<PAGE>
[LOGO]
FORTIS
ADVANTAGE
PORTFOLIOS, INC.
Semi-Annual Report
April 30, 1995
[LOGO]
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FORTIS ADVANTAGE PORTFOLIOS, INC. SEMI-ANNUAL REPORT
CONTENTS
LETTER TO SHAREHOLDERS 1
SCHEDULE OF INVESTMENTS
ASSET ALLOCATION PORTFOLIO 5
CAPITAL APPRECIATION PORTFOLIO 9
HIGH YIELD PORTFOLIO 11
GOVERNMENT TOTAL RETURN PORTFOLIO 15
STATEMENTS OF ASSETS AND LIABILITIES 17
STATEMENTS OF OPERATIONS 18
STATEMENTS OF CHANGES IN NET ASSETS
ASSET ALLOCATION PORTFOLIO 19
CAPITAL APPRECIATION PORTFOLIO 20
HIGH YIELD PORTFOLIO 21
GOVERNMENT TOTAL RETURN PORTFOLIO 22
NOTES TO FINANCIAL STATEMENTS 23
BOARD OF DIRECTORS AND OFFICERS 29
- - TOLL-FREE PERSONAL ASSISTANCE
- Shareholder Services
- (800) 800-2638, Ext. 3012 or 3014
- 7:30 a.m. to 5:30 p.m. CST, M-Th
- 7:30 a.m. to 5:00 p.m. CST, F
- - TOLL-FREE INFORMATION LINE
- For daily account balances,
transaction activity or net asset
value information
- (800) 800-2638, Ext. 4344
- 24 hours a day
FOR MORE INFORMATION ABOUT FORTIS FINANCIAL GROUP'S FAMILY OF PRODUCTS, CALL
YOUR INVESTMENT REPRESENTATIVE OR THE HOME OFFICE AT (800) 800-2638.
TO ORDER PROSPECTUSES OR SALES LITERATURE FOR ANY FORTIS PRODUCT, CALL (800)
800-2638, EXT. 4579.
HOW TO USE THIS REPORT
For a quick overview of the fund's performance during the past six months, refer
to the Highlights box below. The letter from the portfolio manager and president
provides a more detailed analysis of the fund and financial markets.
The charts alongside the letter are useful because they provide more information
about your investments. The top holdings chart shows the types of securities in
which the fund invests, and the pie chart shows a breakdown of the fund's assets
by sector. The portfolio changes show the investment decisions your fund manager
has made over the period in response to changing market conditions.
The performance chart graphically compares the fund's total return performance
with a selected investment index. Remember, however, that an index may reflect
the performance of securities the fund may not hold. Also, the index does not
deduct sales charges, investment advisory fees and other fund expenses, whereas
your fund does. Individuals cannot buy an unmanaged index fund without incurring
some charges and expenses. Sales charges pay for your investment
representative's advice.
This report is just one of several tools you can use to learn more about your
investment in the Fortis Family of Mutual Funds. Your investment representative,
who understands your personal financial situation, can best explain the features
of your investment and how it's designed to help you meet your financial goals.
HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 1995
CLASS A CLASS B* CLASS C* CLASS H*
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
ASSET ALLOCATION PORTFOLIO
NET ASSET VALUE PER SHARE:
Beginning of period............................. $ 14.44 $ 14.27 $ 14.27 $ 14.27
End of period................................... $ 14.95 $ 14.91 $ 14.87 $ 14.89
TOTAL RETURN** 6.14% 7.01% 6.73% 6.87%
DISTRIBUTIONS PER SHARE:
From net investment income...................... $ 0.2650 $ 0.2500 $ 0.2500 $ 0.2500
From net realized gains on investments.......... $ 0.0896 $ 0.0896 $ 0.0896 $ 0.0896
CAPITAL APPRECIATION PORTFOLIO
NET ASSET VALUE PER SHARE:
Beginning of period............................. $ 23.05 $ 22.45 $ 22.45 $ 22.45
End of period................................... $ 24.60 $ 24.55 $ 24.56 $ 24.56
TOTAL RETURN** 6.72% 9.35% 9.40% 9.40%
DISTRIBUTIONS PER SHARE:
From net investment income...................... -- -- -- --
From net realized gains on investments.......... -- -- -- --
HIGH YIELD PORTFOLIO
NET ASSET VALUE PER SHARE:
Beginning of period............................. $ 7.90 $ 7.87 $ 7.87 $ 7.87
End of period................................... $ 7.97 $ 7.96 $ 7.96 $ 7.96
TOTAL RETURN** 6.93% 6.59% 6.59% 6.59%
DISTRIBUTIONS PER SHARE:
From net investment income...................... $ 0.453943 $ 0.398606 $ 0.398606 $ 0.398606
From net realized gains on investments.......... -- -- -- --
GOVERNMENT TOTAL RETURN PORTFOLIO
NET ASSET VALUE PER SHARE:
Beginning of period............................. $ 7.73 $ 7.64 $ 7.64 $ 7.64
End of period................................... $ 7.88 $ 7.86 $ 7.87 $ 7.86
TOTAL RETURN** 5.86% 6.21% 6.34% 6.21%
DISTRIBUTIONS PER SHARE:
From net investment income...................... $ 0.293904 $ 0.247462 $ 0.247462 $ 0.247462
From net realized gains on investments.......... -- -- -- --
<FN>
* Period from November 14, 1994 (commencement of operations) to April 30,
1995.
** These are the fund's total returns during the period, including reinvestment
of all dividend and capital gains distributions without adjustments for
sales charge.
</TABLE>
<PAGE>
DEAR SHAREHOLDER:
[PHOTO]
"I want to spend time enjoying my family and building my career--not
managing my investments. With the Asset Allocation Portfolio, I can do
the things that are important today knowing that my money is hard at
work for tomorrow."
We're pleased to present the Fortis Advantage Portfolios, Inc. semi-annual
report for the period ended April 30, 1995.
ECONOMIC REVIEW AND INVESTMENT STRATEGIES
The rise of the U.S. equity markets year-to-date has been surprising for its
strength, yet not entirely unexpected. The reasons for continued vigor in the
equity markets are quiet inflation, a more relaxed posture by the Federal
Reserve, and declining interest rates. The economic slowdown in the United
States is well under way, and is likely to last a few more quarters. This is in
contrast to the economy's strength in 1994, which was due to two unsustainable
forces: excessive consumer credit growth and business inventory buildup. Neither
of these factors is likely to resume soon. In fact, slower final demand is
beginning to feed back into the system, con-
ASSET ALLOCATION PORTFOLIO ALLOCATION AS OF 4/30/95
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Long-Term Debt Securities 46.6%
Equity Investments 41.3%
Cash Equivalents/Receivables 12.1%
100.0%
</TABLE>
tributing to a weaker employment picture and falling commodity prices.
Currently, the greatest risk to the U.S. equity markets is if the Fed overstays
its welcome and maintains a tight credit policy for too long. This situation
would hurt corporate profits in general, and provoke a narrowing list of
companies to sustain earnings growth during late 1995 and early 1996.
ASSET ALLOCATION PORTFOLIO
TOP HOLDINGS AS OF 4/30/95
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -----------------------------------------------------------------------------
<C> <S> <C>
1. Microsoft Corp. 1.6%
2. 3Com Corp. 1.4%
3. Silicon Graphics, Inc. 1.4%
4. First Data Corp. 1.4%
5. CUC International, Inc. 1.4%
<CAPTION>
Bonds
- -----------------------------------------------------------------------------
<C> <S> <C>
1. U.S. Treasury Bond (8.125%) 2021 5.2%
2. FNMA Note (7.84%) 1998 3.3%
3. U.S. Treasury Note (7.25%) 1996 3.1%
4. FHLB Global Note (6.125%) 1996 3.0%
5. FNMA (8.50%) 2025 2.5%
</TABLE>
PORTFOLIO CHANGES FOR THE SIX-MONTH PERIOD ENDED 4/30/95
STOCK ADDITIONS:
Computer Associates International, Inc.
Disney (Walt) Co.
Novell, Inc.
STOCK ELIMINATIONS:
ALC Communications Corp.
Brinker International, Inc.
Grupo Televisa, S.A. de C.V. ADR
Telefonos de Mexico, S.A. de C.V. ADR
Toys 'R' Us, Inc.
ASSET ALLOCATION PORTFOLIO
CLASS B, C AND H TOTAL RETURNS
Since Inception 11/14/94+
<TABLE>
<CAPTION>
Without With
CDSC CDSC++
- ------------------------------------------------------------
<S> <C> <C>
Class B shares +7.01 % +3.41 %
Class C shares +6.73 % +5.73 %
Class H shares +6.87 % +3.27 %
<FN>
The performance of the separate classes will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Past performance is not indicative of future performance.
Total returns include reinvestment of all dividend and capital gains
distributions.
+ Date shares were first offered to the public.
++ Assumes redemption on April 30, 1995.
</TABLE>
ASSET ALLOCATION PORTFOLIO CLASS A
Value of $10,000 invested January 4, 1988
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS AGGREGATE ASSET ALLOCATION
BOND INDEX# S&P 500## PORTFOLIO CLASS A
<S> <C> <C> <C>
01/04/88 10,000 10,000 9,550
04/30/88 10,320 10,702 9,560
04/30/89 11,140 13,147 10,617
04/30/90 12,146 14,527 11,542
04/30/91 13,991 17,085 13,212
04/30/92 15,529 19,470 15,095
04/30/93 17,589 21,266 16,645
04/30/94 17,737 22,403 17,610
04/30/95 19,053 26,336 19,499
Asset Allocation Portfolio Class A
Average Annual Total Return
1 Year 5 Year Since January 4, 1988@
With Sales Charge* +5.74% +10.04% +9.55%
Without Sales Charge** +10.72% +11.06% +10.24%
<FN>
Annual period ended April 30
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.50%.
** These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions without
adjustment for sales charge.
# An unmanaged index of government, corporate, and mortgage-backed securities
with an average maturity of approximately nine years.
## This is an unmanaged index of 500 common stocks.
@ Date shares were first offered to the public.
</TABLE>
1
<PAGE>
[PHOTO]
"The entrepreneurial spirit still thrives in America. For people willing
to work hard and take some risks, opportunities are unlimited. Young,
growing companies are bringing new products and new ideas to the
marketplace every day. The Capital Appreciation Portfolio lets us invest
in these companies."
However, we do not expect this scenario to unfold. The U.S. bond market has
already taken charge by leading rates downward. Today's lower interest rates may
stimulate growth later.
PORTFOLIO REVIEW
ASSET ALLOCATION PORTFOLIO
There were some small changes in the fixed income portion of the Asset
Allocation over the past six months. When the period began, we changed our
recommended balance from 40 percent equity, 55 percent bonds, 5 percent cash to
40 percent equities and 60 percent bonds. The additional fixed income allocation
was used to purchase a 5 percent position in high grade municipal bonds, as they
seemed to present an unusual value. This small position was completely
eliminated in January 1995 as the municipal market exhibited very strong
performance. Throughout this period, our commitment to high yield has remained
unchanged at about 20 percent of fixed income assets.
CAPITAL APPRECIATION PORTFOLIO COMPOSITION BY INDUSTRY AS OF 4/30/95
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 21.3%
Computer-Software 18.3%
Retail: Miscellaneous 13.0%
Cash Equivalents/Receivables 8.4%
Electronic-Semiconductor and Ca-
pacitor 7.0%
Health Care Services 6.8%
Restaurants and Franchising 6.5%
Electronics-Controls and Equip-
ment 5.4%
Office Equipment and Supplies 4.8%
Business Services and Supplies 4.3%
Telecommunications 4.2%
</TABLE>
CAPITAL APPRECIATION PORTFOLIO
CLASS B, C AND H TOTAL RETURNS
Since Inception 11/14/94+
<TABLE>
<CAPTION>
Without With
CDSC CDSC++
- ------------------------------------------------------------
<S> <C> <C>
Class B shares +9.35 % +5.80 %
Class C shares +9.40 % +8.40 %
Class H shares +9.40 % +5.80 %
<FN>
The performance of the separate classes will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Past performance is not indicative of future performance.
Total returns include reinvestment of all dividend and capital gains
distributions.
+ Date shares were first offered to the public.
++ Assumes redemption on April 30, 1995.
</TABLE>
CAPITAL APPRECIATION PORTFOLIO
TOP TEN HOLDINGS AS OF 4/30/95
<TABLE>
<CAPTION>
Percent
of
Net
Stocks Assets
- ------------------------------------------------------------------------------
<C> <S> <C>
1. Input/Output, Inc. 4.6%
2. America Online, Inc. 3.8%
3. Xilinx, Inc. 3.4%
4. Lone Star Steakhouse and Saloon, Inc. 3.4%
5. Acxiom Corp. 2.8%
6. Informix Corp. 2.8%
7. Ultratech Stepper, Inc. 2.6%
8. Micro Warehouse, Inc. 2.4%
9. Petroleum Geo Services A/S ADS 2.2%
10. Fastenal Co. 2.1%
</TABLE>
PORTFOLIO CHANGES FOR THE SIX-MONTH
PERIOD ENDED 4/30/95
ADDITIONS:
ADC Telecommunications, Inc.
Alliance Semiconductor Corp.
Cerner Corp.
FTP Software, Inc.
Fastenal Co.
Franklin Electric Publishers, Inc.
Hollywood Entertainment Corp.
Indigo NV
Integrated Device Technology, Inc.
Integrated Silicon Solutions, Inc.
Medaphis Corp.
Medic Computer Systems, Inc.
Medpartners, Inc.
Network General Corp.
Omnicare, Inc.
Papa John's International, Inc.
Rotech Medical Corp.
Steris Corp.
Sunglass Hut International, Inc.
System Software Associates, Inc.
ELIMINATIONS:
Cygne Designs, Inc.
DOVatron International, Inc.
ECI Telecom Ltd.
Fastenal Co.
Mid Atlantic Medical Services, Inc.
Powersoft Corp.
Resound Corp.
Rio Hotel & Casino, Inc.
Starbucks Corp.
Stein Mart, Inc.
CAPITAL APPRECIATION PORTFOLIO CLASS A
Value of $10,000 invested January 4, 1988
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CAPITAL APPRECIATION
S&P 500*** PORTFOLIO CLASS A
<S> <C> <C> <C>
01/04/88 10,000 9,550
04/30/88 10,702 10,390
04/30/89 13,147 12,808
04/30/90 14,527 15,400
04/30/91 17,085 16,251
04/30/92 19,470 19,017
04/30/93 21,266 21,358
04/30/94 22,403 24,903
04/30/95 26,336 26,775
Capital Appreciation Portfolio
Class A
Average Annual Total Return
1 Year 5 Year Since January 4, 1988@
With Sales Charge* +2.68% +10.67% +14.40%
Without Sales Charge** +7.52% +11.70% +15.12%
<FN>
Annual period ended April 30
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.50%.
** These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions without
adjustment for sales charge.
*** An unmanaged index of 500 common stocks.
@ Date shares were first offered to the public.
</TABLE>
2
<PAGE>
[PHOTO]
"It makes sense to put part of my money into the High Yield Portfolio. I
want the opportunity to earn the kind of returns that high yield bonds
can offer."
In early April we again changed our allocation to a 50/50 (equities/bonds). In
addition, we shortened our average duration over this period from about five
years at the beginning to the current 4.75 years.
CAPITAL APPRECIATION PORTFOLIO
While the stocks of smaller, emerging growth companies, such as those
represented in the Capital Appreciation Fund, lagged those of large
multinational companies in the early stages of the market advance, they have
gained ground recently as growth stocks have moved back into favor with
investors. Earnings of growth companies should continue to increase strongly as
cyclical earnings begin to weaken under pressure of a slowing economy.
HIGH YIELD PORTFOLIO
Returns for the High Yield Portfolio continued to be excellent. Higher market
prices for gaming credits, machinery, and metal industry securities have aided
recent performance. However, several food distributor holdings have slightly
hurt overall results.
Our strategy continues to emphasize gaming, retail and consumer credits. And we
have -- and may continue to -- sell machinery, metal and container-related
bonds.
The "soft landing" promoted by the Federal Reserve should pose little threat to
most high yield issues. However, should the economy roll into a recession, the
outlook for high yield securities could be more negative. As stated previously,
we do not believe we're on the brink of recession, rather we feel we are in a
temporary pause.
HIGH YIELD PORTFOLIO COMPOSITION BY INDUSTRY AS OF 4/30/95
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 14.1%
Retail 12.7%
Leisure Time-Amusements 11.0%
Consumer Goods 9.0%
Machinery 8.0%
Metals-Mining and Miscellaneous 7.4%
Food-Grocery, Miscellaneous 7.9%
Containers and Packaging 5.8%
Media 5.2%
Cash Equivalents/Receivables 5.3%
Technology 4.7%
Beverage 4.7%
Transportation 4.2%
</TABLE>
HIGH YIELD PORTFOLIO
TOP TEN HOLDINGS AS OF 4/30/95
<TABLE>
<CAPTION>
Percent of
Net Assets
- --------------------------------------------------------------------------------
<C> <S> <C>
1. Computervision Corp. (11.375%) 1999 2.4%
2. Terex Corp. (13.00%) 1996 1.9%
3. Falcon Holding Group (11.00%) 2003 1.9%
4. Liggett Group (11.50%) 1999 1.8%
5. Specialty Foods Corp. (11.25%) 2003 1.7%
6. Envirodyne Industries, Inc. (10.25%) 2001 1.6%
7. Flagstar Corp. (11.25%) 2004 1.6%
8. Plastic Specialty & Technologies, Inc. (11.25%) 2003 1.5%
9. Thrifty Payless, Inc. (12.25%) 2004 1.5%
10. All-American Bottling Corp. (13.00%) 2001 1.5%
</TABLE>
HIGH YIELD PORTFOLIO
CLASS B, C AND H TOTAL RETURNS
Since Inception 11/14/94+
<TABLE>
<CAPTION>
Without With
CDSC CDSC++
<S> <C> <C>
- ------------------------------------------------------------
Class B shares +6.58 % +2.98 %
Class C shares +6.59 % +5.59 %
Class H shares +6.59 % +2.99 %
<FN>
The performance of the separate classes will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Past performance is not indicative of future performance.
Total returns include reinvestment of all dividend and capital gains
distributions.
+ Date shares were first offered to the public.
++ Assumes redemption on April 30, 1995.
</TABLE>
HIGH YIELD PORTFOLIO CLASS A
Value of $10,000 invested January 4, 1988
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS HIGH HIGH YIELD PORTFOLIO
YIELD INDEX*** CLASS A
<S> <C> <C> <C>
01/04/88 10,000 9,550
04/30/88 10,639 9,895
04/30/89 11,435 10,553
04/30/90 11,141 9,135
04/30/91 12,891 10,673
04/30/92 16,167 13,673
04/30/93 18,574 15,752
04/30/94 19,799 17,723
04/30/95 21,854 18,602
High Yield Portfolio Class A
Average Annual Total Return
1 Year 5 Year Since January 4, 1988@
With Sales Charge* +0.24% +14.23% +8.85%
Without Sales Charge** +4.96% +15.29% +9.54%
<FN>
Annual period ended April 30
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.50%.
** These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions without
adjustment for sales charge.
*** An unmanaged index of lower quality, high yield corporate debt securities.
@ Date shares were first offered to the public.
</TABLE>
3
<PAGE>
[PHOTO]
"The Government Total Return Portfolio offers an alternative to today's
low-yielding CDs. It seemed to be the right choice for us."
GOVERNMENT TOTAL RETURN PORTFOLIO
Since the last shareholder letter, some modest changes were made in the
portfolio. Last October, 50 percent of assets were mortgage-backed securities
and approximately 37 percent in treasury/agency bonds. Because mortgage-backed
securities seemed to provide less attractive yields over comparable treasuries,
we have lessened our mortgage exposure to about 35 percent and increased the
treasury/agency holdings to 50 percent.
Last year the portfolio had an overall duration of about 5.1 years, which was
maintained until recently when it was lowered to 4.75 years.
IN CLOSING
We appreciate your investment in the Fortis Advantage Portfolios. If
you have any questions, please call us or talk with your investment
professional.
Sincerely,
/s/ DEAN C. KOPPERUD
- --------------------
Dean C. Kopperud
President
/s/ STEPHEN M. POLING
- --------------------
Stephen M. Poling
Vice President
/s/ DENNIS M. OTT
- ----------------
Dennis M. Ott
Vice President
May 24, 1995
GOVERNMENT TOTAL RETURN PORTFOLIO COMPOSITION BY INDUSTRY AS OF 4/30/95
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
U.S. Treasury Securities 38.6%
GNMA's 15.3%
FNMA's 12.2%
FHLMC's 11.2%
Whole Loan Residential 6.2%
Receivables/Cash Equivalents 5.7%
Other Direct Federal Obligations 5.4%
Miscellaneous 2.9%
Other Government Agencies 2.5%
</TABLE>
GOVERNMENT TOTAL RETURN PORTFOLIO
TOP TEN HOLDINGS AS OF 4/30/95
<TABLE>
<CAPTION>
Percent of
Net Assets
- -------------------------------------------------------------------------------
<C> <S> <C>
1. U.S. Treasury Note (8.75%) 1997 8.1%
2. U.S. Treasury Note (9.375%) 1996 7.4%
3. U.S. Treasury Note (9.00%) 1998 7.4%
4. U.S. Treasury Bond (8.125%) 2021 7.4%
5. GNMA (8.00%) 2022 5.5%
6. FHLB (7.31%) 2004 5.4%
7. U.S. Treasury Note (7.25%) 1996 5.2%
8. FNMA (8.50%) 2022 3.4%
9. U.S. Treasury Note (7.875%) 2004 3.3%
10. GNMA II (9.50%) 2019 3.2%
</TABLE>
GOVERNMENT TOTAL RETURN PORTFOLIO
CLASS B, C AND H TOTAL RETURNS
Since Inception 11/14/94+
<TABLE>
<CAPTION>
Without With
CDSC CDSC++
- ------------------------------------------------------------
<S> <C> <C>
Class B shares +6.20 % +2.60 %
Class C shares +6.34 % +5.34 %
Class H shares +6.21 % +2.61 %
<FN>
The performance of the separate classes will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Past performance is not indicative of future performance.
Total returns include reinvestment of all dividend and capital gains
distributions.
+ Date shares were first offered to the public.
++ Assumes redemption on April 30, 1995.
</TABLE>
GOVERNMENT TOTAL RETURN PORTFOLIO CLASS A
Value of $10,000 invested May 28, 1986
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS
INTERMEDIATE GOV'T GOVERNMENT TOTAL RETURN
INDEX*** PORTFOLIO CLASS A
<S> <C> <C> <C>
05/28/86 10,000 9,550
04/30/87 10,692 10,020
04/30/88 11,475 10,586
04/30/89 12,223 11,182
04/30/90 13,300 12,270
04/30/91 15,117 13,623
04/30/92 16,678 14,411
04/30/93 18,676 16,136
04/30/94 18,841 15,694
04/30/95 20,027 16,325
Government Total Return Portfolio
Class A
Average Annual Total Return
1 Year 5 Year Since May 28, 1986@
With Sales Charge* -0.66% +4.91% +5.64%
Without Sales Charge** +4.03% +5.88% +6.19%
<FN>
Annual period ended April 30
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.50%.
** These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions without
adjustment for sales charge.
*** An unmanaged index of government bonds with an average maturity of three to
four years.
@ Date shares were first offered to the public.
</TABLE>
4
<PAGE>
FORTIS ADVANTAGE ASSET ALLOCATION PORTFOLIO
Schedule of Investments
(Unaudited)
April 30, 1995
COMMON STOCKS-41.05%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
- --------- ----------- -----------
<C> <S> <C> <C>
BROADCASTING - 1.47%
500 Petro PSC Properties, L.P.
(Warrants).......................... $ 18,285 $ 16,500
34,000 The News Corp., Ltd. ADR (e).......... 584,292 663,000
24,669 Viacom, Inc., Non-Voting Class B
(a)................................. 948,787 1,131,690
----------- -----------
1,551,364 1,811,190
----------- -----------
BUSINESS SERVICES AND SUPPLIES - 3.57%
30,400 First Data Corp....................... 988,244 1,710,000
2,809 First Financial Management Corp....... 142,788 205,408
48,000 MBNA Corp............................. 1,033,494 1,452,000
34,950 Sensormatic Electronics Corp.......... 1,009,975 1,039,763
----------- -----------
3,174,501 4,407,171
----------- -----------
COMPUTER-SOFTWARE - 4.61%
15,000 Computer Associates International,
Inc................................. 777,928 965,625
23,000 Lotus Development Corp. (a)........... 1,079,866 724,500
23,600 Microsoft Corp. (a)................... 1,005,434 1,929,300
30,000 Novell, Inc. (a)...................... 653,310 652,500
46,500 Oracle Systems Corp. (a).............. 344,821 1,418,250
----------- -----------
3,861,359 5,690,175
----------- -----------
ELECTRONIC-CONTROLS AND EQUIPMENT -
1.17%
23,500 Applied Materials, Inc. (a)........... 918,164 1,448,187
----------- -----------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR
- 1.94%
10,100 Intel Corp............................ 384,951 1,033,987
24,000 Motorola, Inc......................... 578,050 1,365,000
----------- -----------
963,001 2,398,987
----------- -----------
FINANCE COMPANIES - 2.90%
10,500 Federal National Mortgage
Association......................... 860,212 926,625
24,100 Franklin Resources, Inc............... 283,777 970,025
41,192 Green Tree Financial Corp............. 1,036,227 1,683,723
----------- -----------
2,180,216 3,580,373
----------- -----------
HEALTH CARE SERVICES - 2.35%
25,000 Columbia/HCA Healthcare Corp.......... 929,928 1,050,000
12,500 PacifiCare Health Systems, Inc., Class
B (a)............................... 594,808 775,000
17,500 U.S. HealthCare, Inc.................. 478,244 468,125
16,600 United Healthcare Corp................ 504,429 601,750
----------- -----------
2,507,409 2,894,875
----------- -----------
HOTEL AND MOTEL - 1.20%
49,500 Mirage Resorts, Inc. (a).............. 1,115,820 1,485,000
----------- -----------
LEISURE TIME-AMUSEMENTS - 0.74%
16,500 Disney (Walt) Co...................... 910,134 913,687
----------- -----------
<CAPTION>
Market
Shares Cost (b) Value (c)
- --------- ----------- -----------
<C> <S> <C> <C>
MEDICAL SUPPLIES - 0.72%
12,000 Medtronic, Inc. (and rights).......... $ 293,844 $ 892,500
----------- -----------
MISCELLANEOUS - 1.37%
41,500 CUC International, Inc. (a)........... 1,019,365 1,691,125
----------- -----------
OFFICE EQUIPMENT AND SUPPLIES - 3.54%
46,000 Silicon Graphics, Inc. (a)............ 591,093 1,725,000
40,000 Sterling Software, Inc. (a)........... 772,400 1,360,000
26,100 Tandy Corp............................ 1,182,405 1,291,950
----------- -----------
2,545,898 4,376,950
----------- -----------
PUBLISHING - 0.71%
15,700 Scholastic Corp. (a).................. 810,604 879,200
----------- -----------
RETAIL - DEPARTMENT STORES - 1.12%
24,500 Kohl's Corp. (a)...................... 957,074 1,096,375
12,000 Wal-Mart Stores, Inc.................. 137,670 285,000
----------- -----------
1,094,744 1,381,375
----------- -----------
RETAIL - MISCELLANEOUS - 3.96%
40,800 AutoZone, Inc. (a).................... 783,086 943,500
19,200 Home Depot, Inc....................... 222,400 801,600
39,000 Lowe's Companies, Inc. (e)............ 791,743 1,126,125
50,700 Office Depot, Inc. (a)................ 477,429 1,153,425
27,400 Pep Boys Manny Moe & Jack............. 608,270 705,550
5,300 Talbots (The), Inc.................... 106,104 160,987
----------- -----------
2,989,032 4,891,187
----------- -----------
TELECOMMUNICATIONS - 5.82%
31,000 3Com Corp. (a)........................ 488,696 1,736,000
27,900 Cisco Systems, Inc. (a)............... 698,222 1,112,512
23,600 Ericsson (L.M.) Telephone Co., Class B
ADR (e)............................. 1,146,993 1,582,675
46,400 General Instrument Corp. (a) (e)...... 1,278,464 1,583,400
28,600 Nokia ADS............................. 584,679 1,172,600
----------- -----------
4,197,054 7,187,187
----------- -----------
TELEPHONE SERVICES - 1.18%
60,508 LDDS Communications, Inc. (a)......... 657,407 1,452,192
----------- -----------
TOYS - 1.21%
62,791 Mattel, Inc........................... 694,623 1,491,292
----------- -----------
UTILITIES - TELEPHONE - 1.47%
47,000 Air Touch Communications, Inc. (a).... 1,186,660 1,263,125
14,800 Telephone & Data Systems, Inc......... 785,880 551,300
----------- -----------
1,972,540 1,814,425
----------- -----------
TOTAL COMMON STOCKS................... $33,457,079 $50,687,078
----------- -----------
</TABLE>
PREFERRED STOCKS-0.25%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Value
Shares Cost (b) (c)
- ------ -------- --------
<C> <S> <C> <C>
BROADCASTING - 0.25%
17,000 The News Corp., Preferred ADR (e).......................................... $252,414 $306,000
-------- --------
TOTAL PREFERRED STOCK...................................................... $252,414 $306,000
-------- --------
</TABLE>
5
<PAGE>
FORTIS ADVANTAGE ASSET ALLOCATION PORTFOLIO
Schedule of Investments (continued)
(Unaudited)
April 30, 1995
ASSET BACKED SECURITIES-5.58%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
- ------------ ----------- ------------ ------------
<C> <S> <C> <C> <C>
MANUFACTURED HOMES - 0.84%
$ 1,000,000 Green Tree Financial Corp., 8.35% Ser 1994-7 Class A4
3-15-2020...................................................... Aaa $ 998,750 $ 1,034,989
------------ ------------
MISCELLANEOUS - 2.51%
1,500,000 Green Tree Financial Corp., 7.65% Ser 1994-1 Class A5 Sr Sub Pass
Thru Certificate 4-15-2019..................................... Aa2* 1,494,140 1,431,719
1,675,706 Vanderbilt Mtg & Finance, Inc., 7.00% Ser 1994-A Cl A1 Mfg
Housing Contract 7-10-2019..................................... AA 1,674,659 1,669,839
------------ ------------
3,168,799 3,101,558
------------ ------------
MULTI-FAMILY LOANS - 0.80%
1,000,000 DLJ Mtg Acceptance Corp., 8.80% Ser 1993-12 Cl B1 Multifamily Mtg
Pass Thru Certificate 9-8-2003................................. N/R 982,500 981,579
------------ ------------
WHOLE LOAN RESIDENTIAL - 1.43%
1,982,243 Securitized Asset Sales, Inc., 7.00% Ser 1994-5 CI AM
7-25-2024...................................................... AAA 1,771,010 1,771,010
------------ ------------
TOTAL ASSET BACKED SECURITIES.................................... $ 6,921,059 $ 6,889,136
------------ ------------
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE-3.49%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN - GOVERNMENT - 1.58%
<C> <S> <C> <C> <C>
2,000,000 Hydro-Quebec, 8.00% Deb 2-1-2013................................. A+ 1,953,780 1,952,998
------------ ------------
FOREST PRODUCTS - 0.53%
600,000 Georgia-Pacific Corp., 9.625% Deb 3-15-2022...................... BBB- 616,932 652,918
------------ ------------
MEDIA - 0.94%
600,000 News America Holdings, Inc., 10.125% Sr Note 10-15-2012.......... BBB- 600,000 654,334
500,000 News America Holdings, Inc., 8.875% Sr Note 4-26-2023............ BBB- 495,749 501,112
------------ ------------
1,095,749 1,155,446
------------ ------------
MISCELLANEOUS - 0.44%
500,000 New York (City of), 10.00% General Obligation Taxable Bond Fiscal
1991 Ser D 8-1-2005............................................ A- 471,093 545,485
------------ ------------
TOTAL CORPORATE BONDS - INVESTMENT GRADE......................... 4,137,554 4,306,847
------------ ------------
TOTAL ASSET BACKED & INVESTMENT GRADE CORPORATE DEBT
SECURITIES..................................................... $11,058,613 $11,195,983
------------ ------------
</TABLE>
CORPORATE BONDS-NON-INVESTMENT GRADE-10.59%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BUILDING MATERIALS - 1.51%
<C> <S> <C> <C> <C>
500,000 Associated Materials, Inc., 11.50% Sr Sub Note 8-15-2003......... B- 462,500 458,750
500,000 Essex Group, 10.00% Sr Note 5-1-2003............................. B+ 503,125 481,875
500,000 Inter-City Products Corp., 9.75% Sr Secured Note 3-1-2000........ B 447,500 447,500
500,000 Wickes Lumber Co., 11.625% Sr Sub Note 12-15-2003................ B- 502,500 475,000
------------ ------------
1,915,625 1,863,125
------------ ------------
CHEMICALS - 1.29%
500,000 Arcadian Partners L.P., 10.75% Sr Note Ser B 5-1-2005............ B+ 493,070 512,500
900,000 Indspec Chemical Corp., 11.50% Sr Sub Disc Note Ser B 12-1-2003
(Zero coupon until 12-1-1998).................................. B- 541,220 549,000
500,000 NL Industries, Inc., 11.75% Sr Secured Note 10-15-2003........... B 475,000 530,000
------------ ------------
1,509,290 1,591,500
------------ ------------
CONSUMER GOODS - 0.36%
500,000 Plastic Specialty & Technologies, Inc., 11.25% Sr Secured Note
12-1-2003...................................................... B- 443,125 441,250
------------ ------------
CONTAINERS AND PACKAGING - 0.43%
500,000 Domtar, Inc., 11.25% Sinking Fund Deb 9-15-2017.................. BB- 485,000 531,250
------------ ------------
ENERGY - 0.37%
458,109 Midland Cogeneration Venture, L.P., 10.33% Midland Funding Sr
Secured Lease Obligation Bond Ser C 7-23-2002.................. BB 454,674 461,187
------------ ------------
FOOD - GROCERY, MISCELLANEOUS - 0.39%
500,000 Specialty Foods Corp., 10.25% Sr Note Ser B 8-15-2001............ B 482,500 487,500
------------ ------------
</TABLE>
*Moody's Rating
6
<PAGE>
CORPORATE BONDS-NON-INVESTMENT GRADE-CONTINUED
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
- ------------ ----------- ------------ ------------
<C> <S> <C> <C> <C>
LEISURE TIME-AMUSEMENTS - 0.34%
$ 500,000 Trump Plaza Funding, 10.875% First Mtg Note 6-15-2001............ B $ 395,463 $ 415,000
------------ ------------
MACHINERY - 0.40%
500,000 Spreckels Industries, Inc., 11.50% Sr Secured Note 9-1-2000
(e)............................................................ B 485,624 500,000
------------ ------------
MEDIA - 0.73%
527,500 Falcon Holding Group, L.P. 11.00% Sr Sub Note Ser B 9-15-2003
(Interest is Payable-in-Kind).................................. N/R 427,668 455,631
500,000 Marvel III Holdings, Inc., 9.125% Sr Secured Note 2-15-1998...... B 438,750 450,000
------------ ------------
866,418 905,631
------------ ------------
METALS - MINING AND MISCELLANEOUS - 0.41%
500,000 Renco Metals, Inc., 12.00% Sr Note 7-15-2000..................... B+ 478,125 505,000
------------ ------------
RESTAURANTS AND FRANCHISING - 0.98%
500,000 Carrols Corp., 11.50% Sr Note 8-15-2003.......................... B+ 478,750 465,000
500,000 Family Restaurants, Inc., 9.75% Sr Note 2-1-2002................. B 431,875 341,875
500,000 Flagstar Corp., 11.25% Sr Sub Deb 11-1-2004...................... CCC+ 521,250 406,250
------------ ------------
1,431,875 1,213,125
------------ ------------
RETAIL - MISCELLANEOUS - 1.27%
600,000 Farm Fresh, Inc., 12.25% Sr Note 10-1-2000....................... B- 600,000 572,250
500,000 Pantry (The), Inc., 12.00% Sr Note Ser B 11-15-2000.............. B 490,000 502,500
500,000 Stater Brothers, Inc., 11.00% Sr Note 3-1-2001................... B+ 475,000 488,750
------------ ------------
1,565,000 1,563,500
------------ ------------
TECHNOLOGY - 0.72%
500,000 Computervision Corp., 10.875% Sr Note 8-15-1997.................. B 466,875 502,500
500,000 U.S. Banknote Corp., 10.375% Sr Note 6-1-2002.................... BB- 452,500 385,000
------------ ------------
919,375 887,500
------------ ------------
TEXTILE MANUFACTURING - 0.69%
500,000 CMI Industries, Inc., 9.50% Sr Sub Note 10-1-2003................ B+ 496,382 433,750
500,000 U.S. Leather, Inc., 10.25% Sr Note 7-31-2003..................... B+ 491,901 415,000
------------ ------------
988,283 848,750
------------ ------------
TOBACCO - 0.29%
500,000 Liggett Group, Inc., 11.50% Ser B Secured Note 2-1-1999.......... N/R 361,250 360,000
------------ ------------
TRANSPORTATION - 0.41%
500,000 Petro PSC Properties, L.P., 12.50% Sr Note 6-1-2002.............. B 479,215 502,500
------------ ------------
TOTAL CORPORATE BONDS - NON-INVESTMENT GRADE..................... 13,260,844 13,076,818
------------ ------------
TOTAL ASSET BACKED & CORPORATE DEBT SECURITIES................... $24,319,457 $24,272,801
------------ ------------
</TABLE>
7
<PAGE>
FORTIS ADVANTAGE ASSET ALLOCATION PORTFOLIO
Schedule of Investments (continued)
(Unaudited)
April 30, 1995
U.S. GOVERNMENT SECURITIES-26.96%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Cost (b) Value (c)
- ----------- ------------- --------------
<C> <S> <C> <C>
FEDERAL HOME LOAN MORTGAGE CORPORATION - 2.28%
MORTGAGE BACKED SECURITIES:
$ 3,000,000 6.615% 2004...................................................... $ 2,802,187 $ 2,817,375
------------- --------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 7.60%
MORTGAGE BACKED SECURITIES:
3,000,000 8.500% 2025...................................................... 3,050,626 3,043,125
1,300,709 9.000% 2016-2025................................................. 1,329,301 1,340,543
------------- --------------
4,379,927 4,383,668
------------- --------------
NOTES:
4,000,000 7.840% 1998...................................................... 4,026,840 4,043,752
------------- --------------
REMIC-PAC'S:
1,000,000 7.000% 2020...................................................... 954,375 953,229
------------- --------------
9,361,142 9,380,649
------------- --------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 2.43%
MORTGAGE BACKED SECURITIES:
2,807,317 9.000% 2023...................................................... 2,898,555 2,908,204
83,418 9.500% 2019...................................................... 82,740 87,667
------------- --------------
2,981,295 2,995,871
------------- --------------
<CAPTION>
Principal Market
Amount Cost (b) Value (c)
- ----------- ------------- --------------
<C> <S> <C> <C>
OTHER DIRECT FEDERAL OBLIGATIONS - 5.05%
FEDERAL HOME LOAN BANK:
$ 3,750,000 6.125% 1996...................................................... $ 3,745,313 $ 3,730,538
2,500,000 7.310% 2004...................................................... 2,508,984 2,500,000
------------- --------------
6,254,297 6,230,538
------------- --------------
U.S. TREASURY SECURITIES - 8.37%
BONDS:
6,000,000 8.125% 2021...................................................... 6,618,125 6,448,116
------------- --------------
NOTES:
3,850,000 7.250% 1996...................................................... 3,871,055 3,887,291
------------- --------------
10,489,180 10,335,407
------------- --------------
STUDENT LOAN MARKETING ASSOCIATION - 1.23%
NOTES:
1,500,000 7.500% 2000...................................................... 1,525,312 1,522,841
------------- --------------
TOTAL U.S. GOVERNMENT SECURITIES................................. 33,413,413 33,282,681
------------- --------------
TOTAL LONG TERM DEBT SECURITIES.................................. 57,732,870 57,555,482
------------- --------------
TOTAL LONG TERM INVESTMENTS...................................... $ 91,442,363 $ 108,548,560
------------- --------------
</TABLE>
SHORT-TERM INVESTMENTS-14.04%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value
- ----------- --------------
<C> <S> <C>
BANKS - 4.83%
$ 5,969,000 First Trust Money Market Variable Rate Time Deposit Account,
Current rate - 5.95%........................................... $ 5,969,000
--------------
DIVERSIFIED FINANCE - 1.93%
2,378,000 Associates Corp. Master Variable Rate Note, Current rate -
6.00%.......................................................... 2,378,000
--------------
U.S. GOVERNMENT AGENCY - 1.13%
1,400,000 Federal Home Loan Mortgage Corp., 5.86% 5-3-1995................. 1,399,317
--------------
<CAPTION>
Principal Market
Amount Value
- ----------- --------------
<C> <S> <C>
U.S. OTHER DIRECT FEDERAL OBLIGATIONS - 6.15%
7,600,000 Federal Home Loan Bank 5.84% 5-3-1995............................ 7,596,301
--------------
TOTAL SHORT-TERM INVESTMENTS..................................... 17,342,618
--------------
TOTAL INVESTMENTS IN SECURITIES
(COST: $108,784,981) (B)....................................... $ 125,891,178
--------------
<FN>
(a) Presently not paying dividend income.
(b) At April 30, 1995, the cost of securities for federal income
tax purposes was $108,784,981 and the aggregate gross
unrealized appreciation and depreciation based on that cost
was:
Unrealized appreciation........................... $ 18,750,324
Unrealized depreciation........................... (1,644,127)
- ----------------------------------------------------------------
Net unrealized appreciation....................... $ 17,106,197
- ----------------------------------------------------------------
(c) See Note A of accompanying Notes to Financial Statements
regarding valuation of securities.
(d) Note: Percentage of investments as shown is the ratio of the
total market value to total net assets. Market value of
investments in foreign securities represents 5.03% of net
assets as of April 30, 1995.
(e) Security is fully or partially on loan at April 30, 1995.
See Note A of accompanying Notes to Financial Statements.
</TABLE>
8
<PAGE>
FORTIS ADVANTAGE CAPITAL APPRECIATION PORTFOLIO
Schedule of Investments
(Unaudited)
April 30, 1995
COMMON STOCKS-91.62%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
- --------- ----------- -----------
<C> <S> <C> <C>
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-1.05%
55,000 Centocor, Inc. (a).................. $ 985,784 $ 776,875
----------- -----------
BROADCASTING-3.75%
60,000 America Online, Inc. (a) (e)........ 513,750 2,782,500
----------- -----------
BUSINESS SERVICES AND SUPPLIES -
4.33%
120,000 Acxiom Corp. (a).................... 738,750 2,085,000
45,500 Landmark Graphics Corp. (a)......... 1,282,606 1,126,125
----------- -----------
2,021,356 3,211,125
----------- -----------
COMPUTER-SOFTWARE-18.31%
8,000 Cerner Corp. (a).................... 378,000 425,000
23,000 FTP Software, Inc. (a).............. 720,843 603,750
52,000 Informix Corp. (a).................. 604,875 2,047,500
100,000 Input/Output, Inc. (a).............. 556,250 3,387,500
12,000 Medaphis Corp. (a).................. 663,609 684,000
15,000 Medic Computer Systems, Inc. (a).... 721,680 660,000
25,000 Network General Corp. (a)........... 730,268 653,125
31,000 Parametric Technology Corp. (a)..... 304,238 1,472,500
28,500 Sybase, Inc. (a).................... 650,688 691,125
24,900 Synopsys, Inc. (a).................. 857,600 1,350,825
41,000 System Software Associates, Inc..... 807,700 1,030,125
30,000 Wall Data (a) (e)................... 736,248 577,500
----------- -----------
7,731,999 13,582,950
----------- -----------
CONSTRUCTION-2.14%
60,000 Fastenal Co. (e).................... 356,876 1,590,000
----------- -----------
ELECTRONIC-COMMUNICATION SECURITY -
1.00%
22,500 ADC Telecommunications, Inc. (a).... 729,612 742,500
----------- -----------
ELECTRONIC-CONTROLS AND EQUIPMENT -
5.35%
41,700 Benchmark Electronics, Inc. (a)..... 1,009,517 854,850
33,000 StrataCom, Inc. (a)................. 820,875 1,212,750
34,000 Ultratech Stepper, Inc. (a)......... 901,875 1,904,000
----------- -----------
2,732,267 3,971,600
----------- -----------
ELECTRONIC-SEMICONDUCTOR AND
CAPACITOR-6.95%
10,000 Alliance Semiconductor Corp. (a).... 498,965 407,500
13,500 Integrated Device Technology, Inc.
(a)............................... 533,250 514,688
12,500 Integrated Silicon Solutions, Inc.
(a)............................... 524,413 481,250
59,000 Unitrode Corp. (a).................. 1,129,256 1,224,250
33,000 Xilinx, Inc. (a).................... 1,285,926 2,532,750
----------- -----------
3,971,810 5,160,438
----------- -----------
HEALTH CARE SERVICES-6.83%
43,000 Genesis Health Ventures, Inc. (a)
(e)............................... 773,603 1,171,750
40,000 Health Care & Retirement Corp.
(a)............................... 340,000 1,130,000
17,400 Healthsource, Inc. (a).............. 698,436 624,225
33,500 Medpartners, Inc. (a) (e)........... 603,875 791,438
15,000 Omnicare, Inc. (e).................. 592,500 729,375
19,000 Rotech Medical Corp. (a)............ 555,750 617,500
----------- -----------
3,564,164 5,064,288
----------- -----------
<CAPTION>
Market
Shares Cost (b) Value (c)
- --------- ----------- -----------
<C> <S> <C> <C>
LEISURE TIME-AMUSEMENTS-1.09%
22,500 Hollywood Entertainment Corp. (a)
(e)............................... $ 763,275 $ 810,000
----------- -----------
MACHINERY-OIL AND WELL-2.21%
60,000 Petroleum Geo Services A/S ADS (a)
(e) 1,003,250 1,638,750
----------- -----------
MEDICAL SUPPLIES-1.60%
30,000 Steris Corp. (a) (e)................ 1,067,130 1,185,000
----------- -----------
OFFICE EQUIPMENT AND SUPPLIES -
4.83%
31,000 Avid Technology, Inc. (a) (e)....... 692,825 1,249,687
40,000 Franklin Electric Publishers, Inc.
(a)............................... 977,760 1,240,000
32,200 Sterling Software, Inc. (a)......... 604,985 1,094,800
----------- -----------
2,275,570 3,584,487
----------- -----------
PRINTING-0.92%
14,000 Indigo NV (a)....................... 540,946 679,000
----------- -----------
RECREATION EQUIPMENT-1.46%
87,800 Callaway Golf Co. (e)............... 793,888 1,086,525
----------- -----------
RESTAURANTS AND FRANCHISING-6.51%
67,300 Applebees International, Inc........ 1,201,960 1,480,600
81,200 Lone Star Steakhouse & Saloon, Inc.
(a) (e)........................... 356,925 2,486,750
25,000 Papa John's International, Inc. (a)
(e)............................... 720,625 865,625
----------- -----------
2,279,510 4,832,975
----------- -----------
RETAIL-MISCELLANEOUS-12.97%
73,000 Authentic Fitness Corp. (a)......... 862,723 1,204,500
40,000 Bed, Bath & Beyond, Inc. (a)........ 455,000 835,000
72,000 Books-A-Million, Inc. (a)........... 991,813 999,000
48,600 Corporate Express, Inc. (a) (e)..... 777,600 1,372,950
27,000 Franklin Quest Co. (a) (e).......... 966,660 897,750
42,000 Gymboree Corp. (a) (e).............. 993,000 987,000
50,000 Micro Warehouse, Inc. (a) (e)....... 512,500 1,750,000
33,000 Sunglass Hut International, Inc. (a)
(e)............................... 941,203 946,687
25,500 West Marine, Inc. (a)............... 421,875 631,125
----------- -----------
6,922,374 9,624,012
----------- -----------
TELECOMMUNICATIONS-4.24%
38,800 Cisco Systems, Inc. (a)............. 327,552 1,547,150
26,500 MFS Communications Co. (a).......... 1,039,978 947,375
21,000 Newbridge Networks Corp. (a) (e).... 216,974 651,000
----------- -----------
1,584,504 3,145,525
----------- -----------
TRANSPORTATION-1.58%
50,000 American Freightways Corp. (a)...... 771,875 1,168,750
----------- -----------
UTILITIES-TELEPHONE-2.53%
45,000 IntelCom Group, Inc. (a)............ 644,000 489,375
55,000 LCI International, Inc. (a) (e)..... 894,300 1,388,750
----------- -----------
1,538,300 1,878,125
----------- -----------
WASTE DISPOSAL-1.97%
51,700 United Waste System, Inc. (a)....... 1,158,950 1,460,525
----------- -----------
TOTAL COMMON STOCKS................. $43,307,190 $67,975,950
----------- -----------
</TABLE>
9
<PAGE>
FORTIS ADVANTAGE CAPITAL APPRECIATION PORTFOLIO
Schedule of Investments (continued)
(Unaudited)
April 30, 1995
SHORT-TERM INVESTMENTS-8.31%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
- ----------- ------------
<C> <S> <C>
BANKS-4.51%
$3,342,064 First Trust Money Market Variable Rate Time Deposit Account,
Current rate -- 5.95%.......................................... $ 3,342,064
------------
DIVERSIFIED FINANCE-3.80%
2,822,000 Associates Corp. Master Variable Rate Note, Current
rate -- 6.00%.................................................. 2,822,000
------------
TOTAL SHORT-TERM INVESTMENTS..................................... 6,164,064
------------
TOTAL INVESTMENTS IN SECURITIES (COST: $49,471,254) (B).......... $74,140,014
------------
<FN>
(a) Presently not paying dividend income.
(b) At April 30, 1995, the cost of securities for federal income tax purposes was
$49,471,254 and the aggregate gross unrealized appreciation and depreciation based
on that cost was:
Unrealized appreciation................................................. $26,269,867
Unrealized depreciation................................................. (1,601,107)
- ----------------------------------------------------------------------------------------
Net unrealized appreciation............................................. $24,668,760
- ----------------------------------------------------------------------------------------
(c) See Note A of accompanying Notes to Financial Statements regarding valuation of
Securities.
(d) Note: Percentage of investments as shown is the ratio of the total market value to
total net assets. Market value of investments in foreign securities represents 4.00%
of net assets as of April 30, 1995.
(e) Security is fully or partially on loan at April 30, 1995. See Note A of accompanying
Notes to Financial Statements.
</TABLE>
10
<PAGE>
FORTIS ADVANTAGE HIGH YIELD PORTFOLIO
Schedule of Investments
(Unaudited)
April 30, 1995
COMMON STOCKS-0.31%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
- ------- --------- ----------
<C> <S> <C> <C>
BROADCASTING-0.02%
1,000 Petro PSC Properties, L.P. (Warrants) (a)........................ $ 36,570 $ 33,000
--------- ----------
CONSUMER GOODS-0.03%
1,800 Chattem, Inc. (Warrants) (a) (f)................................. 18,424 7,200
17,400 Drypers Corp. (Warrants) (a)..................................... 52,200 34,800
--------- ----------
70,624 42,000
--------- ----------
LEISURE TIME-AMUSEMENTS-0.14%
4,565 Boomtown, Inc. (warrants) (a).................................... 28,942 2,283
26,670 Capital Gaming International (a)................................. 133,350 113,348
22,750 Capital Gaming International (warrants) (a)...................... 35,440 34,836
6,000 Casino Magic Finance Corp. (Warrants) (a)........................ 9,000 1,500
6,000 Hemmeter Enterprises, Inc. (Warrants) (a)........................ 24,000 12,000
--------- ----------
230,732 163,967
--------- ----------
MACHINERY-0.01%
7,500 Terex Corp. (Rights) (a)......................................... 18,750 6,000
--------- ----------
RETAIL-MISCELLANEOUS-0.11%
5,397 Southland Corp. (Warrants) (a)................................... 1,991 11,131
28,500 Thrifty Payless Holdings, Inc. (Warrants) (a).................... 160,500 114,000
--------- ----------
162,491 125,131
--------- ----------
TOTAL COMMON STOCKS.............................................. $519,167 $ 370,098
--------- ----------
</TABLE>
PREFERRED STOCKS-0.58%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
- ------- --------- ----------
<C> <S> <C> <C>
MACHINERY-0.58%
25,000 Terex Corp. (Warrants) (a) (i)................................... $ 50,000 $ 300,000
25,000 Terex Corp., Mandatory Redemption Pfd Stock (a) (i).............. 575,000 387,500
--------- ----------
TOTAL PREFERRED STOCKS........................................... $625,000 $ 687,500
--------- ----------
</TABLE>
CORPORATE BONDS-NON-INVESTMENT GRADE-93.82%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
- ----------- ----------- ------------- -------------
<C> <S> <C> <C> <C>
AUTOMOBILE AND MOTOR VEHICLE PARTS-2.05%
$1,000,000 Doehler Jarvis, Inc., 11.875% Sr Note 6-1-2002.... B $ 1,005,000 $ 1,040,000
1,500,000 Penda Corp., 10.75% Sr Note Ser B 3-1-2004........ B- 1,462,500 1,365,000
------------- -------------
2,467,500 2,405,000
------------- -------------
BEVERAGE-3.77%
2,000,000 All-American Bottling Corp., 13.00% Sr Secured
Note 8-15-2001 (and warrants)................... B- 1,890,000 1,720,000
2,000,000 Heileman Acquisition Co., 9.625% Sr Sub Note
1-31-2004....................................... B- 1,889,750 1,360,000
1,500,000 Seven-Up/RC Bottling Co. of Southern CA, 11.50% Sr
Secured Note 8-1-1999........................... B- 1,526,875 1,353,750
------------- -------------
5,306,625 4,433,750
------------- -------------
BUILDING MATERIALS-2.98%
1,250,000 Associated Materials, Inc., 11.50% Sr Sub Note
8-15-2003....................................... B- 1,229,750 1,146,875
1,500,000 Nortek, Inc., 9.875% Sr Sub Note 3-1-2004......... CCC+ 1,488,770 1,410,000
1,000,000 Wickes Lumber Co., 11.625% Sr Sub Note
12-15-2003...................................... B- 998,750 950,000
------------- -------------
3,717,270 3,506,875
------------- -------------
</TABLE>
11
<PAGE>
FORTIS ADVANTAGE HIGH YIELD PORTFOLIO
Schedule of Investments (continued)
(Unaudited)
April 30, 1995
CORPORATE BONDS-NON-INVESTMENT GRADE-CONTINUED
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
- ----------- ----------- ------------- -------------
<C> <S> <C> <C> <C>
CHEMICALS-1.68%
$2,000,000 Indspec Chemical Corp., 11.50% Sr Sub Disc Note
Ser B 12-1-2003 (Zero coupon until 12-1-1998)
(e)............................................. B- $ 1,327,173 $ 1,220,000
750,000 Pioneer Americas Acquisition Corp., 13.375% First
Mtg Note 4-15-2005.............................. B2* 750,000 750,000
------------- -------------
2,077,173 1,970,000
------------- -------------
CONSUMER GOODS-9.00%
1,290,000 Allied Waste Industries, Inc., 10.75% Sr Sub Note
2-1-2004........................................ B 1,262,450 1,315,800
1,300,000 Chattem, Inc., 12.75% Sr Sub Note Ser B
6-15-2004....................................... B- 1,268,601 1,189,500
1,200,000 Drypers Corp., 12.50% Sr Note Ser B 11-1-2002..... B+ 1,204,390 1,212,000
1,250,000 Florsheim Shoe Co., 12.75% Sr Note 9-1-2002 (h)... B+ 1,250,000 1,190,625
1,250,000 Hosiery Corp. of America, Inc., 13.75% Sr Sub Note
8-1-2002 (f).................................... B- 1,235,314 1,237,500
2,030,000 Plastic Specialty & Technologies, Inc., 11.25% Sr
Secured Note 12-1-2003.......................... B- 1,978,375 1,791,475
1,500,000 Roadmaster Industries, Inc., 11.75% Sr Sub Note
7-15-2002....................................... B- 1,491,563 1,451,250
1,200,000 Solon Automated Services, Inc., 12.75% Sr Note
7-15-2001....................................... B+ 1,211,750 1,188,000
------------- -------------
10,902,443 10,576,150
------------- -------------
CONTAINERS AND PACKAGING-5.77%
1,350,000 Crown Packaging Ltd., 10.75% Sr Secured Note Ser B
11-1-2000....................................... B3* 1,349,250 1,353,375
1,300,000 Mail-Well Corp., 10.50% Sr Sub Note 2-15-2004
(i)............................................. B- 1,271,000 1,144,000
1,250,000 Malette, Inc., 12.25% Sr Secured Note 7-15-2004... BB- 1,250,000 1,300,000
1,250,000 RXI Holdings, Inc., 14.00% Sr Secured Note
7-15-2002 (f)................................... B- 1,250,000 1,250,000
952,000 Seminole Kraft Corp., 13.50% Sub Deb 10-15-1996... NR 931,125 953,190
800,000 Williamhouse-Regency of Delaware, Inc., 11.50% Sr
Sub Deb 6-15-2005............................... B- 789,500 780,000
------------- -------------
6,840,875 6,780,565
------------- -------------
ENERGY-1.07%
1,250,000 WRT Energy Corp., 13.875% Sr Note 3-1-2002........ B- 1,250,000 1,259,375
------------- -------------
FOOD-GROCERY, MISCELLANEOUS-7.88%
1,000,000 Curtice-Burns Foods Inc., 12.25% Sr Sub Note
2-1-2005........................................ B 1,000,000 1,060,000
1,617,000 Di Giorgio Corp., 12.00% Sr Note 2-15-2003........ B 1,576,930 1,390,620
2,350,000 Envirodyne Industries, Inc., 10.25% Sr Note
12-1-2001 (h)................................... B- 1,901,375 1,915,250
1,000,000 Fresh Del Monte Produce N.V., 10.00% Note Ser A
5-1-2003........................................ B 981,250 840,000
1,400,000 Pilgrims Pride Corp., 10.875% Sr Sub Deb
8-1-2003........................................ B- 1,400,694 1,316,000
2,000,000 Specialty Foods Corp., 11.25% Sr Sub Note
8-15-2003....................................... B- 1,828,750 1,940,000
2,000,000 White Rose Foods, Inc., 12.44% Sr Note
11-1-1998....................................... B- 1,316,169 800,000
------------- -------------
10,005,168 9,261,870
------------- -------------
LEISURE TIME-AMUSEMENTS-10.81%
1,250,000 Boomtown, Inc., 11.50% First Mtg Note 11-1-2003... B+ 1,201,995 1,143,750
2,000,000 Capital Gaming International, Inc., 11.50% Secured
Note 2-1-2001................................... Caa* 1,592,060 1,580,000
1,000,000 GB Property Funding, 10.875% First Mtg Bond
1-15-2004....................................... B+ 820,000 855,000
1,901,480 Hemmeter Enterprises, Inc., 12.00% Sr Secured Note
12-15-2000 (Interest is Payable-in-Kind) (i).... NR 1,606,592 1,443,171
1,000,000 Lady Luck Gaming Finance Corp., 10.50% First Mtg
Note 3-1-2001................................... CCC+ 1,000,000 585,000
1,750,000 Pioneer Finance Corp., 13.50% First Mtg Bond
12-1-1998....................................... B- 1,371,875 1,391,250
1,500,000 PRT Funding Corp., 11.625% Sr Note 4-15-2004(h)... B- 1,384,500 1,233,750
2,750,000 Trump Castle Funding, Inc., 11.75% First Mtg Bond
11-15-2003...................................... Caa* 1,969,087 1,711,875
1,750,000 Trump Plaza Funding, Inc., 10.875% First Mtg Note
6-15-2001....................................... B 1,435,913 1,452,500
1,852,139 Trump Taj Mahal Funding, Inc., 11.35% First Mtg
Note 11-15-1999 (Interest is 9.375% cash and
1.975% Payable-in-Kind)......................... Caa* 1,687,325 1,312,147
------------- -------------
14,069,347 12,708,443
------------- -------------
MACHINERY-7.44%
1,250,000 MVE, Inc., 12.50% Sr Secured Note 2-15-2002....... B+ 1,250,000 1,306,250
1,250,000 Primeco, Inc., 12.75% Sr Sub Note 3-1-2005........ B 1,250,000 1,293,750
1,000,000 Specialty Equipment Companies, Inc., 11.375% Sr
Sub Note 12-1-2003.............................. B- 1,000,000 997,500
1,300,000 Spreckels Industries, Inc., 11.50% Sr Secured Note
9-1-2000 (h).................................... B 1,310,875 1,300,000
622,000 Terex Corp., 13.00% Sr Secured Note 8-1-1996
(i)............................................. NR 600,840 634,440
2,250,000 Terex Corp., 13.75% Sr Secured Note 5-15-2002
(f)............................................. Caa* 2,250,000 2,250,000
</TABLE>
*Moody's Rating
12
<PAGE>
CORPORATE BONDS-NON-INVESTMENT GRADE-CONTINUED
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
- ----------- ----------- ------------- -------------
<C> <S> <C> <C> <C>
$1,000,652 Thermadyne Industries, Inc., 10.75% Sr Sub Note
11-1-2003....................................... CCC $ 962,827 $ 960,626
------------- -------------
8,624,542 8,742,566
------------- -------------
MEDIA-5.21%
2,000,000 American Telecasting, Inc., 12.75% Sr Sub Disc
Note 6-15-2004 (Zero coupon until 6-15-1999)
(and warrants) (e).............................. CCC+ 1,192,346 1,090,000
1,000,000 Commodore Media, 13.25% 5-1-2003 (e) (f).......... NR 860,350 860,350
2,518,472 Falcon Holding Group, L.P., 11.00% Sr Sub Note Ser
B 9-15-2003 (Interest is Payable-in-Kind)....... NR 2,498,844 2,175,343
1,000,000 In-Flight Phone Corp., 14.00% Sr Sub Disc Note Ser
A 5-15-2002 (Zero coupon until 5-15-1998) (e)
(f)............................................. B- 664,840 664,840
2,000,000 Marvel (Parent) Holdings, Inc., 12.25% Sr Secured
Disc Note 4-15-1998 (e)......................... B 1,411,960 1,335,000
------------- -------------
6,628,340 6,125,533
------------- -------------
METALS-MINING AND MISCELLANEOUS-7.43%
1,250,000 Bayou Steel Corp., 10.25% First Mtg Note
3-1-2001........................................ B 1,223,750 1,156,250
1,250,000 Gulf States Steel, 13.50% First Mtg Note 4-15-2003
(and warrants) (f).............................. B1* 1,250,000 1,250,000
1,550,000 Haynes International, Inc., 11.25% Sr Secured Note
Ser A 6-15-1998................................. CCC+ 1,511,250 1,480,250
1,750,000 Haynes International, Inc., 13.50% Sr Sub Deb
8-15-1999....................................... CCC- 1,115,000 1,155,000
1,000,000 Horsehead Industries, Inc., 15.75% Sr Sub Ext
Reset Note 6-1-1999 (h)......................... CCC- 991,250 1,025,000
1,250,000 Renco Metals, Inc., 12.00% Sr Note 7-15-2000...... B+ 1,235,000 1,262,500
1,400,000 Sheffield Steel Corp., 12.00% First Mtg Note
11-1-2001 (and warrants)........................ B- 1,399,000 1,400,000
------------- -------------
8,725,250 8,729,000
------------- -------------
RESTAURANTS AND FRANCHISING-3.22%
1,000,000 Carrols Corp., 11.50% Sr Note 8-15-2003........... B+ 1,000,000 930,000
1,500,000 Family Restaurants, Inc., 9.75% Sr Note
2-1-2002........................................ B 1,375,125 1,025,625
2,252,000 Flagstar Corp., 11.25% Sr Sub Deb 11-1-2004....... CCC+ 2,186,530 1,829,750
------------- -------------
4,561,655 3,785,375
------------- -------------
RETAIL-MISCELLANEOUS-12.59%
511,500 Almacs, Inc., 11.50% Note 11-19-2004 (a).......... D 575,875 178,920
2,000,000 Color Tile, Inc., 10.75% Sr Note 12-15-2001....... B- 1,515,625 1,380,000
1,000,000 Cumberland Farms, Inc., 10.50% Sr Secured Note
10-1-2003 (g)................................... NR 927,500 820,000
2,142,500 Farm Fresh Holdings Corp., 14.25% Sr Note
10-1-2002 (Interest is Payable-in-kind thru
10-1-1997)...................................... CCC+ 781,872 1,056,704
1,400,000 Farm Fresh, Inc., 12.25% Sr Note 10-1-2000........ B- 1,427,500 1,335,250
4,000,000 Grand Union Co., 12.25% Sr Sub Note 7-15-2002 (a)
(h)............................................. D 2,956,937 1,330,000
1,345,563 Kash N Karry Corp., 11.50% Sr Note 2-1-2003
(Interest is Payable in Kind until 2-1-1996).... B- 1,200,706 1,286,244
1,300,000 Mayfair Supermarkets, Inc., 11.75% Sr Sub Note
3-30-2003....................................... B- 1,332,500 1,196,000
1,250,000 Pantry (The), Inc., 12.00% Sr Note Ser B
11-15-2000...................................... B 1,243,750 1,256,250
350,000 Pay 'N' Pak Stores, Inc., 13.50% Sr Sub Deb
6-1-1998 (a).................................... Ca* 350,000 1,750
1,500,000 Purity Supreme, Inc., 11.75% Sr Secured Note
8-1-1999 (and warrants)......................... CCC+ 1,428,733 1,605,000
1,250,000 Stater Brothers, Inc., 11.00% Sr Note 3-1-2001.... B+ 1,236,250 1,221,875
1,750,000 Thrifty Payless, Inc., 12.25% Sr Sub Note
4-15-2004....................................... B- 1,587,937 1,785,000
1,000,000 Victory Markets, Inc., 12.50% Sub Exchange Note
3-15-2000....................................... NR 870,000 350,000
------------- -------------
17,435,185 14,802,993
------------- -------------
TECHNOLOGY-4.74%
3,000,000 Computervision Corp., 11.375% Sr Sub Note
8-15-1999....................................... CCC+ 2,590,000 2,865,000
1,650,000 Genicom Corp., 12.50% Sr Sub Note 2-15-1997....... NR 1,465,500 1,617,000
1,450,000 U.S. Banknote Corp., 11.625% Sr Note Ser B
8-1-2002........................................ B+ 1,377,700 1,087,500
------------- -------------
5,433,200 5,569,500
------------- -------------
TEXTILE MANUFACTURING-2.13%
1,500,000 Synthetic Industries, Inc., 12.75% Sr Sub Deb
12-1-2002....................................... B- 1,454,305 1,470,000
1,250,000 U.S. Leather, Inc., 10.25% Sr Note 7-31-2003...... B+ 1,197,126 1,037,500
------------- -------------
2,651,431 2,507,500
------------- -------------
TOBACCO-1.84%
3,000,000 Liggett Group, Inc., 11.50% Ser B Secured Note
2-1-1999........................................ NR 2,196,625 2,160,000
------------- -------------
</TABLE>
*Moody's Rating
13
<PAGE>
FORTIS ADVANTAGE HIGH YIELD PORTFOLIO
Schedule of Investments (continued)
(Unaudited)
April 30, 1995
CORPORATE BONDS-NON-INVESTMENT GRADE-CONTINUED
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
- ----------- ----------- ------------- -------------
<C> <S> <C> <C> <C>
TRANSPORTATION-4.21%
$ 350,000 Continental Airlines, Inc., 12.125% Secured
Equipment Trust Certificate 4-15-1996 (a)....... NR $ 113,523 $ 52,500
2,000,000 GPA Delaware, Inc., 8.75% Deb 12-15-1998.......... CCC+ 1,633,125 1,580,000
1,250,000 K & F Industries, Inc., 11.875% Sr Secured Note
12-1-2003....................................... B+ 1,185,000 1,265,625
1,000,000 Northwest Airlines Trust No. 2, 13.875% Ser D Sub
Aircraft Note 6-21-2008 (f)..................... BB+ 1,000,000 1,050,773
1,000,000 Petro PSC Properties, L.P., 12.50% Sr Note
6-1-2002........................................ B 962,930 1,005,000
------------- -------------
4,894,578 4,953,898
------------- -------------
TOTAL CORPORATE BONDS - NON-INVESTMENT GRADE...... 117,787,207 110,278,393
------------- -------------
TOTAL LONG-TERM INVESTMENTS....................... $ 118,931,374 $ 111,335,991
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-2.89%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
- ----------- -------------
<C> <S> <C>
BANKS-2.89%
$3,395,000 First Trust Money Market Variable Rate Time Deposit Account,
Current rate -- 5.95%.......................................... $ 3,395,000
-------------
TOTAL INVESTMENTS IN SECURITIES (COST: $122,326,374) (B)......... $ 114,730,991
-------------
-------------
<FN>
(a) Presently non-income producing. For corporate debt securities, items identified are
in default as to payment of interest and/or principal.
(b) At April 30, 1995, the cost of securities for federal income tax purposes was
$122,326,374 and the aggregate gross unrealized appreciation and depreciation based
on that cost was:
Unrealized appreciation................................................ $ 3,004,736
Unrealized depreciation................................................ (10,600,119)
-------------------------------------------------------------------------------------
Net unrealized depreciation............................................ $ (7,595,383)
-------------------------------------------------------------------------------------
(c) See Note A of accompanying Notes to Financial Statements regarding valuation of
Securities.
(d) Note:Percentage of investments as shown is the ratio of the total market value to
total net assets.
(e) The interest rate disclosed for these securities represent the original issue
discount yields on the date of acquisition.
(f) Securities sold within terms of a private placement memorandum, exempt from
registration under Section 144A of the Securities Act of 1933, as amended, and may be
sold only to dealers in that program or to other "accredited investors". These
investments have been identified by portfolio management as illiquid securities, the
value of these securities at April 30, 1995 is $8,570,663 which represents 7.29% of
net assets.
(g) The fund entered into the following restricted security transaction. On February 2,
1994, the fund purchased $1,000,000 of Cumberland Farms with a cost basis of
$927,500. This private placement represents allof the restricted illiquid securities
owned by the fund and is equal to .70% of net assets. See Note A of accompanying
Notes to Financial Statements.
(h) Security is fully or partially on loan at April 30, 1995. See Note A of accompanying
Notes to Financial Statements.
(i) Securities sold within terms of a private placement memorandum, exempt from
registration under Section 144A of the Securities Act of 1933, as amended, and may be
sold only to dealers in that program or other "accreditied investors". Pursuant to
guidelines adopted by The Board of Directors, these issues are deemed to be liquid.
</TABLE>
14
<PAGE>
FORTIS ADVANTAGE GOVERNMENT TOTAL RETURN PORTFOLIO
Schedule of Investments
(Unaudited)
April 30, 1995
ASSET BACKED SECURITIES-9.17%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (a) Value (b)
----------- ------------ ----------- -----------
<C> <S> <C> <C> <C>
MISCELLANEOUS-2.94%
$2,000,000 Green Tree Financial Corp., 7.65% Ser 1994-1 Class A5 Sr Sub Pass
Thru Certificate 4-15-2019..................................... AA2* $1,992,533 $1,908,958
----------- -----------
WHOLE LOAN RESIDENTIAL-6.23%
1,000,000 General Electric Capital Mtg Services, Inc., 8.50% 1995-2 Class M
5-25-2025...................................................... AA 993,141 993,125
1,686,443 Residential Resources, Inc., 9.50% Series 14 Class A Busted PAC
12-1-2018...................................................... AAA 1,727,506 1,726,191
1,486,682 Securitized Asset Sales, Inc., 7.00% Ser 1994-5 Class AM
7-25-2024...................................................... AAA 1,328,849 1,328,258
----------- -----------
4,049,496 4,047,574
----------- -----------
TOTAL ASSET BACKED SECURITIES.................................... $6,042,029 $5,956,532
----------- -----------
</TABLE>
U.S. GOVERNMENT SECURITIES-85.13%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Cost (a) Value (b)
- ---------- ----------- -----------
<C> <S> <C> <C>
FEDERAL HOME LOAN MORTGAGE
CORPORATION - 11.18%
MORTGAGE BACKED SECURITIES:
$ 436,347 9.00% 2001-2018.................... $ 421,422 $ 448,481
1,859,865 9.50% 2016......................... 1,992,576 1,941,815
263,216 11.25% 2014........................ 283,855 287,316
468,326 11.50% 2019........................ 501,123 512,817
337,683 12.50% 2019........................ 367,188 374,828
----------- -----------
3,566,164 3,565,257
----------- -----------
REMIC-IO & IO-ETTE:
47,088 38.00% #1364-1 Interest Only Strip
I/O-ette 2005 (d)................ 278,879 832,046
----------- -----------
REMIC-PACS:
1,278,792 9.00% #136-D 2020.................. 1,285,109 1,314,341
1,500,000 9.50% #1001-F 2003................. 1,527,828 1,548,584
----------- -----------
2,812,937 2,862,925
----------- -----------
6,657,980 7,260,228
----------- -----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION - 12.16%
MORTGAGE BACKED SECURITIES:
2,178,124 8.50% 2022......................... 2,301,401 2,209,435
455,359 10.50% 2014........................ 486,589 492,641
402,938 11.50% 2015........................ 440,460 444,742
307,677 12.00% 2011........................ 338,375 342,099
309,241 12.50% 2015........................ 345,509 345,963
----------- -----------
3,912,334 3,834,880
----------- -----------
NOTE:
2,000,000 8.50% 2005......................... 2,080,377 2,067,768
----------- -----------
REMIC-INVERSE FLOATER:
2,833,703 7.85% Inverse COFI Floating Rate
2008 (e)......................... 1,803,131 1,884,413
----------- -----------
REMIC-PACS:
108,702 13.50% Trust #1989-98G 2017........ 124,730 113,072
----------- -----------
7,920,572 7,900,133
----------- -----------
<CAPTION>
Principal Market
Amount Cost (a) Value (b)
- ---------- ----------- -----------
<C> <S> <C> <C>
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION - 15.31%
MORTGAGE BACKED SECURITIES:
$1,441,231 Fleet Mtg Securities Class D,
9.125% 2018 (GNMA Backed)........ $ 1,474,568 $ 1,477,736
4,130,438 8.00% 2017......................... 4,238,200 4,122,693
584,582 9.00% 2016......................... 620,172 600,840
3,584,109 9.50% 2016......................... 3,754,966 3,744,172
----------- -----------
10,087,906 9,945,441
----------- -----------
OTHER DIRECT FEDERAL OBLIGATIONS -
5.39%
FEDERAL HOME LOAN BANK:
3,500,000 7.31% 2004......................... 3,511,474 3,500,000
----------- -----------
OTHER GOVERNMENT AGENCIES - 2.52%
RESOLUTION FUNDING CORPORATION:
7,000,000 8.395% Zero Coupon Strip 2014
(f).............................. 1,753,629 1,638,203
----------- -----------
U.S. TREASURY SECURITIES - 38.57%
BONDS:
4,430,000 8.125% 2021........................ 4,657,931 4,760,858
----------- -----------
NOTES:
3,360,000 7.25% 1996......................... 3,378,375 3,392,544
2,000,000 7.875% 2004........................ 2,077,988 2,110,000
5,000,000 8.75% 1997......................... 5,270,496 5,229,680
4,500,000 9.00% 1998......................... 4,836,670 4,774,211
4,650,000 9.375% 1996........................ 4,787,933 4,780,781
----------- -----------
20,351,462 20,287,221
----------- -----------
25,009,393 25,048,074
----------- -----------
TOTAL U.S. GOVERNMENT AND
AGENCIES......................... 54,940,954 55,292,079
----------- -----------
TOTAL LONG-TERM DEBT SECURITIES.... $60,982,983 $61,248,611
----------- -----------
</TABLE>
*Moody's Rating
15
<PAGE>
FORTIS ADVANTAGE GOVERNMENT TOTAL RETURN PORTFOLIO
Schedule of Investments (continued)
(Unaudited)
April 30, 1995
SHORT-TERM INVESTMENTS-1.38%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (b)
- --------- ------------
<C> <S> <C>
DIVERSIFIED FINANCE-0.09%
$ 55,000 Associates Corp. Master Variable Rate Note, Current
rate -- 6.00%.................................................. $ 55,000
------------
U.S. GOVERNMENT AGENCY-1.29%
840,000 Federal National Mortgage Association, 5.85% 5-3-1995............ 839,591
------------
TOTAL SHORT-TERM INVESTMENTS..................................... 894,591
------------
TOTAL INVESTMENTS IN SECURITIES
(COST: $61,877,574) (B)........................................ $ 62,143,202
------------
------------
<FN>
(a) At April 30, 1995, the cost of securities for federal income tax
purposes was $62,600,792 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation................................. $ 876,773
Unrealized depreciation................................. (1,334,363)
---------------------------------------------------------------------
Net unrealized depreciation............................. $ (457,590)
---------------------------------------------------------------------
(b) See Note A of accompanying Notes to Financial Statements regarding
valuation of Securities.
(c) Note: Percentage of investments as shown is the ratio of the total
market value to total net assets.
(d) The interest rates disclosed for interest only and principal only
strips represent effective yields at April 30, 1995, based upon the
estimated timing and, in the case of interest only strips, amount
of future cash flows. These investments have been identified by
portfolio management as illiquid securities. The aggregate value of
these securities at April 30, 1995 is $832,046 which represents
1.28% of total net assets.
(e) Inverse floaters represent securities that pay interest at a rate
that increases (decreases) with a decrease (increase) in a
specified index. Interest rates disclosed are the rates in effect
on April 30, 1995.
(f) The interest rate disclosed for these securities represent the
original issue discount yields on the date of acquisition.
</TABLE>
16
<PAGE>
FORTIS ADVANTAGE PORTFOLIOS, INC.
Statements of Assets and Liabilities
(Unaudited)
April 30, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
GOVERNMENT
ASSET CAPITAL HIGH TOTAL
ALLOCATION APPRECIATION YIELD RETURN
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, as detailed in the accompanying
schedules, at market (cost $108,784,981; $49,471,254;
$122,326,374; and $61,877,574; respectively) (Note A)... $ 125,891,178 $74,140,014 $ 114,730,991 $ 62,143,202
Cash on deposit with custodian............................ 5,113 854 26,310 25,952
Collateral for securities lending transactions............ 5,035,140 22,412,800 4,780,740 --
Receivables:
Investment securities sold.............................. 4,190,060 -- 3,708,592 2,136,381
Interest and dividends.................................. 1,073,158 16,810 3,690,332 911,213
Subscriptions of capital stock.......................... 14,312 39,900 891,060 7,323
Deferred registration costs (Note A)...................... 39,255 49,530 61,992 30,668
Prepaid expenses.......................................... 30,334 22,663 27,387 16,886
------------- ------------ ------------- -------------
TOTAL ASSETS................................................ 136,278,550 96,682,571 127,917,404 65,271,625
------------- ------------ ------------- -------------
LIABILITIES:
Cash portion of dividends payable......................... -- -- 386,662 150,960
Payable upon return of securities loaned.................. 5,035,140 22,412,800 4,780,740 --
Payable for investment securities purchased............... 7,592,685 -- 5,113,215 --
Redemptions of capital stock.............................. 60,365 884 9,912 119,474
Payable for investment advisory and management fees (Note
B)...................................................... 97,049 59,764 68,887 42,458
Payable for distribution fees............................. 6,217 3,737 5,200 2,494
Accounts payable and accrued expenses..................... 16,549 11,444 11,357 7,755
------------- ------------ ------------- -------------
TOTAL LIABILITIES........................................... 12,808,005 22,488,629 10,375,973 323,141
------------- ------------ ------------- -------------
NET ASSETS:
Net proceeds of capital stock, par value $.01 per share -
authorized 20,000,000,000 shares........................ 103,349,747 50,828,402 125,622,752 80,481,982
Unrealized appreciation (depreciation) of investments..... 17,106,197 24,668,760 (7,595,383) 265,628
Undistributed net investment income (loss)................ 403,104 (185,632) 867 (188,464)
Accumulated net realized gain (loss) from sale of
investments............................................. 2,611,497 (1,117,588) (486,805) (15,610,662)
------------- ------------ ------------- -------------
TOTAL NET ASSETS............................................ $ 123,470,545 $74,193,942 $ 117,541,431 $ 64,948,484
------------- ------------ ------------- -------------
SHARES OUTSTANDING AND NET ASSET VALUE PER SHARE:
Class A shares (based on net assets of $121,171,781;
$72,831,715; $107,024,136; and $64,857,047; respectively
and 8,104,042; 2,960,528; 13,429,902; and 8,229,616
shares outstanding; respectively)....................... $14.95 $24.60 $7.97 $7.88
------------- ------------ ------------- -------------
Class B shares (based on net assets of $259,670; $300,178;
$1,598,093; $9,104; respectively and 17,415; 12,228;
200,662; and 1,159 shares outstanding; respectively).... $14.91 $24.55 $7.96 $7.86
------------- ------------ ------------- -------------
Class C shares (based on net assets of $325,145; $84,500;
$667,820; $15,103; respectively and 21,864; 3,441;
83,903; and 1,920 shares outstanding; respectively)..... $14.87 $24.56 $7.96 $7.87
------------- ------------ ------------- -------------
Class H shares (based on net assets of $1,713,949;
$977,549; $8,251,382; $67,230; respectively and 115,084;
39,799; 1,036,069; and 8,554 shares outstanding;
respectively)........................................... $14.89 $24.56 $7.96 $7.86
------------- ------------ ------------- -------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
FORTIS ADVANTAGE PORTFOLIOS, INC.
Statements of Operations
(Unaudited)
April 30, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
GOVERNMENT
ASSET CAPITAL HIGH TOTAL
ALLOCATION APPRECIATION YIELD RETURN
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest income................................................... $2,883,188 $ 316,436 $6,426,794 $ 2,655,503
Dividend income................................................... 118,597 13,513 -- --
Fee income (Note A)............................................... 9,185 52,064 6,265 1,691
----------- ----------- ----------- ------------
Total income........................................................ 3,010,970 382,013 6,433,059 2,657,194
----------- ----------- ----------- ------------
Expenses:
Investment advisory and management fees (Note B).................. 572,238 346,336 382,349 260,612
Distribution fees (Class A) (Note B).............................. 264,076 154,761 172,472 115,756
Distribution fees (Class B) (Note B).............................. 460 616 2,277 12
Distribution fees (Class C) (Note B).............................. 503 165 1,481 44
Distribution fees (Class H) (Note B).............................. 3,529 1,694 14,254 166
Registration fees................................................. 23,769 19,393 15,649 22,597
Shareholders' notices and reports................................. 21,065 17,031 12,153 11,960
Custodian fees.................................................... 15,373 10,411 12,149 14,381
Legal and auditing fees (Note B).................................. 12,695 11,258 13,034 12,827
Directors' fees and expenses...................................... 3,843 2,579 3,169 2,579
Other............................................................. 4,530 3,401 3,343 3,759
----------- ----------- ----------- ------------
Total Expenses...................................................... 922,081 567,645 632,330 444,693
----------- ----------- ----------- ------------
NET INVESTMENT INCOME (LOSS).......................................... 2,088,889 (185,632) 5,800,729 2,212,501
----------- ----------- ----------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE A):
Net realized gain (loss) from security transactions................. 2,611,611 (690,797) 218,704 (4,285,955)
Net change in unrealized appreciation (depreciation) of
investments....................................................... 2,443,935 5,569,501 1,291,228 5,846,336
----------- ----------- ----------- ------------
NET GAIN ON INVESTMENTS............................................... 5,055,546 4,878,704 1,509,932 1,560,381
----------- ----------- ----------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. $7,144,435 $4,693,072 $7,310,661 $ 3,772,882
----------- ----------- ----------- ------------
</TABLE>
18
<PAGE>
FORTIS ADVANTAGE PORTFOLIOS, INC.
Statements of Changes in Net Assets
ASSET ALLOCATION PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
SIX-MONTH
PERIOD ENDED FOR THE
APRIL 30, YEAR ENDED
1995 OCTOBER 31,
(UNAUDITED) 1994
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income............................................... $ 2,088,889 $ 2,930,871
Net realized gain from security transacations....................... 2,611,611 788,635
Net change in unrealized appreciation (depreciation) of investments
in securities..................................................... 2,443,935 (2,994,032)
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. 7,144,435 725,474
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A........................................................... (2,163,854) (2,556,356)
Class B........................................................... (1,643) --
Class C........................................................... (1,846) --
Class H........................................................... (10,839) --
From realized gains on investments
Class A........................................................... (736,415) (5,171,318)
Class B........................................................... (258) --
Class C........................................................... (158) --
Class H........................................................... (1,337) --
------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS................................... (2,916,350) (7,727,674)
------------ ------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (535,916 and 2,102,540 shares)............................ 7,733,824 30,350,907
Class B (17,849 shares)........................................... 259,678 --
Class C (22,228 shares)........................................... 322,894 --
Class H (117,369 shares).......................................... 1,686,957 --
Proceeds from shares issued as a result of reinvested dividends
Class A (185,880 and 485,931 shares).............................. 2,626,601 6,992,258
Class B (130 shares).............................................. 1,878 --
Class C (139 shares).............................................. 2,000 --
Class H (749 shares).............................................. 10,789 --
Less cost of repurchase of shares
Class A (883,728 and 1,354,658 shares)............................ (12,738,248) (19,434,221)
Class B (564 shares).............................................. (8,214) --
Class C (503 shares).............................................. (7,187) --
Class H (3,034 shares)............................................ (43,384) --
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS......... (152,412) 17,908,944
------------ ------------
TOTAL INCREASE IN NET ASSETS.......................................... 4,075,673 10,906,744
NET ASSETS:
Beginning of period................................................. 119,394,872 108,488,128
------------ ------------
End of period (includes undistributed net investment income of
$403,104 and $492,397 , respectively)............................. $123,470,545 $119,394,872
------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
FORTIS ADVANTAGE PORTFOLIOS, INC.
Statements of Changes in Net Assets
CAPITAL APPRECIATION PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
SIX-MONTH
PERIOD ENDED FOR THE
APRIL 30, YEAR ENDED
1995 OCTOBER 31,
(UNAUDITED) 1994
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment loss................................................. $ (185,632) $ (367,981)
Net realized loss from security transacations....................... (690,797) (426,791)
Net change in unrealized appreciation (depreciation) of investments
in securities..................................................... 5,569,501 (4,853,816)
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....... 4,693,072 (5,648,588)
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From realized gains on investments
Class A............................................................. -- (3,890,570)
------------- -------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (484,817 and 1,429,148 shares).............................. 11,269,627 33,401,050
Class B (12,281 shares)............................................. 284,955 --
Class C (3,441 shares).............................................. 80,695 --
Class H (40,264 shares)............................................. 946,184 --
Proceeds from shares issued as a result of reinvested dividends
Class A (0 and 160,390 shares)...................................... -- 3,804,448
Less cost of repurchase of shares
Class A (489,514 and 758,288 shares)................................ (11,423,409) (17,748,768)
Class B (53 shares)................................................. (1,112) --
Class H (465 shares)................................................ (7,774) --
------------- -------------
NET INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS.................... 1,149,166 19,456,730
------------- -------------
TOTAL INCREASE IN NET ASSETS.......................................... 5,842,238 9,917,572
NET ASSETS:
Beginning of period.................................................. 68,351,704 58,434,132
------------- -------------
End of period (includes undistributed net investment loss of $185,632
and $0 , respectively).............................................. $ 74,193,942 $ 68,351,704
------------- -------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
FORTIS ADVANTAGE PORTFOLIOS, INC.
Statements of Changes in Net Assets
HIGH YIELD PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
SIX-MONTH
PERIOD ENDED FOR THE
APRILL 30, YEAR ENDED
1995 OCTOBER 31,
(UNAUDITED) 1994
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income............................................... $ 5,800,729 $ 9,248,772
Net realized gain from security transacations....................... 218,704 806,811
Net change in unrealized appreciation (depreciation) of investments
in securities..................................................... 1,291,228 (9,512,273)
------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. 7,310,661 543,310
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A........................................................... (5,810,282) (9,506,269)
Class B........................................................... (23,017) --
Class C........................................................... (15,962) --
Class H........................................................... (150,012) --
Excess distributions of net realized gains
Class A........................................................... -- (45,321)
------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS................................... (5,999,273) (9,551,590)
------------- -------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (2,209,588 and 6,891,317 shares).......................... 17,111,433 58,803,866
Class B (200,579 shares).......................................... 1,562,549 --
Class C (84,389 shares)........................................... 653,764 --
Class H (1,045,618 shares)........................................ 8,118,138 --
Proceeds from shares issued as a result of reinvested dividends
Class A (475,826 and 719,057 shares).............................. 3,695,445 6,047,165
Class B (1,793 shares)............................................ 14,435 --
Class C (1,228 shares)............................................ 9,777 --
Class H (9,919 shares)............................................ 77,814 --
Less cost of repurchase of shares
Class A (1,737,223 and 3,616,490 shares).......................... (13,449,281) (30,627,112)
Class B (1,710 shares)............................................ (13,266) --
Class C (1,714 shares)............................................ (13,400) --
Class H (19,468 shares)........................................... (148,288) --
------------- -------------
NET INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS.................... 17,619,120 34,223,919
------------- -------------
TOTAL INCREASE IN NET ASSETS.......................................... 18,930,508 25,215,639
NET ASSETS:
Beginning of period................................................. 98,610,923 73,395,284
------------- -------------
End of period (includes undistributed net investment income of $867
and $199,411 , respectively)...................................... $ 117,541,431 $ 98,610,923
------------- -------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
FORTIS ADVANTAGE PORTFOLIOS, INC.
Statements of Changes in Net Assets
GOVERNMENT TOTAL RETURN PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
SIX-MONTH FOR THE
PERIOD ENDED YEAR ENDED
APRIL 30, 1995 OCTOBER 31,
(UNAUDITED) 1994
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income............................................... $ 2,212,501 $ 5,024,228
Net realized loss from security transacations....................... (4,285,955) (4,120,660)
Net change in unrealized appreciation (depreciation) of investments
in securities..................................................... 5,846,336 (7,013,797)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....... 3,772,882 (6,110,229)
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A........................................................... (2,213,335) (5,025,096)
Class B........................................................... (66) --
Class C........................................................... (252) --
Class H........................................................... (1,037) --
Excess distributions of net realized gains
Class A........................................................... (319,185) (1,152,236)
Class B........................................................... (10) --
Class C........................................................... (36) --
Class H........................................................... (149) --
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS................................... (2,534,070) (6,177,332)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (72,385 and 690,778 shares)............................... 546,761 5,875,894
Class B (1,154 shares)............................................ 8,985 --
Class C (1,909 shares)............................................ 14,640 --
Class H (8,393 shares)............................................ 64,627 --
Proceeds from shares issued as a result of reinvested dividends
Class A (196,094 and 433,482 shares).............................. 1,524,324 3,609,513
Class B (10 shares)............................................... 76 --
Class C (11 shares)............................................... 86 --
Class H (161 shares).............................................. 1,255 --
Less cost of repurchase of shares
Class A (1,097,476 and 2,074,479 shares).......................... (8,492,327) (17,294,834)
Class B (5 shares)................................................ (35) --
Class C (0 shares)................................................ -- --
Class H (0 shares)................................................ -- --
-------------- --------------
NET DECREASE IN NET ASSETS FROM SHARE TRANSACTIONS.................... (6,331,608) (7,809,427)
-------------- --------------
TOTAL DECREASE IN NET ASSETS.......................................... (5,092,796) (20,096,988)
NET ASSETS:
Beginning of period................................................. 70,041,280 90,138,268
-------------- --------------
End of period (including distributions in excess of net investment
income of $188,464 and $186,275 , respectively)................... $ 64,948,484 $ 70,041,280
-------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
FORTIS ADVANTAGE PORTFOLIOS, INC.
Notes to Financial Statements
(Unaudited)
- --------------------------------------------------------------------------------
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Fortis Advantage Portfolios, Inc.
("Fortis Advantage") is a diversified, open-end management investment company
which currently is comprised of four separate investment portfolios and
series of capital stock: Asset Allocation Portfolio, Capital Appreciation
Portfolio, High Yield Portfolio, and Government Total Return Portfolio, each
of which has different investment objectives and its own investment portfolio
and net asset value. The Articles of Incorporation of Fortis Advantage
permits the Board of Directors to create additional portfolios in the future.
The fund offers Class A, Class B, Class C and Class H shares. Class A shares
are sold with a front-end sales charge. Class B and H shares are sold without
a front-end sales charge and may be subject to a contingent deferred sales
charge, and such shares automatically convert to Class A after eight years.
Class C shares are sold without a front-end sales charge and may be subject
to contingent deferred sales charge. All classes of shares have identical
voting, dividend, liquidation and other rights and the same terms and
conditions, except that the level of distribution fees charged differs
between classes. Income, expenses (other than expenses incurred under each
class's distribution agreement) and realized and unrealized gains or losses
on investments are allocated to each class of shares based on its relative
net assets.
SECURITY VALUATION: Investments in securities traded on a national securities
exchange or on the NASDAQ National Market System are valued at the last
reported sales price; listed securities and over-the-counter securities for
which no sale was reported are valued at the last reported bid price.
Long-term debt securities are valued at current market prices on the basis of
valuations furnished by an independent pricing service. Short-term
investments, with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued at amortized cost.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS: Delivery and payment for
securities that have been purchased by the Government Total Return Portfolio
on a forward commitment or when-issued basis can take place a month or more
after the transaction date. During this period, such securities are subject to
market fluctuation and the portfolio maintains, in a segregated account with
its custodian, assets with a market value equal to the amount of its purchase
commitments. As of April 30, 1995, the portfolio had entered into outstanding
when-issued or forward commitments of $0.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME: Security transactions are
accounted for on the trade date and dividend income is recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Realized
security gains and losses are determined using the identified cost method. For
financial reporting purposes, except for original issue discount, the Asset
Allocation and High Yield portfolios do not amortize bond premium and
discount. For Government Total Return Portfolio, interest income includes
amortization of bond premium and discount.
For the six-month period ended April 30, 1995, the cost of purchases and
proceeds from sales of securities (other than short-term securities) were as
follows:
<TABLE>
<CAPTION>
COST OF PROCEEDS
PURCHASES FROM SALES
----------- -----------
<S> <C> <C>
Asset Allocation Portfolio.............. $61,440,970 $74,299,890
Capital Appreciation Portfolio.......... 14,863,399 6,607,191
High Yield Portfolio.................... 35,669,561 20,942,406
Government Total Return Portfolio....... 30,152,999 37,401,969
</TABLE>
LENDING OF PORTFOLIO SECURITIES: At April 30, 1995, securities were on loan to
brokers from the Portfolios. For collateral, the Fund's custodian received
cash which is maintained in a separate account and invested by the custodian
in short term investment vehicles. The risks to the Portfolios in security
lending transactions are that the borrower may not provide additional
collateral when required or return the securities when due and that the
proceeds from the sale of investments made with cash collateral received will
be less than amounts required to be returned to the borrowers. Value of
securities on loan at April 30, 1995 and fee income from securities lending
was as follows for the six-month period ended April 30, 1995:
<TABLE>
<CAPTION>
FEE INCOME
SECURITIES FOR SIX-MONTH
ON LOAN COLLATERAL PERIOD
----------- ----------- -------------
<S> <C> <C> <C>
Asset Allocation Portfolio.............. $ 4,866,375 $ 5,035,140 $ 9,185
Capital Appreciation Portfolio.......... 20,671,081 22,412,800 52,064
High Yield Portfolio.................... 4,547,613 4,780,740 6,265
Government Total Return Portfolio....... -- -- 1,691
</TABLE>
INCOME TAXES: The portfolios intend to qualify, under the Internal Revenue
Code, as regulated investment companies and if so qualified, will not have to
pay federal income taxes to the extent their taxable net income is
distributed. For tax purposes, each portfolio is a single taxable entity.
On a calendar year basis, each portfolio intends to distribute substantially
all of its net investment income and realized gains, if any, to avoid payment
of federal excise taxes.
Net investment income and net realized gains differ for financial statement
and tax purposes primarily because of the recognition of market discount as
ordinary income for tax purposes for Asset Allocation and High Yield
Portfolios, the non-recognition of premium amortization as a reduction of
ordinary income for tax purposes for Government Total Return Portfolio, and
wash sale transactions. The character of distributions made during the year
from net investment income or net realized gains may, therefore, differ from
their ultimate characterization for federal income tax purposes. Also, due to
the timing of dividend distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or realized gains
(losses) were recorded by the fund. The effect on dividend distributions of
certain current year permanent book-to-tax differences is reflected as excess
distributions of net realized gains in the statements of changes in net
assets and the financial highlights.
23
<PAGE>
FORTIS ADVANTAGE PORTFOLIOS, INC.
Notes to Financial Statements (continued)
(Unaudited)
- --------------------------------------------------------------------------------
For federal income tax purposes the portfolios had the following capital loss
carryovers at October 31, 1994, which, if not offset by subsequent capital
gains, will expire in 1995 through 2002.
<TABLE>
<S> <C>
Capital Appreciation Portfolio.......... $ 426,791
High Yield Portfolio.................... 705,509
Government Total Return Portfolio....... 10,327,608
</TABLE>
It is unlikely the Board of Directors will authorize a distribution of any
net realized gains until the available capital loss carryovers have been
offset or expired.
DEFERRED COSTS: Registration costs are deferred and charged to income over the
registration period.
INCOME AND CAPITAL GAINS DISTRIBUTIONS: It is the policy of Asset Allocation
Portfolio to pay quarterly distributions from net investment income, Capital
Appreciation Portfolio to pay annual distributions from net investment income
and High Yield Portfolio and Government Total Return Portfolio to declare
daily and pay monthly distributions from net investment income. Distributions
of net realized capital gains, if any, are made annually by each portfolio.
The distributions are recorded on the record date and are payable in cash or
reinvested in additional shares of the portfolio at net asset value without
any charge to the shareholder.
ILLIQUID SECURITIES: At April 30, 1995, investments in securities for the High
Yield and Government Total Return Portfolios included issues that are
illiquid. The fund currently limits investments in illiquid securities to 15%
of net assets, at market value, at the date of purchase. The aggregate value
of such securities at April 30, 1995, was $8,339,890 for the High Yield
Portfolio which represents 7.10% of net assets and $832,046 for the Government
Total Return Portfolio which represents 1.28% of net assets. Pursuant to
guidelines adopted by the Board of Directors, certain unregistered securities
are determined to be liquid and are not included within the 15% limitation
specified above.
B. PAYMENTS TO RELATED PARTIES: Fortis Advisers, Inc., is the investment adviser
for each portfolio. Investment advisory and management fees are computed for
Asset Allocation and Capital Appreciation Portfolios at an annual rate of 1%
of the first $100 million of average daily net assets, .80% for the next $150
million, and .70% for average assets over $250 million of each portfolio. For
High Yield Portfolio, investment advisory and management fees are computed at
an annual rate of .80% for the first $50 million of average net assets, .70%
for assets over $50 million. The fee for Government Total Return Portfolio is
computed at an annual rate of .80% of the first $50 million of average daily
net assets, .75% of the next $450 million, and .70% of net assets in excess
of $500 million.
In addition to the investment advisory and management fee, Classes A, B, C
and H pay Fortis Investors, Inc. (the fund's principal underwriter)
distribution fees equal to .45% of average daily net assets for Class A for
each of Asset Allocation and Capital Appreciation Portfolios and .35% of
average daily net assets for Class A for each of High Yield and Government
Total Return Portfolios and 1.00% of average daily net assets for classes B,
C and H for each of the portfolios on an annual basis, to be used to
compensate those who sell shares of the fund and to pay certain other
expenses of selling fund shares. Fortis Investors, Inc. also received sales
charges (paid by purchasers of the fund's shares) aggregating $179,500 for
Class A for the Asset Allocation Portfolio; $164,864 for Class A for Capital
Appreciation Portfolio; $344,185 for Class A for High Yield Portfolio; and
$20,679 for Class A for Government Total Return Portfolio, for the six-month
period ended April 30, 1995.
Legal fees and expenses aggregating $3,670; $3,078; $3,186 and $2,727 for
Asset Allocation Portfolio, Capital Appreciation Portfolio, High Yield
Portfolio, and Government Total Return Portfolio, respectively, for the
six-month period ended April 30, 1995, were paid to a law firm of which the
secretary of Fortis Advantage is a partner.
C. At the special shareholder's meeting of August 23, 1994, the Amended and
Restated Articles of Incorporation were approved, which allows the fund to
issue multiple class shares effective November 14, 1994.
24
<PAGE>
FORTIS ADVANTAGE PORTFOLIOS, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
D. FINANCIAL HIGHLIGHTS: Selected per share historical data for each of the
Portfolios was as follows:
<TABLE>
<CAPTION>
Class A
For the Year Ended October 31,
------------------------------------------------------
ASSET ALLOCATION PORTFOLIO 1995** 1994 1993 1992 1991 1990
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 14.44 $ 15.43 $ 14.00 $ 13.34 $ 10.72 $ 11.91
--------- --------- --------- -------- -------- --------
Operations:
Investment income-net........................... .31 .37 .42 .53 .50 .42
Net realized and unrealized gain (loss) on
investments................................... .56 (.31) 1.52 .96 2.37 (1.00)
--------- --------- --------- -------- -------- --------
Total from operations............................. .87 .06 1.94 1.49 2.87 (.58)
--------- --------- --------- -------- -------- --------
Distributions to shareholders:
From investment income-net...................... (.27) (.33) (.51) (.82) (.25) (.61)
From net realized gains......................... (.09) (.72) -- -- -- --
Excess distributions of net realized gains...... -- -- -- (.01) -- --
--------- --------- --------- -------- -------- --------
Total Distributions to Shareholders............... (.36) (1.05) (.51) (.83) (.25) (.61)
--------- --------- --------- -------- -------- --------
Net asset value, end of period.................... $ 14.95 $ 14.44 $ 15.43 $ 14.00 $ 13.34 $ 10.72
--------- --------- --------- -------- -------- --------
Total return@..................................... 6.14% (0.48%) 14.20% 11.55% 27.25% (5.27%)
Net assets at end of period (000's omitted)....... $ 121,172 $ 119,395 $ 108,488 $ 89,674 $ 27,270 $ 21,691
Ratio of expenses to average daily net assets..... 1.52%* 1.55% 1.58% 1.58% 1.83% 1.98%
Ratio of net investment income to average daily
net assets....................................... 3.47%* 2.60% 2.90% 4.05% 4.11% 3.89%
Portfolio turnover rate........................... 23% 94% 103% 45% 64% 112%
</TABLE>
<TABLE>
<CAPTION>
Class B Class C Class H
ASSET ALLOCATION PORTFOLIO 1995+ 1995+ 1995+
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period............................................ $ 14.27 $ 14.27 $ 14.27
-------- -------- --------
Operations:
Investment income-net......................................................... .23 .23 .25
Net realized and unrealized gains (losses) on investments..................... .75 .71 .71
-------- -------- --------
Total from operations........................................................... .98 .94 .96
-------- -------- --------
Distribution to shareholders:
From investment income-net.................................................... (.25) (.25) (.25)
From net realized gains....................................................... (.09) (.09) (.09)
Excess distributions of net realized gains.................................... -- -- --
-------- -------- --------
Total distributions to shareholders............................................. (.34) (.34) (.34)
-------- -------- --------
Net asset value, end of period.................................................. $ 14.91 $ 14.87 $ 14.89
-------- -------- --------
Total Return@................................................................... 7.01% 6.73% 6.87%
Net assets end of period (000's omitted)........................................ $ 260 $ 325 $ 1,714
Ratio of expenses to average daily net assets................................... 2.07%* 2.07%* 2.07%*
Ratio of net investment income to average daily net assets...................... 2.91%* 2.91%* 2.91%*
Portfolio turnover rate......................................................... 23% 23% 23%
<FN>
* Annualized.
** Six-month period ended April 30, 1995.
@ These are the Fund's total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments for sales
charge.
+ For the period from November 14, 1994 (commencement of operations) to April
30, 1995.
</TABLE>
25
<PAGE>
FORTIS ADVANTAGE PORTFOLIOS, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
D. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
For the Year Ended October 31,
---------------------------------------------------------
CAPITAL APPRECIATION PORTFOLIO 1995*** 1994 1993 1992 1991 1990
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 23.05 $ 27.38 $ 19.85 $ 19.80 $ 11.58 $ 15.44
--------- --------- --------- --------- --------- ---------
Operations:
Investment income (loss)-net**.................. (.06) (.12) (.30) (.17) (.14) (.07)
Net realized and unrealized gain (loss) on
investments................................... 1.61 (2.45) 7.83 .22 8.36 (3.06)
--------- --------- --------- --------- --------- ---------
Total from operations............................. 1.55 (2.57) 7.53 .05 8.22 (3.13)
--------- --------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income-net...................... -- -- -- -- -- (.02)
From net realized gains......................... -- (1.76) -- -- -- (.71)
--------- --------- --------- --------- --------- ---------
Total distributions to shareholders............... -- (1.76) -- -- -- (.73)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.................... $ 24.60 $ 23.05 $ 27.38 $ 19.85 $ 19.80 $ 11.58
--------- --------- --------- --------- --------- ---------
Total return@..................................... 6.72% (9.56%) 37.93% .25% 70.98% (21.21%)
Net assets at end of period (000's omitted)....... $ 72,832 $ 68,352 $ 58,434 $ 43,207 $ 29,992 $ 15,194
Ratio of expenses to average daily net assets..... 1.62%* 1.62% 1.62% 1.68% 1.82% 1.88%
Ratio of net investment income (loss) to average
daily net assets................................. (.53%)* (.61%) (1.23%) (.88%) (.97%) (.56%)
Portfolio turnover rate........................... 11% 36% 60% 43% 93% 62%
</TABLE>
<TABLE>
<CAPTION>
Class B Class C Class H
CAPITAL APPRECIATION PORTFOLIO 1995+ 1995+ 1995+
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period............................................ $ 22.45 $ 22.45 $ 22.45
-------- -------- --------
Operations:
Investment income (loss)-net.................................................. (.06) (.06) (.06)
Net realized and unrealized gains (losses) on investments..................... 2.16 2.17 2.17
-------- -------- --------
Total from operations........................................................... 2.10 2.11 2.11
-------- -------- --------
Net asset value, end of period.................................................. $ 24.55 $ 24.56 $ 24.56
-------- -------- --------
Total Return@................................................................... 9.35% 9.40% 9.40%
Net assets end of period (000's omitted)........................................ $ 300 $ 85 $ 978
Ratio of expenses to average daily net assets................................... 2.17%* 2.17%* 2.17%*
Ratio of net investment income (loss) to average daily net assets............... (1.24%)* (1.24%)* (1.24%)*
Portfolio turnover rate......................................................... 11% 11% 11%
<FN>
* Annualized.
** Per share amounts compiled based upon average shares outstanding for the
period.
*** Six-month period ended April 30, 1995.
@ These are the Fund's total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments for sales
charge.
+ For the period from November 14, 1994 (commencement of operations) to April
30, 1995.
</TABLE>
26
<PAGE>
FORTIS ADVANTAGE PORTFOLIOS, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
D. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class A
For the Year Ended October 31,
---------------------------------------------------------
HIGH YIELD PORTFOLIO 1995** 1994 1993 1992 1991 1990
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 7.90 $ 8.65 $ 8.00 $ 7.82 $ 5.72 $ 8.59
--------- --------- --------- --------- --------- ---------
Operations:
Investment income-net........................... .45 .86 .87 .85 .95 1.04
Net realized and unrealized gain (loss) on
investments................................... .07 (.72) .68 .22 2.03 (2.73)
--------- --------- --------- --------- --------- ---------
Total from operations............................. .52 .14 1.55 1.07 2.98 (1.69)
--------- --------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income-net...................... (.45) (.89) (.89) (.85) (.88) (1.12)
Excess distributions of net realized gains...... -- -- (.01) (.04) -- --
From net realized gains......................... -- -- -- -- -- (.06)
--------- --------- --------- --------- --------- ---------
Total distributions to shareholders............... (.45) (.89) (.90) (.89) (.88) (1.18)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.................... $ 7.97 $ 7.90 $ 8.65 $ 8.00 $ 7.82 $ 5.72
--------- --------- --------- --------- --------- ---------
Total return@..................................... 6.93% 1.48% 20.33% 14.20% 55.78% (21.56%)
Net assets at end of period (000's omitted)....... $ 107,024 $ 98,611 $ 73,395 $ 45,628 $ 31,250 $ 17,484
Ratio of expenses to average daily net assets..... 1.24%* 1.23% 1.29% 1.33% 1.51% 1.53%
Ratio of net investment income to average daily
net assets....................................... 11.58%* 10.18% 10.43% 10.34% 13.80% 14.16%
Portfolio turnover rate........................... 21% 63% 95% 80% 61% 65%
</TABLE>
<TABLE>
<CAPTION>
Class B Class C Class H
HIGH YIELD PORTFOLIO 1995+ 1995+ 1995+
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period............................................ $ 7.87 $ 7.87 $ 7.87
-------- -------- --------
Operations:
Investment income-net......................................................... .40 .40 .40
Net realized and unrealized gains (losses) on investments..................... .09 .09 .09
-------- -------- --------
Total from operations........................................................... .49 .49 .49
-------- -------- --------
Distribution to shareholders:
From investment income-net.................................................... (.40) (.40) (.40)
Excess distributions of net realized gains.................................... -- -- --
From net realized gains....................................................... -- -- --
-------- -------- --------
Total distributions to shareholders............................................. (.40) (.40) (.40)
-------- -------- --------
Net asset value, end of period.................................................. $ 7.96 $ 7.96 $ 7.96
-------- -------- --------
Total Return@................................................................... 6.59% 6.59% 6.59%
Net assets end of period (000's omitted)........................................ $ 1,598 $ 668 $ 8,251
Ratio of expenses to average daily net assets................................... 1.89%* 1.89%* 1.89%*
Ratio of net investment income to average daily net assets...................... 10.09%* 10.09%* 10.09%*
Portfolio turnover rate......................................................... 21% 21% 21%
<FN>
* Annualized.
** Six-month period ended April 30, 1995.
@ These are the Fund's total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments for sales
charge.
+ For the period from November 14, 1994 (commencement of operations) to April
30, 1995.
</TABLE>
27
<PAGE>
FORTIS ADVANTAGE PORTFOLIOS, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
D. FINANCIAL HIGHLIGHTS: (continued)
<TABLE>
<CAPTION>
Class A
For the Period For the Period
For the Year Ended October 31, April 27, 1991 May 1, 1990
------------------------------------ to October 31, to April 26,
GOVERNMENT TOTAL RETURN PORTFOLIO: 1995*** 1994 1993 1992 1991** 1991
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 7.73 $ 9.01 $ 8.88 $ 9.11 $ 9.06 $ 8.91
--------- ---------- ---------- ---------- -------- --------
Operations:
Investment income-net................. .25 .52 .52 .63 .31 .85
Net realized and unrealized gain
(loss) on investments............... .23 (1.16) .33 (.13) .13 .12
--------- ---------- ---------- ---------- -------- --------
Total from operations................... .48 (.64) .85 .50 .44 .97
--------- ---------- ---------- ---------- -------- --------
Distributions to shareholders:
From investment income-net............ (.29) (.52) (.53) (.59) (.37) (.82)
Excess distributions of net realized
gains............................... (.04) (.12) (.19) (.14) (.02) --
--------- ---------- ---------- ---------- -------- --------
Total distributions to shareholders..... (.33) (.64) (.72) (.73) (.39) (.82)
--------- ---------- ---------- ---------- -------- --------
Net asset value, end of period.......... $ 7.88 $ 7.73 $ 9.01 $ 8.88 $ 9.11 $ 9.06
--------- ---------- ---------- ---------- -------- --------
Total return@........................... 5.86% (7.38%) 9.87% 5.73% 4.98% 11.27%
Net assets at end of period (000's
omitted)............................... $ 64,857 $ 70,041 $ 90,138 $ 94,336 $ 70,912 $ 75,605
Ratio of expenses to average daily net
assets................................. 1.33%* 1.28% 1.25% 1.25% 1.25%* 1.25%*
Ratio of net investment income to
average daily net assets............... 6.63%* 6.20% 5.81% 6.64% 6.74%* 9.37%*
Portfolio turnover rate................. 40% 135% 113% 122% 118% 101%
</TABLE>
<TABLE>
<CAPTION>
Class B Class C Class H
GOVERNMENT TOTAL RETURN PORTFOLIO: 1995+ 1995+ 1995+
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period............................................ $ 7.64 $ 7.64 $ 7.64
-------- -------- --------
Operations:
Investment income-net......................................................... .24 .21 .21
Net realized and unrealized gains (losses) on investments..................... .24 .29 .28
-------- -------- --------
Total from operations........................................................... .48 .50 .49
-------- -------- --------
Distribution to shareholders:
From investment income - net.................................................. (.25) (.25) (.25)
Excess distributions of net realized gains.................................... (.01) (.02) (.02)
-------- -------- --------
Total distributions to shareholders............................................. (.26) (.27) (.27)
-------- -------- --------
Net asset value, end of period.................................................. $ 7.86 $ 7.87 $ 7.86
-------- -------- --------
Total Return@................................................................... 6.21% 6.34% 6.21%
Net assets end of period (000's omitted)........................................ $ 9 $ 15 $ 67
Ratio of expenses to average daily net assets................................... 1.98%* 1.98%* 1.98%*
Ratio of net investment income to average daily net assets...................... 5.32%* 5.32%* 5.32%*
Portfolio turnover rate......................................................... 40% 40% 40%
<FN>
* Annualized.
** Fortis Advisers, Inc. assumed management of the fund on April 27, 1991
(formerly Olympus U.S. Government Plus Fund).
*** Six-month period ended April 30, 1995.
@ These are the Fund's total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments for sales
charge.
+ For the period from November 14, 1994 (commencement of operations) to April
30, 1995.
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
DIRECTORS OFFICERS
<S> <C> <C> <C>
RICHARD W. CUTTING DEAN C. KOPPERUD THOMAS R. PELLETT OFFICERSDEAN C. KOPPERUD
CPA and Financial President and Director Prior to January, 1991, President and Director
Consultant Fortis Advisers, Inc. Senior Vice STEPHEN M. POLING
ALLEN R. FREEDMAN Fortis Investors, Inc. President-Administration Vice President
Chairman and Chief Senior Vice President and and Corporate Affairs DENNIS M. OTT
Executive Officer Director of Fortis Benefits and Director Vice President
Fortis, Inc.; Insurance Company Pet, Inc. JAMES S. BYRD
Managing Director of Senior Vice President of ROBB L. PRINCE Vice President
Fortis International, N.V. Time Insurance Vice President and ROBERT C. LINDBERG
DR. ROBERT M. GAVIN Company Treasurer Vice President
President EDWARD M. MAHONEY Jostens, Inc. KEITH R. THOMSON
Macalester College Prior to January, 1995, LEONARD J. SANTOW Vice President
BENJAMIN S. JAFFRAY Chairman and Chief Principal ROBERT W. BELTZ, JR.
Chairman Executive Officer Griggs & Santow, Inc. Vice President
Sheffield Group, Ltd. Fortis Advisers, Inc. JOSEPH M. WIKLER ROBERT J. CLANCY
JEAN L. KING Fortis Investors, Inc. Investment Consultant and Vice President
President Private Investor THOMAS D. GUALDONI
Communi-King Prior to January, 1994, Vice President
Director of Research, LARRY A. MEDIN
Chief Investment Officer, Vice President
Principal, and Director JON H. NICHOLSON
The Rothschild Co. Vice President
JOHN W. NORTON
Vice President
DAVID A. PETERSON
Vice President
MICHAEL J. RADMER
Secretary
TAMARA L. FAGELY
Treasurer
DAVID G. CARROLL
2nd Vice President
CHRIS J. NEUHARTH
2nd Vice President
INVESTMENT MANAGER, CUSTODIAN
REGISTRAR AND Norwest Bank
TRANSFER AGENT Minnesota, N.A.
Fortis Advisers, Inc. Minneapolis, Minnesota
Box 64284 GENERAL COUNSEL
St. Paul, Minnesota 55164 Dorsey & Whitney P.L.L.P.
PRINCIPAL UNDERWRITER Minneapolis, Minnesota
Fortis Investors, Inc. INDEPENDENT AUDITORS
Box 64284 KPMG Peat Marwick LLP
St. Paul, Minnesota 55164 Minneapolis, Minnesota
</TABLE>
THE USE OF THIS MATERIAL IS AUTHORIZED ONLY WHEN PRECEDED OR ACCOMPANIED BY A
PROSPECTUS.
29
<PAGE>
<TABLE>
<S> <C> <C>
FORTIS FINANCIAL GROUP Fortis Financial Group (FFG) is a premier With more than $5 billion in assets under
provider of insurance and investment portfolios management, FFG is part of Fortis, a $100 billion
whose fund manager, Fortis Advisers, Inc. has worldwide financial services and insurance
established a nationwide reputation for money organization represented in 11 countries.
management. Through Fortis Investors, Inc., FFG Like the Fortis name, which comes
offers mutual funds, annuities and variable from the Latin for steadfast, our focus is on the
universal life insurance. Life and disability long-term in all we do: the relationships we
products are issued and underwritten by Time build, the performance we seek, the service we
Insurance Company and Fortis Benefits Insurance provide and the products we offer.
Company.
</TABLE>
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----------------
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FORTIS FINANCIAL GROUP
US Postage
P.O. Box 64284
PAID
St. Paul, MN 55164
Permit No. 3794
Minneapolis, MN
------------------
FORTIS ADVANTAGE
PORTFOLIOS, INC.
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