<PAGE> 1
ANNUAL REPORT
DECEMBER 31, 1997
[ATLAS FUNDS GRAPHIC]
[ATLAS FUNDS LOGO]
The investments you want from the people you trust.
NOT FDIC INSURED
<PAGE> 2
Table of Contents
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<TABLE>
<S> <C>
Letter from the President........................................................................... 2
Atlas Fund Discussions:
Emerging Growth Fund........................................................................... 5
Global Growth Fund............................................................................. 5
Strategic Growth Fund.......................................................................... 6
Growth and Income Fund......................................................................... 7
Balanced Fund.................................................................................. 7
Strategic Income Fund.......................................................................... 8
U.S. Government and Mortgage Securities Fund................................................... 8
Municipal Funds................................................................................ 9
Money Funds.................................................................................... 10
Atlas Stock and Bond Fund Total Returns:
Bond Funds..................................................................................... 11
Stock Funds.................................................................................... 11
Comparing Atlas Fund Performance to the Market...................................................... 12
Statements of Investments in Securities and Net Assets.............................................. 14
Statements of Assets and Liabilities................................................................ 40
Statements of Operations............................................................................ 42
Statements of Changes in Net Assets................................................................. 44
Financial Highlights................................................................................ 48
Notes to Financial Statements....................................................................... 56
Independent Auditors' Report........................................................................ 66
</TABLE>
<PAGE> 3
[ATLAS FUNDS LOGO]
FROM THE OFFICE OF MARION O. SANDLER
President and Chief Executive Officer
Dear Valued Shareholder,
The past year was a good one for both the stock and
bond markets. The stock market continued its record climb,
and the Dow Jones Industrial Average had an unprecedented
third straight year of gains in excess of 20%. For bonds,
fears that an overheated economy would lead to inflation
caused prices to fall during the first quarter. However,
despite strong economic growth, inflation remained tame,
and bond prices rose from that point forward. The rate on
30-year Treasury bonds fell below 6% in December and ended
the year at nearly the lowest level in three decades.
1995 through 1997:
Three Straight Years Of Strong Gains For Atlas Stock Funds
I am very pleased to report that all Atlas stock funds
registered total returns(1) of over 20% in 1997. This was
the third year in a row of double-digit gains for all our
stock funds. The newest member of our fund family, Atlas
Emerging Growth Fund, turned in a total return of 30.00%
in the eight months since its inception on April 30, 1997.
The Strategic Growth Fund and Growth and Income Fund
posted gains of 26.89% and 26.32%, respectively. And
despite a challenging year for international markets, our
Global Growth Fund rewarded shareholders with a return of
24.35%. Even our most conservative stock fund, the
Balanced Fund, recorded an impressive 22.72% increase.
Many investment professionals were surprised by the
strength of the stock market in 1997, and expect some
fluctuations in 1998. As always, we counsel investors to
ignore short-term market conditions and adhere to their
long-term investment goals, because over time stocks and
bonds have historically delivered very rewarding returns.
A Banner Year For Bonds
Atlas bond fund investors also enjoyed a good year in
1997. Our taxable funds, Strategic Income and U.S.
Government and Mortgage Securities produced total returns
of 9.57% and 8.25% respectively. Our tax-free funds, the
National and California Municipal Bond Funds returned
8.56% and 7.97%.
Three Exciting New Investment
Choices In 1997
In our continuing effort to
provide you with a wide-range of
investment choices, we introduced
two types of annuities -- one fixed
and the other variable -- and a new
stock fund that specializes in
emerging growth companies.
[GRAPHIC ... We Want You To Know ...
Atlas Funds are not FDIC-insured and are not deposits or obligations of, or
guaranteed by World Savings. Mutual fund returns and principal value will vary
and you may have a gain or loss when you sell.]
2
<PAGE> 4
We began 1997 by introducing Atlas Tax-Deferred Annuities
to provide our customers with tax-deferred earnings at very
competitive, fixed rates of interest. These annuities offer
stability of principal, a 1% bonus rate for the first year on
each purchase, and an insurance company money back guarantee.
In the Fall, we brought out Atlas Portfolio Builder, a
variable annuity, designed for individuals who want to tap into
the potential benefits of investing in the stock and bond
markets -- tax-deferred! The Portfolio Builder also offers
guaranteed protection for your beneficiaries against loss of
principal, generous access to your money without surrender
charges, and a wide variety of investments managed by Atlas and
several well-known money managers, such as Dreyfus, Janus, and
T. Rowe Price.
Your Atlas Representative will be happy to tell you more
about how Atlas Annuities can work for you. Call
1-800-933-ATLAS (1-800-933-2852) for more information or to
arrange an appointment at a World branch near you.
We continued to add to our fund family in 1997. The Atlas
Emerging Growth Fund opened on April 30, offering investors an
opportunity to invest in innovative and rapidly growing small
companies. Over the past 20 years, stocks in these emerging
companies have outperformed large company stocks and have
provided superior returns for investors who are willing to
assume some additional risk and short-term volatility.
Goodbye Sales Charge, Hello No Load!
The assets in our mutual fund family reached $1 billion in
1997. To celebrate this milestone, from January through April
30, 1998, we are offering investors the opportunity to purchase
Atlas Funds without paying any sales charges. The long-term
returns on Atlas Funds have been very rewarding for
shareholders, and now our No Load offer makes Atlas an even
more attractive investment. Whatever your financial objectives,
we urge you to take advantage of this special, limited-time
opportunity today. Just call 1-800-933-ATLAS (1-800-933-2852)
for more information or to make an appointment with your Atlas
Representative at a nearby World branch.
The Investments You Want From The People You Trust
As a sister company of World Savings and a member of the
$40 billion-strong Golden West Financial Corporation, Atlas is
dedicated to providing the superior products, personal service
and professional advice you've come to expect from World. In
our constant effort to provide you with the best possible
service, we expanded the number of Atlas Representatives that
are available to share their financial expertise with you. For
your added convenience, we now have more Atlas Representatives
available in more branches during more days of the week than
ever before.
If you want more information on our new investment
opportunities, our special limited-time No Load offer, or to
review your current portfolio and your long-term investment
goals, just call 1-800-933-ATLAS (1-800-933-2852) to speak with
an Atlas Representative or set up an appointment at your local
World branch.
3
<PAGE> 5
On behalf of Atlas Funds, I thank you for your trust in
Atlas. We look forward to serving your investment needs now and
in the future.
Sincerely,
/s/ Marion O. Sandler
(Mrs.) Marion O. Sandler
President and Chief Executive Officer
February 10, 1998
(1) Total returns are for Class A shares and do not reflect
sales charges. They include increases or decreases in
price, plus income and capital gains distributions, if any.
4
<PAGE> 6
Atlas Fund Discussions
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Total returns given in this section are for Class A
shares at net asset value.
Emerging Growth Fund:
The Atlas Emerging Growth Fund produced a total
return(1) of 30.00% for the eight months from its
inception on April 30 through the end of the year. This
performance approximately matches the Lipper(2) Small
Company Growth Fund average return of 30.28% for the
same period.
The new Atlas Emerging Growth Fund invests primarily in
small companies with innovative products and services.
The stocks of these companies often have greater
appreciation potential than their larger counterparts
and, over time, have rewarded investors with impressive
performance. During the past year, small company stocks
experienced a strong rally from April to October, but
the turmoil in Asian markets in the Fall created a
renewed preference for the stability and liquidity of
larger companies.
Throughout 1997, the Fund's manager invested in
companies believed to have the potential to sustain
earnings growth -- such as software producers, and
consulting and services companies which are less
sensitive to swings in the economy, changes in
inventory, and exposure to the Far East -- and avoided
companies that are more cyclical in nature -- such as
the makers of semi-conductors, equipment manufacturers,
and personal computer and component suppliers.
Going forward into 1998, the Fund will maintain its
broad diversification across growing industries. Stock
selection will continue to focus on fundamental
developments at the companies themselves, rather than
on certain sectors or industries.
(1) Total returns include increases or decreases in
price, plus income and capital gain distributions, if
any.
(2) Lipper Analytical Services, Inc. is a leading
resource for performance data for the mutual fund
industry.
Global Growth Fund:
Stock markets around the world were volatile in 1997,
and the fourth quarter was particularly turbulent due
to the financial crisis in Asia. The news from the Far
East impacted other emerging markets, such as Latin
America, as well as companies in the U.S. and Europe
whose earnings may be exposed to weak Asian economies.
Despite these many difficulties, the Atlas Global
Growth Fund recorded a total return for the year of
24.35%, exceeding the Lipper Global Fund average return
of 13.04% by a wide margin. In fact, the Fund's
outstanding performance ranked it in the top 3% of all
global funds tracked by Lipper.(3)
The Atlas Global Growth Fund is designed to look for
growth opportunities around the world and has the
flexibility to invest in developed countries, as well
as emerging markets. The Fund's manager looks for
companies that are expected to benefit from one or more
key global themes, such as telecommunications
expansion, emerging consumer markets, corporate
restructuring, and capital market development.
5
<PAGE> 7
Atlas Fund Discussions
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Global Growth Fund: (continued)
Throughout the past year, the Fund maintained very
limited exposure to Japan and other troubled Asian
markets. The manager favored Europe, where economies
were healthy, and interesting opportunities in the
Fund's global investment trends were identified. The
Fund also participated in the U.S. stock market, and
the robust American economy helped boost 1997
performance numbers to excellent levels. In the fourth
quarter, the manager pursued a defensive strategy as
the Asian situation worsened, and took profits in
stocks of European companies vulnerable to Asia or that
had excessively high prices compared to earnings.
For 1998, uncertainty in international markets is
likely to remain high, volatility is expected to
increase, and some deflation is possible, due to
competition from Asian countries with sharply devalued
currencies. The Fund will continue to avoid Asia in the
near term, as well as those industries in the U.S. and
Europe that may be impacted by the Asian crisis. At the
present time, the Fund's manager is finding attractive
opportunities in Europe, and believes that when the
volatility caused by the problems in Asia subsides,
Latin America could be a very rewarding long-term
investment.
(3) Lipper Analytical Services, Inc. ranked the Fund 5
out of 188 Global Funds for total return for the year
ended 12/31/97.
Strategic Growth Fund:
The Atlas Strategic Growth Fund produced a total return
for the year of 26.89%, outperforming the Lipper
average return for Growth Funds of 25.30%. The Fund's
return also exceeded the 22% increase in the Dow Jones
Industrial Average.
The Atlas Strategic Growth Fund focuses on mid- to
large-capitalization companies that are believed to
have above average growth potential and average to
below average prices. With the market at generally high
levels, the manager found it difficult to locate stocks
that were well-priced relative to their earnings
potential. Consequently, the Fund held above average
cash reserves, near 20%, throughout the year. During
1997, the Fund benefitted significantly from its heavy
positions in financial stocks and consumer cyclicals.
However, its holdings in technology and basic materials
were negatively impacted in the fourth quarter by the
upheaval in Asia. The manager continues to like
technology and basic materials for the longer-term and
used the price correction as an opportunity to do some
selective buying.
The Fund's manager anticipates that market volatility
will continue in 1998, and is cautious about growth in
earnings, which is not expected to continue at the
double-digit levels seen in recent years. Growth in
sales is expected to slow as the economy enters its
eighth year of business expansion. The Fund remains
defensively positioned with 20% in cash reserves, and
the manager believes there will be opportunities
throughout 1998 to add to holdings at more attractive
price levels.
6
<PAGE> 8
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Growth and Income Fund:
The Atlas Growth and Income Fund posted a total return
of 26.32% for the year, which was slightly less than
the Lipper average for Growth and Income Funds of
27.14% and outperformed the 22% increase in the Dow
Jones Industrial Average by a sizable margin.
The Fund's performance was aided by its investments in
financial stocks, consumer cyclicals, and technology
companies. The portfolio included above average
holdings in interest-sensitive issues, such as banks,
consumer finance companies, and insurance companies,
which were strong performers. Retail and specialty
retail positions also contributed to returns.
Technology holdings, both hardware and software,
performed well overall, despite the price fluctuations
in that sector over the course of the year. During the
first half of the year, that portion of the portfolio
invested in small and mid-sized companies was
negatively impacted by rising short-term interest rates
and falling price-earnings ratios. During the second
half, the managers gradually shifted the focus to
larger capitalization companies and increasing the
yield component of the portfolio to approximate the
yield on the Standard and Poor's 500 Index. These
changes led to substantially improved Fund performance
during the latter half of 1997.
Although optimistic about 1998, the managers anticipate
a transition to a slower growth environment. Throughout
1997, the Fund was positioned for this change by
emphasizing companies believed to have the potential to
sustain earnings growth in a weaker economy.
Balanced Fund:
The Atlas Balanced Fund recorded a total return of
22.72% for the year, significantly outperforming the
Lipper average return of 19.00% for Balanced Funds and
ranking in the top 16% of its peer group.(4)
The Atlas Balanced Fund provides investors with a
combination of current income and capital appreciation
by investing in a diversified portfolio of
dividend-paying stocks, government and corporate bonds,
and convertible securities. The Fund's manager adjusts
the ratio of stocks and bonds from time to time, in
order to take advantage of rising markets and to
conserve capital in adverse markets. During the past
year, stocks and long-term zero coupon Treasury bonds
were largely responsible for the Fund's very strong
performance. Bank stocks, comprising approximately
one-third of the equity portfolio, outperformed the
market averages by a substantial margin. Insurance and
drug companies were also major contributors to gains,
as were utilities during the latter half of the year.
The manager expects the Atlas Balanced Fund to continue
to perform well compared to the market in 1998.
Entering the year, the Fund was conservatively
positioned, with 40% of its holdings in common stocks
and the rest in bonds and cash. The manager anticipates
that interest rates will decline moderately during the
year, and plans to maintain the
7
<PAGE> 9
Atlas Fund Discussions
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Balanced Fund: (continued)
portion of the portfolio that is invested in long-term
Treasury bonds to take advantage of yields, as well as
some expected price appreciation.
(4) Lipper Analytical Services, Inc. ranked the Fund 55
out of 350 Balanced Funds for total return for the
year ended 12/31/97.
Strategic Income Fund:
The Atlas Strategic Income Fund produced a total return
of 9.57% for the year, outperforming the Lipper average
return of 8.77% for the Multi-Sector Income Fund
category. In addition, the Fund ranked in the top 15%
of its peer group for yield in every single month
during 1997.(5)
The Fund is designed to help investors pursue high
income with less price fluctuation than is typically
associated with high yield investments. The Fund's
strategy of diversification across three fixed income
sectors -- U.S. Government, foreign and high yield
bonds -- served investors well during the volatile
markets of 1997. The manager began the year with below
average positions in emerging markets and high yield
issues, and shortened maturities in U.S. Government
securities in anticipation of an interest rate
increase. In late March, the Federal Reserve raised
short-term rates from 5.25% to 5.50% in what would be
the only upward move for the year. After the rate
increase, expecting moderate inflation and the healthy
economy to continue, the manager increased Treasury
bond maturities, as well as portfolio holdings in the
high yield sector. The Fund's investments in emerging
markets remained modest, and it had almost no exposure
in Asia during the fourth quarter crisis.
Looking forward to 1998, the Fund's manager believes
some interesting opportunities may exist in selected
emerging markets, where prices have been strongly
beaten down. Since inflation is likely to remain low,
slightly longer than average maturities will be
maintained in U.S. Treasuries. The manager expects the
high yield market to remain strong, yet holds some
hedges against the impact that a stock market sell-off
could have on this sector. High yield issues from
companies in fast growing industries, like
telecommunications and financial services, are
particularly favored.
(5) Lipper Analytical Services, Inc. ranked the Fund 27
out of 81 Multi-Sector Income Funds for total return
for the year ended 12/31/97.
U.S. Government and Mortgage Securities Fund:
The Atlas U.S. Government and Mortgage Securities Fund
experienced a total return of 8.25% for the year. The
Fund continued to produce outstanding yields, ranking
in the top 10% of its peers in every single month
during 1997, and ending the year with a yield of 6.45%.
In addition, the Fund has ranked in the top 15% of its
peer group for yield in every month for the past five
years.(6)
The year began with expectations that the Federal
Reserve would raise interest rates, since the economy
had grown at a rapid 4.3% rate during the fourth
quarter of 1996, and the
8
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U.S. Government and Mortgage Securities Fund: (continued)
early months of 1997 were continuing at the same pace.
The 30-year Treasury bond yield, which began the year
at 6.70%, peaked at 7.17% in mid-April, after the rate
increase in late March. The growth rate of the U.S.
economy, which was 4.9% during the first quarter,
continued to exceed 3% during the second and third
quarters. Interest rates, however, were held in check
by low inflation (1.8% for the year) and by a shrinking
Federal deficit. In the fourth quarter, the crisis in
Asian markets, a flight to quality, and a strengthening
dollar caused a further rally in bond prices, and
yields fell to a low of 5.87% in late December.
Traditionally, mortgage rates fall along with Treasury
yields, and there is a marked increase in prepayments
as lower rates encourage homeowners to refinance. In
order to minimize prepayment risk, the manager took
profits in the Fall in some of the securities most
likely to prepay, such as those with high coupon rates,
and replaced them with slower prepaying issues. This
investment strategy resulted in a prepayment rate on
securities in the portfolio that is significantly below
average and contributed to the Fund's outstanding
performance.
Anticipating that low rates of inflation, low interest
rates, and higher prepayment trends will extend into
1998, the manager will continue to look for
opportunities to control prepayments and optimize the
Fund's yield for its investors.
(6) Lipper Analytical Services, Inc. ranked the Fund 129
out of 180 for 1997 total return and 42 out of 78 for
five years ended 12/31/97 for the General U.S.
Government Fund category.
Municipal Funds:
The Atlas National Municipal Bond Fund and California
Municipal Bond Fund rewarded investors with total
returns of 8.56% and 7.97% respectively. After-tax
returns were even higher, since approximately half the
total return is dividend income, which is generally
tax-free. At year-end, the tax-free 30-day yields on
the National and California Municipal Bond Funds were
3.70% and 3.74%, translating to maximum taxable
equivalent yields of 6.13% and 6.83%.
Bond prices were volatile in 1997, and interest rates
declined during the second half of the year after the
Federal Reserve increased short-term rates in the
Spring. Many municipal bond issuers took advantage of
the lower rate environment and refinanced older, higher
interest debt. Consequently, the supply of new issues
in 1997 outpaced what was available the prior year and
dampened the relative performance of municipal bonds
compared to taxable bonds.
The overall credit quality of the Atlas municipal funds
remained exceptionally high. As of December 31, 1997,
approximately 80% of the National Municipal Bond Fund
and 93% of the California Municipal Bond Fund were
invested in securities rated AAA or AA, placing them
among the highest quality of all comparable municipal
debt funds in the
9
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Atlas Fund Discussions
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Municipal Funds: (continued)
country. Ironically, the focus on high credit quality
bonds had a slightly negative impact on the relative
performance of the Atlas municipal funds, as many
investors reduced their commitment to credit safety in
pursuit of the higher yields offered by lower quality
municipals.
In addition to their high credit quality, the Atlas
municipal bond funds are also managed for price
stability. Their shorter average portfolio maturity
resulted in less price appreciation than longer
maturity portfolios, as interest rates declined during
the second half of the year. When interest rates rise,
however, our municipal funds should enjoy greater price
stability than funds with longer maturities.
The general outlook for the municipal market in 1998
continues to be favorable, with expectations that the
economy will grow at a moderate pace and that inflation
will remain low. Both of our municipal funds will
continue to focus on high quality issues and
controlling price volatility, while maintaining
competitive yields.
Money Funds:
For 1997, the Atlas U.S. Treasury Money Fund provided a
total return of 4.73% by investing solely in top
quality U.S. Treasury obligations, which are backed by
the full faith and credit of the U.S. Government.
Income generated by this Fund is 100% exempt from state
and local taxes.
The Atlas National Municipal Money Fund produced a
total return of 3.09%, which is equal to a maximum
taxable equivalent return of 5.26%, and the Atlas
California Municipal Money Fund realized a double
tax-free total return of 2.97%, or a maximum taxable
equivalent return of 5.50%. The Atlas municipal money
funds will continue to purchase only the highest
quality short-term municipal securities, favoring those
that are enhanced by letters of credit, private
insurance, or pre-refunding. In keeping with this
commitment to quality, the manager will continue to
avoid securities backed by letters of credit from
Japanese banks, which are still suffering from weak
economic performance. The recent failures of financial
institutions in Japan underscore the prudence of the
Fund's strategy of avoiding these securities.
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Atlas Stock and Bond Fund Total Returns for periods ended December 31, 1997
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<TABLE>
<CAPTION>
Class A Shares(1) Class B Shares
---------------------------------------- ----------------------------------------------------
12 Months 5 Years Inception To Date 12 Months Inception To Date
--------- ------ ----------------- ------------------ -----------------------------
at at at without with without with
net net net deferred deferred deferred deferred
asset asset asset sales sales sales sales
value value value inception charge charge(2) charge charge(2) inception
% % % date % % % % date
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Stock Funds:
Emerging Growth(3) N.A. N.A. 30.00 4/97 N.A. N.A. 29.30 26.30 4/97
- --------------
Global Growth 24.35 N.A. 21.20 4/96 23.64 20.64 20.42 18.83 4/96
- -----------------
Strategic Growth 26.89 N.A. 18.53 10/93 26.23 23.23 22.25 21.90 7/94
- ---------------
Growth and Income 26.32 17.09 17.38 12/90 25.82 22.82 23.48 23.14 7/94
- ------------
Balanced 22.72 N.A. 14.16 10/93 22.05 19.05 17.78 17.40 7/94
- -----------------------
Bond Funds:
Strategic Income 9.57 N.A. 11.52 5/96 8.77 5.77 10.62 8.87 5/96
- ----------------
U.S. Government
and Mortgage
Securities 8.25 6.31 8.18 1/90 7.72 4.72 7.78 7.30 7/94
- ----------------------
California
Municipal Bond 7.97 6.59 7.88 1/90 7.53 4.53 6.52 6.03 7/94
- ----------------
National
Municipal Bond 8.56 6.71 8.08 1/90 8.11 5.11 6.83 6.35 7/94
- ----------------
</TABLE>
1 Assumes that Class A Shares are purchased at net asset value. Prior to January
1, 1998, the maximum sales charge was 3%. Sales charges may be reinstated in
the future, and if paid, the average annual total returns would be lower.
2 Assumes complete redemption at the end of the given period and imposition of
the maximum Contingent Deferred Sales Charge.
3 Total return is aggregate since inception.
11
<PAGE> 13
Comparing Atlas Fund Performance to the Market
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The following charts compare the growth of a hypothetical $10,000 investment in
each of the Atlas Stock and Bond Funds as compared to a representative total
return index for the market(s) in which each fund invests. Index performance
does not include sales charges or management expenses, and the mix, quality and
maturity of securities in an index may vary widely from those in our Funds'
portfolios. All returns reflect the reinvestment of dividends and capital gains,
if applicable. Atlas Fund returns are for Class A shares only, and are stated at
net asset value. Returns for Class B shares will differ. As always, past
performance is no guarantee of future results.
<TABLE>
<S> <C>
Emerging Growth Fund Global Growth Fund
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[Line Graph] [Line Graph]
Strategic Growth Fund Growth and Income Fund
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[Line Graph] [Line Graph]
</TABLE>
12
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Comparing Atlas Fund Performance to the Market
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<TABLE>
<S> <C>
Balanced Fund Strategic Income Fund
[Line Graph]
[Line Graph]
U.S. Government and Mortgage Securities Fund California Municipal Bond Fund
[Line Graph] [Line Graph]
National Municipal Bond Fund
[Line Graph]
</TABLE>
13
<PAGE> 15
Statements of Investments in Securities and Net Assets December 31, 1997
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<TABLE>
<CAPTION>
Atlas U.S. Treasury Money Fund
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value
face amount (note 1)
---------- ----------
<S> <C> <C>
UNITED STATES TREASURY BILLS - 7.09%
5.25% due 01/22/98................. $ 4,282,000 $ 4,268,899
----------
Total United States Treasury Bills (cost:
$4,268,899) 4,268,899
----------
UNITED STATES TREASURY NOTES - 93.61%
5% - 5.63% due
01/31/98 - 04/30/98.............. 15,739,000 16,036,268
6.13% due 03/31/98................. 4,300,000 4,372,531
7.25% - 7.88% due
02/15/98 - 04/15/98.............. 29,305,000 30,070,228
8.13% due 02/15/98................. 5,680,000 5,872,171
----------
Total United States Treasury Notes (cost:
$56,351,198) 56,351,198
----------
TOTAL SECURITIES (COST: $60,620,097) - 100.70% 60,620,097
OTHER ASSETS AND LIABILITIES, NET - (.70)% (422,729)
----------
NET ASSETS - 100.00% $ 60,197,368
==========
<CAPTION>
Atlas California Municipal Money Fund
- --------------------------------------------------------------
value
face amount (note 1)
---------- ----------
<S> <C> <C>
TAX-EXEMPT COMMERCIAL PAPER - 7.82%
Contra Costa, Water Authority,
3.65% due 01/27/98................ $ 500,000 $ 500,000
Los Angeles, Metro Transportation
Authority, 3.70% due 02/09/98..... 1,000,000 1,000,000
Los Angeles, Wastewater System,
3.75% due 01/12/98................ 1,000,000 1,000,000
Sacramento, Municipal Utility
District, Series I, 3.65% due
02/10/98.......................... 1,000,000 1,000,000
----------
Total Tax-Exempt Commercial Paper (cost:
$3,500,000) 3,500,000
----------
FIXED RATE BONDS AND NOTES - 28.36%
California State, General
Obligation, 4% due 09/01/98....... 100,000 100,094
California State, General
Obligation Unlimited, MIGI, 11%
due 03/01/98...................... 500,000 505,554
Conejo Valley, Unified School
District, Tax and Revenue
Anticipation Notes, 4.25% due
07/02/98.......................... 1,000,000 1,002,154
Contra Costa, Transportation
Authority, Sales Tax Revenue,
Series A, FGIC Insured, 5% due
03/01/98.......................... 800,000 801,637
Contra Costa Water District
Revenue, Series B, 7.625% due
10/01/98.......................... 1,000,000 1,047,814
Glendale Redevelopment Agency, Tax
Allocation Revenue, AMBAC Insured,
7.10% due 12/01/98................ 1,385,000 1,453,028
Lemoore, Unified High School
District, AMBAC Insured, 4% due
01/01/98.......................... 110,000 110,000
Los Angeles, Unified School
District, Tax and Revenue
Anticipation Notes, 4.50% due
07/01/98.......................... 1,000,000 1,003,342
Oxnard, School District Refunding,
MBIA Insured, 4% due 02/01/98..... 105,000 105,008
<CAPTION>
Atlas California Municipal Money Fund (continued)
- --------------------------------------------------------------
value
face amount (note 1)
---------- ----------
<S> <C> <C>
Riverside County, Transportation
Commission Sales Tax Revenue,
Series A, AMBAC Insured, 4.625%
due 06/01/98...................... $ 400,000 $ 401,487
San Diego County, Regional
Transportation Commission Sales
Tax Revenue, Second Senior Sales
Tax, Series A, FGIC Insured, 5%
due 04/01/98...................... 300,000 300,841
San Diego County, Tax and Revenue
Anticipation Notes,
4.50% due 09/30/98................ 1,000,000 1,005,136
San Juan, Unified School District,
COP, 4% due 06/01/98.............. 525,000 525,311
San Mateo County, Transportation
Authority, Series A, 4% due
06/01/98.......................... 1,000,000 1,001,186
State Pollution Control Financing
Authority, Pollution Control
Revenue Refunding, Chevron USA,
Inc. Project, 4% due 05/15/98..... 300,000 300,160
State Public Works Board, High
Technology Facilities, Lease
Revenue, University of California,
Santa Barbara, 8.125% due
02/01/98.......................... 1,000,000 1,023,532
State Revenue Anticipation Notes,
4.50% due 06/30/98................ 2,000,000 2,006,306
----------
Total Fixed Rate Bonds and Notes (cost:
$12,692,590) 12,692,590
----------
VARIABLE RATE DEMAND NOTES* - 62.08%
ABAG Finance Authority for
Nonprofit Corps, University of
California Project, 4% due
12/01/01.......................... 1,000,000 1,000,000
Alameda-Contra Costa, School
Financing Authority,
3.90% due 07/01/16................ 1,000,000 1,000,000
City of Hermosa Beach Parking
Authority, 3.40% due 12/01/23..... 100,000 100,000
Eastern Municipal Water District,
Water and Sewer Revenue, COP, FGIC
Insured, 3.85% due 07/01/20....... 1,400,000 1,400,000
Fairfield, Industrial Development
Authority, Meyer Cookware
Industries, Inc. Project, Series
A, AMT, 3.85% due 05/01/27........ 200,000 200,000
Foothill/Eastern Corridor Agency
California Toll Road Revenue,
Series C, 3.35% due 01/02/35...... 1,800,000 1,800,000
Glendale, Revenue Reliance
Development, Public Parking,
3.75% due 12/01/14................ 500,000 500,000
Imperial County, COP, Capital
Projects, 3.85% due 09/01/17...... 1,000,000 1,000,000
Lassen Municipal Utility District,
Revenue Refunding, Series A, AMT,
FSA Insured, 4.20% due 05/01/08... 1,000,000 1,000,000
Los Angeles, Community Development
Commission, COP, Willowbrook
Project, 3.70% due 11/01/15....... 300,000 300,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
14
<PAGE> 16
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas California Municipal Money Fund (continued)
- --------------------------------------------------------------
value
face amount (note 1)
---------- ----------
<S> <C> <C>
Los Angeles, Community
Redevelopment Agency, COP, Baldwin
Hills Public Park, 3.70% due
12/01/14.......................... $ 600,000 $ 600,000
Los Angeles, Multi-Family Housing
Revenue, Masselin Manor, 3.90% due
07/01/15.......................... 100,000 100,000
Los Angeles, Regional Airports
Improvement Corp. Lease Revenue,
American Airlines, Los Angeles
International Airport,
Series A, 5% due 12/01/24......... 100,000 100,000
Series B, 5% due 12/01/24......... 200,000 200,000
Series F, 4.30% due 12/01/24...... 100,000 100,000
Los Angeles County, Metro
Transportation Authority Sales Tax
Revenue, Series A, 3.85% due
07/01/20.......................... 300,000 300,000
Los Angeles County, Pension
Obligation, Series C, AMBAC
insured, 3.35% due 06/30/07....... 400,000 400,000
Moorpark, Multi-Family Revenue,
LeClub Apartments Project,
Series A, 3.90% due 11/01/15...... 300,000 300,000
Northern California Power Agency
Public Power Revenue Refunding,
Geothermal Project 3, Series A,
AMBAC Insured, 3.35% due
07/01/05.......................... 1,400,000 1,400,000
Otay, Water District, COP, Capital
Projects, 3.45% due 09/01/26...... 700,000 700,000
Palm Springs, Community
Redevelopment Agency, COP,
Project #2, 3.85% due 12/01/14.... 300,000 300,000
Project #10, 3.85% due 12/01/14... 400,000 400,000
Project #11, 3.85% due 12/01/14... 300,000 300,000
Pasadena, COP, Rose Bowl
Improvement Project,
3.40% due 12/01/11................ 100,000 100,000
Riverside, Multi-Family Revenue
Refunding, Sierra Apartments,
Series A, 3.55% due 06/01/05...... 500,000 500,000
San Bernardino County, Industrial
Development Revenue, Tower
Industries, Series IV, AMT, 3.65%
due 12/01/06...................... 790,000 790,000
San Diego County, Multi-Family
Housing Revenue, Country Hills,
Series A, 3.35% due 08/15/23...... 280,000 280,000
San Jose, Multi-Family Mortgage
Revenue, Somerset Park, Series A,
AMT, 3.80% due 11/01/17........... 1,600,000 1,600,000
San Leandro, Multi-Family,
Carlton Plaza Project, Series A,
4.10% due 10/01/27................ 1,000,000 1,000,000
State Educational Facilities
Authority Revenue, Foundation for
Educational Achievement, Series A,
4.15% due 07/01/26................ 800,000 800,000
State Health Facilities Financing
Authority Revenue Refunding,
Catholic Healthcare West, Series
B, MBIA Insured, 3.35% due
07/01/05.......................... 800,000 800,000
Children's Hospital, MBIA Insured,
3.85% due 11/01/21................ 100,000 100,000
Atlas California Municipal Money Fund (continued)
- --------------------------------------------------------------
value
face amount (note 1)
---------- ----------
Enloe Memorial Hospital, Series A,
3.50% due 01/01/16................ $ 200,000 $ 200,000
Multi-Family Housing III, Series
B, AMT, 3.65% due 05/01/39........ 1,600,000 1,600,000
Pool Program, Series 1990A, 3.50%
due 09/01/20...................... 600,000 600,000
State Pollution Control Financing
Authority, Pollution Control
Revenue Refunding, Pacific Gas &
Electric Co., Series B, AMT, 3.55%
due 12/01/16...................... 1,000,000 1,000,000
State Pollution Control Financing
Authority, Resource Recovery
Revenue Refunding, AMT, Delano
Project, 5.15% due 08/01/19....... 100,000 100,000
Statewide Communities Development,
Multi-Family, Sunrise of Moraga,
Series A, AMT, 4.10% due
07/01/27.......................... 500,000 500,000
Statewide Communities Development
Corp. Revenue, Industrial
Development, Encore Video, AMT,
3.85% due 08/01/07................ 300,000 300,000
Florestone, AMT, 3.85% due
05/01/09......................... 830,000 830,000
Karcher Property Project, Series
C, AMT, 3.85% due 12/01/19........ 1,000,000 1,000,000
Setton Properties Project, AMT,
3.80% due 10/01/10................ 900,000 900,000
Staub Project, Series A, AMT,
3.85% due 08/01/02................ 580,000 580,000
Tri-Valley Industrial Development,
Series F, AMT, 3.85% due
12/01/10.......................... 700,000 700,000
----------
Total Variable Rate Demand Notes (cost:
$27,780,000) 27,780,000
----------
TOTAL SECURITIES (COST: $43,972,590) - 98.26% 43,972,590
OTHER ASSETS AND LIABILITIES, NET - 1.74% 778,135
----------
NET ASSETS - 100.00% $ 44,750,725
==========
<CAPTION>
Atlas National Municipal Money Fund
- --------------------------------------------------------------
value
face amount (note 1)
---------- ----------
<S> <C> <C>
TAX-EXEMPT COMMERCIAL PAPER - 4.56%
West Virginia, Public Energy
Authority, Energy Revenue,
Morgantown Association Project,
AMT, 3.75% due 03/06/98........... $ 300,000 $ 300,000
----------
Total Tax-Exempt Commercial Paper (cost:
$300,000) 300,000
----------
FIXED RATE BONDS AND NOTES - 30.65%
Austin, Texas Independent School
District Refunding, 6.10% due
08/01/98.......................... 150,000 151,867
Fargo, North Dakota, Refunding,
Series B, 3.80% due 06/01/98...... 210,000 209,831
</TABLE>
15
<PAGE> 17
Statements of Investments in Securities and Net Assets December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas National Municipal Money Fund (continued)
- --------------------------------------------------------------
value
face amount (note 1)
---------- ----------
<S> <C> <C>
Hawaii State, General Obligation,
Series BN, 7% due 06/01/99........ $ 110,000 $ 112,759
Illinois, Health Facility
Authority, Servantcor Project,
Series A, FSA Insured, 5.15% due
08/15/98.......................... 300,000 302,074
Iowa State, School Cash
Anticipation Program, Series B,
FSA Insured, 4.25% due 01/30/98... 125,000 125,039
New Jersey State, General
Obligation, 5.10% due 01/01/98.... 250,000 250,000
Olathe, Kansas, Health Facility
Revenue, Olathe Medical Center
Project, Series A, AMBAC Insured,
4.75% due 09/01/98................ 135,000 135,745
Shawnee County, Kansas, Unified
School District #437,
Auburn-Washburn, FGIC Insured,
5.50% due 09/01/98................ 90,000 90,913
Washington State Health Care
Facilities, Fred Hutchinson Cancer
Center, Series D, 6.15% due
01/01/98.......................... 235,000 235,000
Winslow Township, New Jersey, AMBAC
Insured, 7.80% due 07/01/98....... 100,000 102,682
Wyoming State General Fund, Tax and
Revenue Anticipation Notes, 4.50%
due 06/26/98...................... 300,000 300,706
----------
Total Fixed Rate Bonds and Notes (cost:
$2,016,616) 2,016,616
----------
VARIABLE RATE DEMAND NOTES* - 63.77%
Alachua County, Florida, Housing
Finance Authority, Shands Teaching
Hospital, MBIA Insured, Series B,
3.70% due 12/01/26................ 200,000 200,000
Alaska Industrial Development and
Export Authority, Fairbanks
Goldmining, AMT, 3.95% due
05/01/09.......................... 100,000 100,000
Chicago, Illinois, O'Hare
International Airport, Series B,
AMT, 3.95% due 01/01/18........... 200,000 200,000
Clark County, Nevada, Airport
Improvements, Series A, AMT, 3.95%
due 07/01/25...................... 100,000 100,000
Dubuque, Iowa, Industrial
Development Revenue, Swiss Valley
Farms Co. Project, AMT, 3.90% due
12/01/01.......................... 100,000 100,000
Florida, Housing Finance Agency,
Multi-Family Refunding, Series E,
3.90% due 04/01/04................ 200,000 200,000
Forsyth, Montana, Pollution Control
Revenue, Portland General Electric
Co., Series C, 4.15% due
06/01/13.......................... 300,000 300,000
Illinois, Housing Finance
Authority, Sisters Service
Hospital, Series E, MBIA Insured,
3.70% due 12/01/14................ 300,000 300,000
Atlas National Municipal Money Fund (continued)
- --------------------------------------------------------------
value
face amount (note 1)
---------- ----------
Marion County, West Virginia,
County Commission Solid Waste
Disposal Facility Revenue,
Granttown Project, Series A, AMT,
4.25% due 10/01/17................ $ 100,000 $ 100,000
Missouri State, Higher Educational
and Health Finance Authority,
Series C, 3.70% due 06/01/22...... 100,000 100,000
Municipal Electric Authority,
Georgia, Project One, Series E,
3.85% due 01/01/26................ 200,000 200,000
North Carolina, Educational
Facility Revenue, Bowman Grey
School Medical Center, 4.05% due
09/01/20.......................... 300,000 300,000
Pennsylvania State, Higher
Education Facility Authority,
Health Services, Series D, 3.65%
due 11/15/35...................... 200,000 200,000
Phenix City, Alabama, Industrial
Development Board, Environmental
Improvement Revenue, AMT,
5.10% due 06/01/28................ 100,000 100,000
5.10% due 03/01/31................ 400,000 400,000
Port Portland, Oregon, Special
Obligation, Horizon Air
Industries, Inc. Project, AMT,
5.10% due 06/15/27................ 200,000 200,000
Southampton County, Virginia,
Industrial Development Authority,
Hadson Power, Series 90A, AMT,
5.30% due 04/01/15................ 300,000 300,000
St. Louis, Missouri Industrial
Development Authority, Service
Merchandise Corp., Inc. Project,
3.80% due 09/15/98................ 100,000 100,000
Thornton, Colorado Industrial
Development Revenue, Service
Merchandise Corp., Inc. Project,
3.80% due 12/15/99................ 200,000 200,000
Utah State Board of Regents,
Student Loan Revenue, Series C,
AMT, 3.75% due 11/01/13........... 300,000 300,000
Winston-Salem, North Carolina, COP,
Risk Acceptance Management Corp.,
3.85% due 07/01/09................ 195,000 195,000
----------
Total Variable Rate Demand Notes (cost:
$4,195,000) 4,195,000
----------
TOTAL SECURITIES (COST: $6,511,616) - 98.98% 6,511,616
OTHER ASSETS AND LIABILITIES, NET - 1.02% 67,058
----------
NET ASSETS - 100.00% $ 6,578,674
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
16
<PAGE> 18
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas California Municipal Bond Fund
- --------------------------------------------------------------
value
face amount (note 1)
---------- ----------
<S> <C> <C>
BONDS - 97.31%
Anaheim Public Financing Authority,
Lease Revenue Public Improvements
Project, Series A, FSA Insured, 5%
due 03/01/37...................... $ 4,000,000 $ 3,860,000
Benicia Unified School District,
Series A, AMBAC Insured, 6.85% due
08/01/16.......................... 1,000,000 1,111,580
Brea, Public Finance Authority
Revenue Tax Allocation,
Redevelopment Project AB,
Pre-Refunded, Series A, MBIA
Insured, 6.75% due 08/01/22....... 1,590,000 1,762,149
Un-Refunded, Series A, MBIA
Insured, 6.75% due 08/01/22....... 660,000 723,775
Burbank, Glendale, Pasadena Airport
Authority, Airport Revenue
Refunding, AMBAC Insured, 6.40%
due 06/01/10...................... 2,000,000 2,156,400
Calleguas Municipal Water District,
COP, System Improvement Project,
AMBAC Insured, 6.25% due
07/01/11.......................... 1,680,000 1,831,570
Central Coast Water Authority,
Revenue Refunding, State Water
Project, Regional Facilities,
Series A, AMBAC Insured, 5% due
10/01/22.......................... 3,250,000 3,181,978
Contra Costa, Transportation
Authority Sales Tax Revenue,
Series A, FGIC Insured, 6% due
03/01/08.......................... 500,000 566,160
Contra Costa Water District, Water
Treatment Revenue Refunding,
Series G, MBIA Insured, 5.90% due
10/01/08.......................... 3,600,000 3,966,228
Cotati-Rohnert Park Unified School
District, Series A, FGIC Insured,
6% due 08/01/14................... 845,000 888,661
6% due 08/01/15................... 905,000 951,761
Cupertino Unified School District,
Series A, FGIC Insured, 6.75% due
08/01/05.......................... 500,000 583,040
Elk Grove Unified School District,
Special Tax Refunding, Community
Facilities District 1, AMBAC
Insured,
6.50% due 12/01/06................ 600,000 700,368
6.50% due 12/01/24................ 1,500,000 1,837,485
Fresno Water System Revenue, Water
Remediation Project, Series A,
FGIC Insured,
7.50% due 06/01/04................ 500,000 592,315
7.50% due 06/01/05................ 715,000 852,487
Kern High School District
Refunding, MBIA Insured, Series
1990-C, 6.25% due 08/01/12........ 1,200,000 1,393,860
Long Beach Harbor Revenue, AMT,
MBIA Insured, 5.25% due
05/15/25.......................... 2,000,000 1,988,360
Long Beach Water Revenue, MBIA
Insured, 5.50% due 05/01/10....... 500,000 544,425
Los Angeles, Harbor Development
Revenue, 7.60% due 10/01/18....... 140,000 180,216
<CAPTION>
Atlas California Municipal Bond Fund (continued)
- --------------------------------------------------------------
value
face amount (note 1)
---------- ----------
<S> <C> <C>
Los Angeles, Wastewater System
Revenue Refunding,
Series A, MBIA Insured, 5.875% due
06/01/24.......................... $ 2,250,000 $ 2,391,750
Series B, AMBAC Insured, 5.90% due
06/01/03.......................... 450,000 488,448
Series B, AMBAC Insured, 6.25% due
06/01/12.......................... 2,500,000 2,721,800
Los Angeles Convention and
Exhibition Center Authority
Refunding, COP Refunding, AMBAC
Insured, 7% due 08/15/08.......... 500,000 546,930
Los Angeles County, Metropolitan
Transportation Authority Sales Tax
Revenue, Proposition C, AMBAC
Insured, Second Series A, 5.90%
due 07/01/06...................... 500,000 559,480
Los Angeles County, Public Works
Financing Authority, Lease Revenue
Refunding, AMBAC Insured, 6% due
12/01/07.......................... 750,000 848,145
Series B, MBIA Insured, 5.25% due
09/01/15.......................... 1,000,000 1,017,340
Los Angeles County, Transportation
Commission, Sales Tax Revenue,
Proposition C, Second Series A,
MBIA Insured, 6.25% due
07/01/13.......................... 8,980,000 9,787,661
Series B, AMBAC Insured, 6.50% due
07/01/13.......................... 1,750,000 1,902,233
Los Angeles Department of Water and
Power, Electric Plant Revenue,
7.10% due 01/15/31................ 500,000 550,670
7.125% due 05/15/30............... 1,875,000 2,037,694
MSR Public Power Agency, San Juan
Project Revenue, Series E, MBIA
Insured, 6.75% due 07/01/11....... 3,000,000 3,285,090
Manhattan Beach Unified School
District, Series A, FGIC Insured,
0% due 09/01/16................... 2,690,000 1,031,776
Marin Municipal Water District
Water Revenue, MBIA Insured, 5.65%
due 07/01/23...................... 2,000,000 2,067,840
Maritime Infrastructure Authority,
Airport Revenue, San Diego
University, Port District Airport,
AMT,
AMBAC Insured, 5% due 11/01/20.... 9,500,000 9,197,805
Metropolitan Water District,
Southern California Waterworks
Revenue,
5.50% due 07/01/19................ 2,500,000 2,525,825
Series C, 5% due 07/01/27......... 2,000,000 1,957,720
Mountain View Capital Improvements
Financing Authority Revenue, City
Hall Community Theater, MBIA
Insured, 6.25% due 08/01/12....... 1,500,000 1,620,315
New Haven Unified School District
Refunding, MBIA Insured, 5.75% due
08/01/11.......................... 925,000 968,290
</TABLE>
17
<PAGE> 19
Statements of Investments in Securities and Net Assets December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas California Municipal Bond Fund (continued)
- --------------------------------------------------------------
value
face amount (note 1)
---------- ----------
<S> <C> <C>
Northern California Power Agency
Public Power Revenue Refunding,
Hydroelectric Project 1, Series A,
AMBAC Insured, 7.50% due
07/01/23.......................... $ 50,000 $ 64,547
MBIA Insured, 6.25% due
07/01/12.......................... 1,500,000 1,634,910
Oakland Redevelopment Agency,
Revenue Refunding, Pension
Financing, Series A, FGIC Insured,
7.60% due 08/01/21................ 1,250,000 1,300,863
Orange County, Sanitation
Districts,
COP Numbers 1, 2, 3, 5, 6, 7, and
11, Series B, FGIC Insured, 6% due
08/01/16.......................... 2,000,000 2,166,940
Oroville Hospital Revenue, Series
A, 5.40% due 12/01/22............. 1,000,000 1,007,590
Palo Alto Unified School District,
Series B, 5.375% due 08/01/18..... 1,250,000 1,268,588
Pleasanton Unified School District,
Series F, FGIC Insured,
6.25% due 08/01/14................ 570,000 599,446
6.25% due 08/01/15................ 610,000 641,513
6.25% due 08/01/16................ 650,000 683,579
Puerto Rico, Public Buildings
Authority Revenue, Gtd. Government
Facilities, Series A, AMBAC
Insured, 6.25% due 07/01/14....... 1,000,000 1,158,990
Puerto Rico Commonwealth Refunding,
MBIA Insured, 6.25% due
07/01/12.......................... 1,000,000 1,155,920
Puerto Rico Ports Authority,
American Airlines, 6.30% due
06/01/23.......................... 1,800,000 1,922,238
Redding Joint Powers Financing
Authority, Electric Systems
Revenue Refunding, Series A, MBIA
Insured, 5.25% due 06/01/15....... 2,000,000 2,039,480
Riverside County, Asset Leasing
Corp., Leasing Revenue, Series B,
MBIA Insured, 5.70% due
06/01/16.......................... 2,000,000 2,164,800
Riverside County Transportation
Commission, Sales Tax Revenue,
Series A, FGIC Insured, 6% due
06/01/09.......................... 400,000 454,244
Riverside Electric Revenue, 6% due
10/01/15.......................... 1,500,000 1,559,415
Sacramento Municipal Utility
District, Electric Revenue
Refunding, Series Z, FGIC Insured,
6.45% due 07/01/10................ 2,500,000 2,713,475
San Bernardino County, COP, Medical
Center Financing Project, MBIA
Insured, 5% due 08/01/28.......... 1,500,000 1,456,485
San Bernardino County
Transportation Authority Sales Tax
Revenue, Series A, FGIC Insured,
6% due 03/01/10................... 2,500,000 2,760,000
San Bernardino Health Care System
Revenue, Sisters of Charity,
Series A, 7% due 07/01/21......... 3,230,000 3,591,954
San Diego Public Safety
Communication Project,
6.50% due 07/15/09................ 1,525,000 1,801,681
San Francisco City and County,
Series 95 A & B, FGIC Insured,
5.50% due 06/15/13................ 1,145,000 1,198,723
Series E, 6.50% due 06/15/11...... 2,220,000 2,397,778
Atlas California Municipal Bond Fund (continued)
- --------------------------------------------------------------
value
face amount (note 1)
---------- ----------
San Francisco City and County
Airport Commission, International
Airport Revenue Refunding, Second
Series,
Issue 1, AMBAC Insured, 6.30% due
05/01/11.......................... $ 3,000,000 $ 3,268,380
Issue 1, AMBAC Insured, 6.50% due
05/01/13.......................... 2,000,000 2,194,540
Issue 12, FGIC Insured, 5.625% due
05/01/06.......................... 500,000 540,860
San Francisco City and County
Public Utilities Commission Water
Revenue Refunding, Series A,
6% due 11/01/15................... 1,000,000 1,059,980
6.50% due 11/01/17................ 1,000,000 1,105,150
San Francisco City and County Sewer
Revenue Refunding, AMBAC Insured,
6% due 10/01/11................... 2,280,000 2,458,478
San Joaquin Hills Transportation
Corridor Agency, Toll Road
Revenue,
0% due 01/01/07................... 1,000,000 944,650
0% due 01/01/09................... 1,000,000 972,000
San Jose Redevelopment Agency Tax
Allocation, Merged Area
Redevelopment Project Refunding,
MBIA Insured, 5% due 08/01/20..... 2,500,000 2,430,650
San Mateo County, Joint Powers
Authority, Lease Revenue Capital
Projects, Series A, 5.125% due
7/15/32........................... 2,145,000 2,105,768
Santa Barbara, Revenue COP,
Retirement Services,
5.75% due 08/01/20................ 2,000,000 2,072,080
Santa Clara Electric Revenue,
Series A, MBIA Insured, 6.25% due
07/01/19.......................... 3,750,000 4,046,063
Santa Clara Local Government
Finance Authority Revenue
Refunding, BIG Insured, 7.25% due
02/01/13.......................... 250,000 264,085
Santa Margarita, Dana Point
Authority Revenue Refunding,
Improvement District 3, 3A, 4, and
4A, Series B, MBIA Insured,
7.25% due 08/01/07................ 500,000 612,400
7.25% due 08/01/13................ 2,000,000 2,538,360
Santa Monica, Malibu Unified School
District, Public School Facilities
Reconstruction Projects A, 6.90%
due 08/01/11...................... 500,000 552,895
Saugus Unified School District,
Series A, MBIA Insured,
5.65% due 09/01/11................ 2,035,000 2,164,426
Southern California Public Power
Authority Power Project Revenue
Refunding, Hydroelectric Hoover
Uprating Project, Series A, 6.625%
due 10/01/05...................... 600,000 659,994
Southern California Public Power
Authority Transmission Project
Revenue Refunding, Southern
Transportation System,
5.75% due 07/01/10................ 2,000,000 2,015,080
</TABLE>
The accompanying notes are an integral part of these financial statements.
18
<PAGE> 20
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas California Municipal Bond Fund (continued)
- --------------------------------------------------------------
value
face amount (note 1)
---------- ----------
<S> <C> <C>
Southern California Rapid Transit
District, COP, Workers
Compensation Fund, MBIA Insured,
6% due 07/01/10................... $ 1,000,000 $ 1,068,500
State, Refunding,
AMBAC Insured, 5.25% due
06/01/21.......................... 1,000,000 1,000,750
Series BH, AMT, 5.60% due
12/01/32.......................... 1,000,000 1,005,020
State, Various Purpose, 6.125% due
10/01/11.......................... 1,000,000 1,143,040
State Department of Water Resources
Central Valley Project Revenue,
Series J-2, 6.125% due 12/01/13... 2,225,000 2,355,986
Series J-3, 5.50% due 12/01/23.... 3,000,000 3,017,460
Series O, 5% due 12/01/15......... 2,000,000 1,976,600
State Educational Facilities
Authority Revenue Refunding,
Los Angeles College Chiropractic,
5.60% due 11/01/17................ 1,810,000 1,842,797
Loyola Marymount University, 5%
due 10/01/22...................... 700,000 685,349
Pepperdine University, MBIA
Insured, 6.10% due 03/15/14....... 2,595,000 2,821,128
Santa Clara University, MBIA
Insured, 5.75% due 09/01/18....... 3,255,000 3,408,636
University of Southern California,
Series C, 5.125% due 10/01/28..... 1,000,000 985,450
State Health Facilities Financing
Authority Revenue Refunding,
Adventist Health System West,
Series B, MBIA Insured, 6.40% due
03/01/02.......................... 1,000,000 1,084,550
Sutter Health Systems, Series A,
AMBAC-TCRS Insured, 6.70% due
01/01/13.......................... 1,000,000 1,033,730
State Housing Finance Agency
Revenue Home Mortgage, AMT, MBIA
Insured, Series K, 6.15% due
08/01/16.......................... 3,000,000 3,184,380
Series L, 5.55% due 08/01/05...... 300,000 315,705
State Housing Finance Agency
Revenue Home Mortgage, Series B,
AMT, AMBAC Insured, 6.05% due
08/01/16.......................... 2,000,000 2,087,260
Series H, AMT, 6.15% due
08/01/16.......................... 2,020,000 2,129,141
Series I, AMT, 5.65% due
08/01/17.......................... 2,400,000 2,457,288
Series Q, MBIA Insured, 5.85% due
08/01/16.......................... 1,000,000 1,047,100
State Pollution Control Financing
Authority, Pollution Control
Revenue, MBIA Insured, Pacific Gas
& Electric Co., Series B, 5.85%
due 12/01/23...................... 2,000,000 2,089,980
State Public Works Board, Lease
Revenue, AMBAC Insured, Department
of Corrections, Series A, 5.25%
due 01/01/21...................... 2,000,000 2,001,300
Atlas California Municipal Bond Fund (continued)
- --------------------------------------------------------------
value
face amount (note 1)
---------- ----------
Various University of California
Projects, Series C, 5.125% due
09/01/22.......................... $ 1,475,000 $ 1,451,562
State Rural Home Mortgage Finance
Authority, Single Family Revenue
Refunding, Series C, AMT,
7.50% due 08/01/27................ 1,065,000 1,224,910
Statewide Communities Development
Authority, Lease Revenue, United
Airlines, 5.70% due 10/01/33...... 4,000,000 4,061,240
Stockton Health Facilities Revenue,
Dameron Hospital, Series A,
5.70% due 12/01/14................ 200,000 203,364
Truckee, Donner Public Utility
District, COP, Water System
Improvement Project, MBIA Insured,
6.75% due 11/15/21................ 1,000,000 1,114,840
Turlock Irrigation District Revenue
Refunding, Series A, MBIA Insured,
5.90% due 01/01/02................ 80,000 85,628
6% due 01/01/10................... 1,000,000 1,132,950
Vallejo Revenue Water Improvement
Project, Series B, FGIC Insured,
6.50% due 11/01/14................ 4,000,000 4,541,800
Watsonville Water Revenue
Refunding, Series A, MBIA Insured,
6% due 05/15/16................... 1,915,000 2,018,180
Westside Unified School District
Refunding, Series C, AMBAC
Insured,
6% due 08/01/14................... 300,000 340,461
----------
Total Bonds (cost: $182,782,935) 197,844,713
----------
VARIABLE RATE DEMAND NOTES* - 2.41%
Los Angeles, Regional Airports
Improvement Corp. Lease Revenue,
American Airlines - LAX,
Series B, 5% due 12/01/24......... 500,000 500,000
Series C, 5% due 12/01/24......... 200,000 200,000
Series D, 5% due 12/01/24......... 100,000 100,000
Series G, 5% due 12/01/24......... 700,000 700,000
Los Angeles County, Regional
Airports Improvement Corp.,
Terminal Facilities Completion
Revenue, Los Angeles International
Airport, AMT,
5.10% due 12/01/25................ 1,000,000 1,000,000
Orange County, Sanitation
Districts, COP Numbers 1, 2, 3, 5,
6, 7, and 11,
5.05% due 08/01/16................ 300,000 300,000
Sacramento County, COP
Administration Center and Court
House,
3.80% due 06/01/20................ 1,700,000 1,700,000
</TABLE>
19
<PAGE> 21
Statements of Investments in Securities and Net Assets December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas California Municipal Bond Fund (continued)
- --------------------------------------------------------------
value
face amount (note 1)
---------- ----------
<S> <C> <C>
State Pollution Control Revenue,
AMT, Delano 3 Project, Series 91,
5.15% due 08/01/19................ $ 200,000 $ 200,000
Malaga, Series A, 5.15% due
04/01/17.......................... 100,000 100,000
Rocklin, Series A, 5.15% due
06/01/17.......................... 100,000 100,000
----------
Total Variable Rate Demand Notes (cost:
$4,900,000) 4,900,000
----------
TOTAL SECURITIES (COST: $187,682,935) - 99.72% 202,744,713
OTHER ASSETS AND LIABILITIES, NET - 0.28% 571,676
----------
NET ASSETS - 100.00% $203,316,389
==========
Atlas National Municipal Bond Fund
- --------------------------------------------------------------
value
face amount (note 1)
---------- ----------
BONDS - 96.53%
Adams County, Colorado, School
District 12, Thornton, Series A,
MBIA Insured, 6.75% due
12/15/07.......................... $ 1,065,000 $ 1,245,475
Alabama State Docks Department,
Docks Facilities Revenue, AMT,
MBIA Insured, 6.10% due
10/01/13.......................... 1,000,000 1,100,580
Anchorage, Alaska, Electric Utility
Revenue Refunding, Senior Lien,
MBIA Insured, 8% due 12/01/10..... 985,000 1,306,090
California State Public Works
Board, Lease Revenue, Department
of Corrections, California State
Prison, Series B, MBIA Insured,
5.375% due 12/01/19............... 1,150,000 1,158,417
Central Coast Water Authority,
California Revenue Refunding State
Water Project, Regional
Facilities, Series A, AMBAC
Insured, 5% due 10/01/22.......... 1,000,000 979,070
Chicago, Illinois, Metropolitan
Water Reclamation District,
Greater Chicago Capital
Improvement,
7.25% due 12/01/12................ 1,500,000 1,890,045
Chicago, Illinois, Park District
Aquarium & Museum, Series B,
6.50% due 11/15/13................ 2,500,000 2,855,150
Chicago, Illinois, Public Building
Commission Mortgage Revenue, Board
of Education, Series A, MBIA
Insured,
7.125% due 01/01/15............... 125,000 135,530
Cleveland, Ohio, Waterworks Revenue
First Mortgage Refunding, Series
F-92B,
AMBAC Insured, 6.25% due
01/01/16.......................... 1,000,000 1,083,980
Colorado, Housing Finance
Authority, Single Family Program,
Senior Series A-1, AMT, 7.40% due
11/01/27.......................... 1,000,000 1,130,100
<CAPTION>
Atlas National Municipal Bond Fund (continued)
- --------------------------------------------------------------
value
face amount (note 1)
----------- ----------
<S> <C> <C>
Colorado, Public Highway Authority,
E-470, Capital Appreciation,
Series B, MBIA Insured, 0% due
09/01/21.......................... $ 2,000,000 $ 587,060
Colorado Springs, Colorado,
Utilities Revenue Refunding,
Series A,
6.50% due 11/15/15................ 2,000,000 2,181,700
Cook County, Illinois, MBIA
Insured, 7.25% due 11/01/07....... 620,000 756,716
Series C, FGIC Insured,
6% due 11/15/08................... 500,000 566,800
Dallas, Fort Worth, Texas, Regional
Airport Revenue, Joint Dallas-Fort
Worth, AMT, MBIA Insured,
5.50% due 11/01/23................ 1,500,000 1,533,030
Georgia, Municipal Electric
Authority Power Revenue, Series O,
8.125% due 01/01/17............... 50,000 51,165
Harris County, Texas Toll Road,
Senior Lien, FGIC Insured,
5.375% due 08/15/20............... 1,000,000 1,007,830
Hudsonville, Michigan, Public
Schools, FGIC Insured, 5.15% due
05/01/27.......................... 1,000,000 986,520
Illinois Development Finance
Authority, Pollution Control
Revenue, Public Service Co.,
Series C-2,
5.70% due 08/15/26................ 1,000,000 1,021,290
Illinois Health Facilities
Authority Revenue Refunding,
Sherman Hospital Project, MBIA
Insured,
6.75% due 08/01/11................ 1,000,000 1,103,320
Indiana State Office Building
Commission, Capital Complex
Revenue, Senate Avenue Parking,
Series A, MBIA Insured,
7.25% due 07/01/12................ 50,000 54,711
Indianapolis, Indiana, Airport
Authority Revenue, Special
Facilities, Federal Express Corp.,
AMT,
7.10% due 01/15/17................ 500,000 559,965
Jacksonville, Florida, Electric
Authority Revenue Refunding, Saint
John's River Project, Issue 2,
Series 5,
6.50% due 10/01/14................ 500,000 528,495
Jefferson County, Colorado, School
District, #R-001, 6.50% due
12/15/10.......................... 400,000 472,688
Jones County, Mississippi Hospital
Revenue, South Central Regional
Medical Center, 5.50% due
12/01/17.......................... 1,000,000 993,610
Kansas City, Kansas, Utility System
Revenue Refunding and Improvement,
FGIC Insured, 6.375% due
09/01/23.......................... 1,500,000 1,676,175
Kern, California High School
District, Series 1990-C Election,
MBIA Insured, 6.25% due
08/01/10.......................... 545,000 633,682
Lakota, Ohio, Local School
District, AMBAC Insured, 7% due
12/01/09.......................... 1,740,000 2,132,335
</TABLE>
The accompanying notes are an integral part of these financial statements.
20
<PAGE> 22
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas National Municipal Bond Fund (continued)
- --------------------------------------------------------------
value
face amount (note 1)
----------- ----------
<S> <C> <C>
Lanse Creuse, Michigan, Public
Schools, AMBAC Insured, 5% due
05/01/04.......................... $ 250,000 $ 260,625
Maine State Housing Authority
Mortgage Purchase, Series A-1,
AMT, AMBAC Insured, 6.40% due
11/15/14.......................... 1,400,000 1,489,362
Maricopa County, Arizona, Unified
School District 69, Paradise
Valley Refunding, MBIA Insured,
6.35% due 07/01/10................ 600,000 700,848
Massachusetts, State Construction
Loan, Series A, FGIC Insured,
6.90% due 03/01/04................ 30,000 30,754
Massachusetts State Health and
Educational Facilities Authority
Revenue, Northeastern University,
Series E, MBIA Insured, 6.55% due
10/01/22.......................... 500,000 551,450
Metropolitan Pier & Exposition
Authority, Illinois, Dedicated
State Tax Revenue, McCormick Place
Expansion Project, Series A, 7.25%
due 06/15/05...................... 250,000 293,580
Metropolitan Transportation
Authority, New York,
Transportation Facilities Revenue,
Series 8, Service Contract, 5.375%
due 07/01/21...................... 1,000,000 992,750
Michigan State University Revenue,
Series A, 6.125% due 08/15/08..... 500,000 539,780
Mississippi Higher Education
Assistance Corp. Student Loan
Revenue, Series C, AMT, 6.05% due
09/01/07.......................... 860,000 909,097
Nevada Housing Division, Single
Family Mortgage, Series C, AMT,
6.60% due 04/01/14................ 995,000 1,057,327
New York City, New York, Industrial
Development Authority, Special
Facilities, United Airlines, Inc.,
5.65% due 10/01/32................ 1,000,000 1,010,260
New York City, New York, Municipal
Water Finance Authority, Water &
Sewer System Revenue, Series B,
FGIC Insured, 7.625% due
06/15/17.......................... 125,000 129,060
New York City, New York, Series F,
6% due 08/01/11................... 500,000 535,085
New York City, New York, Series I,
5.875% due 03/15/14............... 500,000 523,195
New York City, New York, Series L,
5.75% due 08/01/12................ 500,000 523,580
New York State Dormitory Authority
Revenue, Pooled Capital Program,
FGIC Insured, 7.80% due
12/01/05.......................... 150,000 157,346
New York State Highway Authority,
Service Contract Revenue, Local
Highway and Building, 5% due
04/01/17.......................... 1,000,000 967,510
New York State Urban Development
Corp. Revenue, Correctional
Facilities, Series A, 5.50% due
01/01/16.......................... 1,000,000 1,010,960
Atlas National Municipal Bond Fund (continued)
- --------------------------------------------------------------
value
face amount (note 1)
----------- ----------
North Reading, Massachusetts,
Refunding, MBIA Insured, 6.30% due
06/15/01.......................... $ 500,000 $ 537,130
Northern California Power Agency,
Public Power Revenue Refunding,
Hydroelectric Project 1, Series A,
MBIA Insured, 6.25% due
07/01/12.......................... 750,000 817,455
Pennsylvania, State Industrial
Development Authority Revenue,
Economic Development, AMBAC
Insured, 7% due 07/01/06.......... 500,000 592,140
Pinal County, Arizona, Unified
School District 43, Apache JCT,
Series A, FGIC Insured, 6.80% due
07/01/09.......................... 425,000 512,010
Red River Authority, Texas,
Pollution Control Revenue, Hoechst
Celanese Corp. Project, AMT,
6.875% due 04/01/17............... 1,500,000 1,635,960
Redford, Michigan, Unified School
District, AMBAC Insured, 5.125%
due 05/01/18...................... 1,000,000 990,460
Sacramento, California, Municipal
Utility District Electric Revenue
Refunding, Series Z, FGIC Insured,
6.45% due 07/01/10................ 600,000 651,234
Shawnee County, Kansas, Unified
School District 501, FGIC Insured,
7.30% due 02/01/02................ 250,000 280,025
Springfield, Illinois, General
Obligation, 6.30% due 12/01/13.... 100,000 104,218
Superior, Wisconsin, Limited
Obligation Revenue Refunding,
Midwest Energy Resources, Series
E, FGIC Insured, 6.90% due
08/01/21.......................... 500,000 621,435
Tacoma, Washington, Electric System
Revenue, 7.50% due 01/01/12....... 100,000 106,723
Tallassee, Alabama, Industrial
Development Board Revenue
Refunding, Dow United Technologies
Corp., Series B, 6.10% due
08/01/14.......................... 1,000,000 1,070,540
Texas Health Facilities Development
Corp. Hospital Revenue, Cook-Fort
Worth Children's Center Refunding,
FGIC Insured, 6.25% due
12/01/12.......................... 1,000,000 1,087,810
Tulsa, Oklahoma, Airport
Transportation Revenue, American
Airlines, Inc., AMT, 7.375% due
12/01/20.......................... 2,000,000 2,182,500
University of Maryland, System
Auxiliary Facility and Tuition
Revenue, Series A, 6.30% due
02/01/10.......................... 500,000 538,695
Utah State Board of Regents Student
Loan Revenue, Series N, AMT, AMBAC
Insured, 5.90% due 11/01/07....... 1,000,000 1,095,160
Vallejo, California, Revenue, Water
Improvement Project, Series B,
FGIC Insured, 6.50% due
11/01/14.......................... 750,000 851,588
</TABLE>
21
<PAGE> 23
Statements of Investments in Securities and Net Assets December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas National Municipal Bond Fund (continued)
- --------------------------------------------------------------
value
face amount (note 1)
----------- ----------
<S> <C> <C>
Washington State Public Power
Supply System Refunding Revenue,
Nuclear Project 1 Revenue
Pre-Refunded, Series A, 7.50% due
07/01/15.......................... $ 155,000 $ 165,886
Nuclear Project 1 Revenue
Un-Refunded, Series A, 7.50% due
07/01/15.......................... 105,000 112,374
Nuclear Project 2 Revenue
Refunding, Series A, 7.25% due
07/01/06.......................... 500,000 590,730
Nuclear Project 2 Revenue
Refunding, Series B, 7% due
07/01/12.......................... 140,000 152,225
Nuclear Project 3 Revenue
Refunding, Series B, 7.20% due
07/01/99.......................... 250,000 261,410
Wayne Charter County, Michigan,
Airport Revenue Sub. Lien,
Detroit Metro Airport, Series A,
MBIA Insured, 6.50% due 12/01/11.. 500,000 551,525
West Virginia School Building
Authority Revenue, Series A, MBIA
Insured, 7.25% due 07/01/15....... 50,000 54,711
Westminster, Colorado, Sales & Use
Tax Refunding Revenue, Series A,
FGIC Insured, 6.25% due
12/01/12.......................... 1,000,000 1,091,190
Wisconsin State Health and
Educational Facilities Authority
Revenue, Aurora Medical Group,
Inc. Project, FSA Insured, 5.75%
due 11/15/07...................... 500,000 548,135
6% due 11/15/10................... 1,000,000 1,133,760
----------
Total Bonds (cost: $55,271,119) 59,751,127
----------
VARIABLE RATE DEMAND NOTES* - 2.42%
Allegheny County, Pennsylvania,
Longwood, Series A,
5.25% due 07/01/27................ 100,000 100,000
Los Angeles County, Regional
Airports Improvement Corp., Los
Angeles International Airport AMT,
5% due 12/01/25................... 100,000 100,000
Los Angeles County, Regional
Airports Improvement Corp.,
Terminal Facilities Completion
Revenue, Los Angeles International
Airport, AMT,
4.35% due 12/01/25................ 100,000 100,000
Morgan County, Utah, Solid Waste
Disposal, Holman, Inc. Project,
AMT,
3.95% due 08/01/31................ 100,000 100,000
North Central Texas, Health
Facility Development Corp.,
Presbyterian Medical Center, 5%
due 12/01/15...................... 400,000 400,000
Phenix City, Alabama, Industrial
Development Board Environmental
Improvement Revenue, AMT,
5.10% due 06/01/28................ 200,000 200,000
Port Portland, Oregon, Special
Obligation, Horizon Air
Industries, Inc. Project, AMT,
5.10% due 06/15/27................ 300,000 300,000
Atlas National Municipal Bond Fund (continued)
- --------------------------------------------------------------
value
face amount (note 1)
----------- ----------
Southampton County, Virginia,
Industrial Development Authority,
Hadson Power, Series 90A, AMT,
5.30% due 04/01/15................ $ 200,000 $ 200,000
----------
Total Variable Rate Demand Notes (cost:
$1,500,000) 1,500,000
----------
TOTAL SECURITIES (COST: $56,771,119) - 98.95% 61,251,127
OTHER ASSETS AND LIABILITIES, NET - 1.05% 650,527
----------
NET ASSETS - 100.00% $ 61,901,654
==========
Atlas U.S. Government and Mortgage Securities Fund
- --------------------------------------------------------------
value
face amount (note 1)
---------- ---------
U.S. GOVERNMENT AGENCIES - 99.24%
Federal Home Loan Mortgage Corp.
7.00% due 2023-2027............... $ 9,668,732 $ 9,777,803
7.50% due 2023-2024............... 18,431,122 18,932,407
8.00% due 2024-2026............... 12,929,157 13,399,739
8.50% due 2017-2026............... 3,826,574 4,011,548
9.00% due 2017-2024............... 5,630,703 6,039,911
9.50% due 2016-2021............... 1,210,652 1,301,709
10.00% due 2015-2020.............. 117,070 127,972
10.50% due 2018-2020.............. 91,061 101,649
Federal National Mortgage Assn.
5.50% due 2003.................... 81,694 79,785
6.00% due 2001-2021............... 1,514,559 1,503,962
6.50% due 2023-2026............... 2,394,694 2,394,906
7.00% due 2025-2027............... 24,928,149 25,137,373
7.50% due 2026-2027............... 31,845,554 32,596,713
8.00% due 2024-2026............... 62,741,667 64,995,331
8.50% due 2017-2027............... 9,971,735 10,422,663
9.00% due 2021-2025............... 6,702,903 7,151,170
9.50% due 2020.................... 51,670 55,681
Government National Mortgage Assn.
7.50% due 2022-2024............... 7,212,000 7,411,440
8.00% due 2023-2025............... 2,559,909 2,659,754
8.50% due 2016-2020............... 92,704 98,845
----------
Total U.S. Government Agencies (cost:
$203,533,113) 208,200,361
----------
SHORT-TERM INVESTMENTS - 15.48%
6.43% FNMA Floating Collateralized
Mortgage Obligation due 1998...... 190,864 191,103
6.53% FNMA Floating Collateralized
Mortgage Obligation due 1998...... 229,656 229,943
6.20% FHLMC Floating Collateralized
Mortgage Obligation due 1999...... 423,294 424,483
6.73% FNMA Floating Collateralized
Mortgage Obligation due 1999...... 606,057 608,894
Repurchase Agreement dated December
11, 1997 with Chase Securities,
Inc., effective yield of 5.75%,
due January 14, 1998 with respect
to $13,269,052 and $2,155,191
FNMAs, 7.00%, April 1, 2027 and
February 1, 2027 with a value of
$13,335,397 and $2,187,519 (g).... 15,000,000 15,050,313
</TABLE>
The accompanying notes are an integral part of these financial statements.
22
<PAGE> 24
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas U.S. Government and
Mortgage Securities Fund (continued)
- --------------------------------------------------------------
value
face amount (note 1)
----------- ----------
<S> <C> <C>
Repurchase Agreement dated December
31, 1997 with UBS
Securities LLC, effective yield of
6.80%, due January 2, 1998 with
respect to $15,771,766 FNMAs,
7.01%, September 1, 2026 with a
value of $16,299,134.............. $ 15,980,000 $ 15,983,018
----------
Total Short-Term Investments (cost: $32,485,914) 32,487,754
----------
TOTAL SECURITIES (COST: $236,019,027) - 114.72% 240,688,115
OTHER ASSETS AND LIABILITIES, NET - (14.72)% (30,886,668)
----------
NET ASSETS - 100.00% $209,801,447
==========
Atlas Strategic Income Fund
- --------------------------------------------------------------
face amount,
shares or value
units(m) (note 1)
---------- ----------
MORTGAGE-BACKED OBLIGATIONS - 19.83%
Commercial - 3.04%
Asset Securitization Corp.,
Commercial Sub. Bonds, Series
1997-D5, Cl. B2, 6.93% due
02/14/41.......................... $ 100,000 $ 89,266
CS First Boston Mortgage
Securities Corp., Series 1997-C1,
Cl. F, 7.50% due 06/20/13
(a)(c)(g)......................... 50,000 49,141
Cl. G, 7.50% due 06/20/14
(a)(c)(g)......................... 50,000 47,281
Cl. H, 7.50% due 08/20/14
(a)(c)(g)......................... 30,000 23,475
First Chicago/Lennar Trust,
Commercial Collateral Strip
Interest,
Series 1997-CHL1, Cl. D, 8.12% due
05/29/08 (a)(c)(g)................ 100,000 100,219
Series 1997-CHL1, Cl. E, 8.11% due
02/28/11 (a)(c)(g)................ 150,000 126,891
GMAC Commercial Mortgage
Securities, Inc., Series 1997-C1,
Cl. G, 7.414% due 09/30/06........ 120,000 112,200
Cl. X, 1.6287% due 07/15/27....... 975,000 98,109
GMAC Commercial Mortgage
Securities, Inc., Series 1997-C2,
Cl. F, 6.75% due 04/15/29......... 100,000 85,000
Morgan Stanley Capital I, Inc.,
Commercial Sub. Bonds,
Series 1997-HF1, Cl. F, 6.86% due
02/15/10 (a)(c)(g)................ 50,000 47,250
Series 1997-XL1, Cl. G, 7.695% due
10/03/30 (a)(c)................... 60,000 58,463
Series 1997-RR, Cl. F, 7.74% due
11/01/07 (a)(c)................... 100,000 81,563
Nykredit AS, 6% Mortgage-Backed
Security, Series ANN, due 10/01/26
(DKK)............................. 760,000 108,163
Realkredit Danmark, 6% Mortgage-
Backed Security due 10/01/26
(DKK)............................. 760,000 107,997
Salomon Brothers Mortgage
Securities VII, Series 1996-C1,
Cl. F, 9.18% due 02/20/26......... 250,000 212,500
<CAPTION>
Atlas Strategic Income Fund (continued)
- --------------------------------------------------------------
face amount,
shares or value
units(m) (note 1)
---------- ----------
<S> <C> <C>
Structured Asset Securities Corp.,
Commercial Mtg. Pass-Through
Certificates, Series 1997-LL1, Cl.
F, 7.30% due 10/20/34 (a)(g)....... $ 50,000 $ 46,453
Government Agency - 16.05%
Federal Home Loan Mortgage Corp.,
Interest-Only Stripped Mtg.-Backed
Security, Trust 177, 7% due
07/01/26 (h)...................... 2,018,511 587,793
Series 151, Cl. F, 9% due
05/15/21.......................... 500,000 538,905
Federal National Mortgage Assn.,
Global Debt Issuance Program,
6.50% Sr. Unsub. Notes due
07/10/02 (AUD).................... 85,000 56,720
Global Debt Issuance Program,
6.375% due 08/15/07 (AUD)......... 555,000 363,624
7% due 01/01/12 (j)............... 2,500,000 2,536,725
7% due 09/26/00................... 270,000 152,496
7% due 07/01/26................... 854,722 861,667
Government National Mortgage
Assn., 7% due 01/01/27 (j)........ 2,250,000 2,266,178
Multi-Family - .74%
Criimi Mae, Inc., Trust I, Series
1996-C1, Cl. A2, 7.56% due
06/30/33.......................... 100,000 102,906
Mortgage Capital Funding, Inc.,
Multi-family Mtg. Pass-Through
Certificates, Series 1996-MC1, Cl.
G, 7.15% due 06/15/06............. 250,000 238,672
----------
Total Mortgage-Backed Obligations (cost:
$9,251,581) 9,099,657
----------
U.S. GOVERNMENT OBLIGATIONS - 25.66%
U.S. Treasury Bonds:
10.75% due 05/15/03............... 155,000 190,311
10.75% due 02/15/03............... 1,350,000 1,645,734
11.875% due 11/15/03.............. 745,000 968,966
11.625% due 11/15/04.............. 931,000 1,235,029
13.75% due 08/15/04............... 255,000 365,288
9.375% due 02/15/06............... 900,000 1,107,546
8.125% due 08/15/21 (n)........... 274,000 345,583
6% due 02/15/26................... 90,000 89,888
U.S. Treasury Notes:
7.50% due 10/31/99 (n)............ 3,505,000 3,614,531
7.50% due 05/15/02................ 1,110,000 1,185,271
6.25% due 02/15/03................ 280,000 286,387
5.75% due 08/15/03................ 485,000 485,606
5.875% due 02/15/04............... 105,000 105,952
7.25% due 05/15/04................ 135,000 145,716
----------
Total U.S. Government Obligations (cost:
$11,567,093) 11,771,808
----------
FOREIGN GOVERNMENT OBLIGATIONS - 22.58%
Argentina - 2.44%
Argentina (Republic of),
Bonds, Bonos de Consolidacion de
Deudas, Series Previs 2, 5.927%
due 04/01/01 (c).................. 16,607 16,940
Bonds, 5% due 12/20/02 (JPY)...... 10,000,000 77,473
Notes, 11.75% due 02/12/07
(ARP)............................. 100,000 109,459
Par Bonds, 5.25% due 03/31/23
(e)............................... 180,000 131,400
Past Due Interest Global Bearer
Bonds, 6.6875% Debentures due
03/31/05 (c)...................... 710,400 634,032
</TABLE>
23
<PAGE> 25
Statements of Investments in Securities and Net Assets December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- --------------------------------------------------------------
face amount,
shares or value
units(m) (note 1)
---------- -----------
<S> <C> <C>
Unsec. Unsub. Notes, 5.50% due
03/27/01 (JPY).................... $ 10,000,000 $ 81,878
Unsec. Unsub. Notes, 8.75% due
07/10/02 (ARP).................... 80,000 67,200
Australia - 1.61%
Australia (Commonwealth of)
Bonds, New South Wales Treasury
Corp., 8% Gtd. Exchangeable Bonds
due 12/01/01 (AUD)................ 710,000 496,925
Queensland Treasury Corp.,
Exchangeable Gtd. Notes,
8% Global Notes due 08/14/01
(AUD)............................. 100,000 69,880
8% Global Notes due 09/14/07
(AUD)............................. 80,000 58,528
8% Global Notes due 05/14/03
(AUD)............................. 25,000 17,641
10.50% Global Debentures due
05/15/03 (AUD).................... 105,000 82,464
Treasury Corp. of Victoria Gtd.
Bonds, 8.25% Sr. Unsec. Global
Bonds
due 10/15/03 (AUD)................ 20,000 14,459
Brazil - 1.08%
Brazil (Federal Republic of),
Capitalization Bonds,
8% due 04/15/14 (c)............... 628,917 493,700
Bulgaria - .22%
Bulgaria (Republic of),
Front-Loaded Interest Reduction
Bearer Bonds, Tranche A,
2.25% due 07/28/12 (c)............ 120,000 71,040
Past Due Interest Bonds, 6.6875%
Debentures due 07/28/11 (c)....... 40,000 28,580
Canada - 1.84%
Canada (Government of) Bonds,
Series A-33, 11.50% Debentures due
09/01/00 (CAD).................... 1,005,000 807,879
Greater Toronto Airport, 5.40%
Debentures due 12/03/02 (CAD)..... 55,000 37,943
Denmark - .54%
Denmark (Kingdom of) Bonds, 7% due
11/10/24 (DKK).................... 1,530,000 248,608
Ecuador - .30%
Ecuador (Republic of), Global
Bearer Past Due Interest Bonds,
6.6875% Debentures due 02/27/15
(c)............................... 131,227 85,626
Ecuador (Republic of),
6.6875% Gtd. 30 years Discount
Bonds due 02/28/25................ 70,000 52,675
Germany - .73%
Germany (Republic of) Bonds,
Series 94, 6.25% due 01/04/24
(DEM)............................. 570,000 333,083
Series 95, 6.875% due 05/12/05
(DEM)............................. 1,000 614
Great Britain - 1.40%
United Kingdom GILT,
7.25% due 03/30/98 (GBP).......... 190,000 312,650
7.75% due 09/08/06 (GBP).......... 185,000 331,261
Hungary - .54%
Hungary Government Bonds,
Series 98/I, 23.50% due 05/17/98
(HUF)............................. 40,000,000 199,037
Series 99/G, 16.50% due 07/24/99
(HUF)............................. 10,000,000 48,030
Atlas Strategic Income Fund (continued)
- --------------------------------------------------------------
face amount,
shares or value
units(m) (note 1)
---------- ----------
Ireland - .42%
Ireland (Government of) Bonds,
9.25% Debentures due 07/11/03
(IEP)............................. $ 60,000 $ 102,239
8% due 08/18/06 (IEP)............. 55,000 91,446
Italy - 1.41%
Italy (Republic of) Treasury
Bonds, Buoni del Tesoro Poliennali,
10.50% due 04/01/00 (ITL)......... 110,000,000 69,300
12% due 01/01/02 (ITL)............ 370,000,000 259,740
9% due 10/01/03 (ITL)............. 325,000,000 217,100
10.50% due 04/01/05 (ITL)......... 140,000,000 102,760
Mexico - 3.00%
Bonos de la Tesoreia de la
Federacion, Zero Coupon, 23.10%
T-Bills due 02/04/98 (f) (MXP).... 3,333,780 405,195
United Mexican States Bonds,
10.375% due 01/29/03 (DEM)........ 25,000 15,232
11.375% Global Bonds due
09/15/16.......................... 200,000 226,500
Series B, 6.25% Sec. Debentures
due 12/31/19...................... 250,000 207,825
Series W-A, 6.25% due 12/31/19.... 375,000 312,188
Series W-B, 6.25% due 12/31/19.... 250,000 208,125
New Zealand - .64%
New Zealand (Government of),
Bonds, 7% due 07/15/09 (NZD)...... 510,000 295,886
Norway - .40%
Norwegian Government, Gtd. Bonds,
9.50% due 10/31/02 (NOK).......... 1,140,000 184,099
Panama - .18%
Panama (Republic of),
Past Due Interest, 20 years, 4%
Debentures due 07/17/16 (c)....... 51,356 41,727
Pycsa Panama SA., 10.28% Sr. Sec.
Bonds due 12/15/12 (a)(g)......... 45,000 42,750
Peru - .13%
Peru, Front-Loaded Interest
Reduction Bearer Bonds, 3.25% due
03/07/17 (e)...................... 100,000 58,800
Poland - .51%
Poland (Republic of),
16% Bonds due 06/12/98 (PLZ)...... 150,000 41,330
16% Bonds due 02/12/99 (PLZ)...... 400,000 105,282
Unsec. Non-U.S. Global Bearer
Bond, Series PDIB, 4% due 10/27/14
(e)............................... 100,000 86,375
Russia - .82%
Russia (Government of) Principal
Loans When-Issued Bonds,
24 years, 6.719% Sinking Fund
Debentures due 12/15/20
(c)(g)(j)......................... 345,000 213,038
City of St. Petersburg, 9.50%
Sr. Unsec. Unsub. Notes
due 06/18/02 (a).................. 50,000 45,000
CSFB Russian Swap, 22% One Year
Fixed Floating Rate Bond due
04/28/99 (RUR).................... 295,000,000 43,641
Ministry Finance Russia, 10%
Unsec. Unsub. Notes due 06/26/07
(a)............................... 80,000 74,120
</TABLE>
The accompanying notes are an integral part of these financial statements.
24
<PAGE> 26
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- --------------------------------------------------------------
face amount,
shares or value
units(m) (note 1)
---------- ----------
<S> <C> <C>
South Africa - 1.11%
South Africa (Republic of) Bonds,
Series 150, 12% Consolidation
Bonds due 02/28/05 (ZAR).......... $ 1,447,950 $ 274,754
Series 162, 12.50% Bonds due
01/15/02 (ZAR).................... 580,130 114,663
Series 175, 9% Bonds due 10/15/02
(ZAR)............................. 689,860 118,087
Spain - .94% Spain (Kingdom of),
Debentures, Bonos y Obligacion del
Estado, 10.50% due 10/30/03
(ESP)............................. 5,530,000 45,645
Gtd. Bonds, Bonos y Obligacion del
Estado, 12.25% due 03/25/00
(ESP)............................. 20,500,000 155,595
Gtd. Bonds, Bonos y Obligacion del
Estado, 10.30% due 06/15/02
(ESP)............................. 28,970,000 229,095
Sweden - .47%
Sweden (Kingdom of) Bonds, Series
1037, 8% due 08/15/07 (SEK)....... 1,500,000 216,251
Venezuela - 1.85%
Venezuela (Republic of), 9.25%
Unsec. Bonds due 09/15/27......... 225,000 201,600
Discount Bonds, Series DL, 6.8125%
Debentures due 12/18/07 (c)....... 238,095 213,405
Par Bonds, Series W-A,
6.75% due 03/31/20................ 500,000 433,125
----------
Total Foreign Government Obligations (cost:
$10,579,973) 10,360,923
----------
LOAN PARTICIPATIONS - .11%
Moskovskaya Oblast Loan
Participation, 19% due 06/12/98... 50,000 48,847
----------
Total Loan Participations (cost:
$48,936).......................... 48,847
----------
CORPORATE BONDS AND NOTES - 35.23%
Advertisement - .23% Outdoor
Systems, Inc., 8.875% Sr. Sub.
Notes due 06/15/07 (a)............ 100,000 104,000
Aerospace - .06% Kitty Hawk, Inc.,
9.95% Sr. Sec. Notes due 11/15/04
(a)............................... 25,000 25,125
Air Travel - .29% Atlas Air, Inc.,
12.25% Pass-Through Certificates
due 12/01/02...................... 50,000 55,485
10.75% Sr. Notes due 08/01/05
(a)............................... 50,000 52,750
Trans World Airlines, Inc., 11.50%
Sr. Sec. Notes due 12/15/04 (a)... 25,000 25,125
Apparel & Textiles - .74% CMI
Industries, Inc., 9.50% Sr. Sub.
Notes due 10/01/03 (g)............ 5,000 4,913
Indorayon International Finance
Co. BV, 10% Gtd. Unsec. Unsub.
Notes due 03/29/01 (g)............ 100,000 99,082
Polysindo International Finance
Co. BV, 11.375% Gtd. Sec. Notes
due 06/15/06...................... 10,000 8,225
Synthetic Industries, Inc., 9.25%
Sr. Sub. Notes due 02/15/07 (a)... 20,000 21,100
Atlas Strategic Income Fund (continued)
- --------------------------------------------------------------
face amount,
shares or value
units(m) (note 1)
---------- ----------
Tultex Corp., 9.625% Sr. Notes due
04/15/07 (a)...................... $ 100,000 $ 99,500
Unifrax Investment Corp., 10.50%
Sr. Notes due 11/01/03 (g)........ 50,000 52,000
William Carter Co., 10.375% Sr.
Sub. Notes due 12/01/06 (a)....... 50,000 52,500
Automotive - 1.18% Cambridge
Industries, Inc., 10.25% Sr. Sub.
Notes due 07/15/07 (a)............ 50,000 52,250
Collins & Aikman Products Co.,
11.50% Gtd. Sr. Sub. Notes
due 04/15/06...................... 150,000 169,500
Hayes Wheels International, Inc.,
11% Unsec. Sr. Sub. Notes
due 07/15/06...................... 100,000 111,500
9.125% Sr. Sub. Notes due 07/15/07
(a)............................... 50,000 51,688
Oxford Automotive, Inc., 10.125%
Sr. Sub. Notes due 06/15/07 (a)... 50,000 52,563
Titan Wheel International, Inc.,
8.75% Sr. Sub. Notes due
04/01/07.......................... 100,000 104,750
Banks - 1.60% BanAmex, 11% Cv. Jr.
Sub. Notes
due 07/15/03...................... 20,000 21,100
Central Bank of the Philippines,
Series B, 4.25%/6.50% Sec. Bonds
due 12/01/17 (g).................. 25,000 20,051
Export Credit Bank of Turkey,
8.352% Bonds due 08/18/00......... 250,000 248,750
Korea Development Bank, 7.125%
Bonds due 09/17/01................ 30,000 25,536
7.90% Notes due 02/01/02.......... 50,000 43,527
6.50% Global Bond due 11/15/02.... 25,000 19,697
6.625% due 11/21/03............... 50,000 40,205
7.375% due 09/17/04............... 25,000 20,109
Ongko International Finance Co.
BV, 10.50% Gtd. Notes due 03/29/04
(a)............................... 40,000 32,800
Shoshone Partners Trust, 8% Sr.
Notes due 04/23/02 (a)(g)......... 249,000 263,954
Broadcast, Radio & TV - 3.49%
Adelphia Communications Corp.,
10.50% Sr. Notes due 07/15/04
(a)............................... 50,000 54,125
9.25% Sr. Notes due 10/01/02
(a)............................... 50,000 51,000
Azteca Holdings SA, 11% Sr. Sec.
Notes due 06/15/02 (a)............ 35,000 36,050
Cablevision Systems Corp.,
10.50% Sr. Sub. Debentures
due 05/15/16...................... 50,000 58,375
9.875% Sr. Sub. Debentures
due 04/01/23...................... 50,000 55,000
Capstar Broadcasting Partners,
Inc., 9.25% Sr. Sub. Notes due
07/01/07 (a)...................... 200,000 204,500
Chancellor Media Corp., 8.125% Sr.
Sub. Notes due 12/15/07 (a)....... 50,000 48,701
Chancellor Radio Broadcasting
Co.,8.75% Sr. Sub. Notes due
06/15/07 (a) ..................... 50,000 50,875
EchoStar Communications Corp.,
0%/12.875% Sr. Discount Notes due
06/01/04 (d)...................... 100,000 91,500
</TABLE>
25
<PAGE> 27
Statements of Investments in Securities and Net Assets December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- --------------------------------------------------------------
face amount,
shares or value
units(m) (note 1)
---------- ----------
<S> <C> <C>
EchoStar DBS Corp., 12.50% Sr.
Sec. Notes due 07/01/02 (a)....... $ 100,000 $ 108,000
EchoStar Satellite Broadcasting
Corp., 0%/13.125% Sr. Sec.
Discount Notes due 03/15/04 (d)... 100,000 85,000
Helicon Group LP/Helicon Capital
Corp., Series B, 11% Sr. Sec.
Notes due 11/01/03................ 100,000 107,500
Knology Holdings, Inc., Units
(each unit consists of $1,000
principal amount of 0%/11.875% Sr.
Discount Notes due 10/15/07 and
one warrant to purchase .003734
preferred stock shares)
(a)(d)(g)(k)...................... 50,000 27,250
Optel, Inc., 13% Sr. Notes
due 02/15/05...................... 85,000 90,100
Paxson Communications Corp.,
11.625% Sr. Sub. Notes due
10/01/02.......................... 100,000 107,000
Rogers Communication, Inc., 8.75%
Sr. Notes due 07/15/07 (CAD)...... 100,000 72,108
Sinclair Broadcast Group, 8.75%
Sr. Sub. Notes due 12/15/07....... 50,000 50,000
TeleWest Communications PLC,
0%/11% Sr. Discount Debentures due
10/01/07 (d)...................... 65,000 50,456
TV Azteca SA de CV, Series A,
10.125% Sr. Notes due 02/15/04
(a)............................... 100,000 102,500
Young Broadcasting, Inc., 8.75%
Sr. Sub. Debentures due 06/15/07
(a)............................... 100,000 99,000
Series B, 9% Sr. Sub. Notes due
01/15/06.......................... 50,000 50,000
Building & Construction - .56%
Kaufman & Broad Home Corp., 7.75%
Sr. Notes due 10/15/04............ 100,000 99,000
Nortek, Inc., 9.125% Sr. Notes due
09/01/07 (a)...................... 50,000 50,750
J. Ray McDermott SA, 9.375% Sr.
Sub. Notes due 07/15/06........... 100,000 107,125
Building Materials - .23%
Falcon Building Products, Inc.,
9.50% Sr. Sub. Notes due 06/15/07
(a)............................... 50,000 51,875
Triangle Pacific Corp., 10.50% Sr.
Notes due 08/01/03................ 50,000 52,750
Chemicals & Allied Products - 1.38%
Climachem, Inc., 10.75% Gtd. Sr.
Sub. Unsec. Bonds due 12/01/07
(a)............................... 50,000 51,500
Hydrochem Industrial Services,
Inc., 10.375% Sr. Sub. Notes
due 08/01/07 (a).................. 50,000 51,625
Laroche Industries, Inc., 9.50%
Sr. Sub. Notes due 09/15/07 (a)... 100,000 98,500
NL Industries, Inc., 11.75% Sr.
Sec. Notes due 10/15/03........... 40,000 44,300
PCI Chemicals Canada, Inc., 9.25%
Sr. Sec. Notes due 10/15/07 (a)... 50,000 49,250
Pioneer Americas Acquisition
Corp.,9.25% Sr. Sec. Notes due
06/15/07 (a)...................... 75,000 75,563
Polymer Group, Inc., 9% Sr. Sub.
Notes due 07/01/07 (a)............ 50,000 49,875
Atlas Strategic Income Fund (continued)
- --------------------------------------------------------------
face amount,
shares or value
units(m) (note 1)
---------- ----------
Sovereign Specialty Chemicals,
Inc., 9.50% Sr. Sub. Notes due
08/01/07 (a)...................... $ 75,000 $ 76,875
Sterling Chemicals, Inc., 11.75%
Sr. Unsec. Sub. Notes due
08/15/06.......................... 135,000 137,700
Commercial Services - .11%
Kindercare Learning Centers, Inc.,
9.50% Sr. Sub. Notes due 02/15/09
(a)............................... 50,000 49,750
Computers - .25%
Unisys Corp., 11.75% Sr. Notes due
10/15/04.......................... 100,000 114,250
Conglomerates - .01%
Mechala Group Jamaica, Ltd.,
12.75% Bonds due 12/30/99 (a)..... 7,000 6,580
Consumer Products - 1.91%
Coleman Escrow Corp., Zero Coupon
Sr. Discount Notes, 11.125% due
05/15/01 (a)(f)................... 50,000 33,125
Fletcher Challenge, Ltd., 8.05%
Bonds due 06/15/03 (NZD).......... 130,000 73,028
14.50% Cv. Sub. Notes due 09/30/00
(NZD)............................. 185,000 120,921
10% Cv. Unsec. Sub. Notes due
04/30/05 (NZD).................... 5,000 3,102
Holmes Products Corp., 9.875% Gtd.
Sr. Sub. Unsec. Bonds
due 11/15/07 (a).................. 25,000 25,438
Icon Fitness Corp., Series B, 13%
Sr. Sub. Notes due 07/15/02....... 100,000 111,750
0%/14% Sr. Sec. Discount Notes due
11/15/06 (d)(g)................... 250,000 141,250
IHF Holdings, Inc., Series B,
0%/15% Sr. Sec. Discount Notes due
11/15/04 (d)...................... 50,000 43,500
Iron Mountain, Inc., 8.75% Sr.
Sub. Notes due 09/30/09 (a)....... 50,000 51,250
10.125% Sr. Sub. Notes due
10/01/06.......................... 50,000 55,000
Revlon Worldwide Corp., Zero
Coupon Sr. Sec. Discount
Notes, 11.16% due 03/15/01
(a)(f)............................ 150,000 103,500
Samsonite Corp., 11.125% Sr. Sub.
Notes due 07/15/05................ 67,000 75,040
TAG Heuer International SA, 12%
Sr. Sub. Notes due 12/15/05 (g)... 33,000 39,765
Diversified Media - .82%
Ascent Entertainment Group,
0%/11.875% Sr. Sec. Discount Notes
due 12/15/04 (a)(d)............... 25,000 14,313
Hollywood Theaters, Inc., 10.625%
Sr. Sub. Notes due 08/01/07 (a)... 25,000 26,563
ITT Promedia, 9.125% Sr. Sub.
Notes due 09/15/07 (a)............ 125,000 73,232
Katz Media Corp., 10.50% Sr. Sub.
Notes due 01/15/07 (a)............ 90,000 99,616
Lamar Advertising Co., 9.625%
Unsec. Sr. Sub. Notes due
12/01/06.......................... 100,000 107,625
TCI Satellite Entertainment, Inc.,
10.875% Sr. Sub. Notes
due 02/15/07 (a).................. 25,000 26,188
</TABLE>
The accompanying notes are an integral part of these financial statements.
26
<PAGE> 28
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- --------------------------------------------------------------
face amount,
shares or value
units(m) (note 1)
---------- ----------
<S> <C> <C>
Universal Outdoor, Inc., 9.75% Sr.
Sub. Notes due 10/15/06........... $ 25,000 $ 28,000
Electrical Utilities - .48%
Calpine Corp.,
10.50% Sr. Notes due 05/15/06 (g).. 50,000 54,500
8.75% Sr. Notes due 07/15/07 (a)... 115,000 117,300
Central Termica Guemes SA, 12%
Unsec. Bonds due 11/26/01
(a)(g)............................ 50,000 50,000
Electronics - .45%
Tracor, Inc., 8.50% Sr. Sub. Notes
due 03/01/07 (a).................. 100,000 102,500
Wavetek Corp., 10.125% Sr. Sub.
Notes due 06/15/07 (a)............ 100,000 102,000
Energy Services & Producers - .45%
Energy Corp. of America, 9.50% Sr.
Sub. Notes due 05/15/07........... 100,000 99,750
Gothic Energy Corp., 12.25% Sr.
Notes due 09/01/04 (a)(g)......... 100,000 107,000
Environmental - .39%
Allied Waste Industries, Inc.,
0%/11.30% Sr. Discount Notes
due 06/01/07 (a).................. 100,000 70,000
10.25% Sr. Sub. Notes
due 12/01/06 (a).................. 100,000 109,750
Financial - 1.53%
AMRESCO, Inc., Series 97-A, 10%
Sr. Sub. Notes due 03/15/04....... 75,000 77,813
Bancomext Trust Division, Series
REGS, 11.25% due 05/30/06......... 50,000 55,500
BankUnited Financial Corp., 10.25%
due 12/31/26 (a).................. 100,000 103,000
Crown Castle International Corp.,
0%/10.625% Sr. Discount Notes due
11/15/07 (a)(d)................... 75,000 46,688
Local Financial Corp., 11% Sr.
Notes due 09/08/04 (a)(g)......... 50,000 52,750
Netia Holdings BV,
10.25% Sr. Gtd. Notes,
due 11/01/07 (a)(g)............... 25,000 23,875
0%/11% Sr. Gtd. Discount Notes due
11/01/07 (a)(d)(g)................ 100,000 31,968
Pindo Deli Financial Mauritius,
Ltd., 10.75% Gtd. Notes due
10/01/07 (a)(g)................... 30,000 25,800
Polytama International Finance BV,
11.25% Sec. Notes due 06/15/07.... 55,000 40,700
SBS Agro Finance BV, 10.25% Bonds
due 07/21/00...................... 75,000 66,375
Southern Pacific Funding Corp.,
11.50% Sr. Notes due 11/01/04..... 75,000 75,000
Financiera Energy Nacional, 9.375%
Unsub. Unsec. Bonds due
06/15/06.......................... 100,000 100,563
Food & Beverage - .52%
Del Monte Foods Co., 0%/12.50% Sr.
Discount Notes
due 12/15/07 (a)(d)............... 50,000 28,625
Doane Products Co., 10.625% Sr.
Notes due 03/01/06 (g)............ 100,000 106,000
Shoppers Food Warehouse Corp.,
9.75% Sr. Sec. Notes due 06/15/04
(a)............................... 50,000 51,000
Sparkling Spring Water Corp.,
11.50% Sr. Sub. Notes due 11/15/07
(a)............................... 50,000 51,500
Atlas Strategic Income Fund (continued)
- --------------------------------------------------------------
face amount,
shares or value
units(m) (note 1)
---------- ----------
Gas Utilities - .12%
AmeriGas Partners, LP, 10.125% Sr.
Notes due 04/15/07 (a)............ $ 50,000 $ 54,125
Health Care/Supplies &
Services - 1.08%
Fresenius Medical Care AG, 9%
Unsec. Trust Preferred due
12/01/06.......................... 120,000 125,700
Genesis Health Ventures, Inc.,
9.25% Sr. Sub. Notes due
10/01/06.......................... 20,000 20,375
Integrated Health Services, Inc.,
9.50% Sr. Sub. Notes due 09/15/07
(a)............................... 125,000 128,125
Kinetic Concepts, Inc., 9.625% Sr.
Sub. Notes due 11/01/07 (a)....... 25,000 25,406
Magellan Health Services, Inc.,
Series A, 11.25% Sr. Sub. Notes
due 04/15/04...................... 100,000 110,875
Sun Healthcare Group, Inc., 9.50%
Sr. Sub. Notes due 07/01/07 (a)... 85,000 87,125
Homebuilders/Real Estate - .23%
Saul (B.F.) Real Estate Investment
Trust, Series B, 11.625% Sr. Sec.
Notes due 04/01/02................ 100,000 107,000
Hotel/Gaming - 1.81%
Boyd Gaming Corp., 9.25% Sr. Notes
due 10/01/03...................... 100,000 104,750
Grand Casinos, Inc., 10.125% Gtd.
First Mtg. Notes due 12/01/03..... 100,000 107,500
HMH Properties, Inc., 8.875% Sr.
Notes due 07/15/07 (a)............ 100,000 105,250
Horseshoe Gaming LLC, 9.375% Sr.
Sub. Notes due 06/15/07 (a)....... 75,000 78,563
Rio Hotel and Casino, Inc., 9.50%
Gtd. Sr. Sub. Notes due 04/15/07
(a)............................... 100,000 105,750
Showboat Marina Casino
Partnership/Showboat Marina
Finance Corp., Series B, 13.50%
First Mtg. Notes due 03/15/03..... 150,000 180,750
Signature Resorts, Inc., 9.75% Sr.
Sub. Notes due 10/01/07 (a)....... 50,000 50,000
Venetian Casino/LV Sands, 12.25%
First Mtg. Notes due 11/15/04
(a)............................... 50,000 50,063
10% Sr. Sub. Notes due 11/15/05
(a)(e)............................ 50,000 45,625
Industrial - 1.80%
Algoma Steel, Inc., 12.375% Sec.
First Mortgage due 07/15/05....... 25,000 28,875
Capstar Hotel Co., 8.75% Sr. Sub.
Notes due 08/15/07 (a)............ 25,000 25,750
Casino Magic-Louisiana, Series B,
13% due 08/15/03.................. 50,000 48,000
Consorcio Ecuatoriano, 14% Notes
due 05/01/02 (a)(g)............... 15,000 14,850
Dan River, Inc., 10.125% Sr. Sub.
Notes due 12/15/03................ 25,000 26,719
DI Industries, Inc., 8.875% Sr.
Notes due 07/01/07................ 20,000 20,800
Dyersburg Corp., 9.75% Sr. Sub.
Notes due 09/01/07 (a)............ 50,000 52,250
Fleming Companies, Inc.,
10.50% Sr. Sub. Notes due 12/01/04
(a)............................... 75,000 78,563
10.625% Sr. Sub. Notes due
07/31/07 (a)...................... 50,000 52,750
</TABLE>
27
<PAGE> 29
Statements of Investments in Securities and Net Assets December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- --------------------------------------------------------------
face amount,
shares or value
units(m) (note 1)
---------- ----------
<S> <C> <C>
Four M Corp., 12% Sr. Sec. Notes
due 06/01/06 (a)(g)............... $ 25,000 $ 26,500
Insilco Corp., 10.25% Sr. Sub.
Notes due 08/15/07 (a)............ 25,000 26,188
International de Ceramica SA,
9.75% Unsec. Unsub. Notes
due 08/01/02 (a)(g)............... 20,000 18,700
International Wire Group, Inc.,
Series B, 11.75% Sr. Sub. Notes
due 06/01/05 (a).................. 65,000 71,175
Iridium LLC/Capital Corp., 11.25%
Sr. Notes due 07/15/05 (a)........ 25,000 24,813
Key Plastics, Inc., 10.25% Sr.
Sub. Notes due 03/15/07 (a)....... 50,000 53,125
Mohegan Tribal Gaming, Series B,
13.50% Sr. Tax Free Notes due
11/15/02.......................... 50,000 64,000
Pantry, Inc., 10.25% Sr. Sub.
Notes due 10/15/07 (a)(g)......... 50,000 51,000
Roller Bearing Co. America, 9.625%
Sr. Sub. Notes due 06/15/07
(a)(g)............................ 25,000 25,188
Shaw Communications, Inc., 8.54%
Debentures due 09/30/27 (CAD)..... 80,000 51,889
Sterling Chemical Holdings,
0%/13.50% Sr. Sec. Discount Notes
due 08/15/08 (d).................. 25,000 15,250
Trico Marine Services, Inc., 8.50%
Gtd. Sr. Sub. Unsec. Bonds due
08/01/05 (a)...................... 25,000 25,344
Vitro SA., Series P96U, 13% Notes
due 12/07/99 (MXP)................ 88,000 23,993
Information Technology - .75%
Details, Inc., 10% Sr. Sub. Notes
due 11/15/05 (a).................. 25,000 25,563
Dial Call Communications,
0%/12.25% Sr. Discount Notes due
04/15/04 (d)...................... 50,000 47,625
Nextel Communications,
Sr. Discount Notes,
0%/10.65% due 09/15/07 (a)(d)..... 100,000 63,000
0%/9.75% due 10/31/07 (a)(d)...... 125,000 76,250
Nextlink Communications, Inc.,
9.625% Sr. Notes due 10/01/07..... 125,000 129,375
Insurance - .34%
Veritas Capital Trust, 10% Gtd.
Bonds due 01/01/28(a)............. 50,000 51,000
Veritas Holding GMBH, 9.625% Sr.
Notes due 12/15/03(a)............. 100,000 107,000
Manufacturing - .44%
Keystone Consolidated Industries,
9.625% Sr. Sec. Notes due
08/01/07(a)....................... 100,000 100,375
SC International Services, Inc.,
9.25% Sr. Sub. Notes due
09/01/07(a)....................... 100,000 103,500
Metals/Mining - .28%
Centaur Mining & Exploration,
Ltd., 11% Gtd. Sr. Notes
due 12/01/07(a)(g)................ 25,000 25,063
Kaiser Aluminum & Chemical Corp.,
12.75% Sr. Sub. Notes due
02/01/03.......................... 50,000 53,625
Metallurg, Inc., 11% Sr. Notes due
12/01/07(a)....................... 50,000 51,250
Oil & Gas - 1.40%
Belden & Blake Energy Co. LP,
9.875% Sr. Sub. Notes due
06/15/07(a)....................... 100,000 101,000
Atlas Strategic Income Fund (continued)
- --------------------------------------------------------------
face amount,
shares or value
units(m) (note 1)
---------- ----------
Chesapeake Energy Corp.,
12% Sr. Notes due 03/01/01........ $ 125,000 $ 131,563
Forcenergy, Inc.,
8.50% Sr. Sub. Notes due
02/15/07(a)....................... 50,000 50,625
9.50% Unsec. Sr. Sub. Notes due
11/01/06.......................... 100,000 106,000
Parker Drilling Co., Series B,
9.75% Sr. Notes due 11/15/06...... 100,000 107,750
Stone Energy Corp., 8.75% Sr. Sub.
Notes due 09/15/07(a)............. 110,000 111,925
Wiser Oil Co., 9.50% Sr. Sub.
Notes due 05/15/07(a)............. 35,000 34,300
Paper & Forest Products - 1.11%
Florida Coast Paper Co. LLC,
Series B, 12.75% First Mtg. Notes
due 06/01/03...................... 60,000 63,600
Pacific Lumber Co., 10.50% Sr.
Unsec. Notes due 03/01/03......... 50,000 51,500
Riverwood International Corp.,
10.625% Sr. Notes due
08/01/07(a)....................... 100,000 101,500
Repap New Brunswick, Inc., 9.50%
First Priority Sr. Sec. Notes due
07/15/00 (c)...................... 100,000 98,500
SD Warren Co., Series B, 12% Sr.
Sub. Notes due 12/15/04........... 150,000 166,500
U.S. Timberland Co., 9.625% Sr.
Notes due 11/15/07................ 25,000 25,875
Printing, Publishing & Allied
Products - .28%
American Lawyer Media, Inc., 9.75%
Sr. Notes due 12/15/07(a)......... 25,000 25,375
Hollinger International
Publishing, Inc., 9.25% Gtd. Sr.
Sub. Notes due 03/15/07........... 100,000 105,000
Restaurants - .65%
Ameriking, Inc., 10.75% Sr. Unsec.
Notes due 12/01/06................ 150,000 157,500
Apple South, Inc., 9.75% Sr. Notes
due 06/01/06...................... 50,000 52,250
Carrols Corp., 11.50% Sr. Notes
due 08/15/03...................... 85,000 90,525
Security Services - .37%
Borg-Warner Security Corp., 9.625%
Sr. Sub. Notes due 03/15/07(a).... 50,000 52,000
Protection One Alarm Monitoring,
Inc., 6.75% Cv. Gtd. Sr. Sub.
Notes due 09/15/03................ 100,000 118,125
Specialty Retailing - .03%
Speciality Retailers, Inc., 8.50%
Co. Gtd. Notes due 07/15/05(a).... 15,000 15,300
Steel - .34%
AK Steel Corp., 9.125% Sr. Notes
due 12/15/06...................... 100,000 102,500
Bar Technologies, Inc., 13.50% Sr.
Sec. Notes due 04/01/01........... 50,000 54,375
Supermarkets - .60%
Ralphs Grocery Co.,
10.45% Sr. Notes due 06/15/04..... 50,000 56,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
28
<PAGE> 30
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- --------------------------------------------------------------
face amount,
shares or value
units(m) (note 1)
---------- -----------
<S> <C> <C>
11% Sr. Sub. Notes due 06/15/05... $ 25,000 $ 28,438
Series A, 11% Sr. Sub. Notes due
06/15/05(a)....................... 75,000 85,313
Randall's Food Markets, 9.375%
Sr. Sub. Notes due 07/01/07(a).... 100,000 103,500
Telecommunications - 5.85%
Allbritton Communications Co.,
11.50% Sr. Sub. Debentures due
08/15/04.......................... 75,000 78,938
American Communication Services,
Inc., 13.75% Sr. Notes due
07/15/07(a)....................... 25,000 29,625
Brooks Fiber Properties, Inc.,
0%/10.875% Sr. Discount Notes due
03/01/06 (d)...................... 50,000 41,500
0%/11.875% Sr. Discount Notes due
11/01/06 (d)...................... 55,000 44,000
BTI Telecom Corp., 10.50% Sr.
Notes due 09/15/07 (a)............ 50,000 51,250
Call-Net Enterprises, Inc., 8.375%
Sr. Discount Notes due 08/15/07... 50,000 36,604
0%/9.27% Sr. Notes due 08/15/07
(CAD)............................. 50,000 33,875
Clearnet Communications, Inc.,
Units (each unit consists of
$1,000 principal amount of
0%/14.75% Sr. Unsec. Discount
Notes due 12/15/05) (d)(k)........ 75,000 59,063
Colt Telecom Group PLC,
10.125% Sr. Notes due 11/30/07
(GBP)............................. 35,000 56,985
8.875% Sr. Notes due 11/30/07
(GBP)............................. 25,000 13,773
Units (each unit consists of
$1,000 principal amount of 0%/12%
Unsec. Sr. Discount Notes due
12/15/06 and one warrant to
purchase 7.80 ordinary shares of
common stock of Colt Telecom)
(d)(k)............................ 100,000 77,500
Comunicacion Celular SA,
0%/13.125% Sr. Deferred Coupon
Bonds due 11/15/03 (d)............ 100,000 75,750
Diamond Cable Communications PLC,
0%/11.75% Sr. Discount Notes due
12/15/05 (d)...................... 75,000 57,938
GST USA, Inc., 0%/13.875% Gtd. Sr.
Sec. Discount Notes due 12/15/05
(d)............................... 75,000 57,375
Intermedia Communications, Inc.,
8.875% Sr. Notes due 11/01/07
(a)............................... 75,000 77,250
8.50% Sr. Notes due 01/15/08
(a)............................... 50,000 50,000
McLeodUSA, Inc., 0%/10.50% Sr.
Discount Notes due 03/01/07
(a)(d)............................ 50,000 36,250
9.25% Sr. Notes due 07/15/07
(a)............................... 40,000 41,900
Metrocall, Inc., Sr. Sub. Notes,
10.375% due 10/01/07.............. 50,000 50,750
9.75% due 11/01/07 (a)............ 15,000 14,813
Metronet Communications, 0%/10.75%
Sr. Discount Notes due 11/01/07
(a)(d)............................ 75,000 46,313
Microcell Telecommunications,
Inc., 0%/10.125% Sr. Discount
Notes due 10/15/07 (a)(d) (CAD)... 100,000 39,157
Millicom International Cellular
SA, 0%/13.50% Sr. Discount Notes
due 06/01/06 (d).................. 60,000 43,950
Atlas Strategic Income Fund (continued)
- --------------------------------------------------------------
face amount,
shares or value
units(m) (note 1)
---------- ----------
NTL, Inc., 10% Sr. Notes due
02/15/07 (a)...................... $ 100,000 $ 105,750
Occidente Y Caribe Celular SA,
Series B, 0%/14% Sr. Discount
Notes due 03/15/04 (d)............ 100,000 75,000
Omnipoint Corp., Series A, 11.625%
Sr. Notes due 08/15/06............ 150,000 158,250
ORBCOMM Global LP/ORBCOMM Capital
Corp., Series B, 14% Sr. Notes due
08/15/04.......................... 150,000 162,750
Orion Networks Systems, 0%/12.50%
Sr. Discount Notes due 01/15/07
(d)............................... 100,000 74,750
Petersburg Long Distance, Inc.,
Units (each unit consists of
$1,000 principal amount of 0%/14%
Sr. Discount Notes due 06/01/04
and one warrant to purchase 34
ordinary shares) (a)(d)(k)........ 50,000 47,750
Price Communication Cellular
Holdings, Inc., 0%/13.50% Sr.
Discount Notes due 08/01/07
(a)(d)(g)......................... 50,000 32,000
Price Communication Wireless,
Inc., 11.75% Sr. Sub. Notes due
07/15/07 (a)...................... 25,000 27,125
PriCellular Wireless Corp.,
Series B, 0%/14% Sr. Sub. Discount
Notes due 11/15/01 (d)............ 150,000 167,250
10.75% Sr. Notes due 11/01/04..... 75,000 81,188
PTC International Finance BV,
0%/10.75% Unsec. Sub. Notes due
07/01/07 (a)...................... 34,000 22,100
Qwest Communications
International, Inc., 0%/9.47% Sr.
Sub. Notes due 10/15/07 (a)(d).... 150,000 102,000
Star Choice Communications, Inc.,
Units (each unit consist of $1000
principal amount of 13% Sr. Sec.
Notes due 12/15/05 and 23.16
warrants to purchase 1 ordinary
share) (k)........................ 50,000 51,500
Teleport Communications Group,
Inc., 0%/11.125% Sr. Discount
Notes due 07/01/07 (d)............ 200,000 163,500
Teletrac, Inc., Units (each unit
consists of $1,000 principal
amount of 14% Sr. Notes due
08/01/07 and one warrant to
purchase 0.537495 ordinary share
of common stock) (k).............. 40,000 40,400
USA Mobile Communications, Inc.
II, 9.50% Sr. Notes due 02/01/04.. 100,000 97,500
14% Sr. Notes due 11/01/04........ 65,000 71,825
Videotron Holdings PLC, 0%/11% Sr.
Discount Notes due 08/15/05 (d)... 100,000 88,000
Telephone Utilities - .06%
Telecomunicacoes Brasileiras SA,
11.301% due 12/09/99 (a)(c)(g).... 30,000 29,700
Transportation - 1.01%
Coach USA, Inc., 9.375% Gtd. Sr.
Sub. Notes due 07/01/07 (a)....... 75,000 77,250
</TABLE>
29
<PAGE> 31
Statements of Investments in Securities and Net Assets December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- --------------------------------------------------------------
face amount,
shares or value
units(m) (note 1)
---------- ----------
<S> <C> <C>
Navigator Gas Transportation PLC,
10.50% First Priority Ship
Mortgage Notes due 06/30/07 (a)... $ 75,000 $ 79,500
Units (each unit consists of
$1,000 principal amount of 12%
Second Priority Ship Mortgage
Notes due 06/30/07 and 7.66
warrants) (k)..................... 50,000 56,250
TFM SA de CV, 10.25 Sr. Gtd. Bonds
due 06/15/07 (a).................. 75,000 77,063
Transtar Holdings LP/Transtar
Capital Corp., Series B,
0%/13.375% Sr. Discount Notes due
12/15/03 (d)...................... 200,000 175,000
----------
Total Corporate Bonds and Notes (cost:
$15,702,771) 16,167,385
----------
</TABLE>
<TABLE>
<CAPTION>
shares
<S> <C> <C>
----------
COMMON STOCKS - .00%
Optel, Inc. (b)(g)................. 85 0
----------
Total Common Stocks (cost: $0) 0
----------
PREFERRED STOCKS - 1.56%
American Radio Systems Corp.,
11.375% Cum. Exchangeable.......... 752 89,394
Echostar Communications Corp.,
12.125% Sr. Redeemable
Exchangeable, Series B (a)(i)...... 50 52,250
El Paso Electric Co., Series A,
11.40% (i)......................... 761 84,091
ICG Holdings, Inc., 14.25% (i)..... 25 29,188
NEXTLINK Communications, Inc., 14%
Sr. Exchangeable (i)............... 1,368 84,815
Primedia Inc., Series E, 9.20%
(a)(g)............................. 100 10,000
Prime Retail, Inc., Series B, 8.50%
Cv................................. 500 11,906
S.D. Warren Co., Series B, 14% Cum.
Exchangeable (b)................... 5,500 269,500
SFX Broadcasting, Inc., Series E,
12.625% Cum. Exchangeable (i)...... 500 57,000
Spanish Broadcasting Systems, Inc.,
14.25% Cum. Sr. Exchangeable
(a)(i)............................. 26 27,560
----------
Total Preferred Stocks (cost: $642,993) 715,704
----------
<CAPTION>
units
----------
<S> <C> <C>
RIGHTS, WARRANTS AND CERTIFICATES - .02% (B)
Comunicacion Celular SA Wts.,
Exp. 11/03 (g)..................... 100 6,500
Gothic Energy Corp. Wts., Exp.
09/04............................ 1,400 0
NEXTLINK Communications, Inc. Wts.,
Exp. 2/09 (g)...................... 1,235 0
Occidente Y Caribe Celular SA Wts.,
Exp. 03/04 (g)..................... 400 0
Orion Network Systems, Inc. Wts.,
Exp. 01/07 (g)..................... 100 1,700
Price Communication Corp. Wt.,
Exp. 08/07 (g)..................... 172 2
<CAPTION>
Atlas Strategic Income Fund (continued)
- --------------------------------------------------------------
value
units (note 1)
---------- ----------
<S> <C> <C>
Republic of Venezuela Wts, Exp
04/20............................ 1,250 $ 0
United Mexican States Bonds Wts.,
Exp. 6/03.......................... 250,000 0
----------
Total Rights, Warrants and Certificates (cost:
$9,251) 8,202
----------
<CAPTION>
face amount
or units(m)
----------
<S> <C> <C>
STRUCTURED INSTRUMENTS - 3.42%
CS First Boston Corp., Zero Coupon
Russian Linked Notes, 14%
due 01/20/98 (f)................... 100,000 98,500
Goldman, Sachs & Co., Korean Linked
Notes 5.60% due 01/20/98........... 45,000 45,000
Goldman, Sachs & Co., Taiwan Linked
Notes 5.75% due 06/12/98........... 200,000 200,000
ING Barings Securities, Inc., Zero
Coupon Czech Koruna/ U.S. Dollar
Linked Notes,
11.4063% due 03/04/98 (f)......... 100,000 80,280
Salomon Brothers, Inc., Zero Coupon
Russian Linked Notes,
14% due 04/03/98 (f).............. 100,000 95,950
14.50% due 05/07/98 (f)........... 150,000 141,270
14.625% due 05/22/98 (f).......... 55,000 51,431
10% due 07/31/98 (f).............. 100,000 89,130
10% due 08/07/98 (f).............. 400,000 354,320
Salomon Brothers, Inc., Zero Coupon
Chilean Peso Linked Notes,
9.25% due 06/18/98 (f)............ 50,000 45,205
9.35% due 06/24/98 (f)............ 25,000 22,423
9.40% due 07/22/98 (f)............ 250,000 223,350
9.25% due 09/09/98 (f)............ 25,000 21,863
Standard Chartered Bank, Chinese
Yuan Linked Notes,
9.50% due 02/03/98................ 100,000 99,020
----------
Total Structured Instruments (cost: $1,635,142) 1,567,742
----------
</TABLE>
<TABLE>
<CAPTION>
contracts/
face
strike subject
date price to call
---- ------------- --------
<S> <C> <C> <C> <C>
CALL OPTIONS PURCHASED - .43%
German Mark/Japanese
Yen Call Option....... 01/98 67.68 DEM/JPY 26,000,000 94,248
German Mark/Japanese
Yen Call Option....... 03/98 68.59 DEM/JPY 480,000 14,659
US Treasury Bonds,
6.125% due 11/27 Call
Option................ 03/98 $100.265 2,300 83,352
US Treasury Bonds,
6.125% due 11/27 Call
Option................ 01/98 $103.406 500 5,235
-------
Total Call Options Purchased (cost: $74,836) 197,494
-------
</TABLE>
The accompanying notes are an integral part of these financial statements.
30
<PAGE> 32
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- --------------------------------------------------------------
face amount,
shares or value
units(m) (note 1)
---------- ----------
<S> <C> <C>
SHORT-TERM SECURITIES - .65%
Westpac Bank Bill, Zero Coupon
Bills due 03/31/98 (NZD).......... $ 300,000 $ 170,774
Triparty Repurchase Agreement dated
December 31, 1997 with Prudential
Securities, Inc., effective yield
of 6.25%, due January 2, 1998,
collateralized by FNMAs, 6.595%,
November 1, 2025 with a value of
$128,555.......................... 125,177 125,177
----------
Total Short-Term Securities (cost: $304,100) 295,951
----------
TOTAL INVESTMENTS (COST: $49,816,676) - 109.49% 50,233,713
OTHER ASSETS AND LIABILITIES, NET - (9.49)% (4,354,792)
----------
NET ASSETS - 100.00% $ 45,878,921
==========
<CAPTION>
Atlas Balanced Fund
- --------------------------------------------------------------
shares or value
face amount (note 1)
----------- ----------
<S> <C> <C>
COMMON STOCKS - 40.33%
Aerospace/Defense - .02%
Raytheon Co. ..................... 191 $ 9,434
Automotive - .64%
Ford Motor Co. ................... 4,000 194,750
General Motors Corp. ............. 3,000 181,875
Banks - 14.70%
Banc One Corp. ................... 11,000 597,438
Bank of Boston Corp. ............. 6,000 563,625
BankAmerica Corp. ................ 10,000 730,000
Barnett Banks, Inc. .............. 7,000 503,125
Capital One Financial Corp. ...... 6,000 325,125
Chase Manhattan Corp. ............ 7,000 766,500
Citicorp.......................... 5,000 632,188
Crestar Financial Corp. .......... 8,000 456,000
First Chicago NBD Corp. .......... 6,000 501,000
First Union Corp. ................ 19,250 986,563
Fleet Financial Group, Inc. ...... 7,000 524,563
Keycorp........................... 4,000 283,250
Mellon Bank Corp. ................ 10,000 606,250
National City Corp. .............. 4,000 263,000
PNC Bank Corp. ................... 8,000 456,500
Summit Bancorp. .................. 9,000 479,250
Chemicals & Allied Products - 1.06%
Dexter Corp. ..................... 6,000 259,125
Dow Chemical Co. ................. 1,000 101,500
Lyondell Petrochemical Co. ....... 9,904 262,456
Drugs and Health Care - 2.24%
American Home Products Corp. ..... 3,000 229,500
Bristol-Myers Squibb Co. ......... 4,000 378,500
Crescendo Pharmaceuticals
Corp. ............................ 145 1,677
Merck & Co., Inc. ................ 5,000 531,250
Pharmacia & Upjohn, Inc. ......... 5,000 183,125
Electrical Utilities - 1.62%
American Electric Power Co. ...... 1,500 77,438
Central & South West Corp. ....... 6,000 162,375
<CAPTION>
Atlas Balanced Fund (continued)
- --------------------------------------------------------------
shares or value
face amount (note 1)
---------- ----------
<S> <C> <C>
Entergy Corp. .................... 4,000 $ 119,750
Florida Progress Corp. ........... 3,000 117,750
New Century Energies, Inc. ....... 3,000 143,813
Potomac Electric Power Co. ....... 5,000 129,063
Texas Utilities Co. .............. 5,000 207,813
Electronics - .50%
AMP, Inc. ........................ 7,000 294,000
Financial Services - 2.97%
FBR Asset Investment Corp. ....... 50,000 1,000,000
H & R Block, Inc. ................ 7,000 313,688
Imperial Credit Commercial
Mortgage Investment Corp. ........ 30,000 438,750
Food Wholesalers - .71%
SuperValu, Inc. .................. 10,000 418,750
Homebuilders/Real Estate - .48%
Prime Retail, Inc. ............... 20,000 283,750
Industrial Manufacturing - .71%
Sonoco Products Co................ 12,000 416,250
Insurance - 2.30%
Allstate Corp..................... 2,781 252,722
American General Corp............. 9,000 486,563
IPC Holdings, Ltd................. 6,000 193,125
Reliance Group Holdings, Inc...... 30,000 423,750
Machine Tools & Equipment - 1.23%
Cooper Industries, Inc............ 5,000 245,000
Snap-On, Inc...................... 11,000 479,875
Metals Mining - .30%
Reynolds Metals Co................ 3,000 180,000
Oil & Gas - 4.80%
Elf Aquitaine..................... 5,000 293,125
Mobil Corp........................ 4,000 288,750
Occidental Petroleum Corp......... 6,000 175,875
Pacific Enterprises............... 5,000 188,125
Phillips Petroleum Co............. 4,000 194,500
Royal Dutch Petroleum Co. ADR..... 6,800 368,475
Tenneco, Inc...................... 8,000 316,000
Ultramar Diamond Shamrock Corp.... 6,000 191,250
Unocal Corp....................... 8,000 310,500
USX-Marathon Group................ 15,000 506,250
Paper & Forest Products - 1.92%
Fort James Corp................... 11,967 457,738
Union Camp Corp................... 4,500 241,594
Westvaco Corp..................... 6,000 188,625
Weyerhaeuser Co................... 5,000 245,313
Printing, Publishing & Allied
Products - .52%
Dun & Bradstreet Corp............. 10,000 309,375
Retail Trade - 1.54%
Family Dollar Stores, Inc......... 11,000 322,438
J.C. Penney Company, Inc.......... 6,000 361,875
Sears Roebuck & Co................ 5,000 226,250
Telecommunications - 1.67%
BCE, Inc.......................... 6,000 199,875
GTE Corp.......................... 8,000 418,000
SBC Communications, Inc........... 5,000 366,250
Telephone Utilities - .40%
Portugal Telecom SA ADR........... 5,000 235,000
----------
Total Common Stocks (cost: $16,809,310) 23,796,977
----------
</TABLE>
31
<PAGE> 33
Statements of Investments in Securities and Net Assets December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Balanced Fund (continued)
- --------------------------------------------------------------
shares or value
face amount (note 1)
---------- ----------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS - 15.52%
Banks - 2.65%
Bank of Portugal.................. 4,000 $ 293,250
National Australia Bank, Ltd...... 30,000 853,125
Westpac Banking Corp. STRYPES..... 12,400 415,400
Broadcast, Radio & TV - .80%
Merrill Lynch-Cox Communications
STRYPES........................... 14,000 474,250
Consumer Goods & Services - 2.19%
Newell Co. ....................... 25,000 1,293,750
Electrical Utilities - .34%
Houston Industries, Inc.
ACES (b) ....................... 3,500 199,719
Electronics - .32%
Elsag Bailey Process
Automation N.V. (a)............... 5,000 188,750
Environmental Management - .40%
Browning-Ferris Industries, Inc.
ACES.............................. 7,000 238,000
Financial Services - 1.52%
MCN Corp. PRIDES.................. 8,000 274,000
MCN Financing III PRIDES.......... 10,000 625,000
Food & Kindred Products - .52%
Chiquita Brands................... 5,000 307,500
Gas Utilities - .35%
Enron Corp. ACES.................. 10,000 206,250
Industrials - .25%
Owens-Corning Capital LLC
MIPS (a)........................ 3,000 147,750
Insurance - 2.64%
Allstate Corp..................... 4,500 270,000
American Heritage Life Investment
Corp.............................. 5,000 285,000
PLC CAP Trust II.................. 11,500 632,500
Salomon, Inc-FSA Holdings, Inc.
DECS.............................. 9,000 369,000
Printing, Publishing & Allied
Products - .55%
Hollinger International........... 25,000 321,875
Telecommunications - 2.99%
IXC Communications, Inc. (a)...... 3,109 441,478
SBC Communications, Inc........... 15,000 791,250
U.S. West, Inc.................... 10,000 530,000
----------
Total Convertible Preferred Stocks (cost:
$7,471,723) 9,157,847
----------
CONVERTIBLE BONDS - 1.38%
Industrials - .36%
Alza Corp., 5% due 05/01/06....... $ 200,000 210,750
Insurance - .54%
Mutual Risk Management,
0% due 10/30/15 (a).............. $ 500,000 318,750
Metals Mining - .48%
Inco, Ltd., 5.75% due 07/01/04.... $ 300,000 285,000
----------
Total Convertible Bonds (cost: $698,525) 814,500
----------
CORPORATE BONDS - 6.00%
Automotive - .16%
General Motors Acceptance Corp.,
5.50% due 12/15/01................ $ 100,000 96,993
Banks - 2.12%
Barnett Banks, Inc.,
8.50% due 03/01/99................ $ 325,000 333,823
Chase Manhattan Corp., 6.625% due
08/01/03.......................... $ 300,000 300,049
First Chicago NBD Bancorp., 7.25%
due 08/15/04...................... $ 590,000 616,126
Broadcast, Radio & TV - .28%
Tele-Communications, Inc., 7.25%
due 08/01/05...................... $ 160,000 165,301
Diversified Media - .14%
Time Warner, Inc., 7.95% due
02/01/00.......................... $ 80,000 82,613
Drugs and Health Care - .42%
R.P. Scherer Corp., 6.75% due
02/01/04.......................... $ 250,000 247,681
Financial Services - .43%
PaineWebber Group, Inc., 7% due
03/01/00.......................... $ 250,000 253,360
Food Processing - .44%
ConAgra, Inc., 7.40%
due 09/15/04...................... $ 250,000 262,428
Foreign Government - .28%
Treasury Corp. of Victoria,
9% due 09/04/02................... $ 228,000 166,477
Gas Utilities - .56%
Enron Corp., 7.625% due 09/10/04.. $ 175,000 185,420
Enron Corp., 9.875% due
06/15/03.......................... $ 125,000 144,651
Hotel/Gaming - .21%
Circus Circus Enterprises, Inc.,
6.75% due 07/15/03................ $ 125,000 124,200
Oil and Gas - .59% Coastal Corp.,
9.75% due 08/01/03................ $ 300,000 345,443
Paper & Forest Products - .37%
Fletcher Challenge Canada, Ltd.,
7.75% due 06/20/06................ $ 200,000 215,519
----------
Total Corporate Bonds (cost: $3,477,408) 3,540,084
----------
UNITED STATES TREASURY NOTES - 21.92%
6.125% due 08/31/98................ $ 2,000,000 2,006,874
5.50% due 11/15/98................. $ 1,990,000 1,986,890
5.875% due 08/31/99................ $ 1,000,000 1,003,125
6.625% due 03/31/02................ $ 1,000,000 1,032,500
Strip, 0% due 08/15/20............. $ 27,000,000 6,905,223
----------
Total United States Treasury Notes (cost:
$11,771,871) 12,934,612
----------
SHORT-TERM SECURITIES - 14.43%
Triparty Repurchase Agreement dated
December 31, 1997 with Prudential
Securities, Inc., effective yield
of 6.25%, due January 2, 1998,
collateralized by FNMAs, 6.595%,
November 1, 2025 with a value of
$8,743,713........................ $ 8,513,967 8,513,967
----------
Total Short-Term Securities (cost: $8,513,967) 8,513,967
----------
TOTAL SECURITIES (COST: $48,742,804) - 99.58% 58,757,987
OTHER ASSETS AND LIABILITIES, NET - .42% 249,625
----------
NET ASSETS - 100.00% $ 59,007,612
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
32
<PAGE> 34
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Growth and Income Fund
- --------------------------------------------------------------
shares or value
face amount (note 1)
---------- ----------
<S> <C> <C>
COMMON STOCKS - 79.93%
Aerospace/Defense - .87%
Precision Castparts Corp. ........ 27,000 $ 1,628,437
Raytheon Co. ..................... 892 44,025
Apparel & Textiles - 1.45%
Jones Apparel Group, Inc. (b)..... 42,500 1,827,500
Wolverine World Wide, Inc. ....... 42,450 960,431
Automotive - .44%
General Motors Corp. ............. 14,000 848,750
Banks - 9.19%
Banc One Corp. ................... 25,500 1,384,968
BankAmerica Corp. ................ 6,000 438,000
Citicorp.......................... 4,000 505,750
First of America Bank Corp........ 29,500 2,275,187
First Tennessee National Corp. ... 19,500 1,301,625
First Union Corp. ................ 73,000 3,741,250
MBNA Corp. ....................... 70,000 1,911,875
National City Corp. .............. 35,000 2,301,250
Summit Bancorp. .................. 50,000 2,662,500
US Bancorp. ...................... 10,000 1,119,375
Chemicals & Allied Products - 1.49%
Betzdearborn, Inc. ............... 10,000 610,625
Dow Chemical Co. ................. 10,000 1,015,000
Goodrich (B. F.) Co. ............. 30,000 1,243,125
Computer Hardware - 2.75%
Cisco Systems, Inc. (b)........... 18,000 1,003,500
Compaq Computer Corp.............. 18,000 1,015,875
EMC Corp. ........................ 15,000 411,563
International Business Machines
Corp. ............................ 15,000 1,568,437
Sun Microsystems, Inc. (b)........ 32,000 1,276,000
Computer Software - 3.79%
BMC Software, Inc. ............... 40,000 2,625,000
CBT Group PLC (b)................. 21,500 1,765,687
Compuware Corp. (b)............... 40,000 1,280,000
HBO & Co. ........................ 19,000 912,000
J. D. Edwards & Co. (b)........... 10,400 306,800
Microsoft Corp. .................. 3,000 387,750
Consumer Goods & Services - 1.21%
Cendant Corp. .................... 9,000 309,375
Maytag Corp. ..................... 20,000 746,250
Newell Co. ....................... 30,000 1,275,000
Cosmetics/Personal Care - 1.55%
Avon Products, Inc. .............. 30,000 1,841,250
International Flavors &
Fragrances, Inc. ................. 22,000 1,133,000
Diversified Financial - 2.43%
CIT Group, Inc. (b)............... 46,000 1,483,500
Fleet Financial Group, Inc. ...... 14,900 1,116,568
Health Care Properties Investment,
Inc. ............................. 54,600 2,064,563
Drugs & Health Care - 7.78%
American Home Products Corp. ..... 18,000 1,377,000
Bristol-Myers Squibb Co. ......... 32,000 3,028,000
Cardinal Health, Inc. ............ 49,650 3,729,956
Healthsouth Corp. (b)............. 150,000 4,162,500
Merck & Co., Inc.................. 18,000 1,912,500
Pharmacia & Upjohn, Inc........... 20,000 732,500
Electrical Equipment - .65%
AMP, Inc. ........................ 30,000 1,260,000
Electrical Utilities - 1.11%
Edison International, Inc. ....... 50,000 1,359,375
Unicom Corp. ..................... 25,000 768,750
Electronics - .75%
Intel Corp. ...................... 5,000 351,250
Pericom Semiconductor Corp. (b)... 150,000 1,096,875
Energy Services & Producers - 1.78%
Schlumberger, Ltd. ............... 42,400 3,413,200
Environmental Management - 1.05%
Allied Waste Industries, Inc.
(b)............................... 35,700 832,256
USA Waste Services, Inc. ......... 30,000 1,177,500
Financial Services - 7.00%
American Express Co. ............. 28,000 2,499,000
Associates First Capital Corp.
(b)............................... 20,000 1,422,500
Charles Schwab Corp. ............. 20,000 838,750
Federal Home Loan Mortgage
Corp. ............................ 50,000 2,096,875
Household International, Inc. .... 18,000 2,296,125
Morgan Stanley, Dean Witter,
Discover & Co. ................... 40,000 2,365,000
SunAmerica, Inc. ................. 45,000 1,923,750
Food & Beverages - .55%
JP Food Service (b)............... 28,600 1,056,413
Homebuilders/Real Estate - 2.48%
AMB Property Corp. ............... 26,400 663,300
Bay Apartment Communities,
Inc. ............................. 30,000 1,170,000
INMC Mortgage Holdings, Inc. ..... 19,000 445,313
Kilroy Realty Corp. .............. 70,600 2,029,750
Security Capital Group, Cl. B
(b)............................... 14,000 455,000
Industrial Equipment - .53%
Camco International, Inc.......... 16,000 1,019,000
Industrial Manufacturing - 2.35%
Tyco International, Ltd. ........ 100,000 4,506,250
Insurance - 3.96%
Allstate Corp. ................... 10,000 908,750
American General Corp. ........... 20,000 1,081,250
ESG Re, Ltd. (b).................. 11,000 258,500
Hartford Financial Services Group,
Inc. ............................. 17,000 1,590,563
Traveler's Group, Inc. ........... 70,000 3,771,250
Leisure & Entertainment - 1.50%
Carnival Corp., Cl. A............. 52,000 2,879,500
Medical Products - 1.04%
Guidant Corp. .................... 32,000 1,992,000
Oil & Gas - 3.44%
British Petroleum Co. PLC ADR..... 7,200 573,750
Exxon Corp. ...................... 30,000 1,835,625
Stolt Comex Seaway SA (b)......... 11,400 570,000
Tenneco, Inc. .................... 39,000 1,540,500
USX-Marathon Group................ 62,000 2,092,500
Paper & Forest Products - .63%
Union Camp Corp. ................. 22,500 1,207,969
Printing, Publishing & Allied
Products - 1.66%
Dun & Bradstreet Corp. ........... 55,000 1,701,563
R. R. Donnelley & Sons Co. ....... 40,000 1,490,000
Restaurants - .20%
Starbucks Corp. (b)............... 10,000 383,750
Retail Trade - 4.23%
J. C. Penney Company, Inc. ....... 30,000 1,809,375
Kohl's Corp. (b).................. 30,000 2,043,750
Pier 1 Imports, Inc. ............. 82,500 1,866,563
Wal-Mart Stores, Inc. ............ 61,000 2,405,688
Specialty Retailing - 5.81%
CVS Corp. ........................ 48,300 3,094,218
</TABLE>
33
<PAGE> 35
Statements of Investments in Securities and Net Assets December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Growth and Income Fund (continued)
- --------------------------------------------------------------
shares or value
face amount (note 1)
---------- ----------
<S> <C> <C>
General Nutrition Co. (b)......... 65,000 $ 2,210,000
Home Depot, Inc. (b).............. 68,000 4,003,500
Intimate Brands, Inc.............. 50,000 1,203,125
Sherwin Williams Co............... 23,000 638,250
Telecommunications - 4.50%
Airtouch Communications, Inc.
(b)............................... 25,000 1,039,063
Bell Atlantic Corp. .............. 22,600 2,056,600
GTE Corp. ........................ 65,000 3,396,250
SBC Communications, Inc. ......... 29,258 2,143,148
Toys - 1.26%
Mattel, Inc. ..................... 65,000 2,421,250
Transportation - .50%
Kansas City Southern Industries,
Inc. ............................. 30,000 952,500
----------
Total Common Stocks (cost: $119,785,699) 153,491,229
----------
CONVERTIBLE PREFERRED STOCKS - 1.68%
Computer Software - .98%
Microsoft Corp. .................. 21,000 1,887,375
Food & Beverages - .30%
Ralston Purina Co. ............... 8,200 570,925
Insurance - .40%
Merrill Lynch-Sun America
STRYPES........................... 11,000 775,500
----------
Total Convertible Preferred Stocks (cost:
$2,956,960) 3,233,800
----------
CONVERTIBLE BONDS - 5.29%
Building Materials - 1.05%
Home Depot, Inc., 3.25% due
10/01/01.......................... $ 1,500,000 2,008,124
Computer Hardware - .71%
EMC Corp., 3.25% due 03/15/02
(a)............................... $ 1,000,000 1,353,750
Drugs & Health Care - 1.80%
American Retirement Corp., 5.75%
due 10/01/02...................... $ 500,000 501,250
Assisted Living Concepts, Inc., 6%
due 11/01/02...................... $ 1,500,000 1,620,000
Sunrise Assisted Living, Inc.,
5.50% due 06/15/02 (a)............ $ 1,023,000 1,340,130
Electronics - .55%
Level One Communications, Inc., 4%
due 09/01/04...................... $ 500,000 489,375
Photronics, Inc., 6% due
06/01/04.......................... $ 500,000 571,875
Environmental Management - .12%
United Waste Systems, Inc., 4.50%
due 06/01/01...................... $ 167,000 230,878
Manufacturing - .24%
Tower Automotive, Inc., 5% due
08/01/04.......................... $ 440,000 455,400
Oil & Gas - .13%
Key Energy Group, Inc., 5% due
09/15/04 (a)...................... $ 300,000 251,625
Retail Trade - .69%
Pier 1 Imports, Inc., 5.75% due
10/01/03.......................... $ 700,000 1,328,250
----------
Total Convertible Bonds (cost: $8,875,535) 10,150,657
----------
UNITED STATES TREASURY NOTES - 6.32%
6.25% due 3/31/99.................. $ 1,500,000 1,510,781
6% due 08/15/00.................... $ 500,000 503,594
Atlas Growth and Income Fund (continued)
- --------------------------------------------------------------
shares or value
face amount (note 1)
---------- ----------
5.75% due 11/15/00................. $ 2,000,000 $ 2,003,750
6% due 07/31/02.................... $ 500,000 505,313
5.875% due 09/30/02................ $ 1,000,000 1,005,937
5.625% due 12/31/02................ $ 2,000,000 1,992,500
6.50% due 05/15/05................. $ 500,000 521,250
5.875% due 11/15/05................ $ 2,000,000 2,010,938
6.125% due 08/15/07................ $ 1,000,000 1,027,812
6.375% due 08/15/27................ $ 1,000,000 1,054,375
----------
Total United States Treasury Notes (cost:
$11,954,395) 12,136,250
----------
SHORT-TERM SECURITIES - 3.59%
Triparty Repurchase Agreement dated
December 31, 1997 with Prudential
Securities, Inc., effective yield
of 6.25%, due January 2, 1998,
collateralized by FNMAs, 6.595%,
November 1, 2025 with a value of
$7,076,778........................ $ 6,890,832 $ 6,890,832
----------
Total Short-Term Securities (cost: $6,890,832) 6,890,832
----------
TOTAL SECURITIES (COST: $150,463,421) - 96.81% 185,902,768
OTHER ASSETS AND LIABILITIES, NET - 3.19% 6,120,021
----------
NET ASSETS - 100.00% $192,022,789
==========
Atlas Strategic Growth Fund
- --------------------------------------------------------------------
shares or value
face amount (note 1)
---------- ----------
COMMON STOCKS - 78.29%
Air Freight - 1.45%
Federal Express Corp. (b)......... 15,800 964,788
Air Travel - 3.28%
AMR Corp. (b) .................... 8,800 1,130,800
Delta Air Lines, Inc. ............ 8,900 1,059,100
Apparel & Textiles - 3.29%
Federated Dept Stores, Inc. (b)... 23,300 1,003,356
TJX Companies, Inc. .............. 34,600 1,189,375
Automotive - 3.04%
Ford Motor Co. ................... 23,400 1,139,288
Navistar International Corp.
(b)............................... 35,900 890,769
Banks - 2.62%
BankAmerica Corp. ................ 9,000 657,000
Chase Manhattan Corp. ............ 4,900 536,550
Citicorp.......................... 4,400 556,325
Building Materials - 1.56%
Masco Corp. ...................... 20,400 1,037,850
Chemicals & Allied Products - 1.14%
Union Carbide Corp. .............. 17,700 759,994
Computer Hardware - 5.72%
Compaq Computer Corp.............. 20,800 1,173,900
Data General Corp. (b)............ 53,200 927,675
Dell Computer Corp. .............. 10,200 856,800
Sun Microsystems, Inc. (b)........ 21,500 857,313
Computer Software - 1.19%
Digital Equipment Corp. (b)....... 21,500 795,500
</TABLE>
The accompanying notes are an integral part of these financial statements.
34
<PAGE> 36
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Strategic Growth Fund (continued)
- --------------------------------------------------------------
shares or value
face amount (note 1)
---------- ----------
<S> <C> <C>
Consumer Goods & Services - 1.84%
Maytag Corp. ..................... 32,800 $ 1,223,850
Electronics - 5.74%
KLA-Tencor Corp. (b).............. 27,400 1,058,325
National Semiconductor Corp. ..... 32,000 830,000
Tektronix, Inc. .................. 24,450 970,359
Texas Instruments, Inc. .......... 21,500 967,500
Energy Producers & Services - .65%
Baker Hughes, Inc................. 9,900 431,888
Financial Services - 5.40%
Federal Home Loan Mortgage
Corp. ............................ 16,000 671,000
Green Tree Financial Corp. ....... 34,600 906,088
Merrill Lynch & Co., Inc. ........ 14,700 1,072,181
State Street Corp. ............... 16,300 948,456
Food & Beverages - 2.32%
Coors (Adolph) Co., Cl. B......... 27,100 901,075
Fleming Companies, Inc. .......... 48,000 645,000
Homebuilders/Real Estate - 5.02%
Centex Corp. ..................... 17,500 1,101,406
Kaufman & Broad Home Corp. ....... 48,900 1,097,194
Pulte Corp. ...................... 27,400 1,145,663
Insurance - 7.73%
American International Group,
Inc. ............................. 4,650 505,688
Conseco, Inc. .................... 23,500 1,067,781
MBIA, Inc. ....................... 11,400 761,663
MGIC Investment Corp. ............ 15,400 1,024,100
Travelers Group, Inc. ............ 33,274 1,792,637
Manufacturing - 8.19%
Aeroquip-Vickers, Inc. ........... 20,800 1,020,500
Cincinnatti Milacron, Inc. ....... 35,200 913,000
Cooper Tire & Rubber Co. ......... 38,800 945,750
Cummins Engine Co., Inc. ......... 6,900 407,531
Ingersoll-Rand Co. ............... 26,300 1,065,150
Owens-Illinois, Inc. (b).......... 29,200 1,107,775
Metals Mining - .64%
Cyprus Amax Minerals Co. ......... 27,700 425,888
Oil & Gas - 4.09%
Armco, Inc. ...................... 199,700 986,019
Sun Company, Inc. ................ 25,600 1,076,800
USX-Marathon Group................ 19,700 664,875
Paper & Forest Products - 2.77%
Champion International Corp. ..... 19,800 897,188
Union Camp Corp. ................. 17,700 950,269
Printing, Publishing & Allied
Products - 1.41%
Dun & Bradstreet Corp. ........... 30,300 937,406
Retail Trade - 4.32%
Stride Rite Corp. ................ 23,500 282,000
Costco Companies, Inc. (b)........ 21,500 959,438
Dayton Hudson Corp. .............. 16,600 1,120,500
K Mart Corp. ..................... 44,700 516,844
Steel - 2.93%
Inland Steel Industries, Inc. .... 52,200 893,920
USX-US Steel Group, Inc. ......... 33,900 1,059,375
Telecommunications-Equipment - 1.39%
Scientific-Atlanta, Inc. ......... 55,200 924,600
Transportation - .56%
CSX Corp. ........................ 6,900 372,600
----------
Total Common Stocks (cost: $44,202,538) 52,185,665
----------
SHORT-TERM SECURITIES - 21.78%
Triparty Repurchase Agreement dated
December 31, 1997 with Prudential
Securities, Inc., effective yield
of 6.25%, due January 2, 1998,
collateralized by FNMAs, 6.595%,
November 1, 2025 with a value of
$14,907,198 and by U.S. Treasury
Bills, 0%, June 25, 1998 with a
value of $901..................... $ 14,515,510 $ 14,515,510
----------
Total Short-Term Securities (cost: $14,515,510) 14,515,510
----------
TOTAL SECURITIES (COST: $58,718,048) - 100.07% 66,701,175
OTHER ASSETS AND LIABILITIES, NET - (.07)% (47,506)
----------
NET ASSETS - 100.00% $ 66,653,669
==========
</TABLE>
<TABLE>
<CAPTION>
Atlas Global Growth Fund
- --------------------------------------------------------------
shares, units or value
face amount (note 1)
-------------- ----------
<S> <C> <C>
COMMON STOCKS - 83.64%
Aerospace/Defense - 1.25%
Rolls-Royce PLC................ 113,900 $ 439,921
Air Travel - .71%
Ryanair Holdings PLC ADR (b)... 10,000 251,250
Automotive - 1.60%
Porsche AG, Preference......... 338 563,756
Banks - 19.94%
Absa Group, Ltd. .............. 40,000 230,145
Banco Bradesco SA,
Preference..................... 30,940,000 303,212
Banco Espirito Santo e
Comercial de Lisboa(b)......... 6,000 178,549
Banco Frances del Rio de la
Plata SA Sponsored ADR......... 2,300 62,963
Banco Pinto & Sotto Mayor SA... 8,900 127,419
Banco Rio de la Plata ADR...... 21,200 296,800
Bank Handlowy W. Warszawie
(b)............................ 15,000 191,489
Bankers Trust New York
Corp. ......................... 1,500 168,656
Banque Libanaise GDR........... 14,000 254,100
Barclays PLC................... 3,068 81,727
Credito Italiano SPA........... 200,000 618,795
Deutsche Bank AG............... 6,000 423,651
Industrial Credit & Investment
Corp. of India, Ltd. GDR (a)... 9,300 90,724
Industrial Finance Corp. ...... 45,300 6,312
Istituto Bancario San Paolo di
Torino......................... 40,000 384,259
Long-Term Credit Bank of Japan,
Ltd. .......................... 102,000 163,955
National Westminster Bank
PLC............................ 19,700 329,607
Northern Trust Corp. .......... 800 55,800
PT Lippo Bank.................. 30,000 3,273
PT Pan Indonesia Bank.......... 552,000 102,873
Societe Generale de Paris...... 6,100 831,001
Uniao de Bancos Brasileiros SA
GDR............................ 7,000 225,313
Union Bank of Switzerland...... 1,300 1,880,547
</TABLE>
35
<PAGE> 37
Statements of Investments in Securities and Net Assets December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Global Growth Fund (continued)
- --------------------------------------------------------------
shares, units or value
face amount (note 1)
-------------- ----------
<S> <C> <C>
Beer, Wine, & Distilled
Alcohol - 1.66%
Companhia Cervejaria Brahma,
Preference..................... 140,000 $ 94,080
Diageo PLC..................... 30,000 274,637
Remy Cointreau................. 6,126 114,292
South African Breweries,
Ltd. .......................... 4,050 99,869
Computer Hardware - 1.86%
Cisco Systems, Inc. (b)........ 2,250 125,438
International Business Machines
Corp. ......................... 2,200 230,038
Iomega Corp. (b)............... 24,000 298,500
Computer Software - 9.04%
Atos SA (b).................... 2,000 257,839
Cap Gemini Sogeti SA........... 15,000 1,229,804
First Data Corp. .............. 400 11,700
Microsoft Corp. (b)............ 2,000 258,500
Misys PLC...................... 7,714 233,282
Nintendo Corp., Ltd. .......... 12,000 1,185,933
Consumer Goods &
Services - 1.37%
Callaway Golf Co. ............. 7,200 205,650
Granada Group PLC.............. 17,600 269,016
PT Citra Marga Nusaphala
Persada........................ 60,000 6,545
Diversified Financial - 1.37%
American Express Co............ 1,000 89,250
Compagnie Financiere de
Paribas........................ 4,400 382,307
Taiwan Fund, Inc. ............. 600 9,900
Diversified Media - 4.13%
Canal Plus..................... 3,200 594,891
Grupo Televisa SA Sponsored GDR
(b)............................ 9,100 352,056
Havas SA....................... 7,000 503,551
Drugs & Health Care - 4.39%
Amgen, Inc. (b)................ 6,000 324,750
BioChem Pharma, Inc. (b)....... 7,600 158,650
Genzyme Corp.-General Division
(b)............................ 5,000 138,750
Genzyme Corp.-Tissue Repair
(b)............................ 174 1,175
Gilead Sciences, Inc. (b)...... 3,100 118,575
Glaxo Wellcome PLC ADR......... 10,000 478,750
Novartis AG-Reg................ 200 324,658
Electric Utilities - 1.55%
Beijing Datang Power Generation
Co., Ltd....................... 600,000 274,892
Electricidade de Portugal SA... 15,000 268,949
Electronics - 3.64%
Intel Corp. ................... 1,600 112,400
Keyence Corp. ................. 1,650 243,967
National Semiconductor Corp.
(b)............................ 11,600 300,875
Sony Corp. .................... 7,000 622,078
Energy Services &
Producers - 1.37%
Global Marine, Inc. (b)........ 7,000 171,500
Transocean Offshore, Inc. ..... 3,400 163,838
Western Atlas, Inc. (b)........ 2,000 148,000
Environmental Management - 1.01%
Rentokil Initial PLC........... 80,000 354,257
Financial Services - 1.82%
Associates First Capital Corp.
(b)............................ 5,000 355,625
Federal National Mortgage
Association.................... 5,000 285,313
Food & Beverages - 3.20%
Cadbury Schweppes Plc.......... 50,000 504,964
Cresud SA ADR.................. 5,000 98,125
Dairy Farm International
Holdings, Ltd. ................ 364,458 393,615
Fraser & Neave, Ltd. .......... 3,000 13,024
Hellenic Bottling Co., SA...... 5,000 116,017
Health Care/Supplies &
Services - 1.30%
Gehe AG........................ 600 30,023
Quintiles Transnational Corp.
(b)............................ 5,000 191,250
United States Surgical
Corp. ......................... 8,000 234,500
Homebuilders/Real Estate - 1.26%
Brazil Realty SA GDR (a)....... 3,000 61,827
IRSA Inversiones y
Representaciones SA............ 50,000 186,035
Solidere GDR................... 15,000 196,875
Hotel/Gaming - .72%
International Game
Technology..................... 10,000 252,500
Industrial Services - 2.73%
Adecco SA...................... 1,700 493,116
Brisa Auto Estradas de Portugal
SA (b)......................... 4,800 171,945
IHC Caland NV.................. 1,200 62,268
WPP Group PLC.................. 52,900 233,009
Industrial Technology - .09%
Unova, Inc. (b)................ 2,000 32,875
Insurance - 1.09%
American International Group,
Inc............................ 1,100 119,625
Mediolanum SpA (b)............. 10,000 188,285
Reinsurance Australia Corp.,
Ltd............................ 25,300 65,957
Skandia Forsakrings AB Free.... 200 9,435
Leisure & Entertainment - .67%
Corporacion Interamericana de
Entretenimiento SA (b)......... 25,800 200,233
Resorts World Berhad........... 21,000 35,426
Manufacturing - .66%
Bic Corp....................... 2,000 145,965
Bombardier, Inc., Cl. B........ 200 4,109
Powerscreen International
PLC............................ 8,090 81,234
Metals Mining - .68%
De Beers Centenary AG.......... 6,100 124,669
Minerals Technologies, Inc..... 600 27,263
Newmont Mining Corp............ 3,000 88,125
Oil & Gas - .31%
British Petroleum Co. PLC
ADR............................ 8,223 108,863
Printing, Publishing & Allied
Products - .04%
Reed International PLC......... 1,400 13,346
Retail trade - 1.32%
Credit Saison Co., Ltd. ....... 10,000 246,687
PT Matahari Putra Prima........ 16,500 1,702
Sonae Investimentos-SGPS SA.... 5,300 214,361
Specialty Retailing - 3.38%
Circuit City Stores, Inc....... 4,000 142,250
Giordano International, Ltd.... 100,000 34,523
Grupo Elektra SA............... 63,000 111,119
VBH-Vereinigter Baubeschlag
Handel AG...................... 2,000 26,687
Wella AG....................... 1,150 872,738
</TABLE>
The accompanying notes are an integral part of these financial statements.
36
<PAGE> 38
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Global Growth Fund (continued)
- --------------------------------------------------------------
shares, units or value
face amount (note 1)
-------------- ----------
<S> <C> <C>
Supermarkets - 2.19%
Disco ADR (b).................. 4,000 $ 178,000
Great Atlantic & Pacific Tea
Co., Inc. ..................... 20,000 593,750
Telecommunications-Equipment - 1.63%
Alcatel Alsthom SA............. 4,500 571,915
Telecommunications-Technology -
2.64%
Newbridge Networks Corp. (b)... 3,000 104,625
QUALCOMM, Inc. (b)............. 10,400 525,200
SK Telecom Co., Ltd............ 600 157,522
Videsh Sanchar Nigam........... 10,000 140,250
Telephone Utilities - 2.64%
Portugal Telecom SA............ 15,000 696,006
Telecom Italia SpA............. 50,000 230,748
Transportation - .38%
Guangshen Railway Co., Ltd.,
Sponsored ADR.................. 10,000 134,375
----------
Total Common Stocks (cost: $25,637,381) 29,407,138
----------
RIGHTS, WARRANTS AND CERTIFICATES - .00%
PT Panin Bank Warrants, Exp.
06/26/00....................... 78,857 0
----------
Total Rights, Warrants and Certificates (cost: $0) 0
----------
UNITED STATES TREASURY OBLIGATIONS - 4.20%
Strip, 0% due 11/15/18......... $ 1,330,000 378,809
Strip, 0% due 02/15/19......... $ 1,300,000 363,934
Strip, 0% due 08/15/19......... $ 2,700,000 733,425
----------
Total United States Treasury Obligations (cost:
$1,245,149) 1,476,168
----------
SHORT-TERM SECURITIES - 12.09%
Triparty Repurchase Agreement
dated December 31, 1997 with
Prudential Securities, Inc.,
effective yield of 6.25%, due
January 2, 1998, collat-
eralized by FNMAs, 6.595%, No-
vember 1, 2025 with a value of
$4,363,570..................... $ 4,248,915 4,248,915
----------
Total Short-Term Securities (cost: $4,248,915) 4,248,915
----------
TOTAL SECURITIES (COST: $31,131,445) - 99.93% 35,132,221
OTHER ASSETS AND LIABILITIES, NET - .07% 26,121
----------
NET ASSETS - 100.00% $ 35,158,342
==========
<CAPTION>
Atlas Emerging Growth Fund
- --------------------------------------------------------------
shares or value
face amount (note 1)
-------------- ----------
<S> <C> <C>
COMMON STOCKS - 86.17%
Automotive - 1.97%
Budget Group, Inc. (b)......... 7,000 $ 241,938
Computer Software - 21.35%
Acxiom Corp. (b)............... 8,000 154,000
Affiliated Computer Services,
Inc. (b)....................... 5,000 131,563
American Business Information,
Inc., Cl. B (b)................ 9,500 97,375
American Business Information,
Inc., Cl. A (b)................ 5,500 57,750
Aspen Technologies, Inc. (b)... 8,000 274,000
Cambridge Technology Partners
(b)............................ 5,000 208,125
DR Solomons Group PLC ADR (b).. 5,000 161,250
Engineering Animation, Inc.
(b)............................ 7,000 322,000
Global DirectMail Corp. (b).... 4,000 69,250
Integrated Measurement Systems,
Inc. (b)....................... 5,000 85,625
Medical Manager Corp. (b)...... 7,000 126,000
National Instruments Corp.
(b)............................ 9,000 261,000
Registry, Inc. (b)............. 5,000 229,375
Saville System Ireland PLC ADR
(b)............................ 6,000 249,000
Visio Corp. (b)................ 5,000 191,875
Consumer Goods &
Services - 4.27%
CORT Business Services Corp.
(b)............................ 8,000 318,500
Renters Choice, Inc. (b)....... 10,000 205,000
Diversified Financial - 2.83%
FIRSTPLUS Financial Group, Inc.
(b)............................ 4,000 153,500
NCO Group, Inc. (b)............ 7,500 193,125
Drugs & Healthcare - 1.51%
Parexel International Corp.
(b)............................ 5,000 185,000
Electronics - 4.82%
ATMI, Inc. (b)................. 4,400 106,700
Benchmarq Microelectronics,
Inc. (b)....................... 10,000 136,250
Pittway Corp. ................. 5,000 348,125
Energy Services &
Producers - 2.57%
Cal Dive International, Inc.
(b)............................ 4,000 98,000
Core Laboratories NV (b)....... 12,000 216,750
Financial Services - 2.62%
Investors Financial Services
Corp........................... 7,000 322,000
Food & Beverages - 1.81%
JP Foodservice, Inc. (b)....... 6,000 221,625
Healthcare/Supplies & Services -
7.45%
AmeriSource Health Corp., Cl. A
(b)............................ 2,000 117,500
Concentra Managed Care, Inc.
(b)............................ 5,000 168,750
Covance, Inc. (b).............. 10,000 198,750
FPA Medical Management, Inc.
(b)............................ 15,000 279,375
Pediatrix Medical Group, Inc.
(b)............................ 3,500 149,625
Home Builders/Real
Estate - 2.52%
Fairfield Communities, Inc.
(b)............................ 7,000 308,875
Manufacturing - 1.47%
Ballantyne of Omaha, Inc.
(b)............................ 10,000 180,000
Industrial Services - 7.90%
Culligan Water Technologies,
Inc. (b)....................... 4,000 201,000
Daisytek International Corp.
(b)............................ 5,000 173,750
IntelliQuest Information Group,
Inc. (b)....................... 10,000 132,500
Rental Service Corp. (b)....... 10,000 245,625
Rural/Metro Corp. (b).......... 4,000 133,500
US Rental, Inc. (b)............ 3,500 82,250
Leisure & Entertainment - 1.88%
Cinar Films, Inc. (b).......... 6,000 230,250
</TABLE>
37
<PAGE> 39
Statements of Investments in Securities and Net Assets December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Emerging Growth Fund (continued)
- --------------------------------------------------------------
shares or value
face amount (note 1)
-------------- ----------
<S> <C> <C>
Oil & Gas - 2.94%
Cross Timbers Oil Co........... 7,000 $ 174,563
Newfield Exploration Co. (b)... 8,000 186,500
Restaurants - 3.81%
CKE Restaurants, Inc........... 7,000 294,875
Star Buffet, Inc. (b).......... 15,000 172,500
Retail Trade - 5.28%
Barnett, Inc. (b).............. 5,000 110,000
North Face (The), Inc. (b)..... 9,000 198,000
Pier 1 Imports, Inc............ 15,000 339,375
Specialty Retailing - 6.16%
Linens 'N Things, Inc. (b)..... 8,000 349,000
Petco Animal Supplies, Inc.
(b)............................ 10,000 240,000
Wilmar Industries, Inc. (b).... 7,000 167,123
Telecommunications - 2.06%
ACC Corp. (b).................. 5,000 252,500
Transportation - .95%
Genesee & Wyoming, Inc. (b).... 5,000 116,875
----------
Total Common Stocks (cost: $9,644,273) 10,567,762
----------
SHORT-TERM SECURITIES - 14.14%
Triparty Repurchase Agreement
dated December 31, 1997 with
Prudential Securities, Inc.,
effective yield of 6.25%, due
January 2, 1998, collat-
eralized by FNMAs, 6.595%, No-
vember 1, 2025 with a value of
$1,780,771..................... $ 1,733,975 1,733,975
----------
Total Short-Term Securities (cost: $1,733,975) 1,733,975
----------
TOTAL SECURITIES (COST: $11,378,248) - 100.31% 12,301,737
OTHER ASSETS AND LIABILITIES, NET - (0.31)% (38,548)
----------
NET ASSETS - 100.00% $ 12,263,189
==========
</TABLE>
* Variable rate demand notes are tax-exempt obligations which contain a floating
or variable interest rate adjustment formula (computed daily or weekly) and an
unconditional right of demand to receive payment of the unpaid principal
balance plus accrued interest upon short notice prior to specified dates. The
interest rate may change on specified dates in relationship with changes in a
designated rate (such as the prime interest or U.S. Treasury Bill rates).
(a) Restricted securities which are exempt from registration under Rule 144A of
the Securities Act of 1933. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At the
end of the period the value of these securities amounted to $1,096,728 or
1.86% of net assets in the Balanced Fund, $2,945,505 or 1.53% of net assets
in the Growth and Income Fund, $8,133,759 or 17.73% of net assets in the
Strategic Income Fund, and $152,551 or 0.43% of net assets in the Global
Growth Fund.
(b) Non-income producing security.
(c) Represents the current interest rate for a variable rate security.
(d) Denotes a step bond: a zero coupon bond that converts to a fixed rate of
interest at a designated future date.
(e) Represents the current interest rate for an increasing rate security.
(f) For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
(g) Identifies issues considered to be illiquid - See Note 12 to Financial
Statements.
(h) Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed-income
securities increase in price when interest rates decline. The principal
amount of the underlying pool represents the notional amount on which
current interest is calculated. The price of these securities is typically
more sensitive to changes in prepayment rates than traditional
mortgage-backed securities (for example, GNMA pass-throughs).
(i) Interest or dividend is paid in kind.
(j) When-issued security to be delivered and settled after December 31, 1997.
(k) Units may be comprised of several components, such as debt and equity and/or
warrants to purchase equity at some point in the future. For units which
represent debt securities, face amount disclosed represents total underlying
principal.
(l) Indexed instrument for which the principal amount and/or interest due at
maturity is affected by the relative value of a foreign currency.
(m) Face amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
<TABLE>
<S> <C>
AUD - Australian Dollar IDR - Indonesian Rupiah
ARP - Argentine Peso IEP - Irish Punt
CAD - Canadian Dollar INR - Indian Rupee
CHF - Swiss Franc ITL - Italian Lira
CNR - China Renminbi JPY - Japanese Yen
CZK - Czech Koruna KRW - South Korean Won
DEM - German Deutsche Mark MXP - Mexican Peso
DKK - Danish Krone NOK - Norwegian Krone
ESP - Spanish Peseta NZD - New Zealand Dollar
FIM - Finnish Markka PLZ - Polish Zloty
FRF - French Franc RUR - Russian Ruble
GBP - British Pound Sterling SEK - Swedish Krona
GRD - Greek Drachma SKK - Slovakian Koruna
HUF - Hungarian Forint ZAR - South African Rand
</TABLE>
The accompanying notes are an integral part of these financial statements.
38
<PAGE> 40
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CONTRACTS/FACE EXPIRATION EXERCISE PREMIUM MARKET VALUE
SUBJECT TO CALL/PUT DATE PRICE RECEIVED SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------------------
(n) A sufficient amount of securities has been designated to cover outstanding
written call and put options as follows:
<S> <C> <C> <C> <C> <C>
Strategic Income Fund:
German Mark Put Option 409,500 3/9/98 1.82 DEM $2,610 $ 2,535
Japanese Yen Put Option 54,000,000 1/5/98 125.00 JPY 4,709 16,848
-------------------
$7,319 $ 19,383
===================
</TABLE>
ADR = American Depositary Receipt
AMBAC = AMBAC Indemnity Corporation
AMT = Alternative Minimum Tax
BIG = Bond Investors Guarantee
COP = Certificate of Participation
DECS = Debt Exchangeable for Common Stock
ELKS = Equity-Linked Security Valuation
FGIC = Financial Guarantee Insurance Corporation
FLIRBs = Front Loaded Interest Reduction Bonds
FSA = Financial Security Assurance Inc.
GDR = Global Depositary Receipt
LYONS = Liquid Yield Option Notes
MBIA = Municipal Bond Investors Assurance
MIPS = Monthly Income Preferred Shares
PRIDES = Provisionally Redeemable Income Debt Exchangeable for Stock
SONYMA = State of New York Mortgage Authority
STRYPES = Structured Yield Product Exchangeable for Stock
39
<PAGE> 41
Statements of Assets and Liabilities December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Money Funds Bond Funds
--------------------------------------------------------------------------------
U.S. California National California National
Treasury Municipal Municipal Municipal Municipal
Money Fund Money Fund Money Fund Bond Fund Bond Fund
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment in securities, at
identified cost............. $60,620,097 $ 43,972,590 $ 6,511,616 $187,682,935 $56,771,119
========= ========== ========== ========== =========
Investment in securities, at
value....................... $60,620,097 $ 43,972,590 $ 6,511,616 $202,744,713 $61,251,127
Cash.......................... 355 20,496 27,038 15,928 23,483
Receivables for:
Sales of investments........ 0 0 0 0 0
Sales of Fund's shares...... 105,766 516,691 1,000 22,541 54,500
Accrued interest and
dividends................. 0 374,583 56,767 3,379,947 796,630
Other....................... 0 0 0 0 0
Unrealized appreciation on
forward foreign currency
exchange contracts (Note 9)... 0 0 0 0 0
Variation margin on futures
contracts (Note 10)........... 0 0 0 0 0
Unamortized organization costs
(Note 2)...................... 1,077 0 0 1,077 1,077
--------- ---------- ---------- ---------- ---------
Total assets.................. 60,727,295 44,884,360 6,596,421 206,164,206 62,126,817
--------- ---------- ---------- ---------- ---------
LIABILITIES:
Payables for:
Purchases of investments.... 0 0 0 2,112,554 0
Redemptions of Fund's
shares...................... 489,223 100,896 12,692 159,365 57,647
Dividends................... 11,435 5,166 1,311 328,983 94,497
Repurchases of investments
under dollar roll
agreements.................. 0 0 0 0 0
Accrued expenses............ 29,269 27,573 3,744 246,915 73,019
Other liabilities........... 0 0 0 0 0
Variation margin on futures
contracts (Note 10)........... 0 0 0 0 0
Options written, at value
(premiums received $7,319)
(Note 11)..................... 0 0 0 0 0
--------- ---------- ---------- ---------- ---------
Total liabilities............. 529,927 133,635 17,747 2,847,817 225,163
--------- ---------- ---------- ---------- ---------
NET ASSETS...................... $60,197,368 $ 44,750,725 $ 6,578,674 $203,316,389 $61,901,654
========= ========== ========== ========== =========
NET ASSETS CONSIST OF:
Net unrealized appreciation
(Note 3)...................... $ 0 $ 0 $ 0 $ 15,061,778 $ 4,480,008
Accumulated net realized gain
(loss)........................ (20,132) (85) (377) 6,430 28,048
Undistributed net investment
income (loss)................. 0 0 0 0 0
Paid in capital............... 60,217,500 44,750,810 6,579,051 188,248,181 57,393,598
--------- ---------- ---------- ---------- ---------
NET ASSETS...................... $60,197,368 $ 44,750,725 $ 6,578,674 $203,316,389 $61,901,654
========= ========== ========== ========== =========
NET ASSET VALUE PER SHARE:
Class A
Net Assets.................. $60,032,810 $ 44,750,725 $ 6,578,674 $195,291,803 $58,739,556
Shares outstanding.......... 60,052,900 44,750,810 6,579,051 17,072,137 5,088,487
Net asset value per share... $ 1.00 $ 1.00 $ 1.00 $ 11.44 $ 11.54
Maximum offering price per
share (net asset value plus
sales charge of 3.0% for
Bond and Stock Funds)....... $ 1.00 $ 1.00 $ 1.00 $ 11.79 $ 11.90
Class B
Net Assets.................. $ 164,558 NA NA $ 8,024,586 $ 3,162,098
Shares outstanding.......... 164,600 NA NA 701,109 273,784
Net asset value per share
and maximum offering
price....................... $ 1.00 NA NA $ 11.45 $ 11.55
CAPITAL SHARES AUTHORIZED:...... 75,000,000 350,000,000 130,000,000 50,000,000 20,000,000
========= ========== ========== ========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
40
<PAGE> 42
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Stock Funds
-------------------------------------------------------------------------------------------------------------
U.S.
Government
and Mortgage Strategic Emerging
Securities Income Balanced Growth and Strategic Global Growth
Fund Fund Fund Income Fund Growth Fund Growth Fund Fund
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$236,019,027 $49,816,676 $48,742,804 $150,463,421 $58,718,048 $31,131,445 $11,378,248
========== ========= ========= ========== ========= ========= =========
$240,688,115 $50,233,713 $58,757,987 $185,902,768 $66,701,175 $35,132,221 $12,301,737
268 14 0 0 0 2,532 0
43,115 2,695,018 0 12,172,024 0 2,461,279 0
29,456 35,765 114,461 274,617 65,659 47,122 9,368
1,227,194 920,700 285,937 440,020 23,646 15,690 704
0 0 589 3,041 3,376 176,250 0
0 74,781 0 0 0 36,431 0
0 17,905 0 0 0 0 0
1,077 0 1,077 1,077 1,077 0 0
---------- --------- --------- ---------- --------- --------- ---------
241,989,225 53,977,896 59,160,051 198,793,547 66,794,933 37,871,525 12,311,809
---------- --------- --------- ---------- --------- --------- ---------
0 7,816,973 0 5,782,230 0 2,609,821 0
341,004 1,000 10,101 104,839 6,716 8,312 32,100
407,914 237,300 62,835 646,066 42,037 20,803 0
31,153,214 0 0 0 0 0 0
269,447 24,319 75,870 237,623 92,511 61,137 16,520
16,199 0 3,633 0 0 0 0
0 0 0 0 0 13,110 0
0 19,383 0 0 0 0 0
---------- --------- --------- ---------- --------- --------- ---------
32,187,778 8,098,975 152,439 6,770,758 141,264 2,713,183 48,620
---------- --------- --------- ---------- --------- --------- ---------
$209,801,447 $45,878,921 $59,007,612 $192,022,789 $66,653,669 $35,158,342 $12,263,189
========== ========= ========= ========== ========= ========= =========
$ 4,669,088 $ 507,661 $10,015,224 $ 35,439,347 $ 7,983,127 $ 3,941,347 $ 923,489
(14,582,414) (64,706) (21) (47,198) (17) (203,964) (171,980)
0 0 (11) (27) (10) 9,893 (38,646)
219,714,773 45,435,966 48,992,420 156,630,667 58,670,569 31,411,066 11,550,326
---------- --------- --------- ---------- --------- --------- ---------
$209,801,447 $45,878,921 $59,007,612 $192,022,789 $66,653,669 $35,158,342 $12,263,189
========== ========= ========= ========== ========= ========= =========
$202,573,461 $37,830,932 $49,455,600 $173,795,992 $54,309,744 $29,467,566 $10,027,943
19,867,022 7,334,490 3,498,234 9,213,291 3,319,034 2,322,146 771,518
$ 10.20 $ 5.16 $ 14.14 $ 18.86 $ 16.36 $ 12.69 $ 13.00
10.52
$ $ 5.32 $ 14.58 $ 19.44 $ 16.87 $ 13.08 $ 13.40
$ 7,227,986 $ 8,047,989 $ 9,552,012 $ 18,226,797 $12,343,925 $ 5,690,776 $ 2,235,246
708,817 1,562,566 677,785 969,628 760,972 453,460 172,904
$ 10.20 $ 5.15 $ 14.09 $ 18.80 $ 16.22 $ 12.55 $ 12.93
50,000,000 50,000,000 20,000,000 20,000,000 10,000,000 15,000,000 15,000,000
========== ========= ========= ========== ========= ========= =========
</TABLE>
41
<PAGE> 43
Statements of Operations For the period ended December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Money Funds Bond Funds
-----------------------------------------------------------------------------------------
National
California Municipal California National
U.S. Treasury Municipal Money Municipal Municipal
Money Fund(1) Money Fund(1) Fund(1) Bond Fund(1) Bond Fund(1)
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Income:
Interest........ $ 3,427,189 $ 1,658,087 $ 258,663 $ 10,411,971 $ 2,934,228
Dividends....... 0 0 0 0 0
----------- ----------- ---------- ---------- ----------
Total income...... 3,427,189 1,658,087 258,663 10,411,971 2,934,228
----------- ----------- ---------- ---------- ----------
Expenses:
Management fees
(Note 6)...... 326,835 231,605 34,739 1,005,325 283,043
12b-1 fees:
(Note 6)
Class A....... 163,049 115,802 17,369 440,708 122,838
Class B....... 1,109 0 0 47,167 18,233
Transfer agency
fees and
expenses...... 111,426 32,772 9,687 118,757 53,614
Custodian fees
and
expenses...... 40,133 43,123 13,546 107,141 32,754
Directors'
fees.......... 3,298 2,325 350 9,197 2,589
Registration
fees.......... 3,038 4,134 1,030 2,072 1,657
Accounting and
legal fees.... 14,162 12,879 12,384 17,805 16,147
Printing and
postage....... 13,735 4,868 1,262 17,661 6,468
Other........... 4,220 2,806 374 9,311 2,923
----------- ----------- ---------- ---------- ----------
Gross expenses.... 681,005 450,314 90,741 1,775,144 540,266
Waiver of
management
fees (Note
6)............ (96,639) (37,116) (25,920) 0 (287)
Waiver of 12b-1
fees: (Note 6)
Class A....... (163,049) (115,802) (17,369) 0 (581)
Class B....... 0 0 0 0 0
Expense
reimbursement
(Note 6)........ (16,284) 0 0 (16,307) (15,342)
----------- ----------- ---------- ---------- ----------
Net expenses...... 405,033 297,396 47,452 1,758,837 524,056
----------- ----------- ---------- ---------- ----------
Net investment
income (loss)... 3,022,156 1,360,691 211,211 8,653,134 2,410,172
----------- ----------- ---------- ---------- ----------
REALIZED GAIN (LOSS) AND UNREALIZED
APPRECIATION (DEPRECIATION) ON
INVESTMENTS AND FOREIGN CURRENCY:
Realized gain
(loss):
Proceeds from
sales (including
premiums on
options
exercised)...... 393,373,904 117,046,250 24,452,300 28,554,854 10,907,098
Cost of
securities
sold.......... (393,383,858) (117,046,250) (24,452,300) (27,080,232) (10,508,548)
Gain (loss) on
closing of
future
contracts....... 0 0 0 0 0
Gain on closing
and expiration
of options
written......... 0 0 0 0 0
Gain (loss) on
foreign currency
transactions.... 0 0 0 0 0
----------- ----------- ---------- ---------- ----------
Net realized gain
(loss).......... (9,954) 0 0 1,474,622 398,550
----------- ----------- ---------- ---------- ----------
Unrealized
appreciation:
Beginning of
period........ 0 0 0 11,072,901 3,030,902
End of period... 0 0 0 15,061,778 4,480,008
----------- ----------- ---------- ---------- ----------
Unrealized
appreciation.... 0 0 0 3,988,877 1,449,106
----------- ----------- ---------- ---------- ----------
Net realized gain
(loss) and
unrealized
appreciation on
investments and
foreign
currency.......... (9,954) 0 0 5,463,499 1,847,656
----------- ----------- ---------- ---------- ----------
Net increase in
net assets
resulting from
operations........ $ 3,012,202 $ 1,360,691 $ 211,211 $ 14,116,633 $ 4,257,828
=========== =========== ========== ========== ==========
</TABLE>
(1) For the year ended December 31, 1997.
(2) For the period April 30, 1997 (inception of operations) to December 31,
1997.
The accompanying notes are an integral part of these financial statements.
42
<PAGE> 44
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Stock Funds
--------------------------------------------------------------------------------------------------------------------
U.S. Government
and Mortgage Strategic Growth and Strategic Global Emerging
Securities Income Balanced Income Growth Growth Growth
Fund(1) Fund(1) Fund(1) Fund(1) Fund(1) Fund(1) Fund(2)
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 16,521,554 $ 2,990,339 $ 1,315,521 $ 773,746 $ 604,900 $ 187,016 $ 45,551
0 27,611 870,648 2,023,703 409,170 289,691 3,000
----------- ---------- --------- ------------ ----------- ----------- ---------
16,521,554 3,017,950 2,186,169 2,797,449 1,014,070 476,707 48,551
----------- ---------- --------- ------------ ----------- ----------- ---------
1,180,928 267,201 319,681 1,138,054 341,483 216,090 43,175
521,106 75,452 96,893 393,335 98,706 57,327 8,863
46,836 40,791 51,527 118,032 69,178 31,265 6,400
225,687 50,832 55,125 146,585 60,779 42,995 20,623
193,356 110,382 37,814 121,870 36,003 105,056 21,877
10,827 1,776 2,283 8,683 2,426 1,346 261
2,211 6,100 5,387 3,277 8,200 4,559 2,813
18,213 18,106 13,862 15,467 13,943 13,672 8,955
34,571 6,307 10,319 33,725 12,819 7,860 2,221
16,348 2,468 4,172 20,587 4,788 3,808 2,498
----------- ---------- --------- ------------ ----------- ----------- ---------
2,250,083 579,415 597,063 1,999,615 648,325 483,978 117,686
0 (265,363) 0 0 0 (3,378) (5,515)
0 (75,453) 0 0 0 (5,342) (8,629)
0 0 0 (18,853) 0 0 0
(14,853) (50,727) (14,589) (13,763) (10,601) (13,890) (16,345)
----------- ---------- --------- ------------ ----------- ----------- ---------
2,235,230 187,872 582,474 1,966,999 637,724 461,368 87,197
----------- ---------- --------- ------------ ----------- ----------- ---------
14,286,324 2,830,078 1,603,695 830,450 376,346 15,339 (38,646)
----------- ---------- --------- ------------ ----------- ----------- ---------
41,810,808 83,274,399 5,317,289 194,327,896 31,478,314 15,430,965 1,281,992
(42,054,900) (83,251,761) (4,078,207) (164,070,709) (26,580,056) (12,924,611) (1,453,972)
0 29,533 0 0 0 (206,371) 0
0 128,801 0 82,735 0 0 0
0 263,769 1,479 470 0 (60,278) 0
----------- ---------- --------- ------------ ----------- ----------- ---------
(244,092) 444,741 1,240,561 30,340,392 4,898,258 2,239,705 (171,980)
----------- ---------- --------- ------------ ----------- ----------- ---------
1,919,134 462,501 3,412,371 26,292,047 3,487,512 1,001,989 0
4,669,088 507,661 10,015,224 35,439,347 7,983,127 3,941,347 923,489
----------- ---------- --------- ------------ ----------- ----------- ---------
2,749,954 45,160 6,602,853 9,147,300 4,495,615 2,939,358 923,489
----------- ---------- --------- ------------ ----------- ----------- ---------
2,505,862 489,901 7,843,414 39,487,692 9,393,873 5,179,063 751,509
----------- ---------- --------- ------------ ----------- ----------- ---------
$ 16,792,186 $ 3,319,979 $ 9,447,109 $ 40,318,142 $ 9,770,219 $ 5,194,402 $ 712,863
=========== ========== ========= ============ =========== =========== =========
</TABLE>
43
<PAGE> 45
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Money Funds
---------------------------------------------------------------------------------------
California Municipal Money National Municipal Money
U.S. Treasury Money Fund Fund Fund
---------------------------------------------------------------------------------------
1997(1) 1996(2) 1997(1) 1996(2) 1997(1) 1996(2)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment
income (loss)... $ 3,022,156 $ 2,749,893 $ 1,360,691 $ 1,056,490 $ 211,211 $ 215,006
Net realized
gain (loss) on
investments and
foreign
currency........ (9,954) (10,178) 0 (85) 0 (377)
Net unrealized
appreciation
(depreciation)
on investments
and foreign
currency........ 0 0 0 0 0 0
---------- ---------- ---------- ---------- --------- ---------
Net increase in
net assets
resulting from
operations...... 3,012,202 2,739,715 1,360,691 1,056,405 211,211 214,629
---------- ---------- ---------- ---------- --------- ---------
DISTRIBUTIONS PAID
TO SHAREHOLDERS:
Dividends from
net investment
income:
Class A....... (3,016,389) (2,745,028) (1,360,691) (1,056,490) (211,211) (215,006)
Class B....... (5,767) (4,865) NA NA NA NA
Distributions
from net
realized gain on
investments:
Class A....... 0 0 0 0 0 0
Class B....... 0 0 NA NA NA NA
Distributions in
excess of net
realized gain on
investments:
Class A....... 0 0 0 0 0 0
Class B....... 0 0 NA NA NA NA
---------- ---------- ---------- ---------- --------- ---------
Total
distributions:
Class A....... (3,016,389) (2,745,028) (1,360,691) (1,056,490) (211,211) (215,006)
Class B....... (5,767) (4,865) NA NA NA NA
---------- ---------- ---------- ---------- --------- ---------
CAPITAL SHARE
TRANSACTIONS:
(NOTE 4)
Proceeds from
shares sold:
Class A....... 68,097,818 75,634,378 35,349,812 20,788,077 4,627,679 5,107,216
Class B....... 516,184 168,652 NA NA NA NA
Proceeds from
shares issued in
reinvestment of
net investment
income dividends
and capital gain
dividends:
Class A....... 2,850,286 2,546,526 1,301,283 1,001,220 195,422 198,379
Class B....... 5,656 4,762 NA NA NA NA
Proceeds from
shares issued in
plan of
reorganization:
(Note 7)
Class A....... NA NA NA NA NA NA
Class B....... NA NA NA NA NA NA
Cost of shares
redeemed:
Class A....... (76,384,832) (64,076,015) (29,255,049) (23,873,824) (5,758,124) (5,651,446)
Class B....... (477,242) (166,383) NA NA NA NA
---------- ---------- ---------- ---------- --------- ---------
Net increase
(decrease) in
net assets
resulting from
capital share
transactions:
Class A....... (5,436,728) 14,104,889 7,396,046 (2,084,527) (935,023) (345,851)
Class B....... 44,598 7,031 NA NA NA NA
---------- ---------- ---------- ---------- --------- ---------
Net increase
(decrease) in
net assets...... (5,402,084) 14,101,742 7,396,046 (2,084,612) (935,023) (346,228)
NET ASSETS:
Beginning of
period.......... 65,599,452 51,497,710 37,354,679 39,439,291 7,513,697 7,859,925
---------- ---------- ---------- ---------- --------- ---------
End of period... $ 60,197,368 $ 65,599,452 $ 44,750,725 $ 37,354,679 $ 6,578,674 $ 7,513,697
========== ========== ========== ========== ========= =========
</TABLE>
(1) For the year ended December 31, 1997.
(2) For the year ended December 31, 1996.
(3) For the period May 20, 1996 (inception of operations) to December 31, 1996.
The accompanying notes are an integral part of these financial statements.
44
<PAGE> 46
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Bond Funds
---------------------------------------------------------------------------------------------------------------------
U.S. Government and
California Municipal Bond Fund National Municipal Bond Fund Mortgage Securities Fund
---------------------------------------------------------------------------------------------------------------------
1997(1) 1996(2) 1997(1) 1996(2) 1997(1) 1996(2)
<S> <C> <C> <C> <C> <C> <C>
$ 8,653,134 $ 8,802,217 $ 2,410,172 $ 2,398,469 $ 14,286,324 $ 16,261,312
1,474,622 1,168,842 398,550 518,915 (244,092) (1,491,838)
3,988,877 (2,969,666) 1,449,106 (1,130,455) 2,749,954 (4,326,727)
----------- ---------- --------- --------- ---------- ----------
14,116,633 7,001,393 4,257,828 1,786,929 16,792,186 10,442,747
----------- ---------- --------- --------- ---------- ----------
(8,385,957) (8,617,419) (2,307,579) (2,337,023) (13,901,440) (15,943,843)
(267,177) (184,798) (102,593) (61,446) (384,884) (317,469)
(685,771) 0 (351,308) (244,585) 0 0
(28,111) 0 (18,891) (9,623) 0 0
0 0 0 0 0 0
0 0 0 0 0 0
----------- ---------- --------- --------- ---------- ----------
(9,071,728) (8,617,419) (2,658,887) (2,581,608) (13,901,440) (15,943,843)
(295,288) (184,798) (121,484) (71,069) (384,884) (317,469)
----------- ---------- --------- --------- ---------- ----------
13,919,901 14,885,665 3,123,494 2,984,690 13,088,394 19,760,191
2,370,366 2,236,769 998,091 944,259 1,753,314 2,808,568
6,400,559 6,059,281 2,097,782 2,051,732 8,705,129 9,993,486
223,688 142,396 106,431 58,955 264,317 222,729
16,888,793 NA 9,809,295 NA 3,487,178 NA
580,661 NA 250,984 NA 316,243 NA
(24,081,818) (25,832,437) (7,289,081) (7,971,452) (49,439,078) (55,336,871)
(688,795) (182,019) (221,250) (92,044) (1,069,258) (853,491)
----------- ---------- --------- --------- ---------- ----------
13,127,435 (4,887,491) 7,741,490 (2,935,030) (24,158,377) (25,583,194)
2,485,920 2,197,146 1,134,256 911,170 1,264,616 2,177,806
----------- ---------- --------- --------- ---------- ----------
20,362,972 (4,491,169) 10,353,203 (2,889,608) (20,387,899) (29,223,953)
182,953,417 187,444,586 51,548,451 54,438,059 230,189,346 259,413,299
----------- ---------- --------- --------- ---------- ----------
$ 203,316,389 $182,953,417 $61,901,654 $51,548,451 $209,801,447 $230,189,346
=========== ========== ========= ========= ========== ==========
<CAPTION>
Bond Funds
--------------------------------
Strategic Income Fund
--------------------------------
1997(1) 1996(3)
<S> <C> <C>
$ 2,830,078 $ 553,376
444,741 50,719
45,160 462,501
--------- ---------
3,319,979 1,066,596
--------- ---------
(2,432,367) (502,136)
(397,711) (51,240)
(348,740) (43,471)
(74,340) (7,248)
(53,357) (18,565)
(11,349) (3,096)
--------- ---------
(2,834,464) (564,172)
(483,400) (61,584)
--------- ---------
27,268,285 17,647,743
5,458,885 2,909,870
1,398,356 146,503
298,986 38,753
NA NA
NA NA
(8,718,703) (317,560)
(656,792) (38,360)
--------- ---------
19,947,938 17,476,686
5,101,079 2,910,263
--------- ---------
25,051,132 20,827,789
20,827,789 0
--------- ---------
$45,878,921 $20,827,789
========= =========
</TABLE>
45
<PAGE> 47
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Stock Funds
---------------------------------------------------------------------------------------
Balanced Fund Growth and Income Fund Strategic Growth Fund
---------------------------------------------------------------------------------------
1997(1) 1996(2) 1997(1) 1996(2) 1997(1) 1996(2)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment
income (loss)... $ 1,603,695 $ 946,509 $ 830,450 $ 999,904 $ 376,346 $ 206,337
Net realized
gain (loss) on
investments and
foreign
currency........ 1,240,561 890,777 30,340,392 9,131,529 4,898,258 2,797,477
Net unrealized
appreciation
(depreciation)
on investments
and foreign
currency........ 6,602,853 1,902,885 9,147,300 12,724,191 4,495,615 1,529,213
------------ ------------ ------------ ------------ ----------- -----------
Net increase in
net assets
resulting from
operations...... 9,447,109 3,740,171 40,318,142 22,855,624 9,770,219 4,533,027
------------ ------------ ------------ ------------ ----------- -----------
DISTRIBUTIONS PAID
TO SHAREHOLDERS:
Dividends from
net investment
income:
Class A....... (1,386,825) (824,900) (806,041) (966,669) (343,591) (181,354)
Class B....... (216,881) (121,604) (24,417) (33,241) (32,774) (24,971)
Distributions
from net
realized gain of
investments:
Class A....... (1,038,635) (762,138) (27,435,529) (8,366,846) (3,980,719) (2,225,041)
Class B....... (201,932) (125,529) (2,892,139) (753,594) (917,571) (570,429)
Distributions in
excess of net
realized gain of
investments:
Class A....... 0 0 (42,719) 0 0 0
Class B....... 0 0 (4,479) 0 0 0
------------ ------------ ------------ ------------ ----------- -----------
Total
distributions:
Class A....... (2,425,460) (1,587,038) (28,284,289) (9,333,515) (4,324,310) (2,406,395)
Class B....... (418,813) (247,133) (2,921,035) (786,835) (950,345) (595,400)
------------ ------------ ------------ ------------ ----------- -----------
CAPITAL SHARE
TRANSACTIONS:
(NOTE 4)
Proceeds from
shares sold:
Class A....... 17,048,097 16,897,407 29,480,304 47,873,675 28,322,529 10,438,012
Class B....... 3,970,037 2,961,819 3,625,538 7,307,370 5,429,227 2,664,228
Proceeds from
shares issued in
reinvestment of
net investment
income dividends
and capital gain
dividends:
Class A....... 2,319,578 1,486,308 27,713,680 9,153,241 4,304,676 2,287,390
Class B....... 393,826 231,526 2,839,849 762,322 934,030 592,938
Proceeds from
shares issued in
plan of
reorganization:
(Note 7)
Class A....... NA NA NA NA NA NA
Class B....... NA NA NA NA NA NA
Cost of shares
redeemed:
Class A....... (4,835,402) (4,286,818) (30,472,282) (23,511,110) (4,215,490) (3,945,389)
Class B....... (582,207) (284,553) (1,308,132) (642,873) (559,000) (181,623)
------------ ------------ ------------ ------------ ----------- -----------
Net increase
(decrease) in
net assets
resulting from
capital share
transactions:
Class A....... 14,532,273 14,096,897 26,721,702 33,515,806 28,411,715 8,780,013
Class B....... 3,781,656 2,908,792 5,157,255 7,426,819 5,804,257 3,075,543
------------ ------------ ------------ ------------ ----------- -----------
Net increase
(decrease) in
net assets...... 24,916,765 18,911,689 40,991,775 53,677,899 38,711,536 13,386,788
NET ASSETS:
Beginning of
period.......... 34,090,847 15,179,158 151,031,014 97,353,115 27,942,133 14,555,345
------------ ------------ ------------ ------------ ----------- -----------
End of period... $ 59,007,612 $ 34,090,847 $192,022,789 $151,031,014 $66,653,669 $27,942,133
============ ============ ============ ============ =========== ===========
</TABLE>
(1) For the year ended December 31, 1997.
(2) For the year ended December 31, 1996.
(3) For the period April 15, 1996 (inception of operations) to December 31,
1996.
(4) For the period April 30, 1997 (inception of operations) to December 31,
1997.
The accompanying notes are an integral part of these financial statements.
46
<PAGE> 48
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------------------------------------
Emerging
Global Growth Fund Growth Fund
---------------------------------------------
1997(1) 1996(3) 1997(4)
<S> <C> <C> <C>
$ 15,339 $ 1,416 $ (38,646)
2,239,705 373,289 (171,980)
2,939,358 1,001,989 923,489
----------- ----------- -----------
5,194,402 1,376,694 712,863
----------- ----------- -----------
(179) (6,683) 0
0 0 0
(1,858,023) (320,918) 0
(363,901) (52,371) 0
(170,942) (15,289) 0
(33,022) (2,492) 0
----------- ----------- -----------
(2,029,144) (342,890) 0
(396,923) (54,863) 0
----------- ----------- -----------
16,216,002 12,713,597 9,939,204
2,980,894 2,049,552 2,304,201
2,014,769 282,062 0
392,224 54,793 0
NA NA NA
NA NA NA
(4,745,878) (306,945) (576,187)
(230,205) (9,799) (116,892)
----------- ----------- -----------
13,484,893 12,688,714 9,363,017
3,142,913 2,094,546 2,187,309
----------- ----------- -----------
19,396,141 15,762,201 12,263,189
15,762,201 0 0
----------- ----------- -----------
$35,158,342 $15,762,201 $12,263,189
=========== =========== ===========
</TABLE>
47
<PAGE> 49
Financial Highlights selected data for a share outstanding throughout each
period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Money Funds
-------------------------------------------------------------------------------------------
U.S. Treasury Money Fund
Class A Class B
-------------------------------------------------------------------------------------------
1997(1) 1996(1) 1995(1) 1994(1) 1993(1) 1992(2) 1997(1) 1996(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----- ----- ----- ----- ----- ----- ----- -----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss).......... 0.046 0.046 0.050 0.036 0.030 0.023 0.039 0.040
Net gain or loss on securities (both
realized and unrealized).............. 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
----- ----- ----- ----- ----- ----- ----- -----
Total from investment operations...... 0.046 0.046 0.050 0.036 0.030 0.023 0.039 0.040
----- ----- ----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS:
Dividends (from net investment
income)............................. (0.046) (0.046) (0.050) (0.036) (0.030) (0.023) (0.039) (0.040)
Distributions (from realized capital
gains)................................ 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
Distributions (in excess of realized
gains)................................ 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
----- ----- ----- ----- ----- ----- ----- -----
Total distributions................... (0.046) (0.046) (0.050) (0.036) (0.030) (0.023) (0.039) (0.040)
----- ----- ----- ----- ----- ----- ----- -----
Net asset value, end of period......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===== ===== ===== ===== ===== ===== ===== =====
Total return(5)........................ 4.73% 4.74% 5.13% 3.67% 3.03% 2.32% 3.95% 4.07%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)..... $60,033 $65,479 $51,385 $33,448 $14,168 $ 7,632 $ 165 $ 120
Ratio of expenses to average net
assets (annualized)(7)................ 0.62% 0.52% 0.64% 0.46% 0.15% 0.00% 1.37% 1.18%
Ratio of net investment income to
average net assets (annualized)....... 4.63% 4.63% 4.99% 3.75% 2.98% 3.32% 3.90% 3.95%
Portfolio turnover rate (Note 5)...... -- -- -- -- -- -- -- --
Average commission rate paid(6)....... -- -- -- -- -- -- -- --
<CAPTION>
Money Funds
-------------------------
U.S. Treasury Money Fund
Class B
-------------------------
1995(1) 1994(3)
<S> <C> <C>
Net asset value, beginning of period... $ 1.00 $ 1.00
----- -----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss).......... 0.044 0.018
Net gain or loss on securities (both
realized and unrealized).............. 0.000 0.000
----- -----
Total from investment operations...... 0.044 0.018
----- -----
LESS DISTRIBUTIONS:
Dividends (from net investment
income)............................. (0.044) (0.018)
Distributions (from realized capital
gains)................................ 0.000 0.000
Distributions (in excess of realized
gains)................................ 0.000 0.000
----- -----
Total distributions................... (0.044) (0.018)
----- -----
Net asset value, end of period......... $ 1.00 $ 1.00
===== =====
Total return(5)........................ 4.45% 3.53%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)..... $ 113 $ 28
Ratio of expenses to average net
assets (annualized)(7)................ 1.24% 1.13%
Ratio of net investment income to
average net assets (annualized)....... 4.34% 3.71%
Portfolio turnover rate (Note 5)...... -- --
Average commission rate paid(6)....... -- --
</TABLE>
(1) For the year ended December 31.
(2) For the period May 1, 1992 (inception of operations) to December 31, 1992.
(3) For the period July 1, 1994 (inception of operations) to December 31, 1994.
(4) For the period January 10, 1990 (effective date of registration) to December
31, 1990.
(5) Total returns assume purchase at net asset value (without sales charge) at
the beginning of each period. Returns for periods less than a full year are
aggregate (non-annualized) returns.
(6) Initiating with fiscal year 1996, the Funds are required to disclose their
average commission rate per share for purchases and sales of equity
securities.
(7) Effective January 10, 1990, the Distributor and Adviser for the Atlas Funds
agreed to temporarily cap (or waive) their management and 12b-1 fees and to
absorb other operating expenses. Had such action not been taken, the ratio
of expenses to average net assets (annualized) would have been as follows:
<TABLE>
<CAPTION>
Class A Class B
Period Ended 1997 1996 1995 1994 1993 1992 1991 1990 1997
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury Money Fund............... 1.02% 1.02% 1.05% 1.08% 1.10% 1.37% NA NA 3.25%
California Municipal Money Fund........ 0.97% 1.00% 1.00% 1.00% 0.98% 1.03% 1.13% 1.50% NA
National Municipal Money Fund.......... 1.31% 1.32% 1.29% 1.25% 1.28% 1.35% 1.51% 1.93% NA
<CAPTION>
CLASS B
Period Ended 1996 1995 1994
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury Money Fund............... 3.25% 3.25% 3.25%
California Municipal Money Fund........ NA NA NA
National Municipal Money Fund.......... NA NA NA
</TABLE>
The accompanying notes are an integral part of these financial statements.
48
<PAGE> 50
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
National Municipal
California Municipal Money Fund Money Fund
Class A Class A
---------------------------------------------------------------------------------------------------------------------
1997(1) 1996(1) 1995(1) 1994(1) 1993(1) 1992(1) 1991(1) 1990(4) 1997(1) 1996(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
0.029 0.028 0.032 0.024 0.021 0.027 0.045 0.052 0.030 0.029
0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
0.029 0.028 0.032 0.024 0.021 0.027 0.045 0.052 0.030 0.029
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
(0.029) (0.028) (0.032) (0.024) (0.021) (0.027) (0.045) (0.052) (0.030) (0.029)
0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
(0.029) (0.028) (0.032) (0.024) (0.021) (0.027) (0.045) (0.052) (0.030) (0.029)
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===== ===== ===== ===== ===== ===== ===== ===== ===== =====
2.97% 2.82% 3.22% 2.47% 2.13% 2.75% 4.61% 5.40% 3.09% 2.96%
$44,751 $37,355 $39,439 $42,979 $45,784 $55,890 $59,007 $20,190 $ 6,579 $ 7,514
0.64% 0.63% 0.67% 0.46% 0.48% 0.46% 0.00% 0.00% 0.68% 0.68%
2.94% 2.78% 3.18% 2.44% 2.10% 2.73% 4.47% 5.50% 3.04% 2.92%
-- -- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- -- --
<CAPTION>
------------------------------
National Municipal Money Fund
Class A
------------------------------
1995(1) 1994(1) 1993(1) 1992(1) 1991(1) 1990(4)
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----- ----- ----- ----- ----- -----
0.032 0.026 0.022 0.029 0.048 0.055
0.000 0.000 0.000 0.000 0.000 0.000
----- ----- ----- ----- ----- -----
0.032 0.026 0.022 0.029 0.048 0.055
----- ----- ----- ----- ----- -----
(0.032) (0.026) (0.022) (0.029) (0.048) (0.055)
0.000 0.000 0.000 0.000 0.000 0.000
0.000 0.000 0.000 0.000 0.000 0.000
----- ----- ----- ----- ----- -----
(0.032) (0.026) (0.022) (0.029) (0.048) (0.055)
----- ----- ----- ----- ----- -----
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===== ===== ===== ===== ===== =====
3.26% 2.60% 2.25% 2.94% 4.87% 5.66%
$ 7,860 $10,110 $ 9,424 $ 8,139 $ 9,816 $ 4,150
0.75% 0.49% 0.55% 0.54% 0.00% 0.00%
3.21% 2.57% 2.23% 2.92% 4.71% 5.79%
-- -- -- -- -- --
-- -- -- -- -- --
</TABLE>
49
<PAGE> 51
Financial Highlights selected data for a share outstanding throughout each
period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Bond Funds
--------------------------------------------------------------------------------
California Municipal Bond Fund
Class A
--------------------------------------------------------------------------------
1997(1) 1996(1) 1995(1) 1994(1) 1993(1) 1992(1) 1991(1)
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....... $ 11.15 $ 11.26 $ 10.31 $ 11.56 $ 10.74 $ 10.64 $ 10.12
------ ------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss).............. 0.53 0.53 0.54 0.59 0.59 0.60 0.66
Net gain or loss on securities (both
realized and unrealized).................. 0.33 (0.11) 0.95 (1.25) 0.83 0.21 0.56
------ ------ ------ ------ ------ ------ ------
Total from investment operations.......... 0.86 0.42 1.49 (0.66) 1.42 0.81 1.22
------ ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends (from net investment income).... (0.53) (0.53) (0.54) (0.59) (0.59) (0.60) (0.66)
Distributions (from realized capital
gains).................................... (0.04) 0.00 0.00 0.00 (0.01) (0.11) (0.04)
Distributions (in excess of realized
gains).................................... 0.00 0.00 0.00 0.00 0.00 0.00 0.00
------ ------ ------ ------ ------ ------ ------
Total distributions....................... (0.57) (0.53) (0.54) (0.59) (0.60) (0.71) (0.70)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period............. $ 11.44 $ 11.15 $ 11.26 $ 10.31 $ 11.56 $ 10.74 $ 10.64
====== ====== ====== ====== ====== ====== ======
Total return(4)............................ 7.97% 3.90% 14.76% -5.83% 13.52% 7.86% 12.53%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)........... $195,292 $177,593 $184,283 $171,768 $197,394 $141,108 $106,592
Ratio of expenses to average net assets
(annualized)(6)........................... 0.95% 0.96% 0.93% 0.57% 0.53% 0.54% 0.00%
Ratio of net investment income to average
net assets (annualized)................... 4.76% 4.82% 4.98% 5.43% 5.25% 5.66% 6.43%
Portfolio turnover rate (Note 5).......... 15.95% 29.28% 25.90% 30.32% 7.44% 46.55% 30.61%
Average commission rate paid(5)........... -- -- -- -- -- -- --
<CAPTION>
Bond Funds
------------------------------------------------
California Municipal Bond Fund
Class A Class B
------------------------------------------------
1990(2) 1997(1) 1996(1) 1995(1) 1994(3)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period....... $ 10.00 $11.15 $11.26 $10.32 $10.74
----- ---- ---- ---- ----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss).............. 0.65 0.48 0.48 0.48 0.25
Net gain or loss on securities (both
realized and unrealized).................. 0.12 0.34 (0.11) 0.94 (0.42)
----- ---- ---- ---- ----
Total from investment operations.......... 0.77 0.82 0.37 1.42 (0.17)
----- ---- ---- ---- ----
LESS DISTRIBUTIONS:
Dividends (from net investment income).... (0.65) (0.48) (0.48) (0.48) (0.25)
Distributions (from realized capital
gains).................................... 0.00 (0.04) 0.00 0.00 0.00
Distributions (in excess of realized
gains).................................... 0.00 0.00 0.00 0.00 0.00
----- ---- ---- ---- ----
Total distributions....................... (0.65) (0.52) (0.48) (0.48) (0.25)
----- ---- ---- ---- ----
Net asset value, end of period............. $ 10.12 $11.45 $11.15 $11.26 $10.32
===== ==== ==== ==== ====
Total return(4)............................ 9.38% 7.53% 3.39% 14.05% -1.59%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)........... $20,329 $8,025 $5,360 $3,162 $1,416
Ratio of expenses to average net assets
(annualized)(6)........................... 0.00% 1.45% 1.46% 1.46% 1.28%
Ratio of net investment income to average
net assets (annualized)................... 7.13% 4.24% 4.33% 4.42% 4.91%
Portfolio turnover rate (Note 5).......... 64.18% 15.95% 29.28% 25.90% 30.32%
Average commission rate paid(5)........... -- -- -- -- --
</TABLE>
(1) For the year ended December 31.
(2) For the period January 10, 1990 (effective date of registration) to December
31, 1990.
(3) For the period July 1, 1994 (inception of operations) to December 31, 1994.
(4) Total returns assume purchase at net asset value (without sales charge) at
the beginning of each period. Returns for periods less than a full year are
aggregate (non-annualized) returns.
(5) Initiating with fiscal year 1996, the Funds are required to disclose their
average commission rate per share for purchases and sales of equity
securities.
(6) Effective January 10, 1990, the Distributor and Adviser for the Atlas Funds
agreed to temporarily cap (or waive) their management and 12b-1 fees and to
absorb other operating expenses. Had such action not been taken, the ratio
of expenses to average net assets (annualized) would have been as follows:
<TABLE>
<CAPTION>
Class A Class B
Period Ended 1997 1996 1995 1994 1993 1992 1991 1990 1997
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
California Municipal Bond Fund............... 0.95% 0.96% 0.96% 0.97% 0.98% 1.04% 1.14% 1.70% 1.70%
National Municipal Bond Fund................. 1.00% 1.01% 1.05% 1.06% 1.06% 1.16% 1.33% 2.64% 2.13%
<CAPTION>
Class B
Period Ended 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
California Municipal Bond Fund............... 1.83% 2.24% 3.25%
National Municipal Bond Fund................. 2.29% 3.25% 3.25%
</TABLE>
The accompanying notes are an integral part of these financial statements.
50
<PAGE> 52
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Bond Funds
- -------------------------------------------------------------------------------------------------------------------------------
National Municipal Bond Fund
Class A Class B
- -------------------------------------------------------------------------------------------------------------------------------
1997(1) 1996(1) 1995(1) 1994(1) 1993(1) 1992(1) 1991(1) 1990(2) 1997(1) 1996(1) 1995(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 11.21 $ 11.39 $ 10.41 $ 11.61 $ 10.80 $ 10.61 $ 10.03 $10.00 $11.21 $11.39 $10.41
----- ----- ----- ----- ----- ----- ----- ---- ---- ---- ----
0.53 0.52 0.53 0.58 0.60 0.60 0.68 0.66 0.48 0.46 0.47
0.40 (0.12) 0.98 (1.20) 0.82 0.32 0.60 0.03 0.41 (0.12) 0.98
----- ----- ----- ----- ----- ----- ----- ---- ---- ---- ----
0.93 0.40 1.51 (0.62) 1.42 0.92 1.28 0.69 0.89 0.34 1.45
----- ----- ----- ----- ----- ----- ----- ---- ---- ---- ----
(0.53) (0.52) (0.53) (0.58) (0.60) (0.60) (0.68) (0.66) (0.48) (0.46) (0.47)
(0.07) (0.06) 0.00 0.00 (0.01) (0.13) (0.02) 0.00 (0.07) (0.06) 0.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
----- ----- ----- ----- ----- ----- ----- ---- ---- ---- ----
(0.60) (0.58) (0.53) (0.58) (0.61) (0.73) (0.70) (0.66) (0.55) (0.52) (0.47)
----- ----- ----- ----- ----- ----- ----- ---- ---- ---- ----
$ 11.54 $ 11.21 $ 11.39 $ 10.41 $ 11.61 $ 10.80 $ 10.61 $10.03 $11.55 $11.21 $11.39
===== ===== ===== ===== ===== ===== ===== ==== ==== ==== ====
8.56% 3.58% 14.76% -5.41% 13.39% 8.97% 13.22% 8.52% 8.11% 3.07% 14.16%
$58,740 $49,597 $53,387 $50,037 $57,590 $39,463 $26,432 $3,261 $3,162 $1,952 $1,051
1.00% 1.01% 0.91% 0.57% 0.50% 0.54% 0.00% 0.00% 1.50% 1.51% 1.44%
4.72% 4.63% 4.79% 5.35% 5.29% 5.61% 6.59% 7.20% 4.21% 4.14% 4.22%
21.80% 44.76% 53.43% 37.52% 3.72% 39.20% 14.47% 15.37% 21.80% 44.76% 54.30%
-- -- -- -- -- -- -- -- -- -- --
<CAPTION>
- ----------------------------
National Municipal Bond Fund
Class B
- ----------------------------
1994(3)
<S> <C>
$10.76
----
0.24
(0.35)
----
(0.11)
----
(0.24)
0.00
0.00
----
(0.24)
----
$10.41
====
-0.99%
$ 342
1.28%
4.72%
37.52%
--
</TABLE>
51
<PAGE> 53
Financial Highlights selected data for a share outstanding throughout each
period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Bond Funds
--------------------------------------------------------------------------------------
U.S. Government and Mortgage Securities Fund
Class A
--------------------------------------------------------------------------------------
1997(1) 1996(1) 1995(1) 1994(1) 1993(1) 1992(1) 1991(1)
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 10.07 $ 10.30 $ 9.55 $ 10.60 $ 10.57 $ 10.59 $ 10.02
------ ------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)........... 0.67 0.67 0.69 0.70 0.74 0.82 0.91
Net gain or loss on securities (both
realized and unrealized)............... 0.13 (0.23) 0.75 (1.05) 0.03 (0.02) 0.57
------ ------ ------ ------ ------ ------ ------
Total from investment operations....... 0.80 0.44 1.44 (0.35) 0.77 0.80 1.48
------ ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends (from net investment
income)................................ (0.67) (0.67) (0.69) (0.70) (0.74) (0.82) (0.91)
Distributions (from realized capital
gains)................................. 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Distributions (in excess of realized
gains)................................. 0.00 0.00 0.00 0.00 0.00 0.00 0.00
------ ------ ------ ------ ------ ------ ------
Total distributions.................... (0.67) (0.67) (0.69) (0.70) (0.74) (0.82) (0.91)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period.......... $ 10.20 $ 10.07 $ 10.30 $ 9.55 $ 10.60 $ 10.57 $ 10.59
====== ====== ====== ====== ====== ====== ======
Total return(6)......................... 8.25% 4.50% 15.50% -3.30% 7.49% 7.85% 15.53%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)........ $202,573 $224,301 $255,614 $245,715 $311,089 $209,593 $114,130
Ratio of expenses to average net assets
(annualized)(8)........................ 1.03% 1.03% 1.02% 0.80% 0.78% 0.60% 0.00%
Ratio of net investment income to
average net assets (annualized)........ 6.67% 6.67% 6.90% 7.05% 6.93% 7.74% 8.79%
Portfolio turnover rate (Note 5)....... 3.73% 27.45% 48.39% 16.33% 25.63% 25.50% 4.35%
Average commission rate paid(7)........ -- -- -- -- -- -- --
- ------------------------------------
<CAPTION>
Bond Funds
--------------------------------------------------------------------------------------
U.S. Government and Mortgage Securities Fund
Class A Class B
--------------------------------------------------------------------------------------
1990(2) 1997(1) 1996(1) 1995(1) 1994(3)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $10.00 $10.07 $10.30 $ 9.55 $ 9.80
---- ---- ---- ---- ----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)........... 0.92 0.62 0.62 0.64 0.32
Net gain or loss on securities (both
realized and unrealized)............... 0.02 0.13 (0.23) 0.75 (0.25)
---- ---- ---- ---- ----
Total from investment operations....... 0.94 0.75 0.39 1.39 0.07
---- ---- ---- ---- ----
LESS DISTRIBUTIONS:
Dividends (from net investment
income)................................ (0.92) (0.62) (0.62) (0.64) (0.32)
Distributions (from realized capital
gains)................................. 0.00 0.00 0.00 0.00 0.00
Distributions (in excess of realized
gains)................................. 0.00 0.00 0.00 0.00 0.00
---- ---- ---- ---- ----
Total distributions.................... (0.92) (0.62) (0.62) (0.64) (0.32)
---- ---- ---- ---- ----
Net asset value, end of period.......... $10.02 $10.20 $10.07 $10.30 $ 9.55
==== ==== ==== ==== ====
Total return(6)......................... 10.46% 7.72% 3.98% 14.93% 0.69%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)........ $7,387 $7,228 $5,888 $3,799 $1,451
Ratio of expenses to average net assets
(annualized)(8)........................ 0.00% 1.53% 1.53% 1.53% 1.43%
Ratio of net investment income to
average net assets (annualized)........ 9.84% 6.16% 6.19% 6.34% 6.82%
Portfolio turnover rate (Note 5)....... 12.47% 3.73% 27.45% 48.39% 16.33%
Average commission rate paid(7)........ -- -- -- -- --
- ------------------------------------
</TABLE>
(1) For the year ended December 31.
(2) For the period January 10, 1990 (effective date of registration) to December
31, 1990.
(3) For the period July 1, 1994 (inception of operations) to December 31, 1994.
(4) For the period May 20, 1996 (inception of operations) to December 31, 1996.
(5) For the period October 1, 1993 (inception of operations) to December 31,
1993.
(6) Total returns assume purchase at net asset value (without sales charge) at
the beginning of each period. Returns for periods less than a full year are
aggregate (non-annualized) returns.
(7) Initiating with fiscal year 1996, the Funds are required to disclose their
average commission rate per share for purchases and sales of equity
securities.
(8) Effective January 10, 1990, the Distributor and Adviser for the Atlas Funds
agreed to temporarily cap (or waive) their management and 12b-1 fees and to
absorb other operating expenses. Had such action not been taken, the ratio
of expenses to average net assets (annualized) would have been as follows:
<TABLE>
<CAPTION>
Class A
Period Ended 1997 1996 1995 1994 1993 1992 1991 1990
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Government and Mortgage Securities
Fund........................................ 1.03% 1.03% 1.04% 1.05% 1.05% 1.12% 1.20% 2.15%
Strategic Income Fund........................ 1.51% 1.85% NA NA NA NA NA NA
Balanced Fund................................ 1.20% 1.28% 1.53% 1.56% 2.04% NA NA NA
<CAPTION>
Class B
Period Ended 1997 1996 1995 1994
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government and Mortgage Securities
Fund........................................ 1.76% 1.82% 2.27% 3.25%
Strategic Income Fund........................ 2.27% 3.25% NA NA
Balanced Fund................................ 1.91% 2.21% 3.25% 3.25%
</TABLE>
The accompanying notes are an integral part of these financial statements.
52
<PAGE> 54
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Stock Funds
--------------------------------------------------------------------
Strategic Income Fund Balanced Fund
Class A Class B Class A
--------------------------------------------------------------------
1997(1) 1996(4) 1997(1) 1996(4) 1997(1) 1996(1)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 5.16 $ 5.00 $ 5.15 $ 5.00 $ 12.18 $ 11.19
----- ----- ----- ----- ----- -----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)........... 0.42 0.25 0.38 0.23 0.46 0.42
Net gain or loss on securities (both
realized and unrealized)............... 0.06 0.18 0.06 0.17 2.27 1.32
----- ----- ----- ----- ----- -----
Total from investment operations....... 0.48 0.43 0.44 0.40 2.73 1.74
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS:
Dividends (from net investment
income)................................ (0.42) (0.25) (0.38) (0.23) (0.46) (0.42)
Distributions (from realized capital
gains)................................. (0.05) (0.01) (0.05) (0.01) (0.31) (0.33)
Distributions (in excess of realized
gains)................................. (0.01) (0.01) (0.01) (0.01) 0.00 0.00
----- ----- ----- ----- ----- -----
Total distributions.................... (0.48) (0.27) (0.44) (0.25) (0.77) (0.75)
----- ----- ----- ----- ----- -----
Net asset value, end of period.......... $ 5.16 $ 5.16 $ 5.15 $ 5.15 $ 14.14 $ 12.18
===== ===== ===== ===== ===== =====
Total return(6)......................... 9.57% 8.89% 8.77% 8.25% 22.72% 15.81%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)........ $37,831 $17,863 $ 8,048 $ 2,964 $49,456 $29,289
Ratio of expenses to average net assets
(annualized)(8)........................ 0.41% 0.02% 1.16% 0.74% 1.20% 1.28%
Ratio of net investment income to
average net assets (annualized)........ 8.04% 8.19% 7.29% 7.47% 3.58% 3.86%
Portfolio turnover rate (Note 5)....... 221.42% 187.15% 221.42% 187.15% 14.71% 41.41%
Average commission rate paid(7)........ -- -- -- -- $0.0591 $0.0591
<CAPTION>
Stock Funds
----------------------------------------------------------------------------
Balanced Fund
Class A Class B
----------------------------------------------------------------------------
1995(1) 1994(1) 1993(5) 1997(1) 1996(1) 1995(1) 1994(3)
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 9.23 $ 9.85 $10.00 $ 12.15 $ 11.17 $ 9.22 $ 9.41
----- ---- ---- ----- ----- ---- ----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)........... 0.42 0.44 0.09 0.39 0.36 0.35 0.10
Net gain or loss on securities (both (0.62)
realized and unrealized)............... 2.02 (0.15) 2.26 1.32 2.03 (0.07)
----- ---- ---- ----- ----- ---- ----
Total from investment operations....... 2.44 (0.18) (0.06) 2.65 1.68 2.38 0.03
----- ---- ---- ----- ----- ---- ----
LESS DISTRIBUTIONS:
Dividends (from net investment
income)................................ (0.42) (0.44) (0.09) (0.40) (0.37) (0.37) (0.22)
Distributions (from realized capital
gains)................................. (0.06) 0.00 0.00 (0.31) (0.33) (0.06) 0.00
Distributions (in excess of realized
gains)................................. 0.00 0.00 0.00 0.00 0.00 0.00 0.00
----- ---- ---- ----- ----- ---- ----
Total distributions.................... (0.48) (0.44) (0.09) (0.71) (0.70) (0.43) (0.22)
----- ---- ---- ----- ----- ---- ----
Net asset value, end of period.......... $ 11.19 $ 9.23 $ 9.85 $ 14.09 $ 12.15 $11.17 $ 9.22
===== ==== ==== ===== ===== ==== ====
Total return(6)......................... 26.76% -1.87% -0.62% 22.05% 15.25% 26.08% 0.25%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)........ $13,547 $9,654 $5,638 $ 9,552 $ 4,802 $1,632 $ 586
Ratio of expenses to average net assets 0.80%
(annualized)(8)........................ 1.48% 0.00% 1.69% 1.77% 1.99% 1.48%
Ratio of net investment income to 4.85%
average net assets (annualized)........ 4.15% 5.02% 3.07% 3.37% 3.66% 4.43%
Portfolio turnover rate (Note 5)....... 25.84% 29.19% 0.00% 14.71% 41.41% 25.84% 29.19%
Average commission rate paid(7)........ -- -- -- $0.0591 $0.0591 -- --
</TABLE>
53
<PAGE> 55
Financial Highlights selected data for a share outstanding throughout each
period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Stock Funds
-------------------------------------------------------------------------------------
Growth and Income Fund
Class A
-------------------------------------------------------------------------------------
1997(1) 1996(1) 1995(1) 1994(1) 1993(1) 1992(1) 1991(1) 1990(2)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 17.82 $ 15.91 $ 13.52 $ 14.01 $ 13.45 $ 13.52 $ 10.04 $10.00
------ ------ ----- ----- ----- ----- ----- ----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................ 0.10 0.14 0.20 0.16 0.22 0.25 0.31 0.04
Net gain or loss on securities (both
realized and unrealized).................... 4.58 3.06 4.26 (0.34) 1.17 (0.07) 3.48 0.04
------ ------ ----- ----- ----- ----- ----- ----
Total from investment operations............ 4.68 3.20 4.46 (0.18) 1.39 0.18 3.79 0.08
------ ------ ----- ----- ----- ----- ----- ----
LESS DISTRIBUTIONS:
Dividends (from net investment income)...... (0.10) (0.14) (0.20) (0.16) (0.22) (0.25) (0.31) (0.04)
Distributions (from realized capital
gains)...................................... (3.53) (1.15) (1.87) (0.12) (0.59) 0.00 0.00 0.00
Distributions (in excess of realized
gains)...................................... (0.01) 0.00 0.00 (0.03) (0.02) 0.00 0.00 0.00
------ ------ ----- ----- ----- ----- ----- ----
Total distributions......................... (3.64) (1.29) (2.07) (0.31) (0.83) (0.25) (0.31) (0.04)
------ ------ ----- ----- ----- ----- ----- ----
Net asset value, end of period............... $ 18.86 $ 17.82 $ 15.91 $ 13.52 $ 14.01 $ 13.45 $ 13.52 $10.04
====== ====== ===== ===== ===== ===== ===== ====
Total return(7).............................. 26.32% 20.16% 33.06% -1.24% 10.40% 1.40% 38.15% 0.78%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............. $173,796 $138,604 $93,061 $69,590 $59,392 $38,200 $20,084 $1,082
Ratio of expenses to average net assets
(annualized)(9)............................. 1.10% 1.16% 1.24% 1.04% 1.06% 0.87% 0.00% 0.00%
Ratio of net investment income to average
net assets (annualized)..................... 0.51% 0.82% 1.26% 1.21% 1.59% 2.00% 3.44% 5.20%
Portfolio turnover rate (Note 5)............ 118.26% 86.66% 125.28% 123.64% 178.91% 116.14% 146.31% 14.59%
Average commission rate paid(8)............. $ 0.0601 $ 0.0602 -- -- -- -- -- --
<CAPTION>
Stock Funds
-------------------------------------------------------------------------------------
Growth and Income Fund
Class B
-------------------------------------------------------------------------------------
1997(1) 1996(1) 1995(1) 1994(3)
<S> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 17.78 $ 15.89 $ 13.52 $ 13.04
----- ----- ----- -----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................ 0.03 0.06 0.10 0.02
Net gain or loss on securities (both
realized and unrealized).................... 4.56 3.05 4.26 0.67
----- ----- ----- -----
Total from investment operations............ 4.59 3.11 4.36 0.69
----- ----- ----- -----
LESS DISTRIBUTIONS:
Dividends (from net investment income)...... (0.03) (0.07) (0.12) (0.06)
Distributions (from realized capital
gains)...................................... (3.53) (1.15) (1.87) (0.12)
Distributions (in excess of realized
gains)...................................... (0.01) 0.00 0.00 (0.03)
----- ----- ----- -----
Total distributions......................... (3.57) (1.22) (1.99) (0.21)
----- ----- ----- -----
Net asset value, end of period............... $ 18.80 $ 17.78 $ 15.89 $ 13.52
===== ===== ===== =====
Total return(7).............................. 25.82% 19.60% 32.32% 5.32%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............. $18,227 $12,427 $ 4,292 $ 1,460
Ratio of expenses to average net assets
(annualized)(9)............................. 1.49% 1.66% 1.75% 1.66%
Ratio of net investment income to average
net assets (annualized)..................... 0.14% 0.29% 0.84% 0.71%
Portfolio turnover rate (Note 5)............ 118.26% 86.66% 125.28% 123.64%
Average commission rate paid(8)............. $0.0601 $0.0602 -- --
</TABLE>
(1) For the year ended December 31.
(2) For the period December 5, 1990 (inception of operations) to December 31,
1990.
(3) For the period July 1, 1994 (inception of operations) to December 31, 1994.
(4) For the period October 1, 1993 (inception of operations) to December 31,
1993
(5) For the period April 30, 1996 (effective date of registration) to December
31, 1996.
(6) For the period April 30, 1997 (inception of operations) to December 31,
1997.
(7) Total returns assume purchase at net asset value (without sales charge) at
the beginning of each period. Returns for periods less than a full year are
aggregate (non-annualized) returns.
(8) Initiating with fiscal year 1996, the Funds are required to disclose their
average commission rate per share for purchases and sales of equity
securities.
(9) Effective January 10, 1990, the Distributor and Adviser for the Atlas Funds
agreed to temporarily cap (or waive) their management and 12b-1 fees and to
absorb other operating expenses. Had such action not been taken, the ratio
of expenses to average net assets (annualized) would have been as follows:
<TABLE>
<CAPTION>
Class A
Period Ended 1997 1996 1995 1994 1993 1992 1991 1990
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Growth and Income Fund....................... 1.10% 1.16% 1.24% 1.28% 1.36% 1.45% 1.66% 3.41%
Strategic Growth Fund........................ 1.21% 1.31% 1.65% 1.74% 2.23% NA NA NA
Global Growth Fund........................... 1.66% 2.36% NA NA NA NA NA NA
Emerging Growth Fund......................... 1.88% NA NA NA NA NA NA NA
<CAPTION>
Class B
Period Ended 1997 1996 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Growth and Income Fund....................... 1.69% 1.83% 2.39% 3.25%
Strategic Growth Fund........................ 1.82% 2.12% 3.25% 3.25%
Global Growth Fund........................... 2.48% 3.25% NA NA
Emerging Growth Fund......................... 3.25% NA NA NA
</TABLE>
The accompanying notes are an integral part of these financial statements.
54
<PAGE> 56
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
--------------------------------------------------------
Strategic Growth Fund
Class A
--------------------------------------------------------
1997(1) 1996(1) 1995(1) 1994(1) 1993(4)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........ $ 14.01 $ 12.69 $ 10.00 $10.14 $10.00
----- ----- ----- ---- ----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)............... 0.11 0.13 0.10 0.11 0.05
Net gain or loss on securities (both
realized and unrealized)................... 3.65 2.88 2.82 (0.14) 0.14
----- ----- ----- ---- ----
Total from investment operations........... 3.76 3.01 2.92 (0.03) 0.19
----- ----- ----- ---- ----
LESS DISTRIBUTIONS:
Dividends (from net investment income)..... (0.11) (0.13) (0.09) (0.11) (0.05)
Distributions (from realized capital
gains)..................................... (1.30) (1.56) (0.14) 0.00 0.00
Distributions (in excess of realized
gains)..................................... 0.00 0.00 0.00 0.00 0.00
----- ----- ----- ---- ----
Total distributions........................ (1.41) (1.69) (0.23) (0.11) (0.05)
----- ----- ----- ---- ----
Net asset value, end of period.............. $ 16.36 $ 14.01 $ 12.69 $10.00 $10.14
===== ===== ===== ==== ====
Total return(7)............................. 26.89% 23.72% 29.14% -0.28% 1.94%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............ $54,310 $22,253 $12,223 $6,471 $4,168
Ratio of expenses to average net assets
(annualized)(9)............................ 1.21% 1.31% 1.62% 1.17% 0.00%
Ratio of net investment income to average
net assets (annualized).................... 0.86% 1.08% 1.03% 1.25% 2.66%
Portfolio turnover rate (Note 5)........... 85.55% 119.87% 73.32% 54.01% 6.41%
Average commission rate paid(8)............ $0.0582 $0.0597 -- -- --
---------------------------------------------------------
Strategic Growth Fund
Class B
---------------------------------------------
1997(1) 1996(1) 1995(1) 1994(3)
<S> <C> <C> <C> <C>
Net asset value, beginning of period........ $ 13.92 $ 12.63 $ 9.98 $ 9.92
----- ----- ---- ----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)............... 0.05 0.07 0.03 (0.05)
Net gain or loss on securities (both
realized and unrealized)................... 3.60 2.85 2.82 0.21
----- ----- ---- ----
Total from investment operations........... 3.65 2.92 2.85 0.16
----- ----- ---- ----
LESS DISTRIBUTIONS:
Dividends (from net investment income)..... (0.05) (0.07) (0.06) (0.10)
Distributions (from realized capital
gains)..................................... (1.30) (1.56) (0.14) 0.00
Distributions (in excess of realized
gains)..................................... 0.00 0.00 0.00 0.00
----- ----- ---- ----
Total distributions........................ (1.35) (1.63) (0.20) (0.10)
----- ----- ---- ----
Net asset value, end of period.............. $ 16.22 $ 13.92 $12.63 $ 9.98
===== ===== ==== ====
Total return(7)............................. 26.23% 23.13% 28.58% 1.57%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............ $12,344 $ 5,689 $2,332 $ 327
Ratio of expenses to average net assets
(annualized)(9)............................ 1.71% 1.81% 2.14% 1.80%
Ratio of net investment income to average
net assets (annualized).................... 0.37% 0.59% 0.56% 0.82%
Portfolio turnover rate (Note 5)........... 85.55% 119.87% 73.32% 54.01%
Average commission rate paid(8)............ $0.0582 $0.0597 -- --
-------------------------------------------
<CAPTION>
----------------------------------------------------------------------
Global Growth Fund Emerging Growth Fund
Class A Class B Class A Class B
---------------------------------------------------------------------
1997(1) 1996(5) 1997(1) 1996(5) 1997(6) 1997(6)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....... $ 10.96 $ 10.14 $ 10.91 $ 10.14 $ 10.00 $ 10.00
----- ----- ----- ----- ----- -----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss).............. 0.02 0.01 (0.05) (0.03) (0.05) (0.12)
Net gain or loss on securities (both
realized and unrealized).................. 2.65 1.10 2.63 1.08 3.05 3.05
----- ----- ----- ----- ----- -----
Total from investment operations.......... 2.67 1.11 2.58 1.05 3.00 2.93
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS:
Dividends (from net investment income).... 0.00 (0.01) 0.00 0.00 0.00 0.00
Distributions (from realized capital
gains).................................... (0.84) (0.27) (0.84) (0.27) 0.00 0.00
Distributions (in excess of realized
gains).................................... (0.10) (0.01) (0.10) (0.01) 0.00 0.00
----- ----- ----- ----- ----- -----
Total distributions....................... (0.94) (0.29) (0.94) (0.28) 0.00 0.00
----- ----- ----- ----- ----- -----
Net asset value, end of period............. $ 12.69 $ 10.96 $ 12.55 $ 10.91 $ 13.00 $ 12.93
===== ===== ===== ===== ===== =====
Total return(7)............................ 24.35% 10.89% 23.64% 10.34% 30.00% 29.30%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)........... $29,468 $13,552 $ 5,691 $ 2,210 $10,028 $ 2,235
Ratio of expenses to average net assets
(annualized)(9)........................... 1.62% 1.51% 2.14% 2.24% 1.49% 2.23%
Ratio of net investment income to averag
net assets (annualized)................... 0.14% 0.13% -0.40% -0.75% -0.59% -1.35%
Portfolio turnover rate (Note 5).......... 63.62% 64.89% 63.62% 64.89% 17.06% 17.06%
Average commission rate paid(8)........... $0.0029 $0.0052 $0.0029 $0.0052 $0.0600 $0.0600
</TABLE>
55
<PAGE> 57
Notes to Financial Statements December 31, 1997
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Atlas Assets, Inc., a Maryland corporation (the "Company"), is an open-end
management investment company registered under the Investment Company Act of
1940 ("1940 Act"), as amended, and offering twelve portfolios. The Company
currently consists of the Atlas U.S. Treasury Money Fund, the Atlas California
Municipal Money Fund, the Atlas National Municipal Money Fund, the Atlas
California Municipal Bond Fund, the Atlas National Municipal Bond Fund, the
Atlas U.S. Government and Mortgage Securities Fund, the Atlas Strategic Income
Fund, the Atlas Balanced Fund, the Atlas Growth and Income Fund, the Atlas
Strategic Growth Fund, the Atlas Global Growth Fund, and the Atlas Emerging
Growth Fund (a "Fund", or collectively, the "Funds"). All Funds are diversified
with the exception of the Atlas California Municipal Money Fund and the Atlas
California Municipal Bond Fund, which are non-diversified. The Funds offer two
classes of shares, Class A and Class B, with the exception of Atlas California
Municipal Money Fund and Atlas National Municipal Money Fund which offer only
Class A shares. Stock and Bond Fund Class A shares are subject to a sales charge
at the time of purchase while all Class B shares may be subject to a contingent
deferred sales charge. Both share classes have equal rights and privileges but
have separate distribution plans, class specific expenses and exclusive rights
to vote on matters affecting only individual classes. Class B shares will
automatically convert to Class A shares sixty months after purchase.
The investment objective of the Money and Bond Funds is to seek a high level
of current income consistent with prudent investment management. The Money Funds
seek short-term yields with liquidity and stability of principal. The Bond Funds
seek higher long-term yields for investors who can accept price fluctuations.
The Stock Funds seek a varying mix of long-term capital growth and current
income for investors who can accept price fluctuations.
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
policies are in conformity with generally accepted accounting principles for
investment companies.
a. Investment Valuation: Bond Fund securities are valued by pricing
services. Valuations of portfolio securities furnished by the pricing
services are based upon a computerized matrix system and/or appraisals,
in each case, in reliance upon information concerning market transactions
and quotations from recognized securities dealers. Securities for which
quotations are readily available are valued based upon those quotations.
Securities for which quotations are not readily available (which
constitute the majority of the Bond Funds' securities) are valued at
their fair value based upon the information supplied by the pricing
services. The methods used by the pricing services and the quality of
valuations so established are reviewed by the Company's officers under
the general supervision of the Directors of the Company. There are a
number of pricing services available and the Directors, on the basis of
ongoing evaluation of these services, may use other pricing services or
discontinue the use of any pricing service in whole or in part.
Money Fund securities have a remaining maturity of 13 months or less and
their entire portfolios have a weighted average maturity of 90 days or
less. As such, all of the Money Fund securities are valued at amortized
cost, which approximates value. If a Money Fund portfolio had a remaining
weighted average maturity of greater than 90 days, the portfolios would
be stated at value based on recorded closing sales on a national
securities exchange or, in the absence of a recorded sale, at the mean
between the bid and asked prices.
Stock Fund securities listed or traded on an exchange are valued at the
last sales price on the exchange, or lacking any sales on a particular
day, the security is valued at the mean between the closing bid and asked
prices on that day. Each security traded in the over-the-counter market
(but not including securities reported on the NASDAQ National Market
System) is valued at the mean between the last bid and asked prices. Each
security reported on the NASDAQ National Market System is valued at the
last sales price on the valuation date.
b. Security Credit Risk: The Atlas Strategic Income Fund may invest any
amount of its assets in higher yielding, lower-rated debt securities,
including defaulted securities, which may be subject to a greater degree
of credit risk, greater market fluctuations and risk of loss of income
and principal than lower yielding, investment grade fixed income
securities. The Atlas Global Growth Fund and the Atlas Emerging Growth
Fund may also invest in
56
<PAGE> 58
- --------------------------------------------------------------------------------
such lower-rated securities, but only to a much more limited extent. None
of the three Funds holds any securities in default as of December 31,
1997.
c. Municipal Bonds or Notes with "Puts": The Funds have purchased municipal
bonds or notes with the right to resell the bonds or notes to the seller
at an agreed upon price or yield on a specified date or within a
specified period (which will be prior to the maturity date of the bonds
or notes). Such a right to resell is commonly known as a "put". In
determining the weighted average maturity of the Money Funds' portfolios,
municipal bonds and notes as to which the Funds hold a put will be deemed
to mature on the last day on which the put may be exercisable.
d. Variable Rate Demand Notes: The Funds have invested in certain variable
interest rate demand notes with maturities greater than 90 days but which
are redeemable at specified intervals upon demand. The maturity of these
instruments for purposes of calculating the portfolio's weighted average
maturity is considered to be the greater of the period until the interest
rate is adjusted or until the principal can be recovered by demand.
e. Federal Income Taxes: It is the Company's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its net investment income,
including any net realized gain on investments, to its shareholders.
Accordingly, no provision for federal income or excise tax is required.
f. Security Transactions: As is common in the industry, security
transactions are accounted for on the date securities are purchased or
sold (trade date). Realized gains and losses on security transactions are
determined on the basis of specific identification for both financial
statement and federal income tax purposes.
g. Allocation of Expenses, Income and Gains and Losses: Common expenses
incurred by the Company are allocated among the Funds based on the ratio
of net assets of each Fund to the combined net assets. Common expenses,
income and gains and losses are allocated daily among share classes of
each Fund based on the relative proportion of net assets represented by
each class. Other expenses are charged to each Fund as incurred on a
specific identification basis and then allocated amongst the share
classes or charged to the share class to which the expense is directly
attributable.
h. Investment Income, Expenses and Distributions: Interest income and
estimated expenses are accrued daily. Interest on payment-in-kind debt
securities is accrued as income at the coupon rate and a market
adjustment is made periodically. Dividends are recorded on the
ex-dividend date. Dividends-in-kind are recorded as income on the
ex-dividend date at the current market value of the underlying security.
The Money Funds declare and reinvest dividends daily and pay them
monthly. The Bond Funds declare dividends daily and reinvest and pay them
monthly. The Stock Funds, with the exception of the Atlas Strategic
Growth Fund, the Atlas Global Growth Fund and the Atlas Emerging Growth
Fund, which are on an annual schedule, declare, pay and reinvest
dividends quarterly. Income for the Atlas Balanced Fund, the Atlas Growth
and Income Fund and the Atlas Global Growth Fund for the period ended
December 31, 1997 are net of foreign withholding taxes of $3,326, $9,470
and $31,689, respectively. Distributions of capital gains, if any, will
normally be declared and paid once a year.
i. To-Be-Announced Securities: The Atlas U.S. Government and Mortgage
Securities Fund and the Atlas Strategic Income Fund may trade portfolio
securities on a "to-be-announced" (TBA) basis. In a TBA transaction, the
Fund has committed to purchasing or selling securities for which all
specific information is not yet known at the time of the trade,
particularly the pool number and face amount. Securities purchased on a
TBA basis are not settled until they are delivered to the Fund, normally
15 to 45 days later. These transactions are subject to market
fluctuations and their current value is determined in the same manner as
for other portfolio securities. Pursuant to regulation, the Fund sets
aside sufficient investment securities as collateral to meet these
commitments. TBA commitments as of December 31, 1997 were $20,497,917 for
Atlas Government and Mortgage Securities Fund and $7,109,143 for Atlas
Strategic Income Fund.
j. Options: Premiums received from call options written are recorded as a
liability. The amount of the liability is subsequently adjusted to
reflect the current market value of the option written. If the option is
not exercised,
57
<PAGE> 59
Notes to Financial Statements December 31, 1997
- --------------------------------------------------------------------------------
premiums received are realized as a gain at expiration date. If the
position is closed prior to expiration, a gain or loss is realized based
on premiums received less the cost of the closing transaction. When an
option is exercised, premiums received are added to the proceeds from the
sale of the underlying securities and a gain or loss is realized
accordingly. These same principles apply to the sale of put options.
k. Forward Contracts: The Stock Funds and Atlas Strategic Income Fund may
enter into forward foreign currency exchange contracts (forward
contracts) to hedge specific transactions or portfolio positions and to
protect the value of the portfolio against future changes in currency
exchange rates. A forward contract is an obligation to purchase or sell a
specific currency at an agreed upon future date at a price set on the day
of the contract.
The valuation of forward contracts, which may be owned by the Stock funds
and Atlas Strategic Income Fund, is based on the daily closing prices of
the forward currency contract rates in the London foreign exchange
markets as provided by pricing services. Gains or losses are realized
upon the closing or settlement of the forward transaction.
Securities are held in segregated accounts to cover net exposure on
outstanding forward contracts. Unrealized appreciation or depreciation on
forward contracts is reported in the Statement of Assets and Liabilities.
Realized gains and losses are reported with all other foreign currency
gains and losses in the Fund's Statement of Operations.
The risks associated with forward contracts include the potential default
of the other party to the contract and unanticipated movements in the
value of a foreign currency relative to the U.S. dollar.
l. Repurchase Agreements: The Funds may invest in repurchase agreements
secured by U.S. Government obligations or by other securities. Securities
pledged as collateral for repurchase agreements are held by the Funds'
custodian bank until maturity of the repurchase agreements. Provisions of
the agreements ensure that the market value of the collateral is
sufficient in the event of default; however, in the event of default or
bankruptcy by the other party to the agreements, realization and/or
retention of the collateral may be subject to legal proceedings.
m. Dollar Roll Transactions: The Atlas U.S. Government and Mortgage
Securities Fund and the Atlas Strategic Income Fund may engage in dollar
reverse repurchase agreements ("dollar rolls"), which entail the
simultaneous sale of securities with an agreement to buy back
substantially similar securities at a future date at a price less than
the price at which the securities were originally sold. These
transactions are accounted for as financing transactions as opposed to
sales and purchases. The differential in price between the sale price and
repurchase price is recorded as deferred income and recognized between
the settlement dates of the sale and repurchase. Pursuant to regulation,
the funds set aside sufficient investment securities as collateral to
meet these commitments. Dollar roll transactions involve risk that the
market value of the securities sold by the Funds may decline below the
repurchase price of those securities.
n. Foreign Currency Translation: Amounts denominated in or expected to
settle in foreign currencies (FC) are translated into United States
dollars at rates reported by selected pricing services on the following
basis: Market value of investment, other assets and liabilities -- at the
closing rate of exchange at the balance sheet date; purchases and sales
of investment securities, income and expenses -- at the rate of exchange
prevailing on the respective dates such transactions are recorded.
The Funds do not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held.
Such fluctuations are included with the net realized and unrealized gain
or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of FC's, currency gains or
losses realized between the trade and settlement dates on securities
transactions, the difference between the amounts of dividends, interest
and foreign withholding taxes recorded on the Funds' books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities at
fiscal year end, resulting from changes in the exchange rates.
58
<PAGE> 60
- --------------------------------------------------------------------------------
o. The Funds have previously adopted Statement of Position 93-2,
"Determination, Disclosure, and Financial Statement Presentation of
Income, Capital Gain, and Return of Capital Distributions by Investment
Companies." In accordance with the statement, distributions in excess of
realized gains have been reflected in the Statements of Changes in Net
Assets as follows: Atlas Strategic Income Fund -- $39,952 and $21,661 in
1997 and 1996, respectively, resulting from the non-deductibility under
Internal Revenue Service regulations of certain wash sales and $24,754 in
1997 resulting from a difference in the required distribution amount
determined under excise tax rules versus that determined under generally
accepted accounting principles; Atlas Growth and Income Fund -- $47,198
in 1997 resulting from the non-deductibility under Internal Revenue
Service regulations of certain wash sales; and Atlas Global Growth
Fund -- $2,513 and $17,781 in 1997 and 1996, respectively, resulting from
the non-deductibility under Internal Revenue Service regulations of
certain wash sales and $201,451 in 1997 resulting from a difference in
the required distribution amount determined under excise tax rules versus
that determined under generally accepted accounting principles.
p. Use of Estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
2. UNAMORTIZED ORGANIZATION COSTS
Organization costs of $35,906 incurred by the Company as of June 30, 1994 in
the organization of the Class B Plan have been allocated equally to the Funds
existing at that date offering Class B shares. These costs have been deferred
and are being amortized on a straight line basis over a period of five years
from July 1994.
3. UNREALIZED APPRECIATION/DEPRECIATION -- TAX BASIS
As of December 31, 1997, each Fund had the following unrealized appreciation
(depreciation) for federal income tax purposes (in 000's):
<TABLE>
<CAPTION>
California National California National
U.S. Treasury Municipal Municipal Municipal Municipal
Money Fund Money Fund Money Fund Bond Fund Bond Fund
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Unrealized appreciation....... $ 0 $ 0 $ 0 $ 15,062 $ 4,480
Unrealized depreciation....... $ 0 $ 0 $ 0 $ 0 $ 0
-----------------------------------------------------------------------------------------------
Net unrealized appreciation... $ 0 $ 0 $ 0 $ 15,062 $ 4,480
===============================================================================================
Cost of securities for federal
income tax purposes........... $60,620 $43,973 $6,512 $187,683 $56,771
===============================================================================================
<CAPTION>
U.S. Government
and Mortgage
Securities Fund
-----------------------------------------------------------------------------------------------
<S> <C>
Unrealized appreciation....... $ 4,812
Unrealized depreciation....... $ (143)
-----------------------------------------------------------------------------------------------
Net unrealized appreciation... $ 4,669
===============================================================================================
Cost of securities for federal
income tax purposes........... $236,019
===============================================================================================
</TABLE>
<TABLE>
<CAPTION>
Strategic Balanced Growth and Strategic Growth Global Growth
Income Fund Fund Income Fund Fund Fund
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Unrealized appreciation....... $ 1,409 $10,237 $ 36,941 $10,564 $ 5,290
Unrealized depreciation....... $ (953) $ (222) $ (1,550) $(2,581) $(1,354)
------------------------------------------------------------------------------------------------
Net unrealized appreciation... $ 456 $10,015 $ 35,391 $ 7,983 $ 3,936
================================================================================================
Cost of securities for federal
income tax purposes........... $49,869 $48,743 $150,511 $58,718 $31,136
================================================================================================
<CAPTION>
Emerging Growth
Fund
------------------------------------------------------------------------------------------------
<S> <C>
Unrealized appreciation....... $ 1,423
Unrealized depreciation....... $ (500)
------------------------------------------------------------------------------------------------
Net unrealized appreciation... $ 923
===============================================================================================
Cost of securities for federal
income tax purposes........... $11,378
===============================================================================================
</TABLE>
59
<PAGE> 61
Notes to Financial Statements December 31, 1997
- --------------------------------------------------------------------------------
4. SHARE TRANSACTIONS
The following is a summary of share transactions for the years ended December
31, 1997 and December 31, 1996 (in 000's):
<TABLE>
<CAPTION>
U. S. Treasury California Municipal National Municipal
Money Fund Money Fund Money Fund
Class A Class B Class A Class A
1997 1996 1997 1996 1997 1996 1997 1996
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sold............ 68,098 75,634 516 168 35,350 20,788 4,628 5,107
Issued in
reinvestment of
dividends....... 2,850 2,547 5 5 1,301 1,001 195 198
Redeemed........ (76,384) (64,076) (477) (166) (29,255) (23,874) (5,758) (5,651)
-----------------------------------------------------------------------------------------------------------
Net increase
(decrease).... (5,436) 14,105 44 7 7,396 (2,085) (935) (346)
===========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
U.S. Government and
California Municipal National Municipal Mortgage
Bond Fund Bond Fund Securities Fund
Class
Class A Class B Class A Class B Class A B
1997 1996 1997 1996 1997 1996 1997 1996 1997 1996 1997
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sold......................... 1,246 1,356 212 204 276 267 88 85 1,295 1,962 173
Issued in reinvestment of
dividends.................... 569 550 20 13 185 184 9 5 861 995 26
Issued in connection with a
reorganization (Note 7)...... 1,480 N/A 51 N/A 851 N/A 22 N/A 342 N/A 31
Redeemed..................... (2,155) (2,346) (62) (17) (647) (715) (19) (8) (4,897) (5,514) (106)
--------------------------------------------------------------------------------------------------
Net increase (decrease)...... 1,140 (440) 221 200 665 (264) 100 82 (2,399) (2,557) 124
==================================================================================================
<CAPTION>
1996
--------------------------------------------------------------------------------------------------
<S> <C>
Sold......................... 279
Issued in reinvestment of
dividends.................... 22
Issued in connection with a
reorganization (Note 7)...... N/A
Redeemed..................... (85)
--------------------------------------------------------------------------------------------------
Net increase (decrease)...... 216
==================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Strategic Income Fund Balanced Fund Growth and Income Fund
Class
Class A Class B Class A Class B Class A B
1997 1996(1) 1997 1996(1) 1997 1996 1997 1996 1997 1996 1997
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sold......................... 5,282 3,495 1,057 575 1,293 1,435 299 254 1,523 2,756 185
Issued in reinvestment of
dividends.................... 271 29 58 7 169 123 29 19 1,468 514 151
Redeemed..................... (1,680) (62) (128) (7) (368) (364) (45) (24) (1,554) (1,343) (65)
--------------------------------------------------------------------------------------------------
Net increase................. 3,873 3,462 987 575 1,094 1,194 283 249 1,437 1,927 271
==================================================================================================
<CAPTION>
1996
--------------------------------------------------------------------------------------------------
<S> <C>
Sold......................... 423
Issued in reinvestment of
dividends.................... 43
Redeemed..................... (37)
--------------------------------------------------------------------------------------------------
Net increase................. 429
==================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Strategic Growth Fund Global Growth Fund Emerging Growth Fund
Class A Class B Class A Class B Class A Class B
1997 1996 1997 1996 1997 1996(2) 1997 1996(2) 1997(3) 1996 1997(3) 1996
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sold......................... 1,732 749 329 194 1,291 1,239 238 199 816 N/A 182 N/A
Issued in reinvestment of
dividends.................... 263 163 58 43 159 26 31 5 0 N/A 0 N/A
Redeemed..................... (264) (287) (35) (13) (364) (29) (18) (1) (44) N/A (9) N/A
--------------------------------------------------------------------------------------------------
Net increase................. 1,731 625 352 224 1,086 1,236 251 203 772 N/A 173 N/A
==================================================================================================
</TABLE>
(1) For the period May 20, 1996 (inception of operations) to December 31, 1996.
(2) For the period April 15, 1996 (inception of operations) to December 31,
1996.
(3) For the period April 30, 1997 (inception of operations) to December 31,
1997.
60
<PAGE> 62
- --------------------------------------------------------------------------------
5. PURCHASES AND SALES OF SECURITIES
Aggregate purchases and sales of securities (excluding short-term securities)
for the year ended December 31, 1997 were as follows (in 000's):
<TABLE>
<CAPTION>
California
U.S. Treasury Municipal National Municipal California Municipal National Municipal
Money Fund Money Fund Money Fund Bond Fund Bond Fund
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Purchases................... $ 0 $ 0 $ 0 $35,406 $16,676
Sales....................... $ 0 $ 0 $ 0 $28,555 $10,907
---------------------------------------------------------------------------------------------------
<CAPTION>
U.S. Government
and Mortgage
Securities Fund
----------------
<S> <C>
Purchases................... $ 8,085
Sales....................... $37,878
----------------
</TABLE>
<TABLE>
<CAPTION>
Strategic Growth and Strategic Global Emerging
Income Fund Balanced Fund Income Fund Growth Fund Growth Fund Growth Fund(1)
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Purchases................... $109,796 $19,780 $192,805 $51,958 $25,298 $11,098
Sales....................... $ 83,274 $ 5,317 $194,328 $31,158 $15,431 $ 1,621
---------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period April 30, 1997 (inception of operations) to December 31,
1997.
At December 31, 1997 the following Funds had capital loss carryovers
approximating these amounts for federal income tax purposes (in 000's):
<TABLE>
<CAPTION>
Expiring December 31,
----------------------------------------------
2001 2002 2003 2004 2005
<S> <C> <C> <C> <C> <C>
U.S. Treasury Money Fund....................................... $ -- $ -- $ -- $ 10 $ 5
National Municipal Bond Fund................................... $ -- $ 2 $ -- $ -- $ --
U.S. Government and Mortgage Securities Fund................... $487 $5,195 $7,507 $1,491 $280
Emerging Growth Fund........................................... $ -- $ -- $ -- $ -- $ 28
</TABLE>
Such amounts may be used to offset capital gains realized during the
subsequent periods indicated and thereby relieve these funds and their
shareholders of federal tax liability with respect to the capital gains that are
so offset. It is the intention of the Funds not to make distributions from
capital gains while they have a capital loss carryover.
6. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Atlas Advisers, Inc. (the "Adviser") provides portfolio management services to
the U.S. Government and Mortgage Securities Fund and the U.S. Treasury Money
Fund and supervises the provision of similar services to the Atlas Municipal
Funds by Boston Safe Advisers, Inc. and to the Atlas Stock Funds and Atlas
Strategic Income Fund by OppenheimerFunds, Inc. (together, the "Subadvisers").
Each Fund pays the Adviser a management fee for the investment management
services who, in turn, pays the Subadvisers. The management fee is based on an
annual rate, equal to a percentage of each Fund's average daily net assets, and
is paid monthly as follows: .50% of assets up to $500 million and .475% of
assets over $500 million for the Money Funds; .55% of assets up to $500 million
and .50% of assets over $500 million for the Bond Funds other than Atlas
Strategic Income Fund; .70% of assets up to $100 million, .60% of assets of the
next $400 million and .50% of assets over $500 million for the Stock Funds other
than Atlas Global Growth Fund and Atlas Emerging Growth Fund; .75% of assets up
to $100 million, .70% of assets of the next $400 million and .65% of assets over
$500 million for the Atlas Strategic Income Fund; and .80% of assets up to $100
million, .75% of assets of the next $400 million and .70% of assets over $500
million for the Atlas Global Growth Fund and the Atlas Emerging Growth Fund.
Atlas Securities, Inc. (the "Distributor") acts as principal underwriter for
all classes of shares of each Fund pursuant to a Principal Underwriting
Agreement which provides for a commission to be paid on the sale of Class A
shares of the Bond and Stock Funds and on the redemption of Class B shares held
less than five years of the Stock and Bond Funds and the U.S. Treasury Money
Fund. The Distributor also receives payments under separate Distribution Plans
(the "Class A Plan" and "Class B Plan") pursuant to Rule 12b-1 of the 1940 Act.
Under the Class A Plan, the Company may reimburse the Distributor up to a
maximum of .25% per year of average daily Class A net assets in each Fund,
payable
61
<PAGE> 63
Notes to Financial Statements December 31, 1997
- --------------------------------------------------------------------------------
on a quarterly basis. Under the Class B Plan, the maximum rate is .75% per year
of average daily Class B net assets in each Fund and is payable on a monthly
basis.
Due to voluntary expense waivers in effect during the period ended December
31, 1997, 12b-1 fees relating to Class A shares were assessed and paid to the
Distributor at rates, varying by Fund, ranging from 0.00% to .25% per annum.
Such fees under the Class B Plan were assessed and paid at rates, varying by
Fund, ranging from .50% to .75% per annum. Class A and Class B 12b-1 fees due
the Distributor were reduced in the amount of $386,225 and $18,853,
respectively. Management fees due the Adviser were reduced by $434,218. The
Adviser also absorbed $182,701 of other Fund expenses during the period. During
the period ended December 31, 1997, the Distributor received $997,821 for sales
charges paid by purchasers of Class A shares and $61,415 for contingent deferred
sales charges paid by sellers of Class B shares. Such sales charges are not an
expense of the Funds and thus are not reflected in the accompanying Statements
of Operations.
The Adviser and Distributor are wholly owned subsidiaries of Golden West
Financial Corporation. Certain officers and directors of the Company are also
officers and/or directors of the Adviser and the Distributor.
At December 31, 1997, Golden West Financial Corporation owned 80,254 Class A
shares in the California Municipal Bond Fund, 45,162 shares in the National
Municipal Bond Fund, 21,317 shares in the U.S. Government and Mortgage
Securities Fund and 116,324 shares in the Emerging Growth Fund.
7. REORGANIZATIONS
On December 5, 1997, California Municipal Bond Fund, National Municipal Bond
Fund and U.S. Government and Mortgage Securities Fund acquired all of the assets
of California Insured Intermediate Municipal Fund, National Insured Intermediate
Municipal Fund and U.S. Government Intermediate Fund, respectively, pursuant to
separate Agreements and Plans of Reorganization approved by the shareholders of
each acquired fund on November 24, 1997. Information relative to the transfer of
assets and exchange of shares is summarized below. The net assets of California
Insured Intermediate Fund, National Insured Intermediate Fund and U.S.
Government Intermediate Fund included net unrealized appreciation (depreciation)
of $403,011, $221,521 and $(13,671), respectively, on the acquisition date. The
transactions qualified as tax-free reorganizations for federal income tax
purposes.
<TABLE>
<CAPTION>
COMBINED
SHARE SHARES VALUE OF NET ASSETS ON
MERGED FUND/SURVIVING FUND CLASS ISSUED ISSUED SHARES DECEMBER 5, 1997
- -----------------------------------------------------------------
-------------------------------------------------
<S> <C> <C> <C> <C>
California Insured Intermediate Municipal Fund/ California
Municipal Bond Fund............................................ A 1,480,175 $ 16,888,793 $194,353,610
B 50,846 $ 580,661 $ 7,802,691
National Insured Intermediate Municipal Fund/ National Municipal
Bond Fund...................................................... A 850,763 $ 9,809,295 $ 58,188,472
B 21,768 $ 250,984 $ 3,134,813
U.S. Government Intermediate Fund/ U.S. Government and Mortgage
Securities Fund................................................ A 342,216 $ 3,487,178 $203,355,324
B 31,035 $ 316,243 $ 7,195,556
</TABLE>
8. CONCENTRATIONS OF CREDIT RISK
There are certain concentrations of credit risk, which may subject the Funds
more significantly to economic changes occurring in certain industries or
sectors as follows:
The California Municipal Money Fund and the California Municipal Bond Fund
have concentrations in California municipal securities.
The U.S. Government and Mortgage Securities Fund has a concentration in
Federal Home Loan Mortgage Corporation and Federal National Mortgage Association
securities.
The U.S. Treasury Money Fund has a concentration in United States Treasury
obligations.
62
<PAGE> 64
- --------------------------------------------------------------------------------
Industry and sector concentrations greater than 10% of a Fund's net assets at
December 31, 1997 are as follows:
The California Municipal Money Fund has 12.97% in transportation and 12.02% in
housing.
The National Municipal Money Fund has 18.24% in industrial development, 17.83%
in health and 10.68% in general obligation bonds.
The California Municipal Bond Fund has 19.62% in water/sewer, 11.69% in
airport/seaport and 11.66% in public power.
The National Municipal Bond Fund has 24.32% in general obligation bonds and
14.46% in public power.
The Balanced Fund and Global Growth Fund have 19.47% and 19.94%, respectively,
in banks.
The Emerging Growth Fund has 21.35% in computer software.
9. FORWARD CONTRACTS
Open forward contracts in the Funds to purchase and sell foreign currencies as
of December 31, 1997 were as follows:
<TABLE>
<CAPTION>
Valuation
Contract as Unrealized
Settlement Amount of Gain
Date (000's) 12/31/97 (Loss)
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Strategic Income Fund:
- ---------------------
Contracts to Buy:
- ----------------
Australian Dollar..................................... 01/14/98 338 AUD $ 220,511 $ (5,135)
Canadian Dollar....................................... 01/20/98-01/21/98 729 CAD 510,529 (10,402)
Indonesian Rupiah..................................... 02/10/98 532,000 IDR 99,439 (54,764)
Japanese Yen.......................................... 01/20/98 21,770 JPY 167,328 (2,081)
Swiss Franc........................................... 01/21/98 300 CHF 206,077 (11,141)
---------- --------
$1,203,884 (83,523)
==========
--------
Contracts to Sell:
- ---------------
Australian Dollar..................................... 01/14/98-02/10/98 1,940 AUD $1,264,632 77,547
Canadian Dollar....................................... 01/21/98-01/28/98 281 CAD 196,538 8,432
German Deutsche Mark.................................. 02/19/98 125 DEM 69,710 1,011
Indonesian Rupiah..................................... 02/10/98 532,000 IDR 99,439 43,188
Irish Punt............................................ 01/20/98-01/30/98 130 IEP 184,991 9,309
Japanese Yen.......................................... 01/20/98-03/23/98 27,770 JPY 213,877 8,089
Malaysian Ringgit..................................... 02/03/98 354 91,412 8,588
Mexican Peso.......................................... 03/31/98 3,562 MXP 445,188 (20,188)
New Zealand Dollar.................................... 01/28/98-02/11/98 685 NZD 396,254 20,375
South African Rand.................................... 01/26/98 591 ZAR 120,670 (158)
Swiss Franc........................................... 01/21/98 300 CHF 206,077 2,111
---------- --------
$3,288,788 158,304
==========
--------
Net unrealized gain................................... $ 74,781
========
Global Growth Fund:
- -------------------
Contracts to Sell:
- ---------------
Japanese Yen.......................................... 05/26/98 122,980 JPY $ 963,421 $ 36,579
Swedish Krona......................................... 01/02/98 147 SEK 18,472 43
Swiss Franc........................................... 07/06/98 1,429 CHF 1,000,191 (191)
---------- --------
$1,982,084
==========
Net unrealized gain................................... $ 36,431
========
</TABLE>
63
<PAGE> 65
Notes to Financial Statements December 31, 1997
- --------------------------------------------------------------------------------
10. FUTURES CONTRACTS
The Bond and Stock Funds may purchase and sell futures contracts for hedging
their investments against changes in value, to manage cash flow, to attempt to
enhance income, or as a temporary substitute for purchases or sales of actual
securities. These Funds may also buy or write put or call options on these
futures contracts.
The purpose of the acquisition or sale of a futures contract is to protect the
involved Fund from adverse fluctuations in interest rates or in market or
currency indices and the resulting negative valuation effect on the Fund
investments without actually buying or selling securities.
Upon engaging in a futures contract, the Fund is required to deposit with the
broker an amount of cash or cash equivalents equal to a certain percentage of
the contract amount (initial margin). Subsequent payments (variation margins) to
and from the Fund or the broker, must be made daily as the price of the security
or the currency rate underlying the futures contract fluctuates, making the long
or short position in the futures contract more or less valuable. The Fund
recognizes a realized gain or loss when the contract is closed or expires.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statements of
Investments. The Statements of Assets and Liabilities reflects a receivable or
payable for the daily mark to market variation margin.
Futures contracts (and related options) involve risks to which the Bond and
Stock Funds would otherwise not be subject. Inherent risks include the
possibility of imperfect correlation between the price of the futures contract
or option and the price of the securities or indices being hedged and the
possible absence of a liquid secondary market for any particular instrument at
any time.
As of December 31, 1997 the Atlas Strategic Income Fund and Atlas Global
Growth Fund had outstanding futures contracts to purchase and sell debt
securities as follows:
<TABLE>
<CAPTION>
Number of Unrealized
Expiration Futures Appreciation/
Date Contracts Valuation (Depreciation)
--------------------------------------------------------
<S> <C> <C> <C> <C>
Strategic Income Fund:
- ---------------------
Contracts to Purchase:
- --------------------
U.S. Treasury Notes............................................... 03/98 5 $ 543,125 $ 3,359
U.S. Treasury Bonds............................................... 03/98 42 $4,918,375 35,125
-------
38,484
-------
Contracts to Sell:
- ---------------
German Government Bonds........................................... 03/98 1 $ 144,816 $ 2,021
S&P 500 Index..................................................... 03/98 4 $ 983,200 1,900
-------
3,921
-------
Net unrealized gain............................................... $ 42,405
=======
Global Growth Fund:
- -------------------
Contracts to Sell:
- ---------------
French Government Bonds........................................... 12/97 10 $ 995,473 $(88,294)
S&P 500 Index..................................................... 03/98 3 $ 735,675 (6,797)
-------
Net unrealized loss............................................... $(95,091)
=======
</TABLE>
11. OPTIONS TRANSACTIONS
The Bond and Stock Funds may purchase and sell covered exchange listed put and
call options on securities, indices and currencies. These options may be on debt
securities, financial indices and foreign currencies (Bond Funds) and on stocks,
stock and financial indices, foreign government securities or foreign currencies
(Stock Funds).
A Fund may sell covered put options and call options for additional premium
income, buy put options in an effort to protect the value of a security in its
portfolio against decline in value and buy call options in an effort to protect
64
<PAGE> 66
- --------------------------------------------------------------------------------
against a price increase of securities or currencies it intends to purchase. The
Bond and Stock Funds may also make offsetting transactions to close open
positions.
A Fund may write a put option as an alternative to purchasing a security. A
put option gives the holder the right to sell the underlying security to the
Fund at any time during the option period at a predetermined exercise price.
Writing a call option obligates the Fund to sell or deliver the option's
underlying security, in return for the strike price, upon exercise of the
option.
Premiums received are recorded as a liability which is marked to the market
daily to reflect the current value of the options. A Fund will realize a gain or
loss upon the expiration or closing of the option transaction. When an option is
exercised, the proceeds on sales for a written call option, the purchase cost
for a written put option, or the cost of the security for a purchased put or
call option is adjusted by the amount of the premium received or paid. If an
option expires or is canceled in a closing transaction, the Fund will realize a
gain or loss depending on whether the cost of the closing transaction, if any,
is lesser than or greater than the premium originally received.
Securities designated to cover outstanding call options are noted in the
Statements of Investments where applicable. Shares subject to call, expiration
date, exercise price, premium received and market value are detailed in a
footnote to the Statements of Investments. Options written are reported as a
liability in the Statements of Assets and Liabilities. Gains and losses are
reported in the Statements of Operations.
The risk in writing a call option is that the Fund foregoes the opportunity
for profit if the value of the underlying security increases and the option is
exercised. The risk in writing a put option is that the Fund is exposed to a
potential loss if the value of the underlying security declines and the option
is exercised. Owning an option exposes the Fund to the risk of paying a premium
whether the option is exercised or not. Additional risk exists if an illiquid
secondary market does not allow for entering into a closing transaction.
Written option transactions in the Funds for the year ended December 31, 1997
were as follows:
<TABLE>
<CAPTION>
Call Options Put Options
------------------------ -------------------------
Number of Amount of Number of Amount of
Options Premiums Options Premiums
-----------------------------------------------------
<S> <C> <C> <C> <C>
Strategic Income Fund:
Options outstanding at December 31, 1996............................ 1,515,900 $ 14,352 224,500 $ 5,456
Options written..................................................... 29,707,660 119,864 405,249,585 72,078
Options closed or expired........................................... (31,223,560) (134,216) (351,064,585) (70,215)
Options exercised................................................... 0 0 0 0
----------- -------- ------------ -------
Options outstanding at December 31, 1997............................ 0 $ 0 54,409,500 $ 7,319
=========== ======== ============ =======
Growth and Income Fund:
Options outstanding at December 31, 1996............................ 0 $ 0 N/A N/A
Options written..................................................... 400 82,735 N/A N/A
Options closed or expired........................................... (400) (82,735) N/A N/A
Options exercised................................................... 0 0 N/A N/A
----------- -------- ------------ -------
Options outstanding at December 31, 1997............................ 0 $ 0 N/A N/A
=========== ======== ============ =======
</TABLE>
12. ILLIQUID AND RESTRICTED SECURITIES
The Funds may invest in securities that are illiquid or restricted. These
securities are not registered under the Securities Act of 1933, may be acquired
in private placements that may have legal or contractual restrictions preventing
their ready disposition, or may be repurchase agreements or time deposits
maturing in more than seven days. No Fund will invest in illiquid or restricted
assets if, immediately after such purchase, the value thereof, as determined
under methods approved by the Board of Directors, would exceed 10% of its net
assets. At December 31, 1997, the value of these securities and the resulting
percentage of net assets amounted to $15,050,313 or 7.17% in the Atlas U.S.
Government and Mortgage Securities Fund and $2,037,860 or 4.44% in the Atlas
Strategic Income Fund. Certain Funds own restricted securities which have been
determined to be liquid. These securities are not included in the 10% limitation
mentioned above and are identified in the Statements of Investments.
65
<PAGE> 67
Independent Auditors' Report
- --------------------------------------------------------------------------------
The Board of Directors and Shareholders
Atlas Assets, Inc.:
We have audited the accompanying statements of assets and liabilities of the
Funds comprising Atlas Assets, Inc. (Atlas U.S. Treasury Money Fund, Atlas
California Municipal Money Fund, Atlas National Municipal Money Fund, Atlas
California Municipal Bond Fund, Atlas National Municipal Bond Fund, Atlas U.S.
Government and Mortgage Securities Fund, Atlas Strategic Income Fund, Atlas
Balanced Fund, Atlas Growth and Income Fund, Atlas Strategic Growth Fund, Atlas
Global Growth Fund and Atlas Emerging Growth Fund) (the "Funds"), including the
statements of investments in securities and net assets as of December 31, 1997,
the related statements of operations for the period ended December 31, 1997, the
statements of changes in net assets for the periods ended December 31, 1997 and
1996 [Atlas Strategic Income Fund for the year ended December 31, 1997 and for
the period May 20, 1996 (inception of operations) to December 31, 1996; Atlas
Global Growth Fund for the year ended December 31, 1997 and for the period April
15, 1996 (inception of operations) to December 31, 1996; Atlas Emerging Growth
Fund for the period April 30, 1997 (inception of operations) to December 31,
1997], and the financial highlights for each of the periods ended December 31,
1997, 1996, 1995, 1994, 1993, 1992, 1991, and 1990. These financial statements
and financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at December
31, 1997 by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. 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, such financial statements and financial highlights present
fairly, in all material respects, the financial position of each of the
respective Funds comprising Atlas Assets, Inc. at December 31, 1997, the results
of their operations, the changes in their net assets, and their financial
highlights for the respective stated periods in conformity with generally
accepted accounting principles.
[DELOITTE & TOUCHE LLP LOGO]
Oakland, California
February 13, 1998
66
<PAGE> 68
(This page has been left blank intentionally.)
<PAGE> 69
Bulk Rate
U.S. Postage
PAID
Paramount, CA
Permit No. 1
[ATLAS FUNDS LOGO]
P.O. Box 1894
San Leandro, CA 94577
AT-681 B159
AS31M028
