<PAGE> 1
ANNUAL REPORT
December 31, 1998
[ATLAS 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
Stock Funds:
Balanced Fund..................................... 5
Emerging Growth Fund.............................. 5
Global Growth Fund................................ 6
Growth and Income Fund............................ 7
Strategic Growth Fund............................. 7
Bond Funds:
Municipal Bond Funds.............................. 8
Strategic Income Fund............................. 8
U.S. Government and Mortgage Securities Fund...... 9
Money Funds............................................ 9
Atlas Stock and Bond Fund Total Returns
Stock Funds............................................ 11
Bond 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............................... 58
Independent Auditors' Report................................ 68
</TABLE>
<PAGE> 3
[Atlas Funds logo black plate]
[Atlas Funds logo green plate]
FROM THE OFFICE OF MARION O. SANDLER
President and Chief Executive Officer
Dear Valued Shareholder,
The U.S. economy remained strong in 1998, in contrast
to Japan's ongoing recession and the financial turmoil
plaguing emerging markets around the world. Although
growth in American corporate earnings slowed considerably
during the year, personal spending was robust, which could
be attributed to high consumer confidence as:
- Nearly 3 million new jobs were created,
- Unemployment remained low and fell to 4.3% by the
end of 1998, and
- Inflation was almost non-existent at a mere 1.6%.
The Federal Reserve provided an additional stimulus to
the economy by lowering interest rates three times within
a seven week period between the end of September and the
middle of November.
The Stock Market:
Four Straight Years of Double-Digit Gains
The U.S. stock market continued its ascent in 1998,
despite increased volatility. The Dow Jones Industrial
Average (the "Dow"), the nation's most widely followed
stock index, soared to an unprecedented high of 9338 in
July before plunging almost 20% to 7539 in August. The
Dow, however, didn't stay at that level for long and
trended upward throughout the remainder of the year to
close at 9181. This represented an increase -- including
reinvested dividends -- over the previous year-end of
18.13%. In fact, 1998 was the fourth consecutive year of
double-digit increases for the Dow. All of the Atlas stock
funds participated in the continuing Bull Market and
rewarded shareholders with solid returns. The performance
of the Atlas Growth and Income Fund, however, was
especially noteworthy. The fund provided investors with a
total return of 25.83% for the year, ranking
it in the top 17% of all growth and
income funds tracked by Lipper
Analytical Services in 1998.(1) The
Growth and Income Fund, along with our
other stock funds, is discussed in
more detail in the Atlas Fund
Discussions which follow this letter.
(1) Lipper Analytical Services, Inc.,
a leading resource for performance
data for the mutual fund industry,
ranked the fund 130 out of 768 for
total return for one year, and 95
out of 310 for five years ended
12/31/98 for the Growth and Income
Funds category. (NOT FDIC-INSURED INFO)
2
<PAGE> 4
The Bond Market:
U.S. Treasuries Provide Safety and Liquidity
U.S. Treasury securities were in high demand in 1998
as investors, especially those overseas, sought a safe
haven from global financial turmoil. However, the
increased demand caused by this "flight to quality" was
faced with a shrinking supply, as the U.S. Government
issued fewer securities because of a growing budget
surplus. With the demand for Treasuries exceeding supply,
prices rose dramatically and the yield on the benchmark
30-year Treasury bond fell to 5.09% by year-end, which was
close to the lowest level for long-term Treasuries since
the mid-1960s. Because the Atlas U.S. Government and
Mortgage Securities Fund is managed primarily for yield,
the portfolio is heavily weighted in mortgage-backed
securities, which did not fully participate in the price
increases experienced by the Treasury sector of the bond
market. Still, the fund achieved an annual total return of
6.06% and rewarded its shareholders with a 6.20% yield for
1998. In fact, in every month for the past five years, the
Atlas U.S. Government and Mortgage Securities Fund's yield
has ranked in the top 15% of all U.S. government funds
tracked by Lipper Analytical Services.(2) The U.S.
Government and Mortgage Securities Fund and our other bond
funds are discussed in more detail in the Atlas Fund
Discussions which follow this letter.
Atlas No Load Mutual Funds:
Here To Stay
For the first four months of 1998, we offered
investors a limited-time opportunity to purchase Atlas
Funds without a sales charge. However, customer reaction
was so overwhelmingly favorable that we decided to extend
the offer indefinitely. So now, whenever you invest in any
Atlas Fund, you don't pay one cent in sales charges. And
as an added benefit, your Atlas no load mutual funds come
with the knowledge and expertise of a friendly Atlas
Representative. Instead of doing business with some cold,
impersonal voice over the phone, you can meet with your
Atlas Representative, person-to-person, in the comfort of
a nearby branch of our sister company -- World Savings.
Atlas offers you the kind of personal attention and
professional advice that most no load funds simply do not
provide.
(2) The Lipper Mutual Fund Yield Survey is the source for
yield rankings. Lipper Analytical Services, Inc.
ranked the fund 169 out of 184 for total return for
one year and 54 out of 97 for five years ended
12/31/98 for the General U.S. Government Fund
category.
3
<PAGE> 5
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 giving you the quality products,
personal service and caring professional advice you've
come to expect from World. Your Atlas Representative will
be happy to answer any questions you have about your
funds, provide you with information about Atlas Annuities,
or prepare a complimentary review of your investment
portfolio. For an appointment, simply call 1-800-933-ATLAS
(1-800-933-2852).
We appreciate the trust you've placed in Atlas, and we
look forward to serving your financial needs for many
years in the future.
Sincerely,
/s/ Marion O. Sandler
(Mrs.) Marion O. Sandler
President and Chief Executive Officer
4
<PAGE> 6
Atlas Fund Discussions
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Balanced Fund:
The Atlas Balanced Fund had a total return of 8.63% for
1998, compared to the Lipper(1) average of 13.48% for
the Balanced Fund category. Our fund's performance
reflected the fact that, during the year, the portfolio
was invested only 35% to 40% in stocks, which was
relatively light compared to its peer group. This
moderate equity allocation was consistent with the
fund's conservative approach and the manager's view
that many stocks were overpriced, but it did prevent
the fund from fully participating in the gains
experienced in the stock market.
The Balanced Fund seeks to provide shareholders with
current income as well as capital appreciation, and
therefore invests in a diversified portfolio which
includes dividend-paying stocks, government and
corporate bonds, and convertible securities. During the
past year, bank, drug, retail, insurance, and telephone
company stocks were the strongest performers. Long-term
zero coupon Treasury bonds also contributed positively
to fund performance. The returns from oil companies,
electric utilities, REITS (real estate investment
trusts), and paper companies were less robust. At
year-end, the fund was conservatively positioned, with
38% of its holdings in common stocks, 37% in bonds and
convertible securities, and 25% in cash.
Going forward into 1999, the fund's manager plans to
maintain a defensive posture towards stocks as long as
prices remain at year-end levels or higher. However, he
expects market fluctuations to create opportunities to
add to the fund's equity holdings at lower prices
during the coming year.
Emerging Growth Fund:
The Atlas Emerging Growth Fund had a total return in
1998 of 5.77%, significantly outperforming the Lipper
average return for Small-Cap Funds of -0.33% and
ranking the Atlas Fund in the top 25% of its peer
group.(2) The fund also outperformed the Russell 2000
Index, a measure of small company stock performance,
which ended the year with a -3.45% average return.
The Emerging Growth Fund invests primarily in small
companies with innovative products and services. These
companies often have greater appreciation potential
than large companies and, over time, have shown
impressive performance. The past year, however, was a
volatile one for small-capitalization stocks. The
Russell 2000 Index rose 12.5% through mid-April and
then fell almost 37% to the low point for the year in
October. By year-end, the index had failed to recover
fully from its losses. In comparison, the Emerging
Growth Fund's solid return of 5.77% can be attributed
to the fund manager's focus on individual stock
selection, emphasizing companies believed to have
sustainable earnings growth. Additionally, the
portfolio was diversified among a number
- ---------------
(1) Lipper Analytical Services, Inc. is a leading resource for
performance data for the mutual funds industry.
(2) Lipper ranked the fund 157 out of 638 Small-Cap Funds for
total return for the year ended 12/31/98.
5
<PAGE> 7
Atlas Fund Discussions
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Emerging Growth Fund: (continued)
of industry sectors. Technology holdings contributed
the most to the fund's gains. Commercial services,
healthcare, and consumer stocks also did well. Weakness
in commodity prices caused poor performance in the
energy sector, and the fund plans to limit holdings in
this group until trends become more favorable.
Communications services, such as long distance
companies, also had disappointing earnings. Despite
good revenue growth, profits were impacted by the costs
of obtaining new capital.
Entering 1999, the fund manager continues to favor the
technology sector, especially business software and
services companies. The fund will maintain its broad
diversification across industry groups and will
continue to focus on companies expected to have ongoing
growth in earnings.
Global Growth Fund:
Throughout most of 1998, the world's stock markets
reacted with extreme volatility as several countries
encountered financial difficulties. Ongoing turmoil in
Japan and Southeast Asia was followed by devaluation
and loan defaults in Russia and economic problems in
Latin America. Despite international turbulence, the
Atlas Global Growth Fund ended the year with a strong
performance, producing a 16.19% total return. In
contrast, the total return of the Lipper Global Fund
average was only 14.34%.
When selecting stocks for the portfolio, our fund's
manager looks for companies that are expected to
benefit from one or more key "global themes." In 1998,
the most heavily weighted themes in the portfolio were
Telecommunications/Media, Capital Market Development,
and Emerging Consumer Markets, which the manager
believed to have strong potential for growth.
Throughout the year, the fund remained cautious and
maintained a low exposure to Southeast Asia, but
continued to invest in Latin America, believing that,
economically and politically, the region was still
fundamentally strong. The portfolio was most heavily
weighted in the stocks of industrialized Europe. This
area has bright prospects due to significant corporate
restructuring in anticipation of the formation of the
European Monetary Union (EMU). The second largest
regional exposure of the fund was the U.S. It was the
fund's heavy weighting in these two geographic areas
that contributed the most to its solid performance in
the wake of 1998's international turmoil.
Going forward, the global outlook continues to be
mixed. Worldwide growth is expected to slow over the
coming year, and investing prospects in Asia still look
dim. Latin American equities markets are predicted to
be volatile, but the fund's manager believes that the
low valuations on many of the region's stocks could
provide substantial appreciation potential. Although it
is still too early to gauge the true impact of the
newly formed EMU or the Euro, the new common currency
adopted by eleven European nations, the fund manager's
expectations for Western Europe tend to be favorable.
6
<PAGE> 8
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Growth and Income Fund:
The Atlas Growth and Income Fund achieved a total
return of 25.83% for the year, outperforming the Lipper
average return for Growth and Income Funds of 15.61%,
and placing it in the top 17% of its category.(3)
The fund invests both in growth stocks, believed to
have superior earnings potential, and value stocks,
which are thought to be attractively priced. Growth
stocks were the best performers for the fund during
1998. The best performing sectors were technology,
financial, and retail. Holdings in energy companies,
REITS (real estate investment trusts), and waste
disposal companies were weaker performers. The fund
ended 1998 with 79% of its assets invested in stocks,
13% in bonds and convertible securities, and 8% in
cash.
The fund managers anticipate more market volatility and
a slower growth environment in 1999, and have
positioned the fund accordingly by increasing the
portfolio's investment in stocks of large, high quality
companies. The managers believe that these premium
companies have the most potential for sustaining
earnings and revenue growth in a slowing economy.
Strategic Growth Fund:
The Atlas Strategic Growth Fund produced a total return
for the year of 11.22%, under-performing the Lipper
average of 22.86% for the Growth Fund category. Our
fund focuses on mid- to large-capitalization companies,
and it was the mid-capitalization sector which
contributed heavily to the fund's weaker performance
relative to its peer group.
The fund's investment discipline -- selecting stocks
that offer "growth at a reasonable price" -- caused it
to avoid many stocks that were overpriced. As a result,
the fund's performance lagged some of its peers because
a number of the securities our fund had avoided
provided excellent returns in 1998. The fund's strategy
of investing at reasonable valuations caused the
manager to hold high cash reserves during most of the
year, further diluting performance. However, market
weakness in September and October allowed the fund to
invest some of its cash by adding to equity positions.
During 1998, technology, housing, and retail stocks
contributed the most to the fund's gains. Performance
was negatively impacted by holdings in economically
sensitive industries, such as industrials and capital
goods. These sectors lagged the market in the latter
part of the year, amid increasing concerns that the
economy was slowing. The fund ended the year with 83%
of assets in stocks and 17% in cash.
As we enter 1999, the fund's manager will continue to
look for opportunities to convert more of the fund's
cash to equities by taking advantage of anticipated
market volatility and by purchasing stocks at more
reasonable levels during future downturns.
- ---------------
(3) Lipper Analytical Services, Inc. ranked the fund 130 out
of 768 for total return for one year, and 95 out of 310
for five years ended 12/31/98 for the Growth and Income Funds
category.
7
<PAGE> 9
Atlas Fund Discussions
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Municipal Funds:
The Atlas California Municipal Bond Fund delivered a
total return of 5.94% to shareholders, outperforming
the Lipper average return of 5.77% for California
Municipal Debt Funds. The Atlas National Municipal Bond
Fund, with a total return of 5.70%, also outperformed
the Lipper average return of 5.32% for General
Municipal Debt Funds. After-tax returns for the funds
were even higher, since the dividend income is
generally tax-free. At year-end, the 30-day yields were
3.61% and 3.92% respectively, translating to maximum
taxable equivalent yields of 6.59% and 6.49%.
Although municipal bond prices increased far less than
Treasury bonds in 1998, they faired significantly
better than corporate, global, and mortgage-backed
bonds. A high supply of municipal bonds, caused by a
near record volume of new issues, dampened the relative
performance of municipal bonds compared to Treasuries.
Seeking to increase yields for shareholders, both funds
extended maturities somewhat during the spring when
interest rates were rising and selectively added A and
BBB rated securities during the year. However, both
funds continue to maintain portfolios that are among
the highest quality in their categories. As of December
31, 1998, approximately 85% of the assets in the
California Municipal Bond Fund and 72% of the assets in
the National Municipal Bond Fund were invested in
securities rated AAA or AA, the two highest ratings
awarded by Standard & Poor's, one of the nation's
leading credit rating organizations.
The outlook for 1999 continues to be favorable for
municipal bonds. Yields are historically very high when
compared to taxable bonds. This attractive yield ratio
should keep demand robust, as investors recognize the
significant after-tax advantage of municipal
securities.
Strategic Income Fund:
The Atlas Strategic Income Fund generated a total
return of 4.03% for the year, outdistancing the Lipper
Multi-Sector Income Fund Average which returned 1.30%.
Within this peer group, our fund ranked in the top
19%.(4)
The fund is designed to produce high current income
while balancing risk among three different market
sectors -- foreign bonds, U.S. Government securities,
and high yield, lower-rated U.S. corporate bonds.
Diversifying the portfolio across these three segments
helps to mitigate extreme fluctuations experienced by
any one market sector, similar to what occurred in the
summer of 1998 when, amid concerns about liquidity,
investors fled risky, high yield investments for the
safety of high quality securities. As a result, the
segment of our fund invested in U.S. Treasuries
produced strong returns, which helped balance
weaknesses in the high yield portion of the portfolio.
Foreign bonds from emerging markets also performed
poorly, but the fund was able to avoid most of the
- ---------------
(4) Lipper Analytical Services, Inc. ranked the fund 17 out of
93 Multi-Sector Income Funds for total return for the
year ended 12/31/98.
8
<PAGE> 10
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Strategic Income Fund: (continued)
problems experienced by its peers because the fund's
manager had reduced investments in this segment during
the last half of the year.
In 1999, the fund's manager will look for an
opportunity to add to the emerging market
sector -- where bonds are currently trading at low
prices -- once the political and economic landscape
stabilizes. Until that time, the fund will maintain a
limited exposure to that segment. In the near term, the
fund's manager plans to continue to allocate a heavier
proportion of the portfolio to U.S. Treasuries and high
yield corporate bonds. Both of these sectors are
expected to do well in a slow-growth, non-inflationary
economy.
U.S. Government and Mortgage Securities Fund:
The Atlas U.S. Government and Mortgage Securities Fund
experienced a total return of 6.06% for the year,
falling short of the 8.07% average return of all U.S.
Government Funds tracked by Lipper. Our fund is managed
primarily for yield, with more emphasis on capital
preservation than capital appreciation. In pursuit of
its high income objective, the fund favors high quality
mortgage-backed securities, which under-performed the
U.S. Treasury bonds preferred by most of its peers. As
a result of this strategy, our fund has been in the top
15% of the U.S. Government Fund category for yield
every month for the last five years.(5) By the end of
1998, the Atlas U.S. Government and Mortgage Securities
Fund rewarded shareholders with a 30-day yield of
6.03%, far superior to the 5.09% that 30-year
Treasuries were yielding at year-end.
Mortgage rates dropped throughout the year, and the
prepayment rate increased as homeowners took advantage
of lower rates and refinanced their loans. The fund
manager reacted by aggressively selling securities with
high early payoff rates and reinvesting in lower coupon
mortgages. The fund is managed to maintain a
below-average prepayment rate, a strategy that has
contributed to its outstanding yield.
Entering 1999, the fund manager believes that
mortgage-backed securities offer investors very good
value compared to Treasury bonds. The rate of
prepayment on mortgages is expected to slow,
contributing to an anticipated increase in total return
for the fund. The fund will continue to focus on
controlling prepayments of securities in the portfolio
and on producing superior yields for shareholders.
Money Funds:
For 1998, the Atlas U.S. Treasury Money Fund provided a
total return of 4.60% 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 the fund is 100% exempt from state
and local taxes.
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(5) The Lipper Mutual Fund Yield Survey is the source for
yield rankings. Lipper Analytical Services, Inc. ranked the
fund 169 out of 184 for total return for one year, and 54 out
of 97 for five years ended 12/31/98 for the General
U.S. Government Fund category.
9
<PAGE> 11
Atlas Fund Discussions
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Money Funds: (continued)
The Atlas California Municipal Money Fund generated a
total return of 2.67%, which is equal to a maximum
taxable equivalent return of 4.87%, and the Atlas
National Municipal Money Fund realized a return of
2.95%, for a maximum taxable equivalent return of
4.88%. 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
recent years, the funds have not invested in securities
backed by letters of credit from Japanese banks, and
they will continue to avoid them in 1999. The financial
difficulties facing Asian markets were widely
publicized during the past year, testifying to the
prudence of the fund's strategy toward these issues.
All total returns referenced in the preceding letter and Atlas
Fund Discussions are for Class A shares. They include
increases or decreases in price, plus income and capital gains
distributions, if any.
10
<PAGE> 12
Atlas Stock and Bond Fund Total Returns for periods ended December 31, 1998
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<TABLE>
<CAPTION>
Class A Shares Class B Shares
------------------------------------------------ -----------------------
12 Months 5 Years Inception To Date 12 Months
--------- ------- -------------------- -----------------------
at at at inception without with
net net net date deferred deferred
asset asset asset sales sales
value value value charge charge(1)
% % % % %
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<S> <C> <C> <C> <C> <C> <C>
Stock Funds:
Balanced 8.63 13.93 13.09 9/93 8.04 5.04
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Emerging Growth 5.77 N.A. 20.99 4/97 5.18 2.18
- --------------
Global Growth 16.19 N.A. 19.30 4/96 15.58 12.58
- -----------------
Growth and Income 25.83 20.19 18.39 12/90 25.14 22.14
- ------------
Strategic Growth 11.22 17.58 17.10 9/93 10.39 7.39
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Bond Funds:
California
Municipal Bond 5.94 5.13 7.66 1/90 5.41 2.41
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National
Municipal Bond 5.70 5.23 7.81 1/90 5.08 2.08
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Strategic Income 4.03 N.A. 8.60 5/96 3.25 0.35
- ---------------
U.S. Government
and Mortgage
Securities 6.06 6.03 7.94 1/90 5.53 2.54
- ----------------------
<CAPTION>
Class B Shares
--------------------------------------
Inception to Date
--------------------------------------
without with inception
deferred deferred date
sales sales
charge charge(1)
% %
<S> <C> <C> <C>
Stock Funds:
Balanced 15.54 15.41 7/94
- ----------------------
Emerging Growth 20.20 18.61 4/97
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Global Growth 18.59 18.02 4/96
- -----------------
Growth and Income 23.84 23.74 7/94
- ------------
Strategic Growth 19.51 19.39 7/94
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Bond Funds:
California
Municipal Bond 6.27 6.09 7/94
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National
Municipal Bond 6.44 6.26 7/94
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Strategic Income 7.74 7.07 5/96
- ---------------
U.S. Government
and Mortgage
Securities 7.28 7.10 7/94
- ----------------------
</TABLE>
(1) Assumes complete redemption at the end of the given period and imposition of
the maximum Contingent Deferred Sales Charge.
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 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. Returns for Class B shares will
differ. As always, past performance is no guarantee of future results.
<TABLE>
<S> <C>
Balanced Fund Emerging Growth Fund
Performance Graph Black Plate Performance Graph Black Plate
Performance Graph Green Plate Performance Graph Green Plate
Global Growth Fund Growth and Income Fund
'Performance Graph Black Plate 'Performance Graph Black Plate
'Performance Graph Green Plate 'Performance Graph Black Plate
</TABLE>
12
<PAGE> 14
<TABLE>
<S> <C>
- ----------------------------------------------
Strategic Growth Fund California Municipal Bond Fund
[LINE GRAPH] [LINE GRAPH]
National Municipal Bond Fund Strategic Income Fund
[LINE GRAPH] [LINE GRAPH]
U.S. Government and Mortgage Securities Fund
[LINE GRAPH]
</TABLE>
13
<PAGE> 15
Statements of Investments in Securities and Net Assets December 31, 1998
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<TABLE>
<CAPTION>
Atlas U.S. Treasury Money Fund
- ---------------------------------------------------------------------
value
face amount (note 1)
---------- ----------
<S> <C> <C>
UNITED STATES TREASURY BILLS - 62.12%
3.65% - 3.98% due
01/07/99 - 01/14/99.............. $ 1,627,000 $ 1,624,820
4.03% - 4.93% due
01/07/99 - 02/11/99.............. 34,998,000 34,856,327
----------
Total United States Treasury Bills (cost:
$36,481,147) 36,481,147
----------
UNITED STATES TREASURY NOTES - 37.98%
5.88% due 01/31/99................. 10,000,000 10,255,288
6.50% - 6.88% due
04/30/99 - 07/31/99.............. 11,750,000 12,050,427
----------
Total United States Treasury Notes (cost:
$22,305,715) 22,305,715
----------
TOTAL SECURITIES (COST: $58,786,862) - 100.10% 58,786,862
OTHER ASSETS AND LIABILITIES, NET - (.10)% (59,535)
----------
NET ASSETS - 100.00% $ 58,727,327
----------
----------
Atlas California Municipal Money Fund
- ---------------------------------------------------------------------
value
face amount (note 1)
---------- ----------
TAX-EXEMPT COMMERCIAL PAPER - 7.16%
Guam, Power Authority, 2.85% due
02/09/99.......................... $ 900,000 $ 900,000
Los Angeles, Metro Transportation
Authority, Second Subordinate
Sales Tax Revenue, Series A, 2.90%
due 01/15/99...................... 1,000,000 1,000,000
State, General Obligation, Tax
Exempt Commercial Paper, 2.85% due
01/15/99.......................... 1,000,000 1,000,000
----------
Total Tax-Exempt Commercial Paper (cost:
$2,900,000) 2,900,000
----------
FIXED RATE BONDS AND NOTES - 12.15%
Alameda County, Unified School
District, Tax and Revenue
Anticipation Notes, 4% due
06/30/99.......................... 2,000,000 2,002,850
Oxnard, School District, Tax and
Revenue Anticipation Notes, 4% due
08/19/99.......................... 1,500,000 1,504,379
Palm Springs, Unified School
District, FSA Insured, Series F,
7.25% due 02/01/99................ 170,000 170,511
Pomona, Unified School District,
Series F, FGIC Insured, 5.80% due
08/01/99.......................... 100,000 101,254
Sacramento, Municipal Utility
District Electric Revenue, Series
I, MBIA Insured, 4.90% due
01/01/99.......................... 250,000 250,000
Salinas, Sanitation Sewer System
Revenue, FGIC Insured, 4.50% due
08/01/99.......................... 285,000 286,528
San Diego County, Regional
Transportation Commission Sales
Tax, Series A, 6.20% due
04/01/99.......................... 500,000 503,149
State, General Obligation, 5.90%
due 02/01/99...................... 100,000 100,187
----------
Total Fixed Rate Bonds and Notes (cost:
$4,918,858) 4,918,858
----------
</TABLE>
<TABLE>
<CAPTION>
Atlas California Municipal Money Fund (continued)
- ---------------------------------------------------------------------
value
face amount (note 1)
---------- ----------
<S> <C> <C>
VARIABLE RATE DEMAND NOTES* - 80.26%
Alameda County, Industrial
Development Agency, Tool Family
Partnership, AMT, Series A, 4.10%
due 07/01/27...................... $ 1,100,000 $ 1,100,000
Alameda-Contra Costa, School
Financing Authority, 3.70% due
07/01/16.......................... 800,000 800,000
Contra Costa County, State Housing
Authority, Multi-Family Revenue,
Lakeshore Apartments, Series C,
3.60% due 11/15/12................ 295,000 295,000
Eastern Municipal Water District,
Water and Sewer Revenue, COP, FGIC
Insured, 3.60% due 07/01/20....... 400,000 400,000
Fairfield, Industrial Development
Authority, Meyer Cookware
Industries, Inc. Project, Series
A, AMT, 4.10% due 05/01/27........ 400,000 400,000
Foothill/Eastern Corridor Agency
California Toll Road Revenue,
Series C, 3.60% due 01/02/35...... 800,000 800,000
Glendale, Revenue Reliance
Development, Public Parking, 3.40%
due 12/01/14...................... 500,000 500,000
Imperial County, COP, Capital
Projects, 3.80% due 09/01/17...... 500,000 500,000
Irvine, Improvement Bond Act 1915,
Assessment District #97-16, 5.10%
due 09/02/22...................... 500,000 500,000
Assessment District #97-17, 5.10%
due 09/02/23...................... 3,200,000 3,200,000
Lassen Municipal Utility District,
Revenue Refunding, Series A, AMT,
FSA Insured, 4.15% due 05/01/08... 900,000 900,000
Moorpark, Multi-Family Revenue,
LeClub Apartments Project, Series
A, 3.65% due 11/01/15............. 300,000 300,000
Oakland, Joint Powers Financing
Authority Lease Revenue, Series
A-1, 3.90% due 08/01/21........... 1,000,000 1,000,000
Orange County, Water District, COP,
Project B, 4.80% due 08/15/15..... 1,900,000 1,900,000
Otay, Water District, COP, Capital
Projects, 3.90% due 09/01/26...... 700,000 700,000
Pasadena, COP, Rose Bowl
Improvement Project, 3.80% due
12/01/11.......................... 100,000 100,000
Puerto Rico, Commonwealth Highway &
Transportation Authority, AMBAC
Insured, Series A, 3.50% due
07/01/28.......................... 1,600,000 1,600,000
Riverside County, Special Tax,
Community Facilities District
#89-5, 3.50% due 09/01/28......... 1,000,000 1,000,000
San Diego County, Multi-Family
Housing Revenue, Country Hills,
Series A, 3.55% due 08/15/13...... 280,000 280,000
San Jose, Multi-Family Mortgage
Revenue, Somerset Park, Series A,
AMT, 3.50% due 11/01/17........... 1,600,000 1,600,000
San Leandro, Multi-Family, Carlton
Plaza Project, Series A, 4% due
10/01/27.......................... 1,000,000 1,000,000
State Educational Facilities
Authority Revenue, Foundation for
Educational Achievement, Series A,
3.90% due 07/01/26................ 800,000 800,000
</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>
State Health Facilities Financing
Authority Revenue Refunding,
Catholic Healthcare West, Series
D, MBIA Insured, 3.60% due
07/01/18.......................... $ 1,000,000 $ 1,000,000
Sutter Health, Series B, 5.10% due
03/01/20.......................... 500,000 500,000
Sutter/California Healthcare
System, Series C, 5.10% due
07/01/22.......................... 1,000,000 1,000,000
State Housing Finance Agency
Revenue Refunding, Pool Program,
Series 1990A, 3.60% due
09/01/20.......................... 100,000 100,000
State Pollution Control Financing
Authority, Pollution Control
Revenue Refunding, Chevron USA,
Inc. Project, 3.10% due
11/15/01.......................... 1,000,000 1,002,132
Chevron USA, Inc. Project, 3.65%
due 05/15/02...................... 300,000 300,000
Pacific Gas & Electric Co., Series
C, 5% due 11/01/26................ 600,000 600,000
Shell Oil Company Project, Series
B, 5.10% due 10/01/11............. 1,200,000 1,200,000
Statewide Communities Development
Authority, COP, NoCal-Retired
Officers, 5.05% due 06/01/26...... 1,910,000 1,910,000
Multi-Family, Sunrise of Moraga,
Series A, AMT, 4% due 07/01/27.... 500,000 500,000
Statewide Communities Development
Corp. Revenue, Industrial
Development, Florestone, AMT,
3.95% due 05/01/09................ 785,000 785,000
Setton Properties Project, AMT,
3.95% due 10/01/10................ 800,000 800,000
Staub Project, Series A, AMT,
3.95% due 08/01/02................ 520,000 520,000
Tri-Valley Industrial Development,
Series F, AMT, 3.85% due
12/01/10.......................... 700,000 700,000
Stockton, Multi-Family, Mariners
Pointe Association, Series A,
3.80% due 09/01/18................ 1,000,000 1,000,000
Tustin, Improvement Bond Act 1915,
Reassessment District #95-2,
Series A, 5.10% due 09/02/13...... 900,000 900,000
----------
Total Variable Rate Demand Notes (cost:
$32,492,132) 32,492,132
----------
TOTAL SECURITIES (COST: $40,310,990) - 99.57% 40,310,990
OTHER ASSETS AND LIABILITIES, NET - .43% 172,496
----------
NET ASSETS - 100.00% $ 40,483,486
----------
----------
Atlas National Municipal Money Fund
- ---------------------------------------------------------------------
value
face amount (note 1)
---------- ----------
TAX-EXEMPT COMMERCIAL PAPER - 5.49%
Utah State, General Obligation,
Highway Commercial Paper Notes,
1997, Series B, 3.05% due
03/10/99.......................... $ 300,000 $ 300,000
----------
Total Tax-Exempt Commercial Paper (cost:
$300,000) 300,000
----------
FIXED RATE BONDS AND NOTES - 16.67%
Belen, New Mexico, Gross Receipts
Tax Revenue, FSA Insured, 3.50%
due 06/01/99...................... 150,000 149,997
Colorado Springs, Colorado,
Cottonwood General Improvement
District, AMBAC Insured, 3.10% due
12/01/99.......................... 100,000 100,000
Kentucky, Economic Development
Financing Authority, Medical
Center Revenue, Ashland Hospital
Corp., FSA Insured, 4.25% due
02/01/99.......................... 200,000 200,520
Mississippi State, University
Educational Building Corp.
Revenue, MBIA Insured, 3.75% due
08/01/99.......................... 260,000 259,924
Montgomery County, Ohio, Greater
Moraine-Beaver Creek Sewer
Revenue, FGIC Insured, 4.70% due
09/01/99.......................... 200,000 200,367
----------
Total Fixed Rate Bonds and Notes (cost: $910,808) 910,808
----------
VARIABLE RATE DEMAND NOTES* - 75.67%
Allegheny County, Pennsylvania,
Hospital Development Authority,
Presbyterian University, Series
B1, 4.10% due 03/01/18............ 95,000 95,000
Allegheny County, Pennsylvania,
Industrial Development Authority,
Longwood at Oakmont, Inc. Project,
5.10% due 07/01/27................ 100,000 100,000
Babylon, New York, Industrial
Development Authority, Resource
Recovery Revenue, AMT, 4.85% due
12/01/24.......................... 100,000 100,000
Bonner County, Idaho, Industrial
Development Authority, Economic
Development Revenue, McFarland
Cascade Project, AMT, 4.15% due
09/01/20.......................... 295,000 295,000
California, Statewide Communities
Development Authority, COP, John
Muir/Mount Diablo Health, AMBAC
Insured, 4.80% due 08/15/27....... 100,000 100,000
Campbell County, Virginia,
Industrial Development Authority
Revenue, Hadson Power, Series
12-A, AMT, 5.30% due 04/01/15..... 100,000 100,000
Dubuque, Iowa, Industrial
Development Revenue, Swiss Valley
Farms Co. Project, AMT, 4.05% due
12/01/01.......................... 100,000 100,000
Florida, Housing Financing Agency,
Multi-Family Revenue Refunding,
Series E, 3.95% due 04/01/26...... 200,000 200,000
</TABLE>
15
<PAGE> 17
Statements of Investments in Securities and Net Assets December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas National Municipal Money Fund (continued)
- ---------------------------------------------------------------------
value
face amount (note 1)
---------- ----------
<S> <C> <C>
Fort Wayne, Indiana, Hospital
Authority, Parkview Memorial
Hospital, Series D, 3.90% due
01/01/16.......................... $ 200,000 $ 200,000
Grand Forks, North Dakota, Hospital
Facilities Revenue, United
Hospital Obligation Group Project,
4.85% due 12/01/16................ 100,000 100,000
Grapevine, Texas, Industrial
Development Corp., American
Airlines, Series A2, XL589, 4.85%
due 12/01/24...................... 100,000 100,000
Series B1, XL593, 4.85% due
12/01/24.......................... 100,000 100,000
Gulf Coast Waste Disposal
Authority, Texas, Water Pollution
Control Contract Revenue, Amoco
Oil, 3.60% due 1/15/99............ 140,000 140,003
Idaho, Health Facilities Authority,
Saint Lukes Regional Medical
Center Project, 5.10% due
05/01/22.......................... 200,000 200,000
Illinois, Health Facilities
Financing Authority Revenue,
Ingalls Memorial Hospital, Series
C, 4% due 01/01/16................ 200,000 200,000
Indiana, Health Facilities
Financing Authority Revenue,
Capital Access Designated Pool,
1990, 4% due 12/01/10............. 100,000 100,000
Capital Access Designated Pool,
1991, 4% due 08/01/06............. 100,000 100,000
Indiana State, Employment
Development Commission, Triangle
Ventures Project, AMT, 4.05% due
01/01/14.......................... 200,000 200,000
Lone Star, Texas, Airport
Improvement Authority, Series B-2,
XL666, 4.85% due 12/01/14......... 300,000 300,000
Massachusetts, Health & Educational
Facilities Authority Revenue,
Capital Asset Program, Series B,
4.60% due 07/01/05................ 100,000 100,000
Metropolitan Nashville Airport
Authority, Tennessee, American
Airlines, Series A, XL675, 4.85%
due 10/01/12...................... 200,000 200,000
American Airlines, Series B,
XL676, 4.85% due 10/01/12......... 100,000 100,000
Morgan County, Utah, Solid Waste
Disposal Revenue, Holman, Inc.
Project, AMT, 4.05% due
08/01/31.......................... 100,000 100,000
North Alabama, Environmental
Improvement Authority, Pollution
Control Revenue, Reynolds Metals
Project, Series 1985, 4.85% due
12/01/00.......................... 100,000 100,000
Purdue University, Indiana,
University Revenue, Student Fee,
Series L, 3.95% due 07/01/20...... 100,000 100,000
Rockwall, Texas, Industrial
Development Revenue, Columbia
Extrusion Corp., AMT, 4.10% due
07/01/14.......................... 225,000 225,000
Thornton, Colorado, Industrial
Development Revenue, Service
Merchandise Co. Project, 3.50% due
12/15/99.......................... 200,000 200,000
</TABLE>
<TABLE>
<CAPTION>
Atlas National Municipal Money Fund (continued)
- ---------------------------------------------------------------------
value
face amount (note 1)
------------ ------------
<S> <C> <C>
Winston-Salem, North Carolina, COP,
Risk Acceptance Management Corp.,
4.05% due 07/01/09................ $ 180,000 $ 180,000
----------
Total Variable Rate Demand Notes (cost:
$4,135,003) 4,135,003
----------
TOTAL SECURITIES (COST: $5,345,811) - 97.83% 5,345,811
OTHER ASSETS AND LIABILITIES, NET - 2.17% 118,685
----------
NET ASSETS - 100.00% $ 5,464,496
----------
----------
Atlas California Municipal Bond Fund
- ---------------------------------------------------------------------
value
face amount (note 1)
---------- ----------
BONDS - 97.34%
Anaheim Public Financing Authority,
Lease Revenue Capital
Appreciation, Series C, FSA
Insured, 0% due 09/01/32.......... $ 5,000,000 $ 879,250
Anaheim Public Financing Authority,
Lease Revenue Public Improvements
Project, Series A, FSA Insured, 5%
due 03/01/37...................... 6,000,000 5,949,060
Brea, Public Finance Authority
Revenue Tax Allocation,
Redevelopment Project AB,
Un-refunded, Series A, MBIA
Insured, 6.75% due 08/01/22....... 660,000 718,535
Burbank, Glendale, Pasadena Airport
Authority, Airport Revenue
Refunding, AMBAC Insured, 6.40%
due 06/01/10...................... 2,000,000 2,163,940
Central Coast Water Authority,
Revenue Refunding, State Water
Project, Regional Facilities,
Series A, AMBAC Insured, 5% due
10/01/22.......................... 3,250,000 3,227,413
Contra Costa Water District, Water
Treatment Revenue Refunding,
Series G, MBIA Insured, 5.90% due
10/01/08.......................... 3,600,000 4,022,100
Cotati-Rohnert Park Unified School
District, Series A, FGIC Insured,
6% due 08/01/15................... 905,000 938,974
Elk Grove Unified School District,
Special Tax Refunding, Community
Facilities District 1, AMBAC
Insured, 6.50% due 12/01/24....... 1,500,000 1,845,195
Fresno Water System Revenue, Water
Remediation Project, Series A,
FGIC Insured, 7.50% due
06/01/05.......................... 715,000 850,836
Kern High School District
Refunding, MBIA Insured, Series
1990-C, 6.25% due 08/01/12........ 1,200,000 1,421,616
Long Beach Harbor Revenue, AMT,
MBIA Insured, 5.25% due
05/15/25.......................... 2,000,000 2,011,980
Los Angeles, Harbor Development
Revenue, 7.60% due 10/01/18....... 140,000 182,987
</TABLE>
The accompanying notes are an integral part of these financial statements.
16
<PAGE> 18
- --------------------------------------------------------------------------------
<TABLE>
<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 $ 2,430,495
Series B, AMBAC Insured, 6.25% due
06/01/12.......................... 2,500,000 2,757,325
Los Angeles County, Public Works
Financing Authority, Lease Revenue
Refunding, Series B, MBIA Insured,
5.25% due 09/01/15................ 1,000,000 1,039,350
Los Angeles County, Transportation
Commission, Sales Tax Revenue,
Proposition C, Second Series A,
MBIA Insured, 6.25% due
07/01/13.......................... 8,980,000 9,920,835
Series B, AMBAC Insured, 6.50% due
07/01/13.......................... 1,750,000 1,893,325
Los Angeles Department of Water and
Power, Electric Plant Revenue,
7.125% due 05/15/30............... 1,875,000 2,004,375
MSR Public Power Agency, San Juan
Project Revenue, Series E, MBIA
Insured, 6.75% due 07/01/11....... 3,000,000 3,263,400
Manhattan Beach Unified School
District, Series A, FGIC Insured,
0% due 09/01/16................... 2,690,000 1,120,331
Marin Municipal Water District
Water Revenue, MBIA Insured, 5.65%
due 07/01/23...................... 2,000,000 2,097,380
Maritime Infrastructure Authority,
Airport Revenue, San Diego
University, Port District Airport,
AMT, AMBAC Insured, 5% due
11/01/20.......................... 9,500,000 9,313,800
Metropolitan Water District,
Southern California Waterworks
Revenue, 5.50% due 07/01/19....... 2,500,000 2,595,950
Series C, 5% due 07/01/27......... 4,000,000 3,964,000
Montebello, Unified School
District, Capital Appreciation,
FGIC Insured, 0% due 08/01/17..... 2,150,000 846,390
Mountain View, Capital Improvements
Financing Authority Revenue, City
Hall Community Theatre, MBIA
Insured, 6.25% due 08/01/12....... 1,500,000 1,616,430
New Haven Unified School District
Refunding, MBIA Insured, 3.40% due
08/01/11.......................... 925,000 973,118
Northern California Power Agency
Public Power Revenue Refunding,
Hydroelectric Project 1, Series A,
AMBAC Insured, 7.50% due
07/01/23.......................... 50,000 66,388
Series A, MBIA Insured, 6.25% due
07/01/12.......................... 1,500,000 1,640,235
Oakland Building Authority Lease
Revenue, Elihu M. Harris, Series
A, AMBAC Insured, 5% due
04/01/23.......................... 2,330,000 2,313,643
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 2,161,040
</TABLE>
<TABLE>
<CAPTION>
Atlas California Municipal Bond Fund (continued)
- ---------------------------------------------------------------------
value
face amount (note 1)
---------- ----------
<S> <C> <C>
Oroville Hospital Revenue, Series
A, 5.40% due 12/01/22............. $ 1,000,000 $ 1,024,830
Palm Springs Financing Authority,
Airport Passenger Facility Charge
Revenue, FSA Insured, 5.125% due
01/01/18.......................... 1,000,000 1,008,790
Palo Alto Unified School District,
Series B, 5.375% due 08/01/18..... 1,250,000 1,303,663
Pasadena, Electric Revenue, 4.75%
due 08/01/24...................... 1,000,000 958,520
Pleasanton Unified School District,
Series F, FGIC Insured,
6.25% due 08/01/14................ 570,000 592,219
6.25% due 08/01/15................ 610,000 633,778
6.25% due 08/01/16................ 650,000 675,337
Puerto Rico, Public Buildings
Authority Revenue, Gtd. Government
Facilities, Series A, AMBAC
Insured, 6.25% due 07/01/14....... 1,000,000 1,185,750
Puerto Rico Commonwealth, Highway &
Transportation Revenue,
Infrastructure, 5% due 07/01/28... 4,000,000 3,915,440
Series A, 5% due 07/01/38......... 6,500,000 6,304,090
Puerto Rico Commonwealth Refunding,
5% due 07/01/27................... 1,000,000 979,170
MBIA Insured, 6.25% due
07/01/12.......................... 1,000,000 1,186,250
Puerto Rico Electric Power
Authority, Power Revenue, Series
EE, 4.75% due 07/01/24............ 1,000,000 947,640
Puerto Rico Ports Authority,
American Airlines, Series A, AMT,
6.30% due 06/01/23................ 1,800,000 1,912,446
Redding Joint Powers Financing
Authority, Electric Systems
Revenue Refunding, Series A, MBIA
Insured, 5.25% due 06/01/15....... 2,000,000 2,082,220
Riverside County, Asset Leasing
Corp., Leasing Revenue, Series B,
MBIA Insured, 5.70% due
06/01/16.......................... 2,000,000 2,212,640
Sacramento Municipal Utility
District, Electric Revenue
Refunding, Series Z, FGIC Insured,
6.45% due 07/01/10................ 2,500,000 2,707,725
San Bernardino County, COP, Medical
Center Financing Project, 5% due
08/01/28.......................... 1,500,000 1,483,935
San Bernardino County
Transportation Authority Sales Tax
Revenue, Series A, FGIC Insured,
6% due 03/01/10................... 2,500,000 2,765,725
San Diego, Public Safety
Communication Project, 6.50% due
07/15/09.......................... 1,525,000 1,824,785
San Diego, Water Utility Fund Net
System Revenue, COP, 4.75% due
08/01/28.......................... 1,000,000 955,620
San Francisco City and County,
Series 95 A & B, FGIC Insured,
5.50% due 06/15/13................ 1,145,000 1,227,646
Series E, 6.50% due 06/15/11...... 2,220,000 2,377,642
</TABLE>
17
<PAGE> 19
Statements of Investments in Securities and Net Assets December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas California Municipal Bond Fund (continued)
- ---------------------------------------------------------------------
value
face amount (note 1)
---------- ----------
<S> <C> <C>
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 $ 3,275,970
Issue 1, AMBAC Insured, 6.50% due
05/01/13.......................... 2,000,000 2,196,360
San Francisco City and County
Public Utilities Commission Water
Revenue Refunding, Series A, 6%
due 11/01/15...................... 1,000,000 1,064,150
San Francisco City and County
Redevelopment Agency, Hotel Tax
Revenue, FSA Insured, 5% due
07/01/25.......................... 3,750,000 3,722,775
San Francisco City and County Sewer
Revenue Refunding, AMBAC Insured,
6% due 10/01/11................... 2,280,000 2,479,226
San Joaquin Hills Transportation
Corridor Agency, Toll Road
Revenue,
0%/7.40% due 01/01/07 (d)......... 1,000,000 1,012,340
0%/7.50% due 01/01/09 (d)......... 1,000,000 1,049,280
San Jose Redevelopment Agency Tax
Allocation, Merged Area
Redevelopment Project Refunding,
MBIA Insured, 5% due 08/01/20..... 2,500,000 2,486,825
San Mateo County, Joint Powers
Authority, Lease Revenue Capital
Projects, Series A, 5.125% due
07/15/32.......................... 2,145,000 2,149,590
Santa Barbara, Revenue COP,
Retirement Services,
5.75% due 08/01/20................ 2,000,000 2,103,680
Santa Clara Electric Revenue, 1991,
Series A, MBIA Insured, 6.25% due
07/01/19.......................... 3,750,000 4,067,363
Santa Margarita, Dana Point
Authority Revenue Refunding,
Improvement District 3, 3A, 4 and
4A, Series B, MBIA Insured,
7.25% due 08/01/07................ 500,000 610,865
7.25% due 08/01/13................ 2,000,000 2,571,400
Saugus Unified School District,
Series A, MBIA Insured, 5.65% due
09/01/11.......................... 2,035,000 2,203,742
Southern California Public Power
Authority Power Project Revenue
Refunding, Hydroelectric Hoover
Uprating Project, Series A, 6.625%
due 10/01/05...................... 600,000 656,874
Southern California Rapid Transit
District, COP, Workers
Compensation Fund, MBIA Insured,
6% due 07/01/10................... 1,000,000 1,068,190
State, Refunding, 5% due
10/01/23.......................... 3,000,000 2,970,330
AMBAC Insured, 5.25% due
06/01/21.......................... 1,000,000 1,021,560
FGIC Insured, 5% due 02/01/23..... 2,500,000 2,482,575
Series BH, AMT, 5.60% due
12/01/32.......................... 1,000,000 1,029,960
State, Various Purpose, 6.125% due
10/01/11.......................... 1,000,000 1,169,340
State Department of Water Resources
Central Valley Project Revenue,
Series J-2, 6.125% due 12/01/13... 2,225,000 2,368,379
Series J-3, 5.50% due 12/01/23.... 3,000,000 3,140,850
Series O, 5% due 12/01/15......... 2,000,000 2,027,460
</TABLE>
<TABLE>
<CAPTION>
Atlas California Municipal Bond Fund (continued)
- ---------------------------------------------------------------------
value
face amount (note 1)
----------- ------------
<S> <C> <C>
State Educational Facilities
Authority Revenue Refunding,
Los Angeles College Chiropractic,
5.60% due 11/01/17................ $ 1,810,000 $ 1,876,843
Loyola Marymount University, MBIA
Insured, 5% due 10/01/22.......... 700,000 695,135
Pepperdine University, MBIA
Insured, 6.10% due 03/15/14....... 2,595,000 2,879,957
Santa Clara University, MBIA
Insured, 5.75% due 09/01/18....... 3,255,000 3,457,787
University of Southern California,
Series C, 5.125% due 10/01/28..... 1,000,000 1,004,440
State Health Facilities Financing
Authority Revenue Refunding,
Scripps Health, Series C, MBIA
Insured, 5% due 10/01/22.......... 500,000 495,160
Stanford Health Care, Series A,
FSA Insured, 5% due 11/15/28...... 1,000,000 989,230
State Housing Finance Agency
Revenue Home Mortgage,
Multi-Family Program, Series B,
AMT, AMBAC Insured, 6.05% due
08/01/16.......................... 2,000,000 2,125,380
Series B, AMT, AMBAC Insured,
5.25% due 02/01/28................ 2,000,000 2,007,080
Series H, AMT, 6.15% due
08/01/16.......................... 2,020,000 2,164,854
Series I, AMT, MBIA Insured, 5.65%
due 08/01/17...................... 2,400,000 2,508,816
Series K, MBIA Insured, 6.15% due
08/01/16.......................... 3,000,000 3,215,130
Series L, AMT, MBIA Insured, 5.55%
due 08/01/05...................... 300,000 317,415
Series Q, MBIA Insured, 5.85% due
08/01/16.......................... 1,000,000 1,066,610
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 2,111,440
State Public Works Board, Lease
Revenue, AMBAC Insured, Various
University of California Projects,
Series C, 5.125% due 09/01/22..... 1,475,000 1,482,729
State Rural Home Mortgage Finance
Authority, Single Family Revenue
Refunding, Series C, AMT, 7.50%
due 08/01/27...................... 1,065,000 1,222,056
Statewide Communities Development
Authority, COP, 6% due 08/01/28... 2,000,000 2,036,660
Statewide Communities Development
Authority, Lease Revenue, United
Airlines, AMT, Series A, 5.70% due
10/01/33.......................... 4,000,000 4,116,240
Stockton Health Facilities Revenue,
Dameron Hospital, Series A, 5.70%
due 12/01/14...................... 200,000 203,404
</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>
South Whittier, Elementary School
District, Capital Appreciation,
Series A, FGIC Insured, 0% due
08/01/13.......................... $ 500,000 $ 249,285
Series A, FGIC Insured, 0% due
08/01/14.......................... 250,000 117,575
Truckee, Donner Public Utility
District, COP, Water System
Improvement Project, MBIA Insured,
6.75% due 11/15/21................ 1,000,000 1,107,290
Turlock Irrigation District Revenue
Refunding, Series A, MBIA Insured,
6% due 01/01/10................... 1,000,000 1,150,600
Upland, COP, San Antonio Community
Hospital, 5% due 01/01/18......... 3,195,000 3,114,678
Vallejo Revenue Water Improvement
Project, Series B, FGIC Insured,
6.50% due 11/01/14................ 4,000,000 4,569,720
Watsonville Water Revenue
Refunding, Series A, MBIA Insured,
6% due 05/15/16................... 1,915,000 2,024,098
Westside Unified School District
Refunding, Series C, AMBAC
Insured,
6% due 08/01/14................... 300,000 346,849
----------
Total Bonds (cost: $198,184,963) 214,081,102
----------
VARIABLE RATE DEMAND NOTES* - 1.27%
Statewide Communities Development
Authority, COP,
John Muir/Mount Diablo Health,
4.80% due 08/15/27................ 300,000 300,000
Northern California - Retired
Officers, 5.05% due 06/01/26...... 590,000 590,000
Irvine Improvement Bond Act 1915,
Assessment District #94-13, 5.10%
due 09/02/22...................... 500,000 500,000
Irvine Ranch Water District Revenue
Bonds, 5.10% due 10/01/05......... 300,000 300,000
Orange County, Sanitation
Districts, COP Numbers 1, 3, 5, 7,
11, 13 and 14, 5.10% due
08/01/15.......................... 1,100,000 1,100,000
----------
Total Variable Rate Demand Notes (cost
$2,790,000) 2,790,000
----------
TOTAL SECURITIES (COST: $200,974,963) - 98.61% 216,871,102
OTHER ASSETS AND LIABILITIES, NET - 1.39% 3,049,432
----------
NET ASSETS - 100.00% $219,920,534
============
Atlas National Municipal Bond Fund
- --------------------------------------------------------------------------
value
face amount (note 1)
---------- ----------
BONDS - 98.00%
Alabama State Docks Department,
Docks Facilities Revenue, AMT,
MBIA Insured, 6.10% due
10/01/13.......................... $ 1,000,000 $ 1,113,130
</TABLE>
<TABLE>
<CAPTION>
Atlas National Municipal Bond Fund (continued)
- ---------------------------------------------------------------------
value
face amount (note 1)
------------ ------------
<S> <C> <C>
Anchorage, Alaska, Electric Utility
Revenue Refunding, Senior Lien,
MBIA Insured, 8% due 12/01/10..... $ 985,000 $ 1,311,183
Birmingham, Michigan, City School
District, FSA Insured, 4.75% due
11/01/24.......................... 2,000,000 1,894,480
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 1,182,350
Central Coast Water Authority,
California Revenue Refunding State
Water Project, Regional
Facilities, Series A, AMBAC
Insured, 5% due 10/01/22.......... 1,000,000 993,050
Chicago, Illinois, Board of
Education, Capital Appreciation,
School Reform - Series B-1, AMT,
FGIC Insured, 0% due 12/01/26..... 4,000,000 938,800
Chicago, Illinois, Metropolitan
Water Reclamation District,
Greater Chicago Capital
Improvement, 7.25% due 12/01/12... 1,500,000 1,922,400
Chicago, Illinois, Park District
Aquarium & Museum, Series B, 6.50%
due 11/15/13...................... 1,500,000 1,724,445
Chicago, Illinois, Public Building
Commission Mortgage Revenue, Board
of Education, Series A, MBIA
Insured, 7.125% due 01/01/15...... 125,000 133,318
Cleveland, Ohio, Waterworks Revenue
First Mortgage Refunding, Series
F-92B, AMBAC Insured, 6.25% due
01/01/16.......................... 1,000,000 1,082,550
Colorado, Housing Finance
Authority, Single Family Program,
Senior Series A-1, AMT, 7.40% due
11/01/27.......................... 955,000 1,087,029
Colorado, Public Highway Authority,
E-470, Capital Appreciation,
Series B, MBIA Insured, 0% due
09/01/21.......................... 2,000,000 628,460
Colorado Springs, Colorado,
Utilities Revenue Refunding,
Series A, 6.50% due 11/15/15...... 2,000,000 2,175,280
Cook County, Illinois, MBIA
Insured, 7.25% due 11/01/07....... 620,000 754,366
Series C, FGIC Insured, 6% due
11/15/08.......................... 500,000 569,190
Dallas, Fort Worth, Texas, Regional
Airport Revenue, Joint Dallas-Fort
Worth, AMT, MBIA Insured, 5.50%
due 11/01/23...................... 1,500,000 1,539,990
Delaware Valley, Pennsylvania,
Regional Financing Authority,
Local Government Revenue, Series
A, AMBAC Insured, 5.50% due
08/01/28.......................... 1,000,000 1,088,860
Harris County, Texas Toll Road,
Senior Lien, FGIC Insured, 5.375%
due 08/15/20...................... 1,000,000 1,025,380
Hudsonville, Michigan, Public
Schools, FGIC Insured, 5.15% due
05/01/27.......................... 1,000,000 999,930
</TABLE>
19
<PAGE> 21
Statements of Investments in Securities and Net Assets December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas National Municipal Bond Fund (continued)
- ---------------------------------------------------------------------
value
face amount (note 1)
------------ ------------
<S> <C> <C>
Illinois Development Finance
Authority, Pollution Control
Revenue, Public Service Co.,
Series C-2, 5.70% due 08/15/26.... $ 1,000,000 $ 1,031,600
Illinois Health Facilities
Authority Revenue Refunding,
Northwestern Medical Facilities
Foundation, AMT, MBIA Insured,
5.125% due 11/15/28............... 1,000,000 979,710
Sherman Hospital Project, MBIA
Insured, 6.75% due 08/01/11....... 1,000,000 1,094,720
Indiana State Office Building
Commission, Capital Complex
Revenue, Senate Avenue Parking,
Series A, MBIA Insured, 7.25% due
07/01/12.......................... 50,000 53,773
Indianapolis, Indiana, Airport
Authority Revenue, Special
Facilities, Federal Express Corp.,
AMT, 7.10% due 01/15/17........... 500,000 559,395
Jefferson County, Colorado, School
District, #R-001, MBIA Insured,
6.50% due 12/15/10................ 400,000 481,580
Jones County, Mississippi Hospital
Revenue, South Central Regional
Medical Center, 5.50% due
12/01/17.......................... 1,000,000 999,480
Kansas City, Kansas, Utility System
Revenue Refunding and Improvement,
FGIC Insured, 6.375% due
09/01/23.......................... 1,500,000 1,691,235
Kern, California High School
District, Series 1990-C Election,
MBIA Insured, 6.25% due
08/01/10.......................... 545,000 645,743
Lakota, Ohio, Local School
District, AMBAC Insured, 7% due
12/01/09.......................... 1,740,000 2,154,572
Long Island Power Authority, New
York Electric System Revenue,
Series A, 5.25% due 12/01/26...... 1,000,000 1,003,360
Maine State Housing Authority
Mortgage Purchase, Series A-1,
AMT, AMBAC Insured, 6.40% due
11/15/14.......................... 1,400,000 1,500,744
Maricopa County, Arizona, Unified
School District 69, Paradise
Valley Refunding, MBIA Insured,
6.35% due 07/01/10................ 600,000 706,794
Massachusetts Bay Transportation
Authority, General Transportation
System, Series B, 5% due
03/01/28.......................... 1,000,000 973,000
Massachusetts State Health and
Educational Facilities Authority
Revenue, Northeastern University,
Series E, MBIA Insured, 6.55% due
10/01/22.......................... 500,000 552,480
Massachusetts State Industrial
Financing Agency Revenue,
Wentworth Institute of Technology,
5.65% due 10/01/18................ 500,000 514,675
Massachusetts State Turnpike
Authority, Metropolitan Highway
System Revenue, Series A, MBIA
Insured, 5% due 01/01/27.......... 1,000,000 982,250
</TABLE>
<TABLE>
<CAPTION>
Atlas National Municipal Bond Fund (continued)
- ---------------------------------------------------------------------
value
face amount (note 1)
------------ ------------
<S> <C> <C>
Metropolitan Pier & Exposition
Authority, Illinois, Dedicated
State Tax Revenue,
McCormick Place Expansion Project,
Prerefunded, Series A, 7.25% due
06/15/05.......................... $ 35,000 $ 41,178
McCormick Place Expansion Project,
Unrefunded, Series A, 7.25% due
06/15/05.......................... 215,000 251,711
Metropolitan Transportation
Authority, New York,
Transportation Facilities Revenue,
Series 8, 5.375% due 07/01/21..... 1,000,000 1,014,020
Michigan State Hospital Financing
Authority Revenue, Genesys
Regional Medicine, Series A, 5.50%
due 10/01/27...................... 1,000,000 998,470
Michigan State University Revenue,
Series A, 6.125% due 08/15/08..... 500,000 544,395
Mississippi Higher Education
Assistance Corp., Student Loan
Revenue, Series C, AMT, 6.05% due
09/01/07.......................... 745,000 779,762
Montebello, California, Unified
School District, Capital
Appreciation,
FGIC Insured, 0% due 08/01/15..... 1,500,000 664,545
FGIC Insured, 0% due 08/01/16..... 1,000,000 418,200
Nevada Housing Division, Single
Family Mortgage, Series C, AMT,
6.60% due 04/01/14................ 970,000 1,039,180
New York City, New York, Industrial
Development Authority, Special
Facilities, United Airlines, Inc.,
AMT, 5.65% due 10/01/32........... 1,000,000 1,000,700
New York City, New York, Municipal
Water Finance Authority,
Series F, 6% due 08/01/11......... 500,000 553,885
Series I, 5.875% due 03/15/14..... 500,000 541,140
Series L, 5.75% due 08/01/12...... 500,000 545,025
New York State Dormitory Authority
Revenue, City University System,
FGIC Insured, 5% due 07/01/26..... 1,500,000 1,480,140
Pooled Capital Program, FGIC
Insured, 7.80% due 12/01/05....... 35,000 36,226
New York State Highway Authority,
Service Contract Revenue, Local
Highway and Building, 5% due
04/01/17.......................... 1,000,000 979,990
New York State Urban Development
Corp. Revenue, Correctional
Facilities, Series A, 5.50% due
01/01/16.......................... 1,000,000 1,025,670
Northern California Power Agency,
Public Power Revenue Refunding,
Hydroelectric Project 1, Series A,
MBIA Insured, 6.25% due
07/01/12.......................... 750,000 820,118
Philadelphia, Authority for
Industrial Development Revenue,
Franklin Institute Project, 5.20%
due 06/15/26...................... 1,000,000 960,460
Pinal County, Arizona, Unified
School District 43, Apache JCT,
Series A, FGIC Insured, 6.80% due
07/01/09.......................... 425,000 516,554
</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>
Puerto Rico Commonwealth Highway &
Transportation Authority,
Transportation Revenue,
Infrastructure, 5% due 07/01/28... $ 1,000,000 $ 978,860
Series A, 5% due 07/01/38......... 1,000,000 969,860
Sacramento, California, Municipal
Utility District Electric Revenue
Refunding, Series Z, FGIC Insured,
6.45% due 07/01/10................ 600,000 649,854
Superior, Wisconsin, Limited
Obligation Revenue Refunding,
Midwest Energy Resources, Series
E, FGIC Insured, 6.90% due
08/01/21.......................... 500,000 625,635
Tallassee, Alabama, Industrial
Development Board Revenue
Refunding, Dow United Technologies
Corp., Series B, 6.10% due
08/01/14.......................... 1,000,000 1,114,010
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 1,107,920
Tulsa, Oklahoma, Airport
Transportation Revenue, American
Airlines, Inc., AMT, 7.375% due
12/01/20.......................... 2,000,000 2,143,760
Utah State Board of Regents Student
Loan Revenue, Series N, AMT,
AMBAC Insured, 5.90% due
11/01/07.......................... 1,000,000 1,090,380
Vermont Educational & Health
Buildings Financing Agency,
Norwich University Project, 5.50%
due 07/01/21...................... 1,000,000 1,007,630
Washington State Public Power
Supply System Refunding Revenue,
Nuclear Project 2 Revenue
Refunding, Series A, 7.25% due
07/01/06.......................... 500,000 591,420
Nuclear Project 2 Revenue
Refunding, Series B, 7% due
07/01/12.......................... 140,000 149,993
West Virginia School Building
Authority Revenue, Series A, MBIA
Insured, 7.25% due 07/01/15....... 50,000 53,781
Wisconsin State Health and
Educational Facilities Authority
Revenue,
Aurora Medical Group, Inc.
Project, FSA Insured, 5.75% due
11/15/07.......................... 500,000 551,935
6% due 11/15/10................... 1,000,000 1,153,790
----------
Total Bonds (cost: $59,937,749) 64,489,499
----------
VARIABLE RATE DEMAND NOTES* - .99%
Indiana State, Housing Financing
Authority, Multi-Family, Pedcor
Investment, AMT, Series M-B, 4.10%
due 01/01/29...................... 400,000 400,000
Purdue University, Indiana,
University Revenue, Student Fee,
Series O, 3.95% due 07/01/19...... 150,000 150,000
</TABLE>
<TABLE>
<CAPTION>
Atlas National Municipal Bond Fund (continued)
- ---------------------------------------------------------------------
value
face amount (note 1)
------------ ------------
Rockwall, Texas, Industrial
Development Revenue, Columbia
Extrusion Corp., AMT, 4.10% due
07/01/14.......................... $ 100,000 $ 100,000
----------
Total Variable Rate Demand Notes (cost: $650,000) 650,000
----------
TOTAL SECURITIES (COST: $60,587,749) - 98.99% 65,139,499
OTHER ASSETS AND LIABILITIES, NET - 1.01% 662,044
----------
NET ASSETS - 100.00% $ 65,801,543
----------
----------
Atlas U.S. Government and Mortgage Securities Fund
- ---------------------------------------------------------------------
value
face amount (note 1)
------------ ------------
<S> <C> <C>
U.S. GOVERNMENT AGENCIES - 85.40%
Federal Home Loan Mortgage Corp.
7.00% due 2023 - 2027............. $ 7,313,683 $ 7,458,598
7.50% due 2023 - 2024............. 14,274,751 14,663,880
8.00% due 2024 - 2026............. 7,401,406 7,664,848
8.50% due 2017 - 2026............. 2,149,569 2,253,519
9.00% due 2017 - 2024............. 3,753,418 3,988,906
9.50% due 2016 - 2021............. 1,032,128 1,103,450
10.00% due 2015 - 2020............ 75,877 82,259
10.50% due 2018 - 2020............ 71,835 79,492
Federal National Mortgage Assn.
6.50% due 2023 - 2028............. 21,374,397 21,516,730
7.00% due 2023 - 2028............. 48,606,573 49,595,337
7.50% due 2025 - 2028............. 25,066,886 25,749,788
8.00% due 2024 - 2028............. 35,986,430 37,271,534
8.50% due 2014 - 2027............. 6,065,715 6,356,697
9.00% due 2021 - 2025............. 4,373,483 4,629,578
9.50% due 2020.................... 37,843 40,437
Government National Mortgage Assn.
7.50% due 2022 - 2024............. 5,854,359 6,041,322
8.00% due 2023 - 2025............. 1,931,716 2,010,880
8.50% due 2016 - 2020............. 47,878 51,110
----------
Total U.S. Government Agencies (cost:
$186,462,683) 190,558,365
----------
COLLATERALIZED MORTGAGE OBLIGATIONS - 13.11%
6.14% FHLMC Floating Collateralized
Mortgage Obligation due 1999...... 233,947 234,092
6.29% FNMA Floating Collateralized
Mortgage Obligation due 1999...... 380,578 380,456
6.50% FNMA Floating Collateralized
Mortgage Obligation due 2020...... 6,000,000 6,075,000
6.50% FNMA Floating Collateralized
Mortgage Obligation due 2025...... 3,000,000 3,027,180
6.50% FNMA Floating Collateralized
Mortgage Obligation due 2026...... 3,000,000 3,021,540
6.50% FNMA Floating Collateralized
Mortgage Obligation due 2026...... 1,489,000 1,496,907
6.50% FHLMC Floating Collateralized
Mortgage Obligation due 2028...... 2,000,000 2,005,620
6.50% FNMA Floating Collateralized
Mortgage Obligation due 2028...... 2,000,000 2,024,360
6.50% FNMA Floating Collateralized
Mortgage Obligation due 2028...... 4,000,000 4,020,000
</TABLE>
21
<PAGE> 23
Statements of Investments in Securities and Net Assets December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas U.S. Government and
Mortgage Securities Fund (continued)
- ---------------------------------------------------------------------
value
face amount (note 1)
------------ ------------
<S> <C> <C>
6.50% FNMA Floating Collateralized
Mortgage Obligation due 2028...... $ 3,000,000 $ 2,998,125
6.50% FNMA Floating Collateralized
Mortgage Obligation due 2028...... 2,000,000 1,966,240
6.50% FNMA Floating Collateralized
Mortgage Obligation due 2028...... 2,000,000 2,011,240
----------
Total Collateralized Mortgage
Obligations (cost: $29,257,888) 29,260,760
----------
SHORT-TERM INVESTMENTS - 2.01%
Repurchase Agreement dated December
31, 1998 with Chase Securities,
Inc., effective yield of 4.95%,
due January 4, 1999 with respect
to $4,640,275 FHLMC, 6%, May 1,
2028 with a value of $4,582,271... 4,485,617 4,485,617
----------
Total Short-Term Investments (cost: $4,485,617) 4,485,617
----------
TOTAL SECURITIES (COST: $220,206,188) - 100.52% 224,304,742
OTHER ASSETS AND LIABILITIES, NET - (.52)% (1,156,908)
----------
NET ASSETS - 100.00% $223,147,834
----------
----------
Atlas Strategic Income Fund
- ---------------------------------------------------------------------
face amount value
or units (j) (note 1)
---------- ----------
MORTGAGE-BACKED OBLIGATIONS - 14.83%
Commercial - 2.46%
Asset Securitization Corp.,
Commercial Sub. Bonds, Series
1997-D5, Cl. B2, 6.93% due
02/14/41.......................... $ 400,000 $ 289,250
CS First Boston Mortgage
Securities Corp., Series 1997-C1,
Cl. F, 7.50% due 06/20/13
(a)(c)(f)......................... 50,000 39,000
Cl. G, 7.50% due 06/20/14
(a)(c)(f)......................... 50,000 36,000
Cl. H, 7.50% due 08/20/14
(a)(c)(f)......................... 30,000 20,597
First Chicago/Lennar Trust,
Commercial Collateral Strip
Interest, Series 1997-CHL1, Cl. D,
8.10% due 05/29/08 (a)(c)(f)...... 100,000 85,625
Series 1997-CHL1, Cl. E, 8.10% due
02/28/11 (a)(c)(f)................ 150,000 116,625
GMAC Commercial Mortgage
Securities, Inc., Series 1997-C1,
Cl. G, 7.414% due 09/30/06........ 120,000 91,163
Cl. X, 1.6287% due 07/15/27....... 975,000 87,141
GMAC Commercial Mortgage
Securities, Inc., Series 1997-C2,
Cl. F, 6.75% due 04/16/29......... 100,000 68,094
Morgan Stanley Capital I, Inc.,
Commercial Sub. Bonds, Series
1997-RR, Cl. D, 7.73% due 04/30/39
(a)(c)(f)......................... 200,000 201,031
Series 1997-RR, Cl. E, 7.73% due
04/30/39 (a)(c)(f)................ 75,000 74,421
</TABLE>
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- ---------------------------------------------------------------------
face amount value
or units (j) (note 1)
------------ ------------
<S> <C> <C>
Series 1997-HF1, Cl. F, 6.86% due
02/15/10 (a)(c)(f)................ $ 50,000 $ 47,488
Series 1997-XL1, Cl. G, 7.69% due
10/03/30 (a)(c)(f)................ 60,000 60,881
Series 1997-RR, Cl. F, 7.73% due
04/30/39 (a)(c)(f)................ 175,000 149,359
Nykredit AS, 8% Mortgage-Backed
Security, due 10/01/26 (DKK)...... 761,000 123,126
Salomon Brothers Mortgage
Securities VII, Series 1996-C1,
Cl. F, 9.18% due 02/20/26......... 250,000 210,000
Salomon Brothers, Inc., Commercial
Mortgage Pass-Through
Certificates, Series 1998-1A, 5%
due 11/25/27...................... 68,159 65,433
Structured Asset Securities Corp.,
Commercial Mtg. Pass-Through
Certificates, Series 1997-LL1, Cl.
F, 7.30% due 04/12/12 (a)(f)...... 50,000 40,047
Government Agency - 11.95%
Federal Home Loan Mortgage Corp.,
Interest-Only Stripped
Mortgage-Backed Security, Series
177, 7% due 07/01/26 (h).......... 1,616,996 277,895
Series 151, Cl. F, 9% due
05/15/21.......................... 433,263 449,791
5.625% Unsec. Unsub. Notes due
06/10/03 (GBP).................... 20,000 33,881
Federal National Mortgage
Association, 6.875% due
06/07/02.......................... 85,000 148,540
7% due 07/01/26................... 600,557 612,944
7% due 01/01/28................... 1,291,363 1,316,384
Government National Mortgage
Association, 7% due 03/15/28...... 3,022,134 3,093,699
7% due 03/15/28................... 784,660 803,241
7% due 03/15/28................... 1,085,487 1,111,192
7% due 07/15/28................... 923,520 945,390
Multi-Family - .42%
Criimi Mae, Inc., Trust I, Series
1996-C1, Cl. A2, 7.56% due
06/30/33 (a)...................... 100,000 98,628
Mortgage Capital Funding, Inc.,
Multifamily Mtg. Pass-Through
Certificates, Series 1996-MC1, Cl.
G, 7.15% due 06/15/06 (a)......... 250,000 213,448
----------
Total Mortgage-Backed Obligations (cost:
$11,231,173) 10,910,314
----------
U.S. GOVERNMENT OBLIGATIONS - 26.16%
U.S. Treasury Bonds:
11.875% due 11/15/03.............. 2,170,000 2,831,173
10.75% due 02/15/03............... 510,000 622,997
9.375% due 02/15/06 (k)(m)........ 2,185,000 2,791,338
6.50% due 11/15/26................ 350,000 407,313
6.125% due 11/15/27............... 600,000 672,000
U.S. Treasury Notes:
4.50% due 09/30/00................ 500,000 499,063
5.50% due 01/31/03 (l)............ 3,415,000 3,514,250
5.50% due 03/31/03................ 900,000 927,000
7.50% due 02/15/05................ 700,000 801,282
6.50% due 08/15/05................ 25,000 27,469
6.50% due 10/15/06................ 2,260,000 2,508,600
6.125% due 08/15/07............... 2,590,000 2,830,386
</TABLE>
The accompanying notes are an integral part of these financial statements.
22
<PAGE> 24
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- ---------------------------------------------------------------------
face amount value
or units (j) (note 1)
---------- ----------
<S> <C> <C>
U.S. Treasury Strips:
0% due 02/15/19................... $ 2,500,000 $ 818,323
----------
Total U.S. Government Obligations (cost:
$18,512,263) 19,251,194
----------
FOREIGN GOVERNMENT
OBLIGATIONS - 19.38%
Argentina - 3.86%
Argentina (Republic of), Bonds, 5%
due 12/20/02 (JPY)................ 10,000,000 79,875
Bonds, Bonos de Consolidacion de
Deudas, Series Previs 2, 5.01% due
04/01/01 (c)...................... 11,635 8,115
City of Buenos Aires, Series 3,
10.50% Notes due 05/28/04 (a)
(ARP)............................. 40,000 30,829
Notes, 11.75% due 02/12/07
(ARP)............................. 120,000 102,095
Past Due Interest Global Bearer
Bonds, 6.19% Debentures due
03/31/05 (c)...................... 526,400 445,019
Series Pro1, 3.01% Bonds due
04/01/07 (ARP) (c)................ 752,003 552,484
Series WW, 11% Bonds due
12/04/05.......................... 280,000 278,600
Unsec. Unsub. Notes, 5.50% due
03/27/01 (JPY).................... 40,000,000 355,675
Unsec. Unsub. Notes, 8.75% due
07/10/02 (ARP).................... 160,000 131,642
Unsec. Unsub. Notes, 11.375% due
01/30/17.......................... 850,000 847,875
11% Sr. Unsub. Bonds due
10/09/06.......................... 10,000 9,739
Australia - .36%
Australia (Commonwealth of) Bonds,
Series 904, 9% Bonds due 09/15/04
(AUD)............................. 355,000 262,305
Brazil - 1.33%
Brazil (Federal Republic of),
Capitalization Bonds, 8% due
04/15/14 (c)...................... 464,831 277,156
Debt Conversion Bonds, Series RG,
6.19% due 04/15/12 (c)............ 250,000 124,688
18 years Debt Conversion Bonds,
Series L, 6.19% due 04/15/12
(c)............................... 720,000 360,000
30 years Discount Bonds, 6.125%
due 04/15/24...................... 365,000 213,525
Bulgaria - .44%
Bulgaria (Republic of), Discount
Bonds, 0% due 07/28/24 (e)........ 190,000 133,000
Front-Loaded Interest Reduction
Bearer Bonds, Tranche A, 2.50% due
07/28/12 (e)...................... 280,000 160,300
Past Due Interest Bonds, 6.69%
Debentures due 07/28/11 (c)....... 40,000 26,800
Denmark - .54%
Denmark (Kingdom of),
Bullet Bonds, 7% Bonds due
11/15/07 (DKK).................... 320,000 60,412
7% Bonds due 11/10/24 (DKK)....... 330,000 66,381
8% Bonds due 05/15/03 (DKK)....... 1,500,000 273,567
Ecuador - .12%
Ecuador (Republic of), Past Due
Interest Bonds, 3.25% due 02/27/15
(c)............................... 124,482 50,104
Ecuador (Republic of), 6.625% Gtd.
30 years Discount Bonds due
02/28/25 (c)...................... 70,000 35,700
</TABLE>
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- ---------------------------------------------------------------------
face amount value
or units (j) (note 1)
------------ --------
<S> <C> <C>
Finland - .34%
Finland (Government of), 9.50%
Bonds due 03/15/04 (FIM).......... $ 1,000,000 $ 252,463
France - 2.27%
France (Government of) O.A.T.,
5.25% Bonds due 04/25/08 (FRF).... 6,350,000 1,253,468
5.50% Bonds due 10/25/07 (FRF).... 2,070,000 417,333
Germany - 1.22%
Bundesschatzanweisungen, Series
98, 4% Notes due 03/17/00 (DEM)... 1,175,000 713,091
Bundesschatzanweisungen, Series
126, 4.50% Notes due 02/18/03
(DEM)............................. 290,000 181,558
Great Britain - .80%
United Kingdom Treasuries, 8.50%
due 12/07/05 (GBP)................ 225,000 464,760
9% Bonds due 08/06/12 (GBP)....... 50,000 121,686
Greece - .11%
Greek Government Bonds, 8.90% due
04/01/03 (GRD).................... 21,900,000 82,002
Hungary - .27%
Hungary Government Bonds, Series
00/G, 16% due 11/24/00 (HUF)...... 15,900,000 75,768
Series 99/G, 16.50% due 07/24/99
(HUF)............................. 10,000,000 46,450
Series 03/I, 13% due 07/24/03
(HUF)............................. 16,200,000 77,311
Italy - 1.95%
Italy (Republic of) Treasury
Bonds, Buoni del Tesoro
Poliennali, 8.50% Debentures due
01/01/04 (ITL).................... 885,000,000 654,900
8.75% due 07/01/06 (ITL).......... 925,000,000 742,775
10.50% due 04/01/05 (ITL)......... 40,000,000 33,480
Ivory Coast - .05%
Ivory Coast (Government of) Past
Due Interest, 2% Bonds due
03/29/18 (a)(e)................... 139,238 40,379
Jordan - .03%
Hashemite (Kingdom of Jordan)
Bonds, Series DEF, 5% due 12/23/23
(e)............................... 50,000 25,835
Mexico - 2.30%
Mexican Cetes, 0% due 05/06/99
(MXP)............................. 3,650,000 332,238
United Mexican States Bonds,
Series B, 6.25% Sec. Debentures
due 12/31/19...................... 250,000 193,750
Series W-A, 6.25% due 12/31/19.... 375,000 292,969
6.63% Sec. Debentures due
12/31/19.......................... 1,990,000 284,642
8.125%/10.875% Bonds due 09/10/04
(DEM)............................. 220,000 134,402
10.375% due 01/29/03 (DEM)........ 25,000 16,136
11.50% Bonds due 05/15/26......... 415,000 436,842
Nigeria - .06%
Nigeria (Government of) Promissory
Notes, 5.09% due 01/05/10 (e)..... 100,000 42,500
Panama - .10%
Panama (Republic of), Past Due
Interest, 20 years, 4% Debentures
due 07/17/16 (c).................. 52,733 39,022
Pycsa Panama SA., 10.28% Sr. Sec.
Bonds due 12/15/12 (a)(f)......... 45,000 35,100
</TABLE>
23
<PAGE> 25
Statements of Investments in Securities and Net Assets December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- ---------------------------------------------------------------------
face amount value
or units (j) (note 1)
---------- ----------
<S> <C> <C>
Peru - .64%
Peru (Republic of), Zero Coupon,
Sr. Notes due 02/28/16............ $ 800,384 $ 344,566
Past Due Interest, 4% Bonds due
03/07/17 (c)...................... 200,000 125,500
Poland - .69%
Poland (Republic of), Bond, Series
1003, 12% due 10/12/03 (PLZ)...... 270,000 80,548
Treasury Bill, Series 52, due
08/11/99.......................... 120,000 31,736
Treasury Bill, Series 52, due
10/13/99.......................... 210,000 54,247
Unsec. Non-US Global Bearer Bond,
Series PDIB, 5% due 10/27/14
(e)............................... 370,000 344,563
Russia - .10%
Russia (Government of), City of
St. Petersburg, 9.50% Sr. Unsec.
Unsub. Notes due 06/18/02
(a)(f)............................ 50,000 12,000
CSFB Russian Swap, 18.29% Bond due
04/28/99 (RUR) (b)(f)............. 160,000 1,768
23.20% Bond due 04/28/99 (RUR)
(b)(f)............................ 149,000 1,646
28.9% Bond due 07/14/99 (RUR)
(b)(f)............................ 370,000 4,906
29.8% Bond due 07/14/99 (RUR)
(b)(f)............................ 200,000 2,652
Federal Loan Bonds, Series 5022,
15% due 02/23/00 (f).............. 1,279,000 24,395
Ministry of Finance (Russian
Government), Interest Notes,
Series US, 5.97% debentures due
12/15/15 (c)...................... 5,974 646
Principal Loans Debentures, 24
Years, 5.969% due 12/15/20
(b)(c)............................ 455,000 27,300
Spain - 1.50%
Spain (Government of), 4.50% due
07/30/04 (ESP).................... 70,860,000 523,089
5.25% Bonds due 01/31/03 (ESP).... 73,200,000 554,051
6% due 01/31/08 (ESP)............. 3,200,000 25,994
Venezuela - .30%
Venezuela (Republic of), 9.25%
Unsec. Bonds due 09/15/27......... 360,000 219,600
Vietnam - 0%
Vietnam (Government of), 3% Par
Bonds due 03/12/28................ 12,000 2,820
----------
Total Foreign Government Obligations (cost:
$14,371,388) 14,258,773
----------
LOAN PARTICIPATIONS - .41%
Korea (Republic of) Restructured
Loan Participation Agreement,
8.281% due 04/08/00 (c)(f)........ 200,000 179,000
Morocco (Government of) Loan
Participation Agreement, Tranche
A, 6.06% due 01/01/09 (c)(f)...... 171,429 120,000
----------
Total Loan Participations (cost:
$343,146)......................... 299,000
----------
CORPORATE BONDS AND NOTES - 28.45%
Aerospace - .05%
Greater Toronto Airport, 5.40%
Debentures due 12/03/02 (CAD)..... 55,000 36,017
Air Travel - .29%
Atlas Air, Inc., 10.75% Sr. Notes
due 08/01/05...................... 50,000 52,500
12.25% Pass-Through Certificates
due 12/01/02...................... 50,000 53,832
</TABLE>
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- ---------------------------------------------------------------------
face amount value
or units (j) (note 1)
------------ --------
<S> <C> <C>
Trans World Airlines, Inc., 11.50%
Sr. Sec. Notes due 12/15/04....... $ 125,000 $ 105,000
Apparel & Textiles - .23%
Indorayon International Finance
Co. BV, 10% Gtd. Unsec. Unsub.
Notes due 03/29/01................ 100,000 83,583
Unifrax Investment Corp., 10.50%
Sr. Notes due 11/01/03............ 50,000 52,000
William Carter Co., 10.375% Sr.
Sub. Notes due 12/01/06........... 35,000 36,925
Automotive - .87%
Cambridge Industries, Inc., 10.25%
Sr. Sub. Notes due 07/15/07....... 50,000 43,000
Collins & Aikman Products Co.,
11.50% Gtd. Sr. Sub. Notes due
04/15/06.......................... 150,000 156,750
Hayes Wheels International, Inc.,
9.125% Sr. Sub. Notes due
07/15/07.......................... 50,000 51,875
11% Unsec. Sr. Sub. Notes due
07/15/06.......................... 100,000 111,000
HDA Parts System, Inc., 12% Sr.
Sub. Notes due 08/01/05 (a)....... 75,000 67,500
Oxford Automotive, Inc., 10.125%
Sr. Sub. Notes due 06/15/07....... 200,000 207,000
Banks - 2.85%
BanAmex, 11% Cv. Jr. Sub. Notes
due 07/15/03...................... 20,000 17,800
Bank Negara Indonesia, 7.625% Sr.
Notes due 02/15/07................ 100,000 55,000
Bayerische Vereinsbank, Series
661, 5% Sec. Bonds due 07/28/04
(DEM)............................. 795,000 506,425
Deutsche Pfandbrief & Hypobank,
Series 452, 4.75% Sec. Notes due
03/20/03 (DEM).................... 700,000 438,852
Export-Import Bank of Korea, 7.1%
Unsec. Notes due 03/15/07......... 80,000 73,592
Export Credit Bank of Turkey,
8.22% due 08/18/00 (c)............ 250,000 229,985
Industrial Bank of Japan Preferred
Capital Co. (The) LLC, 8.79% Bonds
due 12/29/49 (a)(c)............... 125,000 107,500
Hypothekenbank In Essen AG, Series
459, 5.50% Sec. Bonds due 02/20/07
(DEM)............................. 170,000 111,352
Series 478, 4.50% Sec. Bonds due
05/02/03 (DEM).................... 140,000 86,930
Series 502, 5.25% Sec. Bonds due
01/22/08 (DEM).................... 220,000 141,096
Kreditanstalt Fuer Wiederaufbau
International Finance, 5% Bonds
due 01/04/09 (DEM)................ 160,000 101,218
Ongko International Finance Co.
BV, 10.50% Gtd. Notes due 03/29/04
(a)(b)(f)......................... 40,000 2,400
Shoeshone Partners Trust, 8% Sr.
Notes due 04/28/02 (f)............ 250,000 224,202
</TABLE>
The accompanying notes are an integral part of these financial statements.
24
<PAGE> 26
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- ---------------------------------------------------------------------
face amount value
or units (j) (note 1)
---------- ----------
<S> <C> <C>
Broadcast, Radio & TV - 2.62%
Adelphia Communications Corp.,
8.375% Sr. Notes due 02/01/08..... $ 25,000 $ 25,813
9.25% Sr. Notes due 10/01/02...... 50,000 52,750
10.50% Sr. Notes due 07/15/04..... 50,000 56,250
Azteca Holdings SA, 11% Sr. Sec.
Notes due 06/15/02................ 35,000 29,575
Capstar Broadcasting Partners,
Inc., 9.25% Sr. Sub. Notes due
07/01/07.......................... 200,000 207,000
CBS Radio, Inc., 11.375%
Exchangeable Unsec. Sub.
Debentures due 01/15/09 (h)....... 75,200 89,488
Chancellor Radio Broadcasting Co.,
8.75% Sr. Sub. Notes due
06/15/07.......................... 50,000 51,250
CSC Holdings, Inc., 9.875% Sr.
Sub. Debentures due 04/01/23...... 50,000 55,625
10.50% Sr. Sub. Debentures due
05/15/16.......................... 50,000 58,750
EchoStar Communications Corp.,
0%/12.875% Sr. Discount Notes due
06/01/04 (d)...................... 100,000 102,500
EchoStar DBS Corp., 12.50% Sr.
Sec. Notes due 07/01/02........... 100,000 115,000
EchoStar Satellite Broadcasting
Corp., 0%/13.125% Sr. Sec.
Discount Notes due 03/15/04 (d)... 100,000 99,750
Falcon Holdings Group, L.P.,
0%/9.285% debentures due 04/15/10
(d)............................... 100,000 68,500
Helicon Group LP/Helicon Capital
Corp., Series B, 9% Sr. Sec. Notes
due 11/01/03...................... 100,000 104,000
Jacor Communications Co., 8% Sr.
Sub. Notes due 02/15/10........... 125,000 131,875
Northeast Optic Network, 12.75%
Unsec. Sr. Notes due 08/15/08..... 75,000 73,500
Optel, Inc., 13% Sr. Notes due
02/15/05.......................... 85,000 84,150
Paxson Communications Corp.,
11.625% Sr. Sub. Notes due
10/01/02.......................... 100,000 102,500
Rogers Communication, Inc., 8.75%
Sr. Notes due 07/15/07 (CAD)...... 100,000 62,715
TeleWest Communications PLC,
0%/11% Sr. Discount Debentures due
10/01/07 (d)...................... 65,000 54,275
Time Warner Telecom LLC, 9.75%
Unsec. Sr. Notes due 07/15/08..... 50,000 52,500
United International Holdings,
Inc., 0%/10.75% Sr. Discount Notes
due 02/15/08 (d).................. 25,000 13,500
TV Azteca SA de CV, Series A,
10.125% Sr. Notes due 02/15/04.... 100,000 85,000
Young Broadcasting, Inc., Series
B, 9% Sr. Sub. Notes due
01/15/06.......................... 50,000 50,482
8.75% Sr. Sub. Debentures due
06/15/07.......................... 100,000 101,500
Building & Construction - .42%
Kaufman & Broad Home Corp., 7.75%
Sr. Notes due 10/15/04............ 100,000 101,000
Nortek, Inc., 9.125% Sr. Notes due
09/01/07.......................... 200,000 206,000
Building Materials - .06%
Falcon Building Products, Inc.,
9.50% Sr. Sub. Notes due
06/15/07.......................... 50,000 45,000
</TABLE>
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- ---------------------------------------------------------------------
face amount value
or units (j) (note 1)
------------ --------
<S> <C> <C>
Capital Goods - .27%
Aki Holdings, Inc., 0%/13.50% Sr.
Discount Debentures due 07/01/09
(a)(d)............................ $ 50,000 $ 19,500
10.50% Sr. Notes due 07/01/08
(a)............................... 50,000 47,500
Eagle-Picher Industries, 9.375%
Sr. Sub. Notes due 03/01/08....... 100,000 94,000
Paragon Corp. Holdings, Inc.,
9.625% Sr. Notes due 04/01/08..... 45,000 38,138
Chemicals & Allied Products - .72%
ClimaChem, Inc., 10.75% Gtd. Sr.
Sub. Unsec. Bonds due 12/01/07.... 50,000 50,250
Hydrochem Industrial Service,
10.375% Sr. Sub. Notes due
08/01/07.......................... 50,000 47,500
Laroche Industries, Inc., 9.50%
Sr. Sub. Notes due 09/15/07....... 100,000 80,000
NL Industries, Inc., 11.75% Sr.
Sec. Notes due 10/15/03........... 40,000 42,500
Pioneer Americas Acquisition
Corp., 9.25% Sr. Sec. Notes due
06/15/07.......................... 25,000 20,000
Polymer Group, Inc., 9% Sr. Sub.
Notes due 07/01/07................ 50,000 49,500
PCI Chemicals Canada Inc., 9.25%
Sr. Sec. Notes due 10/15/07....... 50,000 38,500
Sovereign Specialty Chemicals,
Inc., 9.50% Sr. Sub. Notes due
08/01/07.......................... 75,000 76,125
Sterling Chemicals, Inc., 11.75%
Sr. Unsec. Sub. Notes due
08/15/06.......................... 150,000 129,000
Commercial Services - .07%
Kindercare Learning Centers, Inc.,
9.50% Sr. Sub. Notes due
02/15/09.......................... 50,000 49,750
Computers - .16%
Unisys Corp., 11.75% Sr. Notes due
10/15/04.......................... 100,000 116,000
Conglomerates - .01%
Mechala Group Jamaica, Ltd.,
12.75% Bonds due 12/30/99......... 7,000 4,760
Consumer Products - .52%
Bell Sports, Inc., 11% Sr. Sub
Notes due 08/15/08 (a)............ 85,000 86,275
Holmes Products Corp., 9.875% Gtd.
Sr. Sub. Unsec. Bonds due
11/15/07.......................... 25,000 24,112
Icon Health & Fitness, Inc.,
Series B, 13% Sr. Sub. Notes due
07/15/02.......................... 85,000 51,000
Iron Mountain, Inc., 8.75% Sr.
Sub. Notes due 09/30/09........... 50,000 51,500
10.125% Sr. Sub. Notes due
10/01/06.......................... 50,000 53,750
Revlon Consumer Products, Inc.,
8.625% Sr. Sub. Notes due
02/01/08.......................... 50,000 45,500
Revlon Worldwide Corp., Zero
Coupon Sr. Sec. Discount Notes due
03/15/01.......................... 55,000 31,350
TAG Heuer International SA, 12%
Sr. Sub. Notes due 12/15/05 (f)... 33,000 38,319
Diversified Financial - .22%
AMRESCO, Inc., Series 97-A, 10%
Sr. Sub. Notes due 03/15/04....... 75,000 53,063
Series 98-A, 9.875% Sr. Sub. Notes
due 03/15/05...................... 100,000 68,000
</TABLE>
25
<PAGE> 27
Statements of Investments in Securities and Net Assets December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- ---------------------------------------------------------------------
face amount value
or units (j) (note 1)
---------- ----------
<S> <C> <C>
Veritas Capital Trust, 10% Gtd.
Bonds due 01/01/28................ $ 50,000 $ 45,000
Diversified Media - .54%
Chancellor Media Corp., Series B,
8.125% Sr. Sub. Notes due
12/15/07.......................... 50,000 50,000
10.50% Sr. Sub. Notes due
01/15/07.......................... 90,000 98,550
Hollywood Theaters, Inc., 10.625%
Sr. Sub. Notes due 08/01/07....... 25,000 18,438
IPC Magazines Group PLC, 9.625%
Bonds due 03/15/08 (GBP).......... 50,000 72,260
Lamar Advertising Co., 9.625%
Unsec. Sr. Sub. Notes due
12/01/06.......................... 100,000 107,000
Sinclair Broadcast Group, Inc.,
8.75% Sr. Sub. Notes due
12/15/07.......................... 50,000 50,500
Electrical Utilities - .27%
Calpine Corp., 8.75% Sr. Notes due
07/15/07.......................... 115,000 116,150
10.50% Sr. Notes due 05/15/06..... 50,000 55,125
Central Termica Guemes SA, 12%
Unsec. Bonds due 11/26/01
(a)(f)............................ 50,000 28,313
Electronics - .13%
Wavetek Corp., 10.125% Sr. Sub.
Notes due 06/15/07................ 100,000 95,000
Energy Services & Producers - .90%
Gothic Energy Corp., Units (each
unit consists of $1,000 principal
amount of 0%/14.125% Sr. Discount
Notes due 05/01/06 and 7.933
warrants to purchase one ordinary
share) (d)(j)..................... 125,000 40,625
Gothic Production Corp., 11.125%
Sr. Sec. Notes due 05/01/05 (a)... 50,000 39,000
Grant Geophysical Inc., 9.75% Sr.
Notes due 02/15/08................ 90,000 61,200
Great Lakes Carbon Corp., 10.25%
Sr. Sub. Notes due 05/15/08....... 150,000 151,125
P&L Coal Holdings Corp., 9.625%
Sr. Sub. Notes due 05/15/08....... 100,000 101,000
Ram Energy, Inc., 11.5% Sr. Notes
due 02/15/08...................... 210,000 147,000
Universal Compression, Inc.,
0%/9.875% Sec. Discount Notes due
02/15/08.......................... 200,000 120,000
Financial - .73%
BankUnited Capital Trust, 10.25%
Bond due 12/31/26................. 100,000 100,000
CB Richard Ellis Service, 8.875%
Unsec. Sr. Sub. Notes due
06/01/06.......................... 50,000 49,000
Ford Motor Credit Co., 5.25% due
06/16/08.......................... 360,000 222,703
Industrial Finance
Corp., - Thailand, 6.875% Sr.
Notes due 04/01/03 (a)............ 50,000 43,547
Local Financial Corp., 11% Sr.
Notes due 09/08/04 (a)............ 50,000 50,547
Netia Holdings BV, 0%/11% Sr. Gtd
Discount Notes due 11/01/07 (d)... 50,000 16,952
10.25% Sr. Gtd Notes due
11/01/07.......................... 25,000 21,250
Polytama International Finance BV,
11.25% Sec. Notes due 06/15/07.... 44,027 9,686
SBS Agro Finance BV, 10.25% Bonds
due 07/21/00...................... 75,000 7,420
Southern Pacific Funding Corp.,
11.50% Sr. Notes due 11/01/04..... 50,000 13,250
</TABLE>
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- ---------------------------------------------------------------------
face amount value
or units (j) (note 1)
------------ --------
<S> <C> <C>
Food & Beverages - .59%
Aurora Foods, Inc., 8.75% Sr. Sub.
Notes due 07/01/08................ $ 100,000 $ 104,000
Del Monte Foods Co., 0%12.50% Sr.
Discount Notes due 12/15/07 (d)... 50,000 34,250
Doane Products Co., 9.75% due
05/15/07.......................... 73,247 74,895
Purina Mills, Inc., 9% Sr. Sub.
Notes due 03/15/10................ 50,000 51,000
Shoppers Food Warehouse Corp.,
9.75% Sr. Sec. Notes due
06/15/04.......................... 20,000 21,800
Smithfield Foods, Inc., 7.625% Sr.
Sub. Notes due 02/15/08........... 100,000 100,500
Sparkling Spring Water, 11.50% Sr.
Sub. Notes due 11/15/07........... 50,000 48,250
Gas Utilities - .07%
AmeriGas Partners, L.P., 10.125%
Sr. Notes due 04/15/07............ 50,000 50,750
Health Care/Supplies &
Services - .91%
Fresenius Medical Cap Trust II,
7.875% Gtd. Sec. Trust Preferred
Bond due 02/01/08................. 100,000 90,500
Fresenius Medical Cap Trust III,
7.375% Gtd. Sec. Trust Preferred
Bonds due 02/01/08 (DEM).......... 100,000 63,008
ICN Pharmaceutical, Inc., 8.75%
Sr. Notes due 11/15/08 (a)........ 100,000 101,000
Integrated Health Services, 9.50%
Sr. Sub. Notes due 09/15/07....... 95,000 90,250
Kinetic Concepts, Inc., Series B,
9.625% Sr. Unsec. Sub. Notes due
11/01/07.......................... 175,000 167,563
Oxford Health Plans, 11% Sr. Notes
due 05/15/05 (a).................. 100,000 94,000
Sun Healthcare Group, Inc., 9.50%
Sr. Sub. Notes due 07/01/07....... 80,000 64,800
Homebuilders/Real Estate - .19%
Saul (B.F.) Real Estate Investment
Trust, 9.75% Sr. Sec. Notes due
04/01/08.......................... 150,000 139,500
Hotel/Gaming - 1.36%
Apcoa, Inc., 9.25% Sr. Sub. Notes
due 03/15/08...................... 50,000 46,000
Capstar Hotel Co., 8.75% Sr. Sub.
Notes due 08/15/07................ 25,000 24,375
Casino Magic of Louisiana Corp.,
Series B, 13% due 08/15/03........ 40,000 45,200
Empress Entertainment, Inc.,
8.125% Sr. Sub. Notes due
07/01/06.......................... 150,000 149,250
Grand Casinos, Inc., 10.125% Gtd.
First Mtg. Notes due 12/01/03..... 50,000 54,500
Hard Rock Hotel, Inc., 9.25% Sr.
Sub. Notes due 04/01/05........... 90,000 90,000
Horseshoe Gaming LLC, 9.375% Sr.
Sub. Notes due 06/15/07........... 75,000 77,438
Intrawest Corp., 9.75% Sr. Notes
due 08/15/08...................... 75,000 76,875
Majestic Star Casino LLC (The),
12.75% Sec. Sr. Notes due
05/15/03.......................... 50,000 51,875
Mohegan Tribal Gaming Authority
(Connecticut), Series B, 13.50%
Sr. Sec. Notes due 11/15/02....... 50,000 60,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
26
<PAGE> 28
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- ---------------------------------------------------------------------
face amount value
or units (j) (note 1)
---------- ----------
<S> <C> <C>
Rio Hotel and Casino, Inc., 9.50%
Gtd. Sr. Sub. Notes due
04/15/07.......................... $ 100,000 $ 110,500
Showboat Marina Casino
Partnership/ Showboat Marina
Finance Corp., Series B, 13.50%
First Mtg. Notes due 03/15/03..... 150,000 170,250
Venetian Casino Resort LLC/Las
Vegas Sands, Inc., 10%/14.25% Sr.
Sub. Notes due 11/15/05 (e)....... 50,000 44,000
Industrial - 1.36%
Federal-Mogul Corp., 7.875% Notes
due 07/01/10...................... 125,000 127,600
Fleming Companies, Inc., 10.50%
Sr. Sub. Notes due 12/01/04....... 75,000 70,875
10.625% Sr. Sub. Notes due
07/31/07.......................... 170,000 158,525
Focal Communications, Inc.,
0%/12.125% Sr. Discount Notes due
02/15/08 (d)...................... 130,000 68,900
Globe Manufacturing Corp., 10% Sr.
Sub. Notes due 08/01/08 (a)....... 100,000 90,500
International Wire Group, Inc.,
Series B, 11.75% Sr. Sub. Notes
due 06/01/05...................... 65,000 68,413
Key Plastics, Inc., 10.25% Sr.
Sub. Notes due 03/15/07........... 50,000 46,750
Outboard Marine Corp., 10.75% Sr.
Notes due 06/01/08 (a)............ 55,000 53,625
Packaged Ice, Inc., 9.75% Unsec.
Sr. Notes due 02/01/05............ 25,000 25,000
Pantry, Inc. (The), 10.25% Sr.
Sub. Notes due 10/15/07........... 50,000 52,375
Phillips Van-Huesen, 9.50% Sr.
Sub. Notes due 05/01/08........... 100,000 100,000
Roller Bearing Co. of America,
Inc., 9.625% Sr. Sub. Notes due
06/15/07.......................... 25,000 24,250
Shaw Communications, Inc., 8.54%
Debentures due 09/30/27 (CAD)..... 80,000 53,884
Styling Technology Corp., 10.875%
Sr. Sub. Notes due 07/01/08....... 35,000 33,250
UIH Australia/Pacific, Series B,
0%/14% Sr. Discount Notes due
05/15/06 (d)...................... 50,000 26,000
Industrial Services - .36%
Comforce Operating, Inc., 12% Sr.
Notes due 12/01/07................ 50,000 50,000
Fisher Scientific International,
Inc., 9% Sr. Sub. Notes due
02/01/08.......................... 100,000 100,000
Great Lakes Dredge & Dock Corp.,
11.25% Sr. Sub. Notes due 08/15/08
(a)............................... 110,000 111,650
Information Technology - 2.40%
Amazon Communications, Inc.,
0%/10% Sr. Discount Notes due
05/01/08 (d)...................... 105,000 69,300
Bell Technology Group, 13% Sr.
Notes due 05/01/05................ 50,000 41,000
Cellnet Data Systems, Inc., 0%/14%
Unsec. Sr. Discount Notes due
10/01/07 (d)...................... 50,000 12,500
Cellular Communications
International, Inc., 0%/9.50% Sr.
Discount Notes due 04/01/05 (ECU)
(d)............................... 250,000 210,000
Covad Communications Group, Inc.,
0%/13.50% Sr. discount Notes due
03/15/08 (d)...................... 100,000 55,000
</TABLE>
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- ---------------------------------------------------------------------
face amount value
or units (j) (note 1)
<S> <C> <C>
Crown Castle International Corp.,
0%10.625% Sr. Discount Notes due
11/15/07 (d)...................... $ 75,000 $ 52,500
CTI Holdings SA, 0%/11.50% Sr.
Notes due 04/15/08 (d)............ 50,000 22,500
Details, Inc., 10% Sr. Sub. Notes
due 11/15/05...................... 25,000 23,750
Exodus Communications, Inc.,
11.25% Sr. Notes due 07/01/08..... 80,000 80,000
Global Crossing Holdings, Ltd.,
9.625% Sr. Notes due 05/15/08..... 100,000 106,000
GST Telecommunications, Inc./GST
Network Funding Inc., 0%/10.25%
Sr. Discount Notes due 05/01/08
(a)(d)............................ 35,000 15,050
ICG Services, Inc., 0%/10% Sr.
Discount Notes due 02/15/08 (d)... 35,000 18,550
KMC Telecom Holdings, Inc., Units
(each unit consists of $1000
principal amount of 0%/12.50% Sr.
Discount Notes due 02/15/08 and
one warrant to purchase .21785
Ordinary Share of Common Stock)
(i)............................... 100,000 48,000
Nextel Communications, Inc., Sr.
Discount Notes, 0%/9.75% due
10/31/07 (d)...................... 90,000 54,450
0%/9.95% due 02/15/08 (d)......... 75,000 44,438
0%/10.65% due 09/15/07 (d)........ 275,000 175,313
Nextlink Communications, Inc., 0%/
9.45% Sr. Discount Notes due
04/15/08 (d)...................... 100,000 57,000
9% due 03/15/08................... 100,000 94,000
9.625% Sr. Notes due 10/01/07..... 125,000 119,375
Pinnacle Holdings, Inc., 0%/10%
Sr. Discount Notes due 03/15/08
(d)............................... 100,000 58,250
Psinet, Inc., 10% Senior Notes due
02/15/05.......................... 150,000 148,500
Satelites Mexicanos SA, 10.125%
Sr. Notes due 11/01/04............ 50,000 40,000
SBA Communications Corp., 0%/12%
Sr. Discount Notes due 03/01/08
(d)............................... 200,000 115,000
Wam!Net, Inc., 0%/13.25% Sr.
Discount Notes due 03/01/05 (d)... 200,000 109,000
Insurance - .09%
Veritas Holdings, GMBH, 9.625% Sr.
Notes due 12/15/03................ 65,000 65,000
Leisure & Entertainment - .39%
Premier Cruise, Ltd., 11% Sr.
Notes due 03/15/08 (a)............ 50,000 25,000
Premier Parks, Inc.
0%/10% Sr. Discount Notes due
04/01/08 (d)...................... 50,000 33,875
9.25% Sr. Notes due 04/01/06...... 50,000 51,688
SFX Entertainment, Inc., 9.125%
Sr. Sub. Notes due 02/01/08....... 125,000 123,750
Six Flags Entertainment Corp.,
8.875% Sr. Notes due 04/01/06..... 50,000 51,313
Manufacturing - .50%
Axia, Inc., 10.75% Sr. Sub. Notes
due 07/15/08...................... 50,000 50,750
Ball Corp., 7.75% Sr. Notes due
08/01/06 (a)...................... 50,000 52,250
</TABLE>
27
<PAGE> 29
Statements of Investments in Securities and Net Assets December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- ---------------------------------------------------------------------
face amount value
or units (j) (note 1)
---------- ----------
<S> <C> <C>
8.25% Sr. Sub. Notes due 08/01/08
(a)............................... $ 50,000 $ 52,000
Grove Worldwide LLC, 9.25% Sr.
Sub. Notes due 05/01/08........... 50,000 45,000
Insilco Corp., Units, (each unit
consists of $1,000 principal
amount of 12% Sr. Sub. Noes due
08/15/07 and one warrant to
purchase 0.52 Shares of common
stock) (a)(i)..................... 20,000 20,700
Moll Industries, 10.50% Sr. Sub.
Notes due 07/01/08 (a)............ 100,000 98,000
SC International Services, Inc.,
9.25% Sr. Sub. Notes due
09/01/07.......................... 50,000 50,000
Metals/Mining - .46%
Centaur Mining & Exploration,
Ltd., 11% Gtd. Sr. Notes due
12/01/07.......................... 25,000 22,750
International Utility Structures,
Inc., 10.75% Sr. Sub. Notes due
02/01/08.......................... 25,000 23,500
Metallurg Holdings, Inc.,
0%/12.75% Sr. Discount Notes due
07/15/08 (d)...................... 100,000 34,000
Metallurg, Inc., 11% Sr. Notes due
12/01/07.......................... 225,000 209,250
Kaiser Aluminum & Chemical Corp.,
12.75% Sr. Sub. Notes due
02/01/03.......................... 50,000 49,250
Oil & Gas - .81%
Chesapeake Energy Corp., 9.625%
Sr. Notes due 05/01/05............ 80,000 60,000
Dailey International, Inc., 9.50%
Sr. Unsec. Notes due 02/15/08..... 100,000 44,000
Denbury Management, Inc., 9% Sr.
Sub. Notes due 03/01/08........... 150,000 126,000
Forcenergy, Inc., 8.50% Sr. Sub.
Notes due 02/15/07................ 50,000 37,000
9.50% Unsec. Sr. Sub. Notes due
11/01/06.......................... 100,000 77,000
Ocean Rig Norway AS, 10.25% Sr.
Sec. Gtd. Notes due 06/01/08...... 100,000 80,000
Parker Drilling Co., Series B,
9.75% Sr. Notes due 11/15/06...... 100,000 89,000
Stone Energy Corp., 8.75% Sr. Sub.
Notes due 09/15/07................ 85,000 82,025
Paper & Forest Products - .58%
Fletcher Challenge, Ltd., 8.05%
Bonds due 06/15/03 (NZD).......... 30,000 16,378
10% Cv. Unsec. Sub. Notes due
04/30/05 (NZD).................... 5,000 2,763
14.50% Cv. Sub. Notes due 09/30/00
(NZD)............................. 85,000 48,870
Florida Coast Paper Co. LLC,
Series B, 12.75% First Mtg. Notes
due 06/01/03 (b).................. 110,000 58,850
Four M Corp., 12% Sr. Sec. Notes
due 06/01/06 (b).................. 20,000 14,800
Riverwood International Corp.,
10.625% Sr. Notes due 08/01/07.... 100,000 99,000
SD Warren Co., Series B, 12% Sr.
Sub. Notes due 12/15/04........... 150,000 163,313
U.S. Timberland Co., L.P., 9.625%
Sr. Notes due 11/15/07............ 25,000 25,125
</TABLE>
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- ---------------------------------------------------------------------
face amount value
or units (j) (note 1)
------------ --------
<S> <C> <C>
Restaurants - .21%
Ameriking, Inc., 10.75% Sr. Unsec.
Notes due 12/01/06................ $ 150,000 $ 156,375
Retail - .14%
Boyd Collection, Ltd., 9% Sr. Sub.
Notes due 05/15/08 (a)............ 100,000 102,000
Security Services - .21%
Borg-Warner Security Corp., 9.625%
Sr. Sub. Notes due 03/15/07....... 50,000 54,000
Protection One Alarm Monitoring,
Inc., 6.75% Cv. Gtd. Sr. Sub.
Notes due 09/15/03................ 100,000 102,125
Specialty Retailing - .23%
Eye Care Centers of America, Inc.,
9.125% Sr. Sub. Notes due 05/01/08
(a)............................... 75,000 71,250
Finlay Fine Jewelry Corp., 8.375%
Sr. Notes due 05/01/08............ 50,000 46,000
Home Interior & Gifts, Inc.,
10.125% Sr. Sub. Notes due
06/01/08 (a)...................... 50,000 49,500
Steel - .32%
AK Steel Corp., 9.125% Sr. Notes
due 12/15/06...................... 100,000 104,000
Algoma Steel, Inc., 12.375% Sec.
First Mortgage due 07/15/05....... 10,000 7,600
Keystone Consolidated Industries,
Inc., 9.625% Sr. Sec. Notes due
08/01/07.......................... 100,000 95,500
Bar Technologies, Inc., 13.50% Sr.
Sec. Notes due 04/01/01........... 25,000 26,688
Supermarkets - .29%
Pathmark Stores, 0%/10.75% Jr.
Sub. Notes due 11/01/03 (d)....... 130,000 106,600
Randall's Food Markets, Inc.,
9.375% Sr. Sub. Notes due
07/01/07.......................... 100,000 108,250
Telecommunications - 4.33%
Arch Communications, Inc., 12.75%
Sr. Notes due 07/01/07 (a)........ 50,000 50,000
Clearnet Communications, Inc.,
0%/14.75% Sr. Unsec. Discount
Notes due 12/15/05 (d)............ 25,000 21,375
Colt Telecom Group PLC, 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) (d)(i)........... 100,000 84,000
0%/12% Unsec. Sr. Discount Notes
due 12/15/06...................... 50,000 41,500
7.625% Bonds due 07/31/08 (DEM)... 200,000 117,615
8.875% Sr. Notes due 11/30/07
(GBP)............................. 25,000 15,187
10.125% Sr. Notes due 11/30/07
(GBP)............................. 35,000 101,409
Comunicacion Celular SA,
0%/13.125% Sr. Deferred Coupon
Bonds due 03/01/05 (d)............ 100,000 65,250
Convergent Communication, Inc.,
Units (each unit consists of
$1,000 principal amount of 13% Sr.
Notes and four warrants to
purchase 10.8 shares of common
stock) (i)........................ 50,000 24,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
28
<PAGE> 30
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- ---------------------------------------------------------------------
face amount value
or units (j) (note 1)
---------- ----------
<S> <C> <C>
Diamond Cable Communications PLC,
0%/11.75% Sr. Discount Notes due
12/15/05 (d)...................... $ 200,000 $ 165,500
E. Spire Communications, Inc.,
13.75% Unsec. Sr. Notes due
07/15/07.......................... 25,000 23,313
Facilicom International, 10.50%
Sr. Notes due 01/15/08............ 85,000 68,000
Firstworld Communications, Inc.,
Units (each unit consists of
$1,000 principal amount of 13% Sr.
Discount Notes due 04/15/08 and
one warrant to purchase 7.9002
shares of series B, common stock)
(i)............................... 75,000 22,500
GST USA, Inc., 0%/13.875% Gtd. Sr.
Sec. Discount Notes due 12/15/05
(d)............................... 65,000 46,638
ICO Global Communications
(Holdings), Ltd., Units, (each
unit consists of $1,000 principal
amount of 15% Sr. Notes due
08/01/05 and one warrant to
purchase 19.85 shares of common
stock) (i)........................ 50,000 37,250
Intermedia Communications, Inc.,
8.50% Sr. Notes due 01/15/08...... 75,000 71,250
8.6% Sr. Notes due 06/01/08....... 90,000 85,500
8.875% Sr. Notes due 11/01/07..... 75,000 72,375
Level 3 Communications, Inc.,
9.125% Unsec. Sr. Notes due
05/01/08.......................... 150,000 148,125
Long Distance International, Inc.,
Units (each unit consists of
$1,000 12.25%
Sr. Notes due 04/15/08 and one
warrant to purchase 15.0874 shares
of common stock) (a)(f)(i)........ 50,000 41,500
McLeodUSA, Inc., 9.25% Sr. Notes
due 07/15/07...................... 40,000 41,800
Metrocall, Inc., 10.375% Sr. Sub.
Notes due 10/01/07................ 50,000 49,000
Microcell Telecommunications,
Inc., 0%/10.125% Sr. Discount
Notes due 10/15/07 (d) (CAD)...... 100,000 35,809
Millicom International Cellular
SA, 0%/13.50% Sr. Discount Notes
due 06/01/06 (d).................. 60,000 42,450
NTL, Inc., 0%/9.75% Sr. Notes due
04/01/08 (a)(d)................... 100,000 62,000
0%/10.75% Sr. Unsec. Unsub. Notes
due 04/01/08 (GBP) (d)............ 50,000 39,037
7% Sub. Notes due 12/15/08 (a).... 100,000 107,750
10% Sr. Notes due 02/15/07........ 100,000 103,000
Omnipoint Corp., Series A, 11.625%
Sr. Notes due 08/15/06............ 150,000 104,250
Orange PLC, 8% Sr. Notes due
08/01/08.......................... 100,000 101,000
ORBCOMM Global LP/ORBCOMM Capital
Corp., Series B, 14% Sr. Notes due
08/15/04.......................... 150,000 154,500
Orion Networks Systems, Inc.,
0%12.50% Sr. Discount Notes due
01/15/07 (d)...................... 200,000 126,000
</TABLE>
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- ---------------------------------------------------------------------
face amount value
or units (j) (note 1)
------------ ------------
<S> <C> <C>
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) (d)(i)........... $ 50,000 $ 26,500
Price Communication Cellular
Holdings, Inc., 11.25% Sr. Notes
due 08/15/08 (k).................. 50,000 47,250
Price Communication Wireless,
Inc., 9.125% Sec. Notes due
12/15/06 (a)...................... 100,000 101,000
11.75% Unsec. Sr. Sub. Notes due
07/15/07.......................... 50,000 52,750
PTC International Finance BV,
0%/10.75% Unsec. Sub. Notes due
07/01/07 (d)...................... 34,000 23,460
Qwest Communications International
Inc., 0%/9.47% Sr. Sub. Notes due
10/15/07 (d)...................... 140,000 108,150
RSL Communications PLC, 0%/10%
Bonds due 03/15/08 (DEM) (d)...... 50,000 16,502
0%/10.125% Sr. Discount Notes due
03/01/08 (d)...................... 100,000 57,250
Rural Cellular Corp., 9.625% due
05/15/08.......................... 100,000 100,250
Spectrasite Holdings, Inc., 0%/12%
Sr. Discount Notes due 07/15/03
(a)(d)............................ 200,000 100,000
Telecomunicacoes Brasileiras SA,
10.54% due 12/09/99 (c)(f)........ 30,000 29,250
USA Mobile Communications, Inc.
II, 9.50% Sr. Notes due
02/01/04.......................... 100,000 90,000
14% Sr. Notes due 11/01/04........ 65,000 66,950
Viatel, Inc., Units (each unit
consists of $1,000 principal
amount of 11.25% due 04/15/08 and
.483 shares of series A, preferred
stock) (i)........................ 100,000 102,250
Transportation - .63%
Coach USA, Inc., 9.375% Sr. Sub.
Notes due 07/01/07................ 20,000 20,400
Millenium Seacarriers, Units, 12%
Notes due 07/15/05 (a)............ 100,000 80,000
Navigator Gas Transportation PLC,
10.50% Notes due 06/30/07 (a)..... 75,000 66,000
Units (each unit consists of
$1,000 principal amount of 12%
Bonds due 06/30/07 and 7.66
warrants) (a)(i).................. 50,000 45,000
TFM SA de CV, 10.25% Sr. Gtd.
Bonds due 06/15/07................ 75,000 61,688
Transtar Holdings LP/Transtar
Capital Corp., Series B,
0%/13.375%
Sr. Discount Notes due 12/15/03
(d)............................... 200,000 192,000
Utilities - .09%
Korea Electric Power, 6.375%
Unsec. Unsub. Notes due
12/01/03.......................... 80,000 68,543
----------
Total Corporate Bonds and Notes (cost:
$22,123,395) 20,933,681
----------
</TABLE>
29
<PAGE> 31
Statements of Investments in Securities and Net Assets December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- ---------------------------------------------------------------------
face amount value
or units (j) (note 1)
---------- ----------
<S> <C> <C>
COMMON STOCKS - .00%
Horizon Group Properties, Inc...... $ 29 $ 112
----------
Total Common Stocks (cost: $0) 112
----------
shares
----------
PREFERRED STOCKS - 2.01%
Chesapeake Energy Corp., 7% (a).... 2,000 20,000
Concentrix Network Corp., 13.50%... 52 44,460
E. Spire Communications, 12.75%
(h)............................... 53 25,970
Eagle-Picher Holdings, Series B,
0%/11.75% Cum. (d)................ 10 50,500
Echostar Communications Corp.,
12.125% Exchangeable (h).......... 55 57,891
El Paso Electric Co., Series A,
11.40% Cum. (h)................... 850 90,950
ICG Holdings, Inc., 14.25% (h)..... 29 31,900
Nebco Evans Holdings, Co., 11.25%
(h)............................... 1,083 54,150
Nextel Communications, Inc., Series
E, 11.125% (h).................... 54 48,600
NEXTLINK Communications, Inc., 14%
Cum. (h).......................... 4,896 259,488
Paxson Communications, 13.25%...... 50,000 43,750
Prime Retail, Inc., Series B, 8.50%
Cv. .............................. 500 8,250
PRIMEDIA, Inc.,
Series E, 9.20%................... 100 9,825
Series G, 8.625% Exchangeable..... 3,000 288,750
Rural Cellular Corp., 11.375%...... 52 48,360
S.D. Warren Co., Series B, 14% Cum.
Exchangeable (b).................. 5,500 280,500
S.F. Holdings Group, Inc., Units
(each Unit consist of one 13.75%
Preferred Stock and 37 Class C
Shares of Common Stock) (h)(i).... 10 44,000
SFX Broadcasting, Inc., Series E,
12.625% Cum. Exchangeable (h)..... 281 33,931
Spanish Broadcasting Systems, Inc.,
14.25% Cum. Exchangeable (a)(h)... 28 28,560
Viatel, Inc., Cum. Exchangeable
(h)............................... 51 5,610
----------
Total Preferred Stocks (cost: $1,692,734) 1,475,445
----------
units
----------
RIGHTS, WARRANTS AND CERTIFICATES - .06% (B)
Argentina Wts., Exp. 12/99......... 280 1,260
Bell Technology Group Wts., Exp.
05/05 (a)......................... 50 0
Comunicacion Celular SA Wts., Exp.
11/03............................. 100 6,000
Convergent Communications Wts.,
Exp. 04/08........................ 200 0
Covad Communication Group, Inc.
Wts., Exp. 03/08.................. 100 5,000
Firstworld Communications, Inc.
Wts., Exp. 04/08.................. 75 750
Gothic Energy Corp. Wts., Exp.
09/04............................. 1,400 1,400
Gothic Energy Corp. Wts., Exp.
09/04............................. 1,304 13
</TABLE>
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- ---------------------------------------------------------------------
value
units (note 1)
---------- ----------
<S> <C> <C>
Gothic Energy Corp. Wts., Exp.
05/05............................. 991 $ 10
KMC Telecom Holdings, Inc., Wts.,
Exp 04/08......................... 100 250
Long Distance International, Inc.
Wts., Exp 04/08................... 50 125
Loral Orion Network Systems, Inc.
Wts., Exp 01/07................... 100 0
Millenium Seacarriers Wts., Exp.
07/05 (a)(f)...................... 100 0
Occidente Y Caribe Celular SA Wts.,
Exp. 03/04........................ 400 7,000
Optel Inc. Wts., Exp. 12/04........ 85 1
Petersburg Long Distance Inc. Wts.,
Exp. 01/01........................ 50 0
Price Communication Corp. Wt., Exp
08/07 (f)......................... 516 24,639
Republic of Venezuela Wts., Exp.
04/20............................. 1,250 0
S. F. Holdings Group, Inc. Wts.,
Units, Exp. 05/99................. 370 0
United Mexican States Bonds Wts.,
Exp. 06/03........................ 250,000 0
Wam!Net Inc Wts., Exp. 03/05
(a)(f)............................ 600 0
----------
Total Rights, Warrants and Certificates (cost:
$13,256) 46,448
----------
face amount
or units (j)
----------
STRUCTURED INSTRUMENTS - 5.00%
CS First Boston, OFZ Linked Notes,
15% due 02/23/00 (f).............. 1,962,000 37,423
CS First Boston, Turkisk Lira
Linked Notes, 89.53% due 02/02/99
(c)............................... 200,000 182,282
Deutsche Bank Capital Corp.,
Turkish Lira Linked Notes 112.44%
due 02/04/99...................... 200,000 183,335
Deutsche Morgan Grenfell, Russian
Federal Loan Floating Rate Linked
Notes,
14% due 09/27/00 (RUR) (b)(f)..... 880,000 8,535
18.339% due 02/23/00 (b)(f)....... 80,000 800
18.598% due 10/25/00 (b)(f)....... 80,000 800
Goldman, Sachs JGB Linked Notes,
2.11% due 09/10/99................ 400,000 431,480
JP Morgan Securities, Inc.,
Leverage Notes on The Emerging
Markets Bond Index, 9.50% due
08/10/99.......................... 340,000 295,278
Leverage Notes on The Emerging
Markets Bond Index, 9.50% due
07/16/99.......................... 650,000 536,619
Leverage Notes on The Emerging
Markets Bond Index, 9.50% due
08/10/99.......................... 340,000 340,973
Lehman Brothers Holdings, Chilean
Peso/ Japanese Yen Linked Notes,
18.50% due 01/28/99............... 150,000 149,130
Lehman Brothers Holdings, Inc.,
Zero Coupon, Greek
Drachma/European Currency Unit
Linked Notes, due 03/22/99........ 70,000 80,171
</TABLE>
The accompanying notes are an integral part of these financial statements.
30
<PAGE> 32
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- ---------------------------------------------------------------------
face amount value
or units (j) (note 1)
------------ ------------
<S> <C> <C>
Zero Coupon, Greek Drachma/Swiss
Franc Linked Notes due 03/31/99... 45,000 $ 51,980
Lehman High Yield Index Notes,
8.50% due 03/08/99................ 400,000 377,000
Salomon Brothers, Inc., 6% Brazil
Linked Notes, due 04/02/03........ 150,000 76,800
14.076% United Mexican State 16'
Linked Notes, due 03/18/99........ 609,000 617,544
Standard Chartered Bank, 16.45%
Philippine Peso/Japanese Yen
Linked Notes due 01/21/99......... 27,000 29,681
18.70% Philippine Peso/Singapore
Dollar Linked Notes due
03/08/99.......................... 40,000 39,776
18.90% Philippine Peso/Singapore
Dollar Linked Notes due
03/04/99.......................... 120,000 119,496
20.45% Philippine Peso/Japanese
Yen Linked Notes due 02/09/99..... 70,000 69,797
21.83% Philippine Peso/Japanese
Yen Linked Notes due 01/19/99..... 64,000 52,691
----------
Total Structured Instruments (cost: $4,294,708) 3,681,591
----------
</TABLE>
<TABLE>
<CAPTION>
contracts/
face
strike subject
date price to call
----- ---------- -----------
<S> <C> <C> <C> <C>
CALL OPTIONS PURCHASED - .02%
US Treasury Bonds,
6.125% due 11/15/27
Call Option.......... 02/99 $111.375 600 18,516
----------
Total Call Options Purchased (cost: $15,656) 18,516
----------
PUT OPTIONS PURCHASED - .01%
Japanese Yen Put
Option............... 01/99 121.00 JPY 38,720,000 1,394
Japanese Yen Put
Option............... 02/99 125.00 JPY 21,000,000 1,239
Mexican Peso Put
Option............... 02/99 10.75 MXP 3,400,000 7,395
----------
Total Put Options Purchased (cost: $14,549) 10,028
----------
</TABLE>
<TABLE>
<CAPTION>
Atlas Strategic Income Fund (continued)
- ---------------------------------------------------------------------
value
face amount (note 1)
---------- ----------
<S> <C> <C>
SHORT-TERM SECURITIES - 2.08%
Triparty Repurchase Agreement dated
December 31, 1998 with Prudential
Securities, Inc., effective yield
of 3.95%, due January 4, 1999,
collateralized by FNMA, 6.149%,
June 1, 2024 with a value of
$1,559,370........................ $ 1,528,378 $ 1,528,378
----------
Total Short-Term Securities (cost: $1,528,378) 1,528,378
----------
TOTAL INVESTMENTS (COST: $74,140,646) - 98.41% 72,413,480
OTHER ASSETS AND LIABILITIES, NET - 1.59% 1,166,278
----------
NET ASSETS - 100.00% $ 73,579,758
----------
----------
Atlas Balanced Fund
- ---------------------------------------------------------------------
shares or value
face amount (note 1)
---------- ----------
COMMON STOCKS - 38.17%
Aerospace/Defense - .68%
AlliedSignal, Inc................. 15,000 $ 664,688
Raytheon Co., Cl. A............... 191 9,872
Automotive - .24%
Ford Motor Co..................... 4,000 234,750
Banks - 12.70%
Banc One Corp..................... 29,580 1,510,429
BankAmerica Corp.................. 25,000 1,503,125
Bank of Boston Corp............... 16,000 623,000
Capital One Financial Corp........ 6,000 690,000
Chase Manhattan Corp.............. 15,000 1,020,938
CitiGroup......................... 12,500 618,750
Crestar Financial Corp............ 8,000 576,000
First Union Corp.................. 25,000 1,520,313
Fleet Financial Group, Inc........ 20,000 893,750
Keycorp........................... 20,000 640,000
Mellon Bank Corp.................. 13,000 893,750
National City Corp................ 8,000 580,000
PNC Bank Corp..................... 8,000 433,000
Summit Bancorp.................... 13,000 567,938
Union Planters Corp............... 10,000 453,125
Chemicals & Allied Products - .44%
Dexter Corp....................... 8,000 251,500
Lyondell Petrochemical Co......... 9,904 178,272
Consumer Goods & Services - .46%
Newell Co......................... 10,900 449,622
Drugs and Health Care - 2.70%
American Home Products Corp. ..... 7,000 394,188
Bristol-Myers Squibb Co. ......... 7,000 936,688
Crescendo Pharmaceuticals
Corp. ............................ 145 1,976
Hillenbrand Industries, Inc....... 8,000 455,000
Merck & Co., Inc.................. 4,000 590,750
Pharmacia & Upjohn, Inc. ......... 5,000 283,125
Electrical Utilities - 3.69%
American Electric Power Co. ...... 2,500 117,656
Central & South West Corp. ....... 14,000 384,125
DQE, Inc. ........................ 7,200 316,350
Florida Progress Corp. ........... 13,000 582,563
</TABLE>
31
<PAGE> 33
Statements of Investments in Securities and Net Assets December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Balanced Fund (continued)
- ---------------------------------------------------------------------
shares or value
face amount (note 1)
---------- ----------
<S> <C> <C>
Illinova Corp. ................... 15,000 $ 375,000
New Century Energies, Inc. ....... 7,500 365,622
Potomac Electric Power Co. ....... 11,000 289,438
SCANA Corp. ...................... 7,000 225,750
Texas Utilities Co................ 12,000 560,250
Unicom Corp....................... 11,000 424,188
Electronics - .32%
AMP, Inc. ........................ 6,106 317,894
Environmental Management - .20%
Browning-Ferris Industries,
Inc............................... 7,000 199,063
Financial Services - 2.16%
Associates First Capital Corp. ... 2,096 88,818
FBR Asset Investment Corp......... 50,000 800,000
H & R Block, Inc.................. 5,000 225,000
Household International, Inc...... 18,399 729,060
Imperial Credit Commercial
Mortgage Investment Corp.......... 30,000 281,250
Food & Beverages - .39%
General Mills, Inc................ 5,000 388,750
Food Wholesalers - .58%
SuperValue, Inc................... 20,000 560,000
Gas Utilities - .81%
Enron Corp........................ 11,000 627,688
Enron Oil & Gas Co................ 10,000 172,500
Home Builders/Real Estate - .46%
Anthracite Mortgage Capital,
Inc............................... 25,000 195,313
Horizon Group Properties, Inc..... 1,000 3,875
Prime Retail, Inc................. 20,000 196,250
Wilshire Real Estate Investment
Trust............................. 20,000 61,250
Industrial Manufacturing - .48%
Sonoco Products Co................ 16,000 474,000
Insurance - 3.03%
Allstate Corp..................... 5,562 214,832
American General Corp............. 12,000 936,000
Enhance Financial Services Group,
Inc............................... 16,950 508,500
IPC Holdings, Ltd................. 5,000 115,938
Reliance Group Holdings, Inc...... 40,000 515,000
St. Paul Companies, Inc........... 20,000 695,000
Machine Tools & Equipment - .68%
Cooper Industries, Inc............ 6,000 286,125
Snap-On, Inc...................... 11,000 382,938
Manufacturing - .52%
Pall Corp......................... 20,000 506,250
Oil & Gas - 2.05%
Conoco, Inc. (b).................. 20,700 432,113
Occidental Petroleum Corp......... 4,000 67,500
Phillips Petroleum Co............. 3,000 127,875
Royal Dutch Petroleum Co., ADR.... 4,000 191,500
Tenneco, Inc...................... 12,000 408,750
Ultramar Diamond Shamrock Corp.... 6,000 145,500
Unocal Corp....................... 12,000 350,250
USX-Marathon Group................ 10,000 301,250
Paper & Forest Products - 1.33%
Fort James Corp................... 14,067 562,680
Union Camp Corp................... 4,500 303,750
Westvaco Corp..................... 7,000 187,688
Weyerhaeuser Co................... 5,000 254,061
Printing, Publishing & Allied Products - 1.13%
Dun & Bradstreet Corp............. 25,000 789,063
Hollinger International, Inc...... 20,000 278,750
R. H. Donnelley Corp.............. 3,200 46,600
</TABLE>
<TABLE>
<CAPTION>
Atlas Balanced Fund (continued)
- ---------------------------------------------------------------------
shares or value
face amount (note 1)
------------ ------------
<S> <C> <C>
Retail Trade - .62%
Family Dollar Stores, Inc......... 18,000 $ 396,000
Sears Roebuck & Co................ 5,000 212,500
Telecommunications - 2.50%
GTE Corp.......................... 12,000 809,250
Motorola, Inc..................... 14,000 854,875
SBC Communications, Inc........... 15,000 804,375
----------
Total Common Stocks (cost: $29,760,582) 37,621,115
----------
CONVERTIBLE PREFERRED STOCKS - 9.73%
Banks - 1.86%
Bank of Portugal.................. 600 68,400
National Australia Bank, Ltd...... 30,000 836,250
St. George Bank (a)............... 8,000 378,000
Westpac Banking Corp. STRYPES..... 17,400 549,188
Broadcast, Radio & TV - .23%
Merrill Lynch-Cox Communications
STRYPES........................... 4,000 228,500
Consumer Goods & Services - 1.33%
Newell Co......................... 25,000 1,312,500
Electrical Utilities - .72%
Houston Industries, Inc. ACES..... 3,500 372,313
Texas Utilities Co................ 5,900 332,611
Electronics - .30%
Elsag Bailey Process Automation
N.V. (a).......................... 5,000 303,125
Financial Services - .51%
MCN Corp. PRIDES.................. 8,000 149,500
MCN Financing III PRIDES.......... 10,000 349,375
Food & Related - .21%
Chiquita Brands International,
Inc............................... 5,000 211,250
Homebuilders/Real Estate - .46%
Kaufman & Broad Home Corp......... 50,000 450,000
Industrials - .15%
Owens Corning Capital LLC MIPS.... 3,000 148,875
Insurance - 1.52%
American Heritage Life Investment
Corp.............................. 5,000 333,125
PLC CAP Trust II.................. 11,500 750,375
Salomon, Inc.-FSA Holdings, Inc.
DECS.............................. 9,000 411,750
Leisure & Entertainment - .54%
Premier Parks, Inc. PIES.......... 9,000 533,250
Specialty Retailing - .98%
Merrill Lynch-Dollar General Corp.
STRYPES (b)....................... 27,100 965,438
Telecommunications - .51%
IXC Communications, Inc. (a)...... 3,222 499,410
Transportation - .41%
Union Pacific Corp................ 8,800 407,000
----------
Total Convertible Preferred Stocks (cost:
$8,708,597) 9,590,235
----------
CONVERTIBLE BONDS - .97%
Industrials - .29%
Alza Corp., 5% due 05/01/06....... 200,000 288,250
Metals - .26%
Inco, Ltd., 5.75% due 07/01/04.... 300,000 258,750
</TABLE>
The accompanying notes are an integral part of these financial statements.
32
<PAGE> 34
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Balanced Fund (continued)
- ---------------------------------------------------------------------
shares or value
face amount (note 1)
---------- ----------
<S> <C> <C>
Insurance - .42%
Mutual Risk Management, 0% due
10/30/15 (a)...................... 500,000 $ 413,750
----------
Total Convertible Bonds (cost: $707,434) 960,750
----------
CORPORATE BONDS - 6.41%
Automotive - .10%
General Motors Acceptance Corp.,
5.50% due 12/15/01................ 100,000 99,154
Banks - .97%
Banc One Corp., 7.25% due
08/15/04.......................... 590,000 634,109
Bank of America Corp., 8.50% due
03/01/99.......................... 325,000 326,231
Broadcast, Radio & TV - .83%
TCI Communications, Inc., 6.875%
due 02/15/06...................... 600,000 644,312
Tele-Communications, Inc., 7.25%
due 08/01/05...................... 160,000 173,870
Diversified Media - .08%
Time Warner, Inc., 7.95% due
02/01/00.......................... 80,000 81,931
Drugs and Health Care - .26%
R.P. Scherer Corp., 6.75% due
02/01/04.......................... 250,000 259,653
Financial Services - .26%
PaineWebber Group, Inc., 7% due
03/01/00.......................... 250,000 252,201
Food & Beverages - .62%
Coca-Cola Enterprises, 5.75% due
11/01/08.......................... 600,000 606,480
Food Processing - .27%
ConAgra, Inc., 7.40% due
09/15/04.......................... 250,000 268,545
Foreign Government - .16%
Treasury Corp. of Victoria, 9% due
09/04/02.......................... 228,000 156,890
Gas Utilities - .33%
Enron Corp., 7.625% due
09/10/04.......................... 175,000 187,409
Enron Corp., 9.875% due
06/15/03.......................... 125,000 142,350
Hotel/Gaming - .12%
Circus Circus Enterprises, Inc.,
6.75% due 07/15/03................ 125,000 116,037
Industrial Manufacturing - .60%
Tyco International Group, 5.875%
due 11/01/04 (a).................. 600,000 596,301
Oil and Gas - .35%
Coastal Corp., 9.75% due
08/01/03.......................... 300,000 344,409
Paper & Forest Products - .21%
Fletcher Challenge Canada, Ltd.,
7.75% due 06/20/06................ 200,000 203,488
Telephone Utilities - .63%
Sprint Capital Corp., 6.875% due
11/15/28.......................... 600,000 623,029
Transportation - .62%
Union Pacific Co., 6.39% due
11/01/04.......................... 600,000 606,317
----------
Total Corporate Bonds (cost: $6,193,343) 6,322,716
----------
UNITED STATES TREASURY NOTES - 20.00%
6.625% due 03/31/02................ 6,000,000 6,341,250
5.50% due 02/28/03................. 8,000,000 8,237,504
Strip, 0% due 08/15/20............. 17,000,000 5,130,753
----------
Total United States Treasury Notes (cost:
$18,073,471) 19,709,507
----------
</TABLE>
<TABLE>
<CAPTION>
Atlas Balanced Fund (continued)
- ---------------------------------------------------------------------
shares or value
face amount (note 1)
------------ ------------
<S> <C> <C>
SHORT-TERM SECURITIES - 24.25%
Triparty Repurchase Agreement dated
December 31, 1998 with Prudential
Securities, Inc., effective yield
of 3.95%, due January 4, 1999,
collateralized by FNMA, 7.40%,
June 1, 2025 with a value of
$21,020,566 and by FHLMC, 6.18%,
December 1, 2028 with a value of
$3,363,081........................ $ 23,904,926 $ 23,904,926
----------
Total Short-Term Securities (cost: $23,904,926) 23,904,926
----------
TOTAL SECURITIES (COST: $87,348,353) - 99.53% 98,109,249
OTHER ASSETS AND LIABILITIES, NET - .47% 460,349
----------
NET ASSETS - 100.00% $ 98,569,598
----------
----------
Atlas Growth and Income Fund
- ---------------------------------------------------------------------
shares or value
face amount (note 1)
---------- ----------
COMMON STOCKS - 78.74%
Advertising - .84%
Young and Rubicam, Inc. (b)....... 70,000 $ 2,266,250
Automotive - .96%
Republic Industries, Inc. (b)..... 175,000 2,581,250
Banks - 10.21%
Amsouth Bancorp................... 110,000 5,018,750
Fifth Third Bancorp............... 60,000 4,278,750
First Tennessee National Corp..... 100,000 3,806,250
First Union Corp.................. 80,000 4,865,000
Providian Financial Corp.......... 127,500 9,562,500
Broadcast, Radio & TV - .44%
Fox Entertainment Group (b)....... 47,600 1,198,924
Computer Hardware - 2.16%
Dell Computer Corp. (b)........... 60,000 4,391,250
EMC Corp.......................... 17,000 1,445,000
Computer Software - 5.00%
Compuware Corp. (b)............... 66,000 5,156,250
Microsoft Corp. (b)............... 60,000 8,321,250
Consumer Goods & Services - .84%
Newell Co......................... 55,000 2,268,750
Diversified Financial - .62%
Health Care Property Investors,
Inc............................... 54,600 1,678,950
Drugs & Health Care - 9.33%
Biogen, Inc....................... 35,000 2,905,000
Bristol-Myers Squibb Co........... 32,000 4,282,000
Cardinal Health, Inc.............. 115,000 8,725,625
Pharmacia & Upjohn, Inc........... 70,000 3,963,750
Warner-Lambert Co................. 70,000 5,263,125
</TABLE>
33
<PAGE> 35
Statements of Investments in Securities and Net Assets December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Growth and Income Fund (continued)
- ---------------------------------------------------------------------
shares or value
face amount (note 1)
------------ ------------
<S> <C> <C>
Electrical Equipment - .81%
Honeywell, Inc.................... 29,000 $ 2,184,063
Electrical Utilities - 2.15%
Unicom Corp....................... 150,000 5,784,375
Environmental Management - 1.64%
Waste Management, Inc............. 95,000 4,429,375
Financial Services - 6.52%
Charles Schwab Corp............... 97,500 5,478,281
Federal Home Loan Mortgage
Corp.............................. 150,000 9,665,625
SunAmerica, Inc................... 30,000 2,433,750
Food & Beverages - 1.71%
Anheuser-Busch Companies, Inc..... 40,000 2,625,000
U.S. Food Service, Inc. (b)....... 40,000 1,960,000
Gas Utilities - 1.80%
Enron Corp........................ 85,000 4,850,313
Health Care/Supplies &
Services - 2.07%
Medtronic, Inc.................... 75,000 5,568,750
Homebuilders/Real Estate - .60%
Kilroy Realty Corp................ 70,600 1,623,800
Industrial Manufacturing - 3.92%
Tyco International, Ltd........... 140,000 10,561,250
Industrial Services - .98%
ServiceMaster Co. (b)............. 120,000 2,647,500
Insurance - 1.30%
American General Corp............. 45,000 3,510,000
Leisure & Entertainment - 2.85%
Carnival Corp., Cl. A............. 160,000 7,680,000
Oil & Gas - 1.36%
Exxon Corp........................ 50,000 3,656,250
Printing, Publishing & Allied Products - .49%
R. R. Donnelley & Sons Co......... 30,000 1,314,375
Retail Trade - 4.23%
Abercrombie & Fitch Co. (b)....... 52,000 3,679,000
Wal-Mart Stores, Inc.............. 95,000 7,736,562
Semi-Conductors - 1.93%
Uniphase Corp. (b)................ 75,000 5,203,125
Specialty Retailing - 6.98%
CVS Corp.......................... 170,000 9,350,000
Home Depot, Inc. (b).............. 90,000 5,506,875
Linens 'n Things, Inc. (b)........ 100,000 3,962,500
Telecommunications - 7.00%
Bellsouth Corp.................... 50,000 2,493,750
MCI Worldcom, Inc. (b)............ 120,000 8,610,000
U.S. West, Inc.................... 120,000 7,755,000
----------
Total Common Stocks (cost: $151,086,535) 212,248,143
----------
CONVERTIBLE PREFERRED STOCKS - 5.75%
Chemicals - .48%
Monsanto Co....................... 26,500 1,298,500
Computer Software - 4.35%
Microsoft Corp. (b)............... 120,000 11,730,000
Insurance - .30%
Merrill Lynch-Sun America
STRYPES........................... 11,000 819,500
Leisure & Entertainment - .62%
Premier Parks, Inc................ 28,000 1,659,000
----------
Total Convertible Preferred Stocks (cost:
$14,412,011) 15,507,000
----------
CONVERTIBLE BONDS - 2.85%
Computer Hardware - 1.39%
EMC Corp., 3.25% due 03/15/02
(a)............................... $ 1,000,000 3,737,500
</TABLE>
<TABLE>
<CAPTION>
Atlas Growth and Income Fund (continued)
- ---------------------------------------------------------------------
shares or value
face amount (note 1)
------------ ------------
Specialty Retailing - 1.46%
Home Depot, Inc., 3.25% due
10/01/01.......................... $ 1,500,000 $ 3,952,500
----------
Total Convertible Bonds (cost: $2,756,752) 7,690,000
----------
UNITED STATES TREASURY NOTES - 4.68%
6.25% due 3/31/99................. $ 1,500,000 1,505,625
6% due 08/15/00................... $ 500,000 510,313
5.75% due 11/15/00................ $ 2,000,000 2,038,750
6% due 07/31/02................... $ 500,000 521,094
5.875% due 09/30/02............... $ 1,000,000 1,039,688
5.625% due 12/31/02............... $ 2,000,000 2,065,626
6.50% due 05/15/05................ $ 500,000 547,969
5.875% due 11/15/05............... $ 2,000,000 2,133,750
6.125% due 08/15/07............... $ 1,000,000 1,092,813
6.375% due 08/15/27............... $ 1,000,000 1,150,000
----------
Total United States Treasury Notes (cost:
$11,955,244) 12,605,628
----------
SHORT-TERM SECURITIES - 8.03%
Triparty Repurchase Agreement dated
December 31, 1998 with Prudential
Securities, Inc., effective yield
of 3.95%, due January 4, 1999,
collateralized by FHLMC, 6.13%,
February 1, 2037 with a value of
$18,312,806 and by FNMA, 6.15%,
February 1, 2035 with a value of
$3,773,636........................ $ 21,652,873 21,652,873
----------
Total Short-Term Securities (cost: $21,652,873) 21,652,873
----------
TOTAL SECURITIES (COST: $201,863,415) - 100.05% 269,703,644
OTHER ASSETS AND LIABILITIES, NET - (0.05)% (147,157)
----------
NET ASSETS - 100.00% $269,556,487
----------
----------
Atlas Strategic Growth Fund
- ---------------------------------------------------------------------
shares or value
face amount (note 1)
---------- ----------
<S> <C> <C>
COMMON STOCKS - 83.21%
Air Travel - 2.96%
AMR Corp.......................... 20,600 $ 1,223,125
Delta Air Lines, Inc.............. 25,600 1,331,200
Apparel & Textiles - 7.59%
Dillard's, Inc., Cl. A (b)........ 38,000 1,078,250
Federated Department Stores, Inc.
(b)............................... 35,700 1,555,181
Fruit of the Loom, Inc. (b)....... 86,200 1,190,638
TJX Companies, Inc................ 72,900 2,114,100
VF Corp........................... 13,000 609,375
Automotive - 3.16%
Navistar International Corp.
(b)............................... 58,600 1,670,100
Paccar, Inc....................... 25,800 1,054,575
Broadcast, Radio & TV - .44%
Fox Entertainment Group, Inc...... 15,200 382,850
Building Materials - 2.62%
Cincinnati Milacron, Inc.......... 47,500 914,375
Owens Corning..................... 37,900 1,343,081
</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>
Computer Hardware - 11.05%
Apple Computer, Inc. (b).......... 42,500 $ 1,739,844
Dell Computer Corp. (b)........... 22,300 1,632,081
Seagate Technology, Inc. (b)...... 45,900 1,388,475
Sun Microsystems, Inc. (b)........ 27,500 2,354,688
Unisys Corp. (b).................. 70,200 2,417,512
Construction Services - 1.47%
Fluor Corp........................ 29,800 1,268,363
Consumer Goods & Services - 4.28%
Cendant Corp. (b)................. 33,600 640,500
Eastman Kodak Co.................. 18,700 1,346,400
Maytag Corp....................... 27,400 1,705,650
Drugs & Health Care - .85%
United HealthCare Corp............ 17,000 732,063
Electrical Utilities - 1.48%
Niagara Mohawk Power Corp......... 79,400 1,280,325
Electronics - 1.64%
Advanced Micro Devices, Inc.
(b)............................... 49,000 1,417,938
Financial Services - 6.55%
Capital One Financial Corp........ 12,000 1,380,000
Countrywide Credit Industries,
Inc............................... 27,700 1,390,194
Federal Home Loan Mortgage
Corp.............................. 23,500 1,514,281
Federal National Mortgage
Association....................... 18,400 1,361,600
Food Wholesalers - 1.83%
SuperValu, Inc.................... 56,400 1,579,200
Health Care/Supplies &
Services - 5.06%
Amgen, Inc........................ 20,200 2,112,161
Humana, Inc....................... 71,500 1,273,594
Shared Medical Systems Corp....... 19,600 977,550
Homebuilders/Real Estate - 7.19%
Centex Corp....................... 40,700 1,834,044
Fleetwood Enterprises, Inc........ 35,600 1,237,100
Kaufman & Broad Home Corp......... 55,400 1,592,750
Pulte Corp........................ 55,200 1,535,250
Insurance - 6.38%
Allstate Corp..................... 31,000 1,197,374
American General.................. 20,300 1,583,400
Conseco, Inc...................... 44,500 1,360,030
MBIA, Inc......................... 11,400 747,413
MGIC Investment Corp.............. 15,400 613,115
Leisure & Entertainment - 1.20%
Harrah's Entertainment, Inc.
(b)............................... 66,100 1,036,944
Manufacturing - 4.26%
Ball Corp......................... 20,900 956,175
Ingersoll-Rand Co................. 26,800 1,257,925
Louisiana-Pacific Corp............ 79,800 1,461,338
Mining/Precious Metals - 1.24%
Placer Dome, Inc.................. 93,100 1,070,650
Retail Trade - 7.48%
Costco Companies, Inc. (b)........ 21,500 1,552,030
Dayton Hudson Corp................ 36,300 1,969,275
Kmart Corp........................ 108,800 1,666,000
Nordstrom, Inc.................... 36,400 1,262,625
Specialty Retailing - 1.56%
Autozone, Inc. (b)................ 40,800 1,343,850
Steel - .94%
USX-U.S. Steel Group, Inc......... 35,300 811,900
Telecommunications - 1.98%
AirTouch Communications, Inc.
(b)............................... 23,700 1,709,363
----------
Total Common Stocks (cost: $61,051,044) 71,777,820
----------
</TABLE>
<TABLE>
<CAPTION>
Atlas Strategic Growth Fund (continued)
- ---------------------------------------------------------------------
shares or value
face amount (note 1)
------------ ------------
<S> <C> <C>
SHORT-TERM SECURITIES - 16.92%
Triparty Repurchase Agreement dated
December 31, 1998 with Prudential
Securities, Inc., effective yield
of 3.95%, due January 4, 1999,
collateralized by FNMA, 6.15%,
June 1, 2024 with a value of
$14,881,866....................... $ 14,589,829 $ 14,589,829
----------
Total Short-Term Securities (cost: $14,589,829) 14,589,829
----------
TOTAL SECURITIES (COST: $75,640,873) - 100.13% 86,367,649
OTHER ASSETS AND LIABILITIES, NET - (.13)% (114,580)
----------
NET ASSETS - 100.00% $ 86,253,069
----------
----------
</TABLE>
<TABLE>
<CAPTION>
Atlas Global Growth Fund
- ----------------------------------------------------------------------
shares, units
or face value
amount (i) (note 1)
------------- -----------
<S> <C> <C>
COMMON STOCKS - 98.66%
Automotive - 4.64%
Autoliv, Inc. ..................... 8,100 $ 290,114
Porsche AG, Preference............. 320 729,695
Volkswagen AG...................... 12,000 954,124
Banks - 8.25%
Banco Bradesco SA, Preference...... 37,262,845 204,946
Banco Espirito Santo e Comercial de
Lisboa (b)......................... 10,950 340,008
Banco Frances del Rio de la Plata
SA, Sponsored ADR.................. 10,000 207,500
Credito Italiano SPA............... 114,500 674,896
Industrial Credit & Investment
Corp. of India, Ltd. GDR (a)....... 18,500 102,414
Istituto Bancario San Paolo di
Torino............................. 20,000 352,872
National Westminster Bank PLC...... 24,700 478,004
Uniao de Bancos Brasileiros SA,
Sponsored GDR...................... 16,000 231,000
Union Bank of Switzerland.......... 3,000 920,393
Broadcast, Radio & TV - 12.18%
Canal Plus......................... 7,000 1,908,636
Carlton Communications PLC......... 100,000 921,938
Grupo Televisa SA, Sponsored GDR
(b)................................ 12,500 308,594
ProSieben Media AG................. 2,760 127,529
Television Broadcast, Ltd. (b)..... 120,000 309,801
Television Francaise............... 2,000 355,802
Telewest Communications PLC (b).... 435,774 1,252,323
Computer Hardware - 3.30%
Cisco Systems, Inc. (b)............ 3,375 313,242
International Business Machines
Corp. ............................. 2,200 406,450
Sun Microsystems, Inc. (b)......... 8,000 685,000
Computer Software - 3.14%
Cap Gemini Sogeti SA............... 5,410 867,651
Microsoft Corp. (b)................ 2,000 277,375
Nintendo Corp., Ltd. .............. 2,000 192,639
</TABLE>
35
<PAGE> 37
Statements of Investments in Securities and Net Assets December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Global Growth Fund (continued)
- ----------------------------------------------------------------------
shares, units
or face value
amount (i) (note 1)
------------- -----------
<S> <C> <C>
Conglomerate - 3.05%
Bombadier Inc., Cl. B.............. 29,800 $ 426,840
Kinnevik AB, Cl. B................. 15,000 350,780
Vivendi............................ 2,000 518,505
Consumer Goods & Services - 1.60%
Granada Group PLC.................. 21,200 380,689
Service Corporation
International...................... 7,900 300,694
Diversified Financial - 2.47%
American Express Co. .............. 2,000 204,500
Associates First Capital Corp. .... 10,000 423,750
National Mutual Asia, Ltd. ........ 565,000 423,008
Drugs & Health Care - 11.18%
Agouron Pharmaceuticals, Inc.
(b)................................ 1,500 88,125
Amgen, Inc. (b).................... 3,000 313,688
BioChem Pharma, Inc. (b)........... 6,200 177,475
Elan Corp. PLC Sponsored ADR (b)... 3,000 208,688
Fresenius AG, Preference........... 3,900 821,447
Fresenius Medical Care............. 6,200 437,157
Genset, Sponsored ADR (b).......... 22,500 621,563
Genzyme Corp. - General Division
(b)................................ 5,000 248,750
Gilead Sciences, Inc. (b).......... 8,100 332,606
Glaxo Wellcome PLC, Sponsored
ADR................................ 5,000 347,500
Incyte Pharmaceuticals, Inc. (b)... 3,700 138,288
Millenium Pharmaceuticals, Inc.
(b)................................ 5,000 129,375
Pfizer, Inc. ...................... 3,000 376,313
Pliva D. D. GDR (a)(b)............. 15,000 249,000
Quintiles Transnational Corp.
(b)................................ 5,000 266,875
Electronics - 5.96%
Advanced Micro Devices, Inc. (b)... 25,000 723,438
General Instrument Corp. (b)....... 20,000 678,750
Koninklijke Philips Electronics
N.V................................ 5,000 335,285
Lernout & Hauspie Speech Products
N.V. (b)........................... 6,000 195,750
National Semiconductor Corp. (b)... 35,000 472,500
SGS-Thomson Microelectronics N.V.
(b)................................ 1,700 132,706
Energy Services & Producers - .21%
Transocean Offshore, Inc. ......... 3,400 91,163
Environmental Management - 1.86%
Rentokil Initial PLC............... 105,000 791,555
Financial Services - 2.88%
Allianz AG......................... 1,000 366,648
Federal National Mortgage
Association........................ 5,000 370,000
Merrill Lynch & Co. ............... 700 46,725
Morgan Stanley Dean Witter &
Co. ............................... 700 49,700
Nichiei Co., Ltd. ................. 5,000 393,231
Food & Beverages - 3.82%
Cadbury Schweppes PLC.............. 60,000 1,026,591
Companhia Cervejaria Brahma,
Preference......................... 272,000 117,069
Cresud SA, Sponsored ADR........... 5,338 64,056
Dairy Farm International Holdings,
Ltd. .............................. 364,458 419,127
Homebuilders/Real Estate - .78%
Brazil Realty SA GDR (a)........... 3,000 37,742
IRSA Inversiones y Representaciones
SA................................. 50,890 139,567
Solidere GDR....................... 15,000 152,625
Hotel/Gaming - .80%
International Game Technology...... 14,100 342,806
</TABLE>
<TABLE>
<CAPTION>
Atlas Global Growth Fund (continued)
- ----------------------------------------------------------------------
shares, units
or face value
amount (i) (note 1)
------------- -----------
<S> <C> <C>
Industrial Manufacturing - .40%
International Flavors & Fragrances,
Inc. .............................. 3,900 $ 172,331
Industrial Materials - 1.22%
Hanson PLC......................... 65,200 518,790
Industrial Services - 2.44%
Adecco SA.......................... 412 187,804
Brisa-Auto Estradas de Portugal SA
(b)................................ 4,800 282,676
McDermott International, Inc. ..... 10,000 246,875
WPP Group PLC...................... 52,900 320,737
Insurance - 1.14%
American International Group,
Inc. .............................. 1,650 159,431
Chubb Corp. ....................... 5,000 324,375
Leisure & Entertainment - .50%
Corporacion Interamericana de
Entretenimiento SA, Cl. B (b)...... 62,436 171,576
Corporacion Interamericana de
Entretenimiento SA, Cl. L (b)...... 8,324 16,820
Resorts World Berhad (g)........... 21,000 24,205
Manufacturing - 3.99%
Bic Corp. ......................... 11,000 609,691
Olivetti SPA....................... 200,000 696,252
Rolls-Royce PLC.................... 92,900 387,345
Metals Mining - .06%
Minerals Technologies, Inc. ....... 600 24,563
Oil & Gas - .15%
British Petroleum Co. PLC ADR...... 4,242 63,278
Printing, Publishing & Allied Products - .64%
Singapore Press Holdings, Ltd. .... 25,000 272,562
Retail Trade - 3.01%
Credit Saison Co., Ltd. ........... 15,000 369,151
Dixons Group PLC................... 30,000 423,593
Sonae Investimentos-SGPS SA........ 10,000 486,361
Specialty Retailing - 2.45%
Best Buy Co., Inc. ................ 2,600 159,575
Circuit City Stores................ 7,700 384,519
Wella AG, Preference............... 600 500,465
Supermarkets - 1.06%
Carrefour Supermarche SA........... 600 452,601
Telecommunications - 12.48%
AT&T Corp. ........................ 10,000 752,500
Cable & Wireless Communications PLC
(b)................................ 20,000 182,394
Energis PLC (b).................... 50,000 1,112,971
Ericsson LM, Cl. B................. 12,200 289,806
Hellenic Telecommunication
Organization SA.................... 16,666 440,647
Lucent Technologies, Inc. ......... 1,000 110,000
MCI Worldcom, Inc. (b)............. 16,200 1,162,350
QUALCOMM, Inc. (b)................. 8,000 414,500
Scientific-Atlanta, Inc. .......... 17,400 396,938
SK Telecom Co., Ltd. .............. 618 345,731
Societe Europeenne de Communication
SA, Cl. A (b)...................... 600 11,175
Societe Europeenne de Communication
SA, Cl. B (b)...................... 5,400 95,175
Telephone Utilities - 1.73%
Telecom Italia SPA................. 100,000 736,892
</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 face value
amount (i) (note 1)
------------- -----------
<S> <C> <C>
Toys - 1.27%
Hasbro, Inc. ...................... 15,000 $ 541,875
---------
Total Common Stocks (cost: $32,903,296) 41,994,126
---------
RIGHTS, WARRANTS AND CERTIFICATES - 0.00%
Banco Bradesco SA, Preference,
Warrants Exp. 02/99................ 1,544,512 894
---------
Total Rights, Warrants and Certificates (cost: $0) 894
---------
SHORT-TERM SECURITIES - .61%
Triparty Repurchase Agreement dated
December 31, 1998 with Prudential
Securities, Inc., effective yield
of 3.95%, due January 4, 1999,
collateralized by FNMA, 6.15%,
February 1, 2031 with a value of
$267,151........................... $ 261,625 261,625
---------
Total Short-Term Securities (cost: $261,625) 261,625
---------
TOTAL SECURITIES (COST: $33,164,921) - 99.27% 42,256,645
OTHER ASSETS AND LIABILITIES, NET - .73% 308,728
---------
NET ASSETS - 100.00% $42,565,373
---------
---------
Atlas Emerging Growth Fund
- ----------------------------------------------------------------------
shares or value
face amount (note 1)
---------- ---------
COMMON STOCKS - 85.53%
Apparel & Textiles - 1.58%
Cutter & Buck, Inc. (b)............ 8,000 $ 298,000
Computer Hardware - 1.91%
Network Appliance, Inc. (b)........ 8,000 360,000
Computer Software - 16.29%
Acxiom Corp. (b)................... 10,000 310,000
Aspen Technologies, Inc. (b)....... 11,800 171,100
Concord Communications, Inc. ...... 6,000 340,500
Documentum, Inc. (b)............... 8,000 427,500
Engineering Animation, Inc. (b).... 4,400 237,600
Medical Manager Corp. (b).......... 7,000 219,625
New Era of Networks, Inc. (b)...... 5,000 220,000
Phoenix International Ltd., Inc.
(b)................................ 10,000 147,500
Saville Systems PLC ADR (b)........ 5,000 95,000
Software AG Systems, Inc. (b)...... 12,000 217,500
Veritas Software Corp. (b)......... 4,000 239,750
Visio Corp. (b).................... 12,000 438,750
Consumer Goods & Services - 14.80%
Advance Paradigm, Inc. (b)......... 8,000 280,000
Boron Lepore & Associates, Inc.
(b)................................ 8,000 276,000
Cornell Corrections, Inc. (b)...... 15,000 285,000
CORT Business Services Corp. (b)... 10,000 242,500
Getty Images, Inc. (b)............. 15,000 257,813
</TABLE>
<TABLE>
<CAPTION>
Atlas Emerging Growth Fund (continued)
- --------------------------------------------------------------------
shares or value
face amount (note 1)
----------- -----------
<S> <C> <C>
Group Maintenance America Corp.
(b)................................ 20,000 $ 242,500
Maximus, Inc. ..................... 10,000 370,000
Renters Choice, Inc. (b)........... 8,000 254,000
Service Experts, Inc. (b).......... 8,000 234,000
U.S. Foodservice, Inc. (b)......... 7,000 343,000
Diversified Media - 1.18%
Penton Media, Inc. ................ 11,000 222,750
Drugs & Health Care - 4.06%
Kendle International, Inc. (b)..... 5,000 116,875
Pharmaceutical Product Development,
Inc. (b)........................... 10,000 300,625
Renal Care Group, Inc. (b)......... 12,000 345,750
Education - 5.08%
Education Management Corp. (b)..... 20,000 472,500
ITT Educational Services, Inc.
(b)................................ 8,000 272,000
Strayer Education, Inc. ........... 6,000 211,500
Electronics - 2.81%
Pittway Corp., Cl. A............... 16,000 529,000
Energy Services & Producers - 1.22%
Core Laboratories N.V. (b)......... 12,000 229,500
Environmental Management - 5.08%
Casella Waste Systems, Inc., Cl. A
(b)................................ 15,000 556,875
Eastern Environmental (b).......... 8,000 237,000
Stericycle, Inc. .................. 10,000 161,250
Financial Services - 2.55%
Investors Financial Services
Corp. ............................. 8,000 477,000
Health Care/Supplies &
Services - 8.13%
Covance, Inc. (b).................. 10,000 291,250
Hanger Orthopedic Group, Inc. ..... 12,000 270,000
Serologicals Corp. (b)............. 19,500 585,000
Ventana Medical Systems, Inc.
(b)................................ 6,000 129,750
VWR Scientific Products Corp.
(b)................................ 14,600 253,675
Home Builders/Real Estate - 1.06%
Fairfield Communities, Inc. (b).... 18,000 199,125
Industrial Manufacturing - 1.12%
Applied Power, Inc., Cl. A......... 5,600 211,400
Industrial Services - 3.71%
Metzler Group, Inc. (b)............ 7,500 365,156
U.S. Rental, Inc. (b).............. 6,737 223,163
West Teleservices Corp. (b)........ 11,200 109,200
Insurance - 1.43%
Annuity and Life Re (Holdings),
Ltd. .............................. 10,000 270,000
Leisure & Entertainment - 2.70%
Cinar Films, Inc. (b).............. 20,000 507,500
Oil & Gas - .44%
Cross Timbers Oil Co. ............. 11,000 82,500
Retail Trade - 5.27%
Handleman Co. ..................... 20,000 281,250
O'Reilly Automotive, Inc. (b)...... 6,000 283,500
School Specialty, Inc. (b)......... 20,000 427,500
Specialty Retailing - 3.30%
Linens 'n Things, Inc. (b)......... 7,000 277,374
Zebra Technologies Corp., Cl. A.... 12,000 345,000
Telecommunications - 1.81%
Aware, Inc. (b).................... 10,000 271,875
Intermedia Communications, Inc.
(b)................................ 4,000 69,000
---------
Total Common Stocks (cost: $13,477,337) 16,093,481
---------
</TABLE>
37
<PAGE> 39
Statements of Investments in Securities and Net Assets December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Emerging Growth Fund (continued)
- --------------------------------------------------------------------
shares or value
face amount (note 1)
----------- -----------
<S> <C> <C>
SHORT-TERM SECURITIES - 13.76%
Triparty Repurchase Agreement dated
December 31, 1998 with Prudential
Securities, Inc., effective yield
of 3.95%, due January 4, 1999,
collateralized by FHLMC, 7.77%,
October 1, 2026 with a value of
$2,640,860......................... $2,589,039 $ 2,589,039
---------
Total Short-Term Securities (cost: $2,589,039) 2,589,039
---------
TOTAL SECURITIES (COST: $16,066,376) - 99.29% 18,682,520
OTHER ASSETS AND LIABILITIES, NET - .71% 134,187
---------
NET ASSETS - 100.00% $18,816,707
---------
---------
</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 year the value of these securities amounted to $2,190,586 or
2.22% of net assets in the Balanced Fund, $3,737,500 or 1.39% of net assets
in the Growth and Income Fund, $3,403,315 or 4.63% of net assets in the
Strategic Income Fund, and $389,156 or 0.91% 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) Identifies issues considered to be illiquid - See Note 12 to Financial
Statements.
(g) 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).
(h) Interest or dividend is paid in kind.
(i) 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.
(j) Face amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
<TABLE>
<S> <C>
AUD - Australian Dollar GBP - British Pound Sterling
ARP - Argentine Peso GRD - Greek Drachma
CAD - Canadian Dollar HUF - Hungarian Forint
DEM - German Deutsche Mark ITL - Italian Lira
DKK - Danish Krone JPY - Japanese Yen
ECU - European Currency Unit MXP - Mexican Peso
ESP - Spanish Peseta NZD - New Zealand Dollar
FIM - Finnish Markka PLZ - Polish Zloty
FRF - French Franc RUR - Russian Ruble
</TABLE>
(k) A sufficient amount of liquid securities has been designated to cover
outstanding written options, as follows:
<TABLE>
<CAPTION>
CONTRACTS/FACE EXPIRATION EXERCISE PREMIUM MARKET VALUE
SUBJECT TO CALL/PUT DATE PRICE RECEIVED SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Strategic Income Fund:
- -------------------
Japanese Yen Call Option 35,571,200 1/12/99 111.16JPY $ 2,707 $ 5,585
Mexican Peso Call Option 3,400,000 2/9/99 9.92MXP 2,372 3,362
U.S. Treasury Bonds, 6.125% due 11/15/27 Call Option 600 2/18/99 $ 121.52 1,406 2,156
-------------------
$ 6,485 $11,103
-------------------
-------------------
</TABLE>
(l) Securities with an aggregate market value of $255,363 are held in
collateralized accounts to cover initial margin requirements on open
futures purchase contracts. See Note 10 of Notes to Financial Statements.
(m) A sufficient amount of securities has been designated to cover outstanding
forward currency exchange contracts. See Note 9 of Notes to Financial
Statements.
ACES = Automatic Common Exchange Securities
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
PIES = Premium Income Equity Securities
PRIDES = Provisionally Redeemable Income Debt Exchangeable for Stock
STRYPES = Structured Yield Product Exchangeable for Stock
The accompanying notes are an integral part of these financial statements.
38
<PAGE> 40
- --------------------------------------------------------------------------------
(THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.)
39
<PAGE> 41
Statements of Assets and Liabilities December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Money Funds Bond Funds
------------------------------------------------------------------------------------------------
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>
ASSETS:
Investment in securities,
at identified cost....... $ 58,786,862 $ 40,310,990 $ 5,345,811 $200,974,963 $60,587,749
----------- ---------- ---------- ---------- ---------
----------- ---------- ---------- ---------- ---------
Investment in securities,
at value................. $ 58,786,862 $ 40,310,990 $ 5,345,811 $216,871,102 $65,139,499
Cash....................... 160 88,629 83,902 32,242 4,739
Receivables:
Securities sold.......... 0 0 0 0 0
Fund's shares sold....... 128,049 9,045 10,000 166,402 0
Interest and dividends... 0 215,131 32,478 3,655,839 897,783
Other.................... 0 0 0 0 0
Deferred organization
costs.................... 359 0 0 359 359
----------- ---------- ---------- ---------- ---------
Total assets............... 58,915,430 40,623,795 5,472,191 220,725,944 66,042,380
----------- ---------- ---------- ---------- ---------
LIABILITIES:
Payables:
Securities purchased..... 0 0 0 0 0
Fund's shares redeemed... 152,525 114,212 3,749 11,000 29,000
Dividends................ 7,567 3,180 843 539,780 137,170
Accrued expenses........... 28,011 22,917 3,103 254,630 74,667
Other liabilities.......... 0 0 0 0 0
Unrealized depreciation on
forward foreign currency
exchange contracts....... 0 0 0 0 0
Variation margin on futures
contracts................ 0 0 0 0 0
Options written, at value
(premiums received
$6,485).................. 0 0 0 0 0
----------- ---------- ---------- ---------- ---------
Total liabilities.......... 188,103 140,309 7,695 805,410 240,837
----------- ---------- ---------- ---------- ---------
NET ASSETS................... $ 58,727,327 $ 40,483,486 $ 5,464,496 $219,920,534 $65,801,543
----------- ---------- ---------- ---------- ---------
----------- ---------- ---------- ---------- ---------
NET ASSETS CONSIST OF:
Net unrealized appreciation
(depreciation)............. $ 0 $ 0 $ 0 $ 15,896,139 $ 4,551,750
Accumulated net realized
gain (loss).............. (24,144) (85) (377) 6,582 25,715
Undistributed net
investment income
(loss)................... 0 0 0 0 0
Paid in capital............ 58,751,471 40,483,571 5,464,873 204,017,813 61,224,078
----------- ---------- ---------- ---------- ---------
NET ASSETS................... $ 58,727,327 $ 40,483,486 $ 5,464,496 $219,920,534 $65,801,543
----------- ---------- ---------- ---------- ---------
----------- ---------- ---------- ---------- ---------
NET ASSET VALUE PER SHARE:
Class A
Net Assets............... $ 58,185,570 $ 40,483,486 $ 5,464,496 $211,937,668 $62,557,992
Shares outstanding....... 58,209,648 40,483,571 5,464,873 18,447,655 5,412,490
Net asset value per share
and maximum offering
price.................... $ 1.00 $ 1.00 $ 1.00 $ 11.49 $ 11.56
Class B
Net Assets............... $ 541,757 NA NA $ 7,982,866 $ 3,243,551
Shares outstanding....... 541,823 NA NA 694,443 280,477
Net asset value per share
and maximum offering
price.................... $ 1.00 NA NA $ 11.50 $ 11.56
CAPITAL SHARES AUTHORIZED:... 125,000,000 350,000,000 130,000,000 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 Strategic Growth and Strategic Global Emerging
and Mortgage Income Balanced Income Growth Growth Growth
Securities Fund Fund Fund Fund Fund Fund Fund
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$220,206,188 $74,140,646 $87,348,353 $201,863,415 $75,640,873 $33,164,921 $16,066,376
------------ --------- --------- ---------- --------- --------- ---------
------------ --------- --------- ---------- --------- --------- ---------
$224,304,742 $72,413,480 $98,109,249 $269,703,644 $86,367,649 $42,256,645 $18,682,520
212 0 0 0 0 619 0
0 25,307 0 500 0 324,141 156,659
362,750 46,000 362,630 374,297 50,922 23,933 23,926
1,325,554 1,470,879 524,200 378,537 83,767 67,719 2,052
23,617 0 0 0 0 0 0
359 0 359 359 359 0 0
------------ --------- --------- ---------- --------- --------- ---------
226,017,234 73,955,666 98,996,438 270,457,337 86,502,697 42,673,057 18,865,157
------------ --------- --------- ---------- --------- --------- ---------
2,009,382 3,957 0 0 0 0 0
223,197 48,482 201,022 245,459 92,422 38,605 25,387
376,141 232,749 103,129 352,291 54,809 4,575 0
260,680 63,933 122,689 303,100 102,397 62,520 23,063
0 10,776 0 0 0 0 0
0 2,502 0 0 0 1,984 0
0 2,406 0 0 0 0 0
0 11,103 0 0 0 0 0
------------ --------- --------- ---------- --------- --------- ---------
2,869,400 375,908 426,840 900,850 249,628 107,684 48,450
------------ --------- --------- ---------- --------- --------- ---------
$223,147,834 $73,579,758 $98,569,598 $269,556,487 $86,253,069 $42,565,373 $18,816,707
------------ --------- --------- ---------- --------- --------- ---------
------------ --------- --------- ---------- --------- --------- ---------
$ 4,098,554 $(1,791,396) $10,760,597 $ 67,840,229 $10,726,776 $ 9,092,999 $ 2,616,144
(14,633,974) (493,368) 669 1,068,952 (536,796) (747,067) (1,335,981)
0 24,233 167 (15) (1,166) (3,868) (165,693)
233,683,254 75,840,289 87,808,165 200,647,321 76,064,255 34,223,309 17,702,237
------------ --------- --------- ---------- --------- --------- ---------
$223,147,834 $73,579,758 $98,569,598 $269,556,487 $86,253,069 $42,565,373 $18,816,707
------------ --------- --------- ---------- --------- --------- ---------
------------ --------- --------- ---------- --------- --------- ---------
$216,343,918 $66,374,727 $88,430,157 $248,605,519 $73,625,643 $36,548,582 $16,747,063
21,280,394 13,340,615 6,111,090 11,260,116 4,303,683 2,510,647 1,217,604
$ 10.17 $ 4.98 $ 14.47 $ 22.08 $ 17.11 $ 14.56 $ 13.75
$ 6,803,916 $ 7,205,031 $10,139,441 $ 20,950,968 $12,627,426 $ 6,016,791 $ 2,069,644
669,203 1,450,459 703,654 952,607 746,658 420,184 152,221
$ 10.17 $ 4.97 $ 14.41 $ 21.99 $ 16.91 $ 14.32 $ 13.60
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 year ended December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Money Funds Bond Funds
------------------------------------------------------------------------------------------
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>
INVESTMENT INCOME:
Income:
Interest....................... $2,998,327 $1,417,180 $205,116 $11,375,139 $3,461,487
Dividends...................... 0 0 0 0 0
---------- -------- -------- --------- --------
Total income..................... 2,998,327 1,417,180 205,116 11,375,139 3,461,487
---------- -------- -------- --------- --------
Expenses:
Management fees................ 294,022 214,804 28,668 1,162,824 350,922
Distribution fees:
Class A...................... 146,245 107,402 14,334 508,551 151,516
Class B...................... 2,298 0 0 60,017 23,981
Transfer agency fees and
expenses..................... 111,898 29,619 8,314 129,467 60,453
Custodian fees and expenses.... 36,356 37,938 11,318 134,432 47,782
Directors' fees................ 3,189 2,338 310 11,448 3,462
Registration fees.............. 1,463 2,040 1,023 3,575 1,968
Accounting and legal fees...... 14,652 13,290 12,535 17,737 14,753
Reports to shareholders........ 6,167 1,963 477 8,088 3,104
Other.......................... 4,418 2,803 346 12,782 4,162
---------- -------- -------- --------- --------
Total expenses............... 620,708 412,197 77,325 2,048,921 662,103
Management fees waived......... (103,445) (25,425) (23,849) 0 0
Distribution fees waived on
Class A...................... (146,245) (107,402) (14,334) 0 0
Expense reimbursement:
Class A...................... 0 0 (738) 0 0
Class B...................... (15,833) NA NA (14,624) (15,240)
---------- -------- -------- --------- --------
Net expenses..................... 355,185 279,370 38,404 2,034,297 646,863
---------- -------- -------- --------- --------
Net investment income (loss)..... 2,643,142 1,137,810 166,712 9,340,842 2,814,624
---------- -------- -------- --------- --------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND
FOREIGN CURRENCY:
Realized gain (loss) from:
Security transactions
(including premiums on options
exercised)..................... (4,012) 0 0 1,982,806 613,677
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) on
investments and foreign
currency......................... (4,012) 0 0 1,982,806 613,677
---------- -------- -------- --------- --------
Net change in unrealized
appreciation (depreciation) on
investments and foreign
currency......................... 0 0 0 834,361 71,742
---------- -------- -------- --------- --------
Net realized and unrealized gain
(loss) on investments and foreign
currency......................... (4,012) 0 0 2,817,167 685,419
---------- -------- -------- --------- --------
Net increase in net assets
resulting from operations........ $2,639,130 $1,137,810 $166,712 $12,158,009 $3,500,043
---------- -------- -------- --------- --------
---------- -------- -------- --------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
42
<PAGE> 44
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Stock Funds
- ----------------------------------------------------------------------------------------------------
U.S. Government Strategic Growth and Strategic Global Emerging
and Mortgage Income Balanced Income Growth Growth Growth
Securities Fund Fund Fund Fund Fund Fund Fund
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$15,169,760 $5,277,742 $2,173,271 $ 1,600,949 $ 807,632 $ 132,960 $ 125,425
0 105,765 1,436,855 2,424,811 589,488 507,286 10,425
----------- -------- -------- ---------- -------- -------- ---------
15,169,760 5,383,507 3,610,126 4,025,760 1,397,120 640,246 135,850
----------- -------- -------- ---------- -------- -------- ---------
1,155,286 488,097 568,616 1,446,160 578,567 325,640 134,141
507,759 143,452 178,217 512,797 174,537 87,128 36,585
52,113 57,740 74,580 144,309 96,283 43,904 16,003
224,418 75,870 87,083 185,950 92,913 57,069 45,309
200,650 126,353 52,554 128,352 49,635 124,214 35,259
11,383 3,511 4,398 12,187 4,493 2,216 909
5,175 9,282 9,761 8,744 5,225 2,913 2,929
17,708 21,288 15,096 17,986 15,131 14,284 13,798
14,537 5,107 8,051 18,700 9,962 5,422 3,741
12,332 4,082 4,683 13,374 5,801 2,632 139
----------- -------- -------- ---------- -------- -------- ---------
2,201,361 934,782 1,003,039 2,488,559 1,032,547 665,422 288,813
0 (202,922) 0 0 0 0 (591)
0 (143,452) 0 0 0 (1,184) (13,824)
0 0 0 0 0 0 0
0 0 0 0 0 0 0
(13,749) (10,534) (9,243) (9,133) (5,493) (10,228) (11,501)
----------- -------- -------- ---------- -------- -------- ---------
2,187,612 577,874 993,796 2,479,426 1,027,054 654,010 262,897
----------- -------- -------- ---------- -------- -------- ---------
12,982,148 4,805,633 2,616,330 1,546,334 370,066 (13,764) (127,047)
----------- -------- -------- ---------- -------- -------- ---------
(51,560) (592,469) 2,769,203 18,116,065 4,195,214 197,186 (1,164,001)
0 125,234 0 0 0 (212,971) 0
0 6,081 0 3,716 0 0 0
0 83,020 1,469 0 0 7,622 0
----------- -------- -------- ---------- -------- -------- ---------
(51,560) (378,134) 2,770,672 18,119,781 4,195,214 (8,163) (1,164,001)
----------- -------- -------- ---------- -------- -------- ---------
(570,534) (2,299,057) 745,373 32,400,882 2,743,649 5,151,652 1,692,655
----------- -------- -------- ---------- -------- -------- ---------
(622,094) (2,677,191) 3,516,045 50,520,663 6,938,863 5,143,489 528,654
----------- -------- -------- ---------- -------- -------- ---------
$12,360,054 $2,128,442 $6,132,375 $52,066,997 $7,308,929 $5,129,725 $ 401,607
----------- -------- -------- ---------- -------- -------- ---------
----------- -------- -------- ---------- -------- -------- ---------
</TABLE>
43
<PAGE> 45
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Money Funds
------------------------------------------------------------------
California Municipal
U.S. Treasury Money Fund Money Fund
------------------------------------------------------------------
1998(1) 1997(2) 1998(1) 1997(2)
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income (loss)........... $ 2,643,142 $ 3,022,156 $ 1,137,810 $ 1,360,691
Net realized gain (loss) on investments
and foreign currency................... (4,012) (9,954) 0 0
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency....................... 0 0 0 0
---------- ---------- ---------- ----------
Net increase in net assets resulting
from operations........................ 2,639,130 3,012,202 1,137,810 1,360,691
---------- ---------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income:
Class A.............................. (2,632,049) (3,016,389) (1,137,810) (1,360,691)
Class B.............................. (11,093) (5,767) NA NA
Tax return of capital:
Class A.............................. 0 0 0 0
Class B.............................. 0 0 NA NA
From net realized gain:
Class A.............................. 0 0 0 0
Class B.............................. 0 0 NA NA
In excess of net realized gain on
investments:
Class A.............................. 0 0 0 0
Class B.............................. 0 0 NA NA
---------- ---------- ---------- ----------
Total distributions:
Class A.............................. (2,632,049) (3,016,389) (1,137,810) (1,360,691)
Class B.............................. (11,093) (5,767) NA NA
---------- ---------- ---------- ----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares:
Class A.............................. 50,707,219 68,097,818 31,054,254 35,349,812
Class B.............................. 800,236 516,184 NA NA
Reinvestment of distributions:
Class A.............................. 2,505,436 2,850,286 1,091,252 1,301,283
Class B.............................. 10,803 5,656 NA NA
Proceeds from shares issued in plan of
reorganization:
Class A.............................. NA NA NA NA
Class B.............................. NA NA NA NA
Cost of shares redeemed:
Class A.............................. (55,056,160) (76,384,832) (36,412,745) (29,255,049)
Class B.............................. (433,563) (477,242) NA NA
---------- ---------- ---------- ----------
Net increase (decrease) in net assets
resulting from capital share
transactions:
Class A.............................. (1,843,505) (5,436,728) (4,267,239) 7,396,046
Class B.............................. 377,476 44,598 NA NA
---------- ---------- ---------- ----------
Net increase (decrease) in net
assets................................. (1,470,041) (5,402,084) (4,267,239) 7,396,046
NET ASSETS:
Beginning of period.................... 60,197,368 65,599,452 44,750,725 37,354,679
---------- ---------- ---------- ----------
End of period.......................... $ 58,727,327 $ 60,197,368 $ 40,483,486 $ 44,750,725
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
<CAPTION>
Money Funds
-----------------------------------
National Municipal
Money Fund
-----------------------------------
1998(1) 1997(2)
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income (loss)........... $ 166,712 $ 211,211
Net realized gain (loss) on investments
and foreign currency................... 0 0
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency....................... 0 0
--------- ---------
Net increase in net assets resulting
from operations........................ 166,712 211,211
--------- ---------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income:
Class A.............................. (166,712) (211,211)
Class B.............................. NA NA
Tax return of capital:
Class A.............................. 0 0
Class B.............................. NA NA
From net realized gain:
Class A.............................. 0 0
Class B.............................. NA NA
In excess of net realized gain on
investments:
Class A.............................. 0 0
Class B.............................. NA NA
--------- ---------
Total distributions:
Class A.............................. (166,712) (211,211)
Class B.............................. NA NA
--------- ---------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares:
Class A.............................. 2,701,089 4,627,679
Class B.............................. NA NA
Reinvestment of distributions:
Class A.............................. 153,899 195,422
Class B.............................. NA NA
Proceeds from shares issued in plan of
reorganization:
Class A.............................. NA NA
Class B.............................. NA NA
Cost of shares redeemed:
Class A.............................. (3,969,166) (5,758,124)
Class B.............................. NA NA
--------- ---------
Net increase (decrease) in net assets
resulting from capital share
transactions:
Class A.............................. (1,114,178) (935,023)
Class B.............................. NA NA
--------- ---------
Net increase (decrease) in net
assets................................. (1,114,178) (935,023)
NET ASSETS:
Beginning of period.................... 6,578,674 7,513,697
--------- ---------
End of period.......................... $ 5,464,496 $ 6,578,674
--------- ---------
--------- ---------
</TABLE>
(1) For the year ended December 31, 1998.
(2) For the year ended December 31, 1997.
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
-------------------------------------------------------------------------------------------------------------------
1998(1) 1997(2) 1998(1) 1997(2) 1998(1) 1997(2)
<S> <C> <C> <C> <C> <C> <C>
$ 9,340,842 $ 8,653,134 $ 2,814,624 $ 2,410,172 $ 12,982,148 $ 14,286,324
1,982,806 1,474,622 613,677 398,550 (51,560) (244,092)
834,361 3,988,877 71,742 1,449,106 (570,534) 2,749,954
---------- ---------- --------- --------- ---------- ----------
12,158,009 14,116,633 3,500,043 4,257,828 12,360,054 16,792,186
---------- ---------- --------- --------- ---------- ----------
(9,025,681) (8,385,957) (2,689,025) (2,307,579) (12,586,020) (13,901,440)
(315,161) (267,177) (125,599) (102,593) (396,128) (384,884)
0 0 0 0 0 0
0 0 0 0 0 0
(1,910,671) (685,771) (585,693) (351,308) 0 0
(71,983) (28,111) (30,317) (18,891) 0 0
0 0 0 0 0 0
0 0 0 0 0 0
---------- ---------- --------- --------- ---------- ----------
(10,936,352) (9,071,728) (3,274,718) (2,658,887) (12,586,020) (13,901,440)
(387,144) (295,288) (155,916) (121,484) (396,128) (384,884)
---------- ---------- --------- --------- ---------- ----------
30,974,047 13,919,901 8,468,075 3,123,494 48,394,123 13,088,394
214,308 2,370,366 157,266 998,091 380,659 1,753,314
7,860,019 6,400,559 2,564,103 2,097,782 8,061,608 8,705,129
293,120 223,688 138,510 106,431 276,715 264,317
NA 16,888,793 NA 9,809,295 NA 3,487,178
NA 580,661 NA 250,984 NA 316,243
(22,989,735) (24,081,818) (7,280,380) (7,289,081) (42,086,318) (49,439,078)
(582,127) (688,795) (217,094) (221,250) (1,058,306) (1,069,258)
---------- ---------- --------- --------- ---------- ----------
15,844,331 13,127,435 3,751,798 7,741,490 14,369,413 (24,158,377)
(74,699) 2,485,920 78,682 1,134,256 (400,932) 1,264,616
---------- ---------- --------- --------- ---------- ----------
16,604,145 20,362,972 3,899,889 10,353,203 13,346,387 (20,387,899)
203,316,389 182,953,417 61,901,654 51,548,451 209,801,447 230,189,346
---------- ---------- --------- --------- ---------- ----------
$219,920,534 $203,316,389 $65,801,543 $61,901,654 $223,147,834 $209,801,447
---------- ---------- --------- --------- ---------- ----------
---------- ---------- --------- --------- ---------- ----------
<CAPTION>
------------------------------
Strategic Income Fund
------------------------------
1998(1) 1997(2)
<S> <C> <C> <C>
$ 4,805,633 $ 2,830,078
(378,134) 444,741
(2,299,057) 45,160
---------- ---------
2,128,442 3,319,979
---------- ---------
(3,983,874) (2,432,367)
(480,703) (397,711)
(288,617) 0
(34,825) 0
0 (348,740)
0 (74,340)
(39,601) (53,357)
(4,308) (11,349)
---------- ---------
(4,312,092) (2,834,464)
(519,836) (483,400)
---------- ---------
46,697,973 27,268,285
380,992 5,458,885
2,330,794 1,398,356
285,373 298,986
NA NA
NA NA
(18,062,331) (8,718,703)
(1,228,478) (656,792)
---------- ---------
30,966,436 19,947,938
(562,113) 5,101,079
---------- ---------
27,700,837 25,051,132
45,878,921 20,827,789
---------- ---------
$ 73,579,758 $45,878,921
---------- ---------
---------- ---------
</TABLE>
45
<PAGE> 47
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Stock Funds
----------------------------------------------------------------
Balanced Fund Growth and Income Fund
----------------------------------------------------------------
1998(1) 1997(2) 1998(1) 1997(2)
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income (loss)........... $ 2,616,330 $ 1,603,695 $ 1,546,334 $ 830,450
Net realized gain (loss) on investments
and foreign currency................... 2,770,672 1,240,561 18,119,781 30,340,392
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency....................... 745,373 6,602,853 32,400,882 9,147,300
--------- --------- ---------- ----------
Net increase in net assets resulting
from operations........................ 6,132,375 9,447,109 52,066,997 40,318,142
--------- --------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income:
Class A.............................. (2,355,024) (1,386,825) (1,504,508) (806,041)
Class B.............................. (261,128) (216,881) (41,814) (24,417)
From net realized gain:
Class A.............................. (2,482,959) (1,038,635) (15,676,669) (27,435,529)
Class B.............................. (287,023) (201,932) (1,326,962) (2,892,139)
In excess of net realized gain on
investments:
Class A.............................. 0 0 0 (42,719)
Class B.............................. 0 0 0 (4,479)
--------- --------- ---------- ----------
Total distributions:
Class A.............................. (4,837,983) (2,425,460) (17,181,177) (28,284,289)
Class B.............................. (548,151) (418,813) (1,368,776) (2,921,035)
--------- --------- ---------- ----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares:
Class A.............................. 48,172,573 17,048,097 60,420,339 29,480,304
Class B.............................. 506,658 3,970,037 1,070,449 3,625,538
Reinvestment of distributions:
Class A.............................. 4,691,092 2,319,578 16,845,096 27,713,680
Class B.............................. 511,405 393,826 1,330,360 2,839,849
Proceeds from shares issued in plan of
reorganization:
Class A.............................. NA NA NA NA
Class B.............................. NA NA NA NA
Cost of shares redeemed:
Class A.............................. (14,427,520) (4,835,402) (32,989,965) (30,472,282)
Class B.............................. (638,463) (582,207) (2,659,625) (1,308,132)
--------- --------- ---------- ----------
Net increase (decrease) in net assets
resulting from capital share
transactions:
Class A.............................. 38,436,145 14,532,273 44,275,470 26,721,702
Class B.............................. 379,600 3,781,656 (258,816) 5,157,255
--------- --------- ---------- ----------
Net increase (decrease) in net
assets................................. 39,561,986 24,916,765 77,533,698 40,991,775
NET ASSETS:
Beginning of period.................... 59,007,612 34,090,847 192,022,789 151,031,014
--------- --------- ---------- ----------
End of period.......................... $98,569,598 $59,007,612 $269,556,487 $192,022,789
--------- --------- ---------- ----------
--------- --------- ---------- ----------
<CAPTION>
Stock Funds
-----------------------------------
Strategic Growth Fund
-----------------------------------
1998(1) 1997(2)
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income (loss)........... $ 370,066 $ 376,346
Net realized gain (loss) on investments
and foreign currency................... 4,195,214 4,898,258
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency....................... 2,743,649 4,495,615
--------- ---------
Net increase in net assets resulting
from operations........................ 7,308,929 9,770,219
--------- ---------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income:
Class A.............................. (371,222) (343,591)
Class B.............................. 0 (32,774)
From net realized gain:
Class A.............................. (3,571,479) (3,980,719)
Class B.............................. (623,735) (917,571)
In excess of net realized gain on
investments:
Class A.............................. (458,195) 0
Class B.............................. (78,584) 0
--------- ---------
Total distributions:
Class A.............................. (4,400,896) (4,324,310)
Class B.............................. (702,319) (950,345)
--------- ---------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares:
Class A.............................. 27,311,748 28,322,529
Class B.............................. 666,556 5,429,227
Reinvestment of distributions:
Class A.............................. 4,360,431 4,304,676
Class B.............................. 685,674 934,030
Proceeds from shares issued in plan of
reorganization:
Class A.............................. NA NA
Class B.............................. NA NA
Cost of shares redeemed:
Class A.............................. (14,070,156) (4,215,490)
Class B.............................. (1,560,567) (559,000)
--------- ---------
Net increase (decrease) in net assets
resulting from capital share
transactions:
Class A.............................. 17,602,023 28,411,715
Class B.............................. (208,337) 5,804,257
--------- ---------
Net increase (decrease) in net
assets................................. 19,599,400 38,711,536
NET ASSETS:
Beginning of period.................... 66,653,669 27,942,133
--------- ---------
End of period.......................... $86,253,069 $66,653,669
--------- ---------
--------- ---------
</TABLE>
(1) For the year ended December 31, 1998.
(2) For the year ended December 31, 1997.
(3) For the period April 30, 1997 (inception of operations) through December 31,
1997.
The accompanying notes are an integral part of these financial statements.
46
<PAGE> 48
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-----------------------------------------------------------------
Global Growth Fund Emerging Growth Fund
-----------------------------------------------------------------
1998(1) 1997(2) 1998(1) 1997(3)
<S> <C> <C> <C> <C>
$ (13,764) $ 15,339 $ (127,047) $ (38,646)
(8,163) 2,239,705 (1,164,001) (171,980)
5,151,652 2,939,358 1,692,655 923,489
--------- --------- --------- ---------
5,129,725 5,194,402 401,607 712,863
--------- --------- --------- ---------
0 (179) 0 0
0 0 0 0
0 (1,858,023) 0 0
0 (363,901) 0 0
(458,278) (170,942) 0 0
(76,659) (33,022) 0 0
--------- --------- --------- ---------
(458,278) (2,029,144) 0 0
(76,659) (396,923) 0 0
--------- --------- --------- ---------
12,555,581 16,216,002 9,959,353 9,939,204
145,313 2,980,894 124,939 2,304,201
454,679 2,014,769 0 0
75,483 392,224 0 0
NA NA NA NA
NA NA NA NA
(9,773,797) (4,745,878) (3,549,539) (576,187)
(645,016) (230,205) (382,842) (116,892)
--------- --------- --------- ---------
3,236,463 13,484,893 6,409,814 9,363,017
(424,220) 3,142,913 (257,903) 2,187,309
--------- --------- --------- ---------
7,407,031 19,396,141 6,553,518 12,263,189
35,158,342 15,762,201 12,263,189 0
--------- --------- --------- ---------
$42,565,373 $35,158,342 $18,816,707 $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
---------------------------------------------------------------------------------------
December 31, December 31,
1998 1997 1996 1995 1994 1998 1997 1996 1995
<S> <C> <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 $ 1.00
----- ----- ----- ----- ----- ----- ----- ----- -----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)..... 0.045 0.046 0.046 0.050 0.036 0.038 0.039 0.040 0.044
Net realized and unrealized gain
on investments................... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
----- ----- ----- ----- ----- ----- ----- ----- -----
Total from investment
operations....................... 0.045 0.046 0.046 0.050 0.036 0.038 0.039 0.040 0.044
----- ----- ----- ----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS:
From net investment income....... (0.045) (0.046) (0.046) (0.050) (0.036) (0.038) (0.039) (0.040) (0.044)
From net capital gains........... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
In excess of realized gains...... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
Tax return of capital
distribution..................... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
----- ----- ----- ----- ----- ----- ----- ----- -----
Total distributions.............. (0.045) (0.046) (0.046) (0.050) (0.036) (0.038) (0.039) (0.040) (0.044)
----- ----- ----- ----- ----- ----- ----- ----- -----
Net asset value, end of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----- ----- ----- ----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- ----- ----- ----- -----
Total return+..................... 4.60% 4.73% 4.74% 5.13% 3.67% 3.81% 3.95% 4.07% 4.45%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000's).......................... $58,186 $60,033 $65,479 $51,385 $33,448 $ 542 $ 165 $ 120 $ 113
Ratio of expenses to average net
assets: #
Before expense reimbursement... 1.02% 1.02% 1.02% 1.05% 1.08% 6.65% 3.25% 3.25% 3.25%
After expense reimbursement.... 0.60% 0.62% 0.52% 0.64% 0.46% 1.34% 1.37% 1.18% 1.24%
Ratio of net investment income to
average net assets #............. 4.49% 4.63% 4.63% 4.99% 3.75% 3.61% 3.90% 3.95% 4.34%
Portfolio turnover rate.......... -- -- -- -- -- -- -- -- --
<CAPTION>
Money Funds
-----------------
-----------------
July 1, 1994*
through
Dec. 31, 1994
<S> <C> <C>
Net asset value, beginning of
period........................... $ 1.00
-----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)..... 0.018
Net realized and unrealized gain
on investments................... 0.000
-----------
Total from investment
operations....................... 0.018
-----------
LESS DISTRIBUTIONS:
From net investment income....... (0.018)
From net capital gains........... 0.000
In excess of realized gains...... 0.000
Tax return of capital
distribution..................... 0.000
-----------
Total distributions.............. (0.018)
-----------
Net asset value, end of period.... $ 1.00
-----------
-----------
Total return+..................... 3.53%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000's).......................... $ 28
Ratio of expenses to average net
assets: #
Before expense reimbursement... 3.25%
After expense reimbursement.... 1.13%
Ratio of net investment income to
average net assets #............. 3.71%
Portfolio turnover rate.......... --
</TABLE>
* Commencement of operations.
+ 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.
# Annualized when the period presented is less than one year.
The accompanying notes are an integral part of these financial statements.
48
<PAGE> 50
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
California Municipal Money Fund National Municipal Money Fund
Class A Class A
-------------------------------------------------------------------------------------------------
December 31, December 31,
1998 1997 1996 1995 1994 1998 1997 1996 1995 1994
<S> <C> <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
----- ----- ----- ----- ----- ---- ---- ---- ---- -----
0.026 0.029 0.028 0.032 0.024 0.029 0.030 0.029 0.032 0.026
0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
----- ----- ----- ----- ----- ---- ---- ---- ---- -----
0.026 0.029 0.028 0.032 0.024 0.029 0.030 0.029 0.032 0.026
----- ----- ----- ----- ----- ---- ---- ---- ---- -----
(0.026) (0.029) (0.028) (0.032) (0.024) (0.029) (0.030) (0.029) (0.032) (0.026)
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
0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
----- ----- ----- ----- ----- ---- ---- ---- ---- -----
(0.026) (0.029) (0.028) (0.032) (0.024) (0.029) (0.030) (0.029) (0.032) (0.026)
----- ----- ----- ----- ----- ---- ---- ---- ---- -----
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----- ----- ----- ----- ----- ---- ---- ---- ---- -----
----- ----- ----- ----- ----- ---- ---- ---- ---- -----
2.67% 2.97% 2.82% 3.22% 2.47% 2.95% 3.09% 2.96% 3.26% 2.60%
$40,483 $44,751 $37,355 $39,439 $42,979 $5,464 $6,579 $7,514 $7,860 $10,110
0.99% 0.97% 1.00% 1.00% 1.00% 1.35% 1.31% 1.32% 1.29% 1.25%
0.67% 0.64% 0.63% 0.67% 0.46% 0.67% 0.68% 0.68% 0.75% 0.49%
2.74% 2.94% 2.78% 3.18% 2.44% 2.91% 3.04% 2.92% 3.21% 2.57%
-- -- -- -- -- -- -- -- -- --
- -
</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 Class B
------------------------------------------------------------------------
December 31, December 31,
1998 1997 1996 1995 1994 1998 1997
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 11.44 $ 11.15 $ 11.26 $ 10.31 $ 11.56 $11.45 $11.15
------ ------ ------ ------ ------ ---- ----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................ 0.51 0.53 0.53 0.54 0.59 0.45 0.48
Net realized and unrealized gain on
investments................................. 0.16 0.33 (0.11) 0.95 (1.25) 0.16 0.34
------ ------ ------ ------ ------ ---- ----
Total from investment operations............ 0.67 0.86 0.42 1.49 (0.66) 0.61 0.82
------ ------ ------ ------ ------ ---- ----
LESS DISTRIBUTIONS:
From net investment income.................. (0.51) (0.53) (0.53) (0.54) (0.59) (0.45) (0.48)
From net capital gains...................... (0.11) (0.04) 0.00 0.00 0.00 (0.11) (0.04)
In excess of realized gains................. 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Tax return of capital distribution.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00
------ ------ ------ ------ ------ ---- ----
Total distributions......................... (0.62) (0.57) (0.53) (0.54) (0.59) (0.56) (0.52)
------ ------ ------ ------ ------ ---- ----
Net asset value, end of period............... $ 11.49 $ 11.44 $ 11.15 $ 11.26 $ 10.31 $11.50 $11.45
------ ------ ------ ------ ------ ---- ----
------ ------ ------ ------ ------ ---- ----
Total return+................................ 5.94% 7.97% 3.90% 14.76% -5.83% 5.41% 7.53%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)........... $211,938 $195,292 $177,593 $184,283 $171,768 $7,983 $8,025
Ratio of expenses to average net assets: #
Before expense reimbursement.............. 0.94% 0.95% 0.96% 0.96% 0.97% 1.63% 1.70%
After expense reimbursement............... 0.94% 0.95% 0.96% 0.93% 0.57% 1.44% 1.45%
Ratio of net investment income to average
net assets #................................ 4.43% 4.76% 4.82% 4.98% 5.43% 3.94% 4.24%
Portfolio turnover rate..................... 14.95% 15.95% 29.28% 25.90% 30.32% 14.95% 15.95%
<CAPTION>
--------------------------------
Class B
--------------------------------
July 1, 1994*
through
1996 1995 Dec. 31, 1994
<S> <C> <C> <C>
Net asset value, beginning of period......... $11.26 $10.32 $ 10.74
---- ---- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................ 0.48 0.48 0.25
Net realized and unrealized gain on
investments................................. (0.11) 0.94 (0.42)
---- ---- ----------
Total from investment operations............ 0.37 1.42 (0.17)
---- ---- ----------
LESS DISTRIBUTIONS:
From net investment income.................. (0.48) (0.48) (0.25)
From net capital gains...................... 0.00 0.00 0.00
In excess of realized gains................. 0.00 0.00 0.00
Tax return of capital distribution.......... 0.00 0.00 0.00
---- ---- ----------
Total distributions......................... (0.48) (0.48) (0.25)
---- ---- ----------
Net asset value, end of period............... $11.15 $11.26 $ 10.32
---- ---- ----------
---- ---- ----------
Total return+................................ 3.39% 14.05% -1.59%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)........... $5,360 $3,162 $ 1,416
Ratio of expenses to average net assets: #
Before expense reimbursement.............. 1.83% 2.24% 3.25%
After expense reimbursement............... 1.46% 1.46% 1.28%
Ratio of net investment income to average
net assets #................................ 4.33% 4.42% 4.91%
Portfolio turnover rate..................... 29.28% 25.90% 30.32%
</TABLE>
* Commencement of operations.
+ 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.
# Annualized when the period presented is less than one year.
The accompanying notes are an integral part of these financial statements.
50
<PAGE> 52
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
National Municipal Bond Fund
Class A Class B
-------------------------------------------------------------------------------------------------------
July 1, 1994*
December 31, December 31, through
1998 1997 1996 1995 1994 1998 1997 1996 1995 Dec. 31, 1994
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 11.54 $ 11.21 $ 11.39 $ 10.41 $ 11.61 $11.55 $11.21 $11.39 $10.41 $ 10.76
----- ----- ----- ----- ----- ---- ---- ---- ---- ----------
0.51 0.53 0.52 0.53 0.58 0.46 0.48 0.46 0.47 0.24
0.13 0.40 (0.12) 0.98 (1.20) 0.12 0.41 (0.12) 0.98 (0.35)
----- ----- ----- ----- ----- ---- ---- ---- ---- ----------
0.64 0.93 0.40 1.51 (0.62) 0.58 0.89 0.34 1.45 (0.11)
----- ----- ----- ----- ----- ---- ---- ---- ---- ----------
(0.51) (0.53) (0.52) (0.53) (0.58) (0.46) (0.48) (0.46) (0.47) (0.24)
(0.11) (0.07) (0.06) 0.00 0.00 (0.11) (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
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
----- ----- ----- ----- ----- ---- ---- ---- ---- ----------
(0.62) (0.60) (0.58) (0.53) (0.58) (0.57) (0.55) (0.52) (0.47) (0.24)
----- ----- ----- ----- ----- ---- ---- ---- ---- ----------
$ 11.56 $ 11.54 $ 11.21 $ 11.39 $ 10.41 $11.56 $11.55 $11.21 $11.39 $ 10.41
----- ----- ----- ----- ----- ---- ---- ---- ---- ----------
----- ----- ----- ----- ----- ---- ---- ---- ---- ----------
5.70% 8.56% 3.58% 14.76% -5.41% 5.08% 8.11% 3.07% 14.16% -0.99%
$62,558 $58,740 $49,597 $53,387 $50,037 $3,244 $3,162 $1,952 $1,051 $ 342
0.99% 1.00% 1.01% 1.05% 1.06% 1.96% 2.13% 2.29% 3.25% 3.25%
0.99% 1.00% 1.01% 0.91% 0.57% 1.49% 1.50% 1.51% 1.44% 1.28%
4.44% 4.72% 4.63% 4.79% 5.35% 3.93% 4.21% 4.14% 4.22% 4.72%
21.89% 21.80% 44.76% 53.43% 37.52% 21.89% 21.80% 44.76% 54.30% 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
----------------------------------------------------
December 31,
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period.............................. $ 10.20 $ 10.07 $ 10.30 $ 9.55 $ 10.60
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)........ 0.63 0.67 0.67 0.69 0.70
Net realized and unrealized gain on
investments......................... (0.03) 0.13 (0.23) 0.75 (1.05)
------ ------ ------ ------ ------
Total from investment operations.... 0.60 0.80 0.44 1.44 (0.35)
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
From net investment income.......... (0.63) (0.67) (0.67) (0.69) (0.70)
From net capital gains.............. 0.00 0.00 0.00 0.00 0.00
In excess of realized gains......... 0.00 0.00 0.00 0.00 0.00
Tax return of capital
distribution........................ 0.00 0.00 0.00 0.00 0.00
------ ------ ------ ------ ------
Total distributions................. (0.63) (0.67) (0.67) (0.69) (0.70)
------ ------ ------ ------ ------
Net asset value, end of period....... $ 10.17 $ 10.20 $ 10.07 $ 10.30 $ 9.55
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total return+........................ 6.06% 8.25% 4.50% 15.50% -3.30%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)... $216,344 $202,573 $224,301 $255,614 $245,715
Ratio of expenses to average net
assets: #
Before expense reimbursement...... 1.02% 1.03% 1.03% 1.04% 1.05%
After expense reimbursement....... 1.02% 1.03% 1.03% 1.02% 0.80%
Ratio of net investment income to
average net assets #................ 6.20% 6.67% 6.67% 6.90% 7.05%
Portfolio turnover rate............. 22.70% 3.73% 27.45% 48.39% 16.33%
<CAPTION>
Bond Funds
-------------------------------------------------
U.S. Government and Mortgage Securities Fund
Class A
-------------------------------------------------
July 1, 1994*
December 31, through
1998 1997 1996 1995 Dec. 31, 1994
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period.............................. $10.20 $10.07 $10.30 $ 9.55 $ 9.80
---- ---- ---- ---- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)........ 0.58 0.62 0.62 0.64 0.32
Net realized and unrealized gain on
investments......................... (0.03) 0.13 (0.23) 0.75 (0.25)
---- ---- ---- ---- --------
Total from investment operations.... 0.55 0.75 0.39 1.39 0.07
---- ---- ---- ---- --------
LESS DISTRIBUTIONS:
From net investment income.......... (0.58) (0.62) (0.62) (0.64) (0.32)
From net capital gains.............. 0.00 0.00 0.00 0.00 0.00
In excess of realized gains......... 0.00 0.00 0.00 0.00 0.00
Tax return of capital
distribution........................ 0.00 0.00 0.00 0.00 0.00
---- ---- ---- ---- --------
Total distributions................. (0.58) (0.62) (0.62) (0.64) (0.32)
---- ---- ---- ---- --------
Net asset value, end of period....... $10.17 $10.20 $10.07 $10.30 $ 9.55
---- ---- ---- ---- --------
---- ---- ---- ---- --------
Total return+........................ 5.53% 7.72% 3.98% 14.93% 0.69%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)... $6,804 $7,228 $5,888 $3,799 $ 1,451
Ratio of expenses to average net
assets: #
Before expense reimbursement...... 1.72% 1.76% 1.82% 2.27% 3.25%
After expense reimbursement....... 1.53% 1.53% 1.53% 1.53% 1.43%
Ratio of net investment income to
average net assets #................ 5.70% 6.16% 6.19% 6.34% 6.82%
Portfolio turnover rate............. 22.70% 3.73% 27.45% 48.39% 16.33%
</TABLE>
* Commencement of operations.
+ 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.
# Annualized when the period presented is less than one year.
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
- ------------------------------------------------------------------------------------------------------------
May 20, 1996* May 20, 1996*
December 31, through December 31, through December 31,
1998 1997 Dec. 31, 1996 1998 1997 Dec. 31, 1996 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 5.16 $ 5.16 $ 5.00 $ 5.15 $ 5.15 $ 5.00 $ 14.14 $ 12.18 $ 11.19 $ 9.23
----- ----- -------- ----- ----- ------- ----- ----- ----- -----
0.38 0.42 0.25 0.34 0.38 0.23 0.46 0.46 0.42 0.42
(0.15) 0.06 0.18 (0.15) 0.06 0.17 0.75 2.27 1.32 2.02
----- ----- -------- ----- ----- ------- ----- ----- ----- -----
0.23 0.48 0.43 0.19 0.44 0.40 1.21 2.73 1.74 2.44
----- ----- -------- ----- ----- ------- ----- ----- ----- -----
(0.38) (0.42) (0.25) (0.34) (0.38) (0.23) (0.46) (0.46) (0.42) (0.42)
(0.00) (0.05) (0.01) (0.00) (0.05) (0.01) (0.42) (0.31) (0.33) (0.06)
(0.00) (0.01) (0.01) (0.00) (0.01) (0.01) 0.00 0.00 0.00 0.00
(0.03) 0.00 0.00 (0.03) 0.00 0.00 0.00 0.00 0.00 0.00
----- ----- -------- ----- ----- ------- ----- ----- ----- -----
(0.41) (0.48) (0.27) (0.37) (0.44) (0.25) (0.88) (0.77) (0.75) (0.48)
----- ----- -------- ----- ----- ------- ----- ----- ----- -----
$ 4.98 $ 5.16 $ 5.16 $ 4.97 $ 5.15 $ 5.15 $ 14.47 $ 14.14 $ 12.18 $ 11.19
----- ----- -------- ----- ----- ------- ----- ----- ----- -----
----- ----- -------- ----- ----- ------- ----- ----- ----- -----
4.03% 9.57% 8.89% 3.25% 8.77% 8.25% 8.63% 22.72% 15.81% 26.76%
$66,375 $37,831 $17,863 $ 7,205 $ 8,048 $2,964 $88,430 $49,456 $29,289 $13,547
1.36% 1.51% 1.85% 2.01% 2.27% 3.25% 1.16% 1.20% 1.28% 1.53%
0.80% 0.41% 0.02% 1.53% 1.16% 0.74% 1.16% 1.20% 1.28% 1.48%
7.45% 8.04% 8.19% 6.71% 7.29% 7.47% 3.28% 3.58% 3.86% 4.15%
172.43% 221.42% 187.15% 172.43% 221.42% 187.15% 33.62% 14.71% 41.41% 25.84%
-----
<CAPTION>
Stock Funds
- -----------------------------------------------------------
Balanced Fund
Class A
- -----------------------------------------------------------
July 1, 1994*
December 31, December 31, through
1994 1998 1997 1996 1995 Dec. 31, 1994
<C> <C> <C> <C> <C> <C>
$ 9.85 $ 14.09 $12.15 $11.17 $ 9.22 $ 9.41
---- ----- ---- ---- ---- ---------
0.44 0.41 0.39 0.36 0.35 0.10
(0.62) 0.72 2.26 1.32 2.03 (0.07)
---- ----- ---- ---- ---- ---------
(0.18) 1.13 2.65 1.68 2.38 0.03
---- ----- ---- ---- ---- ---------
(0.44) (0.39) (0.40) (0.37) (0.37) (0.22)
0.00 (0.42) (0.31) (0.33) (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 0.00
---- ----- ---- ---- ---- ---------
(0.44) (0.81) (0.71) (0.70) (0.43) (0.22)
---- ----- ---- ---- ---- ---------
$ 9.23 $ 14.41 $14.09 $12.15 $11.17 $ 9.22
---- ----- ---- ---- ---- ---------
---- ----- ---- ---- ---- ---------
-1.87% 8.04% 22.05% 15.25% 26.08% 0.25%
$9,654 $10,139 $9,552 $4,802 $1,632 $ 586
1.56% 1.76% 1.91% 2.21% 3.25% 3.25%
0.80% 1.66% 1.69% 1.77% 1.99% 1.48%
4.85% 2.77% 3.07% 3.37% 3.66% 4.43%
29.19% 33.62% 14.71% 41.41% 25.84% 29.19%
</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
----------------------------------------------------------------------
December 31, December 31,
1998 1997 1996 1995 1994 1998 1997
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period........ $ 18.86 $ 17.82 $ 15.91 $ 13.52 $ 14.01 $ 18.80 $ 17.78
------ ------ ------ ----- ----- ----- -----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)............... 0.15 0.10 0.14 0.20 0.16 0.05 0.03
Net realized and unrealized gain on
investments................................ 4.71 4.58 3.06 4.26 (0.34) 4.67 4.56
------ ------ ------ ----- ----- ----- -----
Total from investment operations........... 4.86 4.68 3.20 4.46 (0.18) 4.72 4.59
------ ------ ------ ----- ----- ----- -----
LESS DISTRIBUTIONS:
From net investment income................. (0.15) (0.10) (0.14) (0.20) (0.16) (0.04) (0.03)
From net capital gains..................... (1.49) (3.53) (1.15) (1.87) (0.12) (1.49) (3.53)
In excess of realized gains................ 0.00 (0.01) 0.00 0.00 (0.03) 0.00 (0.01)
Tax return of capital distribution......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00
------ ------ ------ ----- ----- ----- -----
Total distributions........................ (1.64) (3.64) (1.29) (2.07) (0.31) (1.53) (3.57)
------ ------ ------ ----- ----- ----- -----
Net asset value, end of period.............. $ 22.08 $ 18.86 $ 17.82 $ 15.91 $ 13.52 $ 21.99 $ 18.80
------ ------ ------ ----- ----- ----- -----
------ ------ ------ ----- ----- ----- -----
Total return+............................... 25.83% 26.32% 20.16% 33.06% -1.24% 25.14% 25.82%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's).......... $248,606 $173,796 $138,604 $93,061 $69,590 $20,951 $18,227
Ratio of expenses to average net assets: #
Before expense reimbursement............. 1.06% 1.10% 1.16% 1.24% 1.28% 1.61% 1.69%
After expense reimbursement.............. 1.06% 1.10% 1.16% 1.24% 1.04% 1.56% 1.49%
Ratio of net investment income to average
net assets #............................... 0.73% 0.51% 0.82% 1.26% 1.21% 0.24% 0.14%
Portfolio turnover rate.................... 106.21% 118.26% 86.66% 125.28% 123.64% 106.21% 118.26%
<CAPTION>
Stock Funds
------------------------------------
Growth and Income Fund
Class A
------------------------------------
July 1, 1994*
December 31, through
1996 1995 Dec. 31, 1994
<S> <C> <C> <C> <C>
Net asset value, beginning of period........ $ 15.89 $13.52 $ 13.04
----- ---- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)............... 0.06 0.10 0.02
Net realized and unrealized gain on
investments................................ 3.05 4.26 0.67
----- ---- -----------
Total from investment operations........... 3.11 4.36 0.69
----- ---- -----------
LESS DISTRIBUTIONS:
From net investment income................. (0.07) (0.12) (0.06)
From net capital gains..................... (1.15) (1.87) (0.12)
In excess of realized gains................ 0.00 0.00 (0.03)
Tax return of capital distribution......... 0.00 0.00 0.00
----- ---- -----------
Total distributions........................ (1.22) (1.99) (0.21)
----- ---- -----------
Net asset value, end of period.............. $ 17.78 $15.89 $ 13.52
----- ---- -----------
----- ---- -----------
Total return+............................... 19.60% 32.32% 5.32%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's).......... $12,427 $4,292 $ 1,460
Ratio of expenses to average net assets: #
Before expense reimbursement............. 1.83% 2.39% 3.25%
After expense reimbursement.............. 1.66% 1.75% 1.66%
Ratio of net investment income to average
net assets #............................... 0.29% 0.84% 0.71%
Portfolio turnover rate.................... 86.66% 125.28% 123.64%
</TABLE>
* Commencement of operations.
+ 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.
# Annualized when the period presented is less than one year.
The accompanying notes are an integral part of these financial statements.
54
<PAGE> 56
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
Strategic Growth Fund
Class A Class B
---------------------------------------------------------------------------------------------------------
July 1, 1994*
December 31, December 31, through
1998 1997 1996 1995 1994 1998 1997 1996 1995 Dec. 31, 1994
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 16.36 $ 14.01 $ 12.69 $ 10.00 $10.14 $ 16.22 $ 13.92 $ 12.63 $ 9.98 $ 9.92
----- ----- ----- ----- ---- ----- ----- ----- ---- ----------
0.09 0.11 0.13 0.10 0.11 0.01 0.05 0.07 0.03 (0.05)
1.86 3.65 2.88 2.82 (0.14) 1.79 3.60 2.85 2.82 0.21
----- ----- ----- ----- ---- ----- ----- ----- ---- ----------
1.95 3.76 3.01 2.92 (0.03) 1.80 3.65 2.92 2.85 0.16
----- ----- ----- ----- ---- ----- ----- ----- ---- ----------
(0.09) (0.11) (0.13) (0.09) (0.11) 0.00 (0.05) (0.07) (0.06) (0.10)
(1.00) (1.30) (1.56) (0.14) 0.00 (1.00) (1.30) (1.56) (0.14) 0.00
(0.11) 0.00 0.00 0.00 0.00 (0.11) 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
----- ----- ----- ----- ---- ----- ----- ----- ---- ----------
(1.20) (1.41) (1.69) (0.23) (0.11) (1.11) (1.35) (1.63) (0.20) (0.10)
----- ----- ----- ----- ---- ----- ----- ----- ---- ----------
$ 17.11 $ 16.36 $ 14.01 $ 12.69 $10.00 $ 16.91 $ 16.22 $ 13.92 $12.63 $ 9.98
----- ----- ----- ----- ---- ----- ----- ----- ---- ----------
----- ----- ----- ----- ---- ----- ----- ----- ---- ----------
11.22% 26.89% 23.72% 29.14% -0.28% 10.39% 26.23% 23.13% 28.58% 1.57%
$73,626 $54,310 $22,253 $12,223 $6,471 $12,627 $12,344 $ 5,689 $2,332 $ 327
1.16% 1.21% 1.31% 1.65% 1.74% 1.71% 1.82% 2.12% 3.25% 3.25%
1.16% 1.21% 1.31% 1.62% 1.17% 1.66% 1.71% 1.81% 2.14% 1.80%
0.52% 0.86% 1.08% 1.03% 1.25% 0.03% 0.37% 0.59% 0.56% 0.82%
89.69% 85.55% 119.87% 73.32% 54.01% 89.69% 85.55% 119.87% 73.32% 54.01%
</TABLE>
55
<PAGE> 57
Financial Highlights selected data for a share outstanding throughout each
period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Stock Funds
---------------------------------------------------------------------------------------
Global Growth Fund
Class A Class B
---------------------------------------------------------------------------------------
April 30, 1996* April 30, 1996*
December 31, through December 31, through
1998 1997 Dec. 31, 1996 1998 1997 Dec. 31, 1996
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 12.69 $ 10.96 $ 10.14 $12.55 $10.91 $ 10.14
----- ----- ----------- ---- ---- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)........... 0.00 0.02 0.01 (0.06) (0.05) (0.03)
Net realized and unrealized gain on
investments............................ 2.21 2.65 1.10 2.17 2.63 1.08
----- ----- ----------- ---- ---- -----------
Total from investment operations....... 2.21 2.67 1.11 2.11 2.58 1.05
----- ----- ----------- ---- ---- -----------
LESS DISTRIBUTIONS:
From net investment income............. 0.00 0.00 (0.01) 0.00 0.00 0.00
From net capital gains................. (0.18) (0.84) (0.27) (0.18) (0.84) (0.27)
In excess of realized gains............ (0.16) (0.10) (0.01) (0.16) (0.10) (0.01)
Tax return of capital distribution..... 0.00 0.00 0.00 0.00 0.00 0.00
----- ----- ----------- ---- ---- -----------
Total distributions.................... (0.34) (0.94) (0.29) (0.34) (0.94) (0.28)
----- ----- ----------- ---- ---- -----------
Net asset value, end of period.......... $ 14.56 $ 12.69 $ 10.96 $14.32 $12.55 $ 10.91
----- ----- ----------- ---- ---- -----------
----- ----- ----------- ---- ---- -----------
Total return+........................... 16.19% 24.35% 10.89% 15.58% 23.64% 10.34%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)...... $36,549 $29,468 $ 13,552 $6,017 $5,691 $ 2,210
Ratio of expenses to average net
assets: #
Before expense reimbursement......... 1.53% 1.66% 2.36% 2.21% 2.48% 3.25%
After expense reimbursement.......... 1.53% 1.62% 1.51% 2.04% 2.14% 2.24%
Ratio of net investment income to
average net assets #................... 0.04% 0.14% 0.13% -0.46% -0.40% -0.75%
Portfolio turnover rate................ 74.52% 63.62% 64.89% 74.52% 63.62% 64.89%
</TABLE>
* Effective date of registration.
** Commencement of operations.
+ 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.
# Annualized when the period presented is less than one year.
The accompanying notes are an integral part of these financial statements.
56
<PAGE> 58
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
Emerging Growth Fund
Class A Class B
------------------------------------------------------------------------------
April 30, 1997** April 30, 1997**
December 31, through December 31, through
1998 Dec. 31, 1997 1998 Dec. 31, 1997
<S> <C> <C> <C> <C> <C>
$ 13.00 $ 10.00 $ 12.93 $ 10.00
---------- ------------ ---------- -----------
(0.09) (0.05) (0.17) (0.12)
0.84 3.05 0.84 3.05
---------- ------------ ---------- -----------
0.75 3.00 0.67 2.93
---------- ------------ ---------- -----------
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
---------- ------------ ---------- -----------
0.00 0.00 0.00 0.00
---------- ------------ ---------- -----------
$ 13.75 $ 13.00 $ 13.60 $ 12.93
---------- ------------ ---------- -----------
---------- ------------ ---------- -----------
5.77% 30.00% 5.18% 29.30%
$16,747 $ 10,028 $ 2,070 $ 2,235
1.59% 1.88% 2.62% 3.25%
1.49% 1.49% 2.08% 2.23%
-0.68% -0.59% -1.27% -1.35%
106.24% 17.06% 106.24% 17.06%
</TABLE>
57
<PAGE> 59
Notes to Financial Statements December 31, 1998
- --------------------------------------------------------------------------------
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. Class A shares are offered at net asset value 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 such lower-rated securities, but only to a much
more limited extent. As of December 31, 1998, Atlas Strategic
58
<PAGE> 60
- --------------------------------------------------------------------------------
Income Fund holds securities in default with an aggregate market value of
$124,457, representing less than 0.17% of the Fund's net assets.
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
Strategic Growth Fund and the Atlas Global Growth Fund for the period
ended December 31, 1998 are net of foreign withholding taxes of $3,413,
$1,009 and $46,412, 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. The sole TBA commitment as of December 31, 1998 was
$2,009,382 for Atlas U.S. Government and Mortgage Securities 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, premiums received are realized as a gain at expiration
date. If the position is closed prior to expiration, a gain or
59
<PAGE> 61
Notes to Financial Statements December 31, 1998
- --------------------------------------------------------------------------------
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.
60
<PAGE> 62
- --------------------------------------------------------------------------------
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 -- $100,831 and $39,952 in
1998 and 1997, respectively, resulting from the non-deductibility under
Internal Revenue Service regulations of certain wash sales and $4,389 and
$24,754 in 1998 and 1997, respectively, 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 Strategic Growth Fund -- $536,779 in 1998 resulting from
a difference in the required distribution amount determined under excise
tax rules versus that determined under generally accepted accounting
principles; and Atlas Global Growth Fund -- $62,831 and $2,513 in 1998
and 1997, respectively, resulting from the non-deductibility under
Internal Revenue Service regulations of certain wash sales and $480,272
and $201,451 in 1998 and 1997, respectively, 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, 1998, 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> <C> <C> <C> <C> <C>
Unrealized appreciation........ $ 0 $ 0 $ 0 $ 15,926 $ 4,581
Unrealized depreciation........ $ 0 $ 0 $ 0 $ (30) $ (29)
-------------------------------------------------------------------------------------------
Net unrealized appreciation.... $ 0 $ 0 $ 0 $ 15,896 $ 4,552
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Cost of securities for federal
income tax purposes............ $58,787 $40,311 $5,346 $200,975 $60,588
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
<CAPTION>
U.S. Government
and Mortgage
Securities Fund
-----------------------------------------------------------------------
<S> <C> <C>
Unrealized appreciation........ $ 4,257
Unrealized depreciation........ $ (158)
---------------------------------------------------------------------------------------
Net unrealized appreciation.... $ 4,099
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Cost of securities for federal
income tax purposes............ $220,206
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Strategic Balanced Growth and Strategic Growth Global Growth
Income Fund Fund Income Fund Fund Fund
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unrealized appreciation........ $ 2,512 $13,136 $ 71,260 $16,038 $11,135
Unrealized depreciation........ $(4,482) $(2,375) $ (3,467) $(5,311) $(2,109)
-------------------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation)................. $(1,970) $10,761 $ 67,793 $10,727 $ 9,026
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Cost of securities for federal
income tax purposes............ $74,319 $87,348 $201,911 $75,641 $33,232
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
<CAPTION>
Emerging
Growth Fund
-------------------------------------------------------------------------------------------
<S> <C> <C>
Unrealized appreciation........ $ 3,673
Unrealized depreciation........ $(1,063)
-------------------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation)................. $ 2,610
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Cost of securities for federal
income tax purposes............ $16,073
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
</TABLE>
61
<PAGE> 63
Notes to Financial Statements December 31, 1998
- --------------------------------------------------------------------------------
4. SHARE TRANSACTIONS
The following is a summary of share transactions for the periods ended
December 31, 1998 and December 31, 1997 (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
-----------------------------------------------------------------------------------
1998 1997 1998 1997 1998 1997 1998 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sold........ 50,707 68,098 800 516 31,055 35,350 2,701 4,628
Issued
in
reinvestment
of
dividends... 2,506 2,850 11 5 1,091 1,301 154 195
Redeemed.... (55,056) (76,384) (434) (477) (36,413) (29,255) (3,969) (5,758)
-----------------------------------------------------------------------------------
Net
increase
(decrease)... (1,843) (5,436) 377 44 (4,267) 7,396 (1,114) (935)
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
California Municipal National Municipal U.S. Government and Mortgage
Bond Fund Bond Fund Securities Fund
Class A Class B Class AClass B Class A Class B
---------------------------------------------------------------------------------------------
1998 1997 1998 1997 1998 1997 1998 1997 1998 1997 1998 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sold........ 2,694 1,246 19 212 731 276 14 88 4,755 1,295 37 173
Issued
in
reinvestment
of
dividends... 683 569 25 20 221 185 12 9 792 861 27 26
Issued
in
connection
with a
reorganization
(Note 7).... N/A 1,480 N/A 51 N/A 851 N/A 22 N/A 342 N/A 31
Redeemed.... (2,001) (2,155) (51) (62) (628) (647) (19) (19) (4,134) (4,897) (104) (106)
---------------------------------------------------------------------------------------------
Net
increase
(decrease).. 1,376 1,140 (7) 221 324 665 7 100 1,413 (2,399) (40) 124
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Strategic Income Fund Balanced Fund Growth and Income Fund
Class A Class B Class A Class B Class A Class B
--------------------------------------------------------------------------------------------------
1998 1997 1998 1997 1998 1997 1998 1997 1998 1997 1998 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sold......... 9,118 5,282 74 1,057 3,283 1,293 35 299 2,904 1,523 52 185
Issued
in
reinvestment
of
dividends.... 461 271 56 58 322 169 35 29 766 1,468 61 151
Redeemed..... (3,573) (1,680) (242) (128) (992) (368) (44) (45) (1,623) (1,554) (130) (65)
--------------------------------------------------------------------------------------------------
Net
increase
(decrease)... 6,006 3,873 (112) 987 2,613 1,094 26 283 2,047 1,437 (17) 271
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Strategic Growth Fund Global Growth Fund Emerging Growth Fund
Class A Class B Class A Class B Class A Class B
----------------------------------------------------------------------------------------------
1998 1997 1998 1997 1998 1997 1998 1997 1998 1997(1) 1998 1997(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sold........ 1,547 1,732 39 329 926 1,291 11 238 718 816 9 182
Issued
in
reinvestment
of
dividends... 255 263 41 58 31 159 5 31 0 0 0 0
Redeemed.... (817) (264) (94) (35) (768) (364) (49) (18) (272) (44) (30) (9)
----------------------------------------------------------------------------------------------
Net
increase
(decrease).. 985 1,731 (14) 352 189 1,086 (33) 251 446 772 (21) 173
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
</TABLE>
(1) For the period April 30, 1997 (inception of operations) to December 31,
1997.
5. PURCHASES AND SALES OF SECURITIES
Aggregate purchases and sales of securities (excluding short-term securities)
for the year ended December 31, 1998 were as follows (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> <C> <C> <C> <C> <C>
Purchases...................... $ 0 $ 0 $ 0 $44,261 $17,619
Sales.......................... $ 0 $ 0 $ 0 $30,978 $13,551
----------------------------------------------------------------------------------------------
<CAPTION>
U.S. Government
and Mortgage
Securities Fund
-----------------
<S> <C> <C>
Purchases...................... $47,603
Sales.......................... $67,338
----------------------------------------------------------------------------------------------
</TABLE>
62
<PAGE> 64
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Strategic Balanced Growth and Strategic Global Emerging
Income Fund Fund Income Fund Growth Fund Growth Fund Growth Fund
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Purchases...................... $137,455 $40,842 $238,446 $71,121 $34,518 $20,016
Sales.......................... $114,065 $20,788 $219,780 $58,467 $28,735 $15,019
--------------------------------------------------------------------------------------------------
</TABLE>
At December 31, 1998 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 2006
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury Money Fund.................................... $ -- $ -- $ -- $ 10 $ 5 $ 7
U.S. Government and Mortgage Securities Fund................ $487 $5,195 $7,507 $1,491 $280 $ 52
Emerging Growth Fund........................................ $ -- $ -- $ -- $ -- $ 28 $1,274
</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 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 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, 1998, 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 a rate of .75% per
annum. Class A 12b-1 fees due the Distributor were reduced in the amount of
$383,641. Management fees due the Adviser were reduced by $356,232. The Adviser
also absorbed $116,316 of other Fund expenses during the year. During the year
ended December 31, 1998, the Distributor received $103,560 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, 1998, Golden West Financial Corporation owned 80,862 Class A
shares in the California Municipal Bond Fund, 45,162 Class A shares in the
National Municipal Bond Fund and 116,324 Class A shares in the Emerging Growth
Fund.
63
<PAGE> 65
Notes to Financial Statements December 31, 1998
- --------------------------------------------------------------------------------
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. The transactions qualified as
tax-free reorganizations for federal income tax purposes.
<TABLE>
<CAPTION>
Share Shares Value of Combined Net Assets
Merged Fund/Surviving Fund Class Issued Issued Shares on 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.
Industry and sector concentrations greater than 10% of a Fund's net assets at
December 31, 1998 are as follows:
The California Municipal Money Fund has 21.19% in general obligation bonds,
11.05% in housing and 10.12% in community development.
The National Municipal Money Fund has 25.99% in industrial development, 21.87%
in health and 10.98% in airport/seaport.
The California Municipal Bond Fund has 18.63% in water/sewer and 11.76% in
general obligation bonds.
The National Municipal Bond Fund has 24.29% in general obligation bonds,
13.70% in public power and 12.59% in education.
The Balanced Fund has 20% in U.S. Treasury Notes and 15.53% in banks.
The Growth and Income Fund has 10.21% in banks.
The Strategic Growth Fund has 11.05% in computer hardware.
The Global Growth Fund has 12.48% in telecommunications, 12.18% in
broadcasting, radio and TV and 11.18% in drugs and health care.
The Emerging Growth Fund has 16.29% in computer software and 14.80% in
consumer goods and services.
64
<PAGE> 66
- --------------------------------------------------------------------------------
9. FORWARD CONTRACTS
Open forward contracts in the Funds to purchase and sell foreign currencies as
of December 31, 1998 were as follows:
<TABLE>
<CAPTION>
Contract
Settlement Amount Valuation as Unrealized
Date (000's) of 12/31/98 Gain (Loss)
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Strategic Income Fund:
Contracts to Buy:
- ----------------
Canadian Dollar.......................................... 01/27/99 120 CAD $ 81,828 $ 317
========== -------
Contracts to Sell:
- ---------------
Australian Dollar........................................ 02/22/99 435 AUD $ 266,553 4,192
British Pound Sterling................................... 02/22/99-03/09/99 340 GBP 563,548 (2,687)
Canadian Dollar.......................................... 01/11/99-01/27/99 400 CAD 261,056 (1,084)
German Deutsche Mark..................................... 02/08/99 670 DEM 402,743 (2,516)
Japanese Yen............................................. 02/08/99 6,000 JPY 53,278 (2,353)
New Zealand Dollar....................................... 01/26/99 140 NZD 73,649 1,629
---------- -------
$1,620,827 (2,819)
========== -------
Net unrealized loss...................................... $(2,502)
=======
Global Growth Fund:
- -------------------
Contracts to Sell:
- ---------------
French Franc............................................. 01/29/99 1,813 FRF $ 324,504 $(1,984)
========== =======
</TABLE>
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.
65
<PAGE> 67
Notes to Financial Statements December 31, 1998
- --------------------------------------------------------------------------------
As of December 31, 1998, the Atlas Strategic Income 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......................................... 03/99 8 $ 906,750 $ (3,687)
U.S. Treasury Bonds......................................... 03/99 19 2,427,844 (39,188)
United Kingdom Government Bonds............................. 03/99 1 201,514 790
--------
(42,085)
--------
Contracts to Sell:
- ---------------
U.S. Treasury Notes......................................... 03/99 3 $ 357,469 4,594
----------
Net unrealized loss......................................... $(37,491)
========
</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 my 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
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.
66
<PAGE> 68
- --------------------------------------------------------------------------------
Written option transactions in the Funds for the year ended December 31, 1998
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, 1997................... 0 $ 0 54,409,500 $ 7,319
Options written............................................ 39,748,300 12,604 136,501,370 65,515
Options closed or expired.................................. (776,500) (6,119) (190,910,870) (72,834)
Options exercised.......................................... 0 0 0 0
---------- ------- ------------ --------
Options outstanding at December 31, 1998................... 38,971,800 $ 6,485 0 $ 0
========== ======= ============ ========
Growth and Income Fund:
Options outstanding at December 31, 1997................... 0 $ 0 0 $ 0
Options written............................................ 100 3,716 0 0
Options closed or expired.................................. (100) (3,716) 0 0
Options exercised.......................................... 0 0 0 0
---------- ------- ------------ --------
Options outstanding at December 31, 1998................... 0 $ 0 0 $ 0
========== ======= ============ ========
</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, 1998, the value of these securities and the resulting
percentage of net assets amounted to $1,596,514 or 2.17% in the Atlas Strategic
Income Fund and $24,205 or 0.06% in the Atlas Global Growth 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.
67
<PAGE> 69
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, 1998,
the related statements of operations for the year ended December 31, 1998, the
statements of changes in net assets for the years ended December 31, 1998 and
1997 [Atlas Emerging Growth Fund for the year ended December 31, 1998 and 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, 1998, 1997,
1996, 1995, and 1994. 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, 1998 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, 1998, 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.
[/s/ Deloitte & Touche LLP]
Oakland, California
February 12, 1999
68
<PAGE> 70
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P.O. Box 1894
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- --------------
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AT-392
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