PAGE 1
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Keystone Global Opportunities Fund
Seeks capital growth by investing in small- to medium-sized companies around
the world.
Dear Shareholder:
We are pleased to report to you on activities of Keystone Global
Opportunities Fund for the twelve-month period which ended September 30,
1995.
Following this letter, we have included an interview with Christopher Ely,
portfolio manager of your Fund. Credit Lyonnais International Asset
Management, N.A. is the sub-adviser of your Fund's Europe and Far East
investments.
Performance
For the twelve-month period which ended September 30, 1995, your Fund
produced the following total returns.
Class A shares returned 20.65%.
Class B shares returned 19.79%.
Class C shares returned 19.63%.
The Morgan Stanley Capital International World Index, representing the
performance of stocks from more than 20 countries including the U.S.,
returned 14.40% for the same period. In addition, Morningstar, an independent
mutual fund rating service, assigned your Fund **** --the second highest
rating--out of 2593 equity funds as of September 30, 1995.(1)
We consider this outstanding performance, validating your Fund's emphasis
on small company stocks from around the world. In particular, we think our
tilt toward U.S. small company stocks has provided handsome returns, as
domestic small-cap stocks--especially U.S. technology issues--rose strongly.
We believe these unusually attractive returns were the result of favorable
market conditions in the U.S. and our careful asset allocation and individual
stock selection.
U.S. small caps led
Keystone Global Opportunities Fund has the flexibility to invest anywhere in
the world, and one of the best markets for small company growth stocks during
the past nine months was the United States. In 1995, lower U.S. interest
rates and non-inflationary growth combined to provide a positive environment
for small company stocks. Our Asset Allocation Committee made a timely
decision this spring to gradually increase the proportion of U.S. stocks from
about 50% of net assets to 60%. On September 30, 1995 U.S. holdings comprised
61% of net assets. Part of this decision included an emphasis on U.S.
technology companies which comprised about 19% of net assets at the end of
the period. These technology holdings made a significant contribution to your
Fund's strong performance during the period. When market conditions change,
we will be prepared to reallocate assets in growing international markets.
We believe small U.S. companies still offer room for growth in the near
term and, in our opinion, valuations of these stocks remain attractive. While
it is satisfying to capture the gains offered by a rising market, it is
important to remember that by their nature, small company stocks tend to be
less seasoned and can experience rapid price changes.
(continued)
- -------------------
(1) Source: Morningstar, Inc. Morningstar's proprietary ratings reflect
historical risk-adjusted performance as of September 30, 1995. Ratings
are subject to change monthly. They are calculated based on the Fund's
3-, 5- and 10-year average annual return in excess or below the 90-day
Treasury bill return. Ratings are not adjusted for sales charges, but are
adjusted for other fees. The top 10% of the funds in an investment
category receive 5 stars, the next 22.5% receive 4 stars, the next 35%
receive 3 stars, the next 22.5% receive 2 stars and the bottom 10%
receive 1 star. In the equity category, the Fund received a 5-star rating
for the 3-year and a 4-star rating for the 5-year periods. There is no
10-year rating because the fund was founded less than 10 years ago. There
were 1283 funds in the 3-year, 925 funds in the 5-year, and 484 funds in
the 10-year equity category. Past performance is no guarantee of future
results.
<PAGE>
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Keystone Global Opportunities Fund
Weak markets overseas
Thus far, international markets have not reflected the U.S. small-cap rally,
but we are seeing signs of improvement, notably in the United Kingdom,
Germany, Scandinavia and Japan. We believe the dollar has bottomed in
relationship to the mark and the yen, which could lead to more positive
conditions for foreign exports and an economic revival abroad. Lower interest
rates in Germany and Japan may also help improve economic conditions abroad.
We are intensifying our efforts to identify good prospects in Japan, but we
remain extremely selective--Japanese holdings accounted for 11% of net assets
at the end of the period. In Latin America, we have had minimal exposure,
with Fund investments totaling just 2% of net assets. Economic activity in
Latin America continues to be adversely affected by the 1994-1995 Mexican
peso devaluation.
Outlook
We believe the combination of moderate inflation, low interest rates and
slower economic growth in the United States should continue to provide
positive conditions for international business activity and small company
stocks. While foreign markets have yet to fully participate in this
particular growth cycle, we believe the foreign equity markets should begin
to benefit from declining interest rates in Europe and Japan. As the current
U.S. small stock cycle matures, we plan to gradually reposition your Fund to
take greater advantage of fast growing companies in international markets.
We appreciate your continued support of Keystone Global Opportunities
Fund. If you have any questions or comments, please feel free to write to us.
Sincerely,
/s/ Albert H. Elfner III [photos of Elfner and Bissell]
Albert H. Elfner, III Albert H. Elfner, III George S. Bissell
Chairman and President
Keystone Investments, Inc.
/s/ George S. Bissell
George S. Bissell
Chairman of the Board
Keystone Funds
November 1995
<PAGE>
PAGE 3
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A Discussion With
Your Fund Manager
[photo of Christopher R. Ely]
Christopher R. Ely is head of Keystone's small-cap growth team and senior
portfolio manager of your Fund. Mr. Ely has 16 years of investment
experience, is a Chartered Financial Analyst and is a member of the Boston
Security Analysts Society. He holds a BA in Mathematical Economics from Brown
University and an MBA from Babson College.
Q. What is your investment philosophy in managing the Fund?
A. We invest in small company stocks (small-caps). We find small-caps in a
variety of market sectors that we believe have superior growth rates and
accelerating earnings. Specifically, we seek out companies with projected
earnings growth rates of 20% or more each year. Generally these stocks have
market capitalizations (stock price multiplied by total shares outstanding)
of about $1 billion or less when we purchase them. We look for companies with
a high level of profitability and an attractive stock price. These are
typically companies that have distinctive products or services that will set
them apart. In essence, we are looking for tomorrow's world market leaders.
Q. How did the Fund perform?
A. We think the Fund performed well. Class A shares returned 20.65% for the
twelve-month period which ended September 30, 1995, and ranked 5th out of 21
global small company funds for the same one-year period according to Lipper
Analytical Services, Inc.(2) Class A shares have a 5-year record and ranked
1st out of 8 global small company funds. The primary reason for your Fund's
strong performance relative to its peers during the twelve-month period was
our emphasis on U.S. small company stocks, particularly technology companies,
which accounted for about 19% of net assets. The Fund's U.S. technology
holdings included electronics products and telecommunications companies.
These stocks experienced a strong rally this year and helped protect and
enhance the value of Fund shares when foreign market performance was
lackluster.
================================================================================
Fund Profile
Objective: Seeks capital growth by investing in small- to medium-sized
companies around the world.
Commencement of investment operations: March 16, 1988
Countries: 22
Net assets: $419 million
Newspaper listing: GloOp
================================================================================
(2) Source: Lipper Analytical Services, Inc., an independent mutual fund rating
service. Lipper ranks funds based on total returns. There is no 10-year
ranking for Class A because it commenced operations less than 10 years ago.
Performance is based on total return which includes reinvestment of
dividends, and does not include the effects of sales charges. Past
performance is no guarantee of future results.
<PAGE>
PAGE 4
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Keystone Global Opportunities Fund
Regional Diversification
as of September 30, 1995
[world map]
NORTH AMERICA 60.6%
LATIN AMERICA 1.9%
EUROPE 20.3%
ASIA/PACIFIC 14.0%
OTHER(3) 3.2%
(as a percentage of net assts)
The structure of the Keystone Global Opportunities Fund allows great
flexibility to allocate assets worldwide in pursuit of the best performance.
We are monitoring world markets closely and will reallocate assets abroad
when we see opportunities for greater growth in international markets.
Q. How long do you expect the small stock rally in the U.S. to continue?
A. No one can say for sure, but we believe there is still plenty of steam
left. Using history as a guide, small-cap stocks tend to run in six-to-eight
year cycles. We think we are in the fifth year of this cycle, and believe
there should still be room for growth. Nevertheless, we are watching our
valuations very carefully.
One way we monitor valuations is by comparing the price to earnings ratio
(P/E) of small cap stocks to the P/E of a broader market average, such as the
Standard and Poor's 500 (see chart on p.5). When the estimated relative P/E
ratio is 1.0, that means the P/E for small and large-cap stocks are the same
ratio. A P/E of 2.0 means that small-cap P/Es are twice large cap stocks.
Historically, a P/E on this chart below 2.0 means that small-cap stocks are
not fully valued compared to large-cap stocks. With the estimated relative
P/E at 1.47 as of September 30, 1995, we think that
- --------------------
(3) Includes short-term investments, foreign currency holdings, and other
assets and liabilities.
<PAGE>
PAGE 5
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small-cap stocks can rise further without becoming overvalued.
Q. Technology companies have been a major focus of the Fund's U.S. holdings.
Why have they performed so well?
A. The explosive growth of computing has touched virtually every aspect of our
lives. At Keystone, we often refer to this as the "digitizing" of America.
From supermarket scanners to global wireless communications, there has been a
revolution in the way we process information, communicate with one another,
and manufacture and sell products and services. We group electronics,
software, telecommunications and office and business equipment in the
technology category. These companies are constantly
[typeset representation of line chart]
U.S. Small Cap Cycle
as of September 30, 1995
Ratio below 2.0 represents attractive value
[plot points]
5/86 1.643
9/86 1.572
1/87 1.585
5/87 1.506
9/87 1.377
1/88 1.263
5/88 1.227
9/88 1.211
1/89 1.182
5/89 1.148
9/89 1.127
1/90 1.155
5/90 1.211
9/90 1.325
1/91 1.44
5/91 1.509
9/91 1.599
1/92 1.702
5/92 1.728
9/92 1.698
1/93 1.784
5/93 1.851
9/93 1.996
1/94 2.018
5/94 2.039
9/94 1.91
1/95 1.706
5/95 1.514
9/95 1.462
12 Month Moving Average
Comparison of price to earnings ratios (P/E) of Keystone Small Company Growth
Fund (S-4) to the S&P 500 Index.
Top Fund Holdings
as of September 30, 1995
Percent of
Foreign stocks Industry net assets
----------------------------------------------------------------------------
Nichiei Co. (Japan) Finance 1.6
----------------------------------------------------------------------------
Maruko (Japan) Consumer goods 1.3
----------------------------------------------------------------------------
Shokoh Fund (Japan) Finance 1.3
----------------------------------------------------------------------------
Aucnet (Japan) Electronics 1.1
----------------------------------------------------------------------------
Fulcrum Technologies (Canada) Software Services 1.1
----------------------------------------------------------------------------
U.S. stocks
----------------------------------------------------------------------------
Xilinx Electronics products 2.2
----------------------------------------------------------------------------
KLA Instruments Electronics products 1.9
----------------------------------------------------------------------------
Solectron Electronics products 1.9
----------------------------------------------------------------------------
Adobe Systems Software services 1.9
----------------------------------------------------------------------------
Netmanage Telecommunications 1.8
----------------------------------------------------------------------------
coming up with new and better products to help businesses around the world
maintain their competitive edge. We believe it is an area that will
continue to provide sustainable growth opportunities for some time.
Q. What technology companies did the Fund hold?
A. We saw a big opportunity in stocks related to the surging interest in the
Internet. These included Netmanage, whose software helps people navigate on
the Internet, and Adobe Systems, a leading player in desktop publishing
software. We continue to believe that businesses that can provide services or
tools that save time or money and enhance productivity have a great deal of
growth potential. For example, Synopsys, a leading supplier of electronic
design automation software and Parametric Technology, a leader in mechanical
design software, continue to be important holdings. Their productivity
enhancing solutions continue to fuel growth of over 30% per year.
<PAGE>
PAGE 6
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Keystone Global Opportunities Fund
Top 10 Industries
as of September 30, 1995
Percentage of
Industry net assets
-----------------------------------------
Software services 17.2
-----------------------------------------
Retail 10.5
-----------------------------------------
Electronics products 13.0
-----------------------------------------
Telecommunications 8.5
-----------------------------------------
Finance 5.9
-----------------------------------------
Capital goods 5.5
-----------------------------------------
Business services 4.3
-----------------------------------------
Consumer goods 4.1
-----------------------------------------
Building materials 4.0
-----------------------------------------
Health care services 3.1
-----------------------------------------
Q. What other industries are represented in the portfolio?
A. We have holdings in several areas. Loewen Group, based in Canada, is a
stable growth company that owns and operates a chain of funeral homes
throughout Canada and the United States. Its earnings have grown at
approximately 25% per year for the past five years. Duracraft, an established
manufacturer of fans and heaters was also a strong performer as was Sunglass
Hut, an international franchise selling high fashion eyewear.
Q. How about the Fund's international holdings?
A. Our largest foreign holding is Nichiei Co., a Japanese company that
specializes in financing small- and medium-sized companies. In the United
Kingdom we own Compass Group PLC which provides catering services to
businesses, healthcare establishments and airports throughout Europe. We also
hold two small semiconductor companies in Taiwan, United Micro Electronics
and Taiwan Semiconductor, which we expect to benefit from the global growth
of technology.
Q. What advantages does the Fund offer investors?
A. Keystone Global Opportunities Fund gives investors access to some of the
fastest growing companies around the world. It is a good choice for investors
seeking to diversify their holdings with an international component. The
Fund's ability to allocate its assets geographically helps increase its
potential for higher returns and also has the potential to protect
shareholders from poor market conditions in a particular country or region.
Q. What is your outlook?
A. We expect the U.S. small cap market to remain strong in the near term, and
we believe that increasing global liquidity should benefit economies in
Europe and improve prospects for small stocks there. Japan's commitment to
boosting its economy should also create some good opportunities, which could
have a spillover effect on other markets in the Asia/Pacific region. We are
still proceeding cautiously in Latin America, although we plan to expand our
exposure there when we find the right companies.
[diamond]
This column is intended to answer questions
about your Fund. If you have a question
you would like answered, please write to:
Keystone Investments, Inc.
Attn: Manager, Shareholder Communications
200 Berkeley Street, 22nd Floor,
Boston, Massachusetts 02116-5034.
<PAGE>
PAGE 7
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Your Fund's Performance
[typeset representation of mountain chart]
Growth of an investment in Keystone Global Opportunities Fund Class A
In Thousands
Initial Reinvested
Investment Distributions
3/88 9425 9425
9312 9312
9/89 10537 10889
9378 9839
9/91 12177 13057
11018 13293
9/93 16984 20492
18303 22282
9/95 22083 26883
A $10,000 investment in Keystone Global Opportunities Fund Class A made on
March 16, 1988 with all distributions reinvested was worth $26,883 on
September 30, 1995. Past performance is no guarantee of future results.
Twelve-Month Performance as of September 30, 1995
----------------------------------------------------------
Class A Class B Class C
Total returns* 20.65% 19.79% 19.63%
Net asset value 9/30/94 $19.42 $19.20 $19.26
9/30/95 $23.43 $23.00 $23.04
Dividends None None None
Capital gains None None None
* Before deducting front-end or contingent deferred sales charge (CDSC).
Historical Record as of September 30, 1995
----------------------------------------------------------------
Cumulative total returns Class A Class B Class C
1-year w/o sales charge 20.65% 19.79% 19.63%
1-year 13.71% 15.79% 19.63%
5-year 157.53% -- --
Life of Class 168.83% 62.30% 65.58%
Average Annual Returns
1-year w/o sales charge 20.65% 19.79% 19.63%
1-year 13.71% 15.79% 19.63%
5-year 20.83% -- --
Life of Class 14.01% 19.91% 20.82%
Class A shares were introduced on March 16, 1988. Performance is reported at
the current maximum front-end sales charge of 5.75%.
Class B shares were introduced on February 1, 1993. Shares purchased after
June 1, 1995 are subject to a contingent deferred sales charge (CDSC) that
declines from 5% to 1% over six years from the month purchased. Performance
assumes that shares were redeemed after the end of a one-year holding period
and reflects the deduction of a 4% CDSC.
Class C shares were introduced on February 1, 1993. Performance reflects
the return you would have received after holding shares for one year or more
and redeeming after the end of that period.
The investment return and principal value will fluctuate so that your
shares, when redeemed, may be worth more or less than the original cost.
Performance for each class will differ.
You may exchange your shares for another Keystone fund by phone or in
writing for a $10 fee. The exchange fee is waived for individual investors
who make an exchange using Keystone's Automated Response Line (KARL). The
Fund reserves the right to change or terminate the exchange offer.
<PAGE>
PAGE 8
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Keystone Global Opportunities Fund
Growth of an Investment
[typeset representation of line chart]
Comparison of change in value of a $10,000 investment in Keystone Global
Opportunities Fund Class A, the Morgan Stanley Capital International World
Index and the Consumer Price Index.
In Thousands March 16, 1988 through September 30, 1995
Average Annual Total Return
---------------------------
1 Year 5 Year Life of Class
Class A 13.71% 20.83% 14.01%
Class B 15.79% -- 19.91%
Class C 19.63% -- 20.82%
Morgan Stanley
Capital International
World Index Consumer
Class A (MSCIWI) Price Index
9425 10000 10000
9/88 9312 10264.77 10328
9/89 10889 12922.81 10776
9/90 9839 10165.25 11440
9/91 13057 12674.48 11828
9/92 13293 12619.57 12181
9/93 20492 15184.04 12509
9/94 22282 16334.75 12879
9/95 26883 18687.55 13207
Past performance is no guarantee of future results. The performance of Class
B or Class C shares will be greater or less than the line shown based on
differences in loads and fees paid by the shareholder investing in the
different classes. Class B and Class C shares were introduced February 1,
1993. The Consumer Price Index and Morgan Stanley World Index are from
February 28, 1988.
This chart graphically compares your Fund's total return performance to
certain investment indexes. It is the result of fund performance guidelines
issued by the Securities and Exchange Commission. The intent is to provide
investors with more information about their investment.
Components of the Chart
The chart is composed of several lines that represent the accumulated value
of an initial $10,000 investment for the period indicated. The lines
illustrate a hypothetical investment in:
1. Keystone Global Opportunities Fund Class A
The Fund seeks capital growth by investing in small- to medium-sized
companies around the world. The return is quoted after deducting sales
charges (if applicable), fund expenses, and transaction costs and assumes
reinvestment of all distributions.
2. Morgan Stanley Capital International World Index (MSCIWI)
CIWI is a broad-based securities market index of about 1500 securities from
major developed markets around the world. The index is unmanaged and includes
North America, Europe and the Pacific Rim. The index does not include
transaction costs associated with buying and selling securities. It would be
difficult for most individual investors to duplicate this index.
3. Consumer Price Index (CPI)
This index is a widely recognized measure of the cost of goods and services
produced in the U.S. The index contains factors such as prices of services,
housing, food, transportation and electricity which are compiled by the U.S.
Bureau of Labor Statistics. The CPI is generally considered a valuable
benchmark for investors who seek to outperform increases in the cost of
living.
These indexes do not include transaction costs associated with buying and
selling securities, and do not hold cash to meet redemptions. It would be
difficult for most individual investors to duplicate these indexes.
Understanding What the Chart Means
The chart demonstrates your Fund's total return performance in relation to a
well known investment index and to increases in the cost of living. It is
important to understand what the chart shows and does not show.
This illustration is useful because it charts Fund and index performance
over the same time frame and over a long period. Long-term performance is a
more reliable and useful measure of performance than measurements of
short-term returns or temporary swings in the market. Your financial adviser
can help you evaluate fund performance in conjunction with the other
important financial considerations such as safety, stability and consistency.
<PAGE>
PAGE 9
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Limitations of the Chart
The chart, however, limits the evaluation of Fund performance in several
ways. Because the measurement is based on total returns over an extended
period of time, the comparison often favors those funds which emphasize
capital appreciation when the market is rising. Likewise, when the market is
declining, the comparison usually favors those funds which take less risk.
Performance Can Be Distorted
Funds which are more conservative in their orientation and which place an
emphasis on capital preservation will tend to compare less favorably when the
market is rising. In addition, funds which have income as one of their
objectives also will tend to compare less favorably to relevant indexes.
Indexes may also reflect the performance of some securities which a fund
may be prohibited from buying. A bond fund, for example, may be limited to
investments in only high quality bonds, or a stock fund may only be able to
buy stocks that have been traded on a stock exchange for a minimum number of
years or stocks that have a certain market capitalization. Indexes usually do
not have the same investment restrictions as your Fund.
Indexes Do Not Include Costs of Investing
The comparison is further limited in its utility because the indexes do not
take into account any deductions for sales charges, transaction costs or
other fund expenses. Your Fund's performance figures do reflect such
deductions. Sales charges--whether up-front or deferred--pay for the cost of
the investment advice of your financial adviser. Transaction costs pay for
the costs of buying and selling securities for your Fund's portfolio. Fund
expenses pay for the costs of investment management and various shareholder
services. None of these costs are reflected in index total returns. The
comparison is not completely realistic because an index cannot be duplicated
by an investor--even an unmanaged index--without incurring some charges and
expenses.
One of Several Measures
The chart is one of several tools you can use to understand your investment.
It should be read in conjunction with the Fund's prospectus, and annual and
semiannual reports. Also, your financial adviser, who understands your
personal financial situation, can best explain the features of your Keystone
fund and how it applies to your financial needs.
Future Returns May Be Different
Shareholders also should be mindful that the long-run performance of either
the Fund or the indexes is not representative of what shareholders should
expect to receive from their Fund investment in the future; it is presented
to illustrate only past performance and is not a guarantee of future returns.
<PAGE>
PAGE 10
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Keystone Global Opportunities Fund
Glossary of
Mutual Fund Terms
MUTUAL FUND--A company which combines the investment money of many people
whose financial goals are similar, and invests that money in a variety of
securities. A mutual fund allows the smaller investor the benefits of
diversification, professional management and constant supervision usually
available only to large investors.
PORTFOLIO MANAGER--An investment professional who is responsible for
managing a portfolio's assets prudently and making appropriate investment
decisions, such as which securities to buy, hold and sell, based on the
investment objectives of the portfolio.
STOCK--Equity or ownership interest in a corporation, which represents a
claim on the corporation's assets and earnings.
BOND--Security issued by a government or corporation to those from whom it
has borrowed money. A bond usually promises to pay interest income to the
bondholder at regular intervals and to repay the entire amount borrowed at
maturity date.
CONVERTIBLE SECURITY--A corporate security (usually preferred stock or
bonds) that is exchangeable for a set number of another security type
(usually common stocks) at a pre-stated price.
MONEY MARKET FUND--A mutual fund whose assets are invested in a
diversified portfolio of short-term securities, including commercial paper,
bankers' acceptances, certificates of deposit and other short-term
instruments. The fund pays income which can fluctuate daily. Liquidity and
safety of principal are primary objectives.
NET ASSET VALUE (NAV) PER SHARE--The value of one share of a mutual fund.
The NAV per share is determined by subtracting a fund's total liabilities
from its total assets, and dividing that amount by the number of fund shares
outstanding.
DIVIDEND--A per share distribution of the income earned from the fund's
portfolio holdings. When a dividend distribution is made, the fund's net
asset value drops by the amount of the distribution because the distribution
is no longer considered part of the fund's assets.
CAPITAL GAIN--The profit from the sale of securities, less any losses.
Capital gains are paid to fund shareholders on a per share basis. When a
capital gain distribution is made, the fund's net asset value drops by the
amount of the distribution because the distribution is no longer considered
part of the fund's assets.
YIELD--The annualized rate of income as measured against the current net
asset value of fund shares.
TOTAL RETURN--The change in value of a fund investment over a specified
period of time, taking into account the change in a fund's market price and
the reinvestment of all fund distributions.
SHORT-TERM--An investment with a maturity of one year or less.
LONG-TERM--An investment with a maturity of greater than one year.
AVERAGE MATURITY--The average number of days until the notes, drafts,
acceptances, bonds or other debt instruments in a portfolio become due and
payable.
OFFERING PRICE--The offering price of a share of a mutual fund is the
price at which the share is sold to the public.
<PAGE>
PAGE 11
- ---------------------------------------------------------------------
SCHEDULE OF INVESTMENTS--September 30, 1995
Number Market
of Shares Value
====================================================================
UNITED STATES (58.4%)
AIR TRANSPORTATION (0.1%)
Midwest Express Holdings, Inc. (a) 20,000 $ 450,000
--------------------------------------------------------------------
AMUSEMENTS (0.5%)
Hollywood Casino Corp. (a) 88,250 601,203
Players International, Inc. (a) 117,500 1,689,063
--------------------------------------------------------------------
2,290,266
--------------------------------------------------------------------
AUTOMOTIVE (1.9%)
Exide Securities Corp. 72,600 3,630,000
Lear Seating Corp. (a) 150,000 4,406,250
--------------------------------------------------------------------
8,036,250
--------------------------------------------------------------------
BUILDING MATERIALS (0.4%)
Centex Construction Products, Inc. (a) 62,000 813,750
Congoleum Corp. (a) 97,700 1,025,850
--------------------------------------------------------------------
1,839,600
--------------------------------------------------------------------
BUSINESS SERVICES (0.5%)
Thermedics, Inc. (a) 100,000 1,987,500
--------------------------------------------------------------------
CAPITAL GOODS (1.7%)
AGCO Corp. 157,500 7,166,250
--------------------------------------------------------------------
CONSUMER GOODS (1.4%)
Blyth Industries, Inc. (a) 71,700 3,351,975
Duracraft (a) 51,000 2,307,750
--------------------------------------------------------------------
5,659,725
--------------------------------------------------------------------
DRUGS (2.2%)
Agouron Pharmaceuticals, Inc. (a) 62,200 1,796,025
Autoimmune, Inc. (a) 40,000 620,000
Bio Vascular, Inc. (a) 100,000 1,812,500
Cephalon, Inc. (a) 50,000 1,368,750
Gilead Sciences, Inc. (a) 108,100 2,378,200
Idexx Labs, Inc. (a) 17,000 626,875
Sequus Pharmaceuticals, Inc. (a) 50,000 578,125
--------------------------------------------------------------------
9,180,475
--------------------------------------------------------------------
ELECTRONICS PRODUCTS (11.2%)
Alliance Semiconductor Corp. (a) 100,000 3,987,500
Electroglas, Inc. (a) 80,000 5,430,000
KLA Instruments Corp. (a) 100,000 8,050,000
Microchip Technology, Inc. (a) 135,000 5,121,563
Solectron Corp. (a) 200,000 7,900,000
Teradyne, Inc. (a) 200,000 7,200,000
Xilinx, Inc. (a) 190,900 9,199,002
--------------------------------------------------------------------
46,888,065
--------------------------------------------------------------------
FINANCE (0.4%)
Independent Bank Corp. 200,000 $ 1,475,000
--------------------------------------------------------------------
HEALTH CARE SERVICES (3.0%)
Chad Therapeutics, Inc. (a) 90,000 1,845,000
Health Management Associates, Inc. (a) 99,750 3,204,469
Mariner Health Group, Inc. (a) 150,000 2,137,500
Ostech, Inc. (a) 100,000 1,812,500
Phamis, Inc. (a) 135,000 3,670,313
--------------------------------------------------------------------
12,669,782
--------------------------------------------------------------------
INSURANCE (0.4%)
HCC Insurance Holdings, Inc. (a) 51,100 1,692,688
--------------------------------------------------------------------
OFFICE & BUSINESS EQUIPMENT (1.3%)
EMC Corp. (a) 300,000 5,437,500
--------------------------------------------------------------------
OIL SERVICES (2.3%)
Dual Drilling Co. (a) 200,000 1,937,500
ENSCO International, Inc. (a) 125,000 2,125,000
Global Marine, Inc. (a) 453,600 3,231,900
Noble Drilling Corp. (a) 300,000 2,306,250
--------------------------------------------------------------------
9,600,650
--------------------------------------------------------------------
RESTAURANTS (1.7%)
Applebee's International, Inc. 153,600 4,166,400
Outback Steakhouse, Inc. (a) 100,000 3,087,500
--------------------------------------------------------------------
7,253,900
--------------------------------------------------------------------
RETAIL (6.2%)
Corporate Express, Inc. (a) 200,000 4,850,000
Discount Auto Parts, Inc. (a) 55,500 1,678,875
Michael's Stores, Inc. (a) 10,700 174,544
Office Max, Inc. (a) 300,000 7,275,000
Petsmart, Inc. (a) 187,500 6,281,250
Sunglass Hut International, Inc. (a) 100,000 5,012,500
Tractor Supply Co. (a) 32,500 633,750
--------------------------------------------------------------------
25,905,919
--------------------------------------------------------------------
SOFTWARE SERVICES (15.6%)
Adobe Systems, Inc. 150,000 7,790,625
Applix, Inc. (a) 155,000 3,410,000
BDM International, Inc. (a) 65,700 1,806,750
Business Objects S.A., ADR (a) 44,000 1,881,000
Dendrite International, Inc. (a) 70,000 1,085,000
Desktop Data, Inc. (a) 100,000 3,500,000
Edmark Corp. (a) 75,000 3,581,250
Inference Corp. (a) 89,000 1,301,625
INSO Corp. (a) 162,200 5,190,400
Integrated Silicon Systems, Inc. (a) 200,000 5,900,000
See Notes to Schedule of Investments. (continued on next page)
<PAGE>
PAGE 12
--------------------------------------------------------------------
Keystone Global Opportunities Fund
SCHEDULE OF INVESTMENTS--September 30, 1995
Number Market
of Shares Value
====================================================================
SOFTWARE SERVICES--continued
MapInfo Corp. (a) 99,500 $ 2,052,188
Maxis, Inc. (a) 100,000 4,387,500
Mercury Interactive Corp. (a) 125,000 3,468,750
Parametric Technology Corp. (a) 120,000 7,410,000
Project Software & Development, Inc.
(a) 150,000 3,871,875
Symantec Corp. (a) 50,000 1,496,875
Synopsys, Inc. (a) 120,200 3,726,200
UUnet Technologies, Inc. (a) 40,000 1,860,000
Vantive Corp. (a) 100,000 1,575,000
--------------------------------------------------------------------
65,295,038
--------------------------------------------------------------------
TELECOMMUNICATIONS (7.5%)
3Com Corp. (a) 162,200 7,390,238
California Amplifier, Inc. (a) 150,000 3,159,375
Cascade Communications Corp. (a) 50,000 2,450,000
Cidco Group, Inc. (a) 100,000 3,512,500
Colonial Data Technologies (a) 150,000 2,775,000
Netcom Online Communications (a) 50,000 2,181,250
Netmanage, Inc. (a) 320,000 7,580,000
Winstar Communications, Inc. (a) 127,600 2,544,025
--------------------------------------------------------------------
31,592,388
--------------------------------------------------------------------
TRANSPORTATION (0.1%)
Trism, Inc. (a) 70,000 490,000
--------------------------------------------------------------------
TOTAL UNITED STATES
(Cost--$158,654,952) 244,910,996
====================================================================
FOREIGN (38.4%)
AUSTRALIA (1.3%)
ADVERTISING & PUBLISHING (0.1%)
West Australia Newspaper Holdings Ltd. 150,000 428,507
--------------------------------------------------------------------
FINANCE (0.5%)
Advance Bank of Australia 300,000 2,208,283
--------------------------------------------------------------------
METALS & MINING (0.6%)
Capral Aluminum 600,000 1,410,217
Delta Gold NL (a) 450,000 993,047
--------------------------------------------------------------------
2,403,264
--------------------------------------------------------------------
OIL (0.1%)
Oil Search Ltd. 300,000 278,869
--------------------------------------------------------------------
TOTAL AUSTRALIA 5,318,923
--------------------------------------------------------------------
CANADA (2.1%)
BUSINESS SERVICES (1.0%)
Loewen Group, Inc. 100,000 $ 4,125,000
--------------------------------------------------------------------
SOFTWARE SERVICES (1.1%)
Fulcrum Technologies, Inc. (a) 200,000 4,700,000
--------------------------------------------------------------------
TOTAL CANADA 8,825,000
--------------------------------------------------------------------
CHILE (0.8%)
BUSINESS SERVICES (0.6%)
A.F.P. Provida S.A. (ADR) 100,000 2,437,500
A.F.P. Provida S.A. 10,582 248,099
--------------------------------------------------------------------
2,685,599
--------------------------------------------------------------------
FINANCE (0.1%)
Banco de Credito 38,393 332,136
--------------------------------------------------------------------
PAPER & PACKAGING (0.1%)
Companhia de Manufactuers de Papeles Y
Cartones 17,201 271,731
--------------------------------------------------------------------
TOTAL CHILE 3,289,466
--------------------------------------------------------------------
FINLAND (0.8%)
CAPITAL GOODS (0.8%)
Benefon Oyvappa S.I. 91,400 3,205,818
--------------------------------------------------------------------
FRANCE (2.0%)
ADVERTISING & PUBLISHING (0.2%)
Filipacchi Medias 7,354 903,476
--------------------------------------------------------------------
AUTOMOTIVE (0.5%)
Sylea 23,974 2,132,320
--------------------------------------------------------------------
CAPITAL GOODS (0.6%)
Norbert Destressangle 24,260 2,596,207
--------------------------------------------------------------------
ELECTRONICS PRODUCTS (0.2%)
Faiveley S.A. (a) 3,199 217,619
Ugc Droits Audiovisuels 10,200 449,467
--------------------------------------------------------------------
667,086
--------------------------------------------------------------------
INSURANCE (0.2%)
Union Assurance Federal 8,213 842,231
--------------------------------------------------------------------
TEXTILES & APPAREL (0.3%)
Chaine et Trame S.A. 18,868 674,336
ICBT Groupe 14,793 600,792
--------------------------------------------------------------------
1,275,128
--------------------------------------------------------------------
TOTAL FRANCE 8,416,448
- ---------------------------------------------------------------------
See Notes to Schedule of Investments.
<PAGE>
PAGE 13
--------------------------------------------------------------------
SCHEDULE OF INVESTMENTS--September 30, 1995
Number Market
of Shares Value
====================================================================
GERMANY (1.8%)
BUILDING MATERIALS (1.2%)
Plettac AG 8,100 $ 2,148,286
Praktikerbau (a) 65,000 2,240,203
Tarkett AG (a) 34,400 819,678
--------------------------------------------------------------------
5,208,167
--------------------------------------------------------------------
INSURANCE (0.2%)
Marschollek, Lautenschlager und Partner
AG 1,500 964,661
--------------------------------------------------------------------
METALS & MINING (0.3%)
SGL Carbon (a) 20,500 1,326,977
--------------------------------------------------------------------
TOTAL GERMANY 7,499,805
--------------------------------------------------------------------
HONG KONG (0.5%)
AMUSEMENTS (0.3%)
Cdl Hotels International 2,500,000 1,131,703
--------------------------------------------------------------------
FINANCE (0.1%)
Wing Hang Bank Ltd. 100,000 338,218
--------------------------------------------------------------------
RETAIL (0.1%)
Dickson Concepts International Ltd. 400,000 289,716
--------------------------------------------------------------------
SERVICES (0.0%)
Pico Far East Hldgs. Ltd. 1,200,000 119,507
Pico Far East Hldgs. Ltd., warrants (a) 240,000 1,242
--------------------------------------------------------------------
120,749
--------------------------------------------------------------------
TOTAL HONG KONG 1,880,386
--------------------------------------------------------------------
HUNGARY (0.1%)
DRUGS (0.1%)
Egis Gyogyszergyar (a) 20,000 520,965
--------------------------------------------------------------------
ITALY (0.4%)
AUTOMOTIVE (0.3%)
Brembo SPA (a) 120,000 1,282,977
--------------------------------------------------------------------
CAPITAL GOODS (0.1%)
Stayer Group SPA (a) 200,000 490,543
--------------------------------------------------------------------
TOTAL ITALY 1,773,520
--------------------------------------------------------------------
JAPAN (11.1%)
BUILDING MATERIALS (0.5%)
Hibiya Engineering, Ltd. 200,000 2,180,607
--------------------------------------------------------------------
CAPITAL GOODS (0.9%)
Kanamoto Co., Ltd. 150,000 $ 2,210,893
Max Co. 80,000 1,647,570
--------------------------------------------------------------------
3,858,463
--------------------------------------------------------------------
CONSUMER GOODS (1.8%)
Daiwa Industries Ltd. 165,000 1,565,797
Maruko Co. 90,000 5,542,375
Sekido Co. 31,000 219,070
--------------------------------------------------------------------
7,327,242
--------------------------------------------------------------------
DIVERSIFIED COMPANIES (0.3%)
Takuma Co., Ltd. 100,000 1,362,879
--------------------------------------------------------------------
ELECTRONICS PRODUCTS (1.1%)
Aucnet, Inc. 80,000 4,765,030
--------------------------------------------------------------------
FINANCE (2.9%)
Nichiei Co., Ltd. 105,000 6,741,709
Shokoh Fund 30,000 5,542,375
--------------------------------------------------------------------
12,284,084
--------------------------------------------------------------------
FOODS (0.6%)
MOS Food Services, Inc. 105,000 2,703,044
--------------------------------------------------------------------
OFFICE & BUSINESS EQUIPMENT (0.7%)
Riso Kagaku Corp. 34,000 2,903,841
--------------------------------------------------------------------
RESTAURANTS (0.5%)
Ohsho Food Service Corp. 99,000 1,998,889
--------------------------------------------------------------------
RETAIL (1.8%)
Ministop Co., Ltd. 140,000 3,250,719
Nissen Co. 150,000 4,149,210
--------------------------------------------------------------------
7,399,929
--------------------------------------------------------------------
TOTAL JAPAN 46,784,008
--------------------------------------------------------------------
MALAYSIA (1.6%)
AIR TRANSPORTATION (0.0%)
Malaysian Helicopter Services Bhd 96,000 148,280
--------------------------------------------------------------------
BUILDING MATERIALS (0.8%)
Ho Hup Construction Co. Bhd 140,000 445,860
Hume Industries (Malaysia) Bhd 288,000 1,616,560
IJM Corp. Bhd 140,000 249,681
Leader Universal Holdings Bhd 273,333 837,844
Road Builder (M) Hldgs. Bhd 60,000 191,083
--------------------------------------------------------------------
3,341,028
- ---------------------------------------------------------------------
See Notes to Schedule of Investments. (continued on next page)
<PAGE>
PAGE 14
--------------------------------------------------------------------
Keystone Global Opportunities Fund
SCHEDULE OF INVESTMENTS--September 30, 1995
Number Market
of Shares Value
====================================================================
CHEMICALS (0.4%)
Nylex (Malaysia) SDN Bhd 580,000 $1,697,054
--------------------------------------------------------------------
FINANCE (0.4%)
Affin Holdings Bhd 240,000 456,688
MBF Capital Bhd 1,000,000 1,074,840
--------------------------------------------------------------------
1,531,528
--------------------------------------------------------------------
TOTAL MALAYSIA 6,717,890
--------------------------------------------------------------------
MEXICO (0.0%)
DRUGS (0.0%)
Far Beneficial S.A. de C.V. (a) 141,000 173,266
--------------------------------------------------------------------
NETHERLANDS (1.7%)
DRUGS (0.2%)
Gist Brocades N.V. 30,000 796,925
--------------------------------------------------------------------
FINANCE (0.2%)
Wegener N.V. 10,000 814,426
--------------------------------------------------------------------
FOODS (0.1%)
Van Melle N.V. 6,130 419,548
--------------------------------------------------------------------
RETAIL (0.7%)
Ceteco Holding N.V. 15,000 487,530
Hagemeyer N.V. 54,000 2,477,405
--------------------------------------------------------------------
2,964,935
--------------------------------------------------------------------
SOFTWARE SERVICES (0.5%)
Baan Co. N.V. (ADR) (a) 50,000 2,250,000
--------------------------------------------------------------------
TOTAL NETHERLANDS 7,245,834
--------------------------------------------------------------------
NORWAY (1.0%)
ADVERTISING & PUBLISHING (0.3%)
Schibsted AS 100,000 1,162,420
--------------------------------------------------------------------
RETAIL (0.7%)
Elkjop Norge AS 110,000 3,152,866
--------------------------------------------------------------------
TOTAL NORWAY 4,315,286
--------------------------------------------------------------------
PERU (1.1%)
FINANCE (0.3%)
Banco de Credito del Peru 741,277 1,388,344
--------------------------------------------------------------------
FOODS (0.3%)
La Fabril S.A. (a) 1,024,201 1,233,458
--------------------------------------------------------------------
TELECOMMUNICATIONS (0.4%)
Compania Peruana de Telefonos 815,487 1,563,698
--------------------------------------------------------------------
TELEPHONE UTILITIES (0.1%)
Tele 2000 (a) 498,181 $ 486,518
--------------------------------------------------------------------
TOTAL PERU 4,672,018
--------------------------------------------------------------------
SINGAPORE (0.1%)
DIVERSIFIED COMPANIES (0.1%)
Natsteel Ltd. 150,000 310,919
--------------------------------------------------------------------
SPAIN (2.1%)
AMUSEMENTS (0.8%)
Azkoyen S.A. 50,650 3,318,759
--------------------------------------------------------------------
BUILDING MATERIALS (0.3%)
Tableros de Fibras S.A. 43,108 549,224
Zardoya-Otis S.A. 6,600 682,851
Zardoya-Otis S.A. (rights) (a) 660 68,285
--------------------------------------------------------------------
1,300,360
--------------------------------------------------------------------
BUSINESS SERVICES (0.2%)
Estacionamientos Subterraneo S.A. 50,078 925,645
--------------------------------------------------------------------
RETAIL (0.3%)
Cortefiel S.A. 48,541 1,401,807
--------------------------------------------------------------------
UTILITIES (0.5%)
Hidroelectrica del Cantabrico S.A. 60,450 1,833,745
--------------------------------------------------------------------
TOTAL SPAIN 8,780,316
--------------------------------------------------------------------
SWEDEN (2.2%)
BUSINESS SERVICES (0.0%)
Securitas Teknik AB 3,000 107,845
--------------------------------------------------------------------
CAPITAL GOODS (0.7%)
Hoganas AB 90,000 2,676,638
--------------------------------------------------------------------
FINANCE (0.4%)
Finnveden Invest AB (a) 143,500 1,501,999
--------------------------------------------------------------------
METALS & MINING (0.1%)
Celsius Industriar AB 23,000 393,483
--------------------------------------------------------------------
MISCELLANEOUS (0.0%)
Assa AB (a) 3,000 19,707
--------------------------------------------------------------------
RETAIL (0.5%)
Lindex AB (a) 148,000 1,955,072
--------------------------------------------------------------------
TRANSPORTATION (0.5%)
ASG AB 103,100 1,994,543
--------------------------------------------------------------------
TOTAL SWEDEN 8,649,287
- ---------------------------------------------------------------------
See Notes to Schedule of Investments.
<PAGE>
PAGE 15
--------------------------------------------------------------------
SCHEDULE OF INVESTMENTS--September 30, 1995
Number Market
of Shares Value
====================================================================
SWITZERLAND (0.6%)
CONSUMER GOODS (0.3%)
Phoenix Meccano AG 2,750 $ 1,355,969
--------------------------------------------------------------------
PAPER & PACKAGING (0.3%)
SIG Schweizerische Industrie HG AG 510 1,072,059
--------------------------------------------------------------------
TOTAL SWITZERLAND 2,428,028
--------------------------------------------------------------------
TAIWAN, PROV. OF CHINA (0.6%)
ELECTRONICS PRODUCTS (0.5%)
Taiwan Semiconductor 284,400 1,035,175
United Microelectronics Corp., Ltd. (a) 339,000 920,736
--------------------------------------------------------------------
1,955,911
--------------------------------------------------------------------
FINANCE (0.1%)
Chronicle 2001 Mutual Fund (a) 1,653,374 658,013
--------------------------------------------------------------------
TOTAL TAIWAN 2,613,924
--------------------------------------------------------------------
THAILAND (0.0%)
FINANCE (0.0%)
Phatra Thanakit Co., Ltd. 9,000 65,272
--------------------------------------------------------------------
UNITED KINGDOM (6.5%)
ADVERTISING & PUBLISHING (0.5%)
Cia Group PLC 945,000 2,015,721
--------------------------------------------------------------------
BUILDING MATERIALS (0.8%)
Berkeley Group (The) PLC 250,000 1,615,579
Halma PLC 578,776 1,572,909
--------------------------------------------------------------------
3,188,488
--------------------------------------------------------------------
BUSINESS SERVICES (2.0%)
Compass Group PLC 647,368 4,321,583
Serco Group PLC 125,000 720,888
Takare PLC 1,004,000 3,553,420
--------------------------------------------------------------------
8,595,891
--------------------------------------------------------------------
CAPITAL GOODS (0.7%)
Critchley Group PLC 305,000 3,060,120
--------------------------------------------------------------------
CONSUMER GOODS (0.6%)
Chamberlain Phipps Hldgs. PLC 1,000,000 2,433,243
--------------------------------------------------------------------
ELECTRICAL PRODUCTS (0.2%)
Blick PLC 108,888 891,199
--------------------------------------------------------------------
FINANCE (0.5%)
3I Group PLC 335,000 2,133,117
--------------------------------------------------------------------
FOODS (0.2%)
Devro International Ltd. 200,000 $ 761,574
--------------------------------------------------------------------
HEALTH CARE SERVICES (0.1%)
Westminster Healthcare Hldgs. PLC 120,000 659,820
--------------------------------------------------------------------
PAPER & PACKAGING (0.1%)
Jarvis Porter Group PLC 100,000 440,038
--------------------------------------------------------------------
RETAIL (0.2%)
Brown N Group PLC 180,000 725,233
--------------------------------------------------------------------
TELECOMMUNICATIONS (0.6%)
NYNEX Cablecommunications 1,085,000 2,524,351
--------------------------------------------------------------------
TOTAL UNITED KINGDOM 27,428,795
--------------------------------------------------------------------
TOTAL FOREIGN (Cost--$148,100,242) 160,915,174
--------------------------------------------------------------------
Maturity
Value
====================================================================
SHORT-TERM INVESTMENTS (3.1%)
Investments in repurchase agreements,
in a joint trading account, purchased
9/29/95, 6.39%, maturing 10/02/95
(Cost--$12,980,000) (b) $12,986,817 $ 12,980,000
--------------------------------------------------------------------
TOTAL INVESTMENTS
(Cost--$319,735,194) (c) 418,806,170
FOREIGN CURRENCY HOLDINGS
(Cost--$2,291,171) (0.5%) 2,214,426
OTHER ASSETS AND LIABILITIES--
NET (-0.4%) (1,682,466)
--------------------------------------------------------------------
NET ASSETS (100%) $419,338,130
====================================================================
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Non-income-producing security.
(b) The repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at September 30, 1995.
(c) The cost of investments for federal income tax purposes is $319,743,069.
Gross unrealized appreciation and depreciation of investments, based on
identified tax cost, at September 30, 1995 are as follows:
Gross unrealized
appreciation $113,109,370
Gross unrealized
depreciation (14,046,268)
----------
$ 99,063,102
==========
See Notes to Financial Statements.
<PAGE>
PAGE 16
- ------------------------------
Keystone Global Opportunities Fund
FINANCIAL HIGHLIGHTS--CLASS A SHARES
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
March 16, 1988
Year Ended September 30, (Commencement of
----------------------------------------------------------------- Operations) to
September 30,
1995 1994 1993 1992 1991 1990 1989 1988
=======================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value
beginning of
period $ 19.42 $ 18.02 $ 11.69 $ 12.89 $ 9.89 $11.17 $ 9.77 $10.00
- -----------------------------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment
income (loss) (0.16) (0.04) (0.14) (0.08) 0.17 0.19 0.09 0.05
Net realized and
unrealized
gains (losses)
on investment
and foreign
currency
related
transactions 4.17 1.60 6.47 0.23 3.06 (1.27) 1.66 (0.28)
- -----------------------------------------------------------------------------------------------------------------------
Total from
investment
operations 4.01 1.56 6.33 0.15 3.23 (1.08) 1.75 (0.23)
- -----------------------------------------------------------------------------------------------------------------------
Less
distributions
from:
Net investment
income 0 0 0 0 (0.23) (0.12) (0.09) 0
Net realized
gains (losses)
on investments 0 (0.16) 0 (1.35) 0 (0.08) (0.26) 0
- -----------------------------------------------------------------------------------------------------------------------
Total
distributions 0 (0.16) 0 (1.35) (0.23) (0.20) (0.35) 0
- -----------------------------------------------------------------------------------------------------------------------
Net asset value
end of period $ 23.43 $ 19.42 $ 18.02 $ 11.69 $12.89 $ 9.89 $11.17 $ 9.77
=======================================================================================================================
Total return (b) 20.65% 8.74% 54.15% 1.81% 32.71% (9.65%) 16.94% (1.20%)(c)
Ratios/supplemental
data
Ratios to
average net
assets:
Total expenses 1.83%(d) 2.01% 2.84% 2.50%(a) 2.03%(a) 2.00%(a) 2.00%(a) 1.50%(a)(e)
Net investment
income (loss) (0.83%) (0.86%) (1.72%) (0.69%) 1.49% 1.80% 0.86% 1.42%(a)(e)
Portfolio
turnover rate 35% 32% 64% 75% 134% 51% 13% 19%
- -----------------------------------------------------------------------------------------------------------------------
Net assets end
of period
(thousands) $94,679 $71,122 $29,942 $10,859 $2,159 $1,519 $1,378 $1,082
=======================================================================================================================
</TABLE>
(a) Figures are net of expense reimbursement by Keystone in connection with
voluntary expense limitations. Before the expense reimbursement, the "Ratio
of net operating and management expenses to average net assets" would have
been 3.67%, 7.77%, 10.39%, 13.06%, and 5.54% for the years ended September
30, 1992, 1991, 1990, 1989 and the period March 16, 1988 (Commencement of
Operations) to September 30, 1988, respectively.
(b) Excluding applicable sales charges.
(c) Annualized total return from March 16, 1988 (Commencement of Operations) to
September 30, 1988 is (2.20%)
(d) The expense ratio includes indirectly paid expenses for the year ended
September 30, 1995. Excluding indirectly paid expenses, the expense ratio
would have been 1.81% for the year then ended.
(e) Annualized.
See Notes to Financial Statements.
<PAGE>
PAGE 17
- ------------------------------
FINANCIAL HIGHLIGHTS--CLASS B SHARES
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
February 1, 1993
(Date of Initial
Year Ended Public Offering)
September 30, to
------------------ September 30,
1995 1994 1993
====================================================================================================
<S> <C> <C> <C>
Net asset value beginning of period $ 19.20 $ 17.95 $ 14.04
----------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.25) (0.15) (0.04)
Net realized and unrealized gains (losses) on investment
and foreign currency related transactions 4.05 1.56 3.95
----------------------------------------------------------------------------------------------------
Total from investment operations 3.80 1.41 3.91
----------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income 0 0 0
Net realized gains (losses) on investments 0 (0.16) 0
----------------------------------------------------------------------------------------------------
Total distributions 0 (0.16) 0
----------------------------------------------------------------------------------------------------
Net asset value end of period $ 23.00 $ 19.20 $ 17.95
====================================================================================================
Total return (b) 19.79% 7.93% 27.85%(a)
Ratios/supplemental data
Ratios to average net assets:
Total expenses 2.58%(c) 2.83% 3.35%(a)
Net investment income (loss) (1.59%) (1.61%) (1.86%)(a)
Portfolio turnover rate 35% 32% 64%
----------------------------------------------------------------------------------------------------
Net assets end of period (thousands) $238,320 $131,695 $15,534
====================================================================================================
</TABLE>
(a) Annualized.
(b) Excluding applicable sales charges.
(c) The expense ratio includes indirectly paid expenses for the year ended
September 30, 1995. Excluding indirectly paid expenses, the expense ratio
would have been 2.56% for the year then ended.
See Notes to Financial Statements.
<PAGE>
PAGE 18
- ------------------------------
Keystone Global Opportunities Fund
FINANCIAL HIGHLIGHTS--CLASS C SHARES
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
February 1, 1993
Year Ended (Date of Initial
September 30, Public Offering)
----------------- to
September 30,
1995 1994 1993
=====================================================================================================
<S> <C> <C> <C>
Net asset value beginning of period $ 19.26 $ 17.99 $14.04
- -----------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.27) (0.15) (0.04)
Net realized and unrealized gains (losses) on investment
and foreign currency related transactions 4.05 1.58 3.99
- -----------------------------------------------------------------------------------------------------
Total from investment operations 3.78 1.43 3.95
- -----------------------------------------------------------------------------------------------------
Less distributions from:
Investment income--net 0 0 0
Net realized gains (losses) on investments 0 (0.16) 0
- -----------------------------------------------------------------------------------------------------
Total distributions 0 (0.16) 0
- -----------------------------------------------------------------------------------------------------
Net asset value end of period $ 23.04 $ 19.26 $17.99
=====================================================================================================
Total return (b) 19.63% 8.02% 28.13%(a)
Ratios/supplemental data
Ratios to average net assets:
Total expenses 2.58%(c) 2.85% 3.04%(a)
Net investment income (loss) (1.59%) (1.62%) (1.55%)(a)
Portfolio turnover rate 35% 32% 64%
- -----------------------------------------------------------------------------------------------------
Net assets end of period (thousands) $86,339 $50,535 $6,217
=====================================================================================================
</TABLE>
(a) Annualized.
(b) Excluding applicable sales charges.
(c) The expense ratio includes indirectly paid expenses for the year ended
September 30, 1995. Excluding indirectly paid expenses, the expense ratio
would have been 2.56% for the year then ended. See Notes to Financial
Statements.
See Notes to Financial Statements.
<PAGE>
PAGE 19
- ------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
========================================================================
Assets:
Investments at market value
(identified cost--$319,735,194) (Note 1) $418,806,170
Foreign currency holdings
(identified cost--$2,291,171) (Note 1) 2,214,426
-----------------------------------------------------------------------
Total investments and foreign currency holdings 421,020,596
-----------------------------------------------------------------------
Cash 814
Receivable for:
Investments sold 490,660
Fund shares sold 3,979,008
Foreign currency related contracts (Note 5) 5,947
Dividends and interest 267,366
Foreign tax reclaim 138,865
Prepaid expenses 3,526
-----------------------------------------------------------------------
Total assets 425,906,782
-----------------------------------------------------------------------
Liabilities:
Payable for:
Investments purchased 6,083,985
Fund shares redeemed 324,763
Foreign taxes to be withheld 57,304
Accrued reimbursable expenses 6,369
Other accrued expenses (Note 4) 96,231
-----------------------------------------------------------------------
Total liabilities 6,568,652
-----------------------------------------------------------------------
Net assets $419,338,130
========================================================================
Net assets represented by: (Note 1)
Paid-in capital $330,622,811
Accumulated distributions in excess of investment
income--net (2,960,939)
Accumulated realized gains (losses) on investment and
foreign currency related transactions--net (7,321,617)
Net unrealized appreciation on investments and other
assets and liabilities 98,991,928
Net unrealized appreciation on foreign currency
exchange contracts 5,947
-----------------------------------------------------------------------
Total net assets $419,338,130
========================================================================
Net asset value and redemption price per share: (Note 2)
Class A Shares ($23.43 on 4,040,958 shares outstanding) $ 94,679,332
Class B Shares ($23.00 on 10,363,289 shares
outstanding) 238,320,238
Class C Shares ($23.04 on 3,747,906 shares outstanding) 86,338,560
-----------------------------------------------------------------------
$419,338,130
========================================================================
Offering price per share:
Class A Shares (including sales charge of 5.75%)
(Note 2) $24.86
========================================================================
Class B Shares $23.00
========================================================================
Class C Shares $23.04
========================================================================
STATEMENT OF OPERATIONS
Year Ended September 30, 1995
========================================================================
Investment income (Note 1):
Dividends (net of foreign taxes
of $444,914) $ 2,294,588
Interest 681,463
-----------------------------------------------------------------------
Total income 2,976,051
-----------------------------------------------------------------------
Expenses: (Notes 2 and 4)
Management fee $ 3,009,974
Transfer agent fees 1,214,494
Accounting 22,704
Auditing and legal 27,468
Custodian fees 315,314
Printing 36,402
Trustees' fees and expenses 24,154
Distribution Plan expenses 2,491,967
Registration fees 158,510
Miscellaneous expenses 32,499
-----------------------------------------------------------------------
Total expenses 7,333,486
-----------------------------------------------------------------------
Less: Expenses paid indirectly (Note 4) (71,147)
-----------------------------------------------------------------------
Net expenses 7,262,339
-----------------------------------------------------------------------
Net loss from operations (Note 1) (4,286,288)
-----------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investment and foreign
currency related transactions:
(Notes 1 and 3)
Net realized gain (loss) on:
Investments (4,090,326)
Foreign currency related transactions (2,909,685)
-----------------------------------------------------------------------
Net realized loss on investment and
foreign currency related
transactions (7,000,011)
-----------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency related
transactions 73,894,167
-----------------------------------------------------------------------
Net gain on investment and foreign
currency related transactions 66,894,156
-----------------------------------------------------------------------
Net increase in net assets resulting
from operations $62,607,868
========================================================================
See Notes to Financial Statements.
<PAGE>
PAGE 20
- ------------------------------
Keystone Global Opportunities Fund
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended September 30,
1995 1994
======================================================================================================
<S> <C> <C>
Operations:
Net investment loss from operations (Note 1) ($ 4,286,288) ($ 2,191,168)
Net realized loss on investment and foreign currency related
transactions (Note 3) (7,000,011) (3,409,703)
Net change in unrealized appreciation (depreciation) on investments and
foreign currency related transactions 73,894,167 17,263,860
------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 62,607,868 11,662,989
------------------------------------------------------------------------------------------------------
Distributions to shareholders from: (Notes 1 and 5)
Net investment income:
Class A Shares 0 (326,668)
Class B Shares 0 (244,277)
Class C Shares 0 (83,063)
------------------------------------------------------------------------------------------------------
Total distributions to shareholders 0 (654,008)
------------------------------------------------------------------------------------------------------
Capital share transactions: (Note 2)
Proceeds from shares sold:
Class A Shares 35,039,374 51,373,426
Class B Shares 105,034,904 121,266,409
Class C Shares 38,024,895 49,422,917
Payments for shares redeemed:
Class A Shares (26,560,885) (14,654,789)
Class B Shares (33,012,757) (10,376,196)
Class C Shares (15,147,033) (6,924,492)
Net asset value of shares issued in reinvestment of dividends and
distributions:
Class A Shares 0 274,341
Class B Shares 0 200,189
Class C Shares 0 68,432
------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital share transactions 103,378,498 190,650,237
------------------------------------------------------------------------------------------------------
Total increase in net assets 165,986,366 201,659,218
------------------------------------------------------------------------------------------------------
Net assets:
Beginning of period 253,351,764 51,692,546
------------------------------------------------------------------------------------------------------
End of period [including accumulated distributions in excess of net
investment income as follows: September, 1995--($2,960,939) and
September, 1994--($180,181)] (Note 1) $419,338,130 $253,351,764
======================================================================================================
</TABLE>
See Notes to Financial Statements.
<PAGE>
PAGE 21
- ------------------------------
NOTES TO FINANCIAL STATEMENTS
(1.) Significant Accounting Policies
Keystone Global Opportunities Fund (formerly Keystone America Global
Opportunities Fund) (the "Fund") is a Massachusetts Business Trust. The Fund
was organized on June 17, 1987 and had no operations prior to March 16, 1988.
It is registered under the Investment Company Act of 1940 as a diversified
open-end investment company. Keystone Investment Management Company (formerly
Keystone Custodian Funds, Inc.) ("Keystone") provides investment advisory
services to the Fund pursuant to an Investment Advisory and Management
Agreement.
The Fund currently issues three classes of shares. Class A shares are
offered at a public offering price which includes a maximum sales charge of
5.75% payable at the time of purchase. Class B shares are sold subject to a
contingent deferred sales charge payable upon redemption which varies
depending on when shares were purchased and how long they have been held.
Class C shares are sold subject to a contingent deferred sales charge payable
upon redemption within one year of purchase. Class C shares are available
only through dealers who have entered into special distribution agreements
with Keystone Investment Distributors Company, (formerly Keystone
Distributors, Inc.) ("KIDC") the Fund's principal underwriter.
Keystone is a wholly-owned subsidiary of Keystone Investments, Inc.
(formerly Keystone Group, Inc.) ("KII") a Delaware corporation. KII is
privately owned by an investor group consisting of current and former members
of management of Keystone and its affiliates. Keystone has retained Credit
Lyonnais International Asset Management North America ("CLIAM"), an
international portfolio management firm, to provide the Fund with
sub-advisory services, subject to the supervision of the Fund's Board of
Trustees and Keystone. Keystone Investor Resource Center, Inc. ("KIRC"), a
wholly-owned subsidiary of Keystone, is the Fund's transfer agent.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
A. Investments, including American Depository Receipts ("ADRs") are
usually valued at the closing sales price, or in the absence of sales and for
over-the-counter securities, the mean of bid and asked quotations. Management
values the following securities at prices it deems in good faith to be fair:
(a) securities (including restricted securities) for which complete
quotations are not readily available and (b) listed securities if, in the
opinion of management, the last sales price does not reflect a current value,
or if no sale occurred. ADRs, which are certificates representing shares of
foreign securities deposited in domestic and foreign banks, are traded and
valued in United States dollars.
Short-term investments purchased with maturities of sixty days or less,
are valued at amortized cost (original purchase price adjusted for
amortization of premium or accretion of discount) which, when combined with
accrued interest, approximates market. Short-term investments maturing in
more than sixty days for which market quotations are readily available are
valued at current market value. Short-term investments maturing in more than
sixty days (when purchased) which are held on the sixtieth day prior to
maturity, are valued at amortized cost (market value on the sixtieth day
adjusted for amortization of premium or accretion of discount) which, when
combined with accrued interest, approximates market.
Investments denominated in foreign currencies are adjusted daily to
reflect changes in exchange rates.
<PAGE>
PAGE 22
- ------------------------------
Keystone Global Opportunities Fund
Those securities traded in foreign currency amounts are translated into
United States dollars as follows; market value of investments, assets, and
liabilities at the daily rate of exchange; and purchases and sales of
investments, income, and expenses at the rate of exchange prevailing on the
respective dates of such transactions. Market quotations are not considered
to be readily available for long-term corporate bonds and notes; such
investments are stated at fair value on the basis of valuations furnished by
a pricing service, approved by the Board of Trustees, which determines
valuations for normal, institutional-size trading units of such securities
using methods based on market transactions for comparable securities and
various relationships between securities which are generally recognized by
institutional traders.
A futures contract is an agreement between two parties to buy and sell a
specific amount of a commodity, security, financial instrument, or, in the
case of a stock index, cash at a set price on a future date. Upon entering
into a futures contract, the Fund is required to deposit with a broker an
amount ("initial margin") equal to a certain percentage of the purchase price
indicated in the futures contract. Subsequent payments ("variation margin")
are made or received by the Fund each day, as the value of the underlying
instrument or index fluctuates, and are recorded for book purposes as
unrealized gains or losses by the Fund. For federal tax purposes, any futures
contracts which remain open at fiscal year-end are marked-to-market and the
resultant net gain or loss is included in federal taxable income.
B. Securities transactions are accounted for on the day after trade date.
Realized gains and losses are computed on the identified cost basis. Interest
income is recorded on the accrual basis and dividend income is recorded on
the ex-dividend date. Distributions to the shareholders are recorded by the
Fund at the close of business on the record date.
C. The Fund has qualified, and intends to qualify in the future, as a
regulated investment company under the Internal Revenue Code of 1986, as
amended ("Internal Revenue Code"). Thus, the Fund is relieved of any federal
income or excise tax liability by distributing all of its net taxable
investment income and net taxable capital gains, if any, to its shareholders.
The Fund intends to avoid any excise tax liability by making the required
distributions under the Internal Revenue Code.
D. When the Fund enters into a repurchase agreement (a purchase of securities
whereby the seller agrees to repurchase the securities at a mutually agreed
upon date and price), the repurchase price of the securities will generally
equal the amount paid by the Fund plus a negotiated interest amount. The
seller under the repurchase agreement will be required to provide securities
("collateral") to the Fund whose value will be maintained at an amount not
less than the repurchase price, and which generally will be maintained at
101% of the repurchase price. The Fund monitors the value of collateral on a
daily basis, and if the value of the collateral falls below required levels,
the Fund intends to seek additional collateral from the seller or terminate
the repurchase agreement. If the seller defaults, the Fund would suffer a
loss to the extent that the proceeds from the sale of the underlying
securities were less than the repurchase price. Any such loss would be
increased by any cost incurred on disposing of such securities. If bankruptcy
proceedings are commenced against the seller under the repurchase agreement,
the realization on the collateral may be delayed or limited. Repurchase
agreements entered into by the Fund will be limited to transactions with
<PAGE>
PAGE 23
- ------------------------------
dealers or domestic banks believed to present minimal credit risks, and the
Fund will take constructive receipt of all securities underlying repurchase
agreements until such agreements expire.
Pursuant to an exemptive order issued by the Securities and Exchange
Commission, the Fund, along with certain other Keystone funds, may transfer
uninvested cash balances into a joint trading account. These balances are
invested in one or more repurchase agreements that are collateralized by U.S.
Treasury and/or Federal Agency obligations.
E. In connection with portfolio purchases and sales of securities denominated
in a foreign currency, the Fund may enter into forward foreign currency
exchange contracts ("contracts"). Additionally, from time to time the Fund
may enter into contracts to hedge certain foreign currency assets. Contracts
are recorded at market value and marked-to-market daily. Realized gains and
losses arising from such transactions are included in net realized gain
(loss) on foreign currency related transactions. The Fund is subject to the
credit risk that the other party will not complete the obligations of the
contract.
F. The Fund distributes net income and net capital gains, if any, annually.
Distributions from net investment income are determined in accordance with
income tax regulations. Distributions from taxable net investment income and
net capital gains can exceed book basis net investment income and net capital
gains.
The significant differences between financial statement amounts available
for distribution and distributions made in accordance with income tax
regulations are due to the treatment of foreign currency gains and losses and
net operating losses generated by the Fund.
(2.) Capital Share Transactions
The Trust Agreement authorizes the issuance of an unlimited number of shares
of beneficial interest without par value. Transactions in shares of the Fund
were as follows:
Class A Shares
------------------------
Year Ended September 30,
1995 1994
------------------------------------------
Shares sold 1,705,057 2,770,072
Shares redeemed (1,325,323) (785,508)
Shares issued
in reinvestment
of dividends
and distributions 0 15,404
------------------------------------------
Net increase 379,684 1,999,968
==========================================
Class B Shares
------------------------
Year Ended September 30,
1995 1994
------------------------------------------
Shares sold 5,208,875 6,542,500
Shares redeemed (1,702,740) (562,130)
Shares issued
in reinvestment
of dividends
and distributions 0 11,292
------------------------------------------
Net increase 3,506,135 5,991,662
==========================================
Class C Shares
----------------------
Year Ended September 30,
1995 1994
----------------------------------------
Shares sold 1,900,476 2,647,913
Shares redeemed (775,826) (373,983)
Shares issued
in reinvestment
of dividends
and distributions 0 3,846
----------------------------------------
Net increase 1,124,650 2,277,776
========================================
<PAGE>
PAGE 24
- ------------------------------
Keystone Global Opportunities Fund
The Fund bears some of the costs of selling its shares under Distribution
Plans adopted with respect to its Class A, Class B and Class C shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940 ("1940 Act").
The Class A Distribution Plan provides for payments which are currently
limited to 0.25% annually of the average daily net asset value of Class A
shares to pay expenses of the distribution of Class A shares. Amounts paid by
the Fund to KIDC under the Class A Distribution Plan are currently used to
pay others, such as dealers, service fees at an annual rate of up to 0.25% of
the average net asset value of shares sold by such others and remaining
outstanding on the books of the Fund for specific periods.
The Class B Distribution Plan provides for payments at an annual rate of up
to 1.00% of the average daily net asset value of Class B shares to pay
expenses of the distribution of Class B shares. Amounts paid by the Fund
under the Class B Distribution Plan are currently used to pay others
(dealers) (i) a commission at the time of purchase normally equal to 4.00% of
the value of each Class B share sold plus the first year's service fee in
advance in the amount of 0.25% of the price paid for each Class B share sold.
Beginning approximately 12 months after the purchase of a Class B share, the
broker or other party will receive service fees at an annual rate of 0.25% of
the average net asset value of such Class B shares maintained by the
recipient outstanding on the Fund's books for specified periods. A contingent
deferred sales charge will be imposed, if applicable, on Class B shares
purchased after June 1, 1995 at rates ranging from a maximum of 5.00% of
amounts redeemed during the first 12 months following the date of purchase to
1.00% of amounts redeemed during the sixth twelve month period following the
date of purchase. Class B shares purchased on or after June 1, 1995 that have
been outstanding for eight years following the month of purchase will
automatically convert to Class A shares without a front end sales charge or
exchange fee. Class B shares purchased prior to June 1, 1995 will retain
their existing conversion rights.
The Class C Distribution Plan provides for payments at an annual rate of up
to 1.00% of the average daily net asset value of Class C shares to pay
expenses for the distribution of Class C shares. Amounts paid by the Fund
under the Class C Distribution Plan are currently used to pay others
(dealers) a commission at the time of purchase of 0.75% of the price of each
Class C share sold, plus the first year's service fee in advance in the
amount of 0.25% of the price paid of each Class C share, and, beginning
approximately 15 months after purchase, a commission at an annual rate of
0.75% (subject to applicable limitations imposed by the rules of the National
Association of Securities Dealers, Inc.) ("NASD Rule") and service fees at an
annual rate of 0.25%, respectively, of the average net asset value of each
Class C maintained by the recipient outstanding on the Fund's books for
specified periods.
Each of the Distribution Plans may be terminated at any time by vote of the
Independent Trustees or by vote of a majority of the outstanding voting
shares of the respective class. However, after the termination of any
Distribution Plan payments to KIDC may, at the discretion of the Board of
Trustees, continue as compensation for its services which had been earned
while the Distribution Plan was in effect.
For the year ended September 30, 1995, the Fund paid KIDC $185,409 under its
Class A Distribution Plan. The Fund paid KIDC $1,606,135 for Class B shares
sold prior to June 1, 1995, and $64,006 for Class B shares sold on or after
June 1, 1995. The Fund paid KIDC $636,417 under its Class C Distribution
Plan.
<PAGE>
PAGE 25
- ------------------------------
Under the NASD Rule, the maximum uncollected amounts for which KIDC may seek
payment from the Fund under its Distribution Plans were $9,557,717 for Class
B shares purchased prior to June 1, 1995, and $2,611,116 for Class B shares
purchased on or after June 1, 1995. The maximum uncollected amount for which
KIDC may seek payment from the Fund under its Class C Distribution Plan was
$5,094,255 as of September 30, 1995.
Presently, the Fund's class-specific expenses are limited to Distribution
Plan expenses incurred by a class of shares.
(3.) Securities Transactions
As of September 30, 1995, the Fund had a capital loss carryforward for
federal income tax purposes of approximately $4,525,000 which expires as
follows: 2003--$4,525,000. Purchases and sales of investment securities
(including proceeds received at maturity) for the year ended September 30,
1995 were as follows:
Cost of Proceeds
Purchases from Sales
-----------------------------------------------------
Portfolio securities $ 204,464,496 $ 103,189,294
Short-term
investments 2,808,986,612 2,811,699,000
-----------------------------------------------------
$3,013,451,108 $2,914,888,294
=====================================================
(4.) Investment Management Agreement and Other Transactions
Under the terms of the Investment Advisory and Management Agreement between
Keystone and the Fund dated August 7, 1991, Keystone receives a management
fee calculated by applying percentage rates starting at 1.00% and declining,
as net assets increase, to 0.75% of the net assets of the Fund. For the year
ended September 30, 1995, the Fund paid or accrued investment management and
administrative services fees of $3,009,974 which represented 0.98% of the
Fund's average net assets. Of such amount, $1,577,883 was paid or accrued to
Keystone and $1,432,091 was paid or accrued to CLIAM for its services as
subadviser.
During the year ended September 30, 1995, the Fund paid or accrued to KIRC
$22,704 as reimbursement for certain accounting and printing services, and
$1,214,494 for transfer agent fees.
The Fund is subject to certain state annual expense limits, the most
restrictive of which is as follows: 2.5% of the first $30 million of Fund
assets, 2.0% of the next $70 million of Fund assets, and 1.5% of Fund assets
over $100 million.
The Fund has entered into an expense offset arrangement with its
custodian. For the year ended September 30, 1995, the Fund paid custody fees
in the amount of $244,167 and received a credit of $71,147 pursuant to the
expense offset arrangement, resulting in a total expense of $315,314. The
assets deposited with the custodian under the expense offset arrangement
could have been invested in an income-producing asset.
Certain officers and/or Directors of Keystone are also officers and/or
Trustees of the Fund. Officers of Keystone and affiliated Trustees receive no
compensation directly from the Fund.
<PAGE>
PAGE 26
- ------------------------------
Keystone Global Opportunities Fund
(5.) Foreign Currency Exchange Contracts
At September 30, 1995, the Fund had entered into the following currency
exchange contracts that obligate the Fund to deliver currencies at specified
future dates. The unrealized appreciation of $5,947 on these contracts is
included in the accompanying financial statements. The terms of the open
contracts are as follows:
<TABLE>
<CAPTION>
U.S. $ value
Exchange Currency to as of Currency to U.S. $ value
date be delivered 9/30/95 be received as of 9/30/95
=====================================================================================
<S> <C> <C> <C> <C>
10/03/95 387,285 $ 78,644 78,859 $ 78,859
French Franc U.S. $
10/03/95 307,279 307,279 30,829,278 311,234
U.S. $ Japanese Yen
10/03/95 89,136 89,136 56,702 89,591
U.S. $ Pound Sterling
10/04/95 46,060 72,777 72,479 72,479
Pound Sterling U.S. $
10/06/95 224,367 224,367 297,924 225,154
U.S. $ Australian Dollar
10/06/95 393,082 393,082 989,783 394,022
U.S. $ Malaysian Ringitt
10/10/95 76,775 76,775 192,590 76,668
U.S. $ Malaysian Ringitt
--------- ---------
$1,242,060 $1,248,007
========= =========
</TABLE>
(6.) Distributions to Shareholders
The Fund intends to distribute to its shareholders dividends from net
investment income annually and all net realized long-term capital gains, if
any, annually. Any taxable distribution which is declared in December and
paid before the next February 1 will be taxable to shareholders in the year
declared.
<PAGE>
PAGE 27
- ------------------------------
INDEPENDENT AUDITORS' REPORT
The Trustees and Shareholders
Keystone Global Opportunities Fund
We have audited the accompanying statement of assets and liabilities of
Keystone Global Opportunities Fund (formerly Keystone America Global
Opportunities Fund), including the schedule of investments, as of September
30, 1995, and the related statement of operations for the year then ended,
the statements of changes in net asset for each of the years in the two-year
period then ended, and the financial highlights for each of the years in the
seven-year period then ended and the period from March 16, 1988 (Commencement
of Operations) to September 30, 1988 for Class A shares, and for each of the
years in the two-year period ended September 30, 1995 and for the period from
February 1, 1993 (Date of Initial Public Offering) to September 30, 1993 for
Class B and Class C shares. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of September 30, 1995 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Keystone Global Opportunities Fund as of September 30, 1995, the results of
its operations for the year then ended, the changes in its net assets for
each of the years in the two-year period then ended, and the financial
highlights for each of the periods specified in the first paragraph above in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Boston, Massachusetts
October 27, 1995
<PAGE>
[Back cover]
KEYSTONE AMERICA
FAMILY OF FUNDS
[diamond]
Capital Preservation and Income Fund
Government Securities Fund
Intermediate Term Bond Fund
Strategic Income Fund
World Bond Fund
Tax Free Income Fund
California Insured Tax Free Fund
Florida Tax Free Fund
Massachusetts Tax Free Fund
Missouri Tax Free Fund
New York Insured Tax Free Fund
Pennsylvania Tax Free Fund
Texas Tax Free Fund
Fund for Total Return
Global Opportunities Fund
Hartwell Emerging Growth Fund, Inc.
Hartwell Growth Fund
Omega Fund
Fund of the Americas
Strategic Development Fund
This report was prepared primarily for the information of the Fund's
shareholders. It is authorized for distribution if preceded or accompanied by
the Fund's current prospectus. The prospectus contains important information
about the Fund including fees and expenses. Read it carefully before you invest
or send money. For a free prospectus on other Keystone funds, contact your
financial adviser or call Keystone at 1-800-343-2898.
[Keystone logo] K E Y S T O N E
I N V E S T M E N T S
P.O. Box 2121
Boston, Massachusetts 02106-2121
CGOF-AR-11/95
35.5M ["Recycle" logo]
<PAGE>
[Front cover]
K E Y S T O N E
[Photo: International currencies,
coins and paper, displayed on
edge of American flag.]
GLOBAL
OPPORTUNITIES
FUND
[Keystone logo]
ANNUAL REPORT
SEPTEMBER 30, 1995
