73 81.601941
12/31/96 21.04 12/31/96 12/31/96 0.2509 1.4701 21.04 140.434736 6.674655 88.276595
</TABLE>
<PAGE>
NET CIF: GROWTH & INCOME
RATE OF RETURN
SINCE PREPARED ON: 12/31/96
INCEPTION
...........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
157.266971 21.04 3308.8971
PURCHASE DATE: 12/18/87
INITIAL INVESTMENT $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 11.17 (5% SALES LOAD) 3308.8971 1,000.00 (2308.8971)
SHARES PURCHASED 89.526
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(2308.8971) 1,000.00 2.3089
NET RATE OF RETURN SINCE INCEPTION: 230.89%
ANNUALIZED NET RATE OF RETURN SINCE INCEPTION: 14.15%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/87 10.58 12/31/87 01/14/88 0.0203 10.65 106,982 1.817367950 0.170644878 89.696160
01/31/88 10.35 01/29/88 02/12/88 107,766 89.696160
02/29/88 11.06 02/29/88 03/15/88 115,480 89.696160
03/31/88 10.74 03/31/88 04/15/88 112,351 89.696160
04/29/88 11.05 04/29/88 05/15/88 141,624 89.696160
05/31/88 10.52 05/31/88 06/15/88 393,951 89.696160
06/30/88 11.54 06/30/88 07/15/88 670,003 89.696160
07/29/88 11.16 07/29/88 08/15/88 652,401 89.696160
08/31/88 10.62 08/31/88 09/15/88 622,675 89.696160
09/30/88 10.77 09/30/88 10/14/88 635,845 89.696160
10/31/88 10.83 10/31/88 11/15/88 645,232 89.696160
11/30/88 10.80 11/30/88 12/15/88 647,419 89.696160
12/30/88 10.83 12/30/88 01/13/88 0.2253 11.16 655,146 20.208544769 1.810801503 91.506961
01/31/89 11.57 01/31/89 02/15/89 715,332 91.506961
02/28/89 11.26 02/28/89 03/15/89 697,079 91.506961
03/31/89 11.52 03/31/89 04/14/89 0.0396 11.83 729,265 3.626420870 0.306544452 91.813506
04/28/89 12.08 04/28/89 05/15/89 782,885 91.813506
05/31/89 12.75 05/31/89 06/15/89 832,024 91.813506
06/30/89 12.35 06/30/89 07/14/89 812,486 91.813506
07/31/89 13.33 07/31/89 08/15/89 890,227 91.813506
08/31/89 13.94 08/31/89 09/15/89 931,499 91.813506
09/29/89 13.84 09/29/89 10/13/89 946,813 91.813506
10/31/89 13.38 10/31/89 11/15/89 918,187 91.813506
11/30/89 13.86 11/30/89 12/15/89 960,679 91.813506
12/29/89 13.04 12/29/89 01/15/90 0.4143 0.8018 12.56 928,154 111.654404166 8.889681860 100.703187
01/31/90 12.32 01/31/90 02/15/90 991,630 100.703187
02/28/90 12.94 02/28/90 03/15/90 1,062,351 100.703187
03/30/90 12.72 03/30/90 04/12/90 0.4213 12.72 1,048,696 42.426252879 3.335397239 104.038585
04/30/90 12.36 04/30/90 05/15/90 104.038585
05/31/90 13.40 05/31/90 06/15/90 1,238,868 104.038585
06/29/90 13.36 06/29/90 07/13/90 1,311,319 104.038585
07/31/90 13.54 07/31/90 08/15/90 1,476,656 104.038585
08/31/90 12.36 08/31/90 09/14/90 1,427,689 104.038585
09/29/90 11.81 09/29/90 10/15/90 1,413,608 104.038585
10/31/90 11.46 10/31/90 11/15/90 1,445,962 104.038585
11/30/90 12.06 11/30/90 12/14/90 1,631,224 104.038585
12/31/90 11.95 12/31/90 01/15/91 0.2436 0.0045 11.61 1,770,675 25.811972865 2.223253 106.261838
01/31/91 12.53 01/31/91 02/15/91 1,972,423 106.261838
02/28/91 13.22 02/28/91 03/15/91 2,242,891 106.261838
03/28/91 13.17 03/28/91 04/15/91 0.0013 0.0109 13.42 2,366,425 1.296394426 0.096601671 106.358440
04/30/91 13.51 04/30/91 05/15/91 2,504,380 106.358440
05/31/91 14.45 05/31/91 06/14/91 2,833,866 106.358440
06/28/91 13.85 06/28/91 07/15/91 2,978,522 106.358440
07/31/91 14.32 07/31/91 08/15/91 3,378,836 106.358440
08/30/91 14.62 08/30/91 09/14/91 3,717,903 106.358440
09/30/91 14.56 09/30/91 10/15/91 3,848,309 106.358440
10/31/91 14.83 10/31/91 11/15/91 4,082,393 106.358440
11/29/91 14.27 11/29/91 12/13/91 4,038,028 106.358440
12/31/91 14.83 12/31/91 01/15/92 0.2416 0.8650 15.15 4,412,808 117.696249540 7.768729343 114.127169
01/31/92 14.84 01/31/92 02/14/92 4,920,111 114.127169
02/28/92 15.19 02/28/92 03/15/92 4,964,902 114.127169
03/31/92 14.90 03/31/92 04/15/92 0.1750 15.16 6,305,083 19.972254609 1.317431043 115.444600
04/30/92 15.02 04/30/92 05/15/92 6,434,685 115.444600
05/29/92 15.04 05/29/92 06/16/92 7,157,068 115.444600
06/30/92 14.54 06/30/92 07/15/92 7,179,618 115.444600
</TABLE>
<PAGE>
NET CIF: GROWTH & INCOME
RATE OF RETURN
SINCE PREPARED ON: 12/31/96
INCEPTION
...........
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/92 14.79 07/31/92 08/14/92 115.444600
08/31/92 14.38 08/31/92 09/15/92 8,819,903 115.444600
09/30/92 14.65 09/30/92 10/15/92 8,062,312 115.444600
10/31/92 14.93 10/31/92 11/13/92 8,544,546 115.444600
11/30/92 15.48 11/30/92 12/15/93 9,093,874 115.444600
12/31/92 15.14 12/31/92 12/31/92 0.2143 0.3092 15.14 9,147,901 60.435248224 3.991760120 119.436360
01/29/93 15.36 01/29/93 02/15/93 9,786,306 119.436360
02/26/93 15.54 02/26/93 03/15/93 10,398,386 119.436360
03/31/93 15.87 03/31/93 04/15/93 10,667,885 119.436360
04/30/93 15.60 04/30/93 05/14/93 10,457,563 119.436360
05/31/93 15.74 05/31/93 06/15/93 10,953,563 119.436360
06/30/93 16.00 06/30/93 07/15/93 11,814,597 119.436360
07/30/93 16.12 07/30/93 08/16/93 12,656,892 119.436360
08/31/93 16.59 08/31/93 09/15/93 12,948,117 119.436360
09/30/93 16.71 09/30/93 10/15/93 13,810,883 119.436360
10/31/93 17.03 10/31/93 11/15/93 14,246,439 119.436360
11/30/93 16.74 11/30/93 12/15/93 14,525,321 119.436360
12/31/93 16.70 12/31/93 01/14/94 0.2769 0.4786 16.87 14,885,337 90.234170250 5.348794917 124.785155
01/31/94 17.23 01/31/94 02/15/94 17.08 16,842,517 124.785155
02/28/94 16.91 02/28/94 03/15/94 17.14 17,409,079 124.785155
03/31/94 15.89 03/31/94 04/15/94 0.3311 15.91 17,402,608 41.316364911 2.596880258 127.382036
04/30/94 16.04 04/30/94 05/15/94 15.78 18,895,175 127.382036
05/31/94 16.02 05/31/94 06/15/94 19,297,751 127.382036
06/30/94 15.71 06/30/94 07/15/94 18,807,308 127.382036
07/29/94 16.22 07/29/94 08/15/94 19,341,831 127.382036
08/31/94 16.93 08/31/94 09/15/94 20,582,231 127.382036
09/30/94 16.26 09/30/94 10/15/94 20,058,711 127.382036
10/31/94 16.14 10/31/94 11/15/94 20,041,734 127.382036
11/30/94 15.31 11/30/94 12/15/94 19,307,467 127.382036
12/31/94 14.77 12/31/94 01/15/95 0.2473 0.6447 15.02 18,679,228 113.624775695 7.564898515 134.946934
01/31/95 14.88 01/31/95 02/15/95 20,142,290 134.946934
02/28/95 15.60 02/28/95 03/15/95 21,268,096 134.946934
03/31/95 16.01 03/31/95 04/15/95 21,670,677 134.946934
04/30/95 16.56 04/30/95 05/15/95 21,670,677 134.946934
05/31/95 17.21 05/31/95 06/15/95 24,124,532 134.946934
06/30/95 18.05 06/30/95 07/15/95 25,333,506 134.946934
07/31/95 18.91 07/31/95 08/15/95 n/a 134.946934
08/31/95 19.10 08/31/95 09/15/95 27,133,862 134.946934
09/30/95 19.61 09/30/95 10/15/95 27,928,392 134.946934
10/31/95 19.12 10/31/95 11/15/95 27,342,653 134.946934
11/30/95 19.77 11/30/95 12/15/95 28,531,436 134.946934
12/31/95 18.58 12/31/95 12/31/95 0.2040 1.2319 18.58 27,089,752 193.770302599 10.428972153 145.375906
01/31/96 18.95 01/31/96 01/31/96 18.95 27,089,752 145.375906
02/28/96 19.01 02/28/96 02/28/96 19.01 30,769,319 145.375906
03/31/96 19.09 03/31/96 03/31/96 19.09 31,437,641 145.375906
04/30/96 19.81 04/30/96 04/30/96 19.81 34,526,157 145.375906
05/31/96 20.05 05/31/96 05/31/96 20.05 33,885,953 145.375906
06/30/96 19.99 06/30/96 06/30/96 19.99 34,415,097 145.375906
07/31/96 19.14 07/31/96 07/31/96 19.14 34,415,097 145.375906
08/31/96 19.63 08/31/96 08/31/96 19.63 34,483,109 145.375906
09/30/96 20.40 09/30/96 09/30/96 20.40 35,921,220 145.375906
10/31/96 20.96 10/31/96 10/31/96 20.96 145.375906
11/30/96 22.73 11/30/96 11/30/96 22.73 145.375906
12/31/96 21.04 12/31/96 12/31/96 0.2509 1.4701 21.04 250.188009422 11.891065087 157.266971
</TABLE>
<PAGE>
GROSS CIF: GROWTH & INCOME
RATE OF RETURN
1 YEAR PREPARED ON: 12/31/96
........
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
58.223643 21.04 1225.0255
PURCHASE DATE: 12/31/95
INITIAL INVESTMENT: $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 18.58 1225.0255 1,000.00 (225.0255)
SHARES PURCHASED: 53.82131324
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(225.0255) 1,000.00 0.2250
</TABLE>
ONE YEAR NET RATE OF RETURN: 22.50%
<TABLE>
<CAPTION>
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/95 18.58 12/31/95 12/31/95 0.2040 1.2319 18.58 27,089,752 53.821313
01/31/96 18.95 01/31/96 01/31/96 18.95 27,089,752 53.821313
02/28/96 19.01 02/28/96 02/28/96 19.01 30,769,319 53.821313
03/31/96 19.09 03/31/96 03/31/96 19.09 31,437,641 53.821313
04/30/96 19.81 04/30/96 04/30/96 19.81 34,526,157 53.821313
05/31/96 20.05 05/31/96 05/31/96 20.05 33,885,953 53.821313
06/30/96 19.99 06/30/96 06/30/96 19.99 34,415,097 53.821313
07/31/96 19.14 07/31/96 07/31/96 19.14 34,415,097 53.821313
08/31/96 19.63 08/31/96 08/31/96 19.63 34,483,109 53.821313
09/30/96 20.40 09/30/96 09/30/96 20.40 35,921,220 53.821313
10/31/96 20.96 10/31/96 10/31/96 20.96 53.821313
11/30/96 22.73 11/30/96 11/30/96 22.73 53.821313
12/31/96 21.04 12/31/96 12/31/96 0.2509 1.4701 21.04 92.625027 4.402330 58.223643
</TABLE>
<PAGE>
GROSS CIF: GROWTH & INCOME
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/96
ROLLING
.......
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
92.919599 21.04 1955.0284
URCHASE DATE: 12/31/91
INITIAL INVESTMENT: $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
NITIAL VALUE: 14.83 1955.0284 1,000.00 (955.0284)
HARES PURCHASED: 67.43088334
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(955.0284) 1,000.00 0.9550
</TABLE>
GROSS 5 YEAR RETURN: 95.50%
ANNUALIZED GROSS 5 YEAR RETURN: 14.35%
<TABLE>
<CAPTION>
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/91 14.83 12/31/91 01/15/92 0.2416 0.8650 15.15 4,412,808 67.430883
01/31/92 14.84 01/31/92 02/14/92 4,920,111 67.430883
02/28/92 15.19 02/28/92 03/15/92 4,964,902 67.430883
03/31/92 14.90 03/31/92 04/15/92 0.1750 15.16 6,305,083 11.800405 0.778391 68.209274
04/30/92 15.02 04/30/92 05/15/92 6,434,685 68.209274
05/29/92 15.04 05/29/92 06/16/92 7,157,068 68.209274
06/30/92 14.54 06/30/92 07/15/92 7,179,618 68.209274
07/31/92 14.79 07/31/92 08/14/92 68.209274
08/31/92 14.38 08/31/92 09/15/92 8,819,903 68.209274
09/30/92 14.65 09/30/92 10/15/92 8,062,312 68.209274
10/31/92 14.93 10/31/92 11/13/92 8,544,546 68.209274
11/30/92 15.48 11/30/92 12/15/93 9,093,874 68.209274
12/31/92 15.14 12/31/92 12/31/92 0.2143 0.3092 15.14 9,147,901 35.707555 2.358491 70.567765
01/29/93 15.36 01/29/93 02/15/93 9,786,306 70.567765
02/26/93 15.54 02/26/93 03/15/93 10,398,386 70.567765
03/31/93 15.87 03/31/93 04/15/93 10,667,885 70.567765
04/30/93 15.60 04/30/93 05/14/93 10,457,563 70.567765
05/31/93 15.74 05/31/93 06/15/93 10,953,563 70.567765
06/30/93 16.00 06/30/93 07/15/93 11,814,597 70.567765
07/30/93 16.12 07/30/93 08/16/93 12,656,892 70.567765
08/31/93 16.59 08/31/93 09/15/93 12,948,117 70.567765
09/30/93 16.71 09/30/93 10/15/93 13,810,883 70.567765
10/31/93 17.03 10/31/93 11/15/93 14,246,439 70.567765
11/30/93 16.74 11/30/93 12/15/93 14,525,321 70.567765
12/31/93 16.70 12/31/93 01/14/94 0.2769 0.4786 16.87 14,885,337 53.313947 3.160281 73.728047
01/31/94 17.23 01/31/94 02/15/94 17.08 16,842,517 73.728047
02/28/94 16.91 02/28/94 03/15/94 17.14 17,409,079 73.728047
03/31/94 15.89 03/31/94 04/15/94 0.3311 15.91 17,402,608 24.411356 1.534340 75.262387
04/30/94 16.04 04/30/94 05/15/94 15.78 18,895,175 75.262387
05/31/94 16.02 05/31/94 06/15/94 19,297,751 75.262387
06/30/94 15.71 06/30/94 07/15/94 18,807,308 75.262387
07/29/94 16.22 07/29/94 08/15/94 19,341,831 75.262387
08/31/94 16.93 08/31/94 09/15/94 20,582,231 75.262387
09/30/94 16.26 09/30/94 10/15/94 20,058,711 75.262387
10/31/94 16.14 10/31/94 11/15/94 20,041,734 75.262387
11/30/94 15.31 11/30/94 12/15/94 19,307,467 75.262387
12/31/94 14.77 12/31/94 01/15/95 0.2473 0.6447 15.02 18,679,228 67.134049 4.469644 79.732031
01/31/95 14.88 01/31/95 02/15/95 20,142,290 79.732031
02/28/95 15.60 02/28/95 03/15/95 21,268,096 79.732031
03/31/95 16.01 03/31/95 04/15/95 21,670,677 79.732031
04/30/95 16.56 04/30/95 05/15/95 21,670,677 79.732031
05/31/95 17.21 05/31/95 06/15/95 24,124,532 79.732031
06/30/95 18.05 06/30/95 07/15/95 25,333,506 79.732031
07/31/95 18.91 07/31/95 08/15/95 n/a 79.732031
08/31/95 19.10 08/31/95 09/15/95 27,133,862 79.732031
09/30/95 19.61 09/30/95 10/15/95 27,928,392 79.732031
10/31/95 19.12 10/31/95 11/15/95 27,342,653 79.732031
11/30/95 19.77 11/30/95 12/15/95 28,531,436 79.732031
12/31/95 18.58 12/31/95 12/31/95 0.2040 1.2319 18.58 27,089,752 114.487223 6.161853 85.893883
01/31/96 18.95 01/31/96 01/31/96 18.95 27,089,752 85.893883
02/28/96 19.01 02/28/96 02/28/96 19.01 30,769,319 85.893883
03/31/96 19.09 03/31/96 03/31/96 19.09 31,437,641 85.893883
04/30/96 19.81 04/30/96 04/30/96 19.81 34,526,157 85.893883
05/31/96 20.05 05/31/96 05/31/96 20.05 33,885,953 85.893883
06/30/96 19.99 06/30/96 06/30/96 19.99 34,415,097 85.893883
</TABLE>
<PAGE>
GROSS CIF: GROWTH & INCOME
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/96
ROLLING
.......
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/96 19.14 07/31/96 07/31/96 19.14 34,415,097 85.893883
08/31/96 19.63 08/31/96 08/31/96 19.63 34,483,109 85.893883
09/30/96 20.40 09/30/96 09/30/96 20.40 35,921,220 85.893883
10/31/96 20.96 10/31/96 10/31/96 20.96 85.893883
11/30/96 22.73 11/30/96 11/30/96 22.73 85.893883
12/31/96 21.04 12/31/96 12/31/96 0.2509 1.4701 21.04 147.821054 7.025716 92.919599
</TABLE>
<PAGE>
GROSS CIF: GROWTH & INCOME
RATE OF RETURN
SINCE PREPARED ON: 12/31/96
INCEPTION
......
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED) = GROSS VALUE
165.567584 21.04 0 3483.5420
PURCHASE DATE: 12/18/87
INITIAL INVESTME $1,000.00 GROSS VALUE - INITIAL INVESTMENT = NET VALUE
INITIAL VALUE: 10.61 3483.5420 1,000.00 (2483.5420)
SHARES PURCHASED 94.251
NET VALUE / INITIAL INVESTMENT = GROSS RATE OF RETURN
(2483.5420) 1,000.00 2.4835
</TABLE>
GROSS RATE OF RETURN SINCE INCEPTION: 248.35%
ANNUALIZED GROSS RATE OF RETURN SINCE INCEPTION: 14.80%
<TABLE>
<CAPTION>
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/87 10.58 12/31/87 01/14/88 0.0203 10.65 106,982 1.913289 0.179652 94.430358
01/31/88 10.35 01/29/88 02/12/88 0.0000 0.00 107,766 0.000000 0.000000 94.430358
02/29/88 11.06 02/29/88 03/15/88 115,480 0.000000 0.000000 94.430358
03/31/88 10.74 03/31/88 04/15/88 112,351 0.000000 0.000000 94.430358
04/29/88 11.05 04/29/88 05/15/88 141,624 0.000000 0.000000 94.430358
05/31/88 10.52 05/31/88 06/15/88 393,951 0.000000 0.000000 94.430358
06/30/88 11.54 06/30/88 07/15/88 670,003 0.000000 0.000000 94.430358
07/29/88 11.16 07/29/88 08/15/88 652,401 0.000000 0.000000 94.430358
08/31/88 10.62 08/31/88 09/15/88 622,675 0.000000 0.000000 94.430358
09/30/88 10.77 09/30/88 10/14/88 635,845 0.000000 0.000000 94.430358
10/31/88 10.83 10/31/88 11/15/88 645,232 0.000000 0.000000 94.430358
11/30/88 10.80 11/30/88 12/15/88 647,419 0.000000 0.000000 94.430358
12/30/88 10.83 12/30/88 01/13/88 0.2253 11.16 655,146 21.275160 1.906376 96.336735
01/31/89 11.57 01/31/89 02/15/89 0.0000 0.0000 0.00 715,332 0.000000 0.000000 96.336735
02/28/89 11.26 02/28/89 03/15/89 0.0000 0.00 697,079 0.000000 0.000000 96.336735
03/31/89 11.52 03/31/89 04/14/89 0.0396 11.83 729,265 3.817825 0.322724 96.659459
04/28/89 12.08 04/28/89 05/15/89 782,885 0.000000 0.000000 96.659459
05/31/89 12.75 05/31/89 06/15/89 832,024 0.000000 0.000000 96.659459
06/30/89 12.35 06/30/89 07/14/89 812,486 0.000000 0.000000 96.659459
07/31/89 13.33 07/31/89 08/15/89 890,227 0.000000 0.000000 96.659459
08/31/89 13.94 08/31/89 09/15/89 931,499 0.000000 0.000000 96.659459
09/29/89 13.84 09/29/89 10/13/89 946,813 0.000000 0.000000 96.659459
10/31/89 13.38 10/31/89 11/15/89 918,187 0.000000 0.000000 96.659459
11/30/89 13.86 11/30/89 12/15/89 960,679 0.000000 0.000000 96.659459
12/29/89 13.04 12/29/89 01/15/90 0.4143 0.8018 12.56 928,154 117.547568 9.358883 106.018342
01/31/90 12.32 01/31/90 02/15/90 0.0000 0.00 991,630 0.000000 0.000000 106.018342
02/28/90 12.94 02/28/90 03/15/90 0.0000 0.00 1,062,351 0.000000 0.000000 106.018342
03/30/90 12.72 03/30/90 04/12/90 0.4213 12.72 1,048,696 44.665527 3.511441 109.529782
04/30/90 12.36 04/30/90 05/15/90 0 0.000000 0.000000 109.529782
05/31/90 13.40 05/31/90 06/15/90 1,238,868 0.000000 0.000000 109.529782
06/29/90 13.36 06/29/90 07/13/90 1,311,319 0.000000 0.000000 109.529782
07/31/90 13.54 07/31/90 08/15/90 1,476,656 0.000000 0.000000 109.529782
08/31/90 12.36 08/31/90 09/14/90 1,427,689 0.000000 0.000000 109.529782
09/29/90 11.81 09/29/90 10/15/90 1,413,608 0.000000 0.000000 109.529782
10/31/90 11.46 10/31/90 11/15/90 1,445,962 0.000000 0.000000 109.529782
11/30/90 12.06 11/30/90 12/14/90 1,631,224 0.000000 0.000000 109.529782
12/31/90 11.95 12/31/90 01/15/91 0.2436 0.0045 11.61 1,770,675 27.174339 2.340598 111.870380
01/31/91 12.53 01/31/91 02/15/91 0.0000 0.00 1,972,423 0.000000 0.000000 111.870380
02/28/91 13.22 02/28/91 03/15/91 0.0000 0.00 2,242,891 0.000000 0.000000 111.870380
03/28/91 13.17 03/28/91 04/15/91 0.0013 0.0109 13.42 2,366,425 1.364819 0.101700 111.972080
04/30/91 13.51 04/30/91 05/15/91 2,504,380 0.000000 0.000000 111.972080
05/31/91 14.45 05/31/91 06/14/91 2,833,866 0.000000 0.000000 111.972080
06/28/91 13.85 06/28/91 07/15/91 2,978,522 0.000000 0.000000 111.972080
07/31/91 14.32 07/31/91 08/15/91 3,378,836 0.000000 0.000000 111.972080
08/30/91 14.62 08/30/91 09/14/91 3,717,903 0.000000 0.000000 111.972080
09/30/91 14.56 09/30/91 10/15/91 3,848,309 0.000000 0.000000 111.972080
10/31/91 14.83 10/31/91 11/15/91 4,082,393 0.000000 0.000000 111.972080
11/29/91 14.27 11/29/91 12/13/91 0.0000 0.00 4,038,028 0.000000 0.000000 111.972080
12/31/91 14.83 12/31/91 01/15/92 0.2416 0.8650 15.15 4,412,808 123.908304 8.178766 120.150846
01/31/92 14.84 01/31/92 02/14/92 4,920,111 0.000000 0.000000 120.150846
02/28/92 15.19 02/28/92 03/15/92 4,964,902 0.000000 0.000000 120.150846
03/31/92 14.90 03/31/92 04/15/92 0.1750 15.16 6,305,083 21.026398 1.386966 121.537812
04/30/92 15.02 04/30/92 05/15/92 6,434,685 0.000000 0.000000 121.537812
05/29/92 15.04 05/29/92 06/16/92 7,157,068 0.000000 0.000000 121.537812
06/30/92 14.54 06/30/92 07/15/92 7,179,618 0.000000 0.000000 121.537812
</TABLE>
<PAGE>
GROSS CIF: GROWTH & INCOME
RATE OF RETURN
SINCE PREPARED ON: 12/31/96
INCEPTION
.............
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/92 14.79 07/31/92 08/14/92 0 0.000000 0.000000 121.537812
08/31/92 14.38 08/31/92 09/15/92 8,819,903 0.000000 0.000000 121.537812
09/30/92 14.65 09/30/92 10/15/92 8,062,312 0.000000 0.000000 121.537812
10/31/92 14.93 10/31/92 11/13/92 8,544,546 0.000000 0.000000 121.537812
11/30/92 15.48 11/30/92 12/15/93 9,093,874 0.000000 0.000000 121.537812
12/31/92 15.14 12/31/92 12/31/92 0.2143 0.3092 15.14 9,147,901 63.625045 4.202447 125.740259
01/29/93 15.36 01/29/93 02/15/93 9,786,306 0.000000 0.000000 125.740259
02/26/93 15.54 02/26/93 03/15/93 10,398,386 0.000000 0.000000 125.740259
03/31/93 15.87 03/31/93 04/15/93 10,667,885 0.000000 0.000000 125.740259
04/30/93 15.60 04/30/93 05/14/93 10,457,563 0.000000 0.000000 125.740259
05/31/93 15.74 05/31/93 06/15/93 10,953,563 0.000000 0.000000 125.740259
06/30/93 16.00 06/30/93 07/15/93 11,814,597 0.000000 0.000000 125.740259
07/30/93 16.12 07/30/93 08/16/93 12,656,892 0.000000 0.000000 125.740259
08/31/93 16.59 08/31/93 09/15/93 0.00 12,948,117 0.000000 0.000000 125.740259
09/30/93 16.71 09/30/93 10/15/93 0.0000 0.0000 0.00 13,810,883 0.000000 0.000000 125.740259
10/31/93 17.03 10/31/93 11/15/93 0.0000 0.0000 0.00 14,246,439 0.000000 0.000000 125.740259
11/30/93 16.74 11/30/93 12/15/93 0.0000 0.0000 0.00 14,525,321 0.000000 0.000000 125.740259
12/31/93 16.70 12/31/93 01/14/94 0.2769 0.4786 16.87 14,885,337 94.996765 5.631106 131.371365
01/31/94 17.23 01/31/94 02/15/94 0.0000 0.0000 17.08 16,842,517 0.000000 0.000000 131.371365
02/28/94 16.91 02/28/94 03/15/94 0.0000 0.0000 17.14 17,409,079 0.000000 0.000000 131.371365
03/31/94 15.89 03/31/94 04/15/94 0.0000 0.3311 15.91 17,402,608 43.497059 2.733945 134.105310
04/30/94 16.04 04/30/94 05/15/94 0.0000 0.0000 15.78 18,895,175 0.000000 0.000000 134.105310
05/31/94 16.02 05/31/94 06/15/94 0.0000 0.0000 19,297,751 0.000000 0.000000 134.105310
06/30/94 15.71 06/30/94 07/15/94 0.0000 0.0000 18,807,308 0.000000 0.000000 134.105310
07/29/94 16.22 07/29/94 08/15/94 0.0000 0.0000 19,341,831 0.000000 0.000000 134.105310
08/31/94 16.93 08/31/94 09/15/94 0.0000 0.0000 20,582,231 0.000000 0.000000 134.105310
09/30/94 16.26 09/30/94 10/15/94 0.0000 0.0000 20,058,711 0.000000 0.000000 134.105310
10/31/94 16.14 10/31/94 11/15/94 0.0000 0.0000 20,041,734 0.000000 0.000000 134.105310
11/30/94 15.31 11/30/94 12/15/94 0.0000 0.0000 19,307,467 0.000000 0.000000 134.105310
12/31/94 14.77 12/31/94 01/15/95 0.2473 0.6447 15.02 18,679,228 119.621936 7.964177 142.069487
01/31/95 14.88 01/31/95 02/15/95 0.0000 0.0000 20,142,290 0.000000 0.000000 142.069487
02/28/95 15.60 02/28/95 03/15/95 0.0000 0.0000 0.00 21,268,096 0.000000 0.000000 142.069487
03/31/95 16.01 03/31/95 04/15/95 0.0000 0.0000 0.00 21,670,677 0.000000 0.000000 142.069487
04/30/95 16.56 04/30/95 05/15/95 0.0000 0.0000 0.00 21,670,677 0.000000 0.000000 142.069487
05/31/95 17.21 05/31/95 06/15/95 0.0000 0.0000 0.00 24,124,532 0.000000 0.000000 142.069487
06/30/95 18.05 06/30/95 07/15/95 0.0000 0.0000 0.00 25,333,506 0.000000 0.000000 142.069487
07/31/95 18.91 07/31/95 08/15/95 0.0000 0.0000 0.00 n/a 0.000000 0.000000 142.069487
08/31/95 19.10 08/31/95 09/15/95 0.0000 0.0000 0.00 27,133,862 0.000000 0.000000 142.069487
09/30/95 19.61 09/30/95 10/15/95 0.0000 0.0000 0.00 27,928,392 0.000000 0.000000 142.069487
10/31/95 19.12 10/31/95 11/15/95 0.0000 0.0000 0.00 27,342,653 0.000000 0.000000 142.069487
11/30/95 19.77 11/30/95 12/15/95 0.0000 0.0000 0.00 28,531,436 0.000000 0.000000 142.069487
12/31/95 18.58 12/31/95 12/31/95 0.2040 1.2319 18.58 27,089,752 203.997576 10.979417 153.048904
01/31/96 18.95 01/31/96 01/31/96 0.0000 0.0000 18.95 27,089,752 0.000000 0.000000 153.048904
02/28/96 19.01 02/28/96 02/28/96 0.0000 0.0000 19.01 30,769,319 0.000000 0.000000 153.048904
03/31/96 19.09 03/31/96 03/31/96 0.0000 0.0000 19.09 31,437,641 0.000000 0.000000 153.048904
04/30/96 19.81 04/30/96 04/30/96 0.0000 0.0000 19.81 34,526,157 0.000000 0.000000 153.048904
05/31/96 20.05 05/31/96 05/31/96 0.0000 0.0000 20.05 33,885,953 0.000000 0.000000 153.048904
06/30/96 19.99 06/30/96 06/30/96 0.0000 0.0000 19.99 34,415,097 0.000000 0.000000 153.048904
07/31/96 19.14 07/31/96 07/31/96 0.0000 0.0000 19.14 34,415,097 0.000000 0.000000 153.048904
08/31/96 19.63 08/31/96 08/31/96 0.0000 0.0000 19.63 34,483,109 0.000000 0.000000 153.048904
09/30/96 20.40 09/30/96 09/30/96 0.0000 0.0000 20.40 35,921,220 0.000000 0.000000 153.048904
10/31/96 20.96 10/31/96 10/31/96 0.0000 0.0000 20.96 0 0.000000 0.000000 153.048904
11/30/96 22.73 11/30/96 11/30/96 0.0000 0.0000 22.73 0 0.000000 0.000000 153.048904
12/31/96 21.04 12/31/96 12/31/96 0.2509 1.4701 21.04 0 263.393032 12.518680 165.567584
</TABLE>
<PAGE>
NET CIF: CAPITAL APPRECIATION
RATE OF RETURN
1 YEAR PREPARED ON: 12/31/96
.........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
93.240863 12.99 1211.1988
PURCHASE DATE: 12/31/95
INITIAL INVESTMENT: $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.95 (5% SALES LOAD) 1211.1988 1,000.00 (211.1988)
SHARES PURCHASED: 91.32420091
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(211.1988) 1,000.00 0.2112
ONE YEAR NET RATE OF RETURN: 21.12%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/95 10.40 12/31/95 12/31/95 0.0374 0.0225 10.40 1,587,109 91.324201
01/31/96 10.56 01/31/96 01/31/96 10.56 1,587,109 91.324201
02/28/96 10.57 02/28/96 02/28/96 10.57 2,197,549 91.324201
03/31/96 10.72 03/31/96 03/31/96 10.72 2,448,605 91.324201
04/30/96 11.02 04/30/96 04/30/96 11.02 2,813,871 91.324201
05/31/96 11.27 05/31/96 05/31/96 11.27 3,371,461 91.324201
06/30/96 11.46 06/30/96 06/30/96 11.46 3,728,061 91.324201
07/31/96 10.93 07/31/96 07/31/96 10.93 3,728,061 91.324201
08/31/96 11.31 08/31/96 08/31/96 11.31 4,370,037 91.324201
09/30/96 11.66 09/30/96 09/30/96 11.66 4,634,731 91.324201
10/31/96 12.18 10/31/96 10/31/96 12.18 91.324201
11/30/96 12.89 11/30/96 11/30/96 12.89 91.324201
12/31/96 12.99 12/31/96 12/31/96 0.0669 0.2057 12.99 24.897443 1.916662 93.240863
</TABLE>
<PAGE>
NET CIF: CAPITAL APPRECIATION
RATE OF RETURN
SINCE PREPARED ON: 12/31/96
INCEPTION
...........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
97.518324 12.99 1266.7630
PURCHASE DATE: 09/01/95
INITIAL INVESTMENT $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.53 (5% SALES LOAD) 1266.7630 1,000.00 (266.7630)
SHARES PURCHASED 94.967
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(266.7630) 1,000.00 0.2668
NET RATE OF RETURN SINCE INCEPTION: 26.68%
ANNUALIZED NET RATE OF RETURN SINCE INCE 19.39%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
09/01/95 10.00 09/01/95 09/01/95 10.00 94.96676163
09/30/95 10.12 09/30/95 09/30/95 10.12 1,170,631 94.96676163
10/31/95 10.03 10/31/95 11/15/95 1,299,214 94.96676163
11/30/95 10.36 11/30/95 12/15/95 1,433,440 94.96676163
12/31/95 10.40 12/31/95 12/31/95 0.0374 0.0225 10.40 1,587,109 5.688509022 0.546972021 95.51373365
01/31/96 10.56 01/31/96 01/31/96 10.56 1,587,109 95.51373365
02/28/96 10.57 02/28/96 02/28/96 10.57 2,197,549 95.51373365
03/31/96 10.72 03/31/96 03/31/96 10.72 2,448,605 95.51373365
04/30/96 11.02 04/30/96 04/30/96 11.02 2,813,871 95.51373365
05/31/96 11.27 05/31/96 05/31/96 11.27 3,371,461 95.51373365
06/30/96 11.46 06/30/96 06/30/96 11.46 3,728,061 95.51373365
07/31/96 10.93 07/31/96 07/31/96 10.93 3,728,061 95.51373365
08/31/96 11.31 08/31/96 08/31/96 11.31 4,370,037 95.51373365
09/30/96 11.66 09/30/96 09/30/96 11.66 4,634,731 95.51373365
10/31/96 12.18 10/31/96 10/31/96 12.18 95.51373365
11/30/96 12.89 11/30/96 11/30/96 12.89 95.51373365
12/31/96 12.99 12/31/96 12/31/96 0.0669 0.2057 12.99 26.039622665 2.004589890 97.51832354
</TABLE>
<PAGE>
GROSS CIF: CAPITAL APPRECIATION
RATE OF RETURN
1 YEAR PREPARED ON: 12/31/96
........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
98.171870 12.99 1275.2526
PURCHASE DATE: 12/31/95
INITIAL INVESTMENT: $ 1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.40 1275.2526 1,000.00 (275.2526)
SHARES PURCHASED: 96.15384615
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(275.2526) 1,000.00 0.2753
ONE YEAR NET RATE OF RETURN: 27.53%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/95 10.40 12/31/95 12/31/95 0.0374 0.0225 10.40 1,587,109 96.153846
01/31/96 10.56 01/31/96 01/31/96 10.56 1,587,109 96.153846
02/28/96 10.57 02/28/96 02/28/96 10.57 2,197,549 96.153846
03/31/96 10.72 03/31/96 03/31/96 10.72 2,448,605 96.153846
04/30/96 11.02 04/30/96 04/30/96 11.02 2,813,871 96.153846
05/31/96 11.27 05/31/96 05/31/96 11.27 3,371,461 96.153846
06/30/96 11.46 06/30/96 06/30/96 11.46 3,728,061 96.153846
07/31/96 10.93 07/31/96 07/31/96 10.93 3,728,061 96.153846
08/31/96 11.31 08/31/96 08/31/96 11.31 4,370,037 96.153846
09/30/96 11.66 09/30/96 09/30/96 11.66 4,634,731 96.153846
10/31/96 12.18 10/31/96 10/31/96 12.18 96.153846
11/30/96 12.89 11/30/96 11/30/96 12.89 96.153846
12/31/96 12.99 12/31/96 12/31/96 0.0669 0.2057 12.99 26.214135 2.018024 98.171870
</TABLE>
<PAGE>
GROSS CIF: CAPITAL APPRECIATION
RATE OF RETURN
SINCE PREPARED ON: 12/31/96
INCEPTION
........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
102.686795 12.99 0 1333.9015
PURCHASE DATE: 09/01/95
INITIAL INVESTME $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.00 1333.9015 1,000.00 (333.9015)
SHARES PURCHASED 100.000
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(333.9015) 1,000.00 0.3339
GROSS RATE OF RETURN SINCE INCEPTION: 33.39%
ANNUALIZED GROSS RATE OF RETURN SINCE INCEPTION 24.10%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
09/01/95 10.00 09/01/95 09/01/95 10.00 0.000000 0.000000 100.000000
09/30/95 10.12 09/30/95 09/30/95 10.12 1,170,631 0.000000 0.000000 100.000000
10/31/95 10.03 10/31/95 11/15/95 0.0000 0.0000 0.00 1,299,214 0.000000 0.000000 100.000000
11/30/95 10.36 11/30/95 12/15/95 0.0000 0.0000 0.00 1,433,440 0.000000 0.000000 100.000000
12/31/95 10.40 12/31/95 12/31/95 0.0374 0.0225 10.40 1,587,109 5.990000 0.575962 100.575962
01/31/96 10.56 01/31/96 01/31/96 0.0000 0.0000 10.56 1,587,109 0.000000 0.000000 100.575962
02/28/96 10.57 02/28/96 02/28/96 0.0000 0.0000 10.57 2,197,549 0.000000 0.000000 100.575962
03/31/96 10.72 03/31/96 03/31/96 0.0000 0.0000 10.72 2,448,605 0.000000 0.000000 100.575962
04/30/96 11.02 04/30/96 04/30/96 0.0000 0.0000 11.02 2,813,871 0.000000 0.000000 100.575962
05/31/96 11.27 05/31/96 05/31/96 0.0000 0.0000 11.27 3,371,461 0.000000 0.000000 100.575962
06/30/96 11.46 06/30/96 06/30/96 0.0000 0.0000 11.46 3,728,061 0.000000 0.000000 100.575962
07/31/96 10.93 07/31/96 07/31/96 0.0000 0.0000 10.93 3,728,061 0.000000 0.000000 100.575962
08/31/96 11.31 08/31/96 08/31/96 0.0000 0.0000 11.31 4,370,037 0.000000 0.000000 100.575962
09/30/96 11.66 09/30/96 09/30/96 0.0000 0.0000 11.66 4,634,731 0.000000 0.000000 100.575962
10/31/96 12.18 10/31/96 10/31/96 0.0000 0.0000 12.18 0 0.000000 0.000000 100.575962
11/30/96 12.89 11/30/96 11/30/96 0.0000 0.0000 12.89 0 0.000000 0.000000 100.575962
12/31/96 12.99 12/31/96 12/31/96 0.0669 0.2057 12.99 0 27.419723 2.110833 102.686795
</TABLE>
<PAGE>
NET CIF: GLOBAL INCOME
RATE OF RETURN
1 YEAR PREPARED ON: 12/31/96
.........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
100.320125 10.24 1027.2781
PURCHASE DATE: 12/31/95
INITIAL INVESTMENT: $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.53 (3% SALES LOAD) 1027.2781 1,000.00 (27.2781)
SHARES PURCHASED: 94.96676163
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(27.2781) 1,000.00 0.0273
ONE YEAR NET RATE OF RETURN: 2.73%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/95 10.21 12/31/95 12/31/95 0.0389 10.21 10,585,690 94.966762
01/31/96 10.09 01/31/96 01/31/96 0.0451 10.09 10,585,690 4.283001 0.424480 95.391241
02/28/96 9.93 02/28/96 02/28/96 0.0414 9.93 10,726,946 3.949197 0.397704 95.788945
03/31/96 9.86 03/31/96 03/31/96 0.0394 9.86 10,768,085 3.774084 0.382767 96.171712
04/30/96 9.85 04/30/96 04/30/96 0.0445 9.85 10,951,861 4.277125 0.434226 96.605938
05/31/96 9.82 05/31/96 05/31/96 0.0426 9.82 11,063,063 4.116369 0.419182 97.025120
06/30/96 9.83 06/30/96 06/30/96 0.0354 9.83 11,214,150 3.435507 0.349492 97.374612
07/31/96 9.96 07/31/96 07/31/96 0.0453 9.96 11,214,150 4.407355 0.442506 97.817118
08/31/96 9.96 08/31/96 08/31/96 0.0424 9.96 11,572,970 4.146158 0.416281 98.233399
09/30/96 10.01 09/30/96 09/30/96 0.0437 10.01 11,699,811 4.292800 0.428851 98.662250
10/31/96 10.15 10/31/96 10/31/96 0.0416 10.15 4.104251 0.404360 99.066610
11/30/96 10.30 11/30/96 11/30/96 0.0834 10.30 8.257202 0.801670 99.868280
12/31/96 10.24 12/31/96 12/31/96 0.0463 10.24 4.626897 0.451845 100.320125
</TABLE>
<PAGE>
NET CIF: GLOBAL INCOME
RATE OF RETURN
SINCE PREPARED ON: 12/31/96
INCEPTION
..........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
103.630317 10.24 1061.1744
PURCHASE DATE: 09/01/95
INITIAL INVESTMENT $1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.31 (3% SALES LOAD) 1061.1744 1,000.00 (61.1744)
SHARES PURCHASED 96.993
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(61.1744) 1,000.00 0.0612
NET RATE OF RETURN SINCE INCEPTION: 6.12%
ANNUALIZED NET RATE OF RETURN SINCE INCEPTION 4.55%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
09/01/95 10.00 09/01/95 09/01/95 10.00 96.99321048
09/30/95 9.93 09/30/95 10/15/95 0.0031 9.95 1,170,631 0.300678952 0.030218990 97.02342947
10/31/95 10.01 10/31/95 11/15/95 0.0378 10.12 1,299,214 3.667485634 0.362399766 97.38582923
11/30/95 10.09 11/30/95 12/15/95 0.0358 10.19 10,486,104 3.486412686 0.342140597 97.72796983
12/31/95 10.21 12/31/95 12/31/95 0.0389 10.21 10,585,690 3.801618026 0.372342608 98.10031244
01/31/96 10.09 01/31/96 01/31/96 0.0451 10.09 10,585,690 4.424324091 0.438486035 98.53879847
02/28/96 9.93 02/28/96 02/28/96 0.0414 9.93 10,726,946 4.079506257 0.410826411 98.94962488
03/31/96 9.86 03/31/96 03/31/96 0.0394 9.86 10,768,085 3.898615220 0.395397081 99.34502196
04/30/96 9.85 04/30/96 04/30/96 0.0445 9.85 10,951,861 4.418254115 0.448553717 99.79357568
05/31/96 9.82 05/31/96 05/31/96 0.0426 9.82 11,063,063 4.252194380 0.433013684 100.22658936
06/30/96 9.83 06/30/96 06/30/96 0.0354 9.83 11,214,150 3.548865973 0.361024005 100.58761337
07/31/96 9.96 07/31/96 07/31/96 0.0453 9.96 11,214,150 4.552781468 0.457106573 101.04471994
08/31/96 9.96 08/31/96 08/31/96 0.0424 9.96 11,572,970 4.282965872 0.430016654 101.47473660
09/30/96 10.01 09/30/96 09/30/96 0.0437 10.01 11,699,811 4.434445989 0.443001597 101.91773819
10/31/96 10.15 10/31/96 10/31/96 0.0416 10.15 4.239675991 0.417702068 102.33544026
11/30/96 10.30 11/30/96 11/30/96 0.0834 10.30 8.529658946 0.828122228 103.16356249
12/31/96 10.24 12/31/96 12/31/96 0.0463 10.24 4.779567850 0.466754673 103.63031716
</TABLE>
<PAGE>
GROSS CIF: GLOBAL INCOME
RATE OF RETURN
1 YEAR PREPARED ON: 12/31/96
........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
103.464341 10.24 1059.4748
PURCHASE DATE: 12/31/95
INITIAL INVESTMENT: $ 1,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.21 1059.4748 1,000.00 (59.4748)
SHARES PURCHASED: 97.94319295
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(59.4748) 1,000.00 0.0595
ONE YEAR NET RATE OF RETURN: 5.95%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/95 10.21 12/31/95 12/31/95 0.0389 10.21 10,585,690 97.943193
01/31/96 10.09 01/31/96 01/31/96 0.0451 10.09 10,585,690 4.417238 0.437784 98.380977
02/28/96 9.93 02/28/96 02/28/96 0.0414 9.93 10,726,946 4.072972 0.410168 98.791145
03/31/96 9.86 03/31/96 03/31/96 0.0394 9.86 10,768,085 3.892371 0.394764 99.185909
04/30/96 9.85 04/30/96 04/30/96 0.0445 9.85 10,951,861 4.411178 0.447835 99.633744
05/31/96 9.82 05/31/96 05/31/96 0.0426 9.82 11,063,063 4.245384 0.432320 100.066064
06/30/96 9.83 06/30/96 06/30/96 0.0354 9.83 11,214,150 3.543182 0.360446 100.426510
07/31/96 9.96 07/31/96 07/31/96 0.0453 9.96 11,214,150 4.545490 0.456374 100.882885
08/31/96 9.96 08/31/96 08/31/96 0.0424 9.96 11,572,970 4.276106 0.429328 101.312213
09/30/96 10.01 09/30/96 09/30/96 0.0437 10.01 11,699,811 4.427344 0.442292 101.754505
10/31/96 10.15 10/31/96 10/31/96 0.0416 10.15 4.232886 0.417033 102.171538
11/30/96 10.30 11/30/96 11/30/96 0.0834 10.30 8.515998 0.826796 102.998334
12/31/96 10.24 12/31/96 12/31/96 0.0463 10.24 4.771913 0.466007 103.464341
</TABLE>
<PAGE>
GROSS CIF: GLOBAL INCOME
RATE OF RETURN
SINCE PREPARED ON: 12/31/96
INCEPTION
..........
<TABLE>
<CAPTION>
SHARES TO DATE X (NAV + NOT REINVESTED) = GROSS VALUE
106.842857 10.24 0 1094.0709
PURCHASE DATE: 09/01/95
INITIAL INVESTMENT: $1,000.00 GROSS VALUE - INITIAL INVESTMENT = NET VALUE
INITIAL VALUE: 10.00 1094.0709 1,000.00 (94.0709)
SHARES PURCHASED: 100.000
NET VALUE / INITIAL INVESTMENT = GROSS RATE OF RETURN
(94.0709) 1,000.00 0.0941
GROSS RATE OF RETURN SINCE INCEPTION: 9.41%
ANNUALIZED GROSS RATE OF RETURN SINCE INCEPTION: 6.97%
INCOME CAPITAL SHARES TOTALS
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV NET ASSETS $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
09/01/95 10.00 09/01/95 09/01/95 10.00 0.000000 0.000000 100.000000
09/30/95 9.93 09/30/95 10/15/95 0.0031 9.95 1,170,631 0.310000 0.031156 100.031156
10/31/95 10.01 10/31/95 11/15/95 0.0378 0.0000 10.12 1,299,214 3.781178 0.373634 100.404790
11/30/95 10.09 11/30/95 12/15/95 0.0358 0.0000 10.19 10,486,104 3.594491 0.352747 100.757537
12/31/95 10.21 12/31/95 12/31/95 0.0389 0.0000 10.21 10,585,690 3.919468 0.383885 101.141422
01/31/96 10.09 01/31/96 01/31/96 0.0451 0.0000 10.09 10,585,690 4.561478 0.452079 101.593501
02/28/96 9.93 02/28/96 02/28/96 0.0414 0.0000 9.93 10,726,946 4.205971 0.423562 102.017063
03/31/96 9.86 03/31/96 03/31/96 0.0394 0.0000 9.86 10,768,085 4.019472 0.407654 102.424718
04/30/96 9.85 04/30/96 04/30/96 0.0445 0.0000 9.85 10,951,861 4.555220 0.462459 102.887177
05/31/96 9.82 05/31/96 05/31/96 0.0426 0.0000 9.82 11,063,063 4.384012 0.446437 103.333614
06/30/96 9.83 06/30/96 06/30/96 0.0354 0.0000 9.83 11,214,150 3.658881 0.372216 103.705829
07/31/96 9.96 07/31/96 07/31/96 0.0453 0.0000 9.96 11,214,150 4.693918 0.471277 104.177106
08/31/96 9.96 08/31/96 08/31/96 0.0424 0.0000 9.96 11,572,970 4.415738 0.443347 104.620453
09/30/96 10.01 09/30/96 09/30/96 0.0437 0.0000 10.01 11,699,811 4.571914 0.456735 105.077188
10/31/96 10.15 10/31/96 10/31/96 0.0416 0.0000 10.15 0 4.371106 0.430651 105.507839
11/30/96 10.30 11/30/96 11/30/96 0.0834 0.0000 10.30 0 8.794078 0.853794 106.361633
12/31/96 10.24 12/31/96 12/31/96 0.0463 0.0000 10.24 0 4.927734 0.481224 106.842857
</TABLE>
<PAGE>
SUBSIDIARIES OF THE CHUBB CORPORATION
May 1, 1997
Chubb & Son, Inc.
- Associated Aviation Underwriters (affiliate)
- Chubb Services Corporation
- Chubb & Son Inc. (Illinois)
- Chubb Customer Center, Inc.
The Chubb Corporation, a Delaware corporation
- Bhakdikij Company Limited (affiliate)
- Chubb Insurance Company (Thailand), Limited (affiliate)
Federal Insurance Company
- Bellemead Development Corporation
- C.C. Canada Holdings Ltd,
- Chubb Insurance Company of Canada
- Chubb de Mexico, Compania Afianzadora, S.A. de S.V.
- Chubb de Mexico, Compania de Seguros, S.A. de S.V. (affiliate)
- Chubb Custom Insurance Company
- Chubb de Mexico Servicios de Subscripcion y Administatives, S.A. de C.V.
- Chubb Indemnity Insurance Company
- Chubb Insurance Company of Europe, S.A.
- Chubb Insurance Company of New Jersey
- Chubb Lloyd's Insurance Company of Texas (affiliate)
- Chubb National Insurance Company
- Chubb Pacific Underwriting Management Services Pte. Ltd.
- Chubb Seguros-holdings Chile, S.A.
- Chubb de Chile Compania de Seguros Generales, S.A.
_ Great Northern Insurance Company
- Pacific Indemnity Company
- Northwestern Pacific Indemnity Company
- Texas Pacific Indemnity Company
- Seguros La Federacion, C.A. - Venezuela (affiliate)
- Vigilant Insurance Company
- Chubb de Colombia Compania de Seguros, S.A.
- Chubb Insurance Company of Australia Limited
- Chubb de Colombia Compania de Seguros, S.A.
Chubb Custom Market, Inc.
Chubb Asset Managers, Inc.
Chubb Capital Corporation
Chubb do Brasil Servicos
Chubb Computer Services, Inc.
Chubb Professional Resources, Inc.
The Chubb Institute, Inc.
Personal Line. Insurance Brokerage Inc.
Chubb Investment Services, Ltd.
Transit Air Services, Inc.
Chubb Investment Company of New Jersey, Inc.
Chubb Equity Managers, Inc.
Chubb Atlantic Indemnity, Ltd.
DHC Corporation
Chubb do Brasil Compannia de Seguros
<PAGE>
CHUBB INVESTMENT FUNDS, INC.
Calculation of Offering Prices
December 31, 1996
<TABLE>
<CAPTION>
Net Asset Offering
Total Shares Value Price
Fund Net Assets Outstanding Per Share Per Share
<S> <C> <C> <C> <C>
Money Market $ 8,854,016 8,854,862 $ 1.00 $ 1.00
Government Securities 12,818,450 1,222,744 10.48 10.81
Total Return 31,064,099 1,784,176 17.41 18.33
Tax-Exempt 15,061,382 1,239,556 12.15 12.53
Growth & Income 40,281,849 1,914,289 21.04 22.15
Capital Appreciation 6,440,571 495,668 12.99 13.67
Global Income 12,226,878 1,193,895 10.24 10.56
</TABLE>
