<PAGE>
ANNUAL REPORT
CLASS A SHARES
CLASS B SHARES
TRUST SHARES
JULY 31, 2000
[LOGO OF AMSOUTH FUNDS]
AMSOUTH BANK, INVESTMENT ADVISOR
BISYS FUND SERVICES, DISTRIBUTOR
NOT FDIC INSURED
www.amsouthfunds.com
<PAGE>
AmSouth(R) Funds
Table of Contents
<TABLE>
<S> <C>
Management Discussion of Performance
Message from the Chairman and Investment
Adviser......................................... 3
Fund Summary
Value Fund....................................... 4
Growth Fund...................................... 6
Capital Growth Fund.............................. 8
Large Cap Fund................................... 10
Mid Cap Fund..................................... 12
Small Cap Fund................................... 14
Equity Income Fund............................... 16
Balanced Fund.................................... 18
Select Equity Fund............................... 20
Enhanced Market Fund............................. 22
International Equity Fund........................ 24
Strategic Portfolios............................. 26
Bond Fund........................................ 32
Limited Term Bond Fund........................... 34
Government Income Fund........................... 36
Limited Term U.S. Government Fund................ 38
Municipal Bond Fund.............................. 40
Florida Tax-Exempt Fund.......................... 42
Tennessee Tax-Exempt Fund........................ 44
Limited Term Tennessee Tax-Exempt Fund........... 46
Money Market Funds............................... 48
Financial Statements
Report of Independent Auditors................... 50
Value Fund....................................... 51
Growth Fund...................................... 57
Capital Growth Fund.............................. 63
Large Cap Fund................................... 69
Mid Cap Fund..................................... 76
Small Cap Fund................................... 82
Equity Income Fund............................... 88
Balanced Fund.................................... 94
Select Equity Fund............................... 101
Enhanced Market Fund............................. 107
International Equity Fund........................ 117
Strategic Portfolios: Aggressive Growth
Portfolio....................................... 124
Strategic Portfolios: Growth Portfolio........... 129
Strategic Portfolios: Growth and Income
Portfolio....................................... 134
Strategic Portfolios: Moderate Growth and Income
Portfolio....................................... 139
Strategic Portfolios: Current Income Portfolio... 144
Bond Fund........................................ 149
Limited Term Bond Fund........................... 157
Government Income Fund........................... 164
Limited Term U.S. Government Fund................ 170
Municipal Bond Fund.............................. 175
Florida Tax-Exempt Fund.......................... 184
Tennessee Tax-Exempt Fund........................ 190
Limited Term Tennessee Tax-Exempt Fund........... 196
Prime Money Market Fund.......................... 200
U.S. Treasury Money Market Fund.................. 206
Treasury Reserve Money Market Fund............... 210
Tax-Exempt Money Market Fund..................... 214
Institutional Prime Obligations Fund............. 222
Notes to Financial Statements...................... 228
</TABLE>
1
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[This Page Intentionally Left Blank]
2
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Message From the Chairman and Investment Advisor
Dear Shareholders:
We are pleased to send you this annual report for the 12 months ended July 31,
2000, a time of significant and productive transition for our fund family.
As you may know, in 1999 AmSouth Bank bought First American Bank of Nashville,
Tennessee. On March 13 of this year, First American's ISG Funds merged into the
AmSouth Funds.
In our last report to you, shortly before the merger took effect, we wrote that
we expected the joining of our two fund families to provide you with more fund
choices and additional diversification, among other benefits. Now that the
merger is complete, we are happy to report that our optimism was justified.
We now offer 29 funds, encompassing nearly every major asset class. As of July
31, our total assets under management exceeded $7.1 billion.
By all measures, the merger has been a success, and we intend to continue to
leverage our combined resources in the months and years ahead.
Stocks rolled up and down and often roiled investors' constitutions
For a period that saw unusual levels of volatility, the year just past produced
returns that seemed unexpectedly tame--at least when viewed from start to fin-
ish. For the 12 months ended July 31, 2000, the Standard & Poor's 500 Stock In-
dex/1/ (the "S&P 500"), the stock market's leading indicator, rose a modest
8.97%.
While below historical levels, and perhaps disappointing to investors who have
come to expect high double-digit returns from equities, the market's perfor-
mance certainly was not disastrous. Considering the fact that inflation re-
mained benign, a return of nearly nine percent would seem adequate.
However, the markets' seemingly mild, point-to-point performance masked periods
of turbulent activity. For the first eight months of the fiscal year, invest-
ment sentiment was mostly white-hot about technology, telecommunications and
biotech issues, and ice-cold for stocks derisively grouped as "old economy"
names. Traditional "value" investing--buying stocks with attractive fundamental
valuations and solid earnings prospects--did not work as well as it has many
times in the past.
Then, as often happens in the financial markets, the tide turned. Call it a
correction, a sector rotation or a return to reason, but most of the high-fly-
ing tech stocks plummeted to earth. The Nasdaq Composite Index,/2/ home to many
technology names, reached a peak on March 10, turned sour and did not begin to
regain its balance until late May. The S&P 500 kept rising until the end of
March, but then began to lower, once concerns over rising interest rates, cor-
porate earnings and excessive valuations haunted the markets.
As we write this letter during the third week of August, we are able to report
that stocks are again showing some life. Second-quarter earnings have been sat-
isfactory, and most analysts believe the Federal Reserve Board (the "Fed") is
done raising interest rates for the time being. We now are in a phase that we
believe will test investors' stock-picking skills. Not every sector or stock
will perform well; it is up to us, as your fund managers, to continue to help
you build a foundation for long-term investment success.
Bonds swam against the tide of rising rates
One of the Fed's primary goals is to stave off potentially damaging inflation-
ary pressures before they have the chance to form and gain momentum. The Fed
uses its power to raise short-term rates--specifically, the federal funds
rate--to dampen the threat of inflation.
With the economy growing at a robust pace, the Fed last year decided to embark
on a series of interest-rate hikes. The first was announced in June 1999,
shortly before our most recent 12-month period began. Since then, there have
been six more rate hikes.
When interest rates go up, bond prices generally go down, which is why, for the
first six months of our reporting period, bonds struggled against the handicap
of rising rates. In this difficult climate, we maintained our investment disci-
pline: investing your money in relatively secure issues that offered solid cur-
rent income and prospects for moderate, long-term gains.
In recent months, conditions have improved. Longer-term securities benefited
from the U.S. Treasury's decision to buy back long bonds; long Treasuries have
done well since the beginning of the calendar year 2000. With the economy slow-
ing down, observers hope that the Fed's actions over the last 14 months will
result in a "soft landing" that will mute the threat of inflation without kill-
ing domestic growth.
We will remain cautiously optimistic over the next six to 12 months about
both stocks and bonds. As we have said many times before, we are not short-term
investors. We regard the markets with a long-term perspective, and we hope to
continue serving your needs and helping you achieve your financial goals.
Sincerely,
/s/ J. David Huber
J. David Huber
Chairman
AmSouth Funds
/s/ Brian B. Sullivan
Brian B. Sullivan
Chief Investment Officer
AmSouth Bank
/1/The Standard & Poor's 500 Stock Index is an unmanaged index generally repre-
sentative of the U.S. stock market as a whole. The index does not reflect
the deduction of fees associated with a mutual fund, such as investment man-
agement and fund accounting fees. Investors cannot invest directly in an in-
dex, although they can invest in its underlying securities.
/2/ The Nasdaq Composite Index is a market capitalization price-only index that
tracks the performance of domestic common stocks traded on the regular Nasdaq
market as well as National Market System-traded foreign common stocks and
ADR's.
Investments in the Funds are neither guaranteed by, nor obligations of, AmSouth
Bank or any other bank and are not insured by the FDIC or any other government
agency. Investment in mutual funds involve risk, including the possible loss of
principal. This material must be preceded or accompanied by a current prospec-
tus.
3
<PAGE>
AmSouth Value Fund
Portfolio Manager
Pedro (Pete) Verdu, CFA
Senior Vice President
AmSouth Bank
Pete has been an analyst and
portfolio manager for more than 28
years. He manages the AmSouth Value
Fund and AmSouth Balanced Fund.
Pete has a B.A. in economics and an
M.B.A. in finance.
PORTFOLIO MANAGER'S PERSPECTIVE
"With the AmSouth Value Fund, we apply a 'value investing' approach consistently
over full market cycles. We do not chase fads or glamour stocks. Instead, we
look for sound companies with good fundamentals at bargain prices. By
consistently following this approach to investing, we hope to provide our
shareholders with superior returns over a full market cycle, with downside
protection in volatile markets."
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2000, the AmSouth Value Fund produced a to-
tal return of -8.19% (Class A Shares at NAV). In comparison, the S&P 500 Stock
Index rose 8.97%.
Q. What factors affected your performance?
A. Our decline came in the first six months of the period, an extraordinarily
difficult time for value-oriented funds; it was perhaps the worst such period
in 15 to 20 years.
We were hampered by an environment in which investors focused on a very small
group of growth stocks--principally in the technology, Internet and biotechnol-
ogy sectors. This narrow focus, which had driven investor sentiment for the
last two years, became even more pronounced as investors decided that the "new
economy" was the only thing worthwhile.
But in March, the market rotated sharply away from technology stocks. Since
then, the Fund has had good performance, relative to the market as a whole.
As always, we exercised a strong preference on stocks whose prices, in our
opinion, did not reflect their true value. Throughout the period, we favored
such sectors as financial services and raw materials (including energy and pa-
per and forest products). We believe these areas have excellent earnings pros-
pects--particularly, in the short term, the energy and forest products. The
stocks we own are selling at the largest discount to the market in almost 30
years.
In financial services, we have had our greatest exposure to the insurance
group, including stocks such as St. Paul Cos., Inc. (3.69% of net assets),
Chubb Corp. (3.31%) and Marsh & McLennen Cos., Inc. (2.98%). All have done sig-
nificantly better than their sector as a whole.++
We have also done well with many of our energy holdings. Over the last six
months, the price of oil has risen sharply, which has helped to boost the
prices of holdings such as Kerr-McGee Corp. (2.41%), Burlington Resources, Inc.
(1.17%), USX-Marathon Group (2.00%) and Texaco, Inc. (2.01%).++
As of July 31, 2000, the Fund's top five holdings were St. Paul Cos., Inc.
(3.69%), Washington Mutual, Inc. (3.66%), Chubb Corp. (3.31%), CVS Corp.
(3.21%) and C.R. Bard, Inc. (3.02%).++
Q. What is your outlook for the next six to 12 months?
A. It appears to us that, since March, investors have been reassessing what
probably were excessively high expectations for Internet and certain technology
names. Going forward, we anticipate that our particular value style has the po-
tential to do well, especially relative to the overall market. We expect our
overweightings in energy, financial services and the paper industry to be par-
ticularly constructive.
++ The Fund's portfolio composition is subject to change.
4
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AmSouth Value Fund
Value of a $10,000 Investment
[GRAPH]
AmSouth AmSouth AmSouth
Value Fund Value Fund Value Fund S&P 500
(Class A Shares) (Class B Shares) (Trust Shares) Stock Index
7/31/90 9,554 10,000 10,000 10,000
8/31/90 8,671 9,070 9,076 9,096
9/30/90 8,256 8,628 8,641 8,653
10/31/90 8,167 8,526 8,548 8,617
11/30/90 8,786 9,161 9,196 9,174
12/31/90 9,096 9,478 9,521 9,429
1/31/91 9,488 9,887 9,931 9,840
2/28/91 10,137 10,556 10,611 10,543
3/31/91 10,315 10,726 10,796 10,799
4/30/91 10,289 10,692 10,770 10,824
5/31/91 10,669 11,077 11,167 11,291
6/30/91 10,080 10,454 10,551 10,774
7/31/91 10,363 10,737 10,847 11,276
8/31/91 10,391 10,760 10,876 11,543
9/30/91 10,237 10,590 10,715 11,350
10/31/91 10,333 10,680 10,816 11,503
11/30/91 9,843 10,170 10,302 11,039
12/31/91 10,843 11,190 11,349 12,302
1/31/92 10,965 11,304 11,477 12,073
2/29/92 11,192 11,531 11,714 12,229
3/31/92 10,944 11,270 11,456 11,991
4/30/92 11,387 11,712 11,919 12,343
5/31/92 11,464 11,780 11,999 12,404
6/30/92 11,236 11,542 11,761 12,219
7/31/92 11,703 12,007 12,250 12,718
8/31/92 11,282 11,565 11,809 12,458
9/30/92 11,455 11,735 11,990 12,604
10/31/92 11,502 11,769 12,040 12,648
11/30/92 11,906 12,177 12,462 13,079
12/31/92 11,963 12,222 12,522 13,239
1/31/93 12,282 12,540 12,855 13,350
2/28/93 12,458 12,710 13,040 13,532
3/31/93 12,874 13,118 13,475 13,817
4/30/93 12,914 13,152 13,517 13,483
5/31/93 13,300 13,537 13,922 13,844
6/30/93 13,269 13,492 13,889 13,884
7/31/93 13,318 13,526 13,940 13,829
8/31/93 13,823 14,036 14,469 14,353
9/30/93 13,633 13,832 14,270 14,243
10/31/93 13,863 14,048 14,510 14,538
11/30/93 13,776 13,946 14,420 14,399
12/31/93 14,162 14,331 14,824 14,573
1/31/94 14,804 14,966 15,495 15,069
2/28/94 14,452 14,603 15,127 14,660
3/31/94 13,768 13,900 14,411 14,021
4/30/94 13,843 13,957 14,490 14,201
5/31/94 14,166 14,274 14,828 14,434
6/30/94 13,977 14,070 14,630 14,080
7/31/94 14,372 14,456 15,043 14,542
8/31/94 14,813 14,887 15,505 15,138
9/30/94 14,500 14,558 15,177 14,768
10/31/94 14,668 14,717 15,353 15,100
11/30/94 14,035 14,070 14,691 14,550
12/31/94 14,215 14,240 14,879 14,766
1/31/95 14,483 14,501 15,160 15,149
2/28/95 15,101 15,102 15,807 15,739
3/31/95 15,548 15,533 16,275 16,204
4/30/95 16,138 16,111 16,893 16,681
5/31/95 16,587 16,553 17,362 17,347
6/30/95 16,613 16,565 17,390 17,750
7/31/95 17,139 17,075 17,941 18,339
8/31/95 17,173 17,086 17,976 18,385
9/30/95 17,528 17,426 18,347 19,161
10/31/95 17,213 17,098 18,018 19,092
11/30/95 17,896 17,766 18,733 19,931
12/31/95 18,109 17,959 18,956 20,314
1/31/96 18,651 18,481 19,523 21,006
2/29/96 18,885 18,696 19,768 21,201
3/31/96 19,376 19,172 20,282 21,405
4/30/96 19,980 19,751 20,915 21,720
5/31/96 20,203 19,955 21,148 22,281
6/30/96 20,027 19,762 20,963 22,365
7/31/96 19,038 18,776 19,928 21,377
8/31/96 19,690 19,399 20,611 21,828
9/30/96 20,125 19,819 21,066 23,058
10/31/96 20,045 19,717 20,982 23,693
11/30/96 21,224 20,862 22,216 25,484
12/31/96 20,959 20,590 21,941 24,979
1/31/97 21,763 21,361 22,782 26,539
2/28/97 22,484 22,052 23,537 26,747
3/31/97 22,025 21,576 23,056 25,648
4/30/97 22,550 22,075 23,606 27,179
5/31/97 24,218 23,685 25,352 28,834
6/30/97 25,131 24,558 26,307 30,128
7/31/97 27,100 26,463 28,369 32,524
8/31/97 26,155 25,522 27,380 30,701
9/30/97 27,784 27,098 29,091 32,383
10/31/97 26,356 25,709 27,602 31,301
11/30/97 27,214 26,524 28,505 32,750
12/31/97 27,729 27,011 29,012 33,313
1/31/98 27,816 27,084 29,122 33,681
2/28/98 29,812 29,004 31,206 36,110
3/31/98 31,405 30,529 32,883 37,960
4/30/98 31,118 30,246 32,602 38,341
5/31/98 31,022 30,124 32,507 37,682
6/30/98 31,350 30,425 32,846 39,213
7/31/98 30,445 29,526 31,903 38,795
8/31/98 26,371 25,563 27,648 33,195
9/30/98 28,036 27,151 29,389 35,312
10/31/98 30,423 29,451 31,901 38,185
11/30/98 31,887 30,841 33,445 40,501
12/31/98 32,613 31,521 34,272 42,833
1/31/99 32,642 31,532 34,310 44,624
2/28/99 31,925 30,820 33,563 43,237
3/31/99 32,781 31,628 34,471 44,968
4/30/99 35,224 33,970 37,046 46,708
5/31/99 35,319 34,037 37,150 45,605
6/30/99 36,123 34,780 38,004 48,136
7/31/99 34,987 33,669 36,825 46,633
8/31/99 33,853 32,550 35,627 46,402
9/30/99 32,122 30,870 33,828 45,130
10/31/99 33,542 32,211 35,314 47,986
11/30/99 33,219 31,877 34,982 48,972
12/31/99 33,873 32,506 35,649 51,846
1/31/00 31,927 30,607 33,602 49,241
2/29/00 29,756 28,507 31,324 48,308
3/31/00 33,413 32,002 35,171 53,034
4/30/00 33,020 31,607 34,774 51,439
5/31/00 33,577 32,107 35,348 50,383
6/30/00 31,613 30,212 33,301 51,626
7/31/00 32,123 30,686 33,838 50,818
The Class B contingent deferred sales charge (CDSC) is not included in the above
graph, since the performance is for more than six years and the CDSC would no
longer apply.
Average Annual Total Return
As of Inception 1 5 10
July 31, 2000 Date Year Year Year
Class A Shares* 12/1/88 (12.32%) 12.35% 12.38%
Class B Shares** 9/3/97 1 (12.72%) 12.19% 11.87%
Trust Shares 9/2/97 1 (8.11%) 13.53% 12.96%
*Reflects maximum 4.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 7/31/90 to 7/31/00 versus a similar investment in the Fund's benchmark,
and represents the reinvestment of dividends and capital gains in the Fund.
The performance of the AmSouth Value Fund is measured against the S&P 500
Stock Index, an unmanaged index generally representative of the U.S. stock
market as a whole. The index does not reflect the deduction of fees associ-
ated with a mutual fund, such as investment management and fund accounting
fees. The Fund's performance does reflect the deduction of fees for these
value-added services. Investors cannot invest directly in an index, although
they can invest in its underlying securities. During the period shown, the
Advisor waived and/or voluntarily reimbursed fees for various expenses. Had
these waivers and/or reimbursements not been in effect, performance quoted
would have been lower.
/1/Performance for the Class B and Trust Shares, which commenced operations
on 9/3/97 and 9/2/97, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date.
The historical performance for the Class B Shares has been adjusted to
reflect the higher 12b-1 fees and the contingent deferred sales charge
(CDSC).
Effective 12/1/99, the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
5
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AmSouth Growth Fund
Portfolio Manager
Dennis A. Johnson, CFA
President and Chief Investment
Officer,
Peachtree Asset Management (sub-
advisor)
Dennis has a B.S. in economics and
an M.S. in finance. His 18 years of
investment experience are backed by
an investment team with an average
of nine years of experience.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Growth Fund uses a well-defined and rigorously proven investment
process to select domestic large-capitalization growth stocks. We buy
companies we feel can sustain above-average growth in operating earnings per
share. We sell a stock when we feel it is overvalued when it experiences
sustained deterioration in its earnings or fundamentals."
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2000, the Fund produced a total return of
10.27% (Class A Shares at NAV). In comparison, the S&P 500 Stock Index rose
8.97%.
Despite unusual volatility in the market, including a sharp decline this past
spring in the price of technology issues, the Fund outperformed its benchmark
and gave shareholders solid returns in the face of a challenging investment
climate.
Q. What factors affected your performance?
A. Our success was due in large measure to being overweighted in market sectors
that performed well and underweighted in those that did not.
We had significant weightings in such strong sectors as health care, where we
had holdings in Pharmacia Corp., formerly Pharmacia Upjohn (2.85% of net as-
sets), United Health Group (2.60%), Universal Health Services (2.34%) and Cigna
(0.69%); and producer durable stocks such as General Electric Co. (4.69%) and
Tyco International, Ltd. (3.01%).++
We also held a large number of technology stocks, and with technology powering
the market averages for much of the period, this allocation proved to be very
profitable for us. Some of our tech winners included Sun Microsystems, Inc.
(3.16%), Analog Devices (2.12%) and Apple Computer (0.97%).++
Just as important as picking the right stocks and sectors is avoiding the wrong
ones. During the period, we had little exposure to the consumer staples and fi-
nancial sectors, which helped us avoid some major disappointments. We also
stayed clear of basic industry names, which also helped our performance.
While it might seem to some shareholders that we emphasized investments in what
is known as the "new economy," our investment process actually does not permit
us to make such distinctions. The investments we make, including those in the
technology area, are in companies that we feel offer outstanding growth poten-
tial. In some instances, these companies boast technological advances and are
driven by the Internet. What these companies have in common are their growth
prospects, the forecasts for earnings continue to rise and valuation levels ap-
pear to reflect true upside potential.
Rather than trying to pick the next hot sector, we spend our time and resources
identifying the right companies, regardless of sector.
As of July 31, 2000, the Fund's top five holdings were General Electric Co.
(4.69% of net assets), Sun Microsystems, Inc. (3.16%), Tyco International Ltd.
(3.01%), Eastman Chemical Co. (2.98%) and Knight-Ridder, Inc. (2.90%).++
Q. What is your outlook for the next six to 12 months?
A. We anticipate that technology will do well. We expect to see a relatively
narrow market; we believe only a small group of stocks will drive market re-
turns. Consequently, stock selection will be a very critical factor, so we will
continue to do our research and adhere to a discipline that will keep us on the
right track.
++ The Fund's portfolio composition is subject to change.
6
<PAGE>
AmSouth Growth Fund
[GRAPH]
AmSouth AmSouth AmSouth
Growth Fund Growth Fund Growth Fund S&P 500
(Class A Shares) (Class B Shares) (Trust Shares) Stock Index
8/3/97 9,551 10,000 10,000 10,000
8/31/97 9,121 9,540 9,550 9,440
9/30/97 9,599 10,040 10,050 9,957
10/31/97 9,188 9,600 9,620 9,624
11/30/97 9,436 9,860 9,890 10,070
12/31/97 9,647 10,070 10,110 10,242
1/31/98 9,685 10,110 10,150 10,356
2/28/98 10,535 10,980 11,040 11,103
3/31/98 11,003 11,470 11,540 11,671
4/30/98 10,965 11,420 11,500 11,789
5/31/98 10,707 11,140 11,230 11,586
6/30/98 11,232 11,690 11,790 12,057
7/31/98 11,098 11,540 11,650 11,928
8/31/98 8,978 9,330 9,430 10,206
9/30/98 9,924 10,300 10,410 10,857
10/31/98 10,821 11,230 11,360 11,741
11/30/98 11,519 11,950 12,100 12,453
12/31/98 12,936 13,404 13,594 13,170
1/31/99 13,639 14,120 14,330 13,720
2/28/99 12,811 13,263 13,463 13,294
3/31/99 13,273 13,727 13,947 13,826
4/30/99 13,177 13,626 13,856 14,361
5/31/99 12,657 13,071 13,302 14,022
6/30/99 13,899 14,351 14,622 14,800
7/31/99 13,514 13,958 14,219 14,338
8/31/99 13,388 13,827 14,098 14,267
9/30/99 13,254 13,676 13,957 13,876
10/31/99 14,389 14,845 15,156 14,754
11/30/99 14,794 15,248 15,579 15,057
12/31/99 15,321 15,780 16,131 15,941
1/31/00 14,652 15,079 15,431 15,140
2/29/00 15,291 15,728 16,110 14,853
3/31/00 16,778 17,244 17,677 16,306
4/30/00 16,289 16,742 17,176 15,816
5/31/00 15,101 15,508 15,922 15,491
6/30/00 15,431 15,832 16,267 15,873
7/31/00 14,902 14,978 15,713 15,625
-------------------------------------------------------------------
Average Annual Total Return
-------------------------------------------------------------------
As of Inception 1 Since
July 31, 2000 Date Year Inception
-------------------------------------------------------------------
Class A Shares* 8/3/97 5.32% 14.28%
-------------------------------------------------------------------
Class B Shares** 9/3/97/1/ 4.46% 14.47%
-------------------------------------------------------------------
Trust Shares 9/2/97/1/ 10.51% 16.32%
-------------------------------------------------------------------
* Reflects maximum 4.50% sales charge
** Reflects applicable contingent deferred sales charge (maximum 5.00%)
The chart above represents a comparison of a hypothetical $10,000 investment
from 8/3/97 to 7/31/00 in the indicated share class, versus a similar in-
vestment in the Fund's benchmark, and represents the reinvestment of divi-
dends and capital gains in the Fund.
The performance of the AmSouth Growth Fund is measured against the S&P 500
Stock Index, an unmanaged index generally representative of the U.S. stock
market as a whole. The index does not reflect the deduction of fees associ-
ated with a mutual fund, such as investment management and fund accounting
fees. The Fund's performance does reflect the deduction of fees for these
value-added services. Investors cannot invest directly in an index, although
they can invest in its underlying securities. During the period shown, the
Advisor waived and/or voluntarily reimbursed fees for various expenses. Had
these waivers and/or reimbursements not been in effect, performance quoted
would have been lower.
/1/Performance for the Class B and Trust Shares, which commenced operations
on 9/3/97 and 9/2/97, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date. The
historical performance for the Class B Shares has been adjusted to reflect
the higher 12b-1 fees and the contingent deferred sales charge (CDSC).
Effective 12/1/99, the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
7
<PAGE>
AmSouth Capital Growth Fund
Portfolio Manager
Charles E. Winger, Sr., CFA
Senior Vice President
AmSouth Bank
Charley has 27 years of investment
management experience, including 11
years with First American National
Bank. He earned a Chartered
Financial Analyst designation and
holds his M.B.A. and a B.A. in
psychology from the University of
Tennessee.
PORTFOLIO MANAGER'S PERSPECTIVE
"As a growth-oriented fund, the Capital Growth Fund focuses on industry
leaders with high earnings per share. We generally look for annual earnings
growth of 15% or higher. After identifying strong themes, such as technology
or health care, we select companies that have financial strength, good return
on equity, reasonable debt-to-equity ratios and strong revenue growth. We
apply sell discipline through price targets and downside alerts."
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2000, the Fund's total return was 19.06%
(Class A Shares at NAV). In comparison, the Lipper Growth Fund Index/1/ was up
17.88%, and the S&P 500 Stock Index rose 8.97%.
Q. What factors affected your performance?
A. Throughout the period, we saw an enormous amount of sector rotation, as in-
vestors moved in and out of one area of the market after another. We did our
best to stay in front of that rotation, to be ahead of the curve, rather than
behind it.
For example, in technology--the strength of our tech holdings is the main rea-
son we did so well during the period--we never were more than five percent
above or below the S&P 500's tech weighting. Therefore, although tech was ex-
tremely volatile, and suffered some nerve-wracking declines at times, it was an
immensely profitable sector for the 12 months as a whole.
We are growth managers. We try to take advantage of momentum; we are more
likely to buy stocks when they are going up than when they are falling. There-
fore, we often held large positions in such volatile industries as semiconduc-
tors and software manufacturing. Individual names in the portfolio included
Altera Corp. (0.55% of net assets), LSI Logic Corp. (0.74%), Oracle Corp.
(1.99%), Cisco Systems, Inc. (1.48%), Sun Microsystems, Inc. (2.62%), EMC Corp.
(2.56%) and Corning, Inc. (1.02%), which was our biggest winner.++
We also profited from our positions in health care and drug companies, though
in the final two months of the period, we trimmed our positions in pure pharma-
ceutical plays and redeployed assets in medical product companies and health
care service companies--including Cardinal Health Care, Inc. (2.57%),
Medtronic, Inc. (1.82%) and Stryker Corp. (2.27%).++
As of July 31, 2000 the Fund's top five holdings were Northern Trust Company
(3.02%), American International Group (2.92%), Sun Microsystems, Inc. (2.62%),
Pfizer, Inc. (2.60%) and Cardinal Care, Inc. (2.57%).++
Q. What is your outlook for the next six to 12 months?
A. What we believe most investors are facing now is a slowing economy, which
will probably have negative implications for corporate profits. We intend to
keep the cash allocation in the portfolio to a minimum, therefore the portfolio
will stay close to fully invested.
/1/The Lipper Growth Fund Index is an index comprised of managed funds
that normally invest in companies with long-term earnings expected to
grow significantly faster than the earnings of the stocks represented
in the major unmanaged stock indices.
++ The Fund's portfolio composition is subject to change.
8
<PAGE>
AmSouth Capital Growth Fund
Value of a $10,000 Investment
[GRAPH]
AmSouth AmSouth AmSouth
Capital Capital Capital
Growth Fund Growth Fund Growth Fund S&P 500
(Class A Shares) (Class B Shares) (Trust Shares) Stock Index
7/31/90 9,553 10,000 10,000 10,000
8/31/90 8,780 9,170 9,191 9,096
9/30/90 8,471 8,842 8,867 8,653
10/31/90 8,333 8,687 8,723 8,617
11/30/90 8,763 9,131 9,173 9,174
12/31/90 8,918 9,286 9,335 9,429
1/31/91 9,313 9,691 9,748 9,840
2/28/91 9,863 10,251 10,324 10,543
3/31/91 10,034 10,425 10,504 10,799
4/30/91 9,897 10,270 10,360 10,824
5/31/91 10,155 10,541 10,629 11,291
6/30/91 9,639 10,000 10,090 10,774
7/31/91 10,275 10,637 10,755 11,276
8/31/91 10,498 10,869 10,989 11,543
9/30/91 10,172 10,521 10,647 11,350
10/31/91 10,395 10,734 10,881 11,503
11/30/91 10,034 10,367 10,504 11,039
12/31/91 11,117 11,467 11,637 12,302
1/31/92 10,825 11,158 11,331 12,073
2/29/92 10,876 11,197 11,385 12,229
3/31/92 10,653 10,965 11,151 11,991
4/30/92 10,722 11,023 11,223 12,343
5/31/92 10,790 11,081 11,295 12,404
6/30/92 10,361 10,637 10,845 12,219
7/31/92 10,670 10,946 11,169 12,718
8/31/92 10,498 10,753 10,989 12,458
9/30/92 10,842 11,100 11,349 12,604
10/31/92 11,082 11,332 11,601 12,648
11/30/92 11,546 11,795 12,086 13,079
12/31/92 11,838 12,085 12,392 13,239
1/31/93 12,045 12,297 12,608 13,350
2/28/93 11,976 12,220 12,536 13,532
3/31/93 12,320 12,548 12,896 13,817
4/30/93 11,770 11,988 12,320 13,483
5/31/93 11,993 12,201 12,554 13,844
6/30/93 11,924 12,124 12,482 13,884
7/31/93 11,976 12,162 12,536 13,829
8/31/93 12,234 12,413 12,806 14,353
9/30/93 12,302 12,471 12,878 14,243
10/31/93 12,165 12,317 12,734 14,538
11/30/93 12,062 12,201 12,626 14,399
12/31/93 12,251 12,394 12,824 14,573
1/31/94 12,732 12,857 13,327 15,069
2/28/94 12,560 12,683 13,147 14,660
3/31/94 12,027 12,124 12,590 14,021
4/30/94 11,942 12,027 12,500 14,201
5/31/94 12,010 12,085 12,572 14,434
6/30/94 11,632 11,699 12,176 14,080
7/31/94 11,924 11,988 12,482 14,542
8/31/94 12,474 12,529 13,058 15,138
9/30/94 12,234 12,278 12,806 14,768
10/31/94 12,371 12,413 12,950 15,100
11/30/94 11,959 11,988 12,518 14,550
12/31/94 12,199 12,220 12,770 14,766
1/31/95 12,526 12,529 13,112 15,149
2/28/95 13,007 12,992 13,615 15,739
3/31/95 13,316 13,301 13,939 15,204
4/30/95 13,299 13,263 13,921 16,681
5/31/95 13,780 13,745 14,424 17,347
6/30/95 13,969 13,919 14,622 17,750
7/31/95 14,674 14,614 15,360 18,339
8/31/95 14,536 14,459 15,216 18,385
9/30/95 15,086 15,000 15,791 19,161
10/31/95 14,983 14,884 15,683 19,092
11/30/95 15,808 15,676 16,547 19,931
12/31/95 15,911 15,772 16,655 20,314
1/31/96 16,529 16,371 17,302 21,006
2/29/96 16,942 16,776 17,734 21,201
3/31/96 17,182 16,988 17,986 21,405
4/30/96 17,646 17,432 18,471 21,720
5/31/96 17,955 17,722 18,795 22,281
6/30/96 17,938 17,703 18,777 22,365
7/31/96 16,838 16,602 17,626 21,377
8/31/96 17,165 16,911 17,968 21,828
9/30/96 18,110 17,819 18,957 23,058
10/31/96 18,883 18,571 19,766 23,693
11/30/96 20,000 19,653 20,935 25,484
12/31/96 19,450 19,093 20,360 24,979
1/31/97 20,498 20,097 21,457 26,539
2/28/97 20,189 19,788 21,133 26,747
3/31/97 19,257 18,861 20,157 25,648
4/30/97 20,478 20,039 21,435 27,179
5/31/97 21,750 21,255 22,767 28,834
6/30/97 22,603 22,085 23,660 30,128
7/31/97 24,548 23,958 25,696 32,524
8/31/97 23,326 22,741 24,417 30,701
9/30/97 24,554 23,919 25,702 32,383
10/31/97 24,020 23,378 25,143 31,301
11/30/97 24,726 24,054 25,882 32,750
12/31/97 25,439 24,730 26,402 33,313
1/31/98 25,578 24,846 26,547 33,681
2/28/98 27,585 26,525 28,649 36,110
3/31/98 28,877 27,761 30,006 37,960
4/30/98 28,778 27,645 29,902 38,341
5/31/98 27,645 26,544 28,737 37,682
6/30/98 29,056 27,876 30,200 39,213
7/31/98 29,314 28,089 30,470 38,795
8/31/98 25,419 24,344 26,433 33,195
9/30/98 27,393 26,222 28,502 35,312
10/31/98 28,886 27,634 30,045 38,185
11/30/98 30,280 28,949 31,504 40,501
12/31/98 33,593 32,084 34,957 42,833
1/31/99 35,296 33,720 36,743 44,624
2/28/99 34,350 32,798 35,751 43,237
3/31/99 35,344 33,720 36,793 44,968
4/30/99 35,107 33,467 36,570 46,708
5/31/99 33,853 32,268 35,280 45,605
6/30/99 36,479 34,757 38,009 48,136
7/31/99 35,817 34,112 37,314 46,633
8/31/99 35,273 33,582 36,768 46,402
9/30/99 34,593 32,920 36,081 45,130
10/31/99 36,187 34,402 37,727 47,986
11/30/99 37,611 35,744 39,221 48,972
12/31/99 40,935 38,857 42,679 51,846
1/31/00 39,453 37,435 41,154 49,241
2/29/00 39,425 37,407 41,154 48,308
3/31/00 43,356 41,117 45,256 53,034
4/30/00 42,245 40,057 44,120 51,439
5/31/00 41,077 38,913 42,893 50,383
6/30/00 42,729 40,447 44,598 51,626
7/31/00 42,644 40,336 44,539 50,818
The Class B contingent deferred sales charge (CDSC) is not included in the above
graph, since the performance is for more than six years and the CDSC would no
longer apply.
Average Annual Total Return
As of Inception 1 5 10
July 31, 2000 Date Year Year Year
Class A Shares* 4/1/96 2 13.73% 22.66% 15.61%
Class B Shares** 2/5/98 3 13.36% 22.34% 14.97%
Trust Shares 10/3/97 3 19.36% 23.73% 16.11%
*Reflects maximum 4.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 7/31/90 to 7/31/00 in the indicated share class versus a similar in-
vestment in the Fund's benchmark, and represents the reinvestment of divi-
dends and capital gains in the Fund.
The performance of the AmSouth Capital Growth Fund is measured against the
S&P 500 Stock Index, an unmanaged index generally representative of the U.S.
stock market as a whole. The index does not reflect the deduction of fees
associated with a mutual fund, such as investment management and fund ac-
counting fees. The Fund's performance does reflect the deduction of fees for
these value-added services. Investors cannot invest directly in an index,
although they can invest in its underlying securities. During the period
shown, the Advisor waived and/or voluntarily reimbursed fees for various ex-
penses. Had these waivers and/or reimbursements not been in effect, perfor-
mance quoted would have been lower.
The quoted returns reflect the performance from 4/1/96 to 3/12/00 of the ISG
Capital Growth Fund, an open-end investment company that was the predecessor
fund to the AmSouth Capital Growth Fund.
/2/The ISG Capital Growth Fund commenced operations on 4/1/96, through a
transfer of assets from certain collective trust fund ("commingled") ac-
counts managed by First American National Bank, using substantially the
same investment objective, policies and methodologies as the Fund. The
quoted performance of the Fund includes performance of the commingled ac-
counts for periods dating back to 7/31/90, and prior to the mutual fund's
commencement of operations, as adjusted to reflect the expenses associ-
ated with the Fund. The commingled accounts were not registered with the
Securities and Exchange Commission and, therefore, were not subject to
the investment restrictions imposed by law on registered mutual funds. If
the commingled accounts had been registered, the commingled accounts'
performance may have been adversely affected.
/3/Performance for the Class B and Trust Shares, which commenced operations
on 2/5/98 and 10/3/97, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date.
The historical performance for the Class B Shares has been adjusted to
reflect the higher 12b-1 fees and the contingent deferred sales charge
(CDSC).
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
9
<PAGE>
AmSouth Large Cap Fund
Portfolio Manager
Ronald E. Lindquist
Senior Vice President
AmSouth Bank
Ron has more than 30 years of
investment management experience.
He has a master's degree in
management from Florida
International University and a B.S.
in finance from Florida State
University.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Large Cap Fund is managed in a classic large cap growth style.
Our goal is to outperform the S&P 500 over multiple market cycles. We look for
industry leaders that have relatively predictable 3-to-5 year earnings
streams. We select large company stocks with superior earnings rates and
appropriate price/earnings ratios. We sell when a stock's relative
price/earnings levels are well in excess of the market or when a significant
earnings stream deterioriation is forecast."
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2000, the Fund's total return was 12.82%
(Class A Shares at NAV). In comparison, the S&P 500 Stock Index rose 8.97%.
Q. What factors affected your performance?
A. For the first eight months of the period, our return was about even with the
S&P 500's performance. Then, in late March and April, the broader market, as
measured by the Index, began to decline sharply. For the final four months of
our fiscal year, the Fund gained considerable ground on a relative basis.
What did we do right, how did we preserve capital when many stocks, and other
funds, were declining? For one thing, our large position in health care favored
us during the second calendar quarter of 2000. We did particularly well with
such familiar holdings as American Home Products (1.99% of net assets) and Pfi-
zer, Inc. (2.16%).++
In addition, while the technology sector was being hammered badly, we benefited
from having a somewhat lower allocation to tech stocks than our benchmark. This
is not to say that we did not own technology issues; as a large-cap growth
fund, we normally have a sizable commitment to technology. For the 12 months as
a whole, we profited from holdings in Oracle Corp. (1.88%), Sun Microsystems,
Inc. (2.64%), EMC Corp. (2.13%) and Applied Materials (1.90%).++
As of July 31, 2000, the Fund's top five holdings were Johnson and Johnson
(3.26% of net assets), General Electric Co. (3.22%), Merck & Co., Inc. (3.14%),
Schering-Plough Corp. (2.97%) and IBM Corp. (2.81%).++
Q. What is your outlook for the next six to 12 months?
A. For some time, we were concerned that interest rates could spike much high-
er, reflecting investor's fears about future inflation. That danger seems less
imminent these days. However, our caution has now shifted to the possibility
that corporate earnings may not come in at the elevated rates of growth that
many investors have come to expect--expectations that are priced into the cur-
rent market values of many companies. We will continue to hold companies whose
earnings we believe will remain relatively firm in the coming year.
++ The Fund's portfolio composition is subject to change.
10
<PAGE>
AmSouth Large Cap Fund
Value of a $10,000 Investment
[GRAPH]
AmSouth AmSouth AmSouth
Large Large Large
Cap Fund Cap Fund Cap Fund S&P 500
(Class A Shares)* (Class B Shares) (Trust Shares) Stock Index
8/3/92 9,551 10,000 10,000 10,000
8/31/92 9,427 9,862 9,870 9,795
9/30/92 9,539 9,965 9,988 9,910
10/31/92 9,626 10,046 10,078 9,945
11/30/92 10,029 10,461 10,500 10,283
12/31/92 10,085 10,507 10,559 10,410
1/31/93 10,066 10,484 10,539 10,497
2/28/93 10,162 10,576 10,640 10,640
3/31/93 10,235 10,645 10,716 10,864
4/30/93 9,848 10,230 10,311 10,601
5/31/93 10,168 10,553 10,646 10,885
6/30/93 9,985 10,357 10,454 10,917
7/31/93 9,927 10,288 10,393 10,873
8/31/93 10,286 10,645 10,769 11,286
9/30/93 10,047 10,392 10,519 11,199
10/31/93 10,485 10,841 10,978 11,431
11/30/93 10,524 10,864 11,019 11,322
12/31/93 10,649 10,991 11,150 11,459
1/31/94 10,816 11,152 11,325 11,848
2/28/94 10,669 10,991 11,171 11,527
3/31/94 10,242 10,541 10,723 11,024
4/30/94 10,281 10,576 10,764 11,165
5/31/94 10,370 10,657 10,857 11,349
6/30/94 10,081 10,346 10,555 11,071
7/31/94 10,230 10,495 10,711 11,434
8/31/94 10,697 10,968 11,200 11,903
9/30/94 10,488 10,737 10,981 11,612
10/31/94 10,877 11,129 11,388 11,873
11/30/94 10,637 10,876 11,137 11,440
12/31/94 10,839 11,071 11,348 11,610
1/31/95 11,163 11,394 11,687 11,911
2/28/95 11,547 11,774 12,090 12,375
3/31/95 11,837 12,062 12,393 12,740
4/30/95 12,202 12,431 12,776 13,116
5/31/95 12,517 12,742 13,106 13,640
6/30/95 12,794 13,007 13,396 13,957
7/31/95 13,263 13,479 13,887 14,419
8/31/95 13,100 13,295 13,716 14,456
9/30/95 13,703 13,894 14,347 15,066
10/31/95 14,000 14,182 14,657 15,012
11/30/95 14,501 14,689 15,182 15,671
12/31/95 14,631 14,804 15,319 15,973
1/31/96 15,249 15,415 15,966 16,516
2/29/96 15,441 15,599 16,167 16,670
3/31/96 15,182 15,323 15,896 16,830
4/30/96 15,396 15,530 16,120 17,078
5/31/96 15,727 15,853 16,466 17,519
6/30/96 15,726 15,829 16,465 17,585
7/31/96 15,051 15,138 15,758 16,808
8/31/96 15,297 15,369 16,016 17,163
9/30/96 16,306 16,371 17,073 18,130
10/31/96 16,371 16,429 17,140 18,629
11/30/96 17,659 17,707 18,489 20,037
12/31/96 17,210 17,235 18,019 19,640
1/31/97 18,310 18,329 19,170 20,867
2/28/97 18,343 18,341 19,205 21,031
3/31/97 17,682 17,673 18,513 20,167
4/30/97 18,949 18,917 19,839 21,370
5/31/97 20,050 20,012 20,993 22,672
6/30/97 20,880 20,818 21,861 23,689
7/31/97 22,613 22,523 23,675 25,573
8/31/97 21,443 21,348 22,451 24,140
9/30/97 22,398 22,281 23,451 25,461
10/31/97 21,747 21,613 22,769 24,611
11/30/97 23,050 22,903 24,134 25,750
12/31/97 23,393 23,226 24,493 26,193
1/31/98 24,017 23,825 25,146 26,482
2/28/98 25,632 25,415 26,837 28,392
3/31/98 26,361 26,094 27,600 29,847
4/30/98 26,573 26,290 27,822 30,147
5/31/98 26,183 25,887 27,413 29,629
6/30/98 27,470 27,143 28,761 30,832
7/31/98 27,403 27,051 28,691 30,504
8/31/98 24,178 23,848 25,315 26,100
9/30/98 25,837 25,472 27,051 27,765
10/31/98 28,063 27,638 29,381 30,024
11/30/98 29,918 29,447 31,324 31,845
12/31/98 32,253 31,731 33,758 33,678
1/31/99 33,821 33,252 35,401 35,086
2/28/99 32,604 32,042 34,126 33,996
3/31/99 33,150 32,549 34,697 35,357
4/30/99 32,963 32,342 34,501 36,725
5/31/99 32,413 31,777 33,925 35,858
6/30/99 34,688 33,978 36,307 37,848
7/31/99 34,126 33,402 35,718 36,666
8/31/99 34,103 33,356 35,694 36,485
9/30/99 33,340 32,584 34,895 35,485
10/31/99 34,629 33,828 36,257 37,730
11/30/99 36,491 35,614 38,194 38,506
12/31/99 38,331 37,373 40,118 40,765
1/31/00 37,100 36,147 38,829 38,716
2/29/00 36,088 35,137 37,784 37,984
3/31/00 38,708 37,656 40,518 41,699
4/30/00 38,982 37,898 40,804 40,445
5/31/00 38,708 37,602 40,518 39,615
6/30/00 40,062 38,895 41,951 40,592
7/31/00 38,503 37,359 40,317 39,957
The Class B contingent deferred sales charge (CDSC) is not included in the above
graph, since the performance is for more than six years and the CDSC would no
longer apply.
Average Annual Total Return
As of Inception 1 5 Since
July 31, 2000 Date Year Year Inception
Class A Shares* 8/3/92 7.76% 22.63% 18.36%
Class B Shares** 12/15/98 1 7.06% 22.44% 17.92%
Trust Shares 12/14/98 1 12.88% 23.76% 19.05%
*Reflects maximum 4.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 8/3/92 to 7/31/00 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Large Cap Fund is measured against the S&P
500 Stock Index, an unmanaged index generally representative of the U.S.
stock market as a whole. The index does not reflect the deduction of fees
associated with a mutual fund, such as investment management and fund ac-
counting fees. The Fund's performance does reflect the deduction of fees for
these value-added services. Investors cannot invest directly in an index,
although they can invest in its underlying securities. During the period
shown, the Advisor waived and/or voluntarily reimbursed fees for various ex-
penses. Had these waivers and/or reimbursements not been in effect, perfor-
mance quoted would have been lower.
The quoted returns reflect the performance from 8/3/92 to 12/13/98 of the DG
Equity Fund and from 12/14/98 to 3/12/00 of the ISG Large Cap Equity Fund,
which were open-end investment companies that were predecessor funds to the
AmSouth Large Cap Fund.
/1/Performance for the Class B and Trust Shares, which commenced operations
on 12/15/98 and 12/14/98, respectively, are based on the historical per-
formance of the Class A Shares (without sales charge) prior to that date.
The historical performance for the Class B Shares has been adjusted to
reflect the higher 12b-1 fees and the contingent deferred sales charge
(CDSC).
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
11
<PAGE>
AmSouth Mid Cap Fund
Portfolio Managers
Van Schreiber, Chief Portfolio
Manager
Robert Deaton, CFA, Portfolio
Manager
Bennett Lawrence Management, LLC
(sub-advisor)
Van has 35 years of investment
management experience. He holds an
M.B.A. from New York University and
an undergraduate degree from
Williams College. Robert is a
Chartered Financial Analyst with 14
years of experience in the
securities business, has an M.B.A.
from Vanderbilt University and a
B.A. from Davidson College.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Mid Cap Fund uses a two-step investment process. First, we
identify major demand trends that present powerful investment opportunities.
Then, we select companies that are best positioned to benefit from these
trends. Before a company is selected, our analysts conduct extensive analysis
of the business and its associated risks. The outcome of this process is a
portfolio invested in a relatively small number of highly profitable
companies."
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2000, the Fund's total return was 49.11%
(Class A Shares at NAV). In comparison, the Russell Mid-Cap Growth Index gained
43.76%.
Q. What factors affected your performance?
A. It has been an extremely strong past 12 months for us, and our performance
translated into robust returns for shareholders who held shares for the entire
period. During this time, the stock market broadened, and there was intense in-
terest on the part of investors in the cable business, telecommunication serv-
ices, semiconductors, software companies, biotechnology and all companies re-
lated to the Internet. We participated fully, with the primary point being that
our positions were almost exclusively in profitable companies.
In March 2000, the phase of indiscriminate valuations for Internet companies
ended, and many over-priced, newly public issues declined significantly. Most
growth-oriented portfolios felt the pressure, ours included, but we were spared
the worst problems because we added ballast to the portfolio by building up po-
sitions in non- technology areas. Some of these new investments include energy
exploration and production companies such as Apache Corporation (2.88% of net
assets) and Nabors Industries, Inc. (2.83%). We also took positions in gaming
and lodging companies, specifically MGM Grand (4.08%), which acquired Mirage,
and Four Seasons Hotels, Inc. (3.18%). We made additional, consumer-oriented
investments in high-growth retailers, casual dining companies, and the health
care business.++
As of July 31, 2000, the Fund's top five holdings were Robert Half Int'l, Inc.
(4.49% of net assets), MGM Mirage, Inc. (4.08%), Waters Corp. (3.63%), Best Buy
Company, Inc. (3.30%) and Four Seasons Hotels, Inc. (3.18%).++
Q. What is your outlook for the next six to 12 months?
A. Going forward, we think that interest rates will increase another 50 basis
points (0.50%). We feel that the economy is going to slow; obviously we are
seeing signs of that already. Therefore, we are not going to have the type of
stock market we have had for the last few years, in which the only big decision
was whether to be in the market or out of it. Now the big decisions are going
to be picking which stocks will come through and deliver on the earnings front.
We feel the quality of earnings will be more closely scrutinized than they have
been in the past.
++ The Fund's portfolio composition is subject to change.
12
<PAGE>
AmSouth Mid Cap Fund
Value of a $10,000 Investment
[GRAPH]
AmSouth AmSouth AmSouth
Mid Cap Mid Cap Mid Cap
Fund Fund Fund Russell Mid-Cap
(Class A Shares)* (Class B Shares)** (Trust Shares) Growth Index
5/4/99 9,551 10,000 10,000 10,000
5/31/99 9,436 9,880 9,880 9,871
6/30/99 10,439 10,920 10,940 10,561
7/31/99 10,678 11,170 11,190 10,224
8/31/99 10,726 11,210 11,240 10,118
9/30/99 10,965 11,450 11,490 10,032
10/31/99 11,910 12,440 12,490 10,808
11/30/99 13,840 14,450 14,510 11,927
12/31/99 16,552 17,280 17,370 13,992
1/31/00 16,476 17,160 17,270 13,989
2/29/00 19,226 20,010 20,150 16,930
3/31/00 18,701 19,450 19,600 16,947
4/30/00 16,323 16,960 17,110 15,302
5/31/00 14,947 15,530 15,670 14,187
6/30/00 16,285 16,900 17,070 15,692
7/31/00 15,922 16,120 16,700 14,698
Average Annual Total Return
As of Inception 1 Since
July 31, 2000 Date Year Inception
Class A Shares* 5/4/99 42.36% 45.46%
Class B Shares** 5/4/99 42.90% 46.92%
Trust Shares 5/4/99 49.24% 51.17%
*Reflects maximum 4.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 5/4/99 to 7/31/00 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Mid Cap Fund is measured against the Russell
Mid-Cap Growth Index, an unmanaged index representative of the performance of
a basket of more than 430 mid-cap growth stocks. The index does not reflect
the deduction of fees associated with a mutual fund, such as investment man-
agement and fund accounting fees. The Fund's performance does reflect the de-
duction of fees for these value-added services. Investors cannot invest di-
rectly in an index, although they can invest in its underlying securities.
During the period shown, the Advisor waived and/or voluntarily reimbursed
fees for various expenses. Had these waivers and/or reimbursements not been
in effect, performance quoted would have been lower.
The total returns reflect the performance from 5/4/99 to 3/12/00 of the ISG
Mid-Cap Fund, an open-end investment company that was predecessor to the
AmSouth Mid Cap Fund.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
13
<PAGE>
AmSouth Small Cap Fund+
Portfolio Manager
Dean McQuiddy, CFA
Principal and Director of Equity
Investments
Sawgrass Asset Management, LLC
(sub-advisor)
Dean McQuiddy, Portfolio Manager to
the AmSouth Small Cap Fund, has 16
years of experience in investment
management and a B.S. in finance.
He created and managed the small
cap growth product at Barnett
Capital Advisors for 17 years.
PORTFOLIO MANAGER'S PERSPECTIVE
"For the AmSouth Small Cap Fund, we use a disciplined investment process to
identify 60 to 80 fundamentally attractive small companies that share certain
attributes: above-market sales and earnings growth, increasing estimates of
future earnings and reasonable valuations. We aim to buy these companies in the
early stages of their growth--before their stocks get overvalued in the
marketplace."
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2000, the Fund produced a total return of
49.05% (Class A Shares at NAV). In comparison, the Russell 2000 Growth Index
rose 21.13%.
Quite simply, we surpassed our benchmark. Throughout most of the period, small
caps outperformed their large-cap cousins. Our penchant for small-cap growth
names put us in exactly the right place for much of the time.
Q. What factors affected your performance?
A. Throughout much of the period, technology was the dominant theme in the mar-
ket, and gains in tech stocks were responsible for the bulk of the market's
climb (as well as most of the Fund's robust returns). That all changed in mid-
March, when the "bubble" burst on many of the marginal high-flyers, dragging
the market averages, especially the Nasdaq Composite Index,/1/ markedly lower.
In particular, companies that did not have fundamental underpinnings, such as
real earnings, were at a disadvantage. Our adherence to a disciplined strategy
that emphasizes earnings growth saved us when the Internet sector turned sour;
we had no exposure to "dot.com" companies that showed no earnings.
Technology typically comprises a large portion of our portfolio. Throughout a
market cycle, we will be overweighted in tech stocks. The reason is rather sim-
ple. The tech sector represents the most dynamic areas of the economy and is
where much of the overall market's earnings growth and sales growth can be
found. In recent years, technology's influence has risen so that tech stocks
make up roughly 30 percent of the S&P 500 Index/2/ (up from nine percent 10
years ago).
Within the technology area, we scored in a number of specific sectors. Our win-
ners included semiconductor leader International Rectifier (1.93% of net as-
sets) and networking equipment manufacturer, Avocent Corp. (3.70%). Outside the
tech sector, we profited from owning shares of Quest Diagnostics, Inc. (1.86%),
a very profitable New Jersey firm that specializes in laboratory clinical test-
ing.++
As of July 31, 2000, the Fund's top five holdings were Avocent Corp. (3.70% of
net assets), Chico's FAS, Inc. (3.08%), Silicon Valley Bancshares, Inc.
(2.98%), Silicon Valley Group (2.92%) and Actel (2.81%).++
Q. What is your outlook for the next six to 12 months?
A. Going forward, we are bullish about small-cap growth stocks, which we feel
still have a lot of room to grow. We believe the portfolio has strong poten-
tial; the average stock we own has more than doubled its earnings per share
over the last 12 months. We will continue to look for stocks whose earnings are
growing faster than the overall market's, have positive changes in earnings es-
timates and are still reasonably valued.
+ Small-capitalization funds typically carry additional risks since smaller
companies generally have a higher risk of failure. Historically, smaller compa-
nies' stocks have experienced a greater degree of market volatility than large
company stocks on average.
/1/ The Nasdaq Composite Index is a market capitalization price-only index that
tracks the performance of domestic common stocks traded on the regular Nasdaq
market as well as National Market System-traded foreign common stocks and
ADR's.
/2/ The S&P 500 Stock Index is an unmanaged index generally representative of
the U.S. stock market as a whole. Investors cannot invest directly in an index,
although they can invest in its underlying securities.
++ The Fund's portfolio composition is subject to change.
14
<PAGE>
AmSouth Small Cap Fund
Value of a $10,000 Investment
[GRAPH]
AmSouth AmSouth AmSouth
Small Cap Small Cap Small Cap
Fund Fund Fund Russell 2000
(Class A Shares)* (Class B Shares)** (Trust Shares) Growth Index
3/2/98 9,550 10,000 10,000 10,000
3/31/98 9,867 10,290 10,302 10,419
4/30/98 9,867 10,290 10,302 10,483
5/31/98 9,158 9,540 9,572 9,722
6/30/98 9,426 9,810 9,852 9,821
7/31/98 8,756 9,110 9,152 9,001
8/31/98 6,782 7,050 7,091 6,923
9/30/98 7,558 7,860 7,911 7,625
10/31/98 7,338 7,630 7,681 8,023
11/30/98 7,922 8,220 8,281 8,645
12/31/98 8,995 9,340 9,422 9,427
1/31/99 8,545 8,860 8,941 9,852
2/28/99 7,779 8,060 8,141 8,950
3/31/99 7,261 7,520 7,601 9,269
4/30/99 7,166 7,420 7,511 10,088
5/31/99 7,376 7,630 7,731 10,104
6/30/99 8,085 8,360 8,481 10,636
7/31/99 8,047 8,310 8,441 10,307
8/31/99 8,009 8,270 8,401 9,922
9/30/99 8,191 8,450 8,591 10,113
10/31/99 8,219 8,480 8,631 10,372
11/30/99 9,053 9,330 9,502 11,469
12/31/99 10,432 10,740 10,952 13,490
1/31/00 10,403 10,720 10,942 13,364
2/29/00 12,520 12,890 13,162 16,474
3/31/00 12,655 13,020 13,302 14,742
4/30/00 12,367 12,720 13,002 13,254
5/31/00 11,687 12,000 12,282 12,093
6/30/00 12,693 13,040 13,352 13,655
7/31/00 11,994 12,010 12,612 12,485
Average Annual Total Return
As of Inception 1 Since
July 31, 2000 Date Year Inception
Class A Shares* 3/2/98 42.27% 7.83%
Class B Shares** 3/2/98 43.13% 7.88%
Trust Shares 3/2/98 49.41% 10.09%
*Reflects maximum 4.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 3/2/98 to 7/31/00 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Small Cap Fund is measured against the Russell
2000 Growth Index, an unmanaged index generally representative of domesti-
cally traded common stocks of small to mid-sized companies. The index does
not reflect the deduction of fees associated with a mutual fund, such as in-
vestment management and fund accounting fees. The Fund's performance does re-
flect the deduction of fees for these value-added services. Investors cannot
invest directly in an index, although they can invest in its underlying secu-
rities. During the period shown, the Advisor waived and/or voluntarily reim-
bursed fees for various expenses. Had these waivers and/or reimbursements not
been in effect, performance quoted would have been lower.
Effective 12/1/99, the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and
net asset value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than the original cost.
15
<PAGE>
AmSouth Equity Income Fund
Portfolio Manager
Christopher Wiles, CFA
President and Chief Investment
Officer
Rockhaven Asset Management, LLC
(sub-advisor)
Chris has more than 15 years of
investment management experience
and holds an M.B.A. and a
bachelor's degree in finance.
Previously, he was affiliated with
Federated Investments and Mellon
Bank.
PORTFOLIO MANAGER'S PERSPECTIVE
"With the AmSouth Equity Income Fund, we try to reduce risk through a
disciplined portfolio contruction limited, under normal conditions, to 50
stocks. Then we select the most attractive securities on a risk/reward basis in
each sector. Rather than trying to time the market or guess which sector may
offer the greatest return, we put our emphasis on investing in what we believe
are the best-yielding, best dividend-growing securities, sector by sector."
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2000, the Fund's total return was 19.12%
(Class A Shares at NAV). In comparison, the S&P 500 Stock Index rose 8.97%, and
the Lipper Equity Income Fund Index/1/ produced a -3.59%.
For the 12-month period ended July 31, 2000, the Fund was ranked #4 out of 208
funds (Class A shares) in the Lipper Equity Income category./2/
Q. What factors affected your performance?
A. The volatility that characterized the market throughout the period went a
long way toward justifying our investment philosophy of being fully invested
and remaining sector-neutral to the S&P 500 Index. Through mid-March, we wit-
nessed an explosion in the prices of many technology issues, and because we
held a 30%-to-35% weighting in technology (consistent with the S&P 500's allo-
cation), we profited handsomely.
When the tech rally sputtered, the fact that we were not as overexposed to
technology as some of our peers meant that the drop in prices did not damage us
to the extent that it did many other funds. Obviously, our strategy was effec-
tive, as our year-end performance was outstanding.
We also benefited from building most of our technology exposure with convert-
ible securities. When the underlying stocks went up, we prospered. When tech-
nology turned sour, the convertibles held up much better than the common
shares.
As of July 31, 2000, the Fund's top five holdings were Amdocs Ltd. convertible
shares (3.49% of net assets), Citigroup, Inc. common shares (3.04%), Quaker
Oats Co. common shares (2.93%), Exxon-Mobil Corp. (2.74%) and Tribune Co. con-
vertible shares (2.70%).++
Q. What is your outlook for the next six to 12 months?
A. We believe that in the current environment, the Fed's tightening policy has
worked; the economy has begun to slow. For the second half of 2000, we have a
benign outlook for both interest rates and inflation. Certain areas in the
technology sector are still showing strength, and we anticipate that selected
tech stocks will offer outstanding growth opportunities.
/1/ The Lipper Equity Income Fund Index is an index comprised of managed funds
that seek relatively high current income and growth of income through investing
60% or more of their portfolio in equities.
/2/ For the one- and three-year periods ending July 31, 2000, the Funds (Class
A Shares) was ranked 4 out of 208 and 5 out of 170 funds in the Lipper Equity
Income Funds category, respectively. The Fund was not ranked for the five- and
10-year periods. The Lipper rankings are based on total returns and do not re-
flect a sales charge.
++ The Fund's portfolio composition is subject to change.
16
<PAGE>
AmSouth Equity Income Fund
Value of a $10,000 Investment
[GRAPH]
AmSouth AmSouth AmSouth
Equity Equity Equity
Income Fund Income Fund Income Fund S&P 500
(Class A Shares)* (Class B Shares)** (Trust Shares) Stock Index
3/20/97 9,551 10,000 10,000 10,000
3/31/97 9,390 9,829 9,832 9,584
4/30/97 9,719 10,171 10,175 10,597
5/31/97 10,275 10,742 10,758 11,242
6/30/97 10,592 11,063 11,090 11,747
7/31/97 11,253 11,745 11,781 12,681
8/31/97 10,919 11,384 11,432 11,970
9/30/97 11,409 11,871 11,948 12,626
10/31/97 10,992 11,434 11,514 12,204
11/30/97 11,245 11,693 11,781 12,769
12/31/97 11,450 11,898 11,999 12,988
1/31/98 11,577 12,025 12,134 13,132
2/28/98 12,349 12,812 12,935 14,079
3/31/98 12,797 13,271 13,407 14,800
4/30/98 12,768 13,234 13,390 14,949
5/31/98 12,481 12,929 13,092 14,692
6/30/98 12,524 12,967 13,140 15,289
7/31/98 12,073 12,490 12,669 15,126
8/31/98 10,538 10,901 11,061 12,942
9/30/98 10,953 11,314 11,488 12,768
10/31/98 11,757 12,139 12,345 14,888
11/30/98 12,513 12,914 13,142 15,791
12/31/98 12,840 13,244 13,489 16,700
1/31/99 13,250 13,655 13,912 17,398
2/28/99 12,852 13,235 13,506 16,858
3/31/99 13,187 13,583 13,862 17,533
4/30/99 13,729 14,124 14,435 18,211
5/31/99 13,370 13,749 14,048 17,781
6/30/99 14,057 14,449 14,785 18,768
7/31/99 13,784 14,156 14,497 18,182
8/31/99 13,744 14,106 14,459 18,092
9/30/99 13,428 13,782 14,141 17,596
10/31/99 14,383 14,738 15,137 18,709
11/30/99 14,801 15,158 15,580 19,094
12/31/99 16,021 16,402 16,882 20,214
1/31/00 16,218 16,589 17,090 19,198
2/29/00 16,714 17,101 17,617 18,835
3/31/00 17,458 17,849 18,406 20,678
4/30/00 16,901 17,260 17,810 20,055
5/31/00 16,442 16,778 17,328 19,644
6/30/00 17,067 17,409 18,000 20,128
7/31/00 16,419 16,438 17,331 19,814
Average Annual Total Return
As of Inception 1 Since
July 31, 2000 Date Year Inception
Class A Shares* 3/20/97 13.73% 15.88%
Class B Shares** 9/3/97 3 13.24% 15.92%
Trust Shares 9/2/97 3 19.55% 17.76%
*Reflects maximum 4.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 3/20/97 to 7/31/00 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Equity Income Fund is measured against the S&P
500 Stock Index, an unmanaged index generally representative of the U.S.
stock market as a whole. The index does not reflect the deduction of fees as-
sociated with a mutual fund, such as investment management and fund account-
ing fees. The Fund's performance does reflect the deduction of fees for these
value-added services. Investors cannot invest directly in an index, although
they can invest in its underlying securities. During the period shown, the
Advisor waived and/or voluntarily reimbursed fees for various expenses. Had
these waivers and/or reimbursements not been in effect, performance quoted
would have been lower.
/3/Performance for the Class B and Trust Shares, which commenced operations
on 9/3/97 and 9/2/97, respectively, are based on the historical performance
of the Class A Shares (without sales charge) prior to that date. The histori-
cal performance for the Class B Shares has been adjusted to reflect the
higher 12b-1 fees and the contingent deferred sales charge (CDSC).
Effective 12/1/99, the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
17
<PAGE>
AmSouth Balanced Fund
Portfolio Manager
Pedro (Pete) Verdu, CFA
Senior Vice President
AmSouth Bank
Pete has been an analyst and
portfolio manager for more than 28
years. He manages the AmSouth Value
Fund and AmSouth Balanced Fund.
Pete has a B.A. in economics and an
M.B.A. in finance.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Balanced Fund provides a simple solution to investors who find it
difficult to decide how to allocate their assets between stocks and bonds. We
use a sophisticated asset allocation model to move the Fund's assets toward the
market that we believe has the best risk-adjusted return prospects."
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2000, the AmSouth Balanced Fund produced a
total return of -1.05% (Class A Shares at NAV). In comparison, the S&P 500
Stock Index rose 8.97%, while the Lehman Brothers Government/Credit Bond Index
gained 5.72%.
Q. What factors affected your performance?
A. With regard to the equity portion of our portfolio, our decline came in the
first six months of the period, an extraordinarily difficult time for a value-
oriented funds like ours; it was perhaps the worst such period in 15 to 20
years. We were hampered by an environment in which investors focused on a very
small group of growth stocks--principally in the technology, Internet and bio-
technology sectors. This narrow focus, which had driven investor sentiment for
the last two years, became even more pronounced as; investors decided that the
"new economy" was the only thing worthwhile.
But in March, the market rotated sharply away from technology stocks. Since
then, the Fund's stock holdings have done much better, especially relative to
the market as a whole. Our holdings in energy and insurance, in particular,
demonstrated broad strength. Some of our top energy stocks include Kerr-McGee
Corp. (0.98% of net assets), Burlington Resources, Inc. (0.75%), USX-Marathon
Group (1.11%) and Texaco, Inc. (1.14%). In the insurance group, we hold signif-
icant positions in St. Paul Cos., Inc. (1.59%), Chubb (1.51%) and Marsh &
McLennen Cos., Inc. (0.93%).++
As of July 31, 2000, the Fund's top five equity holdings were Washington Mutu-
al, Inc. (1.64% of net assets), St. Paul Cos., Inc. (1.59%), Chubb Corp.
(1.51%), CVS Corp. (1.41%) and Constellation Energy Group (1.36%).++
In the fixed-income arena, the big story was the Fed's decision to raise short-
term rates six times since June 1999. Fortunately for us, in the 30-year Trea-
sury bond, we saw a decline in rates from July 1999 to July 2000. For while the
rate increases at the short end of the yield curve have been driven by Fed pol-
icy, the decline in long-term rates is a little more complex. Long-term rates
are set by the market, not the Fed and reflect such factors as investors' ex-
pectations for inflation. Arguably, the most important factor driving the re-
cent decline in long-term rates has been the U.S. Treasury Department's program
of buying back long-term bonds.
Earlier in the period, when long-term rates were nearly seven percent, we be-
lieved long bonds represented very good value, and we added to our long Trea-
sury positions. As long-term rates declined, the prices of the bonds we held
went up, and they added value to shareholder returns. When long-term rates fell
to roughly 5.80%, we took the opportunity to realize profits, by selling long
bonds and buying intermediate issues; this action reduced the portfolio's in-
terest-rate sensitivity.
As of July 31, 2000, the fixed-income securities within the Fund maintained an
average credit quality of AAA, with an average maturity of 8.05 years.++
Q. What's your outlook for the next six to 12 months?
A. On the equities side of the portfolio, we believe that our particular value
style should do well, especially relative to the overall market. We expect our
overweightings in energy, financial services and the paper industry to be par-
ticularly constructive.
With regard to our fixed-income outlook, we believe the Fed is nearing an end
to its tightening policy. There is growing evidence that the economy is slow-
ing, which means the Fed has done its job; what remains to be seen is whether
the economic "landing" is soft or hard. As far as interest rates are concerned,
we anticipate that long-term rates probably will not move much lower over the
next six months, and there could be a slight upside risk as a result of the po-
litical rhetoric associated with this year's presidential election campaign.
++ The Fund's portfolio composition is subject to change.
18
<PAGE>
AmSouth Balanced Fund
Value of a $10,000 Investment
[GRAPH]
AmSouth AmSouth AmSouth Lehman
Balanced Balanced Balanced Brothers
Fund Fund Fund Government/Credit
(Class A Shares)* (Class B Shares) (Trust Shares) Bond Index
12/19/91 9,551 10,000 10,000 10,000
12/31/91 10,169 10,655 10,647 10,996
1/31/92 10,190 10,655 10,669 11,048
2/29/92 10,325 10,799 10,810 10,994
3/31/92 10,190 10,642 10,669 11,053
4/30/92 10,412 10,865 10,901 11,245
5/31/92 10,529 10,983 11,024 11,393
6/30/92 10,486 10,931 10,979 11,655
7/31/92 10,859 11,311 11,369 11,749
8/31/92 10,713 11,140 11,216 11,894
9/30/92 10,888 11,311 11,399 11,730
10/31/92 10,816 11,232 11,325 11,721
11/30/92 10,983 11,402 11,499 11,902
12/31/92 11,057 11,468 11,576 12,136
1/31/93 11,309 11,717 11,840 12,364
2/28/93 11,504 11,913 12,045 12,402
3/31/93 11,736 12,136 12,288 12,489
4/30/93 11,811 12,202 12,366 12,483
5/31/93 12,005 12,398 12,569 12,740
6/30/93 12,069 12,451 12,636 12,814
7/31/93 12,103 12,477 12,672 13,082
8/31/93 12,465 12,844 13,051 13,124
9/30/93 12,382 12,739 12,964 13,173
10/31/93 12,518 12,870 13,106 13,037
11/30/93 12,442 12,779 13,026 13,089
12/31/93 12,645 12,975 13,239 13,269
1/31/94 13,048 13,381 13,661 13,005
2/28/94 12,777 13,093 13,378 12,715
3/31/94 12,327 12,621 12,906 12,619
4/30/94 12,351 12,634 12,932 12,598
5/31/94 12,537 12,818 13,126 12,571
6/30/94 12,430 12,700 13,014 12,799
7/31/94 12,724 12,988 13,322 12,804
8/31/94 12,966 13,224 13,575 12,628
9/30/94 12,717 12,962 13,315 12,615
10/31/94 12,809 13,041 13,411 12,594
11/30/94 12,460 12,674 13,045 12,670
12/31/94 12,596 12,805 13,188 12,891
1/31/95 12,822 13,014 13,424 13,164
2/28/95 13,272 13,473 13,896 13,244
3/31/95 13,531 13,722 14,167 13,413
4/30/95 13,914 14,102 14,568 13,927
5/31/95 14,370 14,548 15,045 14,029
6/30/95 14,427 14,587 15,105 13,979
7/31/95 14,664 14,823 15,353 14,144
8/31/95 14,746 14,889 15,439 14,276
9/30/95 14,987 15,125 15,691 14,469
10/31/95 14,927 15,046 15,629 14,688
11/30/95 15,369 15,478 16,091 14,888
12/31/95 15,557 15,662 16,289 14,973
1/31/96 15,902 15,990 16,650 14,680
2/29/96 15,855 15,924 16,600 14,566
3/31/96 16,019 16,081 16,772 14,474
4/30/96 16,220 16,265 16,982 14,452
5/31/96 16,279 16,317 17,045 14,629
6/30/96 16,316 16,343 17,083 14,661
7/31/96 15,889 15,898 16,636 14,627
8/31/96 16,127 16,121 16,885 14,867
9/30/96 16,454 16,435 17,227 15,187
10/31/96 16,652 16,619 17,434 15,446
11/30/96 17,306 17,261 18,119 15,287
12/31/96 17,069 17,012 17,871 15,303
1/31/97 17,434 17,353 18,254 15,333
2/28/97 17,703 17,615 18,535 15,165
3/31/97 17,360 17,261 18,175 15,370
4/30/97 17,735 17,615 18,568 15,502
5/31/97 18,488 18,349 19,357 15,675
6/30/97 18,958 18,794 19,850 16,119
7/31/97 20,086 19,895 21,030 15,951
8/31/97 19,556 19,358 20,475 16,184
9/30/97 20,372 20,150 21,334 16,425
10/31/97 19,967 19,741 20,914 16,505
11/30/97 20,327 20,089 21,296 16,667
12/31/97 20,626 20,372 21,615 16,885
1/31/98 20,834 20,553 21,822 16,853
2/28/98 21,574 21,288 22,617 16,902
3/31/98 22,238 21,919 23,304 16,981
4/30/98 22,137 21,806 23,217 17,151
5/31/98 22,176 21,835 23,263 17,314
6/30/98 22,376 22,006 23,463 17,327
7/31/98 22,003 21,625 23,076 17,643
8/31/98 20,614 20,245 21,623 18,115
9/30/98 21,598 21,215 22,677 17,995
10/31/98 22,495 22,084 23,622 18,096
11/30/98 23,155 22,721 24,320 18,137
12/31/98 23,334 22,866 24,515 18,258
1/31/99 23,341 22,861 24,528 17,851
2/28/99 22,832 22,364 23,997 17,934
3/31/99 23,198 22,692 24,388 17,976
4/30/99 24,267 23,742 25,517 17,802
5/31/99 24,266 23,701 25,519 17,750
6/30/99 24,477 23,893 25,746 17,704
7/31/99 24,070 23,497 25,324 17,691
8/31/99 23,718 23,121 24,959 17,840
9/30/99 23,192 22,608 24,410 17,883
10/31/99 23,630 23,023 24,877 17,874
11/30/99 23,524 22,904 24,771 17,772
12/31/99 23,643 22,999 24,887 17,767
1/31/00 23,006 22,356 24,217 17,976
2/29/00 22,538 21,902 23,730 18,219
3/31/00 23,937 23,249 25,209 18,136
4/30/00 23,820 23,121 25,088 18,120
5/31/00 23,975 23,258 25,276 18,467
6/30/00 23,458 22,740 24,714 18,651
7/31/00 23,818 23,075 25,097 18,651
S&P 500
Stock Index
12/19/91 10,000
12/31/91 10,337
1/31/92 10,151
2/29/92 10,278
3/31/92 10,084
4/30/92 10,371
5/31/92 10,420
6/30/92 10,270
7/31/92 10,676
8/31/92 10,464
9/30/92 10,583
10/31/92 10,618
11/30/92 10,968
12/31/92 11,099
1/31/93 11,189
2/28/93 11,337
3/31/93 11,569
4/30/93 11,297
5/31/93 11,591
6/30/93 11,624
7/31/93 11,578
8/31/93 12,005
9/30/93 11,915
10/31/93 12,155
11/30/93 12,042
12/31/93 12,184
1/31/94 12,586
2/28/94 12,254
3/31/94 11,734
4/30/94 11,881
5/31/94 12,070
6/30/94 11,782
7/31/94 12,158
8/31/94 12,643
9/30/94 12,342
10/31/94 12,612
11/30/94 12,165
12/31/94 12,340
1/31/95 12,651
2/28/95 13,131
3/31/95 13,509
4/30/95 13,897
5/31/95 14,439
6/30/95 14,766
7/31/95 15,245
8/31/95 15,282
9/30/95 15,913
10/31/95 15,857
11/30/95 16,538
12/31/95 16,851
1/31/96 17,412
2/29/96 17,571
3/31/96 17,737
4/30/96 17,993
5/31/96 18,449
6/30/96 18,518
7/31/96 17,715
8/31/96 18,081
9/30/96 19,080
10/31/96 19,597
11/30/96 21,053
12/31/96 20,642
1/31/97 21,911
2/28/97 22,080
3/31/97 21,186
4/30/97 22,431
5/31/97 23,776
6/30/97 24,828
7/31/97 26,775
8/31/97 25,294
9/30/97 26,661
10/31/97 25,781
11/30/97 26,959
12/31/97 27,416
1/31/98 27,716
2/28/98 29,691
3/31/98 31,194
4/30/98 31,504
5/31/98 30,969
6/30/98 32,213
7/31/98 31,873
8/31/98 27,321
9/30/98 29,042
10/31/98 31,378
11/30/98 33,260
12/31/98 35,155
1/31/99 36,611
2/28/99 35,484
3/31/99 36,891
4/30/99 38,306
5/31/99 37,409
6/30/99 39,467
7/31/99 38,245
8/31/99 38,057
9/30/99 37,023
10/31/99 39,345
11/30/99 40,146
12/31/99 42,482
1/31/00 40,364
2/29/00 39,607
3/31/00 43,448
4/30/00 42,151
5/31/00 41,293
6/30/00 42,303
7/31/00 41,647
Average Annual Total Return
As of Inception 1 5 Since
July 31, 2000 Date Year Year Inception
Class A Shares* 12/19/91 (5.48%) 9.18% 10.60%
Class B Shares** 9/2/97 1 (5.97%) 8.97% 10.19%
Trust Shares 9/2/97 1 (0.90%) 10.33% 11.27%
*Reflects maximum 4.00% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%)
The Class B contingent deferred sales charge (CDSC) is not included in the above
graph, since the performance is for more than six years and the CDSC would no
longer apply.
The chart above represents a comparison of a hypothetical $10,000 investment
from 12/19/91 to 7/31/00 in the indicated share class versus a similar in-
vestment in the Fund's benchmark, and represents the reinvestment of divi-
dends and capital gains in the Fund.
The performance of the AmSouth Balanced Fund is measured against the S&P 500
Stock Index, an unmanaged index generally representative of the U.S. stock
market as a whole; and the Lehman Brothers Government/Credit Bond Index, an
unmanaged broad-based index representative of the total return of long-term
government and corporate bonds. The indices do not reflect the deduction of
fees associated with a mutual fund, such as investment management and fund
accounting fees. The Fund's performance does reflect the deduction of fees
for these value-added services. Investors cannot invest directly in an index,
although they can invest in its underlying securities. During the period
shown, the Advisor waived and/or voluntarily reimbursed fees for various ex-
penses. Had these waivers and/or reimbursements not been in effect, perfor-
mance quoted would have been lower.
/1/ Performance for the Class B and Trust Shares, which commenced operations
on 9/2/97, are based on the historical performance of the Class A Shares
(without sales charge) prior to that date. The historical performance for the
Class B Shares has been adjusted to reflect the higher 12b-1 fees and the
contingent deferred sales charge (CDSC).
Effective 12/1/99, the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and
net asset value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than the original cost.
19
<PAGE>
AmSouth Select Equity Fund
Portfolio Managers
Neil Wright, President and Chief
Investment Officer
Janna Sampson, Director of
Portfolio Management
Peter Jankovskis, Director of
Research
OakBrook Investments, LLC (sub-
advisor)
As Portfolio Managers of the
AmSouth Select Equity Fund and the
AmSouth Enhanced Market Fund, Neil,
Janna and Peter have 50 years of
combined experience. Neil and Peter
have Ph.D.s in economics, and Janna
holds an M.A. in economics. They
have worked together for the past
eight years.
PORTFOLIO MANAGER'S PERSPECTIVE
"Our goal in managing the AmSouth Select Equity Fund is to outperform the
S&P 500 while experiencing less volatility than the broad stock market. We
look for 20 to 25 leading companies that have a dominant market position, or
a well-known brand name, yet whose stock price is undervalued. To make this
'growth at a reasonable price' strategy work, we use economic theory to
determine whether a company is likely to recover its dominant position after
a dip. We believe our patient, long-term approach offers excellent defensive
protection, which can reduce losses when the market is weak."
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2000, the Fund's total return was -19.86%
(Class A Shares at NAV). In comparison, the S&P 500 Stock Index rose 8.97%.
Q. What factors affected your performance?
A. Most of the Fund's decline can be attributed to investment style, as the
stable growth stocks in which we invest have been dramatically out of favor.
Performance also was adversely affected by a number of company-specific events.
For example, the stock of Hershey Foods Corp. (4.78% of net assets) experienced
a sharp decline during the fall of 1999, as difficulties in upgrading the
company's inventory control systems resulted in delayed and missed shipments.
The problems at Hershey have been corrected, and we feel the company is on
track to deliver good revenue growth during the second half of 2000.++
Also, Pitney Bowes, Inc. (4.37%) was hurt by a combination of sluggish growth
from its non-core copier business and, in our opinion, the perception that
Internet providers of postage, such as Stamps.com, would pose a threat to the
Pitney Bowes' monopoly position in the postage meter market. We believe that,
with time, investors will come to appreciate that earnings growth from the core
postal meter business is strong, and is likely to remain strong in coming
years--due to the company's wide array of patents for postage metering and
encryption technology, which other users must license.++
On the positive side, holdings with exceptionally steady earnings growth--such
as Emerson Electric Co. (8.36%), Automatic Data Processing, Inc. (6.30%) and
Sysco Corp. (7.09%)--helped the Fund deliver strong returns during the volatile
second quarter of 2000. The strong performance of these stocks highlights the
importance of stable earnings growth as a lure to investors during periods of
market turbulence.++
As of July 31, 2000, the Fund's top five holdings were Emerson Electric Co.
(8.36% of net assets), Waste Management, Inc. (7.91%), Sysco Corp. (7.09%),
General Mills, Inc. (6.88%) and Dun & Bradstreet Corp. (6.50%).++
Q. What is your outlook for the next six to 12 months?
A. We expect the markets to continue to be volatile. We are working through a
period where market analysts are adjusting some of their earnings expectations
downward, and we anticipate this will hurt higher price-to-earnings stocks,
much as it did from March through May of this year. This climate could poten-
tially be favorable for the Fund as it focuses on companies with more stable
earnings growth.
++ The Fund's portfolio composition is subject to change.
20
<PAGE>
AmSouth Select Equity Fund
Value of a $10,000 Investment
[GRAPH]
AmSouth AmSouth AmSouth
Select Select Select
Equity Fund Equity Fund Equity Fund S&P 500
(Class A Shares)* (Class B Shares)** (Trust Shares) Stock Index
9/1/98 9,551 10,000 10,000 10,000
9/30/98 10,032 10,500 10,504 10,638
10/31/98 10,885 11,390 11,396 11,503
11/30/98 11,168 11,670 11,693 12,201
12/31/98 11,520 12,026 12,051 12,903
1/31/99 11,405 11,895 11,941 13,443
2/28/99 11,118 11,590 11,643 13,025
3/31/99 11,109 11,574 11,636 13,547
4/30/99 12,050 12,556 12,631 14,071
5/31/99 11,608 12,085 12,159 13,738
6/30/99 12,099 12,591 12,686 14,501
7/31/99 11,408 11,859 11,962 14,048
8/31/99 11,033 11,468 11,569 13,979
9/30/99 10,518 10,914 11,022 13,596
10/31/99 10,624 11,024 11,143 14,456
11/30/99 10,162 10,542 10,659 14,753
12/31/99 10,353 10,733 10,863 15,619
1/31/00 9,637 9,984 10,123 14,834
2/29/00 8,895 9,199 9,337 14,553
3/31/00 9,444 9,776 9,915 15,977
4/30/00 9,267 9,590 9,741 15,496
5/31/00 9,707 10,027 10,191 15,178
6/30/00 9,560 9,868 10,039 15,552
7/31/00 9,143 9,086 9,602 15,309
Average Annual Total Return
As of Inception 1 Since
July 31, 2000 Date Year Inception
Class A Shares* 9/1/98 (23.46%) (4.58%)
Class B Shares** 9/2/98 1 (24.13%) (4.89%)
Trust Shares 12/3/98 1 (19.72%) (2.10%)
*Reflects maximum 4.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 9/1/98 to 7/31/00 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Select Equity Fund is measured against the S&P
500 Stock Index, an unmanaged index generally representative of the U.S.
stock market as a whole. The index does not reflect the deduction of fees as-
sociated with a mutual fund, such as investment management and fund account-
ing fees. The Fund's performance does reflect the deduction of fees for these
value-added services. Investors cannot invest directly in an index, although
they can invest in its underlying securities. During the period shown, the
Advisors waived and/or voluntarily reimbursed fees for various expenses. Had
these waivers and/or reimbursements not been in effect, performance quoted
would have been lower.
/1/Performance for the Class B and Trust Shares, which commenced operations
on 9/2/98 and 12/3/98, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date. The
historical performance for the Class B Shares has been adjusted to reflect
the higher 12b-1 fees and the contingent deferred sales charge (CDSC).
Effective 12/1/99, the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
21
<PAGE>
AmSouth Enhanced Market Fund
Portfolio Managers
Neil Wright, President and Chief
Investment Officer
Janna Sampson, Director of
Portfolio Management
Peter Jankovskis, Director of
Research
OakBrook Investments, LLC (sub-
advisor)
As Portfolio Managers of the
AmSouth Enhanced Market Fund and
the AmSouth Select Equity Fund,
Neil, Janna and Peter have 50 years
of combined experience. Neil and
Peter have Ph.D.s in economics, and
Janna holds an M.A. in economics.
They have worked together for the
past eight years.
PORTFOLIO MANAGER'S PERSPECTIVE
"Our stock selection strategy for the AmSouth Enhanced Market Fund is fairly
conservative, with fund returns having a very close correlation to those of the
S&P 500. We try to be 100% invested and do not try to time the market. Through
the use of a sophisticated computer model, we attempt to identify stocks within
the S&P 500--typically 350-400 stocks--that are starting to experience a
widening range of investor expectations. We look to overweight these stocks
because we expect they will outperform the overall market."
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2000, the Fund's total return was 9.46%
(Class A Shares at NAV). In comparison, the S&P 500 Stock Index rose 8.97%.
Q. What factors affected your performance?
A. We are a style-neutral fund, which means the Fund closely tracks the S&P
500's sector weightings. When considering a stock for purchase, we look at the
range of expectations surrounding that stock, including price volatility and
short-interest rates.
While excess return comes mainly from selecting which individual stocks should
be over or under weighted, our technology holdings were responsible for much of
the Fund's overall performance during the period. Holdings in this area
included Oracle Corp. (1.70% of net assets) and Cisco Systems, Inc. (3.60%),
names in which we were overweighted at various times. It is not surprising that
much of our return came from the technology sector, as the bulk of the S&P
500's performance was attributable to technology. Outside of technology, we
profited from significant holdings in General Electric Co. (4.26%), Citigroup,
Inc. (2.08%) and Eli Lilly & Co. (1.14%).++
The worst-performing sector in the S&P 500 and in our portfolio was consumer
staples, which was down in the neighborhood of nine percent for the year. These
are traditional, "old economy" stocks that were out of favor for most of the
period.
As of July 31, 2000, the Fund's top five holdings were General Electric Co.
(4.26% of net assets), Cisco Systems, Inc. (3.60%), Intel Corp. (3.58%),
Microsoft Corp. (3.12%) and Exxon-Mobil Corp. (2.42%).++
Q. What is your outlook for the next six to 12 months?
A. We expect the markets to continue to be volatile. We are working through a
period where market analysts are adjusting some of their earnings expectations
downward, and we anticipate this will hurt higher price-to-earnings stocks,
much as it did from March through May of this year. With our disciplined strat-
egy in place, we expect that we will continue to outperform the S&P 500 in such
an environment.
++ The Fund's portfolio composition is subject to change.
22
<PAGE>
AmSouth Enhanced Market Fund
Value of a $10,000 Investment
[GRAPH]
AmSouth AmSouth AmSouth
Enhanced Enhanced Enhanced
Market Fund Market Fund Market Fund S&P 500
(Class A Shares)* (Class B Shares)** (Trust Shares) Stock Index
9/1/98 9,551 10,000 10,000 10,000
9/30/98 10,154 10,623 10,631 10,638
10/31/98 10,955 11,447 11,470 11,503
11/30/98 11,656 12,173 12,204 12,201
12/31/98 12,258 12,799 12,834 12,903
1/31/99 12,757 13,305 13,358 13,443
2/28/99 12,323 12,845 12,906 13,025
3/31/99 12,879 13,410 13,482 13,547
4/30/99 13,361 13,912 14,000 14,071
5/31/99 13,036 13,568 13,651 13,738
6/30/99 13,767 14,322 14,430 14,501
7/31/99 13,365 13,890 14,010 14,048
8/31/99 13,372 13,890 14,021 13,979
9/30/99 12,975 13,469 13,608 13,596
10/31/99 13,730 14,243 14,403 14,456
11/30/99 14,030 14,536 14,710 14,753
12/31/99 14,838 15,381 15,573 15,619
1/31/00 14,172 14,675 14,875 14,834
2/29/00 13,891 14,375 14,573 14,553
3/31/00 15,228 15,755 15,990 15,977
4/30/00 14,829 15,330 15,571 15,496
5/31/00 14,519 14,988 15,248 15,178
6/30/00 14,789 15,268 15,531 15,552
7/31/00 14,629 14,692 15,374 15,309
Average Annual Total Return
As of Inception 1 Since
July 31, 2000 Date Year Inception
Class A Shares* 9/1/98 4.56% 22.01%
Class B Shares** 9/2/98 1 3.65% 22.28%
Trust Shares 12/11/98 1 9.73% 25.22%
*Reflects maximum 4.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 9/1/98 to 7/31/00 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Enhanced Market Fund is measured against the
S&P 500 Stock Index, an unmanaged index generally representative of the U.S.
stock market as a whole. The index does not reflect the deduction of fees
associated with a mutual fund, such as investment management and fund ac-
counting fees. The Fund's performance does reflect the deduction of fees for
these value-added services. Investors cannot invest directly in an index,
although they can invest in its underlying securities. During the period
shown, the Advisor waived and/or voluntarily reimbursed fees for various ex-
penses. Had these waivers and/or reimbursements not been in effect, perfor-
mance quoted would have been lower.
/1/Performance for the Class B and Trust Shares, which commenced operations
on 9/2/98 and 12/11/98, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date. The
historical performance for the Class B Shares has been adjusted to reflect
the higher 12b-1 fees and the contingent deferred sales charge (CDSC).
Effective 12/1/99, the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
23
<PAGE>
AmSouth International Equity Fund+
Portfolio Managers
Herbert Gullquist, Chief Investment
Officer
John Reinsberg, Managing Director
International Equity Management
Lazard Asset Management (Sub-
Advisor)
As Portfolio Managers of the
AmSouth International Equity Fund,
Herbert and John have 37 years and
17 years of investment experience,
respectively. Herbert has a B.A.
from Northwestern University. John
has an M.B.A. from Columbia
University and a B.A. from the
University of Pennsylvania.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth International Equity Fund selects undervalued companies in global
markets, primarily in Europe and the Pacific Basin. Our team of global analysts
used fundamental research to assess the strengths and weaknesses of individual
companies and their competitors, applying both quantitative and qualitative
reviews. We manage portfolio risk through security, market, country and
regional diversification. We maintain a strict discipline of selling stocks
when they reach our valuation targets."
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2000, the Fund's total return was 7.88%
(Class A Shares at NAV). In comparison, the Morgan Stanley Capital Internation-
al, MSCI (Europe, Australasia and Far East ) EAFE Index(R) rose 9.01%.
Q. What factors affected your performance?
A. Sector rotation had a big impact on market performance throughout the peri-
od. "New economy" stocks--known collectively as technology, media and telecom-
munication issues (TMT)--enjoyed robust price growth for the first eight months
of our fiscal year. Beginning in mid-March, however, investor sentiment shifted
abruptly and sharply away from TMT stocks and toward more fundamentally valued
companies.
We felt that the prior dominance of TMT stocks, many of which appeared to be
overvalued, was excessive. The international markets have come around to that
thinking, as well. Investors are now choosing the true enablers and long-term
winners among new economy companies, while rediscovering financially productive
and undervalued old economy firms.
Lazard Asset Management is a value manager and therefore tends to be
underweighted in expensive arenas like TMT. Stocks we favor are in sectors such
as consumer staples and finance companies. Consequently, the Fund
underperformed during the period when TMT stocks soared and enjoyed very strong
returns when value stocks came back into favor.
In Europe, we were heartened by that continent's continued industry consolida-
tion. Banking giant HSBC Holdings PLC (1.45% of net assets) bolstered its posi-
tion as the world's second-largest financial institution, by acquiring Credit
Commercial de France and forming a non-U.S. private banking joint venture with
Merrill Lynch. Telefonica (1.02%) expanded its global Internet presence by buy-
ing Lycos via its separately listed Terra Networks Internet business.++
As of July 31, 2000, approximately 21.8% of the Fund's assets were invested in
Japan, 20.0% in the United Kingdom, 12.6% in France, 8.6% in Germany, 6.3% in
the Netherlands, 4.2% in Switzerland, 3.4% in Sweden, 2.9% in Spain, 2.6% in
Italy and 1.9% in Mexico. Our remaining assets were invested in Australia, Bra-
zil, Denmark, Finland, India, Portugal, Singapore and South Korea, with 5.1% in
cash.++
Q. What is your outlook for the next six to 12 months?
A. In Europe, we are particularly excited about the positive effects of tax
cuts in Germany, which are having a spillover effect into other countries;
France and Italy, for instance, have begun dialogues on possibly cutting their
own taxes. Lower taxes could act as a catalyst for further corporate restruc-
turing and industry consolidation across the continent, where we are seeing
many countries adopt the American model of restructuring and a focus on return
on capital.
In Japan, banking consolidation and reform is continuing; market forces are be-
ing allowed to function more naturally. Companies continue to improve their re-
turn on capital and these positive changes, if sustained, should be reflected
in the stock market.
+ International investing involves increased risk and volatility.
++ The Fund's portfolio composition is subject to change.
24
<PAGE>
AmSouth International Equity Fund+
Value of a $10,000 Investment
[GRAPH]
AmSouth AmSouth AmSouth
International International International
Equity Fund Equity Fund Equity Fund MSCI EAFE
(Class A Shares)* (Class B Shares)** (Trust Shares) Index
8/15/97 9,551 10,000 10,000 10,000
8/31/97 9,245 9,673 9,680 9,253
9/30/97 9,876 10,327 10,340 9,772
10/31/97 9,093 9,504 9,520 9,020
11/30/97 9,188 9,594 9,620 8,928
12/31/97 9,265 9,663 9,700 9,006
1/31/98 9,494 9,901 9,940 9,418
2/28/98 10,001 10,426 10,471 10,023
3/31/98 10,603 11,041 11,102 10,331
4/30/98 10,785 11,219 11,292 10,413
5/31/98 10,842 11,278 11,352 10,362
6/30/98 10,584 11,001 11,082 10,441
7/31/98 10,699 11,110 11,202 10,547
8/31/98 8,968 9,306 9,390 9,240
9/30/98 8,538 8,850 8,939 8,957
10/31/98 9,246 9,574 9,680 9,890
11/30/98 9,781 10,129 10,241 10,397
12/31/98 10,143 10,496 10,619 10,807
1/31/99 10,056 10,396 10,529 10,775
2/28/99 9,807 10,149 10,258 10,519
3/31/99 10,133 10,476 10,609 10,958
4/30/99 10,670 11,021 11,161 11,402
5/31/99 10,277 10,605 10,750 10,815
6/30/99 10,766 11,110 11,262 11,236
7/31/99 11,111 11,457 11,633 11,570
8/31/99 11,283 11,625 11,804 11,612
9/30/99 11,264 11,596 11,784 11,729
10/31/99 11,542 11,873 12,075 12,169
11/30/99 11,878 12,210 12,426 12,591
12/31/99 12,858 13,210 13,456 13,721
1/31/00 11,918 12,240 12,473 12,850
2/29/00 11,976 12,290 12,534 13,196
3/31/00 12,519 12,830 13,102 13,707
4/30/00 11,976 12,270 12,544 12,986
5/31/00 11,792 12,070 12,341 12,669
6/30/00 12,325 12,610 12,909 13,164
7/31/00 11,986 11,960 12,554 12,612
Average Annual Total Return
As of Inception 1 Since
July 31, 2000 Date Year Inception
Class A Shares* 8/15/97 2.99% 6.33%
Class B Shares** 2/2/99 1 2.01% 6.25%
Trust Shares 12/14/98 1 7.92% 8.01%
*Reflects maximum 4.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 8/15/97 to 7/31/00 in the indicated share class versus a similar in-
vestment in the Fund's benchmark, and represents the reinvestment of divi-
dends and capital gains in the Fund.
The performance of the AmSouth International Equity Fund is measured against
the Morgan Stanley Capital International, MSCI (Europe, Australasia and Far
East) EAFE(R) Index, which is unmanaged index that is comprised of a sample
of companies representative of the market structure of 20 European and Pa-
cific Basin countries. The index does not reflect the deduction of fees as-
sociated with a mutual fund, such as investment management and fund account-
ing fees. The Fund's performance does reflect the deduction of fees for
these value-added services. Investors cannot invest directly in an index,
although they can invest in its underlying securities. During the period
shown, the Advisor waived and/or voluntarily reimbursed fees for various ex-
penses. Had these waivers and/or reimbursements not been in effect, perfor-
mance quoted would have been lower.
The quoted returns reflect the performance from 8/15/97 to 12/13/98 of the
DG International Equity Fund and from 12/14/98 to 3/12/00 of the ISG Inter-
national Equity Fund, which were open-end investment companies that were the
predecessor funds to the AmSouth International Equity Fund.
/1/ Performance for the Class B and Trust Shares, which commenced operations
on 2/2/99 and 12/14/98, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date. The
historical performance for the Class B Shares has been adjusted to reflect
the higher 12b-1 fees and the contingent deferred sales charge (CDSC).
Past performance is no guarantee of future results. Investment return and
net asset value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than the original cost.
25
<PAGE>
AmSouth Strategic Portfolios
Aggressive Growth
Growth
Growth and Income
Moderate Growth and Income
Current Income
The AmSouth Strategic Portfolios
are managed by a team of AmSouth
investment managers, including both
equity and fixed-income
specialists, with more than 40
years of combined investment
management experience.
PORTFOLIO MANAGER'S PERSPECTIVE
The Funds seek to provide investors with the potential to achieve a variety
of long- and short-term goals, commensurate with investors' specific time
horizons and tolerance for risk. Each of the five Strategic Portfolios invests
in a combination of underlying mutual funds from the AmSouth Fund Family.
Based on each Portfolio's asset-allocation target, the managers periodically
rebalance stock, bond and money-market holdings--based on analysis of economic
and market trends.
Q. How did the Funds perform during the period?
A. For the 12 months
ended July 31, 2000;
the Funds' total
returns and
comparative benchmark
returns were as
follows:
AmSouth Aggressive Growth Portfolio
(Class A Shares at NAV): 13.92%
Lipper Growth Fund Index/1/: 17.88%
S&P 1500 Stock Index: 9.88%
Merrill Lynch Government/Corporate Master Index: 5.68%
MSCI EAFE(R) Index: 9.27%
AmSouth Growth Portfolio
(Class A Shares at NAV): 7.36%
Lipper Balanced Fund Index/2/: 6.13%
S&P 1500 Stock Index: 9.88%
Merrill Lynch Government/Corporate Master Index: 5.68%
MSCI EAFE(R) Index: 9.27%
AmSouth Growth and Income Portfolio
(Class A Shares at NAV): 7.24%
Lipper Balanced Fund Index/2/: 6.13%
S&P 1500 Stock Index: 9.88%
Merrill Lynch Government/Corporate Master Index: 5.68%
MSCI EAFE(R) Index: 9.27%
AmSouth Moderate Growth and Income Portfolio
(Class A Shares at NAV): 5.83%
Lipper Balanced Fund Index/2/: 6.13%
S&P 1500 Stock Index: 9.88%
Merrill Lynch Government/Corporate Master Index: 5.68%
AmSouth Current Income Portfolio
(Class A Shares at NAV): 3.78%
Lipper Income Fund Index/3/: 4.94%
Merrill Lynch Government/Corporate Master Index: 5.68%
Q. What factors affected the Funds' performance?
A. During the period, the largest market gains were realized in small-cap
stocks and the technology sector. Consequently, the greater allocation each un-
derlying fund had to these two areas, the higher the portfolio returns. This is
consistent with what we would expect from the various risk/return compositions
of the Funds: The more short-term risk, the greater the long-term returns.
Overall, throughout much of our fiscal year (especially the latter half), we
have followed more defensive allocation formulas than we normally would. That
is, we have had more money invested in fixed-income and cash-equivalent securi-
ties, and less in equities. This has been a conscious effort, motivated by our
belief that stocks are richly valued, while bonds appear to offer greater rela-
tive value, especially on a risk-adjusted basis. Our research shows that vola-
tility among the market's largest stocks has jumped appreciably in recent
years, which is one reason why we have scaled back our equity allocation.
As of July 31, 2000, the Funds' portfolios were allocated as follows:++
Aggressive Growth: 80% stocks, 0% bonds, 20% money market.
Growth: 66% stocks, 20% bonds and 14% money market.
Growth and Income: 47% stocks, 45% bonds and 8% money market.
Moderate Growth and Income: 30% stocks, 67% bonds and 3% money market.
Current Income: 0% stocks, 94% bonds and 6% money market.
Q. What is your outlook for the next six to 12 months?
A. The asset allocation models we use consider stocks' expected growth rates in
earnings and dividends, compares them to fixed-income securities and produces
an "equity risk premium," an estimate of how much you are getting paid to in-
vest in riskier stocks, versus more stable bonds. Our models point to continued
high volatility, and high risk, in stocks. Therefore, we anticipate keeping our
allocations at conservative levels until a change in conditions warrant.
++ The composition of the portfolio is subject to change.
/1/ The Lipper Growth Funds Index is an index of managed funds that normally
seek growth of principal through equity investments.
/2/ The Lipper Balanced Fund Index is an index of managed funds whose primary
objective is to conserve principal by maintaining at all times a balanced port-
folio of both stocks and bonds. Typically, the stock/bond ratio ranges around
60%/40%.
/3/ The Lipper Income Funds Index is an index of managed funds that normally
seek a high level of current income through investing in income-producing
stocks, bonds and money market instruments.
26
<PAGE>
AmSouth Aggressive Growth Portfolio
Value of a $10,000 Investment
[GRAPH]
AmSouth
Aggressive Merrill Lynch
Growth Portfolio S&P 1500 Government/Corporate MSCI
(Class A Shares)* Stock Index Master Index EAFE Index
1/13/99 9,551 10,000 10,000 10,000
1/31/99 9,618 10,000 10,072 9,970
2/28/99 9,351 9,656 9,818 9,733
3/31/99 9,494 10,026 9,880 10,139
4/30/99 9,666 10,451 9,913 10,550
5/31/99 9,446 10,239 9,805 10,007
6/30/99 9,876 10,806 9,775 10,397
7/31/99 9,809 10,484 9,747 10,706
8/31/99 9,713 10,397 9,740 10,745
9/30/99 9,629 10,119 9,830 10,853
10/31/99 9,916 10,732 9,849 11,260
11/30/99 10,462 10,980 9,844 11,651
12/31/99 11,168 11,634 9,795 12,696
1/31/00 10,790 11,073 9,792 11,890
2/29/00 10,984 10,978 9,910 12,210
3/31/00 11,509 11,993 10,064 12,683
4/30/00 11,279 11,632 10,011 12,016
5/31/00 11,058 11,397 10,000 11,722
6/30/00 11,353 11,682 10,199 12,181
7/31/00 11,174 11,520 10,301 11,670
Average Annual Total Return
As of Inception 1 Since
July 31, 2000 Date Year Inception
Class A Shares* 1/13/99 8.83% 7.45%
Class B Shares** 1/27/99 8.17% 7.30%
Trust Shares 1/28/99 14.04% 10.58%
*Reflects maximum 4.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represent a comparison to a hypothetical $10,000 investment
from 1/13/99 to 7/31/00 in the indicated share class versus a similar invest-
ment in the Fund's benchmark.
The Portfolio's performance is compared to the Morgan Stanley Capital Inter-
national (Europe, Australasia and Far East) EAFE(R) Index, which is generally
representative of stock markets in those regions; the Merrill Lynch
Government/Corporate Master Index, which is generally representative of the
performance of corporate and U.S. Government bonds; and the S&P 1500 Index,
which is generally representative of the performance of large and small com-
panies in the U.S. stock market. These indices are unmanaged and do not re-
flect the expenses associated with a mutual fund, such as investment manage-
ment and fund accounting fees. The Portfolio's performance reflects the de-
duction of fees for these value-added services. Investors cannot invest di-
rectly in an index, although they can invest in its underlying securities.
During the period shown, the Advisor waived and/or voluntarily reimbursed
fees for various expenses. Had these waivers and/or reimbursements not been
in effect, performance quoted would have been lower.
The quoted returns reflect the performance from 1/13/99 to 3/12/00 of the ISG
Aggressive Growth Portfolio, which was an open-end investment company and
predecessor fund to the AmSouth Aggressive Growth Portfolio.
Past performance is not a prediction of future results. The Fund's investment
return and principal value will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original purchase price.
27
<PAGE>
AmSouth Growth Portfolio
Value of a $10,000 Investment
[GRAPH]
AmSouth
Growth Merrill Lynch
Portfolio S&P 1500 Government/Corporate MSCI EAFE
(Class A Shares)* Stock Index Master Index Index
2/11/99 9,548 10,000 10,000 10,000
2/28/99 9,385 9,656 9,748 9,762
3/31/99 9,337 10,026 9,809 10,169
4/30/99 9,529 10,451 9,842 10,581
5/31/99 9,385 10,239 9,735 10,036
6/30/99 9,706 10,806 9,705 10,428
7/31/99 9,639 10,484 9,677 10,738
8/31/99 9,514 10,397 9,670 10,777
9/30/99 9,454 10,119 9,759 10,885
10/31/99 9,668 10,732 9,778 11,293
11/30/99 9,949 10,980 9,774 11,685
12/31/99 10,393 11,634 9,724 12,734
1/31/00 10,128 11,073 9,722 11,925
2/29/00 10,206 10,978 9,839 12,246
3/31/00 10,606 11,993 9,992 12,721
4/30/00 10,400 11,632 9,939 12,051
5/31/00 10,225 11,397 9,928 11,757
6/30/00 10,485 11,682 10,126 12,217
7/31/00 10,349 11,520 10,227 11,705
Average Annual Total Return
As of Inception 1 Since
July 31, 2000 Date Year Inception
Class A Shares* 2/11/99 2.55% 2.36%
Class B Shares** 2/15/99 1.69% 3.12%
Trust Shares 2/1/99 7.83% 5.47%
*Reflects maximum 4.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represent a comparison to a hypothetical $10,000 investment
from 2/11/99 to 7/31/00 in the indicated share class versus a similar invest-
ment in the Fund's benchmark.
The Portfolio's performance is compared to the Morgan Stanley Capital Inter-
national (Europe, Australasia and Far East) EAFE(R) Index, which is generally
representative of stock markets in those regions; the Merrill Lynch
Government/Corporate Master Index, which is generally representative of the
performance of corporate and U.S. Government bonds; and the S&P 1500 Index,
which is generally representative of the performance of large and small com-
panies in the U.S. stock market. These indices are unmanaged and do not re-
flect the expenses associated with a mutual fund, such as investment manage-
ment and fund accounting fees. The Portfolio's performance reflects the de-
duction of fees for these value-added services. Investors cannot invest di-
rectly in an index, although they can invest in its underlying securities.
During the period shown, the Advisor waived and/or voluntarily reimbursed
fees for various expenses. Had these waivers and/or reimbursements not been
in effect, performance quoted would have been lower.
The quoted returns reflect the performance from 2/11/99 to 3/12/00 of the ISG
Growth Portfolio, which was an open-end investment company and predecessor
fund to the AmSouth Growth Portfolio.
Past performance is not a prediction of future results. The Fund's investment
return and principal value will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original purchase price.
28
<PAGE>
AmSouth Growth and Income Portfolio
Value of a $10,000 Investment
[GRAPH]
AmSouth
Growth & Income Merrill Lynch
Portfolio S&P 1500 Government/Corporate MSCI EAFE
(Class A Shares)* Stock Index Master Index Index
3/8/99 9,546 10,000 10,000 10,000
3/31/99 9,490 10,384 10,063 10,417
4/30/99 9,594 10,824 10,096 10,840
5/31/99 9,452 10,604 9,986 10,281
6/30/99 9,607 11,192 9,956 10,682
7/31/99 9,522 10,858 9,928 11,000
8/31/99 9,474 10,768 9,920 11,040
9/30/99 9,401 10,480 10,011 11,151
10/31/99 9,572 11,115 10,031 11,569
11/30/99 9,809 11,371 10,026 11,971
12/31/99 10,044 12,049 9,976 13,045
1/31/00 9,871 11,468 9,973 12,216
2/29/00 9,852 11,370 10,093 12,545
3/31/00 10,214 12,420 10,250 13,031
4/30/00 10,170 12,047 10,196 12,345
5/31/00 10,103 11,804 10,185 12,044
6/30/00 10,318 12,099 10,387 12,515
7/31/00 10,214 11,931 10,491 11,990
Average Annual Total Return
As of Inception 1 Since
July 31, 2000 Date Year Inception
Class A Shares* 3/8/99 2.47% 1.52%
Class B Shares** 1/27/99 1.50% 2.18%
Trust Shares 2/8/99 7.34% 6.80%
*Reflects maximum 4.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represent a comparison to a hypothetical $10,000 investment
from 3/8/99 to 7/31/00 in the indicated share class versus a similar invest-
ment in the Fund's benchmark.
The Portfolio's performance is compared to the Morgan Stanley Capital Inter-
national (Europe, Australasia and Far East) EAFE(R) Index, which is generally
representative of stock markets in those regions; the Merrill Lynch
Government/Corporate Master Index, which is generally representative of the
performance of corporate and U.S. Government bonds and the S&P 1500 Index,
which is generally representative of the performance of large and small com-
panies in the U.S. stock market. These indices are unmanaged and do not re-
flect the expenses associated with a mutual fund, such as investment manage-
ment and fund accounting fees. The Portfolio's performance reflects the de-
duction of fees for these value-added services. Investors cannot invest di-
rectly in an index, although they can invest in its underlying securities.
During the period shown, the Advisor waived and/or voluntarily reimbursed
fees for various expenses. Had these waivers and/or reimbursements not been
in effect, performance quoted would have been lower.
The quoted returns reflect the performance from 3/8/99 to 3/12/00 of the ISG
Growth & Income Portfolio, which was an open-end investment company and pred-
ecessor fund to the AmSouth Growth and Income Portfolio.
Past performance is not a prediction of future results. The Fund's investment
return and principal value will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original purchase price.
29
<PAGE>
AmSouth Moderate Growth and Income Portfolio
Value of a $10,000 Investment
[GRAPH]
AmSouth Moderate
Growth & Income Merrill Lynch
Portfolio S&P 1500 Government/Corporate
(Class A Shares)* Stock Index Master Index
2/9/99 9,554 10,000 10,000
2/28/99 9,574 9,656 9,748
3/31/99 9,615 10,026 9,809
4/30/99 9,663 10,451 9,842
5/31/99 9,547 10,239 9,735
6/30/99 9,626 10,806 9,705
7/31/99 9,558 10,484 9,677
8/31/99 9,529 10,397 9,670
9/30/99 9,499 10,119 9,759
10/31/99 9,617 10,732 9,778
11/30/99 9,763 10,980 9,774
12/31/99 9,876 11,634 9,724
1/31/00 9,757 11,073 9,722
2/29/00 9,727 10,978 9,839
3/31/00 10,038 11,993 9,992
4/30/00 10,013 11,632 9,939
5/31/00 9,978 11,397 9,928
6/30/00 10,138 11,682 10,126
7/31/00 10,116 11,520 10,227
Average Annual Total Return
As of Inception 1 Since
July 31, 2000 Date Year Inception
Class A Shares* 2/9/99 1.10% 0.78%
Class B Shares** 1/28/99 0.09% (0.31%)
Trust Shares 2/10/99 6.04% 4.20%
*Reflects maximum 4.00% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represent a comparison to a hypothetical $10,000 investment
from 2/9/99 to 7/31/00 in the indicated share class versus a similar invest-
ment in the Fund's benchmark.
The Portfolio's performance is compared to the Merrill Lynch
Government/Corporate Master Index, which is generally representative of the
performance of corporate and U.S. Government bonds, and the S&P 1500 Index,
which is generally representative of the performance of large and small com-
panies in the U.S. stock market. These indices are unmanaged and do not re-
flect the expenses associated with a mutual fund, such as investment manage-
ment and fund accounting fees. The Portfolio's performance reflects the de-
duction of fees for these value-added services. Investors cannot invest di-
rectly in an index, although they can invest in its underlying securities.
During the period shown, the Advisor waived and/or voluntarily reimbursed
fees for various expenses. Had these waivers and/or reimbursements not been
in effect, performance quoted would have been lower.
The quoted returns reflect the performance from 2/9/99 to 3/12/00 of the ISG
Moderate Growth & Income Portfolio, which was an open-end investment company
and predecessor fund to the AmSouth Moderate Growth and Income Portfolio.
Past performance is not a prediction of future results. The Fund's investment
return and principal value will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original purchase price.
30
<PAGE>
AmSouth Current Income Portfolio
Value of a $10,000 Investment
[GRAPH]
AmSouth Current Merrill Lynch
Income Portfolio Government/Corporate
(Class A Shares)* Master Index
2/23/99 9,602 10,000
2/28/99 9,551 9,748
3/31/99 9,599 9,809
4/30/99 9,580 9,842
5/31/99 9,468 9,735
6/30/99 9,436 9,705
7/31/99 9,425 9,677
8/31/99 9,416 9,670
9/30/99 9,484 9,759
10/31/99 9,497 9,778
11/30/99 9,477 9,774
12/31/99 9,445 9,724
1/31/00 9,439 9,722
2/29/00 9,499 9,839
3/31/00 9,606 9,992
4/30/00 9,573 9,939
5/31/00 9,578 9,928
6/30/00 9,720 10,126
7/31/00 9,781 10,227
Average Annual Total Return
As of Inception 1 Since
July 31, 2000 Date Year Inception
Class A Shares* 2/23/99 (0.39%) (1.53%)
Class B Shares** 3/17/99 (2.67%) (2.31%)
Trust Shares 1/25/99 4.03% 1.34%
*Reflects maximum 4.00% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison to a hypothetical $10,000 investment
from 2/23/99 to 7/31/00 in the indicated share class versus a similar in-
vestment in the Fund's benchmark.
The Portfolio's performance is compared the Merrill Lynch
Government/Corporate Master Index, which is generally representative of the
performance of corporate and U.S. Government bonds. The index is unmanaged
and does not reflect the expenses associated with a mutual fund, such as in-
vestment management and fund accounting fees. The Portfolio's performance
reflects the deduction of fees for these value-added services. Investors
cannot invest directly in an index, although they can invest in its under-
lying securities. During the period shown, the Advisor waived and/or volun-
tarily reimbursed fees for various expenses. Had these waivers and/or reim-
bursements not been in effect, performance quoted would have been lower.
The quoted returns reflect the performance from 2/23/99 to 3/12/00 of the
ISG Current Income Portfolio, which was an open-end investment company and
predecessor fund to the AmSouth Current Income Portfolio.
Past performance is not a prediction of future results. The Fund's investment
return and principal value will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original purchase price.
31
<PAGE>
AmSouth Bond Fund
Portfolio Manager
Brian B. Sullivan, CFA, Chief
Investment Officer
John P. Boston, CFA, Senior Vice
President
AmSouth Bank
The AmSouth Bond Fund is co-managed
by Brian Sullivan, CFA and John
Boston, CFA. Brian has 14 years of
fixed-income investment management
experience and holds an M.B.A. in
finance and a bachelor's degree in
economics. John has more than 11
years of experience as a fixed-
income manager. He holds a
bachelor's degree in finance and
political science.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Bond Fund seeks to take advantage of changes in interest rates to
pursue strong returns. We buy longer bonds when interest rates are high and
shorter bonds when interest rates are low. The change in the average maturity or
duration is one of the most powerful determinants of return. Through the active
use of high-quality investments, we strive to obtain excellent returns."
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2000, the AmSouth Bond Fund produced a to-
tal return of 5.10% (Class A Shares at NAV). In comparison, the Lehman Brothers
Government/Credit Bond Index rose 5.11%, and the Lipper Corporate A-Rated Debt
Fund Index/1/ gained 4.57%.
Q. What factors affected your performance?
A. A year ago the Fund was challenged by the start of a rising interest-rate
environment and the Fed's efforts to cool an overheating economy. Therefore, we
worked on getting the Fund positioned for a possible decline in long-term rates
this year and have posted solid gains for the latest 12-month period.
It is true that the Fed has continued to raise short-term interest rates, with
six rate hikes since June 1999. The Fed obviously is trying to effect a slow-
down in economic activity; they felt that growth was exceeding the economy's
"non-inflationary speed limit." During the last 12 months, interest rates
across most of the yield curve have risen.
However, in the 30-year Treasury bond, we saw a decline in rates from July 1999
to July 2000. While the rate increases at the short end of the yield curve have
been driven by Fed policy, the decline in long-term rates is a little more com-
plex. Long-term rates are set by the market, not the Fed, and reflect such fac-
tors as investors' expectations for inflation. Nevertheless, the most important
factor driving the recent decline in long-term rates has been the U.S. Treasury
Department's program of buying back long-term bonds.
Earlier in the period, when long-term rates were nearly seven percent, we be-
lieved long bonds represented very good value, and we added to our long Trea-
sury positions. As long-term rates declined, the prices of the bonds we held
went up, and added value to shareholder returns. When long-term rates fell to
roughly 5.80%, we took the opportunity to realize profits, by selling long
bonds and buying intermediate issues. This action reduced the interest-rate
sensitivity of the portfolio.
The Fund also holds a significant position in corporate securities, which pro-
vide a premium in yield over Treasuries of like maturities. This additional in-
come, or spread, is still very wide by historical measures; we are still re-
ceiving income that we consider to be generous. Therefore, we continue to em-
phasize high-quality, corporate issues.
As of July 31, 2000, approximately 40.9% of the portfolio was invested in cor-
porate issues, 39.4% in securities issued by the U.S. Treasury, 16.0% in U.S.
government agency paper and 1.6% in cash. The securities within the Fund main-
tained an average credit quality of AAA, with an average maturity of 7.50
years.++
Q. What is your outlook for the next six to 12 months?
A. We believe the Fed is nearing an end to its tightening policy. There is
growing evidence that the economy is slowing, which means the Fed has done its
job. What remains to be seen is whether the economic "landing" is soft or hard.
As far as interest rates are concerned, we anticipate that long-term rates will
not move much lower over the next six months.
/1/The Lipper Corporate A-Rated Debt Fund Index is an index comprised of man-
aged funds that invest at least 65% of their assets in corporate and govern-
ment debt issues rated in the top four grades.
++The Fund's portfolio composition is subject to change.
32
<PAGE>
AmSouth Bond Fund
Value of a $10,000 Investment
[GRAPH]
AmSouth AmSouth AmSouth Lehman Brothers
Bond Fund Bond Fund Bond Fund Government/Credit
(Class A Shares)* (Class B Shares) (Trust Shares) Bond Index
7/31/90 9,603 10,000 10,000 10,000
8/31/90 9,420 9,805 9,810 9,855
9/30/90 9,486 9,865 9,878 9,937
10/31/90 9,601 9,970 9,998 10,069
11/30/90 9,902 10,285 10,079 10,288
12/31/90 9,948 10,315 10,360 10,443
1/31/91 10,054 10,420 10,471 10,561
2/28/91 10,097 10,465 10,514 10,651
3/31/91 10,135 10,495 10,555 10,725
4/30/91 10,186 10,540 10,608 10,848
5/31/91 10,248 10,585 10,672 10,899
6/30/91 10,237 10,570 10,660 10,887
7/31/91 10,367 10,690 10,797 11,023
8/31/91 10,610 10,930 11,050 11,277
9/30/91 10,824 11,154 11,272 11,513
10/31/91 10,967 11,289 11,421 11,616
11/30/91 11,124 11,439 11,585 11,732
12/31/91 11,473 11,784 11,947 12,127
1/31/92 11,274 11,574 11,741 11,948
2/29/92 11,328 11,619 11,796 12,011
3/31/92 11,249 11,529 11,715 11,945
4/30/92 11,341 11,604 11,810 12,017
5/31/92 11,546 11,814 12,024 12,250
6/30/92 11,732 11,994 12,217 12,429
7/31/92 12,064 12,324 12,563 12,747
8/31/92 12,197 12,444 12,701 12,861
9/30/92 12,454 12,699 12,969 13,037
10/31/92 12,231 12,459 12,737 12,838
11/30/92 12,153 12,369 12,656 12,827
12/31/92 12,310 12,519 12,819 13,047
1/31/93 12,604 12,804 13,126 13,331
2/28/93 12,854 13,058 13,124 13,607
3/31/93 12,920 13,103 13,455 13,653
4/30/93 13,033 13,208 13,572 13,758
5/31/93 13,007 13,178 13,546 13,751
6/30/93 13,227 13,388 13,592 14,063
7/31/93 13,250 13,403 13,798 14,153
8/31/93 13,485 13,628 14,043 14,478
9/30/93 13,544 13,673 14,104 14,529
10/31/93 13,567 13,688 14,129 14,588
11/30/93 13,484 13,583 14,042 14,423
12/31/93 13,526 13,613 14,086 14,486
1/31/94 13,696 13,778 14,263 14,704
2/28/94 13,474 13,553 14,032 14,384
3/31/94 13,203 13,268 13,749 14,032
4/30/94 13,089 13,133 13,631 13,916
5/31/94 13,099 13,133 13,641 13,891
6/30/94 13,058 13,088 13,599 13,858
7/31/94 13,280 13,298 13,829 14,135
8/31/94 13,302 13,298 13,852 14,141
9/30/94 13,084 13,073 13,626 13,927
10/31/94 13,056 13,043 13,596 13,911
11/30/94 13,014 12,984 13,553 13,886
12/31/94 13,089 13,043 13,631 13,978
1/31/95 13,320 13,268 13,871 14,246
2/28/95 13,649 13,583 14,214 14,577
3/31/95 13,717 13,643 14,285 14,674
4/30/95 13,918 13,823 14,494 14,879
5/31/95 14,503 14,393 15,104 15,503
6/30/95 14,613 14,498 15,218 15,626
7/31/95 14,562 14,438 15,165 15,566
8/31/95 14,727 14,588 15,336 15,765
9/30/95 14,857 14,708 15,472 15,926
10/31/95 15,068 14,903 15,692 16,159
11/30/95 15,306 15,127 15,940 16,425
12/31/95 15,499 15,292 16,140 16,667
1/31/96 15,605 15,397 16,251 16,771
2/29/96 15,324 15,097 15,958 16,415
3/31/96 15,154 14,918 15,781 16,278
4/30/96 15,014 14,768 15,636 16,166
5/31/96 14,975 14,723 15,595 16,139
6/30/96 15,165 14,903 15,793 16,354
7/31/96 15,198 14,918 15,827 16,392
8/31/96 15,123 14,828 15,749 16,352
9/30/96 15,400 15,082 16,037 16,643
10/31/96 15,801 15,472 16,455 17,031
11/30/96 16,117 15,772 16,785 17,345
12/31/96 15,895 15,532 16,553 17,151
1/31/97 15,887 15,517 16,544 17,172
2/28/97 15,900 15,517 16,558 17,208
3/31/97 15,660 15,262 16,308 17,003
4/30/97 15,916 15,502 16,575 17,252
5/31/97 16,058 15,622 16,723 17,413
6/30/97 16,248 15,802 16,921 17,622
7/31/97 16,790 16,312 17,485 18,161
8/31/97 16,561 16,072 17,247 17,957
9/30/97 16,846 16,328 17,528 18,240
10/31/97 17,128 16,616 17,840 18,532
11/30/97 17,197 16,676 17,913 18,629
12/31/97 17,369 16,813 18,077 18,825
1/31/98 17,623 17,063 18,360 19,090
2/28/98 17,554 16,972 18,289 19,051
3/31/98 17,613 17,018 18,352 19,110
4/30/98 17,676 17,067 18,420 19,206
5/31/98 17,851 17,225 18,604 19,413
6/30/98 18,018 17,375 18,779 19,610
7/31/98 18,041 17,385 18,804 19,626
8/31/98 18,460 17,764 19,243 20,009
9/30/98 19,004 18,275 19,812 20,581
10/31/98 18,938 18,200 19,745 20,436
11/30/98 18,916 18,169 19,724 20,558
12/31/98 18,964 18,200 19,776 20,608
1/31/99 19,042 18,263 19,859 20,755
2/28/99 18,641 17,865 19,441 20,261
3/31/99 18,740 17,947 19,547 20,362
4/30/99 18,770 17,962 19,579 20,412
5/31/99 18,562 17,756 19,364 20,202
6/30/99 18,528 17,711 19,330 20,139
7/31/99 18,507 17,660 19,309 20,083
8/31/99 18,463 17,603 19,265 20,067
9/30/99 18,614 17,752 19,425 20,248
10/31/99 18,638 17,744 19,451 20,300
11/30/99 18,611 17,722 19,424 20,289
12/31/99 18,479 17,576 19,290 20,165
1/31/00 18,462 17,540 19,274 20,160
2/29/00 18,738 17,806 19,564 20,413
3/31/00 19,056 18,088 19,899 20,708
4/30/00 18,957 17,983 19,797 20,607
5/31/00 18,928 17,945 19,769 20,588
6/30/00 19,299 18,286 20,160 21,008
7/31/00 19,451 18,419 20,321 21,231
Average Annual Total Return
As of Inception 1 5 10
July 31, 2000 Date Year Year Year
Class A Shares* 12/1/88 0.93%) 5.10% 6.88%
Class B Shares** 9/16/97 2 (0.66%) 4.66% 6.30%
Trust Shares 9/2/97 2 5.24% 6.03% 7.35%
*Reflects maximum 4.00% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The Class B contingent deferred sales charge (CDSC) is not included in the
above graph, since the performance is for more than six years and the CDSC
would no longer apply.
The chart above represents a comparison of a hypothetical $10,000 investment
from 7/31/90 to 7/31/00 in the indicated share class versus a similar in-
vestment in the Fund's benchmark, and represents the reinvestment of divi-
dends and capital gains in the Fund.
The performance of the AmSouth Bond Fund is measured against the Lehman
Brothers Government/Credit Bond Index, an unmanaged broad-based index repre-
sentative of the total return of long-term government and corporate bonds.
The index does not reflect the deduction of fees associated with a mutual
fund, such as investment management and fund accounting fees. The Fund's
performance does reflect the deduction of fees for these value-added servic-
es. Investors cannot invest directly in an index, although they can invest
in its underlying securities. During the period shown, the Advisor waived
and/or voluntarily reimbursed fees for various expenses. Had these waivers
and/or reimbursements not been in effect, performance quoted would have been
lower.
/2/Performance for the Class B and Trust Shares, which commenced operations
on 9/16/97 and 9/2/97, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date.
The historical performance for the Class B Shares has been adjusted to
reflect the higher 12b-1 fees and the contingent deferred sales charge
(CDSC).
Effective 12/1/99 the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
33
<PAGE>
AmSouth Limited Term Bond Fund
Portfolio Manager
John P. Boston, CFA
Senior Vice President
AmSouth Bank
John manages the AmSouth Limited
Term Bond Fund, the AmSouth
Government Income Fund and co-
manages the AmSouth Bond Fund. He
has more than 10 years of
experience as a fixed-income
manager. He holds a bachelor's
degree in finance and political
science and is a Chartered
Financial Analyst.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Limited Term Bond Fund was designed to fill the gap between money
market funds and long-term bond funds. For investors looking for a diversified
bond fund, this Fund represents the first step out on the 'risk/return' spectrum
from the money market arena."
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2000, the AmSouth Limited Term Bond Fund
produced a total return of 4.59% (Class A Shares at NAV). In comparison, the
Merrill Lynch 1-5-Year Government/Corporate Bond Index rose 5.19%, and the
Lipper Short-Term Investment Grade Index/1/ gained 5.03%.
Q. What factors affected your performance?
A. The Fed has continued to raise short-term interest rates, with six rate
hikes since June 1999. The Fed obviously is trying to effect a slowdown in eco-
nomic activity; they felt that growth was exceeding the economy's "non-infla-
tionary speed limit." During the last 12 months, interest rates across most of
the yield curve have risen.
Since we operate mostly at the short-to-intermediate portions of the yield
curve, this upward drift in rates challenged us- as rates rise, the prices of
securities fall. Earlier in the year, the government bonds in the Fund
outperformed the corporate issues. More recently, that trend has reversed, and
the corporate bonds have begun to outperform, as confidence returns to the cor-
porate sector in general.
Having some securities in the longest portion of the Fund's permissible matu-
rity range helped us; for example, a five-year bond performed better than a
two-year security. But, the short-maturity nature of the Fund did not lend it-
self to making big moves in our portfolio allocation. The Fund is designed to
remain relatively stable, compared to portfolios that are more aggressive.
As of July 31, 2000, approximately 71.1% of the portfolio was invested in cor-
porate issues, 14.6% in securities issued by the U.S. Treasury, 10.2% in U.S.
government agency paper and the remainder in cash. The securities within the
Fund maintained an average credit quality of AA, with an average maturity of
2.42 years.++
Q. What is your outlook for the next six to 12 months?
A. We believe the Fed is nearing an end to its tightening policy. There is
growing evidence that the economy is slowing, which means the Fed has done its
job; what remains to be seen is whether the economic "landing" is soft or hard.
As far as interest rates are concerned, we anticipate they will remain in a
narrow range for the time being. We will continue to look for value in specific
sectors, especially federal agency debt and short-maturity corporate securi-
ties.
/1/The Lipper Short-Term Investment-Grade Debt Fund Index is comprised of man-
aged funds that invest at least 65% of their assets in investment-grade debt
issues (rated in the top four grades) with dollar-weighted average maturities
of less than three years.
++The Fund's portfolio composition is subject to change.
34
<PAGE>
AmSouth Limited Term Bond Fund
Value of a $10,000 Investment
[GRAPH]
Merrill Lynch
AmSouth AmSouth AmSouth 1-5-Year
Limited Term Limited Term Limited Term Government/
Bond Fund Bond Fund Bond Fund Corporate
(Class A Shares)* (Class B Shares) (Trust Shares) Bond Index
7/31/90 9,599 10,000 10,000 10,000
8/31/90 9,634 10,030 10,037 10,006
9/30/90 9,684 10,076 10,089 10,091
10/31/90 9,761 10,151 10,169 10,206
11/30/90 9,866 10,257 10,278 10,325
12/31/90 9,970 10,348 10,387 10,457
1/31/91 10,059 10,439 10,479 10,556
2/28/91 10,148 10,514 10,572 10,621
3/31/91 10,214 10,575 10,641 10,693
4/30/91 10,303 10,666 10,733 10,810
5/31/91 10,375 10,726 10,808 10,880
6/30/91 10,398 10,741 10,832 10,906
7/31/91 10,466 10,802 10,903 11,014
8/31/91 10,619 10,953 11,062 11,193
9/30/91 10,732 11,059 11,181 11,344
10/31/91 10,852 11,180 11,306 11,475
11/30/91 10,967 11,286 11,425 11,605
12/31/91 11,161 11,467 11,627 11,820
1/31/92 11,137 11,437 11,603 11,765
2/29/92 11,200 11,498 11,668 11,802
3/31/92 11,189 11,467 11,657 11,781
4/30/92 11,257 11,528 11,727 11,897
5/31/92 11,344 11,619 11,818 12,041
6/30/92 11,526 11,785 12,007 12,198
7/31/92 11,665 11,921 12,152 12,382
8/31/92 11,750 11,997 12,241 12,511
9/30/92 11,897 12,133 12,394 12,659
10/31/92 11,796 12,027 12,289 12,541
11/30/92 11,765 11,982 12,256 12,496
12/31/92 11,834 12,042 12,328 12,634
1/31/93 11,999 12,194 12,500 12,828
2/28/93 12,132 12,330 12,639 12,984
3/31/93 12,174 12,360 12,683 13,035
4/30/93 12,266 12,436 12,779 13,136
5/31/93 12,237 12,405 12,748 13,100
6/30/93 12,403 12,557 12,922 13,236
7/31/93 12,448 12,587 12,968 13,264
8/31/93 12,611 12,753 13,138 13,425
9/30/93 12,651 12,784 13,180 13,473
10/31/93 12,658 12,769 13,187 13,503
11/30/93 12,628 12,738 13,155 13,479
12/31/93 12,682 12,784 13,211 13,535
1/31/94 12,805 12,890 13,340 13,649
2/28/94 12,678 12,753 13,207 13,513
3/31/94 12,503 12,572 13,025 13,390
4/30/94 12,410 12,466 12,929 13,312
5/31/94 12,402 12,451 12,921 13,330
6/30/94 12,401 12,436 12,920 13,358
7/31/94 12,544 12,572 13,069 13,500
8/31/94 12,576 12,587 13,102 13,548
9/30/94 12,498 12,496 13,021 13,478
10/31/94 12,504 12,496 13,027 13,496
11/30/94 12,438 12,421 12,958 13,425
12/31/94 12,453 12,421 12,973 13,461
1/31/95 12,636 12,587 13,165 13,665
2/28/95 12,860 12,814 13,397 13,899
3/31/95 12,948 12,890 13,489 13,982
4/30/95 13,076 12,995 13,623 14,126
5/31/95 13,395 13,313 13,955 14,457
6/30/95 13,469 13,374 14,032 14,544
7/31/95 13,503 13,389 14,067 14,582
8/31/95 13,595 13,464 14,163 14,683
9/30/95 13,671 13,540 14,242 14,766
10/31/95 13,785 13,631 14,362 14,911
11/30/95 13,925 13,767 14,507 15,070
12/31/95 14,037 13,858 14,623 15,204
1/31/96 14,148 13,964 14,739 15,340
2/29/96 14,055 13,858 14,642 15,235
3/31/96 13,994 13,782 14,579 15,192
4/30/96 13,977 13,752 14,562 15,176
5/31/96 13,989 13,752 14,574 15,186
6/30/96 14,086 13,843 14,675 15,317
7/31/96 14,140 13,888 14,731 15,372
8/31/96 14,156 13,888 14,748 15,409
9/30/96 14,288 14,009 14,885 15,578
10/31/96 14,455 14,160 15,059 15,794
11/30/96 14,580 14,266 15,189 15,947
12/31/96 14,555 14,236 15,163 15,907
1/31/97 14,605 14,266 15,215 15,978
2/28/97 14,625 14,281 15,236 16,005
3/31/97 14,549 14,191 15,157 15,968
4/30/97 14,696 14,327 15,311 16,121
5/31/97 14,794 14,402 15,412 16,239
6/30/97 14,903 14,493 15,526 16,366
7/31/97 15,165 14,750 15,798 16,606
8/31/97 15,103 14,675 15,734 16,583
9/30/97 15,266 14,811 15,906 16,737
10/31/97 15,414 14,947 16,061 16,887
11/30/97 15,432 14,962 16,082 16,920
12/31/97 15,545 15,053 16,200 17,046
1/31/98 15,739 15,234 16,404 17,245
2/28/98 15,716 15,204 16,366 17,242
3/31/98 15,754 15,219 16,423 17,309
4/30/98 15,825 15,280 16,498 17,391
5/31/98 15,927 15,371 16,606 17,497
6/30/98 16,019 15,446 16,702 17,598
7/31/98 16,066 15,477 16,753 17,676
8/31/98 16,321 15,719 17,021 17,933
9/30/98 16,609 15,976 17,322 18,254
10/31/98 16,618 15,976 17,337 18,313
11/30/98 16,610 15,961 17,331 18,288
12/31/98 16,653 15,976 17,377 18,355
1/31/99 16,716 16,037 17,445 18,448
2/28/99 16,579 15,900 17,303 18,281
3/31/99 16,701 15,994 17,431 18,431
4/30/99 16,727 16,011 17,443 18,492
5/31/99 16,643 15,925 17,373 18,420
6/30/99 16,687 15,941 17,420 18,473
7/31/99 16,710 15,953 17,446 18,493
8/31/99 16,745 15,974 17,467 18,530
9/30/99 16,853 16,081 17,599 18,680
10/31/99 16,866 16,081 17,613 18,724
11/30/99 16,902 16,088 17,652 18,754
12/31/99 16,880 16,066 17,631 18,757
1/31/00 16,863 16,031 17,614 18,715
2/29/00 16,983 16,146 17,741 18,848
3/31/00 17,108 16,258 17,890 18,995
4/30/00 17,115 16,240 17,883 19,009
5/31/00 17,162 16,289 17,933 19,064
6/30/00 17,378 16,484 18,162 19,316
7/31/00 17,477 16,568 18,268 19,453
Average Annual Total Return
As of Inception 1 5 10
July 31, 2000 Date Year Year Year
Class A Shares* 2/1/89 0.40% 4.45% 5.74%
Class B Shares** 1/21/99 2 (1.08%) 4.01% 5.18%
Trust Shares 9/2/97 2 4.71% 5.36% 6.21%
*Reflects maximum 4.00% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The Class B contingent deferred sales charge (CDSC) is not included in the above
graph, since the performance is for more than six years and the CDSC would no
longer apply.
The chart above represents a comparison of a hypothetical $10,000 investment
from 7/31/90 to 7/31/00 in the indicated share class versus a similar in-
vestment in the Fund's benchmark, and represents the reinvestment of divi-
dends and capital gains in the Fund.
The performance of the AmSouth Limited Term Bond Fund is measured against
the Merrill Lynch 1-5-Year Government/Corporate Bond Index, an unmanaged in-
dex generally representative of the total return of short-term government
and corporate bonds. The index does not reflect the deduction of fees asso-
ciated with a mutual fund, such as investment management and fund accounting
fees. The Fund's performance does reflect the deduction of fees for these
value-added services. Investors cannot invest directly in an index, although
they can invest in its underlying securities. During the period shown, the
Advisor waived and/or voluntarily reimbursed fees for various expenses. Had
these waivers and/or reimbursements not been in effect, performance quoted
would have been lower.
/2/Performance for the Class B and Trust Shares, which commenced operations
on 1/21/99 and 9/2/97, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date.
The historical performance for the Class B Shares has been adjusted to
reflect the higher 12b-1 fees and the contingent deferred sales charge
(CDSC).
Effective 12/1/99, the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
35
<PAGE>
AmSouth Government Income Fund
Portfolio Manager
John P. Boston, CFA
Senior Vice President
AmSouth Bank
John manages the AmSouth Limited
Term Bond Fund and the AmSouth
Government Income Fund and co-
manages the AmSouth Bond Fund. He
has more than 10 years of
experience as a fixed-income
manager. He holds a bachelor's
degree in finance and political
science and is a Chartered
Financial Analyst.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Government Income Fund is more suitable for investors who seek
income but also demand the safety of U.S. government securities. Although we
attempt to consistently generate a high level of income, investors should be
aware that yields and principal values vary and that the Fund is not guaranteed
by the U.S. government."
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2000, the AmSouth Government Income Fund
produced a total return of 5.55% (Class A Shares at NAV). In comparison, the
Lehman Brothers Mortgage Index rose 6.43%, while the Lipper U.S. Mortgage Fund
Index/1/ gained 5.58%.
Q. What factors affected your performance?
A. The Fed raised short-term interest rates six times since June 1999. This was
not good news for securities at the short end of the yield curve. However,
while the Fed controls short-term interest rates, the bond market determines
the direction of intermediate- and long-term rates. During the last 12 months,
Treasury securities actually rose in value--with prices stimulated by the gov-
ernment announcement that it would be buying back large quantities of long-term
bonds, and investors' perceptions that the Fed was taking appropriate measures
to control inflation. Because the Fund owned a significant portion of such se-
curities, we benefited from these circumstances.
The Fund's relative performance also was enhanced by the fact that we had only
a modest portion of our portfolio invested in bonds issued by Government Spon-
sored Enterprises (GSEs). During the period, adverse congressional pronounce-
ments that the federal government should consider removing its backing of GSEs
hurt that particular class of securities. With our underweighting in GSEs, we
were less adversely affected than many of our peers.
As of July 31, 2000, the Fund's average maturity was 8.44 years, and its aver-
age credit quality was AAA (government-quality portfolio). Approximately 56.6%
of the Fund's net assets were invested in government agency securities, 39% in
U.S. Treasuries, 17.6% in mortgage-backed securities and the remainder in
cash.++
Q. What is your outlook for the next six to 12 months?
A. We ended the period with a good bond rally; most investors are anticipating
that the Fed is nearly done raising rates. We would not be surprised to see one
more rate hike, but we believe that should be about all for this year. The Fed
would like to slow the economy down gently, and most of the data we are seeing
right now points to slower economic growth. Rates might drift lower as the year
comes to a close, but we are not making any big bets in that direction. As far
as portfolio allocation, we will continue to buy "spread products"--mortgage-
backed and agency securities.
/1/The Lipper U.S. Mortgage Fund Index is a managed index, which consists of
funds that invest at least 65% of their assets in mortgages/securities is-
sued or guaranteed as to principal and interest by the U.S. government and
certain federal agencies.
++ The Fund's portfolio composition is subject to change.
36
<PAGE>
AmSouth Government Income Fund
Value of a $10,000 Investment
[GRAPH]
AmSouth AmSouth AmSouth
Government Government Government
Income Fund Income Fund Income Fund Lehman Brothers
(Class A Shares)* (Class B Shares)**(Trust Shares) Mortgage Index
10/1/93 9,597 10,000 10,000 10,000
10/31/93 9,573 9,958 9,975 10,029
11/30/93 9,549 9,930 9,950 10,009
12/31/93 9,598 9,972 10,001 10,090
1/31/94 9,656 10,028 10,061 10,190
2/28/94 9,597 9,958 10,000 10,119
3/31/94 9,460 9,804 9,858 9,855
4/30/94 9,411 9,748 9,806 9,783
5/31/94 9,431 9,762 9,827 9,822
6/30/94 9,461 9,776 9,858 9,800
7/31/94 9,572 9,888 9,973 9,996
8/31/94 9,603 9,916 10,005 10,028
9/30/94 9,552 9,846 9,952 9,886
10/31/94 9,552 9,846 9,952 9,880
11/30/94 9,511 9,790 9,909 9,849
12/31/94 9,562 9,832 9,962 9,928
1/31/95 9,720 9,986 10,125 10,140
2/28/95 9,904 10,168 10,318 10,399
3/31/95 9,926 10,182 10,340 10,448
4/30/95 10,027 10,280 10,445 10,596
5/31/95 10,309 10,559 10,737 10,930
6/30/95 10,376 10,615 10,807 10,992
7/31/95 10,379 10,615 10,810 11,011
8/31/95 10,476 10,699 10,911 11,125
9/30/95 10,558 10,783 10,996 11,223
10/31/95 10,672 10,881 11,114 11,323
11/30/95 10,807 11,021 11,255 11,452
12/31/95 10,936 11,133 11,388 11,595
1/31/96 11,000 11,189 11,454 11,682
2/29/96 10,864 11,049 11,314 11,586
3/31/96 10,820 10,993 11,269 11,544
4/30/96 10,767 10,923 11,213 11,511
5/31/96 10,739 10,895 11,183 11,478
6/30/96 10,847 10,993 11,295 11,636
7/31/96 10,888 11,021 11,337 11,680
8/31/96 10,909 11,035 11,359 11,680
9/30/96 11,072 11,189 11,529 11,875
10/31/96 11,308 11,427 11,774 12,107
11/30/96 11,494 11,594 11,968 12,280
12/31/96 11,381 11,483 11,850 12,217
1/31/97 11,428 11,510 11,899 12,307
2/28/97 11,446 11,524 11,917 12,348
3/31/97 11,339 11,399 11,806 12,232
4/30/97 11,494 11,552 11,968 12,426
5/31/97 11,598 11,650 12,075 12,548
6/30/97 11,737 11,776 12,221 12,695
7/31/97 12,001 12,028 12,495 12,933
8/31/97 11,937 11,958 12,429 12,902
9/30/97 12,103 12,112 12,603 13,066
10/31/97 12,252 12,252 12,760 13,211
11/30/97 12,309 12,308 12,820 13,255
12/31/97 12,445 12,434 12,963 13,375
1/31/98 12,580 12,559 13,105 13,508
2/28/98 12,600 12,559 13,127 13,536
3/31/98 12,643 12,601 13,173 13,593
4/30/98 12,691 12,629 13,223 13,670
5/31/98 12,787 12,727 13,325 13,761
6/30/98 12,861 12,783 13,390 13,827
7/31/98 12,910 12,825 13,442 13,897
8/31/98 13,056 12,965 13,609 14,024
9/30/98 13,273 13,161 13,823 14,193
10/31/98 13,253 13,133 13,803 14,175
11/30/98 13,314 13,189 13,882 14,246
12/31/98 13,334 13,203 13,904 14,307
1/31/99 13,417 13,273 13,978 14,409
2/28/99 13,284 13,133 13,854 14,351
3/31/99 13,343 13,175 13,917 14,447
4/30/99 13,400 13,217 13,978 14,514
5/31/99 13,334 13,147 13,910 14,432
6/30/99 13,291 13,091 13,866 14,382
7/31/99 13,248 13,049 13,807 14,284
8/31/99 13,226 13,007 13,815 14,284
9/30/99 13,381 13,147 13,964 14,515
10/31/99 13,436 13,203 14,022 14,600
11/30/99 13,454 13,203 14,042 14,607
12/31/99 13,418 13,161 14,006 14,572
1/31/00 13,389 13,119 13,976 14,445
2/29/00 13,527 13,245 14,121 14,613
3/31/00 13,716 13,413 14,320 14,772
4/30/00 13,664 13,368 14,268 14,782
5/31/00 13,655 13,335 14,261 14,790
6/30/00 13,877 13,558 14,494 15,106
7/31/00 13,983 13,654 14,623 15,203
Average Annual Total Return
As of Inception 1 5 Since
July 31, 2000 Date Year Year Inception
Class A Shares* 10/1/93 1.34% 5.28% 5.03%
Class B Shares** 3/13/00 2 (0.36%) 4.83% 4.67%
Trust Shares 9/2/97 2 5.91% 6.23% 5.72%
*Reflects maximum 4.00% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The Class B contingent deferred sales charge (CDSC) is not included in the
above graph. Since the performance is for more than six years and the CDSC
would no longer apply.
The chart above represents a comparison of a hypothetical $10,000 investment
from 10/1/93 to 7/31/00 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Government Income Fund is measured against the
Lehman Brothers Mortgage Index, an unmanaged index generally representative
of the mortgage bond market as a whole. The index does not reflect the deduc-
tion of fees associated with a mutual fund, such as investment management and
fund accounting fees. The Fund's performance does reflect the deduction of
fees for these value-added services. Investors cannot invest directly in an
index, although they can invest in its underlying securities. During the pe-
riod shown, the Advisor waived and/or voluntarily reimbursed fees for various
expenses. Had these waivers and/or reimbursements not been in effect, perfor-
mance quoted would have been lower.
/2/Performance for the Class B and Trust Shares, which commenced operations
on 3/13/00 and 9/2/97, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date.
The historical performance for the Class B Shares has been adjusted to
reflect the higher 12b-1 fees and the contingent deferred sales charge
(CDSC).
Effective 12/1/99, the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
37
<PAGE>
AmSouth Limited Term U.S. Government Fund
Portfolio Manager
John Mark McKenzie
Senior Vice President
AmSouth Bank
John Mark has more than 14 years of
investment management experience.
In addition to managing the AmSouth
Limited Term U.S. Government Fund,
he manages four of the AmSouth
Money Market Funds: U.S.Treasury,
Treasury Reserve, Prime, and
Institutional Prime Obligations. He
holds bachelors' degrees in banking
and finance, and earned a law
degree from the University of
Mississippi School of Law.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Limited Term U.S. Government Fund seeks to provide current income
from high-grade securities while limiting share price fluctuations. We
minimize share price movements by investing in securities with short
maturities. While we generally track the Merrill Lynch I--5-Year Government
Bond Index, we seek to outperform it through an occasional contrarian stance
to prevailing market sentiment."
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2000, the AmSouth Limited Term U.S. Govern-
ment Fund produced a total return of 4.13% (Class A Shares at NAV). In compari-
son, the Merrill Lynch 1-5-Year Government Bond Index gained 5.20%.
Q. What factors affected your performance?
A. The Fed raised short-term interest rates six times since June 1999. This was
not good news for the prices of securities at the short end of the yield curve,
where the Fund generally operates (when interest rates go up, bond prices go
down).
However, the primary consideration of this Fund, in response to the needs of
our shareholders, is to generate high current income (while not taking exces-
sive risks). To that end, we have benefited from being able to reinvest the
funds from maturing bonds into new securities with higher yields.
As of July 31, 2000, the Fund's average maturity was 2.38 years, and its aver-
age credit quality was AAA (government-quality portfolio). Approximately 59.6%
of the Fund net assets were invested in government agency securities, 36% in
U.S. Treasuries and the remainder in cash equivalents.++
Q. What is your outlook for the next six to 12 months?
A. We ended the period with a good bond rally; most investors are anticipating
that the Fed is nearly done raising rates. We would not be surprised to see one
more rate hike, but we believe that should be about all for this year. The Fed
would like to slow the economy down gently, and most of the data we are seeing
right now points to slower economic growth. Rates might drift lower as the year
comes to a close, but we are not making any big bets in that direction. As far
as portfolio allocation, we will continue to buy "spread products"--agency and
mortgage-backed securities--whenever it is feasible, and appropriate to meet
the Fund's objectives.
++The Fund's portfolio composition is subject to change.
38
<PAGE>
AmSouth Limited Term U.S. Government Fund
Value of a $10,000 Investment
[GRAPH]
AmSouth AmSouth AmSouth
Limited Term Limited Term Limited Term Merrill Lynch
U.S. Government U.S. Government U.S. Government 1-5 Year
Fund Fund Fund Government
(Class A Shares)* (Class B Shares) (Trust Shares) Bond Index
7/31/90 9,595 10,000 10,000 10,000
8/31/90 9,538 9,941 9,940 10,060
9/30/90 9,610 10,000 10,015 10,148
10/31/90 9,725 10,118 10,136 10,272
11/30/90 9,884 10,280 10,301 10,395
12/31/90 10,014 10,398 10,437 10,530
1/31/91 10,101 10,486 10,527 10,630
2/28/91 10,145 10,515 10,572 10,692
3/31/91 10,173 10,545 10,602 10,757
4/30/91 10,275 10,633 10,708 10,866
5/31/91 10,318 10,677 10,753 10,935
6/30/91 10,303 10,648 10,738 10,960
7/31/91 10,419 10,751 10,858 11,071
8/31/91 10,621 10,957 11,069 11,251
9/30/91 10,795 11,134 11,250 11,402
10/31/91 10,925 11,252 11,386 11,533
11/30/91 11,040 11,370 11,506 11,666
12/31/91 11,286 11,605 11,762 11,884
1/31/92 11,156 11,458 11,627 11,826
2/29/92 11,185 11,487 11,657 11,861
3/31/92 11,127 11,414 11,596 11,834
4/30/92 11,228 11,502 11,702 11,950
5/31/92 11,387 11,664 11,867 12,092
6/30/92 11,532 11,797 12,018 12,248
7/31/92 11,720 11,988 12,214 12,432
8/31/92 11,850 12,106 12,349 12,562
9/30/92 12,023 12,268 12,530 12,712
10/31/92 11,835 12,077 12,334 12,590
11/30/92 11,749 11,973 12,244 12,544
12/31/92 11,908 12,121 12,410 12,683
1/31/93 12,139 12,342 12,651 12,876
2/28/93 12,327 12,533 12,846 13,032
3/31/93 12,355 12,548 12,877 13,079
4/30/93 12,457 12,636 12,982 13,178
5/31/93 12,399 12,577 12,922 13,139
6/30/93 12,529 12,695 13,057 13,273
7/31/93 12,543 12,695 13,072 13,299
8/31/93 12,688 12,828 13,223 13,460
9/30/93 12,731 12,872 13,268 13,509
10/31/93 12,746 12,872 13,283 13,534
11/30/93 12,702 12,813 13,238 13,510
12/31/93 12,746 12,842 13,283 13,563
1/31/94 12,832 12,931 13,373 13,673
2/28/94 12,702 12,784 13,238 13,537
3/31/94 12,587 12,651 13,117 13,415
4/30/94 12,514 12,577 13,042 13,338
5/31/94 12,514 12,563 13,042 13,355
6/30/94 12,529 12,563 13,057 13,380
7/31/94 12,645 12,666 13,178 13,520
8/31/94 12,673 12,695 13,208 13,567
9/30/94 12,616 12,622 13,148 13,496
10/31/94 12,630 12,622 13,163 13,514
11/30/94 12,587 12,577 13,117 13,442
12/31/94 12,616 12,592 13,148 13,476
1/31/95 12,760 12,725 13,298 13,682
2/28/95 12,948 12,901 13,494 13,915
3/31/95 13,020 12,960 13,569 13,994
4/30/95 13,136 13,063 13,690 14,137
5/31/95 13,382 13,299 13,946 14,463
6/30/95 13,454 13,358 14,021 14,549
7/31/95 13,454 13,343 14,021 14,586
8/31/95 13,540 13,417 14,111 14,687
9/30/95 13,613 13,490 14,187 14,769
10/31/95 13,743 13,608 14,322 14,913
11/30/95 13,873 13,726 14,458 15,069
12/31/95 13,988 13,829 14,578 15,200
1/31/96 14,075 13,903 14,669 15,335
2/29/96 13,945 13,756 14,533 15,231
3/31/96 13,873 13,667 14,458 15,187
4/30/96 13,829 13,623 14,413 15,172
5/31/96 13,829 13,608 14,413 15,182
6/30/96 13,931 13,697 14,518 15,312
7/31/96 13,974 13,726 14,563 15,365
8/31/96 13,974 13,711 14,563 15,402
9/30/96 14,104 13,829 14,699 15,568
10/31/96 14,277 13,991 14,880 15,780
11/30/96 14,422 14,124 15,030 15,930
12/31/96 14,364 14,050 14,970 15,890
1/31/97 14,422 14,094 15,030 15,962
2/28/97 14,451 14,109 15,060 15,989
3/31/97 14,396 14,050 15,003 15,950
4/30/97 14,509 14,153 15,121 16,102
5/31/97 14,594 14,212 15,209 16,218
6/30/97 14,692 14,300 15,311 16,343
7/31/97 14,889 14,477 15,516 16,576
8/31/97 14,843 14,433 15,469 16,557
9/30/97 14,982 14,566 15,614 16,707
10/31/97 15,109 14,669 15,746 16,859
11/30/97 15,134 14,698 15,772 16,895
12/31/97 15,252 14,801 15,895 17,023
1/31/98 15,411 14,934 16,060 17,221
2/28/98 15,413 14,934 16,063 17,217
3/31/98 15,451 14,975 16,103 17,283
4/30/98 15,518 15,012 16,172 17,364
5/31/98 15,602 15,080 16,260 17,466
6/30/98 15,669 15,147 16,330 17,567
7/31/98 15,722 15,184 16,385 17,645
8/31/98 15,946 15,388 16,619 17,920
9/30/98 16,232 15,650 16,916 18,239
10/31/98 16,237 15,642 16,922 18,312
11/30/98 16,225 15,618 16,909 18,266
12/31/98 16,272 15,649 16,950 18,330
1/31/99 16,340 15,703 17,021 18,416
2/28/99 16,195 15,554 16,870 18,249
3/31/99 16,296 15,639 16,974 18,386
4/30/99 16,345 15,675 17,026 18,443
5/31/99 16,283 15,605 16,962 18,380
6/30/99 16,284 15,594 16,962 18,433
7/31/99 16,287 15,586 16,965 18,463
8/31/99 16,306 15,593 16,985 18,509
9/30/99 16,425 15,696 17,109 18,649
10/31/99 16,445 15,703 17,130 18,690
11/30/99 16,461 15,708 17,147 18,719
12/31/99 16,448 15,684 17,133 18,717
1/31/00 16,417 15,628 17,084 18,677
2/29/00 16,517 15,712 17,188 18,808
3/31/00 16,628 15,812 17,323 18,955
4/30/00 16,621 15,811 17,317 18,985
5/31/00 16,674 15,835 17,358 19,053
6/30/00 16,866 16,008 17,578 19,295
7/31/00 16,960 16,102 17,677 19,423
Average Annual Total Return
As of Inception 1 5 Since
July 31, 2000 Date Year Year Inception
Class A Shares* 2/28/97 1 (0.08%) 3.88% 5.42%
Class B Shares** 3/3/98 2 (1.65%) 3.48% 4.88%
Trust Shares 12/14/98 2 4.20% 4.74% 5.86%
*Reflects maximum 4.00% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The class B contingent deferred sales charge (CDSC) is not included in the above
graph, since the performance is for more than six years and the CDSC would no
longer apply
The chart above represents a comparison of a hypothetical $10,000 investment
7/31/90 to 7/31/00 in the indicated share class versus a similar investment
in the Fund's benchmark, and represents the reinvestment of dividends and
capital gains in the Fund.
The performance of the AmSouth Limited Term U.S. Government Fund is measured
against the Merrill Lynch 1-5-Year Government Bond Index, which is generally
representative of the performance of government bonds in that maturity range
with a rating of at least Baa. The index does not reflect the deduction of
fees associated with a mutual fund, such as investment management and fund
accounting fees. The Fund's performance does reflect the deduction of fees
for these value-added services. Investors cannot invest directly in an index,
although they can invest in its underlying securities. During the period
shown, the Advisor waived and/or voluntarily reimbursed fees for various ex-
penses. Had these waivers and/or reimbursements not been in effect, perfor-
mance quoted would have been lower.
The quoted returns reflect the performance from 2/28/97 to 3/12/00 of the ISG
Limited Term U.S. Government Fund, an open-end investment company that was
the predecessor fund to the AmSouth Limited Term U.S. Government Fund.
/1/The ISG Limited Term U.S. Government Fund commenced operations on
2/28/97, through a transfer of assets from certain collective trust fund
("commingled") accounts managed by First American National Bank, using
substantially the same investment objective, policies and methodologies
as the Fund. The quoted performance of the Fund includes performance of
the commingled accounts for periods dating back to 7/31/90, and prior to
the mutual fund's commencement of operations, as adjusted to reflect the
expenses associated with the Fund. The commingled accounts were not reg-
istered with the Securities and Exchange Commission and, therefore, were
not subject to the investment restrictions imposed by law on registered
mutual funds. If the commingled accounts had been registered, the commin-
gled accounts' performance may have been adversely affected.
/2/Performance for the Class B and Trust Shares, which commenced operations
on 3/3/98 and 12/14/98, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date.
The historical performance for the Class B Shares has been adjusted to
reflect the higher 12b-1 fees and the contingent deferred sales charge
(CDSC).
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
39
<PAGE>
AmSouth Municipal Bond Fund+
Portfolio Manager
Dorothy E. Thomas, CFA
Senior Vice President
AmSouth Bank
Dorothy has a more than 16 years of
experience as an investment
portfolio manager. She holds a B.A.
in economics and an M.B.A. She also
serves as manager of tax-exempt,
fixed-income investments.
PORTFOLIO MANAGER'S PERSPECTIVE
"With the AmSouth Municipal Bond Fund, we concentrate on high-quality
municipal bonds--those in the top three rating classes, or of comparable
quality. As with other AmSouth bond funds, we strive to achieve strong
returns by taking advantage of anticipated changes in interest rates."
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2000, the Fund produced a total return of
3.62% (Class A Shares at NAV). In comparison, the Merrill Lynch 3-7-Year Munic-
ipal Bond Index and the Merrill Lynch 1-12-Year Municipal Bond Index rose 4.21%
and 4.89%, respectively, while the Lipper Intermediate Municipal Debt Index/1/
gained 3.42%.
It is also important to recognize income yield to shareholders. As of July 31,
2000, the Fund's 30-day SEC yield (Class A Shares at NAV) was 3.90%. For in-
vestors in the 36% federal income tax bracket, that is equivalent to a taxable
yield of 6.09%. (Shareholders who are residents of Alabama could realize a
higher taxable-equivalent yield. The yield percentage is annualized).
We achieved our objectives while maintaining an average credit quality of AA
(as rated by Standard & Poor's). As of July 31, 2000, the Fund's average matu-
rity was 7.18 years.++
Q. What factors affected your performance?
A. The Fed raised short-term interest rates six times since June 1999, which
certainly had a negative effect on the prices of fixed-income securities. Fur-
ther, the yield curve for taxable securities inverted, and shorter-term securi-
ties yielded more than longer-term debt. However, the yield curve for municipal
bonds flattened somewhat, but did not invert. In the muni market, short rates
rose 50 to 60 basis points (0.50-0.60%), while long rates went up 25 to 30 ba-
sis points (0.25-0.30%).
These moves were nothing like the dramatic move in the Treasury (taxable) mar-
ket. Consequently, the best-performing segment of the muni yield curve was in
the 8 to 12-year area. That was where we saw the smallest increase in yields,
and the greatest stability of bond prices.
For these reasons, we concentrated our holdings in this portion of the yield
curve. The most important contributors to our performance were the decision to
focus on the middle part of the yield curve, and our commitment to holding
higher-quality issues, which outperformed lower-rated bonds.
With the majority of our shareholders living in Alabama, we maintained a sig-
nificant allocation to municipal debt securities issued in the state (44.7% as
of July 31, 2000).++
Q. What is your outlook for the next six to 12 months?
A. As is customary, the muni market will continue to follow trends in the tax-
able market, though muni rate activity tends to lag taxable rate moves, and is
more muted. We do not believe interest rates will change significantly between
now and the end of 2000, though there certainly could be some volatility in the
interim.
+ The Fund's income may be subject to certain state and local taxes and, de-
pending on one's tax status, the federal alternative minimum tax.
/1/The Lipper Intermediate Municipal Debt Fund Index is an index of managed
funds that invest in municipal debt issues with dollar-weighted average matu-
rities of five to ten years.
++The Fund's portfolio composition is subject to change.
40
<PAGE>
AmSouth Municipal Bond Fund+
Value of a $10,000 Investment
[GRAPH]
AmSouth AmSouth AmSouth Merrill Lynch
Municipal Municipal Municipal 3-7-Year
Bond Fund Bond Fund Bond Fund Municipal
(Class A Shares)* (Class B Shares) (Trust Shares) Bond Index
7/31/90 9,606 10,000 10,000 10,000
8/31/90 9,549 9,927 9,941 9,890
9/30/90 9,549 9,927 9,941 9,923
10/31/90 9,690 10,058 10,088 10,146
11/30/90 9,873 10,248 10,279 10,371
12/31/90 9,930 10,292 10,337 10,376
1/31/91 10,014 10,379 10,425 10,590
2/28/91 10,141 10,496 10,557 10,681
3/31/91 10,113 10,452 10,528 10,652
4/30/91 10,197 10,539 10,616 10,836
5/31/91 10,282 10,612 10,704 10,897
6/30/91 10,254 10,583 10,674 10,852
7/31/91 10,324 10,641 10,748 10,964
8/31/91 10,465 10,773 10,894 11,146
9/30/91 10,563 10,875 10,997 11,254
10/31/91 10,690 10,991 11,129 11,332
11/30/91 10,690 10,977 11,129 11,365
12/31/91 10,901 11,195 11,349 11,546
1/31/92 10,915 11,195 11,364 11,644
2/29/92 10,873 11,137 11,320 11,598
3/31/92 10,845 11,108 11,290 11,587
4/30/92 10,901 11,152 11,349 11,690
5/31/92 11,028 11,268 11,481 11,731
6/30/92 11,197 11,443 11,657 11,949
7/31/92 11,423 11,662 11,891 12,163
8/31/92 11,366 11,589 11,833 12,092
9/30/92 11,380 11,589 11,848 12,176
10/31/92 11,380 11,589 11,848 12,071
11/30/92 11,535 11,735 12,009 12,391
12/31/92 11,549 11,735 12,023 12,448
1/31/93 11,606 11,778 12,082 12,546
2/28/93 11,901 12,070 12,390 12,807
3/31/93 11,803 11,968 12,287 12,787
4/30/93 11,859 12,012 12,346 12,856
5/31/93 11,901 12,041 12,390 12,951
6/30/93 12,000 12,128 12,493 13,053
7/31/93 12,042 12,172 12,537 13,027
8/31/93 12,183 12,303 12,683 13,159
9/30/93 12,296 12,405 12,801 13,286
10/31/93 12,324 12,420 12,830 13,359
11/30/93 12,254 12,332 12,757 13,252
12/31/93 12,423 12,493 12,933 13,442
1/31/94 12,479 12,551 12,991 13,576
2/28/94 12,296 12,347 12,801 13,347
3/31/94 11,986 12,026 12,478 12,975
4/30/94 12,028 12,055 12,522 13,059
5/31/94 12,056 12,085 12,551 13,149
6/30/94 12,099 12,114 12,595 13,155
7/31/94 12,254 12,259 12,757 13,396
8/31/94 12,282 12,274 12,786 13,408
9/30/94 12,197 12,187 12,698 13,300
10/31/94 12,113 12,085 12,610 13,216
11/30/94 11,972 11,939 12,463 13,090
12/31/94 12,099 12,055 12,595 13,210
1/31/95 12,197 12,143 12,698 13,296
2/28/95 12,437 12,376 12,947 13,576
3/31/95 12,549 12,464 13,065 13,659
4/30/95 12,592 12,507 13,109 13,751
5/31/95 12,817 12,711 13,343 14,062
6/30/95 12,831 12,726 13,358 14,076
7/31/95 12,986 12,857 13,519 14,190
8/31/95 13,070 12,930 13,607 14,318
9/30/95 13,085 12,945 13,622 14,316
10/31/95 13,239 13,076 13,783 14,384
11/30/95 13,310 13,134 13,856 14,583
12/31/95 13,352 13,163 13,900 14,616
1/31/96 13,408 13,207 13,959 14,788
2/29/96 13,451 13,251 14,003 14,761
3/31/96 13,310 13,090 13,856 14,638
4/30/96 13,282 13,061 13,827 14,635
5/31/96 13,268 13,032 13,812 14,625
6/30/96 13,352 13,105 13,900 14,685
7/31/96 13,451 13,192 14,003 14,825
8/31/96 13,507 13,236 14,062 14,847
9/30/96 13,563 13,280 14,120 14,946
10/31/96 13,676 13,382 14,238 15,083
11/30/96 13,845 13,528 14,413 15,258
12/31/96 13,817 13,499 14,384 15,240
1/31/97 13,789 13,455 14,355 15,274
2/28/97 13,887 13,542 14,457 15,381
3/31/97 13,732 13,382 14,296 15,227
4/30/97 13,761 13,397 14,326 15,257
5/31/97 13,930 13,542 14,501 15,438
6/30/97 14,085 13,688 14,663 15,618
7/31/97 14,347 13,936 14,936 15,884
8/31/97 14,225 13,805 14,809 15,783
9/30/97 14,391 13,950 14,983 15,947
10/31/97 14,445 13,994 15,040 16,006
11/30/97 14,475 14,009 15,086 16,068
12/31/97 14,671 14,184 15,292 16,228
1/31/98 14,790 14,300 15,402 16,353
2/28/98 14,777 14,271 15,405 16,376
3/31/98 14,763 14,242 15,392 16,401
4/30/98 14,680 14,155 15,307 16,334
5/31/98 14,904 14,359 15,541 16,544
6/30/98 14,941 14,388 15,581 16,587
7/31/98 14,964 14,402 15,606 16,646
8/31/98 15,217 14,636 15,856 16,885
9/30/98 15,389 14,781 16,051 17,044
10/31/98 15,397 14,781 16,046 17,079
11/30/98 15,414 14,781 16,065 17,099
12/31/98 15,466 14,825 16,121 17,193
1/31/99 15,678 15,015 16,343 17,396
2/28/99 15,556 14,876 16,217 17,336
3/31/99 15,525 14,852 16,186 17,349
4/30/99 15,574 14,874 16,239 17,407
5/31/99 15,452 14,750 16,112 17,338
6/30/99 15,181 14,497 15,847 17,142
7/31/99 15,309 14,596 15,965 17,284
8/31/99 15,256 14,541 15,927 17,289
9/30/99 15,277 14,536 15,935 17,284
10/31/99 15,156 14,414 15,810 17,246
11/30/99 15,275 14,530 15,952 17,353
12/31/99 15,208 14,439 15,867 17,307
1/31/00 15,123 14,355 15,779 17,276
2/29/00 15,242 14,458 15,905 17,347
3/31/00 15,462 14,652 16,137 17,512
4/30/00 15,353 14,555 16,041 17,461
5/31/00 15,291 14,472 15,962 17,457
6/30/00 15,649 14,819 16,355 17,807
7/31/00 15,863 14,998 16,580 18,014
Merrill Lynch
1-12-Year
Municipal
Bond Index
7/31/90 10,000
8/31/90 9,845
9/30/90 9,856
10/31/90 10,080
11/30/90 10,306
12/31/90 10,336
1/31/91 10,510
2/28/91 10,577
3/31/91 10,581
4/30/91 10,746
5/31/91 10,812
6/30/91 10,763
7/31/91 10,909
8/31/91 11,106
9/30/91 11,198
10/31/91 11,290
11/30/91 11,305
12/31/91 11,477
1/31/92 11,537
2/29/92 11,469
3/31/92 11,473
4/30/92 11,583
5/31/92 11,623
6/30/92 11,872
7/31/92 12,168
8/31/92 12,033
9/30/92 12,112
10/31/92 11,973
11/30/92 12,264
12/31/92 12,350
1/31/93 12,489
2/28/93 12,806
3/31/93 12,744
4/30/93 12,856
5/31/93 12,892
6/30/93 13,045
7/31/93 13,042
8/31/93 13,236
9/30/93 13,339
10/31/93 13,443
11/30/93 13,324
12/31/93 13,534
1/31/94 13,669
2/28/94 13,366
3/31/94 13,010
4/30/94 13,065
5/31/94 13,125
6/30/94 13,113
7/31/94 13,393
8/31/94 13,427
9/30/94 13,275
10/31/94 13,186
11/30/94 13,020
12/31/94 13,190
1/31/95 13,385
2/28/95 13,742
3/31/95 13,810
4/30/95 13,864
5/31/95 14,262
6/30/95 14,235
7/31/95 14,344
8/31/95 14,495
9/30/95 14,509
10/31/95 14,629
11/30/95 14,873
12/31/95 14,956
1/31/96 15,138
2/29/96 14,994
3/31/96 14,983
4/30/96 14,984
5/31/96 14,986
6/30/96 15,072
7/31/96 15,215
8/31/96 15,228
9/30/96 15,365
10/31/96 15,512
11/30/96 15,708
12/31/96 15,687
1/31/97 15,736
2/28/97 15,846
3/31/97 15,680
4/30/97 15,744
5/31/97 15,968
6/30/97 16,131
7/31/97 16,490
8/31/97 16,356
9/30/97 16,541
10/31/97 16,608
11/30/97 16,676
12/31/97 16,894
1/31/98 17,035
2/28/98 17,063
3/31/98 17,086
4/30/98 17,007
5/31/98 17,255
6/30/98 17,302
7/31/98 17,357
8/31/98 17,624
9/30/98 17,814
10/31/98 17,837
11/30/98 17,863
12/31/98 17,953
1/31/99 18,201
2/28/99 18,093
3/31/99 18,078
4/30/99 18,129
5/31/99 18,029
6/30/99 17,771
7/31/99 17,924
8/31/99 17,904
9/30/99 17,929
10/31/99 17,832
11/30/99 17,994
12/31/99 17,951
1/31/00 17,889
2/29/00 18,019
3/31/00 18,250
4/30/00 18,183
5/31/00 18,132
6/30/00 18,554
7/31/00 18,803
Average Annual Total Return
As of Inception 1 5 10
July 31, 2000 Date Year Year Year
Class A Shares* 7/1/97 2 (0.51%) 3.25% 4.72%
Class B Shares** 2/3/99 3 (2.19%) 2.77% 4.14%
Trust Shares 9/2/97 3 3.85% 4.17% 5.19%
*Reflects maximum 4.00% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The Class B contingent deferred sales charge (CDSC) is not included in the above
graph, since the performance is for more than six years and the CDSC would no
longer apply.
The chart above represents a comparison of a hypothetical $10,000 investment
from 7/31/90 to 7/31/00 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Municipal Bond Fund is measured against the
Merrill Lynch 3-7-Year Municipal Bond Index and the Merrill Lynch 1-12-Year
Municipal Bond Index which are unmanaged indices that are generally represen-
tative of municipal bonds with intermediate maturities. The indices do not
reflect the deduction of fees associated with a mutual fund, such as invest-
ment management and fund accounting fees. The Fund's performance does reflect
the deduction of fees for these value-added services. Investors cannot invest
directly in an index, although they can invest in its underlying securities.
During the period shown, the Advisor waived and/or voluntarily reimbursed
fees for various expenses. Had these waivers and/or reimbursements not been
in effect, performance quoted would have been lower.
/2/The quoted performance of the AmSouth Municipal Bond Fund ("Mutual Fund")
includes performance of common and collective trust fund ("Commingled")
accounts advised by AmSouth Bank for periods dating back to 7/31/90 for
the Municipal Bond Fund and prior to the Mutual Fund's commencement of
operations on 7/1/97, as adjusted to reflect the expenses associated with
the Mutual Funds. The Commingled accounts were not registered with the
Securities and Exchange Commission and, therefore, were not subject to
the investment restrictions imposed by law on registered mutual funds. If
the Commingled account had been registered, the Commingled accounts' per-
formance may have been adversely affected.
/3/Performance for the Class B and Trust Shares, which commenced operations
on 2/3/99 and 9/2/97, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date.
The historical performance for the Class B Shares has been adjusted to
reflect the higher 12b-1 fees and the contingent deferred sales charge
(CDSC).
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
41
<PAGE>
AmSouth Florida Tax-Exempt Fund+
Portfolio Manager
Dorothy E. Thomas, CFA
Senior Vice President
AmSouth Bank
Dorothy has more than 16 years of
experience as an investment
portfolio manager. She holds a B.A.
in economics and an M.B.A. She also
serves as manager of tax-exempt,
fixed-income investments.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Florida Tax-Exempt Fund has a portfolio of high quality issues
in a fast-growing state with a strong economic base. Interest on the bonds
is exempt from both Federal income tax and the Florida intangible tax. This
portfolio is managed to benefit from expect interest rate moves."
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2000, the Fund produced a total return
of 3.99% (Class A Shares at NAV). In comparison, the Merrill Lynch 3-7-Year Mu-
nicipal Bond Index and the Merrill Lynch 1-12-Year Municipal Bond Index rose
4.21% and 4.89%, respectively.
It is also important to recognize income yield to shareholders. As of July 31,
2000, the Fund's 30-day SEC yield (Class A Shares at NAV) was 3.84%. For in-
vestors in the 36% federal income tax bracket, that is equivalent to a taxable
yield of 6.00%. (Shareholders who are residents of Florida could realize a
higher taxable-equivalent yield. The yield percentage is annualized).
We achieved our objectives while maintaining an average credit quality of AA
(as rated by Standard & Poor's). As of July 31, 2000, the Fund's average matu-
rity was 7.55 years.++
Q. What factors affected your performance?
A. The Fed raised short-term interest rates six times since June 1999, which
certainly had a negative effect on the prices of fixed-income securities. Fur-
ther, the yield curve for taxable securities inverted, and shorter-term securi-
ties yielded more than longer-term debt. However, the yield curve for municipal
bonds flattened somewhat, but did not invert. In the muni market, short rates
rose 50 to 60 basis points (0.50-0.60%), while long rates went up 25 to 30 ba-
sis points (0.25-0.30%).
These moves were nothing like the dramatic move in the Treasury (taxable)
market. Consequently, the best-performing segment of the muni yield curve was
in the 8 to 12-year area. That was where we saw the smallest increase in
yields, and greatest stability of bond prices. For these reasons, we concen-
trated our holdings in this portion of the yield curve. The most important con-
tributors to our performance were the decision to focus on the middle part of
the yield curve, and our commitment to holding higher-quality issues, which
outperformed lower-rated bonds.
The Florida municipal market has numerous high-quality issuers, as would be
expected in a large state that has both above-average growth and a strong
economic base. However, yields are generally lower than yields on comparably
rated bonds of other states, a phenomenon that became even more pronounced
in the past year as new issuance slowed, while demand for Florida bonds did not
abate.
We maintained almost all of our portfolio in municipal debt securities is-
sued in the state of Florida (97.1% of net assets) as of July 31, 2000.++
Q. What is your outlook for the next six to 12 months?
A. As is customary, the muni market will continue to follow trends in the tax-
able market, though muni rate activity tends to lag taxable rate moves, and is
more muted. We do not believe interest rates will change significantly between
now and the end of 2000, though there certainly could be some volatility in the
interim.
+ Regional funds may be subject to additional risk, since the issues they in-
vest in are located in one geographical location. The Fund's income may be
subject to certain state and local taxes and, depending on your tax status,
the federal alternative minimum tax.
++The Fund's portfolio composition is subject to change.
42
<PAGE>
AmSouth Florida Tax-Exempt Fund+
Value of a $10,000 Investment
[GRAPH]
AmSouth AmSouth AmSouth
Florida Florida Florida
Tax-Exempt Fund Tax-Exempt Fund Tax-Exempt Fund
(Class A Shares)* (Class B Shares)** (Trust Shares)
9/30/94 9,597 10,000 10,000
10/31/94 9,530 9,918 9,930
11/30/94 9,414 9,790 9,809
12/31/94 9,497 9,860 9,896
1/31/95 9,633 10,000 10,038
2/28/95 9,841 10,210 10,254
3/31/95 9,915 10,269 10,331
4/30/95 9,950 10,304 10,368
5/31/95 10,142 10,491 10,568
6/30/95 10,149 10,491 10,575
7/31/95 10,223 10,561 10,652
8/31/95 10,288 10,619 10,720
9/30/95 10,304 10,619 10,737
10/31/95 10,390 10,701 10,827
11/30/95 10,476 10,783 10,916
12/31/95 10,545 10,841 10,988
1/31/96 10,637 10,935 11,084
2/29/96 10,627 10,911 11,073
3/31/96 10,512 10,783 10,953
4/30/96 10,518 10,783 10,960
5/31/96 10,515 10,771 10,956
6/30/96 10,553 10,806 10,997
7/31/96 10,655 10,900 11,102
8/31/96 10,655 10,888 11,102
9/30/96 10,722 10,946 11,172
10/31/96 10,804 11,016 11,257
11/30/96 10,938 11,145 11,398
12/31/96 10,925 11,121 11,384
1/31/97 10,943 11,133 11,402
2/28/97 11,020 11,203 11,483
3/31/97 10,910 11,086 11,368
4/30/97 10,944 11,110 11,403
5/31/97 11,069 11,227 11,534
6/30/97 11,163 11,308 11,631
7/31/97 11,389 11,530 11,867
8/31/97 11,297 11,425 11,772
9/30/97 11,416 11,542 11,896
10/31/97 11,468 11,589 11,952
11/30/97 11,504 11,612 11,990
12/31/97 11,640 11,741 12,145
1/31/98 11,722 11,811 12,220
2/28/98 11,725 11,811 12,236
3/31/98 11,736 11,811 12,237
4/30/98 11,673 11,741 12,172
5/31/98 11,858 11,916 12,365
6/30/98 11,876 11,928 12,397
7/31/98 11,897 11,939 12,420
8/31/98 12,083 12,114 12,604
9/30/98 12,204 12,231 12,731
10/31/98 12,199 12,208 12,727
11/30/98 12,225 12,231 12,755
12/31/98 12,273 12,266 12,806
1/31/99 12,424 12,407 12,964
2/28/99 12,330 12,301 12,868
3/31/99 12,307 12,275 12,856
4/30/99 12,347 12,295 12,887
5/31/99 12,254 12,197 12,803
6/30/99 12,079 12,027 12,622
7/31/99 12,142 12,072 12,688
8/31/99 12,115 12,035 12,660
9/30/99 12,108 12,020 12,655
10/31/99 12,053 11,946 12,586
11/30/99 12,146 12,041 12,697
12/31/99 12,109 11,991 12,647
1/31/00 12,040 11,920 12,588
2/29/00 12,169 12,025 12,711
3/31/00 12,326 12,172 12,877
4/30/00 12,266 12,117 12,815
5/31/00 12,211 12,044 12,760
6/30/00 12,474 12,308 13,050
7/31/00 12,626 12,351 13,197
Merrill Lynch Merrill Lynch
3-7 Year 1-12-Year
Municipal Municipal
Bond Index Bond Index
9/30/94 10,000 10,000
10/31/94 9,937 9,933
11/30/94 9,842 9,808
12/31/94 9,933 9,936
1/31/95 9,998 10,083
2/28/95 10,208 10,352
3/31/95 10,270 10,403
4/30/95 10,339 10,444
5/31/95 10,573 10,744
6/30/95 10,538 10,723
7/31/95 10,670 10,806
8/31/95 10,766 10,919
9/30/95 10,764 10,929
10/31/95 10,815 11,020
11/30/95 10,965 11,204
12/31/95 10,990 11,266
1/31/96 11,119 11,403
2/29/96 11,099 11,295
3/31/96 11,006 11,286
4/30/96 11,004 11,288
5/31/96 10,996 11,289
6/30/96 11,042 11,354
7/31/96 11,147 11,462
8/31/96 11,163 11,471
9/30/96 11,238 11,575
10/31/96 11,341 11,685
11/30/96 11,473 11,833
12/31/96 11,459 11,817
1/31/97 11,484 11,854
2/28/97 11,565 11,937
3/31/97 11,449 11,812
4/30/97 11,472 11,860
5/31/97 11,608 12,028
6/30/97 11,743 12,151
7/31/97 11,943 12,422
8/31/97 11,867 12,321
9/30/97 11,990 12,460
10/31/97 12,035 12,511
11/30/97 12,082 12,562
12/31/97 12,202 12,726
1/31/98 12,296 12,832
2/28/98 12,313 12,854
3/31/98 12,332 12,871
4/30/98 12,281 12,811
5/31/98 12,439 12,998
6/30/98 12,472 13,034
7/31/98 12,516 13,075
8/31/98 12,696 13,276
9/30/98 12,815 13,419
10/31/98 12,842 13,436
11/30/98 12,857 13,456
12/31/98 12,927 13,524
1/31/99 13,080 13,711
2/28/99 13,035 13,629
3/31/99 13,045 13,618
4/30/99 13,088 13,657
5/31/99 13,037 13,581
6/30/99 12,889 13,387
7/31/99 12,996 13,502
8/31/99 12,999 13,487
9/30/99 12,996 13,506
10/31/99 12,968 13,433
11/30/99 13,048 13,555
12/31/99 13,013 13,523
1/31/00 12,990 13,476
2/29/00 13,043 13,573
3/31/00 13,167 13,748
4/30/00 13,129 13,697
5/31/00 13,126 13,659
6/30/00 13,389 13,977
7/31/00 13,545 14,164
Average Annual Total Return
As of Inception 1 5 Since
July 31, 2000 Date Year Year Inception
Class A Shares* 9/30/94 (0.21%) 3.47% 4.08%
Class B Shares** 3/16/99 1 (1.83%) 3.00% 3.69%
Trust Shares 9/2/97 1 4.02% 4.38% 4.87%
*Reflects maximum 4.00% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 9/30/94 to 7/31/00 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Florida Tax-Exempt Fund is measured against
the Merrill Lynch 3-7-Year Municipal Bond Index and the Merrill Lynch 1-12-
Year Municipal Bond Index which are unmanaged indices generally representa-
tive of municipal bonds with intermediate maturities. The indices do not re-
flect the deduction of fees associated with a mutual fund, such as investment
management and fund accounting fees. The Fund's performance does reflect the
deduction of fees for these value-added services. Investors cannot invest di-
rectly in an index, although they can invest in its underlying securities.
During the period shown, the Advisor waived and/or voluntarily reimbursed
fees for various expenses. Had these waivers and/or reimbursements not been
in effect, performance quoted would have been lower.
/1/Performance for the Class B and Trust Shares, which commenced operations
on 3/16/99 and 9/2/97, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date. The
historical performance for the Class B Shares has been adjusted to reflect
the higher 12b-1 fees and the contingent deferred sales charge (CDSC).
Effective 12/1/99, the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
43
<PAGE>
AmSouth Tennessee Tax-Exempt Fund+
Portfolio Manager
Sharon Brown
Senior Vice President
AmSouth Funds
Sharon Brown manages three of the
AmSouth Funds: the Tennessee Tax-
Exempt Fund, the Limited Term
Tennessee Tax-Exempt Fund and the
Tax-Exempt Money Market Fund. She
has 22 years of investment
management experience and holds a
bachelor's degree in business
administration from the University
of Tennessee.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Tennessee Tax-Exempt Bond Fund holds a portfolio of high-quality
Tennessee municipal bonds. The Fund buys only bonds rated "A" and above, while
attempting to provide a steady flow of tax-free income. We hold bonds of
intermediate duration in our search for higher yields. We generally extend
durations slightly as interest rates drop. Average duration is 7 to 12 years."
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2000, the Fund produced a total return of
2.82% (Class A Shares at NAV). In comparison, the Lehman Brothers Municipal 10-
Year Index and the Merrill Lynch 1-12-Year Municipal Bond Index produced a to-
tal return of 5.21% and 4.89%, respectively.
It is also important to recognize income yield to shareholders. As of July 31,
2000, the Fund's 30-day SEC yield (Class A Shares at NAV) was 3.90%. For in-
vestors in the 36% federal income tax bracket, that is equivalent to a taxable
yield of 6.09%. (Shareholders who are residents of Tennessee could realize a
higher taxable-equivalent yield. The yield percentage is annualized).
We achieved our objectives while maintaining an average credit quality of AA
(as rated by Standard & Poor's). As of July 31, 2000, the Fund's average matu-
rity was 8.95 years.++
Q. What factors affected your performance?
A. The Fed raised short-term interest rates six times during the period, which
certainly had a negative effect on prices of fixed-income securities. However,
as far as this Fund is concerned, more than the rate increases, the lack of new
issues was a negative factor. The lack of supply was very apparent in the mu-
nicipal market in general, but more so in Tennessee.
Therefore, despite the increase in interest rates, municipal bonds declined in
value only moderately, because demand outstripped supply. Another benefit was
that we never experienced the inverted yield curve that the taxable market did.
When the yield curve inverts, shorter-term securities yield more than longer-
term debt.
In fact, many tax-free bonds looked attractive and cheap relative to taxable
securities, because the municipal bond curve remained normal, and municipal
bonds experienced less volatility.
On the downside, both Standard & Poor's and Moody put the state of Tennessee on
negative credit watch. Near the end of the period, S&P actually downgraded the
state's rating to an AA+. Nevertheless, these actions did not have a strong
negative effect, since the state has not been issuing new debt, and AA+ still
is a good rating.
Among some of our favorites are the Knoxville Electric revenue bonds 5.10%, due
2024 (3.33% of the Fund's net assets). This is a recent purchase for us, which
we made in anticipation of the Fed nearing the end of their credit tightening.
We also like a shorter bond, Memphis 6.25%, due 2004, which we see as a defen-
sive income play.++
Q. What is your outlook for the next six to 12 months?
A. Most observers believe the Fed is near the end in raising rates this cycle.
Our feeling is that, until we get some definitive confirmation, we think we are
going to stay in a relatively tight trading range. Once we are past the uncer-
tainty, we look for rates to drop, though not significantly.
+ Regional funds may be subject to additional risk, since the issues they in-
vest in are located in one geographical location. The Fund's income may be
subject to certain state and local taxes and, depending on your tax status,
the federal alternative minimum tax.
++The Fund's portfolio composition is subject to change.
44
<PAGE>
AmSouth Tennessee Tax-Exempt Fund+
Value of a $10,000 Investment
[GRAPH]
<TABLE>
<CAPTION>
AmSouth AmSouth AmSouth Lehman Merrill
Tennessee Tennessee Tennessee Brothers Lynch
Tax Exempt Tax Exempt Tax Exempt Municipal 1 to 12 Year Merrill Lynch
Fund Fund Fund 10-Year Municipal 3-7 Year Municipal
(Class A Shares)* (Class B Shares) (Trust Shares) Index Bond Index Bond Index
<S> <C> <C> <C> <C> <C> <C>
7/31/90 9,598 10,000 10,000 10,000 10,000 10,000
8/31/90 9,538 9,938 9,933 9,856 9,845 9,890
9/30/90 9,527 9,926 9,906 9,858 9,856 9,923
10/31/90 9,680 10,086 10,054 10,075 10,080 10,146
11/30/90 9,870 10,284 10,243 10,281 10,306 10,371
12/31/90 9,917 10,333 10,283 10,306 10,336 10,376
1/31/91 9,988 10,407 10,351 10,476 10,510 10,590
2/28/91 10,142 10,567 10,499 10,566 10,577 10,681
3/31/91 10,059 10,481 10,405 10,561 10,581 10,652
4/30/91 10,142 10,567 10,486 10,706 10,746 10,836
5/31/91 10,260 10,691 10,607 10,787 10,812 10,897
6/30/91 10,189 10,617 10,513 10,775 10,763 10,852
7/31/91 10,296 10,728 10,621 10,887 10,909 10,964
8/31/91 10,462 10,900 10,783 11,034 11,106 11,146
9/30/91 10,521 10,962 10,837 11,204 11,198 11,255
10/31/91 10,710 11,159 11,026 11,295 11,290 11,332
11/30/91 10,663 11,110 10,958 11,314 11,305 11,365
12/31/91 10,840 11,295 11,134 11,555 11,477 11,546
1/31/92 10,876 11,332 11,161 11,579 11,537 11,644
2/29/92 10,805 11,258 11,080 11,562 11,469 11,598
3/31/92 10,781 11,233 11,053 11,544 11,473 11,587
4/30/92 10,828 11,282 11,093 11,654 11,583 11,690
5/31/92 11,006 11,467 11,255 11,790 11,623 11,731
6/30/92 11,183 11,652 11,431 11,995 11,872 11,951
7/31/92 11,479 11,961 11,727 12,388 12,168 12,165
8/31/92 11,290 11,763 11,525 12,241 12,033 12,095
9/30/92 11,290 11,763 11,511 12,343 12,112 12,178
10/31/92 11,160 11,628 11,363 12,217 11,973 12,074
11/30/92 11,420 11,899 11,619 12,441 12,264 12,393
12/31/92 11,432 11,911 11,633 12,585 12,350 12,450
1/31/93 11,574 12,059 11,768 12,797 12,489 12,548
2/28/93 11,917 12,417 12,105 13,265 12,806 12,809
3/31/93 11,811 12,306 11,984 13,072 12,744 12,789
4/30/93 11,953 12,454 12,119 13,196 12,856 12,859
5/31/93 12,012 12,515 12,173 13,242 12,892 12,953
6/30/93 12,142 12,651 12,294 13,504 13,045 13,055
7/31/93 12,130 12,639 12,267 13,538 13,042 13,030
8/31/93 12,367 12,885 12,497 13,818 13,236 13,162
9/30/93 12,533 13,058 12,659 13,988 13,339 13,288
10/31/93 12,521 13,046 12,632 14,011 13,443 13,362
11/30/93 12,379 12,898 12,470 13,897 13,324 13,255
12/31/93 12,604 13,132 12,686 14,193 13,534 13,444
1/31/94 12,698 13,231 12,780 14,367 13,669 13,578
2/28/94 12,379 12,898 12,443 13,974 13,366 13,350
3/31/94 11,580 12,065 11,633 13,440 13,010 12,978
4/30/94 11,634 12,122 11,673 13,609 13,065 13,062
5/31/94 11,714 12,205 11,741 13,696 13,125 13,151
6/30/94 11,640 12,128 11,660 13,637 13,113 13,158
7/31/94 11,829 12,325 11,849 13,866 13,393 13,399
8/31/94 11,873 12,370 11,876 13,920 13,427 13,410
9/30/94 11,711 12,202 11,700 13,732 13,275 13,302
10/31/94 11,515 11,998 11,484 13,532 13,186 13,219
11/30/94 11,305 11,779 11,269 13,276 13,020 13,091
12/31/94 11,523 12,006 11,484 13,515 13,190 13,211
1/31/95 11,817 12,312 11,768 13,866 13,385 13,298
2/28/95 12,106 12,614 12,038 14,258 13,742 13,577
3/31/95 12,204 12,716 12,132 14,451 13,810 13,660
4/30/95 12,201 12,712 12,105 14,468 13,864 13,752
5/31/95 12,486 13,010 12,375 14,927 14,262 14,063
6/30/95 12,358 12,876 12,240 14,834 14,235 14,077
7/31/95 12,419 12,939 12,294 15,052 14,344 14,191
8/31/95 12,566 13,092 12,429 15,256 14,495 14,320
9/30/95 12,623 13,152 12,470 15,354 14,509 14,317
10/31/95 12,771 13,307 12,605 15,531 14,629 14,385
11/30/95 12,956 13,499 12,780 15,740 14,873 14,585
12/31/95 13,067 13,615 12,874 15,836 14,956 14,619
1/31/96 13,153 13,704 12,955 15,996 15,138 14,790
2/29/96 13,017 13,562 12,807 15,930 14,994 14,762
3/31/96 12,806 13,343 12,591 15,732 14,983 14,639
4/30/96 12,735 13,268 12,510 15,677 14,984 14,636
5/31/96 12,702 13,235 12,470 15,633 14,986 14,626
6/30/96 12,799 13,336 12,537 15,781 15,072 14,687
7/31/96 12,884 13,424 12,618 15,933 15,215 14,811
8/31/96 12,838 13,376 12,564 15,933 15,228 14,833
9/30/96 12,963 13,506 12,672 16,097 15,365 14,963
10/31/96 13,103 13,652 12,794 16,300 15,512 15,100
11/30/96 13,334 13,893 13,009 16,630 15,708 15,275
12/31/96 13,248 13,803 12,915 16,555 15,687 15,257
1/31/97 13,254 13,810 12,915 16,621 15,736 15,290
2/28/97 13,337 13,896 12,969 16,777 15,846 15,398
3/31/97 13,129 13,679 12,753 16,552 15,680 15,243
4/30/97 13,188 13,741 12,794 16,674 15,744 15,274
5/31/97 13,357 13,917 12,955 16,910 15,968 15,455
6/30/97 13,456 14,021 13,036 17,097 16,131 15,635
7/31/97 13,817 14,396 13,374 17,577 16,490 15,901
8/31/97 13,658 14,230 13,212 17,407 16,356 15,800
9/30/97 13,827 14,406 13,360 17,628 16,541 15,964
10/31/97 13,901 14,484 13,428 17,721 16,608 16,024
11/30/97 13,947 14,535 13,455 17,803 16,676 16,086
12/31/97 14,192 14,792 13,684 18,084 16,894 16,246
1/31/98 14,333 14,942 13,806 18,285 17,035 16,371
2/28/98 14,288 14,882 13,818 18,284 17,063 16,395
3/31/98 14,247 14,858 13,781 18,271 17,086 16,419
4/30/98 14,106 14,714 13,636 18,170 17,007 16,352
5/31/98 14,360 14,982 13,872 18,479 17,255 16,562
6/30/98 14,358 14,983 13,862 18,547 17,302 16,605
7/31/98 14,372 15,000 13,866 18,577 17,357 16,665
8/31/98 14,612 15,255 14,088 18,900 17,624 16,904
9/30/98 14,780 15,433 14,241 19,181 17,814 17,063
10/31/98 14,777 15,433 14,229 19,189 17,837 17,098
11/30/98 14,786 15,446 14,229 19,247 17,863 17,118
12/31/98 14,796 15,460 14,229 19,307 17,953 17,212
1/31/99 14,982 15,641 14,400 19,602 18,201 17,415
2/28/99 14,842 15,514 14,260 19,426 18,093 17,355
3/31/99 14,823 15,498 14,235 19,416 18,078 17,368
4/30/99 14,862 15,542 14,265 19,468 18,129 17,426
5/31/99 14,727 15,403 14,142 19,332 18,029 17,357
6/30/99 14,472 15,140 13,877 18,972 17,771 17,160
7/31/99 14,528 15,201 13,923 19,100 17,924 17,303
8/31/99 14,450 15,123 13,841 19,029 17,904 17,307
9/30/99 14,465 15,127 13,849 19,093 17,929 17,324
10/31/99 14,330 14,988 13,713 18,959 17,832 17,265
11/30/99 14,447 15,129 13,818 19,166 17,994 17,372
12/31/99 14,342 15,023 13,711 19,066 17,951 17,325
1/31/00 14,267 14,947 13,632 18,988 17,889 17,295
2/29/00 14,385 15,074 13,738 19,137 18,019 17,365
3/31/00 14,582 15,282 13,921 19,510 18,250 17,531
4/30/00 14,491 15,173 13,811 19,412 18,183 17,479
5/31/00 14,419 15,115 13,748 19,296 18,132 17,475
6/30/00 14,758 15,472 14,061 19,821 18,554 17,826
7/31/00 14,938 15,663 14,224 20,095 18,803 18,034
</TABLE>
Average Annual Total Return
As of Inception 1 5 10
July 31, 2000 Date Year Year Year
Class A Shares* 3/28/94 1 (1.30%) 2.92% 4.09%
Class B Shares** 2/24/98 2 (2.80%) 2.60% 3.59%
Trust Shares 10/3/97 2 3.04% 3.89% 4.59%
*Reflects maximum 4.00% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The Class B contingent deferred sales charge (CDSC) is not included in the above
graph, since the performance is for more than six years and the CDSC would no
longer apply.
The chart above represents a comparison of a hypothetical $10,000 investment
from 7/31/90 to 7/31/00 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Tennessee Tax-Exempt Fund is being measured
against the Merrill Lynch 1-12-Year Municipal Bond Index which is unmanaged
and is generally representative of municipal bonds with intermediate maturi-
ties. The Lehman Brothers Municipal 10-Year Index is an unmanaged index that
includes municipal bonds issued within the last five years by municipalities
throughout the United States, with maturities of at least one year, but no
more than 12 years, and a credit quality of at least Baa. The indices do not
reflect the deduction of fees associated with a mutual fund, such as invest-
ment management and fund accounting fees. The Fund's performance does reflect
the deduction of fees for these value-added services. Investors cannot invest
directly in an index, although they can invest in its underlying securities.
During the period shown, the Advisor waived and/or voluntarily reimbursed
fees for various expenses. Had these waivers and/or reimbursements not been
in effect, performance quoted would have been lower.
The quoted returns reflect the performance from 3/28/94 to 3/12/00 of the ISG
Tennessee Tax-Exempt Fund, an open-end investment company that was the prede-
cessor fund to the AmSouth Tennessee Tax-Exempt Fund.
/1/The ISG Tennessee Tax-Exempt Fund commenced operations on 3/28/94,
through a transfer of assets from certain collective trust fund ("commin-
gled") accounts managed by First American National Bank, using substan-
tially the same investment objective, policies and methodologies as the
Fund. The quoted performance of the Fund includes performance of the com-
mingled accounts for periods dating back to 7/31/90, and prior to the mu-
tual fund's commencement of operations, as adjusted to reflect the ex-
penses associated with the Fund. The commingled accounts were not regis-
tered with the Securities and Exchange Commission and, therefore, were not
subject to the investment restrictions imposed by law on registered mutual
funds. If the commingled accounts had been registered, the commingled ac-
counts' performance may have been adversely affected.
/2/Performance for the Class B and Trust Shares, which commenced operations
on 2/24/98 and 10/3/97, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date. The
historical performance for the Class B Shares has been adjusted to reflect
the higher 12b-1 fees and the contingent deferred sales charge (CDSC).
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
45
<PAGE>
AmSouth Limited Term Tennessee Tax-Exempt Fund+
Portfolio Manager
Sharon Brown
Senior Vice President
AmSouth Funds
Sharon Brown manages three of the
AmSouth Funds: the Tennessee Tax-
Exempt Fund, the Limited Term
Tennessee Tax-Exempt Fund and the
Tax-Exempt Money Market Fund. She
has 22 years of investment
management experience and holds a
bachelor's degree in business
administration from the University
of Tennessee.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Limited Term Tennessee Tax-Exempt Fund holds a portfolio
of high-quality, short-term Tennessee municipal bonds. The Fund buys only
bonds rated 'A' and above, while attempting to provide a reliable flow of
tax-free income. By investing in high-quality bonds and keeping bond
duration's short, we strive to limit fluctuations in the Fund's market
value."
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2000, the Fund produced a total return of
2.65% (Class A Shares at NAV). In comparison, the Merrill Lynch 3-7-Year Munic-
ipal Bond Index produced a total return of 4.22%.
It is also important to recognize income yield to shareholders. As of July 31,
2000, the Fund's 30-day SEC yield (Class A Shares at NAV) was 3.73%. For in-
vestors in the 36% federal income tax bracket, that is equivalent to a taxable
yield of 5.83%. (Shareholders who are residents of Tennessee could realize a
higher taxable-equivalent yield. The yield percentage is annualized).
We achieved our objectives while maintaining an average credit quality of AA
(as rated by Standard & Poor's). As of July 31, 2000, the Fund's average matu-
rity was 4.61 years.++
Q. What factors affected your performance?
A. The Fed raised short-term interest rates six times during the period, which
certainly had a negative effect on prices of fixed-income securities. Because
the Fund operates on the short/intermediate part of the yield curve, higher fed
funds rates had a small impact. However, more than the rate increases, the lack
of new issues was a negative factor. The lack of supply was very apparent in
the municipal market, but more so in Tennessee.
Therefore, despite the increase in interest rates, municipal bonds declined in
value only moderately, because demand outstripped supply. Another benefit was
that we never experienced the inverted yield curve that the taxable market did.
When the yield curve inverts, shorter-term securities yield more than longer-
term debt.
In fact, many tax-free bonds looked attractive and cheap relative to taxable
securities, because the municipal bond curve remained normal. Municipal bonds
experienced less volatility.
On the downside, both Standard & Poor's and Moody put the state of Tennessee on
negative credit watch. Near the end of the period, S&P actually downgraded the
state's rating to an AA+. However, these actions did not have a strong negative
effect, since the state has not been issuing new debt, and AA+ still is a good
rating.
One of our favorites is the State of Tennessee 6.50%, due 2003 (4.91% of the
Fund's net assets). This bond is good quality and has a good coupon, and we be-
lieve it still will be a market performer. We also like Lenoir City general ob-
ligations bonds (insured) 4.80%, due 2011 (6.18%).++
Q. What is your outlook for the next six to 12 months?
A. Most observers believe the Fed is near the end in raising rates this cycle.
Our feeling is that, until we get some definitive confirmation, we plan to stay
in a relatively tight trading range. Once we are past the uncertainty, we look
for rates to drop, though not significantly.
+ Regional funds may be subject to additional risk, since the issues they in-
vest in are located in one geographical location. The Fund's income may be
subject to certain state and local taxes and, depending on one's tax status,
the federal alternative minimum tax.
++The Fund's portfolio composition is subject to change.
46
<PAGE>
AmSouth Limited Term Tennessee Tax-Exempt Fund
Value of a $10,000 Investment
[GRAPH]
AmSouth AmSouth
Limited Term Limited Term
Tennessee Tennessee Merrill Lynch
Tax Exempt Fund Tax Exempt Fund 3-7 Year Municipal
(Class A Shares)* (Class B Shares) Bond Index
7/31/90 9,596 10,000 10,000
8/31/90 9,583 9,986 9,890
9/30/90 9,583 9,986 9,923
10/31/90 9,701 10,109 10,146
11/30/90 9,857 10,271 10,371
12/31/90 9,922 10,339 10,376
1/31/91 9,961 10,380 10,590
2/28/91 10,078 10,502 10,681
3/31/91 10,039 10,461 10,652
4/30/91 10,091 10,516 10,836
5/31/91 10,195 10,624 10,897
6/30/91 10,156 10,583 10,852
7/31/91 10,182 10,611 10,964
8/31/91 10,352 10,787 11,146
9/30/91 10,430 10,868 11,255
10/31/91 10,521 10,963 11,332
11/30/91 10,521 10,963 11,365
12/31/91 10,729 11,180 11,546
1/31/92 10,768 11,221 11,644
2/28/92 10,729 11,180 11,598
3/31/92 10,742 11,194 11,587
4/30/92 10,755 11,208 11,690
5/31/92 10,846 11,303 11,731
6/30/92 10,990 11,452 11,951
7/31/92 11,146 11,615 12,165
8/31/92 11,133 11,601 12,095
9/30/92 11,081 11,547 12,178
10/31/92 11,107 11,574 12,074
11/30/92 11,224 11,696 12,393
12/31/92 11,224 11,696 12,450
1/31/93 11,341 11,818 12,548
2/28/93 11,562 12,049 12,809
3/31/93 11,497 11,981 12,789
4/30/93 11,576 12,062 12,859
5/31/93 11,602 12,090 12,953
6/30/93 11,693 12,185 13,055
7/31/93 11,693 12,185 13,030
8/31/93 11,797 12,293 13,162
9/30/93 11,875 12,374 13,288
10/1/93 11,862 12,361 13,362
11/30/93 11,810 12,307 13,255
12/31/93 11,940 12,442 13,444
1/31/94 12,044 12,551 13,578
2/28/94 11,875 12,374 13,350
3/31/94 11,589 12,076 12,978
4/30/94 11,641 12,130 13,062
5/31/94 11,667 12,157 13,151
6/30/94 11,641 12,130 13,158
7/31/94 11,719 12,212 13,399
8/31/94 11,784 12,280 13,410
9/30/94 11,719 12,212 13,302
10/31/94 11,667 12,157 13,219
11/30/94 11,549 12,035 13,091
12/31/94 11,628 12,117 13,211
1/31/95 11,719 12,212 13,298
2/28/95 11,862 12,361 13,577
3/31/95 11,940 12,442 13,660
4/30/95 11,992 12,497 13,752
5/31/95 12,201 12,714 14,063
6/30/95 12,174 12,687 14,077
7/31/95 12,292 12,809 14,191
8/31/95 12,370 12,890 14,320
9/30/95 12,396 12,917 14,317
10/31/95 12,435 12,958 14,385
11/30/95 12,539 13,066 14,585
12/31/95 12,604 13,134 14,619
1/31/96 12,682 13,216 14,790
2/29/96 12,656 13,189 14,762
3/31/96 12,539 13,066 14,639
4/30/96 12,513 13,039 14,636
5/31/96 12,500 13,026 14,626
6/30/96 12,565 13,094 14,687
7/31/96 12,630 13,161 14,811
8/31/96 12,604 13,134 14,833
9/30/96 12,682 13,216 14,963
10/31/96 12,786 13,324 15,100
11/30/96 12,930 13,474 15,275
12/31/96 12,878 13,419 15,257
1/31/97 12,930 13,474 15,290
2/28/97 13,021 13,569 15,398
3/31/97 12,886 13,428 15,243
4/30/97 12,922 13,465 15,274
5/31/97 13,036 13,584 15,455
6/30/97 13,098 13,649 15,635
7/31/97 13,307 13,867 15,901
8/31/97 13,226 13,768 15,800
9/30/97 13,330 13,891 15,964
10/31/97 13,396 13,960 16,024
11/30/97 13,438 14,003 16,086
12/31/97 13,576 14,147 16,246
1/31/98 13,695 12,777 16,371
2/28/98 13,675 14,243 16,395
3/31/98 13,658 14,216 16,419
4/30/98 13,599 14,129 16,352
5/31/98 13,744 14,281 16,562
6/30/98 13,766 14,292 16,605
7/31/98 13,789 14,304 16,665
8/31/98 13,920 14,428 16,904
9/30/98 14,013 14,512 17,063
10/31/98 14,035 14,522 17,098
11/30/98 14,055 14,531 17,118
12/31/98 14,086 14,537 17,212
1/31/99 14,192 14,650 17,415
2/28/99 14,154 14,602 17,355
3/31/99 14,148 14,585 17,368
4/30/99 14,182 14,609 17,426
5/31/99 14,120 14,535 17,357
6/30/99 13,958 14,358 17,160
7/31/99 14,009 14,400 17,303
8/31/99 13,975 14,355 17,307
9/30/99 14,013 14,369 17,324
10/31/99 13,922 14,280 17,265
11/30/99 13,986 14,336 17,372
12/31/99 13,945 14,269 17,325
1/31/00 13,896 12,732 17,295
2/29/00 13,990 14,309 17,365
3/31/00 14,074 14,389 17,531
4/30/00 14,022 14,327 17,479
5/31/00 13,990 14,285 17,475
6/30/00 14,236 13,001 17,826
7/31/00 14,380 13,123 18,034
Average Annual Total Return
As of Inception 1 5 10
July 31, 2000 Date Year Year Year
Class A Shares* 2/28/97 (1.44%) 2.36% 3.70%
Class B Shares** 2/3/98 (3.16%) 1.85% 3.13%
*Reflects maximum 4.00% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The Class B contingent deferred sales charge (CDSC) is not included in the
above graph, since the performance is for more than six years and the CDSC
would no longer apply.
The chart above represents a comparison of a hypothetical $10,000 investment
from 7/31/90 to 7/31/00 in the indicated share class versus a similar in-
vestment in the Fund's benchmark, and represents the reinvestment of divi-
dends and capital gains in the Fund.
The performance of the AmSouth Limited Term Tennessee Tax-Exempt Fund is
measured against the Merrill Lynch 3-7-Year Municipal Bond Index, an unman-
aged index that is generally representative of municipal bonds with interme-
diate maturities. The index does not reflect the deduction of fees associ-
ated with a mutual fund, such as investment management and fund accounting
fees. The Fund's performance does reflect the deduction of fees for these
value-added services. Investors cannot invest directly in an index, although
they can invest in its underlying securities. During the period shown, the
Advisor waived and/or voluntarily reimbursed fees for various expenses. Had
these waivers and/or reimbursements not been in effect, performance quoted
would have been lower.
The quoted returns reflect the performance from 2/28/97 to 3/12/00 of the
ISG Limited Term Tennessee Tax-Exempt Fund, an open-end investment company
that was the predecessor fund to the AmSouth Limited Term Tennessee Tax-Ex-
empt Fund.
/1/The ISG Limited Term Tennessee Tax-Exempt Fund commenced operations on
2/28/97, through a transfer of assets from certain collective trust fund
("commingled") accounts managed by First American National Bank, using
substantially the same investment objective, policies and methodologies as
the Fund. The quoted performance of the Fund includes performance of the
commingled accounts for periods dating back to 7/31/90, and prior to the
mutual Fund's commencement of operations, as adjusted to reflect the ex-
penses associated with the Fund. The commingled accounts were not regis-
tered with the Securities and Exchange Commission and, therefore, were not
subject to the investment restrictions imposed by law on registered mutual
funds. If the commingled accounts had been registered, the commingled ac-
counts' performance may have been adversely affected.
/2/Performance for the Class B Shares, which commenced operations on 2/3/98,
respectively, are based on the historical performance of the Class A
Shares (without sales charge) prior to that date. The historical perfor-
mance for the Class B Shares has been adjusted to reflect the higher 12b-1
fees and the contingent deferred sales charge (CDSC).
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
47
<PAGE>
The AmSouth Money Market Funds
Portfolio Manager
John Mark McKenzie, Senior Vice
President
Sharon Brown, Senior Vice President
AmSouth Funds
John Mark has more than 14 years of Sharon Brown manages three of the
investment management experience. AmSouth Funds: the Tennessee Tax-
In addition to managing the AmSouth Exempt Fund, the Limited Term
Limited Term U.S. Government Fund, Tennessee Tax-Exempt Fund and the
he manages four of the AmSouth Tax-Exempt Money Market Fund. She
Money Market Funds: U.S. Treasury, has 22 years of investment
Treasury Reserve, Prime and management experience and holds a
Institutional Prime Obligations. He bachelor's degree in business
holds bachelors' degrees in banking administration from the University
and finance, and he earned a law of Tennessee.
degree from the University of
Mississippi School of Law.
Q. What factors affected the performance of the money market funds?
A. The Fed raised short-term interest rates six times during the period, driv-
ing the fed funds rate 1.75% higher. (The Fed has hiked rates seven times since
June 1999). While rate increases can be bad for stocks and most types of fixed-
income securities, money market funds usually thrive in such an environment.
That is because we are not concerned with generating capital appreciation, but
simply in providing shareholders with high current income, consistent with rel-
ative safety and stability.
With short-term rates moving higher, the rates on the type of debt instruments
we favor also rose. This enabled us to pass solid yields on to our sharehold-
ers. Also, with inflation still under control--thanks in large measure to the
Fed's tightening policy--the "real returns" (total returns minus inflation)
were very attractive.
. As of July 31, 2000, the Prime Fund's average maturity was 39 days, compared
to 37 days on January 31, 2000, and 66 days on July 31, 1999.++
. As of July 31, 2000, the U.S. Treasury Fund's average maturity was 56 days,
compared to 57 days on January 31, 2000, and 47 days on July 31, 1999.++
. As of July 31, 2000, the Tax-Exempt Fund's+ average maturity was 87 days,
compared to 51 days on January 31, 2000, and 53 days on July 31, 1999.++
. As of July 31, 2000, the Treasury Reserve Fund's average maturity was
56 days, compared to 54 days on January 31, 2000, and 53 days on July 31,
1999.++
. As of July 31, 2000, the Institutional Prime Obligations Fund's average
maturity was 34 days, compared to 34 days on January 31, 2000, and 48 days on
July 31, 1999.++
+ The Fund's income may be subject to the federal alternative minimum tax and
to certain state and local taxes.
++The Fund's portfolio composition is subject to change.
Investments in the Prime, the U.S. Treasury, the Tax-Exempt, the Treasury Re-
serve and the Institutional Prime Obligations Money Market Funds are neither
insured nor guaranteed by the Federal Deposit Insurance Corporation or any gov-
ernment agency. Although the Funds seek to preserve the value of your invest-
ments at $1.00 per share, it is possible to lose money by investing in the
Funds. Although money market funds may produce higher returns than insured de-
posit products, the net asset value may be sensitive to interest-rate movement.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
48
<PAGE>
[This Page Intentionally Left Blank]
49
<PAGE>
Report of Independent Auditors
The Board of Trustees and Shareholders
AmSouth Funds
We have audited the accompanying statements of assets and liabilities,
including the schedules of portfolio investments, of AmSouth Funds (comprised
of AmSouth Value Fund, AmSouth Growth Fund, AmSouth Capital Growth Fund,
AmSouth Large Cap Fund, AmSouth Mid Cap Fund, AmSouth Small Cap Fund, AmSouth
Equity Income Fund, AmSouth Balanced Fund, AmSouth Select Equity Fund, AmSouth
Enhanced Market Fund, AmSouth International Equity Fund, AmSouth Strategic
Portfolios: Aggressive Growth Portfolio, AmSouth Strategic Portfolios: Growth
Portfolio, AmSouth Strategic Portfolios: Growth and Income Portfolio, the
AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio, the AmSouth
Strategic Portfolios: Current Income Portfolio, AmSouth Bond Fund, AmSouth
Limited Term Bond Fund, AmSouth Government Income Fund, AmSouth Limited Term
U.S. Government Fund, AmSouth Municipal Bond Fund, AmSouth Florida Tax-Exempt
Fund, AmSouth Tennessee Tax-Exempt Fund, AmSouth Limited Term Tennessee Tax-
Exempt Fund, AmSouth Prime Money Market Fund, AmSouth U.S. Treasury Money
Market Fund, AmSouth Treasury Reserve Money Market Fund, AmSouth Tax-Exempt
Money Market Fund and AmSouth Institutional Prime Obligations Fund) (the Funds)
as of July 31, 2000, the related statements of operations, statements of
changes in net assets and the financial highlights for the period then ended.
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. The
statements of changes in net assets presented herein for the year ended July
31, 1999 and the financial highlights presented herein for each of the
respective years or periods ended July 31, 1999 were audited by other auditors
whose report dated September 21, 1999 expressed an unqualified opinion. The
statements of changes in net assets and the financial highlights presented
herein for each of the respective years or periods ended December 31, 1999 were
audited by other auditors whose report dated February 22, 2000 expressed an
unqualified opinion.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. 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 and financial highlights. Our procedures included
confirmation of securities owned as of July 31, 2000, by correspondence with
the custodians and others. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios comprising AmSouth Funds at July 31, 2000, the
results of their operations, the changes in their net assets and their
financial highlights for the period ended July 31, 2000, in conformity with
accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP
Columbus, Ohio
September 25, 2000
50
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Value Fund July 31, 2000
(Amounts in thousands, except shares)
Common Stocks (98.1%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- ---------
<S> <C> <C>
Automotive (1.8%)
Ford Motor Co.............................................. 235,000 $ 10,942
---------
Automotive Parts (0.1%)
Visteon Corp. ............................................. 30,769 431
---------
Banking (7.1%)
Bank of America Corp....................................... 375,000 17,766
First Union Corp........................................... 135,000 3,485
Washington Mutual, Inc..................................... 700,000 22,487
---------
43,738
---------
Business Services (2.1%)
Modis Professional Services, Inc. (b)...................... 345,000 2,631
Reynolds & Reynolds Co., Class A........................... 605,000 10,096
---------
12,727
---------
Chemicals -- Speciality (2.7%)
Engelhard Corp............................................. 750,000 13,547
M.A. Hanna Co.............................................. 355,000 2,840
---------
16,387
---------
Computer Hardware (4.1%)
Compaq Computer Corp. ..................................... 250,000 7,016
IBM Corp................................................... 160,000 17,990
---------
25,006
---------
Computer Software (0.9%)
Computer Associates International, Inc. ................... 230,000 5,707
---------
Computers & Peripherals (2.8%)
Cabletron Systems, Inc. (b)................................ 650,000 16,981
---------
Consumer Goods (0.7%)
American Greetings Corp., Class A.......................... 270,000 4,590
---------
Electrical & Electronic (1.9%)
Avnet, Inc................................................. 204,000 11,615
---------
Financial Services (3.6%)
Dun & Bradstreet Corp. .................................... 610,000 18,033
Equifax, Inc. ............................................. 185,000 4,371
---------
22,404
---------
Food Products, Processing & Packaging (3.6%)
Flowers Industries, Inc.................................... 60,000 1,279
International Flavors & Fragrances, Inc.................... 127,000 3,397
Sara Lee Corp. ............................................ 730,000 13,459
Universal Foods Corp....................................... 205,000 3,998
---------
22,133
---------
Forest & Paper Products (4.1%)
International Paper Co..................................... 220,000 7,480
Weyerhaeuser Co. .......................................... 240,000 10,965
Willamette Industries, Inc................................. 213,000 6,457
---------
24,902
---------
Health Care (4.2%)
Health Management Assoc., Inc., Class A (b) ............... 450,000 7,059
HEALTHSOUTH Corp. (b)...................................... 200,000 1,188
UnitedHealth Group Inc..................................... 210,800 17,246
---------
25,493
---------
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- ---------
<S> <C> <C>
Household Products/Wares (1.6%)
Newell Rubbermaid, Inc. ................................... 361,803 $ 9,746
---------
Insurance (10.5%)
ACE Ltd. .................................................. 90,000 3,240
Chubb Corp. ............................................... 275,000 20,350
Marsh & McLennan Cos., Inc. ............................... 150,000 18,300
St. Paul Cos., Inc......................................... 510,000 22,662
---------
64,552
---------
Medical Supplies (5.6%)
C.R. Bard, Inc. ........................................... 370,000 18,523
DENTSPLY International, Inc................................ 335,000 11,327
Guidant Corp. (b).......................................... 85,000 4,792
---------
34,642
---------
Newspapers (1.9%)
Gannett Co., Inc........................................... 215,000 11,583
---------
Oil & Gas Exploration, Production & Services (12.8%)
Burlington Resources, Inc.................................. 220,000 7,178
Kerr-McGee Corp............................................ 270,000 14,815
Noble Affiliates........................................... 350,000 10,500
Schlumberger Ltd. ......................................... 10,000 739
Sunoco, Inc................................................ 420,000 10,238
Texaco, Inc................................................ 250,000 12,359
Ultramar Diamond Shamrock Corp............................. 445,000 10,179
USX-Marathon Group......................................... 505,000 12,278
---------
78,286
---------
Pharmaceuticals (6.0%)
Baxter International, Inc. ................................ 240,000 18,660
Pharmacia Corp............................................. 333,200 18,243
---------
36,903
---------
Retail (7.3%)
CVS Corp................................................... 500,000 19,719
May Department Stores Co................................... 360,000 8,550
Stein Mart, Inc. (b)....................................... 199,000 2,189
Target Corp................................................ 500,000 14,500
---------
44,958
---------
Telecommunications -- Equipment (1.1%)
Harris Corp................................................ 45,000 1,541
Lucent Technologies, Inc................................... 125,000 5,469
---------
7,010
---------
Transportation Leasing & Trucking (1.8%)
Ryder System, Inc.......................................... 215,000 4,488
US Freightways Corp........................................ 243,000 6,743
---------
11,231
---------
Utilities -- Electric & Gas (5.5%)
Constellation Energy Group................................. 440,000 14,658
New Century Energies, Inc.................................. 170,000 5,812
Southern Co................................................ 545,000 13,318
---------
33,788
---------
Utilities -- Telecommunications (4.3%)
AT&T Corp. ................................................ 270,000 8,353
SBC Communications, Inc. .................................. 120,000 5,108
</TABLE>
Continued
51
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Value Fund July 31, 2000
(Amounts in thousands, except shares)
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- ---------
<S> <C> <C>
Utilities -- Telecommunications, continued
Verizon Communications..................................... 280,000 $ 13,160
---------
26,621
---------
TOTAL COMMON STOCKS........................................ 602,376
---------
Investment Companies (1.5%)
AmSouth Prime Money Market Fund............................ 9,124,347 9,125
AmSouth U.S. Treasury Money Market Fund.................... 114,180 114
---------
TOTAL INVESTMENT COMPANIES................................. 9,239
---------
Short-Term Securities+ (20.7%)
Commercial Paper (13.3%)
Asset Backed -- Miscellaneous (2.8%)
Asset Securitization Corp., 6.60%, 9/6/00.................. $ 5,284 5,194
Corporate Receivables, 6.62%, 8/1/00....................... 6,605 6,604
Falcon Asset Securitization Corp., 6.62%, 8/14/00.......... 5,284 5,196
---------
16,994
---------
Financial Services (7.8%)
Golden Funding Corp., 6.55%-6.62%, 9/8/00-9/18/00.......... 6,733 6,645
Liberty Street Funding Corp., 6.56%, 10/11/00.............. 4,707 4,627
Moat Funding Corp., 6.54%-6.67%, 8/11/00-10/6/00........... 6,737 6,631
Orix Corp., 6.85%, 8/10/00................................. 3,302 3,266
Superior Funding Corp., 6.51%-6.53%, 8/21/00-8/29/00....... 7,265 7,225
TransAmerica, 6.65%, 9/5/00................................ 5,284 5,217
Trident, 6.70%, 8/4/00..................................... 6,605 6,559
UBS Finance, 6.57%-6.64%, 8/1/00-8/7/00.................... 7,041 7,038
---------
47,208
---------
Food -- Retail (0.5%)
Safeway, Inc., 6.70%, 8/15/00.............................. 3,302 3,278
---------
Miscellaneous (0.4%)
Tyco International, Ltd., 6.91%, 8/7/00.................... 2,732 2,701
---------
Utilities -- Electrical & Gas (0.7%)
Dominion Resources, Inc., 6.88%, 8/7/00.................... 4,623 4,569
---------
Utilities -- Telecommunications (1.1%)
Qwest Communications International, Inc., 6.80%, 9/5/00.... 6,605 6,530
---------
Total Commercial Paper..................................... 81,280
---------
</TABLE>
Short-Term Securities+, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
----------- ---------
<S> <C> <C>
Floating Rate Notes (1.4%)
Financial Services (1.1%)
Ford Motor Credit Co., 6.71%*, 4/11/02, MTN............. $ 2,642 $ 2,642
General Motors Acceptance Corp., 6.72%*, 4/5/02, MTN.... 1,320 1,320
General Motors Acceptance Corp., 6.94%*, 11/13/00, MTN.. 1,585 1,585
KeyCorp, 6.94%*, 10/23/00, MTN.......................... 1,321 1,321
---------
6,868
---------
Miscellaneous (0.3%)
Tyco International, Ltd., 7.47%*, 9/5/00 (c) 1,981 1,981
---------
Total Floating Rate Notes............................... 8,849
---------
Time Deposits (1.6%)
Amex Centurion, 6.56%-6.58%, 8/8/00-8/30/00............. 9,907 9,907
---------
Investment Companies (3.3%)
AIM Liquid Asset Money Market Fund...................... 20,431,396 20,431
---------
Repurchase Agreements (1.1%)
Lehman Brothers, 6.74%, 8/1/00, dated 7/31/00, with a
maturity value of $6,606 (See Significant Accounting
Policies, Securities Lending in the Notes to Financial
Statements for collateral description)................. $ 6,605 6,605
---------
TOTAL SHORT-TERM SECURITIES............................. 127,072
---------
TOTAL INVESTMENTS (Cost $557,557) (a) -- (120.3%)....... 738,687
Liabilities in excess of other assets -- (-20.3%)....... (124,679)
---------
TOTAL NET ASSETS -- (100.0%)............................ $ 614,008
=========
</TABLE>
---------
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of
$1,115. Cost for federal income tax purposes differs from value by net
unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $199,072
Unrealized depreciation............................................. (19,057)
--------
Net unrealized appreciation......................................... $180,015
========
</TABLE>
(b) Represents non-income producing securities.
(c) Represents a restricted security purchased under Rule 144A which is
exempt from registration under the Security Act of 1933, as amended.
* Variable rate security. Rate represents rate in effect at July 31, 2000.
+ Represents securities purchased with cash collateral received on loaned
securities.
MTN -- Medium Term Note
See notes to financial statements
52
<PAGE>
AMSOUTH FUNDS
Value Fund (a)
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $550,952)....................... $732,082
Repurchase agreements, at cost.............................. 6,605
--------
Total Investments.......................................... 738,687
Interest and dividends receivable........................... 890
Receivable for investments sold............................. 6,268
Prepaid expenses and other assets........................... 27
--------
Total Assets............................................... 745,872
Liabilities:
Payable for return of collateral held for securities on
loan....................................................... $127,072
Payable for investments purchased........................... 4,313
Payable for capital shares redeemed......................... 162
Accrued expenses and other payables:
Investment advisory fees................................... 163
Administration fees........................................ 20
Distribution fees.......................................... 66
Custodian fees............................................. 15
Other...................................................... 53
--------
Total Liabilities.......................................... 131,864
--------
Net Assets:
Capital..................................................... 389,358
Undistributed (distributions in excess of) net investment
income..................................................... 360
Undistributed (distributions in excess of) net realized
gains...................................................... 43,160
Net unrealized appreciation (depreciation) from
investments................................................ 181,130
--------
Net Assets.................................................. $614,008
========
Class A Shares (b)
Net Assets................................................. $ 45,255
Shares outstanding......................................... 2,315
Redemption price per share................................. $ 19.54
========
Class A Shares -- Maximum Sales Charge...................... 4.50%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum
Sales Charge) of net asset value adjusted to the nearest
cent)..................................................... $ 20.46
========
Class B Shares
Net Assets................................................. $ 7,949
Shares outstanding......................................... 410
Offering price per share*.................................. $ 19.41
========
Trust Shares (c)
Net Assets................................................. $560,804
Shares outstanding......................................... 28,718
Offering and redemption price per share.................... $ 19.53
========
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly AmSouth Equity Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2000
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income............................................. $ 281
Dividend income............................................. 19,152
Income from securities lending.............................. 27
---------
Total Investment Income.................................... 19,460
Expenses:
Investment advisory fees.................................... $6,419
Administration fees......................................... 1,605
Distribution fees -- Class B Shares......................... 101
Shareholder servicing fees -- Class A Shares (b)............ 146
Shareholder servicing fees -- Trust Shares (c).............. 351
Custodian fees.............................................. 150
Accounting fees............................................. 182
Transfer agent fees......................................... 241
Trustee fees and expenses................................... 37
Other fees.................................................. 210
------
Total expenses before voluntary fee reductions............. 9,442
Expenses voluntarily reduced............................... (132)
---------
Net expenses............................................... 9,310
---------
Net Investment Income....................................... 10,150
---------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment transactions.... 60,783
Net change in unrealized appreciation (depreciation) from
investments................................................ (151,006)
---------
Net realized/unrealized gains (losses) from investments..... (90,223)
---------
Change in net assets resulting from operations.............. $ (80,073)
=========
</TABLE>
See notes to financial statements
53
<PAGE>
AMSOUTH FUNDS
Value Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2000 1999
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................. $ 10,150 $ 10,818
Net realized gains (losses) from investment
transactions......................................... 60,783 136,676
Net change in unrealized appreciation (depreciation)
from investments..................................... (151,006) 419
---------- ----------
Change in net assets resulting from operations......... (80,073) 147,913
---------- ----------
Distributions to Class A Shareholders (b):
From net investment income............................ (628) (565)
From net realized gains on investment transactions.... (9,331) (7,000)
Distributions to Class B Shareholders:
From net investment income............................ (51) (24)
From net realized gains on investment transactions.... (1,626) (935)
Distributions to Trust Shareholders (c):
From net investment income............................ (9,589) (9,737)
From net realized gains on investment transactions.... (123,978) (94,909)
---------- ----------
Change in net assets from shareholder distributions.... (145,203) (113,170)
---------- ----------
Change in net assets from capital transactions......... (204,510) (19,618)
---------- ----------
Change in net assets................................... (429,786) 15,125
Net Assets:
Beginning of period................................... 1,043,794 1,028,669
---------- ----------
End of period......................................... $ 614,008 $1,043,794
========== ==========
</TABLE>
---------
(a) Formerly AmSouth Equity Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
See notes to financial statements
54
<PAGE>
AMSOUTH FUNDS
Value Fund (a)
Financial Highlights, Class A Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2000 1999 1998 (b) 1997 1996
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 25.25 $ 24.60 $ 23.35 $ 17.62 $ 16.75
------- ------- ------- -------- --------
Investment Activities
Net investment income
(loss)................ 0.23 0.20 0.21 0.30 0.33
Net realized and
unrealized gains
(losses) from
investments........... (2.21) 3.11 2.54 6.77 1.48
------- ------- ------- -------- --------
Total from Investment
Activities............ (1.98) 3.31 2.75 7.07 1.81
------- ------- ------- -------- --------
Distributions
Net investment income.. (0.23) (0.19) (0.25) (0.30) (0.33)
Net realized gains from
investment
transactions.......... (3.50) (2.47) (1.25) (1.04) (0.61)
------- ------- ------- -------- --------
Total Distributions.... (3.73) (2.66) (1.50) (1.34) (0.94)
------- ------- ------- -------- --------
Net change in asset
value.................. (5.71) 0.65 1.25 5.73 0.87
------- ------- ------- -------- --------
Net Asset Value, End of
Period................. $ 19.54 $ 25.25 $ 24.60 $ 23.35 $ 17.62
======= ======= ======= ======== ========
Total Return (excludes
sales charge).......... (8.19)% 14.92% 12.34% 42.35% 11.09%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $45,255 $70,740 $73,165 $974,985 $374,622
Ratio of expenses to
average net assets..... 1.35% 1.33% 1.19% 1.06% 1.02%
Ratio of net investment
income to average net
assets................. 1.07% 0.82% 0.89% 1.52% 1.86%
Ratio of expenses to
average net assets*.... 1.35% 1.34% 1.19% 1.10% 1.11%
Portfolio turnover**.... 17% 18% 17% 24% 19%
</TABLE>
/\ Formerly Classic Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly AmSouth Equity Fund.
(b) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2000 1999 1998 (b)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period....... $25.14 $ 24.55 $23.15
------ ------- ------
Investment Activities
Net investment income (loss).............. 0.07 0.02 0.09
Net realized and unrealized gains (losses)
from investments......................... (2.19) 3.10 2.68
------ ------- ------
Total from Investment Activities.......... (2.12) 3.12 2.77
------ ------- ------
Distributions
Net investment income..................... (0.11) (0.06) (0.12)
Net realized gains from investment
transactions............................. (3.50) (2.47) (1.25)
------ ------- ------
Total Distributions....................... (3.61) (2.53) (1.37)
------ ------- ------
Net change in asset value.................. (5.73) 0.59 1.40
------ ------- ------
Net Asset Value, End of Period............. $19.41 $ 25.14 $24.55
====== ======= ======
Total Return (excludes redemption charge).. (8.86)% 14.03% 12.49%(c)
Ratios/Supplemental Data:
Net Assets at end of period (000).......... $7,949 $12,394 $7,929
Ratio of expenses to average net assets.... 2.10% 2.08% 2.11%(d)
Ratio of net investment income to average
net assets................................ 0.32% 0.05% 0.26%(d)
Ratio of expenses to average net assets*... 2.11% 2.09% 2.11%(d)
Portfolio turnover**....................... 17% 18% 17%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly AmSouth Equity Fund.
(b) For the period from September 3, 1997 (commencement of operations) through
July 31, 1998.
(c) Not annualized.
(d) Annualized.
See notes to financial statements
55
<PAGE>
AMSOUTH FUNDS
Value Fund (a)
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2000 1999 1998 (b)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period..... $ 25.27 $ 24.57 $ 22.51
-------- -------- --------
Investment Activities
Net investment income (loss)............ 0.28 0.26 0.28
Net realized and unrealized gains
(losses) from investments.............. (2.24) 3.16 3.31
-------- -------- --------
Total from Investment Activities........ (1.96) 3.42 3.59
-------- -------- --------
Distributions
Net investment income................... (0.28) (0.25) (0.28)
Net realized gains from investment
transactions........................... (3.50) (2.47) (1.25)
-------- -------- --------
Total Distributions..................... (3.78) (2.72) (1.53)
-------- -------- --------
Net change in asset value................ (5.74) 0.70 2.06
-------- -------- --------
Net Asset Value, End of Period........... $ 19.53 $ 25.27 $ 24.57
======== ======== ========
Total Return............................. (8.11)% 15.43% 12.46%(c)
Ratios/Supplemental Data:
Net Assets at end of period (000)........ $560,804 $960,660 $947,575
Ratio of expenses to average net assets.. 1.13% 1.08% 1.09%(d)
Ratio of net investment income to average
net assets.............................. 1.30% 1.07% 1.26%(d)
Ratio of expenses to average net
assets*................................. 1.15% 1.09% 1.10%(d)
Portfolio turnover**..................... 17% 18% 17%
</TABLE>
/\ Formerly Premier Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly AmSouth Equity Fund.
(b) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
(c) Represents total return based on the activity of Classic Shares for the
period from August 1, 1997 to September 1, 1997 and the activity of Premier
Shares for the period from September 2, 1997 to July 31, 1998. Total return
for the Premier Shares for the period from September 2, 1997 (commencement
of operations) through July 31, 1998 was 16.52%.
(d) Annualized.
See notes to financial statements
56
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Growth Fund July 31, 2000
(Amounts in thousands, except shares)
Common Stocks (99.8%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- -------
<S> <C> <C>
Aerospace/Defense (1.9%)
United Technologies Corp..................................... 16,000 $ 934
-------
Banking (0.8%)
Commerce Bancshares, Inc..................................... 12,915 424
-------
Broadcasting/Cable (1.4%)
Comcast Corp.-Special Class A................................ 21,000 714
-------
Chemicals (4.9%)
Air Products and Chemicals, Inc.............................. 29,000 968
Eastman Chemical Co.......................................... 32,000 1,500
-------
2,468
-------
Computer Hardware (4.1%)
Apple Computer, Inc. (b)..................................... 9,600 488
Sun Microsystems, Inc. (b)................................... 15,100 1,592
-------
2,080
-------
Computer Software & Services (2.1%)
Microsoft Corp. (b).......................................... 14,800 1,033
-------
Computers -- Memory Devices (1.9%)
SanDisk Corp. (b)............................................ 15,000 956
-------
Cosmetics/Toiletries (2.0%)
Colgate-Palmolive Co......................................... 18,000 1,002
-------
Diversified Manufacturing (7.7%)
General Electric Co.......................................... 45,900 2,361
Tyco International Ltd....................................... 28,400 1,519
-------
3,880
-------
Electronic Components (9.1%)
Analog Devices, Inc. (b)..................................... 16,000 1,069
Arrow Electronics, Inc. (b).................................. 31,000 1,025
LSI Logic Corp. (b).......................................... 14,600 495
Microchip Technology, Inc. (b)............................... 13,400 930
Sanmina Corp. (b)............................................ 11,000 1,022
-------
4,541
-------
Entertainment (1.5%)
Disney (Walt) Co............................................. 20,000 774
-------
Financial Services (2.6%)
Providian Financial.......................................... 13,000 1,325
-------
Food Distributors & Wholesalers (3.3%)
Kroger Co. (b)............................................... 53,000 1,097
Ralston Purina Group......................................... 27,000 545
-------
1,642
-------
Health Care (4.9%)
United Health Group Inc. .................................... 16,000 1,309
Universal Health Services, Inc. (b).......................... 17,500 1,179
-------
2,488
-------
Insurance (0.7%)
Cigna Corp. ................................................. 3,500 350
-------
Internet Software (7.2%)
America Online, Inc. (b)..................................... 20,000 1,065
CMGI, Inc. (b)............................................... 8,000 304
CNET Networks, Inc. (b)...................................... 25,000 748
Critical Path, Inc. (b)...................................... 11,000 613
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- -------
<S> <C> <C>
Internet Software, continued
Earthlink Network, Inc. (b).................................. 62,685 $ 784
Symantec Corp. (b)........................................... 2,500 128
-------
3,642
-------
Machinery & Equipment (3.2%)
Deere & Co. ................................................. 30,000 1,157
Dover Corp. ................................................. 10,000 458
-------
1,615
-------
Media (2.0%)
USA Networks, Inc. (b)....................................... 48,000 1,011
-------
Newspapers (5.0%)
Dow Jones & Co., Inc. ....................................... 16,000 1,055
Knight-Ridder, Inc. ......................................... 28,000 1,460
-------
2,515
-------
Oil & Gas Exploration, Production, & Services (1.1%)
Tosco Corp. ................................................. 20,000 530
-------
Pharmaceuticals (4.8%)
Bristol-Myers Squibb Co. .................................... 20,100 997
Pharmacia Corp. ............................................. 26,180 1,434
-------
2,431
-------
Retail (3.6%)
Safeway, Inc. (b)............................................ 20,000 901
Zale Corp. (b)............................................... 25,000 935
-------
1,836
-------
Semiconductors (8.4%)
Advanced Micro Devices, Inc. (b)............................. 11,500 827
Applied Materials, Inc. (b).................................. 16,600 1,259
Integrated Device Technology, Inc. (b)....................... 21,000 1,113
KLA-Tencor Corp. (b)......................................... 19,300 1,028
-------
4,227
-------
Technology (1.8%)
Novellus Systems, Inc. (b)................................... 17,000 917
-------
Telecommunications -- Equipment (1.9%)
Commscope, Inc. (b).......................................... 28,000 936
-------
Utilities -- Electric & Gas (6.0%)
FPL Group, Inc. ............................................. 19,000 917
Pinnacle West Capital Corp. ................................. 25,000 989
PPL Corp. ................................................... 42,000 1,134
-------
3,040
-------
Utilities -- Telecommunications (5.9%)
Broadwing, Inc. (b).......................................... 30,000 788
SBC Communications, Inc. .................................... 25,000 1,064
Sprint Corp. (PCS Group) (b)................................. 20,000 1,105
-------
2,957
-------
TOTAL COMMON STOCKS.......................................... 50,268
-------
</TABLE>
Continued
57
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Growth Fund July 31, 2000
(Amounts in thousands, except shares)
Short-Term Securities+ (10.5%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Commercial Paper (6.8%)
Asset Backed -- Miscellaneous (1.4%)
Asset Securitization Corp., 6.60%, 9/6/00................... $ 221 $ 217
Corporate Receivables, 6.62%, 8/1/00........................ 276 276
Falcon Asset Securitization Corp., 6.62%, 8/14/00........... 221 217
--------
710
--------
Financial Services (4.0%)
Golden Funding Corp., 6.55%-6.62%, 9/8/00-9/18/00........... 281 278
Liberty Street Funding Corp., 6.56%, 10/11/00............... 197 193
Moat Funding Corp., 6.54%-6.67%, 8/11/00-10/6/00............ 281 277
Orix Corp., 6.85%, 8/10/00.................................. 138 136
Superior Funding Corp., 6.51%-6.53%, 8/21/00-8/29/00........ 303 301
TransAmerica, 6.65%, 9/5/00................................. 221 218
Trident, 6.70%, 8/4/00...................................... 276 274
UBS Finance, 6.57%-6.64%, 8/1/00-8/7/00..................... 294 294
--------
1,971
--------
Food -- Retail (0.3%)
Safeway, Inc., 6.70%, 8/15/00............................... 138 137
--------
Miscellaneous (0.2%)
Tyco International, Ltd., 6.91%, 8/7/00..................... 114 113
--------
Utilities -- Electrical & Gas (0.4%)
Dominion Resources, Inc., 6.88%, 8/7/00..................... 193 191
--------
Utilities -- Telecommunications (0.5%)
Qwest Communications International, Inc., 6.80%, 9/5/00..... 276 273
--------
Total Commercial Paper...................................... 3,395
--------
Floating Rate Notes (0.7%)
Financial Services (0.5%)
Ford Motor Credit Co., 6.71%*, 4/11/02, MTN................. 111 111
General Motors Acceptance Corp., 6.72%*, 4/5/02, MTN........ 55 55
General Motors Acceptance Corp., 6.94%*, 11/13/00, MTN...... 66 66
KeyCorp, 6.94%*, 10/23/00, MTN.............................. 55 55
--------
287
--------
Miscellaneous (0.2%)
Tyco International, Ltd., 7.47%*, 9/5/00 (c)................ 83 83
--------
Total Floating Rate Notes................................... 370
--------
</TABLE>
Short-Term Securities+, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- -------
<S> <C> <C>
Time Deposits (0.8%)
Amex Centurion, 6.56%-6.58%, 8/8/00-8/30/00................. $ 414 $ 414
-------
Investment Companies (1.7%)
AIM Liquid Asset Money Market Fund.......................... 853,454 853
-------
Repurchase Agreements (0.5%)
Lehman Brothers, 6.74%, 8/1/00, dated 7/31/00, with a
maturity value of $276 (See Significant Accounting
Policies, Securities Lending in the Notes to Financial
Statements for collateral description)..................... $ 276 276
-------
TOTAL SHORT-TERM SECURITIES................................. 5,308
-------
TOTAL INVESTMENTS
(Cost $54,382) (a) -- (110.3%)............................. 55,576
Liabilities in excess of
other assets -- (- 10.3%).................................. (5,189)
-------
TOTAL NET ASSETS -- (100.0%)................................ $50,387
=======
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................ $ 6,602
Unrealized depreciation............................................ (5,408)
-------
Net unrealized appreciation........................................ $ 1,194
=======
</TABLE>
(b) Represents non-income producing securities.
(c) Represents a restricted security purchased under Rule 144A which is exempt
from registration under the Security Act of 1933, as amended.
* Variable rate security. Rate represents rate in effect at July 31, 2000.
+ Represents securities purchased with cash collateral received on loaned
securities.
MTN -- Medium Term Note
See notes to financial statements
58
<PAGE>
AMSOUTH FUNDS
Growth Fund (a)
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $54,106)............................ $55,300
Repurchase agreements, at cost.................................. 276
-------
Total Investments.............................................. 55,576
Interest and dividends receivable............................... 45
Receivable for capital shares issued............................ 11
Receivable for investments sold................................. 1,153
Prepaid expenses and other assets............................... 4
-------
Total Assets................................................... 56,789
Liabilities:
Payable for return of collateral held for securities on loan.... $5,308
Custody payable................................................. 630
Payable for investments purchased............................... 419
Payable for capital shares redeemed............................. 5
Accrued expenses and other payables:
Investment advisory fees....................................... 13
Administration fees............................................ 1
Distribution fees.............................................. 14
Custodian fees................................................. 1
Other.......................................................... 11
------
Total Liabilities.............................................. 6,402
-------
Net Assets:
Capital......................................................... 42,525
Undistributed (distributions in excess of) net investment
income......................................................... 4
Undistributed (distributions in excess of) net realized gains... 6,664
Net unrealized appreciation (depreciation) from investments..... 1,194
-------
Net Assets...................................................... $50,387
=======
Class A Shares (b)
Net Assets..................................................... $13,665
Shares outstanding............................................. 915
Redemption price per share..................................... $ 14.93
=======
Class A Shares -- Maximum Sales Charge.......................... 4.50%
-------
Maximum Offering Price Per Share (100%/(100% -- Maximum Sales
Charge) of net asset value adjusted to the nearest cent)...... $ 15.63
=======
Class B Shares
Net Assets..................................................... $ 9,223
Shares outstanding............................................. 631
Offering price per share*...................................... $ 14.61
=======
Trust Shares (c)
Net Assets..................................................... $27,499
Shares outstanding............................................. 1,829
Offering and redemption price per share........................ $ 15.04
=======
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly AmSouth Capital Growth Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2000
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Dividend income................................................. $ 368
Income from securities lending.................................. 1
-------
Total Investment Income........................................ 369
Expenses:
Investment advisory fees........................................ $391
Administration fees............................................. 98
Distribution fees -- Class B Shares............................. 89
Shareholder servicing fees -- Class A Shares (b)................ 37
Shareholder servicing fees -- Trust Shares (c).................. 17
Custodian fees.................................................. 11
Accounting fees................................................. 39
Transfer agent fees............................................. 56
Trustee fees and expenses....................................... 2
Other fees...................................................... 41
----
Total expenses before voluntary fee reductions................. 781
Expenses voluntarily reduced................................... (105)
-------
Net expenses................................................... 676
-------
Net Investment Income (Loss).................................... (307)
-------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment transactions........ 7,075
Net change in unrealized appreciation (depreciation) from
investments.................................................... (2,745)
-------
Net realized/unrealized gains (losses) from investments......... 4,330
-------
Change in net assets resulting from operations.................. $ 4,023
=======
</TABLE>
See notes to financial statements
59
<PAGE>
AMSOUTH FUNDS
Growth Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2000 1999
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income (loss)............................ $ (307) $ (149)
Net realized gains (losses) from investment
transactions........................................... 7,075 1,650
Net change in unrealized appreciation (depreciation)
from investments....................................... (2,745) 2,629
------- -------
Change in net assets resulting from operations........... 4,023 4,130
------- -------
Distributions to Class A Shareholders (b):
From net realized gains on investment transactions...... (495) (69)
Distributions to Class B Shareholders:
From net realized gains on investment transactions...... (311) (31)
Distributions to Trust Shareholders (c):
From net realized gains on investment transactions...... (794) (40)
------- -------
Change in net assets from shareholder distributions...... (1,600) (140)
------- -------
Change in net assets from capital transactions........... 8,406 19,547
------- -------
Change in net assets..................................... 10,829 23,537
Net Assets:
Beginning of period..................................... 39,558 16,021
------- -------
End of period........................................... $50,387 $39,558
======= =======
</TABLE>
---------
(a) Formerly AmSouth Capital Growth Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
See notes to financial statements
60
<PAGE>
AMSOUTH FUNDS
Growth Fund (a)
Financial Highlights, Class A Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2000 1999 1998 (b)(c)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.... $ 14.04 $ 11.62 $ 10.00
-------- -------- -------
Investment Activities
Net investment income (loss)........... (0.09) (0.06) (0.03)
Net realized and unrealized gains
(losses) from investments............. 1.53 2.57 1.65
-------- -------- -------
Total from Investment Activities....... 1.44 2.51 1.62
-------- -------- -------
Distributions
Net realized gains from investment
transactions.......................... (0.55) (0.09) --
-------- -------- -------
Total Distributions.................... (0.55) (0.09) --
-------- -------- -------
Net change in asset value............... 0.89 2.42 1.62
-------- -------- -------
Net Asset Value, End of Period.......... $ 14.93 $ 14.04 $ 11.62
======== ======== =======
Total Return (excludes sales charge).... 10.27% 21.76% 16.20%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)....... $ 13,665 $ 14,040 $ 9,720
Ratio of expenses to average net
assets................................. 1.35% 1.23% 1.40%(e)
Ratio of net investment income to
average net assets..................... (0.59)% (0.50)% (0.42)%(e)
Ratio of expenses to average net
assets*................................ 1.55% 1.74% 2.37%(e)
Portfolio turnover**.................... 111% 79% 77%
</TABLE>
/\ Formerly Classic Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly AmSouth Capital Growth Fund.
(b) For the period from August 3, 1997 (commencement of operations) through
July 31, 1998.
(c) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
(d) Not annualized.
(e) Annualized.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2000 1999 1998 (b)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period...... $ 13.85 $ 11.54 $ 9.82
------- ------- -------
Investment Activities
Net investment income (loss)............. (0.19) (0.12) (0.06)
Net realized and unrealized gains
(losses) from investments............... 1.50 2.52 1.78
------- ------- -------
Total from Investment Activities......... 1.31 2.40 1.72
------- ------- -------
Distributions
Net realized gains from investment
transactions............................ (0.55) (0.09) --
------- ------- -------
Total Distributions...................... (0.55) (0.09) --
------- ------- -------
Net change in asset value................. 0.76 2.31 1.72
------- ------- -------
Net Asset Value, End of Period............ $ 14.61 $ 13.85 $ 11.54
======= ======= =======
Total Return (excludes redemption
charge).................................. 9.46% 20.96% 17.52%(c)
Ratios/Supplemental Data:
Net Assets at end of period (000)......... $ 9,223 $ 7,463 $ 3,477
Ratio of expenses to average net assets... 2.10% 1.97% 2.05%(d)
Ratio of net investment income to average
net assets............................... (1.34)% (1.26)% (1.10)%(d)
Ratio of expenses to average net assets*.. 2.30% 2.48% 3.11%(d)
Portfolio turnover**...................... 111% 79% 77%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly AmSouth Capital Growth Fund.
(b) For the period from September 3, 1997 (commencement of operations) through
July 31, 1998.
(c) Not annualized.
(d) Annualized.
See notes to financial statements
61
<PAGE>
AMSOUTH FUNDS
Growth Fund (a)
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2000 1999 1998 (b)(c)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period....... $ 14.11 $ 11.65 $ 9.55
------- ------- ------
Investment Activities
Net investment income (loss).............. (0.06) (0.02) --
Net realized and unrealized gains (losses)
from investments......................... 1.54 2.57 2.10
------- ------- ------
Total from Investment Activities.......... 1.48 2.55 2.10
------- ------- ------
Distributions
Net realized gains from investment
transactions............................. (0.55) (0.09) --
------- ------- ------
Total Distributions....................... (0.55) (0.09) --
------- ------- ------
Net change in asset value.................. 0.93 2.46 2.10
------- ------- ------
Net Asset Value, End of Period............. $ 15.04 $ 14.11 $11.65
======= ======= ======
Total Return............................... 10.51% 22.05% 16.50%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000).......... $27,499 $18,055 $2,824
Ratio of expenses to average net assets.... 1.15% 0.96% 0.99%(e)
Ratio of net investment income to average
net assets................................ (0.40)% (0.28)% 0.00%(e)
Ratio of expenses to average net assets*... 1.37% 1.47% 2.05%(e)
Portfolio turnover**....................... 111% 79% 77%
</TABLE>
/\ Formerly Premier Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly AmSouth Capital Growth Fund.
(b) For the period from August 3, 1997 (commencement of operations) through
July 31, 1998.
(c) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
(d) Represents total return based on the activity of Classic Shares for the
period from August 4, 1997 to September 1, 1997 and the activity of Premier
Shares for the period from September 2, 1997 to July 31, 1998. Total return
for the Premier Shares for the period from September 2, 1997 (commencement
of operations) through July 31, 1998 was 21.99%.
(e) Annualized.
See notes to financial statements
62
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Capital Growth Fund July 31, 2000
(Amounts in thousands, except shares)
Common Stocks (94.0%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- ---------
<S> <C> <C>
Aerospace/Defense (1.0%)
United Technologies Corp. ................................. 55,000 $ 3,211
---------
Banks (3.0%)
Northern Trust Corp........................................ 130,000 9,734
---------
Business Equipment & Services (3.7%)
Cintas Corp. .............................................. 89,500 3,776
Paychex, Inc. ............................................. 180,000 8,235
---------
12,011
---------
Computer Hardware (7.1%)
Dell Computer Corp. (b).................................... 100,000 4,394
Hewlett-Packard Co. ....................................... 42,500 4,640
IBM Corp. ................................................. 45,000 5,060
Sun Microsystems, Inc. (b)................................. 80,000 8,435
---------
22,529
---------
Computer Software & Services (10.6%)
Cisco Systems, Inc. (b).................................... 73,000 4,777
DST Systems Inc. (b)....................................... 74,000 6,910
EMC Corp. (b).............................................. 97,000 8,257
Microsoft Corp. (b)........................................ 105,000 7,330
Oracle Corp. (b)........................................... 85,000 6,391
---------
33,665
---------
Containers & Packaging (0.7%)
Sealed Air Corp. (b)....................................... 47,500 2,393
---------
Cosmetics/Toiletries (0.6%)
Colgate-Palmolive Co. ..................................... 35,000 1,949
---------
Data Processing & Reproduction (2.3%)
Automatic Data Processing, Inc. ........................... 150,000 7,434
---------
Diversified Manufacturing (4.6%)
Corning, Inc. ............................................. 14,000 3,275
General Electric Co. ...................................... 136,500 7,021
Tyco International Ltd. ................................... 85,020 4,549
---------
14,845
---------
Educational Services (1.7%)
DeVry, Inc. (b)............................................ 165,000 5,589
---------
Electronic Components (1.9%)
Altera Corp. (b)........................................... 18,000 1,767
LSI Logic Corp. (b)........................................ 70,000 2,371
QLogic Corp. (b)........................................... 25,000 1,863
---------
6,001
---------
Financial Services (5.5%)
American Express Co. ...................................... 125,000 7,086
Biotech Holders Trust...................................... 17,500 2,949
Citigroup, Inc............................................. 110,000 7,762
---------
17,797
---------
Food Distributors & Wholesalers (1.8%)
Sysco Corp................................................. 150,600 5,930
---------
Health Care -- Drugs (4.3%)
Amgen, Inc. (b)............................................ 87,000 5,650
Cardinal Health, Inc....................................... 112,800 8,290
---------
13,940
---------
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- ---------
<S> <C> <C>
Insurance (4.7%)
American International Group, Inc. ........................ 107,250 $ 9,404
Marsh & McLennan Cos., Inc. ............................... 48,000 5,856
---------
15,260
---------
Internet Software (1.2%)
America Online, Inc. (b)................................... 70,000 3,732
---------
Medical Equipment & Supplies (5.1%)
Medtronic, Inc............................................. 115,000 5,872
PE Biosystems Group........................................ 15,000 1,308
Stryker Corp............................................... 170,000 7,300
Sybron International Corp. (b)............................. 100,000 2,081
---------
16,561
---------
Oil & Gas Exploration, Production & Services (4.2%)
Enron Corp................................................. 103,000 7,583
Schlumberger Ltd. ......................................... 80,000 5,915
---------
13,498
---------
Pharmaceuticals (3.9%)
Pfizer, Inc................................................ 193,750 8,355
Schering-Plough Corp....................................... 100,000 4,319
---------
12,674
---------
Retail (16.4%)
Best Buy Co., Inc. (b)..................................... 88,500 6,439
CVS Corp................................................... 161,000 6,349
Dollar Tree Stores, Inc. (b)............................... 120,750 5,139
Home Depot, Inc............................................ 95,000 4,916
Lowes Companies, Inc....................................... 125,000 5,273
Safeway, Inc. (b).......................................... 140,000 6,309
Target Corp................................................ 190,000 5,510
Wal-Mart Stores, Inc. ..................................... 115,000 6,318
Walgreen Co................................................ 200,000 6,238
---------
52,491
---------
Semiconductors (4.4%)
Applied Materials, Inc. (b)................................ 45,000 3,414
Intel Corp. ............................................... 116,000 7,743
Texas Instruments, Inc..................................... 51,000 2,993
---------
14,150
---------
Technology (0.9%)
Agilent Technologies (b)................................... 1 --*
Novellus Systems, Inc. (b)................................. 51,500 2,778
---------
Telecommunications -- Equipment (0.9%)
Tellabs, Inc. (b).......................................... 45,000 2,925
---------
Utilities -- Telecommunications (3.5%)
Qwest Communications International, Inc. (b)............... 110,000 5,163
WorldCom, Inc. (b)......................................... 155,000 6,055
---------
11,218
---------
TOTAL COMMON STOCKS........................................ 302,315
---------
</TABLE>
Continued
63
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Capital Growth Fund July 31, 2000
(Amounts in thousands, except shares)
Investment Companies (3.8%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- ---------
<S> <C> <C>
AIM Liquid Assets Money Market Fund........................ 1,000 $ 1
AmSouth Prime Money Market Fund............................ 4,855,582 4,856
S & P 500 Depositary Receipts.............................. 40,000 5,717
S & P Mid-Cap 400 Depositary Receipts...................... 20,000 1,800
---------
TOTAL INVESTMENT COMPANIES................................. 12,374
---------
Short-Term Securities+ (34.8%)
Commercial Paper (22.3%)
Asset Backed -- Miscellaneous (4.7%)
Asset Securitization Corp., 6.60%, 9/6/00.................. $ 4,662 4,583
Corporate Receivables, 6.62%, 8/1/00....................... 5,828 5,827
Falcon Asset Securitization Corp., 6.62%, 8/14/00.......... 4,662 4,585
---------
14,995
---------
Financial Services (12.9%)
Golden Funding Corp., 6.55%-6.62%, 9/8/00-9/18/00.......... 5,941 5,864
Liberty Street Funding Corp., 6.56%, 10/11/00.............. 4,153 4,083
Moat Funding Corp., 6.54%-6.67%, 8/11/00-10/6/00........... 5,944 5,851
Orix Corp., 6.85%, 8/10/00................................. 2,914 2,882
Superior Funding Corp., 6.51%-6.53%, 8/21/00-8/29/00....... 6,411 6,373
TransAmerica, 6.65%, 9/5/00................................ 4,662 4,604
Trident, 6.70%, 8/4/00..................................... 5,828 5,788
UBS Finance, 6.57%-6.64%, 8/1/00-8/7/00.................... 6,213 6,208
---------
41,653
---------
Food -- Retail (0.9%)
Safeway, Inc., 6.70%, 8/15/00.............................. 2,914 2,893
---------
Miscellaneous (0.7%)
Tyco International, Ltd., 6.91%, 8/7/00.................... 2,411 2,383
---------
Utilities -- Electrical & Gas (1.3%)
Dominion Resources, Inc., 6.88%, 8/7/00.................... 4,080 4,032
---------
Utilities -- Telecommunications (1.8%)
Qwest Communications International, Inc., 6.80%, 9/5/00.... 5,828 5,762
---------
Total Commerical Paper..................................... 71,718
---------
Floating Rate Notes (2.4%)
Financial Services (1.9%)
Ford Motor Credit Co., 6.71%**, 4/11/02, MTN............... 2,331 2,331
General Motors Acceptance Corp., 6.72%**, 4/5/02, MTN...... 1,164 1,164
General Motors Acceptance Corp., 6.94%**, 11/13/00, MTN.... 1,399 1,399
KeyCorp, 6.94%**, 10/23/00, MTN............................ 1,166 1,166
---------
6,060
---------
</TABLE>
Short-Term Securities+, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ---------
<S> <C> <C>
Floating Rate Notes, continued
Miscellaneous (0.5%)
Tyco International, Ltd., 7.47%**, 9/5/00 (c)............ $ 1,748 $ 1,748
---------
Total Floating Rate Notes................................ 7,808
---------
Time Deposits (2.7%)
Amex Centurion, 6.56%-6.58%, 8/8/00-8/30/00.............. 8,742 8,742
---------
Investment Companies (5.6%)
AIM Liquid Asset Money Market Fund....................... 18,028,042 18,028
---------
Repurchase Agreements (1.8%)
Lehman Brothers, 6.74%, 8/1/00, dated 7/31/00, with a
maturity value of $5,829 (See Significant Accounting
Policies, Securities Lending in the Notes to Financial
Statements for collateral description) ................. $ 5,828 5,828
---------
TOTAL SHORT-TERM SECURITIES.............................. 112,124
---------
TOTAL INVESTMENTS (Cost $378,840) (a) -- (132.6%)........ 426,813
Liabilities in excess of other
assets -- (-32.6%)...................................... (104,966)
---------
TOTAL NET ASSETS -- (100.0%)............................. $ 321,847
=========
</TABLE>
---------
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of $762. Cost
for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.............................................. $57,725
Unrealized depreciation.............................................. (10,514)
-------
Net unrealized appreciation.......................................... $47,211
=======
</TABLE>
(b) Represents non-income producing securities.
(c) Represents a restricted security purchased under Rule 144A which is exempt
from registration under the Security Act of 1933, as amended.
* Due to rounding, figure was below thousand dollar threshold.
** Variable rate security. Rate represents rate in effect at July 31, 2000.
+ Represents securities purchased with cash collateral received on loaned
securities.
MTN -- Medium Term Note
See notes to financial statements
64
<PAGE>
AMSOUTH FUNDS
Capital Growth Fund (a)
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $373,012)....................... $420,985
Repurchase agreements, at cost.............................. 5,828
--------
Total Investments.......................................... 426,813
Cash........................................................ 228
Interest and dividends receivable........................... 74
Receivable for capital shares issued........................ 124
Receivable for investments sold............................. 6,876
Receivable from investment adviser.......................... 20
Prepaid expenses and other assets........................... 22
--------
Total Assets............................................... 434,157
Liabilities:
Payable for return of collateral held for securities on
loan....................................................... $112,124
Payable for capital shares redeemed......................... 10
Accrued expenses and other payables:
Investment advisory fees................................... 86
Administration fees........................................ 8
Distribution fees.......................................... 37
Custodian fees............................................. 8
Other...................................................... 37
--------
Total Liabilities.......................................... 112,310
--------
Net Assets:
Capital..................................................... 247,551
Undistributed (distributions in excess of) net investment
income..................................................... (5)
Undistributed (distributions in excess of) net realized
gains...................................................... 26,328
Net unrealized appreciation (depreciation) from
investments................................................ 47,973
--------
Net Assets.................................................. $321,847
========
Class A Shares
Net Assets................................................. $ 14,137
Shares outstanding......................................... 945
Redemption price per share................................. $ 14.97
========
Class A Shares -- Maximum Sales Charge...................... 4.50%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum
Sales Charge) of net asset value adjusted to the nearest
cent)..................................................... $ 15.68
========
Class B Shares
Net Assets................................................. $ 8,939
Shares outstanding......................................... 618
Offering price per share*.................................. $ 14.46
========
Trust Shares (b)
Net Assets................................................. $298,771
Shares outstanding......................................... 20,071
Offering and redemption price per share.................... $ 14.89
========
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG Capital Growth Fund.
(b) Formerly Institutional Shares.
(c) For the period from January 1, 2000 through July 31, 2000.
Statements of Operations
<TABLE>
<CAPTION>
Period Ended Year Ended
July 31, December 31,
2000 (c) 1999
------------ ------------
(Amounts in thousands)
<S> <C> <C>
Investment Income:
Interest income..................................... $ 69 $ 105
Dividend income..................................... 1,298 1,890
Income from securities lending...................... 154 229
------- -------
Total Investment Income............................ 1,521 2,224
Expenses:
Investment advisory fees............................ 1,355 1,476
Administration fees................................. 332 341
Distribution fees -- Class A Shares................. 5 19
Distribution fees -- Class B Shares................. 45 40
Shareholder servicing fees -- Class A Shares........ 16 11
Shareholder servicing fees -- Class B Shares........ 4 13
Shareholder servicing fees -- Trust Shares (b)...... 251 321
Custodian fees...................................... 82 60
Accounting fees..................................... 5 25
Transfer agent fees................................. 63 76
Trustee fees and expenses........................... 6 6
Other fees.......................................... 80 127
------- -------
Total expenses before voluntary fee reductions/
reimbursements.................................... 2,244 2,515
Expenses voluntarily reduced/reimbursed............ (196) (26)
------- -------
Net expenses....................................... 2,048 2,489
------- -------
Net Investment Income (Loss)........................ (527) (265)
------- -------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment
transactions....................................... 18,488 46,657
Net change in unrealized appreciation (depreciation)
from investments................................... (3,450) 466
------- -------
Net realized/unrealized gains (losses) from
investments........................................ 15,038 47,123
------- -------
Change in net assets resulting from operations...... $14,511 $46,858
======= =======
</TABLE>
See notes to financial statements
65
<PAGE>
AMSOUTH FUNDS
Capital Growth Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended
July 31, December 31, December 31,
2000 (b) 1999 1998
------------ ------------ ------------
(Amounts in thousands)
<S> <C> <C> <C>
From Investment Activities:
Operations:
Net Investment income (loss)......... $ (527) $ (265) $ 87
Net realized gains (losses) from
investment transactions............. 18,488 46,657 31,139
Net change in unrealized appreciation
(depreciation) from investments..... (3,450) 466 13,756
-------- -------- --------
Change in net assets resulting from
operations........................... 14,511 46,858 44,982
-------- -------- --------
Distributions to Class A Shareholders:
From net realized gains on investment
transactions........................ -- (1,690) (660)
Distributions to Class B Shareholders:
From net realized gains on investment
transactions........................ -- (1,261) (356)(c)
Distributions to Trust Shareholders
(d):
From net investment income........... -- -- (87)
In excess of net investment income... (35) -- (2)
From net realized gains on investment
transactions........................ -- (39,425) (25,873)
-------- -------- --------
Change in net assets from shareholder
distributions........................ (35) (42,376) (26,978)
-------- -------- --------
Change in net assets from capital
transactions......................... 47,546 74,316 20,404
-------- -------- --------
Change in net assets.................. 62,022 78,798 38,408
Net Assets:
Beginning of period.................. 259,825 181,027 142,619
-------- -------- --------
End of period........................ $321,847 $259,825 $181,027
======== ======== ========
</TABLE>
---------
(a) Formerly ISG Capital Growth Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) For the period from February 5, 1998 (commencement of operations) through
December 31, 1998.
(d) Formerly Institutional Shares.
See notes to financial statements
66
<PAGE>
AMSOUTH FUNDS
Capital Growth Fund (a)
Financial Highlights, Class A Shares
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Year Ended Period Ended
July 31, December 31, December 31, December 31, December 31,
2000 (b) 1999 1998 1997 1996 (c)
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 14.37 $ 14.20 $ 12.80 $ 11.32 $ 10.00
------- ------- ------- ------- -------
Investment Activities
Net investment income
(loss)................ (0.04) (0.04) (0.01) 0.06 --
Net realized and
unrealized gains
(losses) from
investments........... 0.64 2.97 3.89 3.40 1.32
------- ------- ------- ------- -------
Total from Investment
Activities............ 0.60 2.93 3.88 3.46 1.32
------- ------- ------- ------- -------
Distributions
Net investment income.. -- -- -- (0.06) --
Net realized gains..... -- (2.76) (2.48) (1.92) --
------- ------- ------- ------- -------
Total Distributions.... -- (2.76) (2.48) (1.98) --
------- ------- ------- ------- -------
Net change in asset
value.................. 0.60 0.17 1.40 1.48 1.32
------- ------- ------- ------- -------
Net Asset Value, End of
Period................. $ 14.97 $ 14.37 $ 14.20 $ 12.80 $ 11.32
======= ======= ======= ======= =======
Total Return (excludes
sales charge).......... 4.18%(d) 21.85% 32.05% 30.79% 13.20%(d)
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $14,137 $10,310 $ 4,631 $ 858 $49,008
Ratio of expenses to
average net assets..... 1.32%(e) 1.32% 1.28% 0.93% 1.20%(e)
Ratio of net investment
income to average net
assets................. (0.49)%(e) (0.33)% (0.19)% 0.42% (0.02)%(e)
Ratio of expenses to
average net assets*.... 1.37%(e) 1.33% 1.29% 1.18% 1.39%(e)
Portfolio turnover**.... 91% 178% 152% 116% 69%
</TABLE>
* During the period, certain fees were voluntarily reduced/reimbursed. If such
voluntary fee reductions/reimbursements had not occurred, the ratios would
have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Capital Growth Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from April 1, 1996 (commencement of operations) through
December 31, 1996.
(d) Not annualized.
(e) Annualized.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
July 31, December 31, December 31,
2000 (b) 1999+ 1998 (c)
------------ ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period............................. $13.93 $13.92 $13.10
------ ------ ------
Investment Activities
Net investment income (loss)....... (0.09) (0.14) (0.05)
Net realized and unrealized gains
(losses) from investments......... 0.62 2.91 3.35
------ ------ ------
Total from Investment Activities... 0.53 2.77 3.30
------ ------ ------
Distributions
Net realized gains................. -- (2.76) (2.48)
------ ------ ------
Total Distributions................ -- (2.76) (2.48)
------ ------ ------
Net change in asset value........... 0.53 0.01 0.82
------ ------ ------
Net Asset Value, End of Period...... $14.46 $13.93 $13.92
====== ====== ======
Total Return (excludes redemption
charge)............................ 3.80%(d) 21.11% 26.86%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)... $8,939 $7,704 $2,854
Ratio of expenses to average net
assets............................. 1.96%(e) 1.92% 2.04%(e)
Ratio of net investment income to
average net assets................. (1.11)%(e) (0.93)% (0.95)%(e)
Ratio of expenses to average net
assets*............................ 2.07%(e) 1.93% (f)
Portfolio turnover**................ 91% 178% 152%
</TABLE>
* During the period, certain fees were voluntarily reduced/reimbursed. If
such voluntary fee reductions/reimbursements had not occurred, the ratios
would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
+ Net investment income (loss) is based on average shares outstanding during
the period.
(a) Formerly ISG Capital Growth Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 5, 1998 (commencement of operations) through
December 31, 1998.
(d) Not annualized.
(e) Annualized.
(f) There was no fee reduction in this period.
See notes to financial statements
67
<PAGE>
AMSOUTH FUNDS
Capital Growth Fund (a)
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Period Ended
July, 31 December 31, December 31, December 31,
2000 (b) 1999 1998 1997 (c)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value, Begin-
ning of Period......... $ 14.27 $ 14.09 $ 12.69 $ 14.51
-------- -------- -------- --------
Investment Activities
Net investment income
(loss)................ (0.02) (0.01) 0.01 0.02
Net realized and
unrealized gains
(losses) from invest-
ments................. 0.64 2.95 3.88 0.10
-------- -------- -------- --------
Total from Investment
Activities............ 0.62 2.94 3.89 0.12
-------- -------- -------- --------
Distributions
Net investment income.. -- -- (0.01) (0.02)
Net realized gains..... -- (2.76) (2.48) (1.92)
-------- -------- -------- --------
Total Distributions..... -- (2.76) (2.49) (1.94)
-------- -------- -------- --------
Net change in asset val-
ue..................... 0.62 0.18 1.40 (1.82)
-------- -------- -------- --------
Net Asset Value, End of
Period................. $ 14.89 $ 14.27 $ 14.09 $ 12.69
======== ======== ======== ========
Total Return............ 4.36%(d) 22.09% 32.40% 0.88%(d)
Ratios/Supplemental Da-
ta:
Net Assets at end of pe-
riod (000)............. $298,771 $241,810 $173,542 $141,761
Ratio of expenses to av-
erage net assets....... 1.11%(e) 1.07% 1.02% 0.58%(e)
Ratio of net investment
income to average net
assets................. (0.26)%(e) (0.09)% 0.07% 0.80%(e)
Ratio of expenses to av-
erage net assets*...... 1.22%(e) 1.08% 1.03% 0.99%(e)
Portfolio turnover**.... 91% 178% 152% 116%
</TABLE>
/\ Formerly Institutional Shares.
* During the period, certain fees were voluntarily reduced/reimbursed. If
such voluntary fee reductions/reimbursements had not occurred, the ratios
would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Capital Growth Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from October 3, 1997 (commencement of operations) through
December 31, 1997.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
68
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Large Cap Fund July 31, 2000
(Amounts in thousands, except shares)
Common Stocks (98.0%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ----------
<S> <C> <C>
Advertising (1.0%)
The Interpublic Group of Companies, Inc. ................. 200,000 $ 8,013
----------
Aerospace/Defense (1.5%)
Boeing Co................................................. 250,000 12,250
----------
Beverages (3.9%)
Coca-Cola Co.............................................. 245,000 15,022
PepsiCo, Inc.............................................. 355,000 16,263
----------
31,285
----------
Business Equipment & Services (1.0%)
Paychex, Inc.............................................. 180,000 8,235
----------
Computer Hardware (10.4%)
Compaq Computer Corp...................................... 400,000 11,225
Dell Computer Corp. (b)................................... 200,000 8,788
Hewlett-Packard Co. ...................................... 180,000 19,653
IBM Corp.................................................. 200,000 22,487
Sun Microsystems, Inc. (b)................................ 200,000 21,087
----------
83,240
----------
Computer Software & Services (8.8%)
BMC Software, Inc. (b).................................... 200,000 3,775
Cisco Systems, Inc. (b)................................... 180,000 11,779
Electronic Data Systems Corp. ............................ 200,000 8,600
EMC Corp. (b)............................................. 200,000 17,024
Microsoft Corp. (b)....................................... 200,000 13,963
Oracle Corp. (b).......................................... 200,000 15,037
----------
70,178
----------
Consumer Goods (2.2%)
Gillette Co. ............................................. 300,000 8,757
Procter & Gamble Co....................................... 150,000 8,531
----------
17,288
----------
Data Processing & Reproduction (2.5%)
Automatic Data Processing, Inc............................ 400,000 19,825
----------
Diversified Manufacturing (7.8%)
General Electric Co....................................... 500,000 25,718
Honeywell International, Inc.............................. 200,000 6,725
Illinois Tool Works, Inc.................................. 150,000 8,588
Tyco International Ltd.................................... 400,000 21,400
----------
62,431
----------
Entertainment (1.9%)
Disney (Walt) Co. ........................................ 400,000 15,475
----------
Food Distributors & Wholesalers (1.5%)
Sysco Corp................................................ 300,000 11,813
----------
Food Products, Processing &
Packaging (2.2%)
H.J. Heinz Co............................................. 150,000 5,991
International Flavors & Fragrances, Inc. ................. 200,000 5,350
Sara Lee Corp. ........................................... 350,000 6,453
----------
17,794
----------
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- -----------
<S> <C> <C>
Health Care (6.3%)
American Home Products Corp............................... 300,000 $ 15,919
Johnson & Johnson......................................... 280,000 26,058
UnitedHealth Group Inc. .................................. 100,000 8,181
-----------
50,158
-----------
Health Care -- Drugs (3.5%)
Amgen, Inc. (b)........................................... 300,000 19,481
Cardinal Health, Inc...................................... 120,000 8,820
-----------
28,301
-----------
Household Products/Wares (0.5%)
Clorox Corp............................................... 100,000 4,131
-----------
Machinery & Equipment (2.4%)
Dover Corp. .............................................. 420,000 19,241
-----------
Media (0.7%)
McGraw Hill Cos., Inc. ................................... 100,000 5,944
-----------
Medical Equipment & Supplies (3.1%)
IMS Health, Inc........................................... 225,000 4,064
Medtronic, Inc............................................ 400,000 20,425
-----------
24,489
-----------
Office Equipment & Services (1.5%)
Pitney Bowes, Inc......................................... 335,000 11,599
-----------
Pharmaceuticals (10.3%)
Abbott Laboratories....................................... 400,000 16,650
Merck & Co., Inc.......................................... 350,000 25,090
Pfizer, Inc............................................... 400,000 17,250
Schering-Plough Corp...................................... 550,000 23,753
-----------
82,743
-----------
Raw Materials (1.0%)
Avery Dennison Corp. ..................................... 150,000 8,138
-----------
Restaurants (2.4%)
McDonald's Corp........................................... 600,000 18,900
-----------
Retail (10.7%)
Albertsons, Inc........................................... 200,000 6,038
Dollar General Stores..................................... 250,000 4,594
Gap (The), Inc............................................ 300,000 10,744
Home Depot, Inc........................................... 375,000 19,406
TJX Cos., Inc............................................. 400,000 6,700
Wal-Mart Stores, Inc...................................... 300,000 16,481
Walgreen Co. ............................................. 700,000 21,830
-----------
85,793
-----------
Semiconductors (4.4%)
Applied Materials, Inc. (b)............................... 200,000 15,175
Intel Corp................................................ 300,000 20,025
-----------
35,200
-----------
Technology (0.3%)
Agilent Technologies (b).................................. 68,652 2,798
-----------
Telecommunications -- Equipment (2.7%)
Lucent Technologies, Inc. ................................ 180,000 7,875
Motorola, Inc............................................. 120,000 3,968
Tellabs, Inc. (b)......................................... 150,000 9,750
-----------
21,593
-----------
</TABLE>
Continued
69
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Large Cap Fund July 31, 2000
(Amounts in thousands, except shares)
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ----------
<S> <C> <C>
Tobacco (0.5%)
Philip Morris Companies,
Inc.................... 150,000 $ 3,788
----------
Utilities -- Telecommunications
(3.0%)
AT&T Corp............... 175,000 5,414
BellSouth Corp.......... 150,000 5,972
SBC Communications,
Inc.................... 150,000 6,385
WorldCom, Inc. (b)...... 150,000 5,859
----------
23,630
----------
TOTAL COMMON STOCKS..... 784,273
----------
Investment Companies (1.9%)
AIM Liquid Assets Money
Market Fund............ 40,451 40
AmSouth Prime Money
Market Fund............ 15,186,503 15,187
----------
TOTAL INVESTMENT
COMPANIES.............. 15,227
----------
Short-Term Securities+ (33.6%)
Commercial Paper (21.6%)
Asset Backed --
Miscellaneous (4.5%)
Asset Securitization
Corp., 6.60%, 9/6/00... $ 11,166 10,976
Corporate Receivables,
6.62%, 8/1/00.......... 13,957 13,955
Falcon Asset
Securitization Corp.,
6.62%, 8/14/00......... 11,166 10,981
----------
35,912
----------
Financial Services
(12.6%)
Golden Funding Corp.,
6.55%-6.62%, 9/8/00-
9/18/00................ 14,228 14,043
Liberty Street Funding
Corp., 6.56%,
10/11/00............... 9,946 9,778
Moat Funding Corp.,
6.54%-6.67%, 8/11/00-
10/6/00................ 14,237 14,013
Orix Corp., 6.85%,
8/10/00................ 6,979 6,902
Superior Funding Corp.,
6.51%-6.53%, 8/21/00-
8/29/00................ 15,353 15,266
TransAmerica, 6.65%,
9/5/00................. 11,166 11,026
Trident, 6.70%, 8/4/00.. 13,957 13,861
UBS Finance, 6.57%-
6.64%,
8/1/00-8/7/00.......... 14,879 14,871
----------
99,760
----------
Food -- Retail (0.9%)
Safeway, Inc., 6.70%,
8/15/00................ 6,979 6,928
----------
Miscellaneous (0.7%)
Tyco International,
Ltd., 6.91%, 8/7/00.... 5,774 5,708
----------
Utilities -- Electrical
& Gas (1.2%)
Dominion Resources,
Inc., 6.88%, 8/7/00.... 9,770 9,656
----------
Utilities -- Telecommunications
(1.7%)
Qwest Communications
International, Inc.,
6.80%, 9/5/00.......... 13,957 13,799
----------
Total Commercial Paper.. 171,763
----------
</TABLE>
Short-Term Securities+, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ----------
<S> <C> <C>
Floating Rate Notes (2.3%)
Financial Services (1.8%)
Ford Motor Credit Co., 6.71%*, 4/11/02, MTN............. $ 5,583 $ 5,583
General Motors Acceptance Corp., 6.72%*, 4/5/02, MTN.... 2,789 2,789
General Motors Acceptance Corp., 6.94%*, 11/13/00, MTN.. 3,350 3,350
KeyCorp, 6.94%*, 10/23/00, MTN.......................... 2,791 2,791
----------
14,513
----------
Miscellaneous (0.5%)
Tyco International, Ltd., 7.47%*, 9/5/00 (c)............ 4,187 4,186
----------
Total Floating Rate Notes............................... 18,699
----------
Time Deposits (2.6%)
Amex Centurion, 6.56%-6.58%, 8/8/00-8/30/00............. 20,936 20,936
----------
Investment Companies (5.4%)
AIM Liquid Asset Money Market Fund...................... 43,176,042 43,176
----------
Repurchase Agreements (1.7%)
Lehman Brothers, 6.74%, 8/1/00, dated 7/31/00, with a
maturity value of $13,960 (See Significant Accounting
Policies, Securities Lending in the Notes to Financial
Statements for collateral description)................. $ 13,957 13,957
----------
TOTAL SHORT-TERM SECURITIES............................. 268,531
----------
TOTAL INVESTMENTS (Cost $678,924) (a) -- (133.5%)....... 1,068,031
Liabilities in excess of other
assets -- (-33.5%)..................................... (268,170)
----------
TOTAL NET ASSETS -- (100.0%)............................ $ 799,861
==========
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $416,732
Unrealized depreciation............................................. (27,625)
--------
Net unrealized appreciation......................................... $389,107
========
</TABLE>
(b) Non-income producing securities.
(c) Represents a restricted security purchased under Rule 144A which is exempt
from registration under the Security Act of 1933, as amended.
* Variable rate security. Rate represents rate in effect at July 31, 2000.
+ Represents securities purchased with cash collateral received on loaned
securities.
MTN -- Medium Term Note
See notes to financial statements
70
<PAGE>
AMSOUTH FUNDS
Large Cap Fund (a)
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $664,967)..................... $1,054,074
Repurchase agreements, at cost............................ 13,957
----------
Total Investments........................................ 1,068,031
Interest and dividends receivable......................... 444
Receivable for capital shares issued...................... 351
Prepaid expenses and other assets......................... 36
----------
Total Assets............................................. 1,068,862
Liabilities:
Payable for return of collateral held for securities on
loan..................................................... $268,531
Custody payable........................................... 30
Payable for capital shares redeemed....................... 27
Accrued expenses and other payables:
Investment advisory fees................................. 201
Administration fees...................................... 20
Distribution fees........................................ 99
Custodian fees........................................... 19
Other.................................................... 74
--------
Total Liabilities........................................ 269,001
----------
Net Assets:
Capital................................................... 307,209
Undistributed (distributions in excess of) net realized
gains.................................................... 103,545
Net unrealized appreciation (depreciation) from
investments.............................................. 389,107
----------
Net Assets................................................ $ 799,861
==========
Class A Shares
Net Assets............................................... $ 81,099
Shares outstanding....................................... 2,882
Redemption price per share............................... $ 28.14
==========
Class A Shares -- Maximum Sales Charge.................... 4.50%
----------
Maximum Offering Price Per Share (100%/(100% -- Maximum
Sales Charge) of net asset value adjusted to the nearest
cent)................................................... $ 29.47
==========
Class B Shares
Net Assets............................................... $ 24,655
Shares outstanding....................................... 889
Offering price per share*................................ $ 27.74
==========
Trust Shares (b)
Net Assets............................................... $ 694,107
Shares outstanding....................................... 24,665
Offering and redemption price per share.................. $ 28.14
==========
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG Large-Cap Equity Fund.
(b) Formerly Institutional Shares.
(c) For the period from January 1, 2000 through July 31, 2000.
Statements of Operations
<TABLE>
<CAPTION>
Period Ended Year Ended
July 31, December 31,
2000 (c) 1999
------------ ------------
(Amounts in thousands)
<S> <C> <C>
Investment Income:
Dividend income..................................... $ 4,512 $ 8,553
Income from securities lending...................... 502 242
-------- --------
Total Investment Income............................ 5,014 8,795
Expenses:
Investment advisory fees............................ 3,677 5,769
Administration fees................................. 861 1,154
Distribution fees -- Class A Shares................. 38 173
Distribution fees -- Class B Shares................. 117 75
Shareholder servicing fees -- Class A Shares........ 101 104
Shareholder servicing fees -- Class B Shares........ 10 25
Shareholder servicing fees -- Trust Shares (b)...... 615 1,035
Custodian fees...................................... 169 185
Accounting fees..................................... 1 25
Transfer agent fees................................. 165 205
Trustee fees and expenses........................... 15 24
Other fees.......................................... 137 274
-------- --------
Total expenses before voluntary fee
reductions/reimbursements......................... 5,906 9,048
Expenses voluntarily reduced/reimbursed............ (732) (982)
-------- --------
Net expenses....................................... 5,174 8,066
-------- --------
Net Investment Income (Loss)........................ (160) 729
-------- --------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment
transactions....................................... 56,300 205,658
Net change in unrealized appreciation (depreciation)
from investments................................... (52,282) (70,611)
-------- --------
Net realized/unrealized gains (losses) from
investments........................................ 4,018 135,047
-------- --------
Change in net assets resulting from operations...... $ 3,858 $135,776
======== ========
</TABLE>
See notes to financial statements
71
<PAGE>
AMSOUTH FUNDS
Large Cap Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended Year Ended
July 31, December 31, December 31, February 28,
2000 (b) 1999 1998 (c) 1998
------------ ------------ ------------ ------------
(Amounts in thousands)
<S> <C> <C> <C> <C>
From Investment
Activities:
Operations:
Net investment income
(loss)................. $ (160) $ 729 $ 1,332 $ 3,180
Net realized gains
(losses) from
investment
transactions........... 56,300 205,658 32,551 9,991
Net change in unrealized
appreciation
(depreciation) from
investments............ (52,282) (70,611) 146,744 193,990
-------- --------- -------- --------
Change in net assets
resulting from
operations.............. 3,858 135,776 180,627 207,161
-------- --------- -------- --------
Distributions to Class A
Shareholders:
From net investment
income................. -- (73) (1,673) (3,295)
In excess of net
investment income...... (15) (1) -- --
From net realized gains
on investment
transactions........... -- (11,381) (38,068) (4,464)
Distributions to Class B
Shareholders:
From net realized gains
on investment
transactions........... -- (2,572) -- --
Distributions to Trust
Shareholders (e):
From net investment
income................. -- (655) (58)(d) --
In excess of net
investment income...... (236) (5) -- --
From net realized gains
on investment
transactions........... -- (104,281) -- --
-------- --------- -------- --------
Change in net assets from
shareholder
distributions........... (251) (118,968) (39,799) (7,759)
-------- --------- -------- --------
Change in net assets from
capital transactions.... (7,854) (57,034) (12,125) 25,837
-------- --------- -------- --------
Change in net assets..... (4,247) (40,226) 128,703 225,239
Net Assets:
Beginning of period..... 804,108 844,334 715,631 490,392
-------- --------- -------- --------
End of period........... $799,861 $ 804,108 $844,334 $715,631
======== ========= ======== ========
</TABLE>
---------
(a) Formerly ISG Large-Cap Equity Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) For the period from March 1, 1998 through December 31, 1998.
(d) For the period from December 14, 1998 (commencement of operations) through
December 31, 1998.
(e) Formerly Institutional Shares.
See notes to financial statements
72
<PAGE>
AMSOUTH FUNDS
Large Cap Fund (a)
Financial Highlights, Class A Shares
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended Year Ended Year Ended Year Ended Year Ended
July 31, December 31, February 28, February 28, February 28, February 28, February 28,
2000 (b) 1999 1998 (c) 1998 1997 1996 1995
------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 28.02 $ 27.55 $ 23.01 $ 16.68 $ 14.49 $ 11.41 $ 10.87
------- ------- ------- -------- -------- -------- --------
Investment Activities
Net investment income
(loss)................ (0.01) 0.03 0.05 0.11 0.14 0.16 0.16
Net realized and
unrealized gains
(losses) from
investments........... 0.14 5.07 5.79 6.48 2.54 3.63 0.71
------- ------- ------- -------- -------- -------- --------
Total from Investment
Activities............ 0.13 5.10 5.84 6.59 2.68 3.79 0.87
------- ------- ------- -------- -------- -------- --------
Distributions
Net investment income.. -- (0.03) (0.05) (0.11) (0.14) (0.17) (0.16)
In excess of net
investment income..... (0.01) -- -- -- -- -- --
Net realized gains..... -- (4.60) (1.25) (0.15) (0.35) (0.54) (0.17)
------- ------- ------- -------- -------- -------- --------
Total Distributions.... (0.01) (4.63) (1.30) (0.26) (0.49) (0.71) (0.33)
------- ------- ------- -------- -------- -------- --------
Net change in asset
value.................. 0.12 0.47 4.54 6.33 2.19 3.08 0.54
------- ------- ------- -------- -------- -------- --------
Net Asset Value, End of
Period................. $ 28.14 $ 28.02 $ 27.55 $ 23.01 $ 16.68 $ 14.49 $ 11.41
======= ======= ======= ======== ======== ======== ========
Total Return (excludes
sales charge).......... 0.45%(d) 18.85% 25.83%(d) 39.74% 18.79% 33.73% 8.23%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $81,099 $79,211 $57,772 $715,631 $490,392 $385,145 $259,998
Ratio of expenses to
average net assets..... 1.14%(e) 1.04% 1.03%(e) 0.99% 0.92% 0.94% 0.95%
Ratio of net investment
income to average net
assets................. (0.07)%(e) 0.12% 0.21%(e) 0.54% 0.95% 1.24% 1.54%
Ratio of expenses to
average net assets*.... 1.37%(e) 1.39% 1.03%(e) (f) (f) (f) (f)
Portfolio turnover**.... 10% 15% 3% 6% 7% 15% 1%
</TABLE>
* During the period, certain fees were voluntarily reduced/reimbursed. If
such voluntary fee reductions/reimbursements had not occurred, the ratios
would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Large-Cap Equity Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from March 1, 1998 through December 31, 1998. In
conjunction with the reorganization of the ISG Funds, the Fund changed its
fiscal year end to December 31.
(d) Not annualized.
(e) Annualized.
(f) There were no fee reductions in this period.
See notes to financial statements
73
<PAGE>
AMSOUTH FUNDS
Large Cap Fund (a)
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
July 31, December 31, December 31,
2000 (b) 1999 + 1998 (c)
------------ ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period.............................. $ 27.75 $ 27.54 $25.98
------- ------- ------
Investment Activities
Net investment income (loss)........ (0.13) (0.23) --
Net realized and unrealized gains
(losses) from investments.......... 0.12 5.04 1.56
------- ------- ------
Total from Investment Activities.... (0.01) 4.81 1.56
------- ------- ------
Distributions
Net realized gains.................. -- (4.60) --
------- ------- ------
Total Distributions................. -- (4.60) --
------- ------- ------
Net change in asset value............ (0.01) 0.21 1.56
------- ------- ------
Net Asset Value, End of Period....... $ 27.74 $ 27.75 $27.54
======= ======= ======
Total Return (excludes redemption
charge)............................. (0.04)%(d) 17.78% 6.02%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000).... $24,655 $18,584 $ 100
Ratio of expenses to average net
assets.............................. 2.00%(e) 1.98% 1.10%(e)
Ratio of net investment income to
average net assets.................. (0.93)%(e) (0.79)% 0.23%(e)
Ratio of expenses to average net
assets*............................. 2.07%(e) 2.00% 2.11%(e)
Portfolio turnover**................. 10% 15% 3%
</TABLE>
* During the period, certain fees were voluntarily reduced/reimbursed. If
such voluntary fee reductions/reimbursements had not occurred, the ratios
would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
+ Net investment income (loss) is based on average shares outstanding during
the period.
(a) Formerly ISG Large-Cap Equity Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from December 15, 1998 (commencement on operations) through
December 31, 1998.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
74
<PAGE>
AMSOUTH FUNDS
Large Cap Fund (a)
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
July 31, December 31, December 31,
2000 (b) 1999 1998 (c)
------------ ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period............................. $ 28.01 $ 27.54 $ 25.52
-------- -------- --------
Investment Activities
Net investment income (loss)....... -- 0.03 --
Net realized and unrealized gains
(losses) from investments......... 0.14 5.07 2.02
-------- -------- --------
Total from Investment Activities... 0.14 5.10 2.02
-------- -------- --------
Distributions
Net investment income.............. -- (0.03) --
In excess of net investment
income............................ (0.01) -- --
Net realized gains................. -- (4.60) --
-------- -------- --------
Total Distributions................ (0.01) (4.63) --
-------- -------- --------
Net change in asset value........... 0.13 0.47 2.02
-------- -------- --------
Net Asset Value, End of Period...... $ 28.14 $ 28.01 $ 27.54
======== ======== ========
Total Return........................ 0.50%(d) 18.84% 7.92%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)... $694,107 $706,313 $786,462
Ratio of expenses to average net
assets............................. 1.07%(e) 1.04% 1.04%(e)
Ratio of net investment income to
average net assets................. 0.00%(e) 0.11% 0.20%(e)
Ratio of expenses to average net
assets*............................ 1.22%(e) 1.14% 1.09%(e)
Portfolio turnover**................ 10% 15% 3%
</TABLE>
/\ Formerly Institutional Shares.
* During the period, certain fees were voluntarily reduced/reimbursed. If such
voluntary fee reductions/reimbursements had not occurred, the ratios would
have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Large-Cap Equity Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from December 14, 1998 (commencement of operations) through
December 31, 1998.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
75
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Mid Cap Fund July 31, 2000
(Amounts in thousands, except shares)
Common Stocks (91.6%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- -------
<S> <C> <C>
Banking (2.7%)
BB&T Corp.................................................... 94,800 $ 2,364
-------
Cable Television (2.2%)
AT&T Corp. -- Liberty Media Group, Class A (b)............... 85,800 1,909
-------
Computer Software & Services (11.1%)
BEA Systems, Inc. (b)........................................ 55,800 2,403
Eclipsys Corp. (b)........................................... 45,000 506
Macromedia, Inc. (b)......................................... 24,000 1,836
Parametric Technology Corp. (b).............................. 110,000 1,100
Peregrine Systems, Inc. (b).................................. 99,300 2,475
Veritas Software Corp. (b)................................... 15,075 1,537
-------
9,857
-------
Data Processing & Reproduction (3.2%)
Fiserv, Inc. (b)............................................. 50,000 2,791
-------
Electronic Components (4.8%)
Broadcom Corp., Class A (b).................................. 8,000 1,794
QLogic Corp. (b)............................................. 32,400 2,414
-------
4,208
-------
Entertainment (4.1%)
MGM Mirage, Inc. ............................................ 100,000 3,594
-------
Health Care (2.6%)
Health Management Assoc., Inc., Class A (b).................. 147,850 2,319
-------
Hotels & Lodging (3.2%)
Four Seasons Hotels, Inc..................................... 40,000 2,805
-------
Human Resources (4.5%)
Robert Half International, Inc. (b).......................... 115,200 3,960
-------
Industrial Goods & Services (6.7%)
SPX Corp. (b)................................................ 19,150 2,742
Waters Corp. (b)............................................. 27,000 3,203
-------
5,945
-------
Internet Services (5.9%)
Exodus Communications, Inc. (b).............................. 40,100 1,782
Internet Security Systems Inc. (b)........................... 22,000 1,625
RealNetworks, Inc. (b)....................................... 42,900 1,821
-------
5,228
-------
Medical -- Biomedical/Genetic (1.5%)
PE Corp. -- Celera Genomics Group (b)........................ 14,800 1,286
-------
Multimedia (6.4%)
Clear Channel Communications, Inc. (b)....................... 32,100 2,446
Echostar Communications, Class A (b)......................... 26,000 1,025
Gemstar -- TV Guide International, Inc....................... 35,000 2,128
-------
5,599
-------
Oil & Gas Exploration, Production & Services (8.1%)
Apache Corp. ................................................ 51,000 2,536
Enron Corp. ................................................. 30,000 2,209
Nabors Industries, Inc. (b).................................. 60,000 2,498
-------
7,243
-------
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- -------
<S> <C> <C>
Pharmaceuticals (2.1%)
Genentech, Inc. (b).......................................... 12,400 $ 1,886
-------
Restaurants (2.3%)
Brinker International Inc. (b)............................... 71,300 2,037
-------
Retail (8.0%)
Best Buy Co., Inc. (b)....................................... 40,000 2,910
Kohls Corp. (b).............................................. 40,000 2,270
Tiffany & Co. ............................................... 54,000 1,850
-------
7,030
-------
Semiconductors (0.8%)
Applied Materials, Inc. (b).................................. 9,000 683
-------
Technology (2.1%)
Gentex Corp. (b)............................................. 79,500 1,809
-------
Telecommunications (5.7%)
Metromedia Fiber Network, Inc., Class A (b).................. 73,000 2,564
Nextel Communications, Inc., Series A........................ 44,000 2,461
NTL, Inc. (b)................................................ 1 -- *
-------
5,025
-------
Transportation & Shipping (1.3%)
United Parcel Service, Inc., Class B......................... 20,000 1,175
-------
Utilities -- Telecommunications (2.3%)
NEXTLINK Communications, Class A............................. 60,000 1,984
-------
TOTAL COMMON STOCKS.......................................... 80,737
-------
Short-Term Securities+ (14.0%)
Commercial Paper (8.9%)
Asset Backed -- Miscellaneous (1.9%)
Asset Securitization Corp., 6.60%, 9/6/00.................... $ 513 504
Corporate Receivables, 6.62%, 8/1/00......................... 641 642
Falcon Asset Securitization Corp., 6.62%, 8/14/00............ 513 505
-------
1,651
-------
Financial Services (5.1%)
Golden Funding Corp., 6.55%-6.62%, 9/8/00-9/18/00............ 654 645
Liberty Street Funding Corp., 6.56%, 10/11/00................ 457 449
Moat Funding Corp., 6.54%-6.67%, 8/11/00-10/6/00............. 654 644
Orix Corp., 6.85%, 8/10/00................................... 321 317
Superior Funding Corp., 6.51%-6.53%, 8/21/00-8/29/00......... 706 703
TransAmerica, 6.65%, 9/5/00.................................. 513 507
Trident, 6.70%, 8/4/00....................................... 641 637
UBS Finance, 6.57%-6.64%, 8/1/00-8/7/00...................... 684 683
-------
4,585
-------
Food -- Retail (0.4%)
Safeway, Inc., 6.70%, 8/15/00................................ 321 318
-------
Miscellaneous (0.3%)
Tyco International, Ltd., 6.91%, 8/7/00...................... 265 262
-------
</TABLE>
Continued
76
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Mid Cap Fund July 31, 2000
(Amounts in thousands, except shares)
Short-Term Securities+, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- -------
<S> <C> <C>
Commercial Paper, continued
Utilities -- Electrical & Gas (0.5%)
Dominion Resources, Inc., 6.88%, 8/7/00..................... $ 449 $ 444
-------
Utilities -- Telecommunications (0.7%)
Qwest Communications International, Inc., 6.80%, 9/5/00..... 641 634
-------
Total Commercial Paper...................................... 7,894
-------
Floating Rate Notes (1.0%)
Financial Services (0.8%)
Ford Motor Credit Co., 6.71%**, 4/11/02, MTN................ 257 257
General Motors Acceptance Corp., 6.72%**, 4/5/02, MTN....... 128 128
General Motors Acceptance Corp., 6.94%**, 11/13/00, MTN..... 154 154
KeyCorp, 6.94%**, 10/23/00, MTN............................. 128 128
-------
667
-------
Miscellaneous (0.2%)
Tyco International, Ltd., 7.47%**, 9/5/00 (c)............... 192 192
-------
Total Floating Rate Notes................................... 859
-------
Time Deposits (1.1%)
Amex Centurion, 6.56%-6.58%, 8/8/00-8/30/00................. 962 962
-------
Investment Companies (2.3%)
AIM Liquid Asset Money Market Fund.......................... 1,984,152 1,984
-------
</TABLE>
Short-Term Securities+, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- -------
<S> <C> <C>
Repurchase Agreements (0.7%)
Lehman Brothers, 6.74%, 8/1/00, dated 7/31/00, with a
maturity value of $642 (See Significant Accounting
Policies, Securities Lending in the Notes to Financial
Statements for collateral description)..................... $ 641 $ 641
-------
TOTAL SHORT-TERM SECURITIES................................. 12,340
-------
TOTAL INVESTMENTS (Cost $83,158) (a) -- (105.6%)............ 93,077
Liabilities in excess of other assets -- (-5.6%)............ (4,933)
-------
TOTAL NET ASSETS -- (100.0%)................................ $88,144
=======
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes
and differs from value by net unrealized appreciation of securities as
follows:
<TABLE>
<S> <C>
Unrealized appreciation.............................................. $16,873
Unrealized depreciation.............................................. (6,954)
-------
Net unrealized appreciation.......................................... $ 9,919
=======
</TABLE>
(b) Represents non-income producing securities.
(c) Represents a restricted security purchased under Rule 144A which is exempt
from registration under the Security Act of 1933, as amended.
* Due to rounding, figure was below thousand dollar threshold.
** Variable rate security. Rate represents rate in effect at July 31, 2000.
+ Represents securities purchased with cash collateral received on loaned
securities.
MTN -- Medium Term Note
See notes to financial statements
77
<PAGE>
AMSOUTH FUNDS
Mid Cap Fund (a)
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $82,517)......................... $ 92,436
Repurchase agreements, at cost............................... 641
--------
Total Investments........................................... 93,077
Cash......................................................... 7,265
Interest and dividends receivable............................ 22
Receivable for capital shares issued......................... 194
Prepaid expenses and other assets............................ 3
--------
Total Assets................................................ 100,561
Liabilities:
Payable for return of collateral held for securities on
loan........................................................ $12,340
Accrued expenses and other payables:
Investment advisory fees.................................... 29
Administration fees......................................... 2
Distribution fees........................................... 19
Custodian fees.............................................. 2
Other....................................................... 25
-------
Total Liabilities........................................... 12,417
--------
Net Assets:
Capital...................................................... 82,180
Accumulated net realized losses.............................. (3,955)
Net unrealized appreciation (depreciation) from investments.. 9,919
--------
Net Assets................................................... $ 88,144
========
Class A Shares
Net Assets.................................................. $ 11,536
Shares outstanding.......................................... 692
Redemption price per share.................................. $ 16.67
========
Class A Shares -- Maximum Sales Charge....................... 4.50%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum
Sales Charge) of net asset value adjusted to the nearest
cent)...................................................... $ 17.46
========
Class B Shares
Net Assets.................................................. $ 12,912
Shares outstanding.......................................... 782
Offering price per share*................................... $ 16.52
========
Trust Shares (b)
Net Assets.................................................. $ 63,696
Shares outstanding.......................................... 3,815
Offering and redemption price per share..................... $ 16.70
========
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG Mid-Cap Fund.
(b) Formerly Institutional Shares.
(c) For the period from January 1, 2000 through July 31, 2000.
(d) For the period from May 4, 1999 (commencement of operations) through
December 31, 1999.
Statements of Operations
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (c) 1999 (d)
------------ ------------
(Amounts in thousands)
<S> <C> <C>
Investment Income:
Interest income..................................... $ 76 $ 63
Dividend income..................................... 63 9
Income from securities lending...................... 17 1
------- -------
Total Investment Income............................ 156 73
Expenses:
Investment advisory fees............................ 425 102
Administration fees................................. 79 15
Distribution fees -- Class A Shares................. 2 2
Distribution fees -- Class B Shares................. 47 3
Shareholder servicing fees --Class A Shares......... 10 1
Shareholder servicing fees --Class B Shares......... 2 1
Shareholder servicing fees -- Trust Shares (b)...... 50 14
Custodian fees...................................... 11 3
Accounting fees..................................... 7 15
Transfer agent fees................................. 28 28
Trustee fees and expenses........................... 1 --
Registration and filing fees........................ 25 24
Audit fees.......................................... 6 13
Other fees.......................................... 5 8
------- -------
Total expenses before voluntary fee reductions..... 698 229
Expenses voluntarily reduced....................... (27) (1)
------- -------
Net expenses....................................... 671 228
------- -------
Net Investment Income (Loss)........................ (515) (155)
------- -------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment
transactions....................................... (3,386) (570)
Net change in unrealized appreciation (depreciation)
from investments................................... (2,489) 12,408
------- -------
Net realized/unrealized gains (losses) from
investments........................................ (5,875) 11,838
------- -------
Change in net assets resulting from operations...... $(6,390) $11,683
======= =======
</TABLE>
See notes to financial statements
78
<PAGE>
AMSOUTH FUNDS
Mid Cap Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ ------------
(Amounts in thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income (loss)........................ $ (515) $ (155)
Net realized gains (losses) from investment
transactions....................................... (3,386) (570)
Net change in unrealized appreciation (depreciation)
from investments................................... (2,489) 12,408
------- -------
Change in net assets resulting from operations....... (6,390) 11,683
------- -------
Change in net assets from capital transactions....... 52,813 30,038
------- -------
Change in net assets................................. 46,423 41,721
Net Assets:
Beginning of period................................. 41,721 --
------- -------
End of period....................................... $88,144 $41,721
======= =======
</TABLE>
---------
(a) Formerly ISG Mid-Cap Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) For the period from May 4, 1999 (commencement of operations) through
December 31, 1999.
See notes to financial statements
79
<PAGE>
AMSOUTH FUNDS
Mid Cap Fund (a)
Financial Highlights, Class A Shares
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b)+ 1999 (c)+
------------ ------------
<S> <C> <C>
Net Asset Value, Beginning of Period............. $ 17.33 $10.00
------- ------
Investment Activities
Net investment income (loss).................... (0.13) (0.14)
Net realized and unrealized gains (losses) from
investments.................................... (0.53) 7.47
------- ------
Total from Investment Activities................ (0.66) 7.33
------- ------
Net change in asset value........................ (0.66) 7.33
------- ------
Net Asset Value, End of Period................... $ 16.67 $17.33
======= ======
Total Return (excludes sales charge)............. (3.81)%(d) 73.30%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)................ $11,536 $2,357
Ratio of expenses to average net assets.......... 1.62%(e) 2.28%(e)
Ratio of net investment income to average net
assets.......................................... (1.27)%(e) (1.62)%(e)
Ratio of expenses to average net assets*......... 1.65%(e) 2.29%(e)
Portfolio turnover**............................. 39% 20%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
+ Net investment income (loss) is based on average shares outstanding during
the period.
(a) Formerly ISG Mid-Cap Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from May 4, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b)+ 1999 (c)+
------------ ------------
<S> <C> <C>
Net Asset Value, Beginning of Period............. $ 17.28 $10.00
------- ------
Investment Activities
Net investment income (loss).................... (0.20) (0.19)
Net realized and unrealized gains (losses) from
investments.................................... (0.56) 7.47
------- ------
Total from Investment Activities................ (0.76) 7.28
------- ------
Net change in asset value........................ (0.76) 7.28
------- ------
Net Asset Value, End of Period................... $ 16.52 $17.28
======= ======
Total Return (excludes redemption charge)........ (4.40)%(d) 72.80%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)................ $12,912 $2,177
Ratio of expenses to average net assets.......... 2.33%(e) 2.86%(e)
Ratio of net investment income to average net
assets.......................................... (2.00)%(e) (2.17)%(e)
Ratio of expenses to average net assets*......... 2.37%(e) 2.86%(e)
Portfolio turnover**............................. 39% 20%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
+ Net investment income (loss) is based on average shares outstanding during
the period.
(a) Formerly ISG Mid-Cap Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from May 4, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
80
<PAGE>
AMSOUTH FUNDS
Mid Cap Fund (a)
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b)+ 1999 (c)+
------------ ------------
<S> <C> <C>
Net Asset Value, Beginning of Period............. $ 17.37 $ 10.00
------- -------
Investment Activities
Net investment income (loss).................... (0.11) (0.12)
Net realized and unrealized gains (losses) from
investments.................................... (0.56) 7.49
------- -------
Total from Investment Activities................ (0.67) 7.37
------- -------
Net change in asset value........................ (0.67) 7.37
------- -------
Net Asset Value, End of Period................... $ 16.70 $ 17.37
======= =======
Total Return..................................... (3.86)%(d) 73.70%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)................ $63,696 $37,186
Ratio of expenses to average net assets.......... 1.46%(e) 2.18%(e)
Ratio of net investment income to average net
assets.......................................... (1.08)%(e) (1.47)%(e)
Ratio of expenses to average net assets*......... 1.53%(e) 2.18%(e)
Portfolio turnover**............................. 39% 20%
</TABLE>
/\ Formerly Institutional Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
+ Net investment income (loss) is based on average shares outstanding during
the period.
(a) Formerly ISG Mid-Cap Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from May 4, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
81
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Small Cap Fund July 31, 2000
(Amounts in thousands, except shares)
Common Stocks (95.4%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Business Services (1.2%)
Learning Tree International, Inc. (b)....................... 45,600 $ 2,058
--------
Computer Software (2.2%)
Rainbow Technologies, Inc. (b).............................. 88,600 3,843
--------
Computers & Peripherals (4.6%)
Avocent Corp. (b)........................................... 143,619 6,411
Insight Enterprises, Inc. (b)............................... 35,500 1,642
--------
8,053
--------
Construction (1.6%)
Dycom Industries, Inc. (b).................................. 65,400 2,796
--------
Electrical & Electronic (17.2%)
Cyberoptics Corp. (b)....................................... 32,000 1,060
Electro Scientific Industries, Inc. (b)..................... 46,500 2,113
Intergrated Silicon Solution, Inc. (b)...................... 67,700 1,422
Kemet Corp. (b)............................................. 159,100 3,818
Kent Electronics Corp. (b).................................. 100,600 3,131
Littelfuse, Inc. (b)........................................ 48,800 1,720
Mentor Graphics Corp. (b)................................... 222,200 4,431
Merix Corp. (b)............................................. 77,900 3,895
Plexus Corp. (b)............................................ 19,800 2,234
Power-One, Inc. (b)......................................... 8,550 1,009
Quanta Services, Inc. (b)................................... 83,600 3,825
Technitrol, Inc. ........................................... 8,800 970
--------
29,628
--------
Entertainment (1.5%)
Aztar Corp. (b)............................................. 170,900 2,606
--------
Financial Services (8.9%)
Affiliated Managers Group, Inc. (b)......................... 73,400 3,482
Greater Bay Bancorp......................................... 24,900 1,340
Metris Companies, Inc. ..................................... 69,200 2,028
Silicon Valley Bancshares (b)............................... 117,700 5,157
Waddell & Reed Financial, Inc., Class A..................... 104,450 3,421
--------
15,428
--------
Health Care (6.6%)
First Health Group Corp. (b)................................ 54,100 1,657
LifePoint Hospitals, Inc. (b)............................... 93,000 2,488
NBTY, Inc. (b).............................................. 18,800 120
Oxford Health Plans, Inc. (b)............................... 167,300 4,004
Quest Diagnostics, Inc. (b)................................. 31,900 3,220
--------
11,489
--------
Human Resources (1.9%)
Hall, Kinion & Associates, Inc. (b)......................... 83,200 3,255
--------
Instruments -- Scientific (0.5%)
FEI Co. (b)................................................. 34,900 927
--------
Internet Broker (1.9%)
Investment Technology Group, Inc. (b)....................... 66,700 3,243
--------
Machinery -- Diversified (2.5%)
Asyst Technologies, Inc. (b)................................ 15,300 369
FSI International, Inc. (b)................................. 241,100 3,963
--------
4,332
--------
Manufacturing (1.7%)
Polycom, Inc. (b)........................................... 30,800 2,922
--------
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Medical Services (2.0%)
IMPATH, Inc. (b)............................................ 57,000 $ 3,409
--------
Oil & Gas Exploration, Production & Services (5.9%)
Helmerich & Payne, Inc. .................................... 57,100 1,827
Newfield Exploration Co. (b)................................ 81,700 2,783
Valero Energy Corp. ........................................ 105,700 2,742
Vintage Petroleum, Inc. .................................... 154,800 2,786
--------
10,138
--------
Pharmaceuticals (2.8%)
Alpharma, Inc., Class A..................................... 59,500 3,897
SICOR, Inc. (b)............................................. 108,100 1,020
--------
4,917
--------
Restaurants (1.6%)
The Cheesecake Factory, Inc. (b)............................ 90,150 2,733
--------
Retail (8.0%)
Chico's FAS, Inc. (b)....................................... 180,600 5,328
Factory 2-U Stores, Inc. (b)................................ 73,300 3,042
Hot Topic, Inc. (b)......................................... 81,700 2,635
Stein Mart, Inc. (b)........................................ 58,100 639
Talbots, Inc. .............................................. 44,500 2,247
--------
13,891
--------
Semiconductors (9.3%)
Actel Corp. (b)............................................. 131,000 4,863
Brooks Automation, Inc. (b)................................. 43,400 2,154
DuPont Photomasks, Inc. (b)................................. 15,400 922
Silicon Valley Group, Inc. (b).............................. 199,500 5,063
Varian Semiconductor Equipment Associates, Inc. (b)......... 62,900 3,055
--------
16,057
--------
Steel Pipe and Tubes (2.3%)
The Shaw Group, Inc. (b).................................... 86,000 4,053
--------
Technology (6.3%)
Cable Design Technologies Corp. (b)......................... 117,800 4,153
Cognex Corp. (b)............................................ 71,200 3,493
International Rectifier Corp. (b)........................... 60,400 3,341
--------
10,987
--------
Telecommunications -- Equipment (4.9%)
Andrew Corp. (b)............................................ 101,300 2,855
Anixter International, Inc. (b)............................. 122,800 3,569
DSET Corp. (b).............................................. 68,600 2,015
--------
8,439
--------
TOTAL COMMON STOCKS......................................... 165,204
--------
U.S. Treasury Bills (4.6%)
5.48%*, 8/3/00.............................................. $ 3,000 2,999
6.01%*, 9/7/00.............................................. 5,000 4,969
--------
TOTAL U.S. TREASURY BILLS................................... 7,968
--------
</TABLE>
Continued
82
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Small Cap Fund July 31, 2000
(Amounts in thousands, except shares)
Investment Companies (1.8%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
AmSouth Prime Money Market Fund............................. 3,111,490 $ 3,111
--------
TOTAL INVESTMENT COMPANIES.................................. 3,111
--------
Short-Term Securities+ (6.8%)
Commercial Paper (4.3%)
Asset Backed -- Miscellaneous (0.9%)
Asset Securitization Corp., 6.60%, 9/6/00................... $ 493 484
Corporate Receivables, 6.62%, 8/1/00........................ 616 616
Falcon Asset Securitization Corp., 6.62%, 8/14/00........... 493 484
--------
1,584
--------
Financial Services (2.5%)
Golden Funding Corp., 6.55%-6.62%, 9/8/00-9/18/00........... 628 619
Liberty Street Funding Corp., 6.56%, 10/11/00............... 439 431
Moat Funding Corp., 6.54%-6.67%, 8/11/00-10/6/00............ 628 618
Orix Corp., 6.85%, 8/10/00.................................. 308 304
Superior Funding Corp., 6.51%-6.53%, 8/21/00-8/29/00........ 677 674
TransAmerica, 6.65%, 9/5/00................................. 493 486
Trident, 6.70%, 8/4/00...................................... 616 611
UBS Finance, 6.57%-6.64%, 8/1/00-8/7/00..................... 656 656
--------
4,399
--------
Food -- Retail (0.2%)
Safeway, Inc., 6.70%, 8/15/00............................... 308 306
--------
Miscellaneous (0.1%)
Tyco International, Ltd., 6.91%, 8/7/00..................... 255 252
--------
Utilities -- Electrical & Gas (0.2%)
Dominion Resources, Inc., 6.88%, 8/7/00..................... 431 426
--------
Utilities -- Telecommunications (0.4%)
Qwest Communications International, Inc., 6.80%, 9/5/00..... 616 609
--------
Total Commercial Paper...................................... 7,576
--------
Floating Rate Notes (0.5%)
Financial Services (0.4%)
Ford Motor Credit Co., 6.71%**, 4/11/02, MTN................ 246 246
General Motors Acceptance Corp., 6.72%**, 4/5/02, MTN....... 123 123
General Motors Acceptance Corp., 6.94%**, 11/13/00, MTN..... 148 148
KeyCorp, 6.94%**, 10/23/00, MTN............................. 123 123
--------
640
--------
Miscellaneous (0.1%)
Tyco International, Ltd., 7.47%**, 9/5/00 (c)............... 185 185
--------
Total Floating Rate Notes................................... 825
--------
</TABLE>
Short-Term Securities+, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- --------
<S> <C> <C>
Time Deposits (0.5%)
Amex Centurion, 6.56%-6.58%, 8/8/00-8/30/00............... $ 923 $ 923
--------
Investment Companies (1.1%)
AIM Liquid Asset Money Market Fund........................ 1,904,401 1,904
--------
Repurchase Agreements (0.4%)
Lehman Brothers, 6.74%, 8/1/00, dated 7/31/00, with a
maturity value of $616 (See Significant Accounting
Policies, Securities Lending in the Notes to Financial
Statements for collateral description)................... $ 616 616
--------
TOTAL SHORT-TERM SECURITIES............................... 11,844
--------
TOTAL INVESTMENTS (Cost $181,414) (a) -- (108.6%)......... 188,127
Liabilities in excess of other assets -- (-8.6%).......... (14,885)
--------
TOTAL NET ASSETS -- (100.0%).............................. $173,242
========
</TABLE>
---------
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of $624.
Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $ 17,565
Unrealized depreciation............................................. (11,476)
--------
Net unrealized appreciation......................................... $ 6,089
========
</TABLE>
(b) Represents non-income producing securities.
(c) Represents a restricted security purchased under Rule 144A which is exempt
from registration under the Security Act of 1933, as amended.
* Yield effective at purchase.
** Variable rate security. Rate represents rate in effect at July 31, 2000.
+ Represents securities purchased with cash collateral received on loaned
securities.
MTN -- Medium Term Note
See notes to financial statements
83
<PAGE>
AMSOUTH FUNDS
Small Cap Fund
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $180,798)........................ $187,511
Repurchase agreements, at cost............................... 616
--------
Total Investments........................................... 188,127
Interest and dividends receivable............................ 34
Receivable for capital shares issued......................... 63
Receivable for investments sold.............................. 3,414
Receivable from investment adviser........................... 1
Prepaid expenses and other assets............................ 6
--------
Total Assets................................................ 191,645
Liabilities:
Payable for return of collateral held for securities on
loan........................................................ $11,844
Payable for investments purchased............................ 6,252
Payable for capital shares redeemed.......................... 194
Accrued expenses and other payables:
Investment advisory fees.................................... 64
Administration fees......................................... 4
Distribution fees........................................... 18
Custodian fees.............................................. 4
Other....................................................... 23
-------
Total Liabilities........................................... 18,403
--------
Net Assets:
Capital...................................................... 149,184
Undistributed (distributions in excess of) net realized
gains....................................................... 17,345
Net unrealized appreciation (depreciation) from investments.. 6,713
--------
Net Assets................................................... $173,242
========
Class A Shares (a)
Net Assets.................................................. $ 8,408
Shares outstanding.......................................... 672
Redemption price per share.................................. $ 12.52
========
Class A Shares -- Maximum Sales Charge....................... 4.50%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum
Sales Charge) of net asset value adjusted to the nearest
cent)...................................................... $ 13.11
========
Class B Shares
Net Assets.................................................. $ 2,619
Shares outstanding.......................................... 213
Offering price per share*................................... $ 12.31
========
Trust Shares (b)
Net Assets.................................................. $162,215
Shares outstanding.......................................... 12,863
Offering and redemption price per share..................... $ 12.61
========
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2000
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income.............................................. $ 132
Dividend income.............................................. 187
Income from securities lending............................... 28
--------
Total Investment Income..................................... 347
Expenses:
Investment advisory fees..................................... $1,000
Administration fees.......................................... 167
Distribution fees -- Class B Shares.......................... 15
Shareholder servicing fees -- Class A Shares (a)............. 12
Shareholder servicing fees -- Trust Shares (b)............... 87
Custodian fees............................................... 28
Accounting fees.............................................. 37
Transfer agent fees.......................................... 56
Trustee fees and expenses.................................... 1
Other fees................................................... 39
------
Total expenses before voluntary fee
reductions/reimbursements.................................. 1,442
Expenses voluntarily reduced/reimbursed..................... (235)
--------
Net expenses................................................ 1,207
--------
Net Investment Income (Loss)................................. (860)
--------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment transactions..... 23,232
Net change in unrealized appreciation (depreciation) from
investments................................................. (16,813)
--------
Net realized/unrealized gains (losses) from investments...... 6,419
--------
Change in net assets resulting from operations............... $ 5,559
========
</TABLE>
See notes to financial statements
84
<PAGE>
AMSOUTH FUNDS
Small Cap Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2000 1999
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income (loss)............................ $ (860) $ (99)
Net realized gains (losses) from investment
transactions........................................... 23,232 (2,191)
Net change in unrealized appreciation (depreciation)
from investments....................................... (16,813) 2,703
-------- -------
Change in net assets resulting from operations........... 5,559 413
-------- -------
Change in net assets from capital transactions........... 143,904 16,051
-------- -------
Change in net assets..................................... 149,463 16,464
Net Assets:
Beginning of period..................................... 23,779 7,315
-------- -------
End of period........................................... $173,242 $23,779
======== =======
</TABLE>
See notes to financial statements
85
<PAGE>
AMSOUTH FUNDS
Small Cap Fund
Financial Highlights, Class A Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2000 1999 1998 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period...... $ 8.40 $ 9.14 $ 9.97
------ ------ ------
Investment Activities
Net investment income (loss)............. (0.08) (0.10) (0.03)
Net realized and unrealized gains
(losses) from investments............... 4.20 (0.64) (0.80)
------ ------ ------
Total from Investment Activities......... 4.12 (0.74) (0.83)
------ ------ ------
Net change in asset value................. 4.12 (0.74) (0.83)
------ ------ ------
Net Asset Value, End of Period............ $12.52 $ 8.40 $ 9.14
====== ====== ======
Total Return (excludes sales charge)...... 49.05% (8.10)% (8.31)%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000)......... $8,408 $1,073 $1,372
Ratio of expenses to average net assets... 1.53% 1.66% 1.78%(c)
Ratio of net investment income to average
net assets............................... (1.11)% (1.07)% (0.92)%(c)
Ratio of expenses to average net assets*.. 1.85% 2.68% 4.23%(c)
Portfolio turnover**...................... 318% 208% 71%
</TABLE>
/\ Formerly Classic Shares.
* During the period, certain fees were voluntarily reduced/reimbursed. If such
voluntary fee reductions/reimbursements had not occurred, the ratios would
have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) For the period from March 2, 1998 (commencement of operations) through July
31, 1998.
(b) Not annualized.
(c) Annualized.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2000 1999 1998 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period...... $ 8.31 $9.11 $10.00
------ ----- ------
Investment Activities
Net investment income (loss)............. (0.14) (0.14) (0.04)
Net realized and unrealized gains
(losses) from investments............... 4.14 (0.66) (0.85)
------ ----- ------
Total from Investment Activities......... 4.00 (0.80) (0.89)
------ ----- ------
Net change in asset value................. 4.00 (0.80) (0.89)
------ ----- ------
Net Asset Value, End of Period............ $12.31 $8.31 $ 9.11
====== ===== ======
Total Return (excludes redemption
charge).................................. 48.13% (8.78)% (8.90)%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000)......... $2,619 $ 929 $ 871
Ratio of expenses to average net assets... 2.39% 2.41% 2.54%(c)
Ratio of net investment income to average
net assets............................... (1.99)% (1.83)% (1.69)%(c)
Ratio of expenses to average net assets*.. 2.59% 3.42% 4.98%(c)
Portfolio turnover**...................... 318% 208% 71%
</TABLE>
* During the period, certain fees were voluntarily reduced/reimbursed. If such
voluntary fee reductions/reimbursements had not occurred, the ratios would
have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) For the period from March 2, 1998 (commencement of operations) through July
31, 1998.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
86
<PAGE>
AMSOUTH FUNDS
Small Cap Fund
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2000 1999 1998 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period..... $ 8.44 $ 9.15 $10.00
-------- ------- ------
Investment Activities
Net investment income (loss)............ (0.07) (0.03) (0.02)
Net realized and unrealized gains
(losses) from investments.............. 4.24 (0.68) (0.83)
-------- ------- ------
Total from Investment Activities........ 4.17 (0.71) (0.85)
-------- ------- ------
Net change in asset value................ 4.17 (0.71) (0.85)
-------- ------- ------
Net Asset Value, End of Period........... $ 12.61 $ 8.44 $ 9.15
======== ======= ======
Total Return............................. 49.41% (7.76)% (8.48)%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000)........ $162,215 $21,777 $5,072
Ratio of expenses to average net assets.. 1.42% 1.39% 1.50%(c)
Ratio of net investment income to average
net assets.............................. (1.01)% (0.82)% (0.52)%(c)
Ratio of expenses to average net
assets*................................. 1.70% 2.38% 3.94%(c)
Portfolio turnover**..................... 318% 208% 71%
</TABLE>
/\ Formerly Premier Shares.
* During the period, certain fees were voluntarily reduced/reimbursed. If such
voluntary fee reductions/reimbursements had not occurred, the ratios would
have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) For the period from March 2, 1998 (commencement of operations) through July
31, 1998.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
87
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Equity Income Fund July 31, 2000
(Amounts in thousands, except shares)
Common Stocks & Securities Convertible to Common Stocks (99.3%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Basic Materials (2.1%)
Sealed Air Corp., 4.00%, CVT. PFD., 4/1/18................. 73,600 $ 3,625
--------
Capital Goods/Diversified (8.3%)
Corning Glass Works, Inc. ................................. 9,700 2,269
General Electric Co. ...................................... 88,000 4,527
Oak Industries/Corning, 4.88%, CVT. BD., 3/1/08............ $ 480 2,375
Sanmina Corp., 4.25%, CVT. BD., 5/1/04..................... 1,725 3,730
Solectron, 0.00%, CVT. BD., 1/27/19........................ 2,510 1,663
--------
14,564
--------
Communication Services (6.4%)
Intermedia Communications.................................. 1,033 18
Intermedia Communications, 7.00%, Series E, CVT. PFD.,
10/18/00.................................................. 109,300 1,913
Level 3 Communications, Inc., 6.00%, CVT. BD., 3/15/10..... $ 3,950 3,130
Nextel Communications, Inc., 5.25%, CVT. BD., 1/15/10 (b).. 3,060 3,052
Vodafone/Mediaone Group, 7.00%, CVT. PFD., 11/5/02......... 72,700 2,999
--------
11,112
--------
Consumer Cyclical/Transportation (8.0%)
Costco Co., 0.00%, CVT. BD., 8/19/02....................... $ 5,850 4,679
Ford Motor Co. ............................................ 72,700 3,385
Omnicom Group, 4.25%, CVT. BD., 1/3/07..................... $ 1,240 3,350
Wal-Mart Stores, Inc. ..................................... 46,500 2,555
--------
13,969
--------
Energy (5.5%)
EOG Resources., 7.00%, CVT. PFD., 7/31/02.................. 107,500 2,990
Exxon Mobil Corp. ......................................... 59,743 4,779
Shell Transport & Trading PLC (ADR)........................ 36,700 1,771
--------
9,540
--------
Finance (14.4%)
American International Group, Inc. ........................ 39,900 3,499
Chase Manhattan Corp. ..................................... 55,350 2,750
Citigroup, Inc. ........................................... 75,200 5,305
J.P. Morgan & Co., Inc. ................................... 21,675 2,894
Lehman Brothers Holdings, Inc. ............................ 18,200 2,045
Lehman Brothers Holdings, Inc., 5.00%,
Series B, CVT. PFD., 12/31/49............................. 36,000 1,391
Merrill Lynch & Co., Inc................................... 28,000 3,619
Metlife Capital Trust I, 8.00%, CVT. PFD., 5/15/03......... 52,000 3,556
--------
25,059
--------
Health Care (10.8%)
Abbott Laboratories........................................ 65,800 2,739
Bristol-Myers Squibb Co.................................... 62,500 3,102
Centocor/Johnson & Johnson, Inc., 4.75%, CVT. BD.,
2/15/05................................................... $ 1,740 2,201
Johnson & Johnson.......................................... 23,000 2,140
Monsanto (ACES), 6.50%, CVT. PFD., 11/30/01................ 73,900 3,548
</TABLE>
continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Health Care, continued
Pfizer, Inc................................................ 68,600 $ 2,958
Roche Holding, Inc., 0.00%, CVT. BD., 1/19/15 (b).......... $ 2,490 2,107
--------
18,795
--------
Staples (10.2%)
Clear Channel Communication, 2.63%, CVT. BD., 4/1/03....... 3,380 4,398
Coca-Cola Co. ............................................. 29,900 1,833
Cox Communications, Inc., 7.00%, CVT. PFD., 8/16/02........ 62,200 3,157
Estee Lauder, 6.25%, CVT. PFD., 2/23/02.................... 39,000 3,239
Quaker Oats Co............................................. 76,100 5,118
--------
17,745
--------
Technology (31.0%)
Amdocs Ltd., 6.75%, CVT. PFD., 9/11/02..................... 106,700 6,096
American Tower Corp., 5.00%, CVT. BD., 2/15/10............. $ 2,910 3,023
Burr-Brown Corp., 4.25%, CVT. BD., 2/15/07 (b)............. 1,970 2,985
EMC Corp. -- Mass.......................................... 48,000 4,086
Exodus Communications, 4.75%, CVT. BD., 7/15/08............ $ 2,920 4,143
Intel Corp................................................. 12,000 801
International Rectifier Corp., 4.25%, CVT. BD., 7/15/07.... $ 3,900 3,661
Juniper Networks, Inc., 4.75%, CVT. BD., 3/15/07........... 3,600 3,969
Lattice Semiconductor Corp., 4.75%, CVT. BD., 11/1/06...... 1,450 2,182
Level One Communications, 4.00%, CVT. BD., 9/1/04.......... 680 2,948
LSI Logic Corp., 4.00%, CVT. BD., 2/15/05.................. 2,610 2,205
Lucent Technologies, Inc. ................................. 68,000 2,975
Motorola, Inc.............................................. 78,400 2,592
Nortel Networks Corp....................................... 48,000 3,570
Rational Software, 5.00%, CVT. BD., 2/1/07 (b)............. $ 2,850 4,289
Tribune Co., 2.00%, CVT. BD., 5/15/29...................... 40 4,715
--------
54,240
--------
Utilities (2.6%)
Calpine Capital Trust II, 5.50%, CVT. PFD., 2/1/05 (b)..... 62,000 4,573
--------
TOTAL COMMON STOCKS & SECURITIES CONVERTIBLE TO COMMON
STOCKS.................................................... 173,222
--------
Investment Companies (1.9%)
AmSouth Prime Money Market Fund............................ 3,299,215 3,299
AmSouth U.S. Treasury Money Market Fund.................... 2,057 2
--------
TOTAL INVESTMENT COMPANIES................................. 3,301
--------
</TABLE>
Continued
88
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Equity Income Fund July 31, 2000
(Amounts in thousands, except shares)
Short-Term Securities+ (8.1%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Commercial Paper (5.2%)
Asset Backed -- Miscellaneous (1.1%)
Asset Securitization Corp., 6.60%, 9/6/00................... $ 590 $ 580
Corporate Receivables, 6.62%, 8/1/00........................ 738 738
Falcon Asset Securitization Corp., 6.62%, 8/14/00........... 590 581
--------
1,899
--------
Financial Services (3.0%)
Golden Funding Corp., 6.55%-6.62%, 9/8/00-9/18/00........... 752 742
Liberty Street Funding Corp., 6.56%, 10/11/00............... 526 517
Moat Funding Corp., 6.54%-6.67%, 8/11/00-10/6/00............ 753 741
Orix Corp., 6.85%, 8/10/00.................................. 369 365
Superior Funding Corp., 6.51%-6.53%, 8/21/00-8/29/00........ 812 806
TransAmerica, 6.65%, 9/5/00................................. 590 583
Trident, 6.70%, 8/4/00...................................... 738 733
UBS Finance, 6.57%-6.64%, 8/1/00-8/7/00..................... 787 785
--------
5,272
--------
Food -- Retail (0.2%)
Safeway, Inc., 6.70%, 8/15/00............................... 369 366
--------
Miscellaneous (0.2%)
Tyco International, Ltd., 6.91%, 8/7/00..................... 305 302
--------
Utilities -- Electrical & Gas (0.3%)
Dominion Resources, Inc., 6.88%, 8/7/00..................... 517 511
--------
Utilities -- Telecommunications (0.4%)
Qwest Communications International, Inc., 6.80%, 9/5/00..... 738 730
--------
Total Commercial Paper...................................... 9,080
--------
Floating Rate Notes (0.6%)
Financial Services (0.5%)
Ford Motor Credit Co., 6.71%*, 4/11/02, MTN................. 295 296
General Motors Acceptance Corp., 6.72%*, 4/5/02, MTN........ 147 147
General Motors Acceptance Corp., 6.94%*, 11/13/00, MTN...... 177 177
KeyCorp, 6.94%*, 10/23/00, MTN.............................. 148 148
--------
768
--------
Miscellaneous (0.1%)
Tyco International, Ltd., 7.47%*, 9/5/00 (c)................ 221 221
--------
Total Floating Rate Notes................................... 989
--------
Time Deposits (0.6%)
Amex Centurion, 6.56%-6.58%, 8/8/00-8/30/00................. 1,107 1,107
--------
Investment Companies (1.3%)
AIM Liquid Asset Money Market Fund.......................... 2,282,684 2,283
--------
</TABLE>
Short-Term Securities+, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Repurchase Agreements (0.4%)
Lehman Brothers, 6.74%, 8/1/00, dated 7/31/00, with a
maturity value of $738 (See Significant Accounting
Policies, Securities Lending in the Notes to Financial
Statements for collateral description).................... $ 738 $ 738
--------
TOTAL SHORT-TERM SECURITIES................................ 14,197
--------
TOTAL INVESTMENTS (Cost $181,982) (a) -- (109.3%).......... 190,720
Liabilities in excess of other assets -- (-9.3%)........... (16,245)
--------
TOTAL NET ASSETS -- (100.0%)............................... $174,475
========
---------
<CAPTION>
Number of Market
Contracts Value
--------- --------
<S> <C> <C>
Written Covered Call Options Outstanding at End of Period:
Corning Glass Works, Inc. (Strike Price $250, expires on
8/22/00).................................................. 40 $ (30)
--------
TOTAL WRITTEN COVERED CALL OPTIONS (PREMIUM RECEIVED $49).. $ (30)
========
</TABLE>
---------
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of $749.
Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $ 20,732
Unrealized depreciation............................................. (12,743)
--------
Net unrealized appreciation......................................... $ 7,989
========
</TABLE>
(b) Represents a restricted security, purchased under Rule 144A, which is
exempt from registration under the Security Act of 1933, as amended. These
securities have been deemed liquid under guidelines established by the
Board of Trustees.
(c) Represents a restricted security, purchased under Rule 144A, which is
exempt from registration under the Security Act of 1933, as amended.
* Variable rate security. Rate represents rate in effect at July 31, 2000.
+ Represents securities purchased with cash collateral received on loaned
securities.
ACES -- Adjustable Conversion-Rate Equity Securities
ADR -- American Depository Receipt
CVT. BD. -- Convertible Bond
CVT. PFD. -- Convertible Preferred Stock
MTN -- Medium Term Note
PLC -- Public Limited Co.
<TABLE>
<CAPTION>
Breakdown of Sectors (excluding Short-Term Securities+)
-------------------------------------------------------
<S> <C>
Common Stocks............................................................ 40.4%
Convertible Preferred Stocks............................................. 21.0%
Convertible Bonds........................................................ 36.7%
Investment Companies..................................................... 1.9%
------
Total.................................................................... 100.0%
======
</TABLE>
See notes to financial statements
89
<PAGE>
AMSOUTH FUNDS
Equity Income Fund
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $181,244)........................ $189,982
Repurchase agreements, at cost............................... 738
--------
Total Investments........................................... 190,720
Interest and dividends receivable............................ 678
Receivable for capital shares issued......................... 571
Receivable from investment adviser........................... 3
Prepaid expenses and other assets............................ 6
--------
Total Assets................................................ 191,978
Liabilities:
Payable for return of collateral held for securities on
loan........................................................ $14,197
Payable for investments purchased............................ 3,142
Payable for capital shares redeemed.......................... 13
Covered call options written, at value (premiums received
$49)........................................................ 30
Accrued expenses and other payables:
Investment advisory fees.................................... 46
Administration fees......................................... 4
Distribution fees........................................... 42
Custodian fees.............................................. 4
Other....................................................... 25
-------
Total Liabilities........................................... 17,503
--------
Net Assets:
Capital...................................................... 168,582
Undistributed (distributions in excess of) net investment
income...................................................... 127
Undistributed (distributions in excess of) net realized
gains....................................................... (2,991)
Net unrealized appreciation (depreciation) from investments
and option contracts........................................ 8,757
--------
Net Assets................................................... $174,475
========
Class A Shares (a)
Net Assets.................................................. $ 39,201
Shares outstanding.......................................... 2,693
Redemption price per share.................................. $ 14.56
========
Class A Shares -- Maximum Sales Charge....................... 4.50%
--------
Maximum Offering Price Per Share
(100%/(100% -- Maximum Sales Charge) of net asset value
adjusted to the nearest cent).............................. $ 15.25
========
Class B Shares
Net Assets.................................................. $ 28,153
Shares outstanding.......................................... 1,944
Offering price per share*................................... $ 14.48
========
Trust Shares (b)
Net Assets.................................................. $107,121
Shares outstanding.......................................... 7,354
Offering and redemption price per share..................... $ 14.57
========
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2000
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income................................................. $ 1,424
Dividend income................................................. 969
Income from securities lending.................................. 3
-------
Total Investment Income........................................ 2,396
Expenses:
Investment advisory fees........................................ $747
Administration fees............................................. 187
Distribution fees -- Class B Shares............................. 148
Shareholder servicing fees -- Class A Shares (a)................ 72
Shareholder servicing fees -- Trust Shares (b).................. 59
Custodian fees.................................................. 28
Accounting fees................................................. 35
Transfer agent fees............................................. 77
Trustee fees and expenses....................................... 2
Other fees...................................................... 50
----
Total expenses before voluntary fee reductions/reimbursements.. 1,405
Expenses voluntarily reduced/reimbursed........................ (105)
-------
Net expenses................................................... 1,300
-------
Net Investment Income........................................... 1,096
-------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment transactions........ (1,441)
Net change in unrealized appreciation (depreciation) from
investments and option contracts............................... 4,396
-------
Net realized/unrealized gains (losses) from investments......... 2,955
-------
Change in net assets resulting from operations.................. $ 4,051
=======
</TABLE>
See notes to financial statements
90
<PAGE>
AMSOUTH FUNDS
Equity Income Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2000 1999
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................... $ 1,096 $ 519
Net realized gains (losses) from investment
transactions........................................... (1,441) 2,385
Net change in unrealized appreciation (depreciation)
from investments and option contracts.................. 4,396 2,356
-------- -------
Change in net assets resulting from operations........... 4,051 5,260
-------- -------
Distributions to Class A Shareholders (a):
From net investment income.............................. (317) (314)
From net realized gains on investment transactions...... (1,173) (525)
In excess of net realized gains......................... (68) --
Distributions to Class B Shareholders:
From net investment income.............................. (64) (56)
From net realized gains on investment transactions...... (459) (167)
In excess of net realized gains......................... (26) --
Distributions to Trust Shareholders (b):
From net investment income.............................. (600) (144)
From net realized gains on investment transactions...... (752) (184)
In excess of net realized gains......................... (44) --
-------- -------
Change in net assets from shareholder distributions...... (3,503) (1,390)
-------- -------
Change in net assets from capital transactions........... 133,574 (6,023)
-------- -------
Change in net assets..................................... 134,122 (2,153)
Net Assets:
Beginning of period..................................... 40,353 42,506
-------- -------
End of period........................................... $174,475 $40,353
======== =======
</TABLE>
---------
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
See notes to financial statements
91
<PAGE>
AMSOUTH FUNDS
Equity Income Fund
Financial Highlights, Class A Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2000 1999 1998 (a) 1997 (b)
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period......................... $ 13.10 $ 11.89 $ 11.72 $ 10.00
------- ------- ------- -------
Investment Activities
Net investment income (loss)... 0.17 0.17 0.24 0.07
Net realized and unrealized
gains (losses) from
investments................... 2.26 1.46 0.59 1.71
------- ------- ------- -------
Total from Investment
Activities.................... 2.43 1.63 0.83 1.78
------- ------- ------- -------
Distributions
Net investment income.......... (0.16) (0.16) (0.25) (0.06)
Net realized gains from
investment transactions....... (0.77) (0.26) (0.41) --
In excess of net realized
gains......................... (0.04) -- -- --
------- ------- ------- -------
Total Distributions............ (0.97) (0.42) (0.66) (0.06)
------- ------- ------- -------
Net change in asset value....... 1.46 1.21 0.17 1.72
------- ------- ------- -------
Net Asset Value, End of Period.. $ 14.56 $ 13.10 $ 11.89 $ 11.72
======= ======= ======= =======
Total Return (excludes sales
charge)........................ 19.12% 14.17% 7.29% 17.81%(c)
Ratios/Supplemental Data:
Net Assets at end of period
(000).......................... $39,201 $21,526 $26,686 $22,273
Ratio of expenses to average net
assets......................... 1.38% 1.41% 1.42% 1.30%(d)
Ratio of net investment income
to average net assets.......... 1.22% 1.37% 2.03% 2.13%(d)
Ratio of expenses to average net
assets*........................ 1.45% 1.58% 1.57% 1.51%(d)
Portfolio turnover**............ 168% 134% 83% 27%
</TABLE>
/\ Formerly Classic Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
(b) For the period from March 20, 1997 (commencement of operations) through
July 31, 1997.
(c) Not annualized.
(d) Annualized.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2000 1999 1998 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period....... $ 13.05 $11.86 $11.60
------- ------ ------
Investment Activities
Net investment income (loss).............. 0.07 0.07 0.15
Net realized and unrealized gains (losses)
from investments......................... 2.24 1.47 0.68
------- ------ ------
Total from Investment Activities.......... 2.31 1.54 0.83
------- ------ ------
Distributions
Net investment income..................... (0.07) (0.09) (0.16)
Net realized gains from investment
transactions............................. (0.77) (0.26) (0.41)
In excess of net realized gains........... (0.04) -- --
------- ------ ------
Total Distributions....................... (0.88) (0.35) (0.57)
------- ------ ------
Net change in asset value.................. 1.43 1.19 0.26
------- ------ ------
Net Asset Value, End of Period............. $ 14.48 $13.05 $11.86
======= ====== ======
Total Return (excludes redemption charge).. 18.24% 13.34% 7.26%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000).......... $28,153 $7,919 $7,733
Ratio of expenses to average net assets.... 2.09% 2.16% 2.19%(c)
Ratio of net investment income to average
net assets................................ 0.49% 0.61% 1.29%(c)
Ratio of expenses to average net assets*... 2.20% 2.33% 2.35%(c)
Portfolio turnover**....................... 168% 134% 83%
</TABLE>
* During the period, certain fees were voluntarily reduced/reimbursed. If such
voluntary fee reductions/reimbursements had not occurred, the ratios would
have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) For the period from September 3, 1997 (commencement of operations) through
July 31, 1998.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
92
<PAGE>
AMSOUTH FUNDS
Equity Income Fund
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2000 1999 1998 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period....... $ 13.10 $ 11.89 $11.35
-------- ------- ------
Investment Activities
Net investment income (loss).............. 0.20 0.19 0.25
Net realized and unrealized gains (losses)
from investments......................... 2.27 1.47 0.95
-------- ------- ------
Total from Investment Activities.......... 2.47 1.66 1.20
-------- ------- ------
Distributions
Net investment income..................... (0.19) (0.19) (0.25)
Net realized gains from investment
transactions............................. (0.77) (0.26) (0.41)
In excess of net realized gains........... (0.04) -- --
-------- ------- ------
Total Distributions....................... (1.00) (0.45) (0.66)
-------- ------- ------
Net change in asset value.................. 1.47 1.21 0.54
-------- ------- ------
Net Asset Value, End of Period............. $ 14.57 $ 13.10 $11.89
======== ======= ======
Total Return............................... 19.55% 14.43% 7.54%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000).......... $107,121 $10,908 $8,087
Ratio of expenses to average net assets.... 1.19% 1.16% 1.19%(c)
Ratio of net investment income to average
net assets................................ 1.35% 1.59% 2.34%(c)
Ratio of expenses to average net assets*... 1.32% 1.33% 1.35%(c)
Portfolio turnover**....................... 168% 134% 83%
</TABLE>
/\ Formerly Premier Shares.
* During the period, certain fees were voluntarily reduced/reimbursed. If such
voluntary fee reductions/reimbursements had not occurred, the ratios would
have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
(b) Represents total return based on the activity of Classic Shares for the
period from August 1, 1997 to September 1, 1997 and the activity of Premier
Shares for the period from September 2, 1997 to July 31, 1998. Total return
for the Premier Shares for the period from September 2, 1997 (commencement
of operations) through July 31, 1998 was 10.82%.
(c) Annualized.
See notes to financial statements
93
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Balanced Fund July 31, 2000
(Amounts in thousands, except shares)
Common Stocks (44.6%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Automotive (1.2%)
Ford Motor Co. ............................................. 50,000 $ 2,328
--------
Automotive Parts (0.0%)
Visteon Corp................................................ 6,547 92
--------
Banking (3.1%)
Bank of America Corp. ...................................... 40,000 1,895
First Union Corp. .......................................... 40,000 1,033
Washington Mutual, Inc...................................... 100,000 3,212
--------
6,140
--------
Business Services (0.9%)
Modis Professional Services, Inc. (b)....................... 35,000 267
Reynolds & Reynolds Co., Class A............................ 85,000 1,418
--------
1,685
--------
Chemicals -- Speciality (1.6%)
Engelhard Corp. ............................................ 130,000 2,348
M.A. Hanna Co. ............................................. 100,000 800
--------
3,148
--------
Computer Hardware (1.4%)
Compaq Computer Corp........................................ 40,000 1,123
IBM Corp. .................................................. 15,000 1,686
--------
2,809
--------
Computers & Peripherals (1.3%)
Cabletron Systems, Inc. (b)................................. 100,000 2,613
--------
Electrical & Electronic (0.9%)
Avnet, Inc. ................................................ 32,000 1,822
--------
Financial Services (1.5%)
Dun & Bradstreet Corp....................................... 85,000 2,512
Equifax, Inc................................................ 20,000 473
--------
2,985
--------
Food Products, Processing & Packaging (1.8%)
International Flavors & Fragrances, Inc. ................... 9,000 241
Sara Lee Corp............................................... 120,000 2,212
Universal Foods Corp........................................ 56,000 1,092
--------
3,545
--------
Forest & Paper Products (2.4%)
International Paper Co. .................................... 35,000 1,190
Weyerhaeuser Co............................................. 40,000 1,827
Willamette Industries, Inc. ................................ 56,000 1,698
--------
4,715
--------
Health Care (1.5%)
Health Management Assoc., Inc., Class A (b)................. 35,000 549
UnitedHealth Group Inc...................................... 28,000 2,291
--------
2,840
--------
Household Products/Wares (0.6%)
Newell Rubbermaid, Inc...................................... 46,644 1,256
--------
Insurance (4.3%)
ACE Ltd..................................................... 10,000 360
Chubb Corp.................................................. 40,000 2,960
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Insurance, continued
Marsh & McLennan Cos., Inc................................ 15,000 $ 1,830
St. Paul Cos., Inc. ...................................... 70,000 3,111
--------
8,261
--------
Medical Supplies (3.1%)
C.R. Bard, Inc............................................ 55,000 2,753
DENTSPLY International, Inc. ............................. 65,000 2,198
Guidant Corp. (b)......................................... 20,000 1,128
--------
6,079
--------
Newspapers (1.0%)
Gannett Co., Inc. ........................................ 35,000 1,886
--------
Oil & Gas Exploration, Production & Services (6.5%)
Burlington Resources, Inc. ............................... 45,000 1,468
Kerr-McGee Corp. ......................................... 35,000 1,921
Noble Affiliates.......................................... 60,000 1,800
Sunoco, Inc. ............................................. 65,000 1,584
Texaco, Inc. ............................................. 45,000 2,225
Ultramar Diamond Shamrock Corp. .......................... 60,000 1,373
USX-Marathon Group........................................ 90,000 2,188
--------
12,559
--------
Pharmaceuticals (3.0%)
Baxter International, Inc................................. 40,000 3,110
Pharmacia Corp. .......................................... 50,000 2,738
--------
5,848
--------
Retail (3.0%)
CVS Corp. ................................................ 70,000 2,760
May Department Stores Co. ................................ 90,000 2,138
Target Corp. ............................................. 36,000 1,044
--------
5,942
--------
Telecommunications -- Equipment (0.3%)
Lucent Technologies, Inc. ................................ 15,000 656
--------
Transportation Leasing & Trucking (0.8%)
US Freightways Corp. ..................................... 55,000 1,526
--------
Utilities -- Electric & Gas (2.8%)
Constellation Energy Group................................ 80,000 2,665
New Century Energies, Inc. ............................... 25,000 855
Southern Co............................................... 80,000 1,955
--------
5,475
--------
Utilities -- Telecommunications (1.6%)
AT&T Corp................................................. 35,000 1,083
Verizon Communications.................................... 45,000 2,115
--------
3,198
--------
TOTAL COMMON STOCKS....................................... 87,408
--------
Corporate Bonds (25.0%)
Automotive -- Finance (2.5%)
General Motors Acceptance Corp., 6.00%, 2/1/02............ $2,000 1,965
Toyota Motor Credit Corp., 5.50%, 9/17/01................. 3,000 2,951
--------
4,916
--------
</TABLE>
Continued
94
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Balanced Fund July 31, 2000
(Amounts in thousands, except shares)
Corporate Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Banking (2.2%)
Bank of America Corp., 9.50%, 4/1/01......................... $ 930 $ 943
SunTrust Banks, Inc., 7.38%, 7/1/06.......................... 2,000 1,980
Wachovia Corp., 6.63%, 11/15/06.............................. 1,475 1,401
--------
4,324
--------
Brokerage Services (2.5%)
Bear Stearns & Co., Inc., 6.50%, 8/1/02...................... 3,000 2,948
Morgan Stanley Group, Inc., 8.10%, 6/24/02................... 2,000 2,030
--------
4,978
--------
Consumer Goods (1.0%)
Procter & Gamble Co., 5.25%, 9/15/03......................... 2,000 1,918
--------
Diversified Manufacturing (1.3%)
Avnet Inc., 6.45%, 8/15/03................................... 2,500 2,450
--------
Electronic Components/Instruments (1.0%)
Honeywell, Inc., 6.75%, 3/15/02.............................. 2,000 1,995
--------
Financial Services (2.6%)
Associates Corp. N.A., 6.75%, 7/15/01........................ 3,000 2,989
Commercial Credit Co., 7.88%, 7/15/04........................ 1,000 1,014
Pitney Bowes Credit Corp., 6.80%, 10/1/01.................... 1,000 996
--------
4,999
--------
Forest & Paper Products (0.5%)
Mead Corp., 6.60%, 3/1/02.................................... 1,000 991
--------
Industrial Goods & Services (3.4%)
Caterpillar Financial Services, 6.02%, 4/15/02............... 2,000 1,955
First Data Corp., 6.75%, 7/15/05............................. 3,000 2,890
Illinois Tool Works, 5.75%, 3/1/09........................... 2,000 1,795
--------
6,640
--------
Insurance (0.7%)
Capital Holding Corp., 9.20%, 4/17/01........................ 1,400 1,419
--------
Oil & Gas Exploration, Production & Services (0.7%)
Conoco Inc., 6.35%, 4/15/09.................................. 1,500 1,403
--------
Retail (3.0%)
J.C. Penney & Co., Inc., 7.25%, 4/1/02....................... 2,000 1,943
Sears, Roebuck and Co., 6.00%, 3/20/03....................... 2,000 1,925
Wal-Mart Stores, Inc., 6.75%, 5/15/02........................ 2,000 1,994
--------
5,862
--------
Telecommunications -- Equipment (0.9%)
Lucent Technologies, Inc., 6.90%, 7/15/01.................... 1,730 1,732
--------
Tools (1.1%)
Stanley Works, 7.38%, 12/15/02............................... 2,200 2,214
--------
Utilities -- Telecommunications (1.6%)
AT&T Corp., 7.13%, 1/15/02................................... 1,000 1,000
BellSouth Telecommunications, 6.00%, 6/15/02................. 2,200 2,159
--------
3,159
--------
TOTAL CORPORATE BONDS........................................ 49,000
--------
</TABLE>
Municipal Bonds (1.9%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- --------
<S> <C> <C>
Illinois (1.9%)
Chicago Public Building, 7.00%, 1/1/06..................... $ 3,800 $ 3,757
--------
TOTAL MUNICIPAL BONDS...................................... 3,757
--------
U.S. Government Agencies (11.2%)
Fannie Mae (2.4%)
6.21%, 11/7/07............................................. 5,000 4,759
Freddie Mac (4.5%)
5.83%, 2/9/06.............................................. 7,000 6,632
7.10%, 4/10/07............................................. 2,000 2,010
--------
8,642
--------
Government National Mortgage Assoc. (4.3%)
6.50%, 11/20/28............................................ 8,927 8,433
--------
TOTAL U.S. GOVERNMENT AGENCIES............................. 21,834
--------
U.S. Treasury Bonds (15.1%)
7.50%, 11/15/16............................................ 16,000 18,220
7.25%, 8/15/22............................................. 10,000 11,381
--------
TOTAL U.S. TREASURY BONDS.................................. 29,601
--------
Investment Companies (2.2%)
AmSouth Prime Money Market Fund............................ 4,291,262 4,291
AmSouth U.S. Treasury Money Market Fund.................... 32,715 33
--------
TOTAL INVESTMENT COMPANIES................................. 4,324
--------
Short-Term Securities+ (35.2%)
Commercial Paper (23.0%)
Asset Backed -- Miscellaneous (4.4%)
Asset Securitization Corp., 6.60%, 9/6/00.................. $ 1,688 1,659
Corporate Receivables, 6.62%, 8/1/00....................... 2,110 2,110
Falcon Asset Securitization Corp., 6.62%, 8/14/00.......... 1,688 1,660
Mermaid, 6.87%, 8/10/00.................................... 3,133 3,124
--------
8,553
--------
Financial Services (12.8%)
Golden Funding Corp., 6.55%-6.62%, 9/8/00-9/18/00.......... 2,151 2,123
Liberty Street Funding Corp., 6.56%, 10/11/00.............. 1,504 1,478
Moat Funding Corp., 6.54%-6.67%, 8/11/00-10/6/00........... 2,152 2,118
Orix Corp., 6.78%-6.85%, 8/10/00-9/1/00.................... 2,551 2,525
Rabobank, 6.65%, 8/1/00.................................... 8,244 8,243
Superior Funding Corp., 6.51%-6.53%, 8/21/00-8/29/00....... 2,321 2,308
TransAmerica, 6.65%, 9/5/00................................ 1,688 1,667
Trident, 6.70%, 8/4/00..................................... 2,110 2,096
UBS Finance, 6.57%-6.64%, 8/1/00-8/7/00.................... 2,249 2,248
--------
24,806
--------
</TABLE>
Continued
95
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Balanced Fund July 31, 2000
(Amounts in thousands, except shares)
Short-Term Securities+, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Commercial Paper, continued
Food -- Retail (0.5%)
Safeway, Inc., 6.70%, 8/15/00............................... $1,055 $ 1,047
--------
Miscellaneous (1.7%)
Tyco International, Ltd., 6.80%-6.91%, 8/7/00-8/21/00....... 3,346 3,317
--------
Utilities -- Electrical & Gas (0.7%)
Dominion Resources, Inc., 6.88%, 8/7/00..................... 1,477 1,460
--------
Utilities -- Telecommunications (2.9%)
Cox Communications, Inc., 6.72%, 8/22/00.................... 3,718 3,690
Qwest Communications International, Inc., 6.80%, 9/5/00..... 2,110 2,086
--------
5,776
--------
Total Commercial Paper...................................... 44,959
--------
Floating Rate Notes (4.8%)
Financial Services (4.5%)
Ford Motor Credit Co., 6.71%*, 4/11/02, MTN................. 844 844
General Motors Acceptance Corp., 6.72%*, 4/5/02, MTN........ 2,895 2,892
General Motors Acceptance Corp., 6.94%*, 11/13/00, MTN...... 506 506
KeyBank N.A., 6.66%*, 1/7/02................................ 4,122 4,125
KeyCorp, 6.94%*, 10/23/00, MTN.............................. 422 422
--------
8,789
--------
Miscellaneous (0.3%)
Tyco International, Ltd., 7.47%*, 9/5/00 (c)................ 633 633
--------
Total Floating Rate Notes................................... 9,422
--------
Time Deposits (1.6%)
Amex Centurion, 6.56%-6.58%,
8/8/00-8/30/00............................................. 3,165 3,165
--------
</TABLE>
Short-Term Securities+, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Investment Companies (4.7%)
AIM Liquid Asset Money Market Fund........................ 9,211,458 9,211
--------
Repurchase Agreements (1.1%)
Lehman Brothers, 6.74%, 8/1/00, dated 7/31/00, with a
maturity value of $2,110 (See Significant Accounting
Policies, Securities Lending in the Notes to Financial
Statements for collateral description)................... $ 2,110 2,110
--------
TOTAL SHORT-TERM SECURITIES............................... 68,867
--------
TOTAL INVESTMENTS
(Cost $237,002) (a) -- (135.2%).......................... 264,791
Liabilities in excess of other assets -- (-35.2%)......... (68,971)
--------
TOTAL NET ASSETS -- (100.0%).............................. $195,820
========
</TABLE>
---------
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of $474.
Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................ $32,132
Unrealized depreciation............................................ (4,817)
-------
Net unrealized appreciation........................................ $27,315
=======
</TABLE>
(b) Represents non-income producing securities.
(c) Represents a restricted security purchased under Rule 144A which is exempt
from registration under the Security Act of 1933, as amended.
* Variable rate security. Rate represents rate in effect at July 31, 2000.
+ Represents securities purchased with cash collateral received on loaned
securities.
MTN -- Medium Term Note
See notes to financial statements
96
<PAGE>
AMSOUTH FUNDS
Balanced Fund
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $234,892)........................ $262,681
Repurchase agreements, at cost............................... 2,110
--------
Total Investments........................................... 264,791
Interest and dividends receivable............................ 1,964
Prepaid expenses and other assets............................ 8
--------
Total Assets................................................ 266,763
Liabilities:
Payable for return of collateral held for securities on
loan........................................................ $68,867
Payable for capital shares redeemed.......................... 1,966
Accrued expenses and other payables:
Investment advisory fees.................................... 52
Administration fees......................................... 5
Distribution fees........................................... 26
Custodian fees.............................................. 5
Other....................................................... 22
-------
Total Liabilities........................................... 70,943
--------
Net Assets:
Capital...................................................... 157,719
Undistributed (distributions in excess of) net investment
income...................................................... 251
Undistributed (distributions in excess of) net realized
gains....................................................... 10,061
Net unrealized appreciation (depreciation) from investments.. 27,789
--------
Net Assets................................................... $195,820
========
Class A Shares (a)
Net Assets.................................................. $ 21,951
Shares outstanding.......................................... 1,759
Redemption price per share.................................. $ 12.48
========
Class A Shares -- Maximum Sales Charge....................... 4.50%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum
Sales Charge) of net asset value adjusted to the nearest
cent)...................................................... $ 13.07
========
Class B Shares
Net Assets.................................................. $ 7,072
Shares outstanding.......................................... 568
Offering price per share*................................... $ 12.45
========
Trust Shares (b)
Net Assets.................................................. $166,797
Shares outstanding.......................................... 13,375
Offering and redemption price per share..................... $ 12.47
========
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2000
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income.............................................. $ 9,593
Dividend income.............................................. 3,600
Income from securities lending............................... 9
--------
Total Investment Income..................................... 13,202
Expenses:
Investment advisory fees..................................... $2,284
Administration fees.......................................... 571
Distribution fees -- Class B Shares.......................... 88
Shareholder servicing fees -- Class A Shares (a)............. 80
Shareholder servicing fees -- Trust Shares (b)............... 108
Custodian fees............................................... 53
Accounting fees.............................................. 84
Transfer agent fees.......................................... 110
Trustee fees and expenses.................................... 13
Other fees................................................... 85
------
Total expenses before voluntary fee reductions.............. 3,476
Expenses voluntarily reduced................................ (94)
--------
Net expenses................................................ 3,382
--------
Net Investment Income........................................ 9,820
--------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment transactions..... 10,788
Net change in unrealized appreciation (depreciation) from
investments................................................. (27,415)
--------
Net realized/unrealized gains (losses) from investments...... (16,627)
--------
Change in net assets resulting from operations............... $ (6,807)
========
</TABLE>
See notes to financial statements
97
<PAGE>
AMSOUTH FUNDS
Balanced Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2000 1999
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................... $ 9,820 $ 10,947
Net realized gains (losses) from investment
transactions........................................... 10,788 43,490
Net change in unrealized appreciation (depreciation)
from investments....................................... (27,415) (19,188)
--------- --------
Change in net assets resulting from operations........... (6,807) 35,249
--------- --------
Distributions to Class A Shareholders (a):
From net investment income.............................. (1,100) (1,197)
In excess of net investment income...................... (19) --
From net realized gains on investment transactions...... (4,396) (3,540)
Distributions to Class B Shareholders:
From net investment income.............................. (242) (153)
In excess of net investment income...................... (4) --
From net realized gains on investment transactions...... (1,214) (554)
Distributions to Trust Shareholders (b):
From net investment income.............................. (9,055) (9,447)
In excess of net investment income...................... (159) --
From net realized gains on investment transactions...... (35,672) (25,304)
--------- --------
Change in net assets from shareholder distributions...... (51,861) (40,195)
--------- --------
Change in net assets from capital transactions........... (117,882) (4,433)
--------- --------
Change in net assets..................................... (176,550) (9,379)
Net Assets:
Beginning of period..................................... 372,370 381,749
--------- --------
End of period........................................... $ 195,820 $372,370
========= ========
</TABLE>
---------
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
See notes to financial statements
98
<PAGE>
AMSOUTH FUNDS
Balanced Fund
Financial Highlights, Class A Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2000 1999 1998 (a) 1997 1996
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 14.93 $ 15.19 $ 15.21 $ 13.03 $ 12.76
------- ------- ------- -------- --------
Investment Activities
Net investment income
(loss)................ 0.44 0.41 0.38 0.48 0.47
Net realized and
unrealized gains
(losses) from
investments........... (0.64) 0.93 0.98 2.78 0.58
------- ------- ------- -------- --------
Total from Investment
Activities............ (0.20) 1.34 1.36 3.26 1.05
------- ------- ------- -------- --------
Distributions
Net investment income.. (0.46) (0.40) (0.41) (0.50) (0.47)
In excess of net
investment income..... (0.01) -- -- -- --
Net realized gains from
investment
transactions.......... (1.78) (1.20) (0.97) (0.58) (0.31)
------- ------- ------- -------- --------
Total Distributions.... (2.25) (1.60) (1.38) (1.08) (0.78)
------- ------- ------- -------- --------
Net change in asset
value.................. (2.45) (0.26) (0.02) 2.18 0.27
------- ------- ------- -------- --------
Net Asset Value, End of
Period................. $ 12.48 $ 14.93 $ 15.19 $ 15.21 $ 13.03
======= ======= ======= ======== ========
Total Return (excludes
sales charge).......... (1.05)% 9.40% 9.54% 26.42% 8.37%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $21,951 $43,223 $46,814 $372,769 $338,425
Ratio of expenses to
average net assets..... 1.35% 1.34% 1.24% 1.05% 0.98%
Ratio of net investment
income to average net
assets................. 3.28% 2.67% 2.77% 3.49% 3.61%
Ratio of expenses to
average net assets*.... 1.37% 1.35% 1.24% 1.10% 1.11%
Portfolio turnover**.... 16% 23% 25% 25% 20%
</TABLE>
/\ Formerly Classic Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2000 1999 1998 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period....... $14.90 $ 15.16 $14.99
------ ------- ------
Investment Activities
Net investment income (loss).............. 0.34 0.29 0.28
Net realized and unrealized gains (losses)
from investments......................... (0.64) 0.95 1.15
------ ------- ------
Total from Investment Activities.......... (0.30) 1.24 1.43
------ ------- ------
Distributions
Net investment income..................... (0.36) (0.30) (0.29)
In excess of net investment income........ (0.01) -- --
Net realized gains from investment
transactions............................. (1.78) (1.20) (0.97)
------ ------- ------
Total Distributions....................... (2.15) (1.50) (1.26)
------ ------- ------
Net change in asset value.................. (2.45) (0.26) 0.17
------ ------- ------
Net Asset Value, End of Period............. $12.45 $ 14.90 $15.16
====== ======= ======
Total Return (excludes redemption charge).. (1.80)% 8.66% 10.07%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000).......... $7,072 $10,131 $5,309
Ratio of expenses to average net assets.... 2.10% 2.09% 2.12%(c)
Ratio of net investment income to average
net assets................................ 2.54% 1.93% 1.83%(c)
Ratio of expenses to average net assets*... 2.12% 2.10% 2.12%(c)
Portfolio turnover**....................... 16% 23% 25%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) For the period from September 2, 1997 (commencement of operations) through
July 31, 1998.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
99
<PAGE>
AMSOUTH FUNDS
Balanced Fund
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2000 1999 1998 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period..... $ 14.93 $ 15.18 $ 14.77
-------- -------- --------
Investment Activities
Net investment income (loss)............ 0.46 0.44 0.41
Net realized and unrealized gains
(losses) from investments.............. (0.64) 0.95 1.38
-------- -------- --------
Total from Investment Activities........ (0.18) 1.39 1.79
-------- -------- --------
Distributions
Net investment income................... (0.49) (0.44) (0.41)
In excess of net investment income...... (0.01) -- --
Net realized gains from investment
transactions........................... (1.78) (1.20) (0.97)
-------- -------- --------
Total Distributions..................... (2.28) (1.64) (1.38)
-------- -------- --------
Net change in asset value................ (2.46) (0.25) 0.41
-------- -------- --------
Net Asset Value, End of Period........... $ 12.47 $ 14.93 $ 15.18
======== ======== ========
Total Return............................. (0.90)% 9.74% 9.73%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000)........ $166,797 $319,016 $329,626
Ratio of expenses to average net assets.. 1.13% 1.09% 1.10%(c)
Ratio of net investment income to average
net assets.............................. 3.50% 2.93% 2.95%(c)
Ratio of expenses to average net
assets*................................. 1.17% 1.10% 1.10%(c)
Portfolio turnover**..................... 16% 23% 25%
</TABLE>
/\ Formerly Premier Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
(b) Represents total return based on the activity of Classic Shares for the
period from August 1, 1997 to September 1, 1997 and the activity of Premier
Shares for the period from September 2, 1997 to July 31, 1998. Total return
for the Premier Shares for the period from September 2, 1997 (commencement
of operations) through July 31, 1998 was 12.70%.
(c) Annualized.
See notes to financial statements
100
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Select Equity Fund July 31, 2000
(Amounts in thousands, except shares)
Common Stocks (99.7%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- -------
<S> <C> <C>
Batteries/Battery Systems (1.8%)
Energizer Holdings, Inc. (b)................................. 6,266 $ 151
-------
Consumer Goods (7.4%)
American Greetings Corp., Class A............................ 11,900 202
Gillette Co. ................................................ 14,100 412
-------
614
-------
Data Processing & Reproduction (6.3%)
Automatic Data Processing, Inc. ............................. 10,600 525
-------
Electrical Equipment (2.3%)
Hubbell Harvey, Inc., Class B................................ 8,000 193
-------
Electronic Components/Instruments (8.4%)
Emerson Electric Co. ........................................ 11,400 696
-------
Financial Services (11.0%)
Dun & Bradstreet Corp. ...................................... 18,300 541
H & R Block, Inc. ........................................... 11,800 378
-------
919
-------
Food Distributors & Wholesalers (14.7%)
Ralston Purina Group......................................... 18,800 380
Smuckers Co., Class A........................................ 14,000 252
Sysco Corp. ................................................. 15,000 590
-------
1,222
-------
Food Products, Processing & Packaging (15.7%)
General Mills, Inc. ......................................... 16,700 573
Hershey Foods Corp. ......................................... 8,600 398
International Flavors & Fragrances, Inc. .................... 12,700 340
-------
1,311
-------
Machinery & Equipment (4.0%)
Briggs & Stratton Corp. ..................................... 4,500 158
Snap-On, Inc. ............................................... 5,700 172
-------
330
-------
Newspapers (8.5%)
Gannett Co., Inc. ........................................... 6,500 351
Lee Enterprises.............................................. 8,000 212
Washington Post, Class B..................................... 301 144
-------
707
-------
Office Equipment & Services (4.4%)
Pitney Bowes, Inc. .......................................... 10,500 364
-------
Pharmaceuticals (5.9%)
Bristol-Myers Squibb Co. .................................... 9,900 491
-------
Pollution Control Services & Equipment (7.9%)
Waste Management, Inc. ...................................... 35,260 659
-------
Restaurants (1.4%)
McDonald's Corp. ............................................ 3,800 120
-------
TOTAL COMMON STOCKS.......................................... 8,302
-------
Investment Companies (0.0%)
AmSouth Prime Money Market Fund.............................. 1,335 1
-------
TOTAL INVESTMENT COMPANIES................................... 1
-------
</TABLE>
Short-Term Securities+ (4.3%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Commercial Paper (2.8%)
Asset Backed -- Miscellaneous (0.6%)
Asset Securitization Corp., 6.60%, 9/6/00................... $ 15 $ 15
Corporate Receivables, 6.62%, 8/1/00........................ 18 18
Falcon Asset Securitization Corp., 6.62%, 8/14/00........... 15 15
--------
48
--------
Financial Services (1.6%)
Golden Funding Corp., 6.55%-6.62%, 9/8/00-9/18/00........... 19 19
Liberty Street Funding Corp., 6.56%, 10/11/00............... 13 13
Moat Funding Corp., 6.54%-6.67%, 8/11/00-10/6/00............ 19 19
Orix Corp., 6.85%, 8/10/00.................................. 9 9
Superior Funding Corp., 6.51%-6.53%, 8/21/00-8/29/00........ 20 20
TransAmerica, 6.65%, 9/5/00................................. 15 15
Trident, 6.70%, 8/4/00...................................... 18 18
UBS Finance, 6.57%-6.64%, 8/1/00-8/7/00..................... 20 19
--------
132
--------
Food -- Retail (0.1%)
Safeway, Inc., 6.70%, 8/15/00............................... 9 9
--------
Miscellaneous (0.1%)
Tyco International, Ltd., 6.91%, 8/7/00..................... 8 8
--------
Utilities -- Electrical & Gas (0.2%)
Dominion Resources, Inc., 6.88%, 8/7/00..................... 13 13
--------
Utilities -- Telecommunications (0.2%)
Qwest Communications International, Inc., 6.80%, 9/5/00..... 18 18
--------
Total Commercial Paper...................................... 228
--------
Floating Rate Notes (0.3%)
Financial Services (0.2%)
Ford Motor Credit Co., 6.71%*, 4/11/02, MTN................. 7 7
General Motors Acceptance Corp., 6.72%*, 4/5/02, MTN........ 4 4
General Motors Acceptance Corp., 6.94%*, 11/13/00, MTN...... 4 4
KeyCorp, 6.94%*, 10/23/00, MTN.............................. 4 4
--------
19
--------
Miscellaneous (0.1%)
Tyco International, Ltd., 7.47%*, 9/5/00 (c)................ 6 6
--------
Total Floating Rate Notes................................... 25
--------
Time Deposits (0.3%)
Amex Centurion, 6.56%-6.58%, 8/8/00-8/30/00................. 28 28
--------
Investment Companies (0.7%)
AIM Liquid Asset Money Market Fund.......................... 57,176 57
--------
</TABLE>
Continued
101
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Select Equity Fund July 31, 2000
(Amounts in thousands, except shares)
Short-Term Securities+, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- ------
<S> <C> <C>
Repurchase Agreements (0.2%)
Lehman Brothers, 6.74%, 8/1/00, dated 7/31/00, with a
maturity value of $18 (See Significant Accounting Policies,
Securities Lending in the Notes to Financial Statements for
collateral description)..................................... $18 $ 18
------
TOTAL SHORT-TERM SECURITIES.................................. 356
------
TOTAL INVESTMENTS (Cost $9,723) (a) -- (104.0%)............. 8,659
Liabilities in excess of other assets --
(-4.0%).................................................... (332)
------
TOTAL NET ASSETS -- (100.0%)................................. $8,327
======
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation........................................... $ 430
Unrealized depreciation........................................... (1,494)
-------
Net unrealized depreciation....................................... $(1,064)
=======
</TABLE>
(b) Represents non-income producing securities.
(c) Represents a restricted security purchased under Rule 144A which is exempt
from registration under the Security Act of 1933, as amended.
* Variable rate security. Rate represents rate in effect at July 31, 2000.
+ Represents securities purchased with cash collateral received on loaned
securities.
MTN -- Medium Term Note
See notes to financial statements
102
<PAGE>
AMSOUTH FUNDS
Select Equity Fund
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $9,705).............................. $ 8,641
Repurchase agreements, at cost................................... 18
-------
Total Investments............................................... 8,659
Interest and dividends receivable................................ 10
Receivable for capital shares issued............................. 1
Receivable for investments sold.................................. 306
Prepaid expenses and other assets................................ 2
-------
Total Assets.................................................... 8,978
Liabilities:
Payable for return of collateral held for securities on loan..... $356
Custody payable.................................................. 21
Payable for investments purchased................................ 262
Accrued expenses and other payables:
Investment advisory fees........................................ 2
Distribution fees............................................... 2
Other........................................................... 8
----
Total Liabilities............................................... 651
-------
Net Assets:
Capital.......................................................... 11,039
Undistributed (distributions in excess of) net realized gains.... (1,648)
Net unrealized appreciation (depreciation) from investments...... (1,064)
-------
Net Assets....................................................... $ 8,327
=======
Class A Shares (a)
Net Assets...................................................... $ 2,512
Shares outstanding.............................................. 288
Redemption price per share...................................... $ 8.72
=======
Class A Shares -- Maximum Sales Charge........................... 4.50%
-------
Maximum Offering Price Per Share (100%/(100% -- Maximum Sales
Charge) of net asset value adjusted to the nearest cent)....... $ 9.13
=======
Class B Shares
Net Assets...................................................... $ 715
Shares outstanding.............................................. 83
Offering price per share*....................................... $ 8.64
=======
Trust Shares (b)
Net Assets...................................................... $ 5,100
Shares outstanding.............................................. 584
Offering and redemption price per share......................... $ 8.73
=======
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2000
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Dividend income................................................. $ 282
Expenses:
Investment advisory fees........................................ $107
Administration fees............................................. 28
Distribution fees -- Class B Shares............................. 12
Shareholder servicing fees -- Class A Shares (a)................ 12
Shareholder servicing fees -- Trust Shares (b).................. 3
Custodian fees.................................................. 2
Accounting fees................................................. 35
Transfer agent fees............................................. 36
Trustee fees and expenses....................................... 1
Other fees...................................................... 21
----
Total expenses before voluntary fee reductions................. 257
Expenses voluntarily reduced................................... (70)
-------
Net expenses................................................... 187
-------
Net Investment Income........................................... 95
-------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment transactions........ (1,118)
Net change in unrealized appreciation (depreciation) from
investments.................................................... (2,445)
-------
Net realized/unrealized gains (losses) from investments......... (3,563)
-------
Change in net assets resulting from operations.................. $(3,468)
=======
</TABLE>
See notes to financial statements
103
<PAGE>
AMSOUTH FUNDS
Select EquityFund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Period Ended
July 31, July 31,
2000 1999 (a)
---------- ------------
(Amounts in thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................ $ 95 $ 72
Net realized gains (losses) from investment
transactions........................................ (1,118) 612
Net change in unrealized appreciation (depreciation)
from investments.................................... (2,445) 1,381
-------- -------
Change in net assets resulting from operations........ (3,468) 2,065
-------- -------
Distributions to Class A Shareholders (b):
From net investment income........................... (34) (49)
In excess of net investment income................... (1) --
From net realized gains on investment transactions... (236) (19)
In excess of net realized gains...................... (214) --
Distributions to Class B Shareholders:
From net investment income........................... (4) (2)(d)
From net realized gains on investment transactions... (60) --
In excess of net realized gains...................... (54) --
Distributions to Trust Shareholders (c):
From net investment income........................... (57) (22)(e)
In excess of net investment income................... (1) --
From net realized gains on investment transactions... (290) (6)(e)
In excess of net realized gains...................... (262) --
-------- -------
Change in net assets from shareholder distributions... (1,213) (98)
-------- -------
Change in net assets from capital transactions........ (9,603) 20,644
-------- -------
Change in net assets.................................. (14,284) 22,611
Net Assets:
Beginning of period.................................. 22,611 --
-------- -------
End of period........................................ $ 8,327 $22,611
======== =======
</TABLE>
---------
(a) For the period from September 1, 1998 (commencement of operations) through
July 31, 1999.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
(d) For the period from September 2, 1998 (commencement of operations) through
July 31, 1999.
(e) For the period from December 3, 1998 (commencement of operations) through
July 31, 1999.
See notes to financial statements
104
<PAGE>
AMSOUTH FUNDS
Select Equity Fund
Financial Highlights, Class A Shares/\
<TABLE>
<CAPTION>
Year Ended Period Ended
July 31, July 31,
2000+ 1999 (a)
---------- ------------
<S> <C> <C>
Net Asset Value, Beginning of Period.................. $ 11.88 $ 10.00
-------- -------
Investment Activities
Net investment income (loss)......................... 0.07 0.04
Net realized and unrealized gains (losses) from
investments......................................... (2.35) 1.91
-------- -------
Total from Investment Activities..................... (2.28) 1.95
-------- -------
Distributions
Net investment income................................ (0.07) (0.05)
In excess of net investment income................... -- (0.01)
Net realized gains from investment transactions...... (0.43) (0.01)
In excess of net realized gains...................... (0.38) --
-------- -------
Total Distributions.................................. (0.88) (0.07)
-------- -------
Net change in asset value............................. (3.16) 1.88
-------- -------
Net Asset Value, End of Period........................ $ 8.72 $ 11.88
======== =======
Total Return (excludes sales charge).................. (19.86)% 19.44%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000)..................... $ 2,512 $10,258
Ratio of expenses to average net assets............... 1.44% 1.13%(c)
Ratio of net investment income to average net assets.. 0.67% 0.43%(c)
Ratio of expenses to average net assets*.............. 1.96% 1.81%(c)
Portfolio turnover**.................................. 25% 10%
</TABLE>
/\ Formerly Classic Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
+ Net investment income (loss) is based on average shares outstanding during
the period.
(a) For the period from September 1, 1998 (commencement of operations) through
July 31, 1999.
(b) Not annualized.
(c) Annualized.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Year Ended Period Ended
July 31, July 31,
2000 + 1999 (a)
---------- ------------
<S> <C> <C>
Net Asset Value, Beginning of Period................. $ 11.83 $ 9.98
------- ------
Investment Activities
Net investment income (loss)........................ (0.01) 0.02
Net realized and unrealized gains (losses) from
investments........................................ (2.34) 1.86
------- ------
Total from Investment Activities.................... (2.35) 1.88
------- ------
Distributions
Net investment income............................... (0.03) (0.01)
In excess of net investment income.................. -- (0.01)
Net realized gains from investment transactions..... (0.43) (0.01)
In excess of net realized gains..................... (0.38) --
------- ------
Total Distributions................................. (0.84) (0.03)
------- ------
Net change in asset value............................ (3.19) 1.85
------- ------
Net Asset Value, End of Period....................... $ 8.64 $11.83
======= ======
Total Return (excludes redemption charge)............ (20.47)% 18.83%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000).................... $ 715 $1,933
Ratio of expenses to average net assets.............. 2.21% 1.99%(c)
Ratio of net investment income to average net
assets.............................................. (0.08)% (0.49)%(c)
Ratio of expenses to average net assets*............. 2.72% 2.58%(c)
Portfolio turnover**................................. 25% 10%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
+ Net investment income (loss) is based on average shares outstanding during
the period.
(a) For the period from September 2, 1998 (commencement of operations) through
July 31, 1999.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
105
<PAGE>
AMSOUTH FUNDS
Select Equity Fund
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Year Ended Period Ended
July 31, July 31,
2000 1999 (a)
---------- ------------
<S> <C> <C>
Net Asset Value, Beginning of Period.................. $ 11.89 $ 11.52
------- -------
Investment Activities
Net investment income (loss)......................... 0.09 0.04
Net realized and unrealized gains (losses) from
investments......................................... (2.36) 0.38
------- -------
Total from Investment Activities..................... (2.27) 0.42
------- -------
Distributions
Net investment income................................ (0.08) (0.03)
In excess of net investment income................... -- (0.01)
Net realized gains from investment transactions...... (0.43) (0.01)
In excess of net realized gains...................... (0.38) --
------- -------
Total Distributions.................................. (0.89) (0.05)
------- -------
Net change in asset value............................. (3.16) 0.37
------- -------
Net Asset Value, End of Period........................ $ 8.73 $ 11.89
======= =======
Total Return.......................................... (19.72)% 3.63%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000)..................... $ 5,100 $10,420
Ratio of expenses to average net assets............... 1.25% 0.99%(c)
Ratio of net investment income to average net assets.. 0.88% 0.65%(c)
Ratio of expenses to average net assets*.............. 1.78% 1.58%(c)
Portfolio turnover**.................................. 25% 10%
</TABLE>
/\ Formerly Premier Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) For the period from December 3, 1998 (commencement of operations) through
July 31, 1999.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
106
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Enhanced Market Fund July 31, 2000
(Amounts in thousands, except shares)
Common Stocks (98.2%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Advertising (0.0%)
Young & Rubicam, Inc. ...................................... 400 $ 23
--------
Aerospace/Defense (1.3%)
Boeing Co. ................................................. 7,800 383
General Dynamics Corp. ..................................... 2,200 124
Northrop Grumman Corp. ..................................... 400 28
Raytheon Company, Class B................................... 3,800 92
United Technologies Corp. .................................. 4,100 239
--------
866
--------
Airlines (0.1%)
AMR Corp. (b)............................................... 1,600 53
--------
Apparel (0.2%)
Liz Claiborne, Inc. ........................................ 300 12
Nike, Inc., Class B......................................... 3,100 136
Reebok International Ltd. (b)............................... 200 3
Russell Corp. .............................................. 100 2
V F Corp. .................................................. 100 2
--------
155
--------
Appliances (0.1%)
Whirlpool Corp. ............................................ 800 35
--------
Automotive (1.1%)
Ford Motor Co. ............................................. 9,100 423
General Motors Corp. ....................................... 5,000 285
Navistar International (b).................................. 700 25
PACCAR, Inc. ............................................... 400 18
--------
751
--------
Automotive Parts (0.2%)
Cooper Tire & Rubber Co. ................................... 400 4
Dana Corp. ................................................. 900 21
Delphi Automotive Systems................................... 3,237 48
Goodyear Tire & Rubber Co. ................................. 900 18
TRW, Inc. .................................................. 700 31
Visteon Corp. .............................................. 1,191 17
--------
139
--------
Banking (3.4%)
Bank of America Corp. ...................................... 9,500 450
Bank of New York Co., Inc. ................................. 4,100 192
Bank One Corp. ............................................. 3,048 97
BB&T Corp. ................................................. 1,300 32
Chase Manhattan Corp. ...................................... 8,700 432
Comerica, Inc. ............................................. 1,800 92
Firstar Corp. .............................................. 9,027 178
Huntington Bancshares, Inc. ................................ 1,386 22
J.P. Morgan & Co., Inc. .................................... 1,900 254
Keycorp..................................................... 2,500 44
MBNA Corp. ................................................. 8,900 297
Regions Financial Corp. .................................... 1,200 24
SouthTrust Corp. ........................................... 900 22
Summit Bancorp. ............................................ 300 7
U.S. Bancorp. .............................................. 4,300 83
Union Planters Corp. ....................................... 200 6
Wells Fargo Co. ............................................ 3,300 136
--------
2,368
--------
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Beverages (2.5%)
Adolph Coors Co., Class B.................................... 200 $ 13
Anheuser-Busch Co., Inc. .................................... 2,600 209
Coca-Cola Co. ............................................... 13,800 845
PepsiCo, Inc. ............................................... 11,800 541
Seagram Co. Ltd. ............................................ 2,400 135
--------
1,743
--------
Biotechnology (0.7%)
Amgen, Inc. (b).............................................. 7,800 507
--------
Brokerage Services (1.3%)
Lehman Brothers Holdings, Inc. .............................. 1,300 146
Merrill Lynch & Co., Inc. ................................... 3,000 388
Morgan Stanley Dean Witter & Co. ............................ 3,100 283
Paine Webber Group, Inc. .................................... 1,100 76
--------
893
--------
Building Materials (0.0%)
Armstrong Holdings, Inc. .................................... 200 3
Owens Corning................................................ 300 2
Vulcan Materials Co. ........................................ 200 8
--------
13
--------
Chemicals (1.0%)
Air Products and Chemicals, Inc. ............................ 2,600 87
E.I. du Pont de Nemours & Co. ............................... 8,578 388
Eastman Chemical Co. ........................................ 100 5
Praxair, Inc. ............................................... 1,700 67
Rohm & Haas Co. ............................................. 784 20
Sherwin Williams Co. ........................................ 1,900 40
Sigma Aldrich Corp. ......................................... 500 14
Union Carbide Corp. ......................................... 1,500 67
W.R.Grace and Co. (b)........................................ 300 3
--------
691
--------
Chemicals -- Speciality (0.0%)
Engelhard Corp. ............................................. 1,400 25
--------
Commercial Services (0.0%)
Ecolab, Inc. ................................................ 300 11
Quintiles Transnational Corp. (b)............................ 600 9
--------
20
--------
Computer Hardware (5.1%)
Apple Computer, Inc. (b)..................................... 3,600 183
Compaq Computer Corp. ....................................... 13,500 379
Dell Computer Corp. (b)...................................... 14,300 628
IBM Corp. ................................................... 11,100 1,248
Sun Microsystems, Inc. (b)................................... 10,100 1,065
--------
3,503
--------
Computer Software (5.4%)
Adobe Systems, Inc. ......................................... 700 80
Autodesk, Inc. .............................................. 300 6
Citrix Systems, Inc. (b)..................................... 1,000 15
Computer Associates International, Inc. ..................... 5,400 134
Computer Sciences Corp. (b).................................. 1,900 119
Compuware Corp. (b).......................................... 2,000 16
Microsoft Corp. (b).......................................... 30,900 2,158
Novell, Inc. (b)............................................. 1,800 17
</TABLE>
Continued
107
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Enhanced Market Fund July 31, 2000
(Amounts in thousands, except shares)
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Computer Software, continued
Oracle Corp. (b)............................................. 15,700 $ 1,180
Parametric Technology Corp. (b).............................. 1,400 14
Peoplesoft, Inc. (b)......................................... 1,400 31
--------
3,770
--------
Computers & Peripherals (7.4%)
3Com Corp. (b)............................................... 3,800 52
Adaptec, Inc. (b)............................................ 500 12
Cabletron Systems, Inc. (b).................................. 2,100 55
Cisco Systems, Inc. (b)...................................... 38,100 2,492
Electronic Data Systems Corp. ............................... 4,300 185
EMC Corp. (b)................................................ 13,062 1,111
Hewlett-Packard Co. ......................................... 6,500 710
NCR Corp. (b)................................................ 500 18
Network Appliance Corp. (b).................................. 3,000 259
Seagate Technology, Inc. (b)................................. 2,400 122
Silicon Graphics, Inc. (b)................................... 1,900 9
Unisys Corp. (b)............................................. 2,900 28
--------
5,053
--------
Consumer Goods (0.8%)
American Greetings Corp., Class A............................ 400 7
Brunswick Corp. ............................................. 1,000 19
Procter & Gamble Co. ........................................ 9,600 546
--------
572
--------
Containers & Packaging (0.1%)
Ball Corp. .................................................. 200 7
Crown Cork & Seal, Inc. ..................................... 1,500 21
Sealed Air Corp. (b)......................................... 200 10
--------
38
--------
Cosmetics/Personal Care (0.4%)
Alberto Culver Co., Class B.................................. 200 6
Avon Products, Inc. ......................................... 2,700 107
Kimberly Clark Corp. ........................................ 3,100 178
--------
291
--------
Data Processing & Reproduction (0.6%)
Automatic Data Processing, Inc. ............................. 3,500 173
First Data Corp. ............................................ 4,700 217
--------
390
--------
Diversified Manufacturing (6.4%)
B.F. Goodrich Co. ........................................... 100 4
Cooper Industries ........................................... 1,100 35
Corning, Inc. ............................................... 300 70
Crane Co. ................................................... 400 9
Eaton Corp. ................................................. 800 54
FMC Corp. (b)................................................ 200 12
General Electric Co. ........................................ 57,400 2,954
Honeywell International, Inc. ............................... 4,400 148
ITT Industries, Inc. ........................................ 1,000 33
Leggett & Platt, Inc. ....................................... 1,100 19
Minnesota Mining & Manufacturing Co. ........................ 3,300 297
National Service Industries, Inc. ........................... 200 4
Pactiv Corp. (b)............................................. 1,000 9
PerkinElmer, Inc. ........................................... 500 32
Springs Industries, Inc., Class A............................ 100 3
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Diversified Manufacturing, continued
Textron, Inc. ............................................... 1,600 $ 91
Tyco International Ltd. ..................................... 12,324 659
--------
4,433
--------
Electronic Components (1.9%)
Altera Corp. (b)............................................. 2,100 206
Analog Devices, Inc. (b)..................................... 3,200 214
Broadcom Corp., Class A (b).................................. 1,200 270
Millipore Corp. ............................................. 500 31
Palm, Inc. (b)............................................... 5,636 220
Solectron Corp. (b).......................................... 3,300 133
Tektronix, Inc. (b).......................................... 300 18
Xilinx, Inc. (b)............................................. 3,200 240
--------
1,332
--------
Electronic Components/Instruments (1.1%)
Emerson Electric Co. ........................................ 4,100 250
Johnson Controls, Inc. ...................................... 900 47
MIPS Technologies, Inc., Class B (b)......................... 263 11
Parker-Hannifin Corp. ....................................... 1,300 46
PE Corp. Biosystems.......................................... 2,300 201
Rockwell International Corp. ................................ 2,100 74
Teradyne, Inc. (b)........................................... 1,900 120
Thomas & Betts Corp. ........................................ 300 6
--------
755
--------
Engineering & Construction (0.0%)
Fluor Corp. ................................................. 900 27
--------
Entertainment (0.4%)
Disney (Walt) Co. ........................................... 6,000 232
Harrah's Entertainment, Inc. (b)............................. 1,400 35
--------
267
--------
Financial Services (5.4%)
American Express Co. ........................................ 10,200 578
Associates First Capital Corp., Class A...................... 8,200 215
Capital One Financial Corp. ................................. 1,400 82
Citigroup, Inc. ............................................. 20,400 1,438
Dun & Bradstreet Corp. ...................................... 900 27
Fannie Mae................................................... 7,900 394
Fleet Boston Financial Corp. ................................ 5,100 183
Freddie Mac.................................................. 3,900 154
Golden West Financial Corp. ................................. 400 18
H & R Block, Inc. ........................................... 500 16
Household International, Inc. ............................... 4,700 209
Mellon Financial Corp. ...................................... 5,700 215
Old Kent Financial Corp. .................................... 210 6
Providian Financial.......................................... 1,550 158
Stilwell Financial, Inc. (b)................................. 1,200 53
T. Rowe Price Associates, Inc. .............................. 600 25
--------
3,771
--------
Food Distributors & Wholesalers (0.2%)
Archer-Daniels-Midland Co. .................................. 5,820 55
Great Atlantic & Pacific Tea Co., Inc. ...................... 200 3
Ralston Purina Group......................................... 3,400 68
--------
126
--------
</TABLE>
Continued
108
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Enhanced Market Fund July 31, 2000
(Amounts in thousands, except shares)
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Food Products, Processing & Packaging (1.1%)
Bestfoods.................................................... 3,100 $ 216
H.J. Heinz Co. .............................................. 4,000 160
Nabisco Group................................................ 3,700 98
Quaker Oats Co. ............................................. 1,100 74
Sara Lee Corp. .............................................. 5,100 94
Unilever NV ADR.............................................. 3,150 139
--------
781
--------
Forest & Paper Products (0.4%)
Boise Cascade Corp. ......................................... 600 17
Fort James Corp. ............................................ 2,400 73
Georgia Pacific Corp. ....................................... 1,000 25
International Paper Co. ..................................... 3,078 105
Louisiana Pacific Corp. ..................................... 600 6
Mead Corp. .................................................. 600 15
Potlatch Corp. .............................................. 100 3
Temple-Inland, Inc. ......................................... 600 26
Willamette Industries, Inc. ................................. 600 18
--------
288
--------
Gas Distribution (0.4%)
Coastal Corp. ............................................... 1,200 69
El Paso Energy Corp. ........................................ 1,300 63
Nicor, Inc. ................................................. 200 7
Oneok, Inc. ................................................. 100 3
Sempra Energy................................................ 1,100 21
Williams Cos., Inc. ......................................... 2,400 100
--------
263
--------
Health Care (0.1%)
Aetna, Inc. ................................................. 1,000 55
HEALTHSOUTH Corp. (b)........................................ 4,100 24
Humana, Inc. (b)............................................. 900 7
--------
86
--------
Health Care Services (0.3%)
IMS Health, Inc. ............................................ 3,400 61
Manor Care, Inc. (b)......................................... 1,200 12
McKesson HBOC, Inc. ......................................... 570 14
UnitedHealth Group, Inc. .................................... 900 74
Wellpoint Health Networks, Inc. (b).......................... 700 61
--------
222
--------
Home Builders (0.0%)
Centex Corp. ................................................ 300 7
Kaufman & Broad Home Corp. .................................. 200 4
Pulte Corp. ................................................. 200 5
--------
16
--------
Hotels & Lodging (0.2%)
Carnival Corp. .............................................. 6,900 128
Hilton Hotels Corp. ......................................... 2,100 22
--------
150
--------
Household Products/Wares (0.1%)
Fortune Brands, Inc. ........................................ 1,900 43
Tupperware Corp. ............................................ 300 6
--------
49
--------
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Insurance (3.2%)
AFLAC, Inc. ................................................. 1,500 $ 78
American International Group, Inc. .......................... 11,138 976
AON Corp. ................................................... 800 29
Cigna Corp. ................................................. 1,900 190
Cincinnati Financial Corp. .................................. 900 34
Hartford Financial Services Group............................ 2,500 161
Jefferson Pilot Corp. ....................................... 300 18
Lincoln National Corp. ...................................... 2,200 96
Loews Corp. ................................................. 1,200 75
Marsh & McLennan Cos., Inc. ................................. 2,800 342
MGIC Investment Corp. ....................................... 1,200 68
Progressive Corp. ........................................... 200 13
Safeco Corp. ................................................ 600 14
St. Paul Cos., Inc. ......................................... 800 36
Torchmark Corp. ............................................. 700 17
UnumProvident Corp. ......................................... 2,565 59
--------
2,206
--------
Internet Software (1.3%)
America Online, Inc. (b)..................................... 14,700 783
Yahoo!, Inc. (b)............................................. 1,100 142
--------
925
--------
Machinery & Equipment (0.4%)
Black & Decker Corp. ........................................ 1,000 37
Briggs & Stratton Corp. ..................................... 100 4
Caterpillar, Inc. ........................................... 4,000 136
Ingersoll Rand Co. .......................................... 1,700 67
Milacron, Inc. .............................................. 200 3
W W Grainger, Inc. .......................................... 100 3
--------
250
--------
Media (1.2%)
Harcourt General, Inc. ...................................... 400 22
McGraw Hill Cos., Inc. ...................................... 2,200 131
Meredith Corp. .............................................. 600 19
Time Warner, Inc. ........................................... 4,500 345
Viacom, Inc., Class B (b).................................... 4,324 287
--------
804
--------
Medical Supplies (0.6%)
Allergan, Inc. .............................................. 1,100 74
Bausch & Lomb, Inc. ......................................... 600 37
Biomet, Inc. (b)............................................. 600 27
C.R. Bard, Inc. ............................................. 500 25
Edwards Lifesciences Corp. (b)............................... 620 14
Guidant Corp. (b)............................................ 1,700 96
Mallinckrodt, Inc. .......................................... 800 37
Medtronic, Inc. ............................................. 2,000 101
St. Jude Medical, Inc. (b)................................... 500 21
--------
432
--------
Metals & Mining (0.3%)
Alcan Aluminum Ltd. ......................................... 1,200 39
Alcoa, Inc. ................................................. 1,484 46
Barrick Gold Corp. .......................................... 2,100 33
Freeport-McMoran Copper & Gold, Inc. ........................ 1,800 16
Homestake Mining............................................. 2,900 16
</TABLE>
Continued
109
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Enhanced Market Fund July 31, 2000
(Amounts in thousands, except shares)
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Metals & Mining, continued
Inco Ltd. (b)................................................ 900 $ 13
Newmont Mining Corp. ........................................ 1,600 28
Phelps Dodge Corp. .......................................... 505 21
Placer Dome, Inc. ........................................... 1,800 15
--------
227
--------
Newspapers (0.4%)
Gannett Co., Inc. ........................................... 3,000 161
Tribune Co. ................................................. 3,250 106
--------
267
--------
Office Equipment & Services (0.4%)
Avery Dennison Corp. ........................................ 600 33
Lexmark International Group, Inc., Class A (b)............... 1,400 63
Pitney Bowes, Inc. .......................................... 3,000 104
Xerox Corp. ................................................. 7,500 111
--------
311
--------
Oil & Gas Exploration, Production & Services (6.0%)
Amerada Hess Corp. .......................................... 500 30
Anadarko Petroleum Corp. .................................... 1,320 63
Apache Corp. ................................................ 1,300 65
Baker Hughes, Inc. .......................................... 3,752 130
Burlington Resources, Inc. .................................. 2,400 78
Chevron Corp. ............................................... 3,700 292
Columbia Energy Group........................................ 500 34
Conoco, Inc., Class B........................................ 3,590 83
Eastern Enterprises.......................................... 200 13
Enron Corp. ................................................. 4,000 295
Exxon Mobil Corp. ........................................... 20,932 1,675
Halliburton Co. ............................................. 2,500 115
Kerr-McGee Corp. ............................................ 200 11
McDermott International, Inc. ............................... 400 3
Occidental Petroleum Corp. .................................. 2,100 43
Phillips Petroleum Co. ...................................... 2,800 142
Rowan Companies, Inc. (b).................................... 1,000 25
Royal Dutch Petroleum Co. ................................... 11,900 693
Texaco, Inc. ................................................ 3,100 153
Transocean Sedco Forex, Inc. ................................ 1,174 58
Unocal Corp. ................................................ 1,400 42
USX-Marathon Group........................................... 3,300 80
--------
4,123
--------
Pharmaceuticals (9.5%)
Abbott Laboratories.......................................... 10,900 454
ALZA Corp., Class A (b)...................................... 600 39
American Home Products Corp. ................................ 9,700 515
Baxter International, Inc. .................................. 3,200 249
Biogen, Inc. (b)............................................. 800 42
Bristol-Myers Squibb Co. .................................... 13,300 660
Eli Lilly & Co. ............................................. 7,600 789
Johnson & Johnson............................................ 4,800 447
Merck & Co., Inc. ........................................... 13,000 932
Pfizer, Inc. ................................................ 31,850 1,374
Pharmacia Corp. ............................................. 9,374 513
Schering-Plough Corp. ....................................... 11,100 479
--------
6,493
--------
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Photography & Imaging (0.0%)
Polaroid Corp. .............................................. 200 $ 4
--------
Pollution Control Services & Equipment (0.1%)
Waste Management, Inc. ...................................... 3,500 65
--------
Printing (0.0%)
R.R. Donnelley & Sons Co. ................................... 700 16
--------
Railroads (0.2%)
Burlington Northern Santa Fe................................. 5,200 127
Norfolk Southern Corp........................................ 2,200 41
--------
168
--------
Restaurants (0.5%)
Darden Restaurants, Inc. .................................... 700 11
McDonald's Corp. ............................................ 9,900 312
Tricon Global Restaurants (b)................................ 900 22
Wendy's International, Inc. ................................. 700 12
--------
357
--------
Retail (4.8%)
Bed Bath & Beyond, Inc. (b).................................. 800 29
Best Buy Co., Inc. (b)....................................... 2,300 167
Circuit City Stores, Inc. ................................... 2,300 53
Gap, Inc. ................................................... 4,800 172
Home Depot, Inc. ............................................ 14,400 745
IKON Office Solutions........................................ 600 2
J.C. Penney Co., Inc. ....................................... 300 5
Longs Drug Stores Corp. ..................................... 200 4
Lowes Companies, Inc. ....................................... 3,900 165
May Department Stores Co. ................................... 3,700 88
Office Depot, Inc. (b)....................................... 1,800 11
RadioShack Corp. ............................................ 2,200 124
Rite Aid..................................................... 1,000 4
Safeway, Inc. (b)............................................ 4,800 216
Staples, Inc. (b)............................................ 2,700 37
SUPERVALU, Inc. ............................................. 1,500 27
Target Corp. ................................................ 8,800 255
TJX Co., Inc. (b)............................................ 2,500 42
Toys R US, Inc. (b).......................................... 2,600 43
Wal-Mart Stores, Inc. ....................................... 20,500 1,127
--------
3,316
--------
Semiconductors (5.8%)
Advanced Micro Devices, Inc. (b)............................. 1,600 115
Applied Materials, Inc. (b).................................. 4,300 326
Conexant Systems, Inc. (b)................................... 1,200 38
Intel Corp. ................................................. 37,200 2,483
KLA-Tencor Corp. (b)......................................... 2,100 112
Micron Technology, Inc. (b).................................. 3,000 245
National Semiconductor Corp. (b)............................. 1,900 69
Texas Instruments, Inc. ..................................... 10,200 599
--------
3,987
--------
Steel (0.1%)
Bethlehem Steel Corp. (b).................................... 500 2
Nucor Corp. ................................................. 1,000 39
Timken Co. .................................................. 300 5
</TABLE>
Continued
110
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Enhanced Market Fund July 31, 2000
(Amounts in thousands, except shares)
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- -------
<S> <C> <C>
Steel, continued
USX-U.S. Steel Group, Inc. ................................... 1,000 $ 18
Worthington Industries, Inc. ................................. 400 4
-------
68
-------
Technology (0.1%)
Agilent Technologies, Inc. (b)................................ 2,479 101
-------
Telecommunications -- Equipment (2.8%)
JDS Uniphase Corp. (b)........................................ 3,200 378
Lucent Technologies, Inc. .................................... 17,750 776
Motorola, Inc. ............................................... 14,931 494
Scientific-Atlanta, Inc. ..................................... 1,800 139
Tellabs, Inc. (b)............................................. 2,200 143
-------
1,930
-------
Telecommunications -- Wireless (2.2%)
Andrew Corp. (b).............................................. 400 11
Nortel Networks Corp., ADR.................................... 16,200 1,205
Qualcomm, Inc. (b)............................................ 5,200 338
-------
1,554
-------
Tobacco (0.7%)
Philip Morris Companies, Inc. ................................ 18,600 469
UST, Inc. .................................................... 1,000 15
-------
484
-------
Toys/Games/Hobbies (0.1%)
Hasbro, Inc. ................................................. 1,950 22
Mattel, Inc. ................................................. 4,300 48
-------
70
-------
Transportation & Shipping (0.1%)
FedEx Corp. (b)............................................... 1,600 63
Kansas City Southern Industries, Inc. ........................ 300 2
-------
65
-------
Transportation Leasing & Trucking (0.0%)
Ryder System, Inc. ........................................... 600 13
-------
Utilities -- Electric & Gas (1.6%)
Ameren Corp. ................................................. 800 29
American Electric Power Co. .................................. 1,820 60
Cinergy Corp. ................................................ 900 23
CMS Energy Corp. ............................................. 700 18
Consolidated Edison, Inc. .................................... 1,200 36
Constellation Energy Group.................................... 900 30
CP&L Energy, Inc. ............................................ 900 30
Dominion Resources, Inc. ..................................... 1,304 59
DTE Energy Co. ............................................... 800 25
Duke Energy Corp. ............................................ 2,000 123
Edison International.......................................... 2,000 39
Entergy Corp. ................................................ 1,400 38
Firstenergy Corp. ............................................ 1,200 31
Florida Progress Corp. ....................................... 500 25
FPL Group, Inc. .............................................. 1,000 48
GPU, Inc. .................................................... 600 16
New Century Energies, Inc. ................................... 700 24
Niagara Mohawk Holdings, Inc. (b)............................. 800 11
Northern States Power Co. .................................... 900 20
PECO Energy Co. .............................................. 1,000 43
Peoples Energy Corp. ......................................... 200 6
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- -------
<S> <C> <C>
Utilities -- Electric & Gas, continued
PG&E Corp. .................................................. 2,200 $ 57
Pinnacle West Capital Corp. ................................. 400 16
PPL Corp. ................................................... 750 20
Public Service Enterprise Group, Inc. ....................... 1,200 40
Reliant Energy, Inc. ........................................ 1,600 54
Southern Co. ................................................ 3,800 93
TXU Corp. ................................................... 1,500 47
Unicom Corp. ................................................ 1,200 49
-------
1,110
-------
Utilities -- Telecommunications (6.1%)
Alltel Corp. ................................................ 3,100 191
AT&T Corp. .................................................. 12,811 396
BellSouth Corp. ............................................. 10,500 418
Centurytel, Inc. ............................................ 1,600 47
Global Crossing Ltd. (b)..................................... 4,230 103
Qwest Communications International, Inc. (b)................. 8,128 381
SBC Communications, Inc. .................................... 21,080 898
Sprint Corp. ................................................ 7,000 249
Sprint Corp. (PCS Group) (b)................................. 4,800 265
Verizon Communications....................................... 13,506 635
WorldCom, Inc. (b)........................................... 15,800 617
-------
4,200
-------
TOTAL COMMON STOCKS.......................................... 68,011
-------
U.S. Treasury Notes (0.7%)
5.12%, 8/31/00 (c)........................................... $ 500 499
-------
TOTAL U.S. TREASURY NOTES.................................... 499
-------
Investment Companies (1.3%)
AmSouth Prime Money Market Fund.............................. 878,069 878
AmSouth U.S. Treasury Money Market Fund...................... 1,921 2
-------
TOTAL INVESTMENT COMPANIES................................... 880
-------
Short-Term Securities+ (7.3%)
Commercial Paper (4.6%)
Asset Backed -- Miscellaneous (0.9%)
Asset Securitization Corp., 6.60%, 9/6/00.................... $ 211 207
Corporate Receivables, 6.62%, 8/1/00......................... 263 263
Falcon Asset Securitization Corp., 6.62%, 8/14/00............ 211 207
-------
677
-------
Financial Services (2.6%)
Golden Funding Corp., 6.55%-6.62%, 9/8/00-9/18/00............ 268 265
Liberty Street Funding Corp., 6.56%, 10/11/00................ 188 184
Moat Funding Corp., 6.54%-6.67%, 8/11/00-10/6/00............. 268 264
Orix Corp., 6.85%, 8/10/00................................... 132 130
Superior Funding Corp., 6.51%-6.53%, 8/21/00-8/29/00......... 289 288
</TABLE>
Continued
111
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Enhanced Market Fund July 31, 2000
(Amounts in thousands, except shares)
Short-Term Securities+, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- -------
<S> <C> <C>
Financial Services, continued
TransAmerica, 6.65%, 9/5/00................................. $ 211 $ 208
Trident, 6.70%, 8/4/00...................................... 263 261
UBS Finance, 6.57%-6.64%, 8/1/00-8/7/00..................... 281 280
-------
1,880
-------
Food -- Retail (0.2%)
Safeway, Inc., 6.70%, 8/15/00............................... 132 131
-------
Miscellaneous (0.2%)
Tyco International, Ltd., 6.91%, 8/7/00..................... 109 108
-------
Utilities -- Electrical & Gas (0.3%)
Dominion Resources, Inc., 6.88%, 8/7/00..................... 184 182
-------
Utilities -- Telecommunications (0.4%)
Qwest Communications International, Inc., 6.80%, 9/5/00..... 263 260
-------
Total Commercial Paper...................................... 3,238
-------
Floating Rate Notes (0.5%)
Financial Services (0.4%)
Ford Motor Credit Co., 6.71%*, 4/11/02, MTN................. 105 105
General Motors Acceptance Corp., 6.72%*, 4/5/02, MTN........ 53 53
General Motors Acceptance Corp., 6.94%*, 11/13/00, MTN...... 63 63
KeyCorp, 6.94%*, 10/23/00, MTN.............................. 53 53
-------
274
-------
Miscellaneous (0.1%)
Tyco International, Ltd., 7.47%*, 9/5/00.................... 79 79
-------
Total Floating Rate Notes................................... 353
-------
Time Deposits (0.6%)
Amex Centurion, 6.56%-6.58%, 8/8/00-8/30/00................. 395 395
-------
Investment Companies (1.2%)
AIM Liquid Asset Money Market Fund.......................... 814,045 814
-------
Repurchase Agreements (0.4%)
Lehman Brothers, 6.74%, 8/1/00, dated 7/31/00, with a
maturity value of $263 (See Significant Accounting
Policies, Securities Lending in the Notes to Financial
Statements for collateral description)..................... $ 263 263
-------
TOTAL SHORT-TERM SECURITIES................................. 5,063
-------
TOTAL INVESTMENTS
(Cost $68,239) (a) -- (107.5%)............................. 74,453
Liabilities in excess of
other assets -- (-7.5%).................................... (5,181)
-------
TOTAL NET ASSETS -- (100.0%)................................ $69,272
=======
</TABLE>
---------
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of $47.
Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................ $12,598
Unrealized depreciation............................................ (6,431)
-------
Net unrealized appreciation........................................ $ 6,167
=======
</TABLE>
(b) Represents non-income producing securities.
(c) All or part of this security has been pledged as collateral as of July 31,
2000.
(d) Represents a restricted security purchased under Rule 144A which is exempt
from registration under the Security Act of 1933, as amended.
* Variable rate security. Rate represents rate in effect at July 31, 2000.
+ Represents securities purchased with cash collateral received on loaned
securities.
ADR -- American Depository Receipt
MTN -- Medium Term Note
<TABLE>
<CAPTION>
Open Futures Contracts
----------------------
# of Contract Expiration Unrealized
Contracts Value Date Gain/(Loss)
--------- -------- ---------- -----------
<S> <C> <C> <C> <C>
S&P 500 Stock Index................... 3 $1,079 9/15/00 (27)
</TABLE>
The aggregate market value of securities pledged to cover margin requirements
for open futures positions at July 31, 2000 was $56.
See notes to financial statements
112
<PAGE>
AMSOUTH FUNDS
Enhanced Market Fund
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $67,976)........................... $74,190
Repurchase agreements, at cost................................. 263
-------
Total Investments............................................. 74,453
Cash........................................................... 1
Interest and dividends receivable.............................. 56
Receivable for capital shares issued........................... 37
Net receivable for variation margin on futures contracts....... 5
Prepaid expenses and other assets.............................. 3
-------
Total Assets................................................. 74,555
Liabilities:
Payable for return of collateral held for securities on loan... $5,063
Payable for capital shares redeemed............................ 169
Accrued expenses and other payables:
Investment advisory fees...................................... 10
Administration fees........................................... 2
Distribution fees............................................. 22
Custodian fees................................................ 2
Other......................................................... 15
------
Total Liabilities............................................ 5,283
-------
Net Assets:
Capital........................................................ 62,478
Undistributed (distributions in excess of) net investment
income........................................................ (2)
Undistributed (distributions in excess of) net realized gains.. 609
Net unrealized appreciation (depreciation) from investments and
futures....................................................... 6,187
-------
Net Assets..................................................... $69,272
=======
Class A Shares (a)
Net Assets.................................................... $20,555
Shares outstanding............................................ 1,404
Redemption price per share.................................... $ 14.64
=======
Class A Shares -- Maximum Sales Charge......................... 4.50%
-------
Maximum Offering Price Per Share (100%/(100% -- Maximum Sales
Charge) of net asset value adjusted to the nearest cent)..... $ 15.33
=======
Class B Shares
Net Assets.................................................... $17,095
Shares outstanding............................................ 1,175
Offering price per share*..................................... $ 14.55
=======
Trust Shares (b)
Net Assets.................................................... $31,622
Shares outstanding............................................ 2,159
Offering and redemption price per share....................... $ 14.65
=======
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2000
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income.................................................. $ 55
Dividend income.................................................. 807
Income from securities lending................................... 1
------
Total Investment Income......................................... 863
Expenses:
Investment advisory fees......................................... $264
Administration fees.............................................. 120
Distribution fees -- Class B Shares.............................. 126
Shareholder servicing fees -- Class A Shares (a)................. 49
Shareholder servicing fees -- Trust Shares (b)................... 19
Custodian fees................................................... 13
Accounting fees.................................................. 52
Transfer agent fees.............................................. 62
Trustee fees and expenses........................................ 2
Other fees....................................................... 35
----
Total expenses before voluntary fee reductions.................. 742
Expenses voluntarily reduced.................................... (106)
------
Net expenses.................................................... 636
------
Net Investment Income............................................ 227
------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment transactions and
futures......................................................... 769
Net change in unrealized appreciation (depreciation) from
investments and futures......................................... 3,755
------
Net realized/unrealized gains (losses) from investments.......... 4,524
------
Change in net assets resulting from operations................... $4,751
======
</TABLE>
See notes to financial statements
113
<PAGE>
AMSOUTH FUNDS
Enhanced Market Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Period Ended
July 31, July 31,
2000 1999 (a)
---------- ------------
(Amounts in thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................ $ 227 $ 126
Net realized gains (losses) from investment
transactions and futures............................ 769 1,583
Net change in unrealized appreciation (depreciation)
from investments and futures........................ 3,755 2,432
------- -------
Change in net assets resulting from operations........ 4,751 4,141
------- -------
Distributions to Class A Shareholders (b):
From net investment income........................... (81) (79)
In excess of net investment income................... (7) --
From net realized gains on investment transactions... (614) (30)
Distributions to Class B Shareholders:
From net investment income........................... (4) (4)(d)
From net realized gains on investment transactions... (326) (2)(d)
Distributions to Trust Shareholders (c):
From net investment income........................... (144) (41)(e)
In excess of net investment income................... (12) --
From net realized gains on investment transactions... (754) --
------- -------
Change in net assets from shareholder distributions... (1,942) (156)
------- -------
Change in net assets from capital transactions........ 31,693 30,785
------- -------
Change in net assets.................................. 34,502 34,770
Net Assets:
Beginning of period.................................. 34,770 --
------- -------
End of period........................................ $69,272 $34,770
======= =======
</TABLE>
---------
(a) For the period from September 1, 1998 (commencement of operations) through
July 31, 1999.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
(d) For the period from September 2, 1998 (commencement of operations) through
July 31, 1999.
(e) For the period from December 11, 1998 (commencement of operations) through
July 31, 1999.
See notes to financial statements
114
<PAGE>
AMSOUTH FUNDS
Enhanced Market Fund
Financial Highlights, Class A Shares/\
<TABLE>
<CAPTION>
Year Ended Period Ended
July 31, July 31,
2000 1999 (a)
---------- ------------
<S> <C> <C>
Net Asset Value, Beginning of Period.................. $ 13.86 $ 10.00
------- -------
Investment Activities
Net investment income (loss)......................... 0.07 0.09
Net realized and unrealized gains (losses) from
investments and futures............................. 1.23 3.89
------- -------
Total from Investment Activities..................... 1.30 3.98
------- -------
Distributions
Net investment income................................ (0.06) (0.09)
In excess of net investment income................... (0.01) --
Net realized gains from investment transactions...... (0.45) (0.03)
------- -------
Total Distributions.................................. (0.52) (0.12)
------- -------
Net change in asset value............................. 0.78 3.86
------- -------
Net Asset Value, End of Period........................ $ 14.64 $ 13.86
======= =======
Total Return (excludes sales charge).................. 9.46% 39.93%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000)..................... $20,555 $14,365
Ratio of expenses to average net assets............... 1.01% 0.88%(c)
Ratio of net investment income to average net assets.. 0.48% 0.79%(c)
Ratio of expenses to average net assets*.............. 1.22% 1.52%(c)
Portfolio turnover**.................................. 30% 36%
</TABLE>
/\ Formerly Classic Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) For the period from September 1, 1998 (commencement of operations) through
July 31, 1999.
(b) Not annualized.
(c) Annualized.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Year Ended Period Ended
July 31, July 31,
2000 1999 (a)
---------- ------------
<S> <C> <C>
Net Asset Value, Beginning of Period................. $ 13.82 $10.30
------- ------
Investment Activities
Net investment income (loss)........................ (0.04) 0.03
Net realized and unrealized gains (losses) from
investments and futures............................ 1.22 3.55
------- ------
Total from Investment Activities.................... 1.18 3.58
------- ------
Distributions
Net investment income............................... -- (0.03)
Net realized gains from investment transactions..... (0.45) (0.03)
------- ------
Total Distributions................................. (0.45) (0.06)
------- ------
Net change in asset value............................ 0.73 3.52
------- ------
Net Asset Value, End of Period....................... $ 14.55 $13.82
======= ======
Total Return (excludes redemption charge)............ 8.65% 34.85%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000).................... $17,095 $6,132
Ratio of expenses to average net assets.............. 1.77% 1.73%(c)
Ratio of net investment income to average net
assets.............................................. (0.31)% (0.12)%(c)
Ratio of expenses to average net assets*............. 1.93% 2.28%(c)
Portfolio turnover**................................. 30% 36%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) For the period from September 2, 1998 (commencement of operations) through
July 31, 1999.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
115
<PAGE>
AMSOUTH FUNDS
Enhanced Market Fund
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Year Ended Period Ended
July 31, July 31,
2000 1999 (a)
---------- ------------
<S> <C> <C>
Net Asset Value, Beginning of Period.................. $ 13.86 $ 12.18
------- -------
Investment Activities
Net investment income (loss)......................... 0.10 0.07
Net realized and unrealized gains (losses) from
investments and futures............................. 1.23 1.71
------- -------
Total from Investment Activities..................... 1.33 1.78
------- -------
Distributions
Net investment income................................ (0.08) (0.07)
In excess of net investment income................... (0.01) --
Net realized gains from investment transactions...... (0.45) (0.03)
------- -------
Total Distributions.................................. (0.54) (0.10)
------- -------
Net change in asset value............................. 0.79 1.68
------- -------
Net Asset Value, End of Period........................ $ 14.65 $ 13.86
======= =======
Total Return.......................................... 9.73% 14.71%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000)..................... $31,622 $14,273
Ratio of expenses to average net assets............... 0.81% 0.74%(c)
Ratio of net investment income to average net assets.. 0.65% 0.90%(c)
Ratio of expenses to average net assets*.............. 0.98% 1.29%(c)
Portfolio turnover**.................................. 30% 36%
</TABLE>
/\ Formerly Premier Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) For the period from December 11, 1998 (commencement of operations) through
July 31, 1999.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
116
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
International Equity Fund July 31, 2000
(Amounts in thousands, except shares)
Common Stocks (96.2%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Australia (1.2%)
Materials & Commodities (1.2%)
Broken Hill Proprietary Co., Ltd. .......................... 119,117 $ 1,259
--------
Brazil (0.9%)
Telecommunications (0.9%)
Embratel Participacoes SA -- ADR............................ 23,500 505
Tele Norte Leste Participacoes SA -- ADR.................... 20,310 486
--------
991
--------
Denmark (1.2%)
Telecommunications (1.2%)
Tele Danmark A/S............................................ 21,800 1,341
--------
Finland (0.9%)
Forest Products & Paper (0.9%)
UPM-Kymmene OYJ............................................. 38,000 937
--------
France (12.6%)
Banking (1.1%)
BNP Paribas................................................. 12,020 1,186
--------
Chemicals (2.2%)
Aventis S.A. ............................................... 30,951 2,384
--------
Diversified (0.7%)
Lagardere S.C.A. ........................................... 11,900 770
--------
Electrical & Electronics (1.8%)
Alcatel Alsthom............................................. 26,400 1,947
--------
Insurance (1.3%)
AXA......................................................... 8,990 1,366
--------
Materials & Commodities (0.9%)
Compagnie de St. Gobain..................................... 6,240 916
--------
Multi-Industry (2.4%)
Suez Lyonnaise des Eaux..................................... 7,950 1,301
Vivendi..................................................... 16,238 1,297
--------
2,598
--------
Oil & Gas Production & Services (2.2%)
Total Fina SA-B............................................. 15,701 2,326
--------
13,493
--------
Germany (8.6%)
Airline Services (1.2%)
Deutsche Lufthansa AG....................................... 52,900 1,314
--------
Banking (1.9%)
Bayerische Hypo-und Vereinsbank............................. 34,460 2,034
--------
Insurance (2.1%)
Allianz AG.................................................. 6,022 2,260
--------
Multi-Industry (3.0%)
E.On AG..................................................... 29,000 1,633
Siemens AG.................................................. 7,050 1,097
Thyssen Krupp AG............................................ 30,600 527
--------
3,257
--------
Telecommunications (0.4%)
Deutsche Telekom AG......................................... 9,236 406
--------
9,271
--------
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
India (0.2%)
Telecommunications (0.2%)
Mahanager Telephone Nigam, Ltd. --
GDR (c).................................................... 25,900 $ 227
--------
Italy (2.6%)
Banking (1.1%)
San Paolo -- IMI SpA........................................ 71,100 1,205
--------
Energy Sources (1.0%)
ENI SpA..................................................... 185,400 1,038
--------
Insurance (0.5%)
Alleanza Assicurazioni SpA.................................. 40,500 505
--------
2,748
--------
Japan (21.8%)
Automobile (2.5%)
Nissan Motor Co., Ltd. (b).................................. 533,000 2,661
--------
Banking (3.8%)
Fuji Bank, Ltd. ............................................ 103,000 666
Industrial Bank of Japan, Ltd. ............................. 131,000 840
Sumitomo Trust & Banking, Ltd. ............................. 212,000 1,365
The Sakura Bank, Ltd. ...................................... 228,000 1,321
--------
4,192
--------
Computer Systems (1.4%)
Fujitsu Ltd. ............................................... 53,000 1,490
--------
Electrical & Electronics (4.3%)
Hitachi Ltd. ............................................... 41,000 490
Sony Corp. ................................................. 22,500 2,068
TDK Corp. .................................................. 17,000 2,124
--------
4,682
--------
Financial Services (1.8%)
Acom Co., Ltd. ............................................. 5,200 394
Orix Corp. ................................................. 11,700 1,511
--------
1,905
--------
Food & Household Products (1.4%)
Kao Corp. .................................................. 52,000 1,538
--------
Office Equipment (1.7%)
Canon, Inc. ................................................ 41,000 1,826
--------
Paper & Pulp (0.6%)
Nippon Paper Industries Co., Ltd. .......................... 86,000 628
--------
Pharmaceutical (0.9%)
Sankyo Co., Ltd. ........................................... 41,000 962
--------
Telecommunications (2.7%)
Nippon Telegraph & Telephone Corp. ......................... 146 1,746
NTT DoCoMo.................................................. 44 1,104
--------
2,850
--------
Wire & Cable Products (0.7%)
Sumitomo Electric Industries, Ltd. ......................... 49,000 793
--------
23,527
--------
</TABLE>
Continued
117
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
International Equity Fund July 31, 2000
(Amounts in thousands, except shares)
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Mexico (1.9%)
Financial Services (1.1%)
Grupo Financiero Banamex Accival, SA de CV, Class O (b)..... 249,100 $ 1,186
--------
Telecommunications (0.8%)
Telefonos de Mexico SA de CV -- Class L, ADR................ 16,500 868
--------
2,054
--------
Netherlands (6.3%)
Beverages (1.3%)
Heineken NV................................................. 24,525 1,402
--------
Chemicals (1.2%)
Akzo Nobel NV............................................... 30,050 1,336
--------
Computer Services (1.0%)
Getronics NV................................................ 61,800 1,042
--------
Electrical & Electronics (1.1%)
Philips Electronics NV...................................... 25,496 1,155
--------
Financial Services (1.7%)
ING Groep NV................................................ 28,200 1,886
--------
6,821
--------
Portugal (1.6%)
Telecommunications (1.6%)
Portugal Telecom SA......................................... 153,400 1,670
--------
Singapore (3.1%)
Banking (3.1%)
Oversea-Chinese Banking Corp., Ltd. ........................ 203,050 1,476
United Overseas Bank, Ltd. ................................. 254,632 1,820
--------
3,296
--------
South Korea (1.3%)
Electrical & Electronics (1.0%)
Samsung Electronics Co. -- GDR (c).......................... 7,130 1,025
--------
Telecommunications (0.3%)
SK Telecom Co., Ltd. -- ADR................................. 12,000 366
--------
1,391
--------
Spain (2.9%)
Energy Sources (1.9%)
Endesa SA................................................... 94,900 1,969
--------
Telecommunications (1.0%)
Telefonica de Espana (b).................................... 52,234 1,099
--------
3,068
--------
Sweden (3.4%)
Appliances & Household Durables (0.8%)
Electrolux AB, Class B...................................... 60,100 895
--------
Banking (1.1%)
Svenska Handelsbanken AB, Class A........................... 76,000 1,144
--------
Investment Company (1.5%)
Investor AB, B Shares....................................... 111,700 1,619
--------
3,658
--------
Switzerland (4.2%)
Insurance (1.5%)
Zurich Allied AG............................................ 2,950 1,591
--------
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Switzerland, continued
Machinery & Engineering (1.5%)
ABB Ltd. (b).............................................. 13,784 $ 1,643
--------
Pharmaceutical (1.2%)
Roche Holding AG.......................................... 136 1,278
--------
4,512
--------
United Kingdom (21.5%)
Aerospace & Military Technology (1.3%)
British Aerospace PLC..................................... 209,000 1,409
--------
Banking (2.3%)
Halifax Group PLC......................................... 109,300 856
HSBC Holdings PLC......................................... 115,100 1,558
--------
2,414
--------
Beverages (1.3%)
Diageo PLC................................................ 156,168 1,371
--------
Chemicals (0.4%)
Imperial Chemical Industries PLC.......................... 63,100 453
--------
Electrical & Electronics (1.3%)
Invensys PLC.............................................. 382,400 1,370
--------
Energy Sources (1.6%)
BP Amoco PLC.............................................. 196,600 1,720
--------
Food & Household Products (1.1%)
Cadbury Schweppes PLC..................................... 185,000 1,196
--------
Food Retailer (1.4%)
Tesco PLC................................................. 465,000 1,532
--------
Industrial Services (0.7%)
GKN PLC................................................... 61,500 787
--------
Insurance (0.9%)
Prudential Corp. PLC...................................... 69,500 948
--------
Pharmaceutical (3.0%)
AstraZeneca Group PLC..................................... 31,760 1,368
SmithKline Beecham PLC.................................... 142,800 1,838
--------
3,206
--------
Publishing (1.2%)
Reed International PLC.................................... 158,200 1,264
--------
Retail (1.1%)
Great Universal Stores PLC................................ 176,900 1,170
--------
Telecommunications (2.5%)
British Telecommunications PLC............................ 93,600 1,236
Vodafone Airtouch PLC..................................... 330,800 1,462
--------
2,698
--------
Utilities -- Electrical & Gas (1.4%)
British Energy PLC........................................ 113,997 410
National Grid Group PLC................................... 129,200 1,060
--------
1,470
--------
23,008
--------
TOTAL COMMON STOCKS....................................... 103,272
--------
Cash Equivalents (5.1%)
BT Institutional Liquid Assets Fund....................... $ 5,519 5,519
--------
TOTAL CASH EQUIVALENTS.................................... 5,519
--------
</TABLE>
Continued
118
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
International Equity Fund July 31, 2000
(Amounts in thousands, except shares)
<TABLE>
<CAPTION>
Market
Value
--------
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $107,761) (a) -- (101.3%).................................. $108,791
Liabilities in excess of
other assets -- (-1.3%).......................................... (1,363)
--------
TOTAL NET ASSETS -- (100.0%)...................................... $107,428
========
</TABLE>
---------
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of $212
and by the amount of mark to market adjustment for passive foreign
investment companies of $157. Cost for federal income tax purposes differs
from value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................ $ 6,750
Unrealized depreciation............................................ (6,089)
-------
Net unrealized appreciation........................................ $ 661
=======
</TABLE>
(b) Represents non-income producing securities.
(c) Represents a restricted security purchased under Rule 144A which is exempt
from registration under the Security Act of 1933, as amended. These
securities have been deemed liquid under guidelines established by the
Board of Directors.
ADR -- American Depository Receipt
GDR -- Global Depository Receipt
PLC -- Public Limited Company
See notes to financial statements
119
<PAGE>
AMSOUTH FUNDS
International Equity Fund (a)
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $107,761)......................... $108,791
Foreign currency (cost $15)................................... 15
Interest and dividends receivable............................. 118
Receivable for capital shares issued.......................... 1
Receivable for investments sold............................... 1,410
Reclaim receivable............................................ 108
Prepaid expenses and other assets............................. 14
--------
Total Assets................................................. 110,457
Liabilities:
Custody payable............................................... $ 2
Payable for investments purchased............................. 2,914
Accrued expenses and other payables:
Investment advisory fees..................................... 37
Administration fees.......................................... 3
Distribution fees............................................ 9
Custodian fees............................................... 45
Other........................................................ 19
------
Total Liabilities............................................ 3,029
--------
Net Assets:
Capital....................................................... 102,359
Undistributed (distributions in excess of) net investment
income....................................................... 295
Undistributed (distributions in excess of) net realized gains
from investments and foreign currency transactions........... 3,754
Net unrealized appreciation (depreciation) from investments
and translation of assets and liabilities denominated in
foreign currencies........................................... 1,020
--------
Net Assets.................................................... $107,428
========
Class A Shares
Net Assets................................................... $ 1,799
Shares outstanding........................................... 145
Redemption price per share................................... $ 12.36
========
Class A Shares -- Maximum Sales Charge........................ 4.50%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum Sales
Charge) of net asset value adjusted to the nearest cent).... $ 12.94
========
Class B Shares
Net Assets................................................... $ 595
Shares outstanding........................................... 48
Offering price per share*.................................... $ 12.25
========
Trust Shares (b)
Net Assets................................................... $105,034
Shares outstanding........................................... 8,491
Offering and redemption price per share...................... $ 12.37
========
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG International Equity Fund.
(b) Formerly Institutional Shares.
(c) For the period from January 1, 2000 through July 31, 2000.
Statements of Operations
<TABLE>
<CAPTION>
Period Ended Year Ended
July 31, December 31,
2000 (c) 1999
------------ ------------
(Amounts in thousands)
<S> <C> <C>
Investment Income:
Interest income...................................... $ 170 $ 38
Dividend income...................................... 1,058 786
Foreign withholding tax expense...................... (120) (54)
------- ------
Total Investment Income............................. 1,108 770
Expenses:
Investment advisory fees............................. 542 327
Administration fees.................................. 86 49
Distribution fees -- Class A Shares.................. 1 1
Distribution fees -- Class B Shares.................. 3 --
Shareholder servicing fees -- Class A Shares......... 2 1
Shareholder servicing fees -- Trust Shares (b)....... 67 48
Custodian fees....................................... 83 45
Accounting fees...................................... 9 30
Transfer agent fees.................................. 27 41
Trustee fees and expenses............................ 1 1
Other fees........................................... 44 63
------- ------
Total expenses before voluntary fee
reductions/reimbursements.......................... 865 606
Expenses voluntarily reduced/reimbursed............. (135) (94)
------- ------
Net expenses........................................ 730 512
------- ------
Net Investment Income................................ 378 258
------- ------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investments and
foreign currency transactions....................... 4,009 1,721
Net change in unrealized appreciation (depreciation)
from investments and translation of assets and
liabilities denominated in foreign currencies....... (8,547) 6,624
------- ------
Net realized/unrealized gains (losses) from
investments......................................... (4,538) 8,345
------- ------
Change in net assets resulting from operations....... $(4,160) $8,603
======= ======
</TABLE>
See notes to financial statements
120
<PAGE>
AMSOUTH FUNDS
International Equity Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended Period Ended
July 31, December 31, December 31, February 28,
2000 (b) 1999 1998 (c) 1998 (d)
------------ ------------ ------------ ------------
(Amounts in thousands)
<S> <C> <C> <C> <C>
From Investment
Activities:
Operations:
Net investment income.... $ 378 $ 258 $ 143 $ (46)
Net realized gains
(losses) from investment
and foreign currency
transactions............ 4,009 1,721 (1,609) (240)
Net change in unrealized
appreciation
(depreciation) from
investments and
translation of assets
and liabilities in
foreign currencies...... (8,547) 6,624 1,522 1,422
-------- ------- ------- -------
Change in net assets
resulting from
operations............... (4,160) 8,603 56 1,136
-------- ------- ------- -------
Distributions to Class A
Shareholders:
From net investment
income.................. -- (6) (71) --
In excess of net
investment income....... -- (5) -- (20)
Distributions to Class B
Shareholders:
From net investment
income.................. -- (1)(e) -- --
In excess of net
investment income....... -- (1)(e) -- --
Distributions to Trust
Shareholders (f):
From net investment
income.................. -- (251) -- --
In excess of net
investment income....... -- (224) -- --
-------- ------- ------- -------
Change in net assets from
shareholder
distributions............ -- (488) (71) (20)
-------- ------- ------- -------
Change in net assets from
capital transactions..... 64,224 11,123 1,608 25,417
-------- ------- ------- -------
Change in net assets...... 60,064 19,238 1,593 26,533
Net Assets:
Beginning of period...... 47,364 28,126 26,533 --
-------- ------- ------- -------
End of period............ $107,428 $47,364 $28,126 $26,533
======== ======= ======= =======
</TABLE>
---------
(a) Formerly ISG International Equity Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) For the period from March 1, 1998 through December 31, 1998.
(d) For the period from August 15, 1997 (commencement of operations) through
February 28, 1998.
(e) For the period from February 2, 1999 (commencement of operations) through
December 31, 1999.
(f) Formerly Institutional Shares.
See notes to financial statements
121
<PAGE>
AMSOUTH FUNDS
International Equity Fund (a)
Financial Highlights, Class A Shares
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended Period Ended
July 31, December 31, December 31, February 28,
2000 (b)+ 1999 1998 (c) 1998 (d)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $13.27 $10.58 $10.46 $ 10.00
------ ------ ------ -------
Investment Activities
Net investment income
(loss)................ 0.05 0.02 0.03 (0.02)
Net realized and
unrealized gains
(losses) from
investments and
foreign currencies.... (0.96) 2.81 0.12 0.49
------ ------ ------ -------
Total from Investment
Activities............ (0.91) 2.83 0.15 0.47
------ ------ ------ -------
Distributions
Net investment income.. -- (0.07) (0.03) --
In excess of net
investment income..... -- (0.07) -- (0.01)
------ ------ ------ -------
Total Distributions.... -- (0.14) (0.03) (0.01)
------ ------ ------ -------
Net change in asset
value.................. (0.91) 2.69 0.12 0.46
------ ------ ------ -------
Net Asset Value, End of
Period................. $12.36 $13.27 $10.58 $ 10.46
====== ====== ====== =======
Total Return (excludes
sales charge).......... (6.78)%(e) 26.77% 1.42%(e) 4.71%(e)
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $1,799 $1,033 $ 149 $26,533
Ratio of expenses to
average net assets..... 1.69%(f) 1.59% 1.81%(f) 1.77%(f)
Ratio of net investment
income to average net
assets................. 0.69%(f) 0.26% 0.71%(f) (0.48)%(f)
Ratio of expenses to
average net assets*.... 2.01%(f) 2.12% 2.16%(f) 2.27%(f)
Portfolio turnover**.... 32% 40% 62% 21%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
+ Net investment income (loss) is based on average shares outstanding during
the period.
(a) Formerly ISG International Equity Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from March 1, 1998 through December 31, 1998. In conjunction
with the reorganization of the ISG Funds, the Fund changed its year end to
December 31.
(d) For the period from August 15, 1997 (commencement of operations) through
February 28, 1998.
(e) Not annualized.
(f) Annualized.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b)+ 1999 (c)
------------ ------------
<S> <C> <C>
Net Asset Value, Beginning of Period............. $13.21 $10.66
------ ------
Investment Activities
Net investment income (loss).................... -- (0.02)
Net realized and unrealized gains (losses) from
investments and foreign currencies............. (0.96) 2.69
------ ------
Total from Investment Activities................ (0.96) 2.67
------ ------
Distributions
Net investment income........................... -- (0.06)
In excess of net investment income.............. -- (0.06)
------ ------
Total Distributions............................. -- (0.12)
------ ------
Net change in asset value........................ (0.96) 2.55
------ ------
Net Asset Value, End of Period................... $12.25 $13.21
====== ======
Total Return (excludes redemption charge)........ (7.19)%(d) 25.98%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)................ $ 595 $ 228
Ratio of expenses to average net assets.......... 2.47%(e) 2.45%(e)
Ratio of net investment income to average net
assets.......................................... (0.04)%(e) (0.54)%(e)
Ratio of expenses to average net assets*......... 2.72%(e) 2.73%(e)
Portfolio turnover**............................. 32% 40%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
+ Net investment income (loss) is based on average shares outstanding during
the period.
(a) Formerly ISG International Equity Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 2, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
122
<PAGE>
AMSOUTH FUNDS
International Equity Fund (a)
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
July 31, December 31, December 31,
2000 (b)+ 1999 1998 (c)
------------ ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period............................ $ 13.27 $ 10.58 $ 10.05
-------- ------- -------
Investment Activities
Net investment income (loss)...... 0.06 0.08 (0.01)
Net realized and unrealized gains
(losses) from investments and
foreign currencies............... (0.96) 2.75 0.54
-------- ------- -------
Total from Investment Activities.. (0.90) 2.83 0.53
-------- ------- -------
Distributions
Net investment income............. -- (0.07) --
In excess of net investment
income........................... -- (0.07) --
-------- ------- -------
Total Distributions............... -- (0.14) --
-------- ------- -------
Net change in asset value.......... (0.90) 2.69 0.53
-------- ------- -------
Net Asset Value, End of Period..... $ 12.37 $ 13.27 $ 10.58
======== ======= =======
Total Return....................... (6.71)%(d) 26.72% 5.27%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000).. $105,034 $46,104 $27,977
Ratio of expenses to average net
assets............................ 1.59%(e) 1.56% 1.61%(e)
Ratio of net investment income to
average net assets................ 0.83%(e) 0.80% (1.47)%(e)
Ratio of expenses to average net
assets*........................... 1.88%(e) 1.84% 1.89%(e)
Portfolio turnover**............... 32% 40% 62%
</TABLE>
/\ Formerly Institutional Shares.
* During the period, certain fees were voluntarily reduced/reimbursed. If such
voluntary fee reductions/reimbursements had not occurred, the ratios would
have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
+ Net investment income (loss) is based on average shares outstanding during
the period.
(a) Formerly ISG International Equity Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from December 14, 1998 (commencement of operations) through
December 31, 1998.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
123
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Strategic Portfolios: Aggressive Growth Portfolio July 31, 2000
(Amounts in thousands, except shares)
Investments in Affiliates (100.0%)
<TABLE>
<CAPTION>
Market
Shares Value
--------- -------
<S> <C> <C>
Investment Companies (100.0%)
AmSouth Capital Growth Fund, Trust Shares.................... 250,564 $ 3,731
AmSouth International Equity Fund, Trust Shares.............. 134,657 1,667
AmSouth Large Cap Fund, Trust Shares......................... 182,656 5,140
AmSouth Mid Cap Fund, Trust Shares (b)....................... 100,054 1,671
AmSouth Prime Money Market Fund, Trust Shares................ 4,315,410 4,315
AmSouth Small Cap Fund, Trust Shares (b)..................... 134,876 1,701
AmSouth Value Fund, Trust Shares............................. 160,283 3,130
-------
Total Investment Companies................................... 21,355
-------
TOTAL INVESTMENTS IN AFFILIATES
(Cost $20,777) (a) -- (100.0%).............................. 21,355
Liabilities in excess of
other assets -- (0.0%)...................................... (4)
-------
TOTAL NET ASSETS -- (100.0%)................................. $21,351
=======
</TABLE>
---------
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of $75.
Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................ $ 906
Unrealized depreciation............................................ (403)
-------
Net unrealized appreciation........................................ $ 503
=======
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements
124
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Aggressive Growth Portfolio (a)
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments in affiliates, at value (cost $20,777)................ $21,355
Interest and dividends receivable................................. 22
Receivable for capital shares issued.............................. 1
Receivable from investment adviser................................ 1
Prepaid expenses and other assets................................. 12
-------
Total Assets..................................................... 21,391
Liabilities:
Payable for capital shares redeemed............................... $25
Accrued expenses and other payables:
Investment advisory fees......................................... 1
Distribution fees................................................ 2
Custodian fees................................................... 1
Other............................................................ 11
---
Total Liabilities................................................ 40
-------
Net Assets:
Capital........................................................... 19,168
Undistributed (distributions in excess of) net investment income.. 4
Undistributed (distributions in excess of) net realized gains..... 1,601
Net unrealized appreciation (depreciation) from investments....... 578
-------
Net Assets........................................................ $21,351
=======
Class A Shares
Net Assets....................................................... $ 476
Shares outstanding............................................... 41
Redemption price per share....................................... $ 11.53
=======
Class A Shares -- Maximum Sales Charge............................ 4.50%
-------
Maximum Offering Price Per Share
(100%/(100% -- Maximum Sales Charge) of net asset value adjusted
to the nearest cent)............................................ $ 12.07
=======
Class B Shares
Net Assets....................................................... $ 390
Shares outstanding............................................... 34
Offering price per share*........................................ $ 11.42
=======
Trust Shares (b)
Net Assets....................................................... $20,485
Shares outstanding............................................... 1,779
Offering and redemption price per share.......................... $ 11.51
=======
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG Aggressive Growth Portfolio.
(b) Formerly Institutional Shares.
(c) For the period from January 1, 2000 through July 31, 2000.
(d) For the period from January 13, 1999 (commencement of operations) through
December 31, 1999.
Statements of Operations
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (c) 1999 (d)
------------ ------------
(Amounts in thousands)
<S> <C> <C>
Investment Income:
Dividend income from affiliates..................... $137 $ 250
Expenses:
Investment advisory fees............................ 24 13
Administration fees................................. 22 10
Distribution fees -- Class B Shares................. 2 2
Shareholder servicing fees -- Class A Shares....... 1 --
Shareholder servicing fees -- Trust Shares (b)..... 17 9
Custodian fees...................................... 3 2
Accounting fees..................................... 5 19
Transfer agent fees................................. 22 44
Registration and filing fees........................ 29 37
Audit fees.......................................... 7 13
Legal fees.......................................... -- 9
Other fees.......................................... 2 3
---- ------
Total expenses before voluntary fee
reductions/reimbursements......................... 134 161
Expenses voluntarily reduced/reimbursed............ (40) (111)
---- ------
Net expenses....................................... 94 50
---- ------
Net Investment Income............................... 43 200
---- ------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment
transactions with affilliates...................... (96) 190
Realized gain distributions from underlying funds... -- 1,545
Net change in unrealized appreciation (depreciation)
from investments................................... 55 523
---- ------
Net realized/unrealized gains (losses) from
investments........................................ (41) 2,258
---- ------
Change in net assets resulting from operations...... $ 2 $2,458
==== ======
</TABLE>
See notes to financial statements
125
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Aggressive Growth Portfolio (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ ------------
(Amounts in thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income.............................. $ 43 $ 200
Net realized gains (losses) from investment
transactions with affiliates...................... (96) 190
Realized gain distributions from underlying funds.. -- 1,545
Net change in unrealized appreciation
(depreciation) from investments................... 55 523
------- -------
Change in net assets resulting from operations...... 2 2,458
------- -------
Distributions to Class A Shareholders:
From net investment income......................... (1) (4)
From net realized gains on investment
transactions...................................... -- (1)
Distributions to Class B Shareholders:
From net investment income......................... -- (4)(d)
From net realized gains on investment
transactions...................................... -- (1)(d)
Distributions to Trust Shareholders (f):
From net investment income......................... (38) (192)(e)
From net realized gains on investment
transactions...................................... -- (36)(e)
------- -------
Change in net assets from shareholder
distributions...................................... (39) (238)
------- -------
Change in net assets from capital transactions...... 1,635 17,533
------- -------
Change in net assets................................ 1,598 19,753
Net Assets:
Beginning of period................................ 19,753 --
------- -------
End of period...................................... $21,351 $19,753
======= =======
</TABLE>
---------
(a) Formerly ISG Aggressive Growth Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) For the period from January 13, 1999 (commencement of operations) through
December 31, 1999.
(d) For the period from January 27, 1999 (commencement of operations) through
December 31, 1999.
(e) For the period from January 28, 1999 (commencement of operations) through
December 31, 1999.
(f) Formerly Institutional Shares.
See notes to financial statements
126
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Aggressive Growth Portfolio (a)
Financial Highlights, Class A Shares
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ -------------
<S> <C> <C>
Net Asset Value, Beginning of Period............... $11.54 $10.00
------ ------
Investment Activities
Net investment income (loss)...................... 0.02 0.09
Net realized and unrealized gains (losses) from
investments with affiliates...................... (0.01) 1.60
------ ------
Total from Investment Activities.................. 0.01 1.69
------ ------
Distributions
Net investment income............................. (0.02) (0.11)
Net realized gains................................ -- (0.04)
------ ------
Total Distributions............................... (0.02) (0.15)
------ ------
Net change in asset value.......................... (0.01) 1.54
------ ------
Net Asset Value, End of Period..................... $11.53 $11.54
====== ======
Total Return (excludes sales charge)............... 0.06%(d) 16.92%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000).................. $ 476 $ 450
Ratio of expenses to average net assets............ 0.86%(e) 0.96%(e)
Ratio of net investment income to average net
assets............................................ 0.26%(e) 1.65%(e)
Ratio of expenses to average net assets*........... 1.24%(e) 6.10%(e)
Portfolio turnover**............................... 22% 95%
</TABLE>
* During the period, certain fees were voluntarily reduced/reimbursed. If
such voluntary fee reductions/reimbursements had not occurred, the ratios
would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Aggressive Growth Portfolio.
(b) For the period January 1, 2000 through July 31, 2000. In conjunction with
the reorganization of the AmSouth Funds, the fund changed its fiscal year
end to July 31.
(c) For the period from January 13, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ -------------
<S> <C> <C>
Net Asset Value, Beginning of Period.............. $11.47 $10.03
------ ------
Investment Activities
Net investment income (loss)..................... (0.03) 0.07
Net realized and unrealized gains (losses) from
investments with affiliates..................... (0.02) 1.50
------ ------
Total from Investment Activities................. (0.05) 1.57
------ ------
Distributions
Net investment income............................ -- (0.09)
Net realized gains............................... -- (0.04)
------ ------
Total Distributions............................... -- (0.13)
------ ------
Net change in asset value......................... (0.05) 1.44
------ ------
Net Asset Value, End of Period.................... $11.42 $11.47
====== ======
Total Return (excludes redemption charge)......... (0.43)%(d) 15.70%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)................. $ 390 $ 456
Ratio of expenses to average net assets........... 1.56% (e) 1.52%(e)
Ratio of net investment income to average net
assets........................................... (0.44)%(e) 0.92%(e)
Ratio of expenses to average net assets*.......... 1.94% (e) 7.86%(e)
Portfolio turnover**.............................. 22% 95%
</TABLE>
* During the period, certain fees were voluntarily reduced/reimbursed. If
such voluntary fee reductions/reimbursements had not occurred, the ratios
would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Aggressive Growth Portfolio.
(b) For the period January 1, 2000 through July 31, 2000. In conjunction with
the reorganization of the AmSouth Funds, the fund changed its fiscal year
end to July 31.
(c) For the period from January 27, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
127
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Aggressive Growth Portfolio (a)
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ ------------
<S> <C> <C>
Net Asset Value, Beginning of Period............... $ 11.53 $ 10.05
------- -------
Investment Activities
Net investment income (loss)...................... 0.02 0.12
Net realized and unrealized gains (losses) from
investments with affiliates...................... (0.02) 1.52
------- -------
Total from Investment Activities.................. -- 1.64
------- -------
Distributions
Net investment income............................. (0.02) (0.12)
Net realized gains................................ -- (0.04)
------- -------
Total Distributions............................... (0.02) (0.16)
------- -------
Net change in asset value.......................... (0.02) 1.48
------- -------
Net Asset Value, End of Period..................... $ 11.51 $ 11.53
======= =======
Total Return....................................... 0.01%(d) 16.31%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000).................. $20,485 $18,847
Ratio of expenses to average net assets............ 0.75%(e) 0.73%(e)
Ratio of net investment income to average net
assets............................................ 0.38%(e) 3.23%(e)
Ratio of expenses to average net assets*........... 1.09%(e) 2.10%(e)
Portfolio turnover**............................... 22% 95%
</TABLE>
/\ Formerly Institutional Shares.
* During the period, certain fees were voluntarily reduced/reimbursed. If
such voluntary fee reductions/reimbursements had not occurred, the ratios
would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Aggressive Growth Portfolio.
(b) For the period January 1, 2000 through July 31, 2000. In conjunction with
the reorganization of the AmSouth Funds, the fund changed its fiscal year
end to July 31.
(c) For the period from January 28, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
128
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Strategic Portfolios: Growth Portfolio July 31, 2000
(Amounts in thousands, except shares)
Investments in Affiliates (99.9%)
<TABLE>
<CAPTION>
Market
Shares Value
--------- -------
<S> <C> <C>
Investment Companies (99.9%)
AmSouth Capital Growth Fund, Trust Shares.................... 180,005 $ 2,680
AmSouth Equity Income Fund, Trust Shares..................... 177,557 2,587
AmSouth Government Income Fund, Trust Shares................. 443,762 4,264
AmSouth International Equity Fund, Trust Shares.............. 105,493 1,306
AmSouth Large Cap Fund, Trust Shares......................... 89,328 2,514
AmSouth Mid Cap Fund, Trust Shares (b)....................... 67,784 1,132
AmSouth Prime Money Market Fund, Trust Shares................ 3,015,557 3,016
AmSouth Small Cap Fund, Trust Shares (b)..................... 99,915 1,260
AmSouth Value Fund, Trust Shares............................. 139,442 2,723
-------
Total Investment Companies................................... 21,482
-------
TOTAL INVESTMENTS IN AFFILIATES
(Cost $21,569) (a) -- (99.9%)............................... 21,482
Other assets in excess
of liabilities -- (0.1%).................................... 17
-------
TOTAL NET ASSETS -- (100.0%)................................. $21,499
=======
</TABLE>
---------
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of $128.
Cost for federal income tax purposes differs from value by net unrealized
depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $ 427
Unrealized depreciation............................................. (642)
-----
Net unrealized depreciation......................................... $(215)
=====
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements
129
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Growth Portfolio (a)
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments in affiliates, at value (cost $21,569)................ $21,482
Interest and dividends receivable................................. 14
Receivable for capital shares issued.............................. 1
Receivable from investment adviser................................ 3
Prepaid expenses and other assets................................. 12
-------
Total Assets..................................................... 21,512
Liabilities:
Accrued expenses and other payables:
Investment advisory fees......................................... $ 1
Distribution fees................................................ 2
Other............................................................ 10
---
Total Liabilities................................................ 13
-------
Net Assets:
Capital........................................................... 20,595
Undistributed (distributions in excess of) net investment income.. 19
Undistributed (distributions in excess of) net realized gains..... 972
Net unrealized appreciation (depreciation) from investments....... (87)
-------
Net Assets........................................................ $21,499
=======
Class A Shares
Net Assets....................................................... $ 763
Shares outstanding............................................... 73
Redemption price per share....................................... $ 10.47
=======
Class A Shares -- Maximum Sales Charge............................ 4.50%
-------
Maximum Offering Price Per Share
(100%/(100% -- Maximum Sales Charge) of net asset value adjusted
to the nearest cent)............................................ $ 10.96
=======
Class B Shares
Net Assets....................................................... $ 1,241
Shares outstanding............................................... 119
Offering price per share*........................................ $ 10.44
=======
Trust Shares (b)
Net Assets....................................................... $19,495
Shares outstanding............................................... 1,855
Offering and redemption price per share.......................... $ 10.51
=======
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG Growth Portfolio.
(b) Formerly Institutional Shares.
(c) For the period from January 1, 2000 through July 31, 2000.
(d) For the period from February 1, 1999 (commencement of operations) through
December 31, 1999.
Statements of Operations
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (c) 1999 (d)
------------ ------------
(Amounts in thousands)
<S> <C> <C>
Investment Income:
Dividend income from affiliates..................... $ 234 $ 195
Expenses:
Investment advisory fees............................ 23 7
Administration fees................................. 21 6
Distribution fees -- Class B Shares................. 6 4
Shareholder servicing fees -- Class B Shares........ 1 1
Shareholder servicing fees -- Trust Shares (b)...... 16 5
Custodian fees...................................... 3 1
Accounting fees..................................... 5 18
Transfer agent fees................................. 20 42
Registration and filing fees........................ 28 35
Audit fees.......................................... 7 13
Legal fees.......................................... -- 9
Other fees.......................................... -- 2
----- -----
Total expenses before voluntary fee
reductions/reimbursements......................... 130 143
Expenses voluntarily reduced/reimbursed............ (38) (111)
----- -----
Net expenses....................................... 92 32
----- -----
Net Investment Income............................... 142 163
----- -----
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment
transactions with affiliates....................... 377 6
Realized gain distributions from underlying funds... 6 624
Net change in unrealized appreciation (depreciation)
from investments................................... (250) 163
----- -----
Net realized/unrealized gains (losses) from
investments........................................ 133 793
----- -----
Change in net assets resulting from operations...... $ 275 $ 956
===== =====
</TABLE>
See notes to financial statements
130
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Growth Portfolio (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ ------------
(Amounts in thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income.............................. $ 142 $ 163
Net realized gains (losses) from investment
transactions with affiliates...................... 377 6
Realized gain distributions from underlying funds.. 6 624
Net change in unrealized appreciation
(depreciation) from investments................... (250) 163
------- -------
Change in net assets resulting from operations...... 275 956
------- -------
Distributions to Class A Shareholders:
From net investment income......................... (2) (2)(d)
From net realized gains on investment
transactions...................................... -- (1)(d)
Distributions to Class B Shareholders:
From net investment income......................... (5) (11)(e)
From net realized gains on investment
transactions...................................... -- (6)(e)
Distributions to Trust Shareholders (f):
From net investment income......................... (116) (149)
From net realized gains on investment
transactions...................................... -- (35)
------- -------
Change in net assets from shareholder
distributions...................................... (123) (204)
------- -------
Change in net assets from capital transactions...... 8,813 11,782
------- -------
Change in net assets................................ 8,965 12,534
Net Assets:
Beginning of period................................ 12,534 --
------- -------
End of period...................................... $21,499 $12,534
======= =======
</TABLE>
---------
(a) Formerly ISG Growth Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) For the period from February 1, 1999 (commencement of operations) through
December 31, 1999.
(d) For the period from February 11, 1999 (commencement of operations) through
December 31, 1999.
(e) For the period from February 15, 1999 (commencement of operations) through
December 31, 1999.
(f) Formerly Institutional Shares.
See notes to financial statements
131
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Growth Portfolio (a)
Financial Highlights, Class A Shares
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ ------------
<S> <C> <C>
Net Asset Value, Beginning of Period.............. $10.58 $ 9.93
------ ------
Investment Activities
Net investment income (loss)..................... 0.07 0.14
Net realized and unrealized gains (losses) from
investments with affiliates..................... (0.11) 0.73
------ ------
Total from Investment Activities................. (0.04) 0.87
------ ------
Distributions
Net investment income............................ (0.07) (0.14)
Net realized gains............................... -- (0.08)
------ ------
Total Distributions.............................. (0.07) (0.22)
------ ------
Net change in asset value......................... (0.11) 0.65
------ ------
Net Asset Value, End of Period.................... $10.47 $10.58
====== ======
Total Return (excludes sales charge).............. (0.43)%(d) 8.85%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)................. $ 763 $ 164
Ratio of expenses to average net assets........... 0.86%(e) 0.94%(e)
Ratio of net investment income to average net
assets........................................... 1.27%(e) 2.44%(e)
Ratio of expenses to average net assets*.......... 1.25%(e) 9.41%(e)
Portfolio turnover**.............................. 97% 76%
</TABLE>
* During the period, certain fees were voluntarily reduced/reimbursed. If such
voluntary fee reductions/reimbursements had not occurred, the ratios would
have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Growth Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 11, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ ------------
<S> <C> <C>
Net Asset Value, Beginning of Period.............. $10.57 $ 9.84
------ ------
Investment Activities
Net investment income (loss)..................... 0.03 0.12
Net realized and unrealized gains (losses) from
investments with affiliates..................... (0.12) 0.81
------ ------
Total from Investment Activities................. (0.09) 0.93
------ ------
Distributions
Net investment income............................ (0.04) (0.12)
Net realized gains............................... -- (0.08)
------ ------
Total Distributions.............................. (0.04) (0.20)
------ ------
Net change in asset value......................... (0.13) 0.73
------ ------
Net Asset Value, End of Period.................... $10.44 $10.57
====== ======
Total Return (excludes redemption charge)......... (0.84)%(d) 9.48%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)................. $1,241 $ 998
Ratio of expenses to average net assets........... 1.56%(e) 1.55%(e)
Ratio of net investment income to average net
assets........................................... 0.46%(e) 2.14%(e)
Ratio of expenses to average net assets*.......... 1.97%(e) 6.75%(e)
Portfolio turnover**.............................. 97% 76%
</TABLE>
* During the period, certain fees were voluntarily reduced/reimbursed. If such
voluntary fee reductions/reimbursements had not occurred, the ratios would
have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Growth Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 15, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
132
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Growth Portfolio (a)
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ ------------
<S> <C> <C>
Net Asset Value, Beginning of Period.............. $ 10.61 $ 10.00
------- -------
Investment Activities
Net investment income (loss)..................... 0.08 0.16
Net realized and unrealized gains (losses) from
investments with affiliates..................... (0.11) 0.69
------- -------
Total from Investment Activities................. (0.03) 0.85
------- -------
Distributions
Net investment income............................ (0.07) (0.16)
Net realized gains............................... -- (0.08)
------- -------
Total Distributions.............................. (0.07) (0.24)
------- -------
Net change in asset value......................... (0.10) 0.61
------- -------
Net Asset Value, End of Period.................... $ 10.51 $ 10.61
======= =======
Total Return...................................... (0.29)%(d) 8.59%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)................. $19,495 $11,372
Ratio of expenses to average net assets........... 0.76%(e) 0.73%(e)
Ratio of net investment income to average net
assets........................................... 1.28%(e) 4.82%(e)
Ratio of expenses to average net assets*.......... 1.10%(e) 3.14%(e)
Portfolio turnover**.............................. 97% 76%
</TABLE>
/\ Formerly Institutional Shares.
* During the period, certain fees were voluntarily reduced/reimbursed. If such
voluntary fee reductions/reimbursements had not occurred, the ratios would
have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Growth Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 1, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
133
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Strategic Portfolios: Growth and Income Portfolio July 31, 2000
(Amounts in thousands, except shares)
Investments in Affiliates (100.0%)
<TABLE>
<CAPTION>
Market
Shares Value
--------- -------
<S> <C> <C>
Investment Companies (100.0%)
AmSouth Capital Growth Fund, Trust Shares.................... 201,749 $ 3,004
AmSouth Equity Income Fund, Trust Shares..................... 155,273 2,262
AmSouth Government Income Fund, Trust Shares................. 3,446,938 33,126
AmSouth International Equity Fund, Trust Shares.............. 113,733 1,408
AmSouth Large Cap Fund, Trust Shares......................... 889,886 25,042
AmSouth Limited Term Bond Fund, Trust Shares................. 725,452 7,349
AmSouth Mid Cap Fund, Trust Shares (b)....................... 102,541 1,712
AmSouth Prime Money Market Fund, Trust Shares................ 6,890,414 6,890
AmSouth Small Cap Fund, Trust Shares (b)..................... 237,149 2,990
AmSouth Value Fund, Trust Shares............................. 284,673 5,560
-------
Total Investment Companies................................... 89,343
-------
TOTAL INVESTMENTS IN AFFILIATES
(Cost $89,828) (a) -- (100.0%).............................. 89,343
Liabilities in excess
of other assets -- ( 0.0%).................................. (6)
-------
TOTAL NET ASSETS -- (100.0%)................................. $89,337
=======
</TABLE>
---------
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of $211.
Cost for federal income tax purposes differs from value by net unrealized
depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation........... $ 895
Unrealized depreciation........... (1,591)
-------
Net unrealized depreciation....... $ (696)
=======
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements
134
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Growth and Income Portfolio (a)
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments in affiliates, at value (cost $89,828)................ $89,343
Interest and dividends receivable................................. 35
Receivable for capital shares issued.............................. 14
Prepaid expenses and other assets................................. 12
-------
Total Assets..................................................... 89,404
Liabilities:
Payable for capital shares redeemed............................... $36
Accrued expenses and other payables:
Investment advisory fees......................................... 3
Administration fees.............................................. 3
Distribution fees................................................ 9
Custodian fees................................................... 2
Other............................................................ 14
---
Total Liabilities................................................ 67
-------
Net Assets:
Capital........................................................... 84,882
Undistributed (distributions in excess of) net investment income.. 192
Undistributed (distributions in excess of) net realized gains..... 4,748
Net unrealized appreciation (depreciation) from investments....... (485)
-------
Net Assets........................................................ $89,337
=======
Class A Shares
Net Assets....................................................... $ 271
Shares outstanding............................................... 26
Redemption price per share....................................... $ 10.54
=======
Class A Shares -- Maximum Sales Charge............................ 4.50%
-------
Maximum Offering Price Per Share (100%/(100% -- Maximum Sales
Charge) of net asset value adjusted to the nearest cent)........ $ 11.04
=======
Class B Shares
Net Assets....................................................... $ 1,613
Shares outstanding............................................... 153
Offering price per share*........................................ $ 10.53
=======
Trust Shares (b)
Net Assets....................................................... $87,453
Shares outstanding............................................... 8,280
Offering and redemption price per share.......................... $ 10.56
=======
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG Growth & Income Portfolio.
(b) Formerly Institutional Shares.
(c) For the period from January 1, 2000 through July 31, 2000.
(d) For the period from January 27, 1999 (commencement of operations) through
December 31, 1999.
Statements of Operations
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (c) 1999 (d)
------------ ------------
(Amounts in thousands)
<S> <C> <C>
Investment Income:
Dividend income from affiliates..................... $1,567 $ 1,024
Expenses:
Investment advisory fees............................ 106 50
Administration fees................................. 97 37
Distribution fees -- Class B Shares................. 9 9
Shareholder servicing fees -- Class A Shares........ -- 1
Shareholder servicing fees -- Class B Shares........ 1 3
Shareholder servicing fees -- Trust Shares (b)...... 77 35
Custodian fees...................................... 14 7
Accounting fees..................................... 5 18
Transfer agent fees................................. 29 45
Trustee fees and expenses........................... 2 --
Registration and filing fees........................ 32 51
Other fees.......................................... 15 32
------ -------
Total expenses before voluntary fee
reductions/reimbursements......................... 387 288
Expenses voluntarily reduced/reimbursed............ (74) (103)
------ -------
Net expenses....................................... 313 185
------ -------
Net Investment Income............................... 1,254 839
------ -------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment
transactions with affiliates....................... (486) 363
Realized gain distributions from underlying funds... 4 4,971
Net change in unrealized appreciation (depreciation)
from investments................................... 744 (1,229)
------ -------
Net realized/unrealized gains (losses) from
investments........................................ 262 4,105
------ -------
Change in net assets resulting from operations...... $1,516 $ 4,944
====== =======
</TABLE>
See notes to financial statements
135
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Growth and Income Portfolio (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ ------------
(Amounts in thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income.............................. $ 1,254 $ 839
Net realized gains (losses) from investment
transactions with affiliates...................... (486) 363
Realized gain distributions from underlying funds.. 4 4,971
Net change in unrealized appreciation
(depreciation) from investments................... 744 (1,229)
------- -------
Change in net assets resulting from operations...... 1,516 4,944
------- -------
Distributions to Class A Shareholders:
From net investment income......................... (4) (5)(d)
From net realized gains on investment
transactions...................................... -- (2)(d)
Distributions to Class B Shareholders:
From net investment income......................... (15) (12)
From net realized gains on investment
transactions...................................... -- (5)
Distributions to Trust Shareholders (f):
From net investment income......................... (1,043) (822)(e)
From net realized gains on investment
transactions...................................... -- (97)(e)
------- -------
Change in net assets from shareholder
distributions...................................... (1,062) (943)
------- -------
Change in net assets from capital transactions...... (77) 84,959
------- -------
Change in net assets................................ 377 88,960
Net Assets:
Beginning of period................................ 88,960 --
------- -------
End of period...................................... $89,337 $88,960
======= =======
</TABLE>
---------
(a) Formerly ISG Growth & Income Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) For the period from January 27, 1999 (commencement of operations) through
December 31, 1999.
(d) For the period from March 8, 1999 (commencement of operations) through
December 31, 1999.
(e) For the period from February 8, 1999 (commencement of operations) through
December 31, 1999.
(f) Formerly Institutional Shares.
See notes to financial statements
136
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Growth and Income Portfolio (a)
Financial Highlights, Class A Shares
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ ------------
<S> <C> <C>
Net Asset Value, Beginning of Period............... $10.48 $10.10
------ ------
Investment Activities
Net investment income (loss)...................... 0.14 0.11
Net realized and unrealized gains (losses) from
investments with affiliates...................... 0.04 0.41
------ ------
Total from Investment Activities.................. 0.18 0.52
------ ------
Distributions
Net investment income............................. (0.12) (0.11)
Net realized gains................................ -- (0.03)
------ ------
Total Distributions............................... (0.12) (0.14)
------ ------
Net change in asset value.......................... 0.06 0.38
------ ------
Net Asset Value, End of Period..................... $10.54 $10.48
====== ======
Total Return (excludes sales charge)............... 1.69%(d) 5.21%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000).................. $ 271 $ 535
Ratio of expenses to average net assets............ 0.72%(e) 0.95%(e)
Ratio of net investment income to average net
assets............................................ 2.15%(e) 2.44%(e)
Ratio of expenses to average net assets*........... 0.88%(e) 2.27%(e)
Portfolio turnover**............................... 21% 57%
</TABLE>
* During the period, certain fees were voluntarily reduced/reimbursed. If such
voluntary fee reductions/reimbursements had not occurred, the ratios would
have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Growth & Income Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year to July 31.
(c) For the period from March 8, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ ------------
<S> <C> <C>
Net Asset Value, Beginning of Period............... $10.50 $10.00
------ ------
Investment Activities
Net investment income (loss)...................... 0.10 0.08
Net realized and unrealized gains (losses) from
investments with affiliates...................... 0.02 0.53
------ ------
Total from Investment Activities.................. 0.12 0.61
------ ------
Distributions
Net investment income............................. (0.09) (0.08)
Net realized gains................................ -- (0.03)
------ ------
Total Distributions............................... (0.09) (0.11)
------ ------
Net change in asset value.......................... 0.03 0.50
------ ------
Net Asset Value, End of Period..................... $10.53 $10.50
====== ======
Total Return (excludes redemption charge).......... 1.13%(d) 6.10%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000).................. $1,613 $1,725
Ratio of expenses to average net assets............ 1.40%(e) 1.52%(e)
Ratio of net investment income to average net
assets............................................ 1.58%(e) 1.74%(e)
Ratio of expenses to average net assets*........... 1.57%(e) 4.26%(e)
Portfolio turnover**............................... 21% 57%
</TABLE>
* During the period, certain fees were voluntarily reduced/reimbursed. If such
voluntary fee reductions/reimbursements had not occurred, the ratios would
have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Growth & Income Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year to July 31.
(c) For the period from January 27, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
137
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Growth and Income Portfolio (a)
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ ------------
<S> <C> <C>
Net Asset Value, Beginning of Period............... $ 10.51 $ 9.85
------- -------
Investment Activities
Net investment income (loss)...................... 0.14 0.13
Net realized and unrealized gains (losses) from
investments with affiliates...................... 0.03 0.69
------- -------
Total from Investment Activities.................. 0.17 0.82
------- -------
Distributions
Net investment income............................. (0.12) (0.13)
Net realized gains................................ -- (0.03)
------- -------
Total Distributions............................... (0.12) (0.16)
------- -------
Net change in asset value.......................... 0.05 0.66
------- -------
Net Asset Value, End of Period..................... $ 10.56 $ 10.51
======= =======
Total Return....................................... 1.64%(d) 8.40%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000).................. $87,453 $86,700
Ratio of expenses to average net assets............ 0.58%(e) 0.70%(e)
Ratio of net investment income to average net
assets............................................ 2.39%(e) 3.43%(e)
Ratio of expenses to average net assets*........... 0.72%(e) 0.98%(e)
Portfolio turnover**............................... 21% 57%
</TABLE>
/\ Formerly Institutional Shares.
* During the period, certain fees were voluntarily reduced/reimbursed. If such
voluntary fee reductions/reimbursements had not occurred, the ratios would
have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Growth & Income Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year to July 31.
(c) For the period from February 8, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
138
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Strategic Portfolios: Moderate Growth and Income Portfolio July 31, 2000
(Amounts in thousands, except shares)
Investments in Affiliates (100.1%)
<TABLE>
<CAPTION>
Market
Shares Value
------- -------
<S> <C> <C>
Investment Companies (100.1%)
AmSouth Capital Growth Fund, Trust Shares...................... 69,447 $ 1,034
AmSouth Equity Income Fund, Trust Shares....................... 49,194 717
AmSouth Government Income Fund, Trust Shares................... 933,633 8,972
AmSouth Large Cap Fund, Trust Shares........................... 117,907 3,318
AmSouth Limited Term Bond Fund, Trust Shares................... 498,336 5,048
AmSouth Prime Money Market Fund, Trust Shares.................. 682,506 683
AmSouth Value Fund, Trust Shares............................... 61,519 1,201
-------
Total Investment Companies..................................... 20,973
-------
TOTAL INVESTMENTS IN AFFILIATES
(Cost $21,075) (a) -- (100.1%)................................ 20,973
Liabilities in excess of
other assets -- (-0.1%)....................................... (12)
-------
TOTAL NET ASSETS -- (100.0%)................................... $20,961
=======
</TABLE>
---------
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of $125.
Cost for federal income tax purposes differs from value by net unrealized
depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation........................................... $ 131
Unrealized depreciation........................................... (358)
-------
Net unrealized depreciation....................................... $ (227)
=======
</TABLE>
See notes to financial statements
139
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Moderate Growth and Income Portfolio (a)
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments in affiliates, at value (cost $21,075)................ $20,973
Interest and dividends receivable................................. 3
Receivable from investment adviser................................ 1
Prepaid expenses and other assets................................. 12
-------
Total Assets..................................................... 20,989
Liabilities:
Payable for capital shares redeemed............................... $15
Accrued expenses and other payables:
Investment advisory fees......................................... 1
Distribution fees................................................ 2
Other............................................................ 10
---
Total Liabilities................................................ 28
-------
Net Assets:
Capital........................................................... 20,345
Undistributed (distributions in excess of) net investment income.. 63
Undistributed (distributions in excess of) net realized gains..... 655
Net unrealized appreciation (depreciation) from investments....... (102)
-------
Net Assets........................................................ $20,961
=======
Class A Shares
Net Assets....................................................... $ 48
Shares outstanding............................................... 5
Redemption price per share....................................... $ 10.06
=======
Class A Shares -- Maximum Sales Charge............................ 4.50%
-------
Maximum Offering Price Per Share (100%/(100% -- Maximum Sales
Charge) of net asset value adjusted to the nearest cent)........ $ 10.53
=======
Class B Shares
Net Assets....................................................... $ 832
Shares outstanding............................................... 83
Offering price per share*........................................ $ 10.04
=======
Trust Shares (b)
Net Assets....................................................... $20,081
Shares outstanding............................................... 1,993
Offering and redemption price per share.......................... $ 10.08
=======
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG Moderate Growth & Income Portfolio.
(b) Formerly Institutional Shares.
(c) For the period from January 1, 2000 through July 31, 2000.
(d) For the period from January 28, 1999 (commencement of operations) through
December 31, 1999.
Statements of Operations
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (c) 1999 (d)
------------ ------------
(Amounts in thousands)
<S> <C> <C>
Investment Income:
Dividend income from affiliates..................... $ 487 $ 326
Expenses:
Investment advisory fees............................ 26 13
Administration fees................................. 24 10
Distribution fees -- Class B Shares................. 5 5
Shareholder servicing fees -- Class B Shares........ -- 2
Shareholder servicing fees -- Trust Shares (b)...... 19 8
Custodian fees...................................... 3 2
Accounting fees..................................... 5 18
Transfer agent fees................................. 20 42
Registration and filing fees........................ 28 38
Audit fees.......................................... 7 13
Legal fees.......................................... -- 9
Other fees.......................................... -- 1
----- -----
Total expenses before
voluntary fee reductions/reimbursements........... 137 161
Expenses voluntarily reduced/reimbursed............ (38) (109)
----- -----
Net expenses....................................... 99 52
----- -----
Net Investment Income............................... 388 274
----- -----
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment
transactions with affiliates....................... (129) (40)
Realized gain distributions from underlying funds... 1 897
Net change in unrealized appreciation (depreciation)
from investments................................... 268 (370)
----- -----
Net realized/unrealized gains (losses) from
investments........................................ 140 487
----- -----
Change in net assets resulting from operations...... $ 528 $ 761
===== =====
</TABLE>
See notes to financial statements
140
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Moderate Growth and Income Portfolio (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ ------------
(Amounts in thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income.............................. $ 388 $ 274
Net realized gains (losses) from investment
transactions with affiliates...................... (129) (40)
Realized gain distribution from underlying funds... 1 897
Net change in unrealized appreciation
(depreciation) from investments................... 268 (370)
------- -------
Change in net assets resulting from operations...... 528 761
------- -------
Distributions to Class A Shareholders:
From net investment income......................... (1) (3)(d)
From net realized gains on investment
transactions...................................... -- (1)(d)
Distributions to Class B Shareholders:
From net investment income......................... (10) (11)
From net realized gains on investment
transactions...................................... -- (5)
Distributions to Trust Shareholders (f):
From net investment income......................... (314) (260)(e)
From net realized gains on investment
transactions...................................... -- (68)(e)
------- -------
Change in net assets from shareholder
distributions...................................... (325) (348)
------- -------
Change in net assets from capital transactions...... (1,739) 22,084
------- -------
Change in net assets................................ (1,536) 22,497
Net Assets:
Beginning of period................................ 22,497 --
------- -------
End of period...................................... $20,961 $22,497
======= =======
</TABLE>
---------
(a) Formerly ISG Moderate Growth & Income Portfolio.
(b) For the period January 1, 2000 through July 31, 2000.
(c) For the period from January 28, 1999 (commencement of operations) through
December 31, 1999.
(d) For the period from February 9, 1999 (commencement of operations) through
December 31, 1999.
(e) For the period from February 10, 1999 (commencement of operations) through
December 31, 1999.
(f) Formerly Institutional Shares.
See notes to financial statements
141
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Moderate Growth and Income Portfolio (a)
Financial Highlights, Class A Shares
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ ------------
<S> <C> <C>
Net Asset Value, Beginning of Period................ $ 9.96 $9.86
------ -----
Investment Activities
Net investment income (loss)....................... 0.14 0.17
Net realized and unrealized gains (losses) from
investments with affiliates....................... 0.10 0.16
------ -----
Total from Investment Activities................... 0.24 0.33
------ -----
Distributions
Net investment income.............................. (0.14) (0.17)
Net realized gains................................. -- (0.06)
------ -----
Total Distributions................................ (0.14) (0.23)
------ -----
Net change in asset value........................... 0.10 0.10
------ -----
Net Asset Value, End of Period...................... $10.06 $9.96
====== =====
Total Return (excludes sales charge)................ 2.43%(d) 3.37%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)................... $ 48 $ 172
Ratio of expenses to average net assets............. 0.91%(e) 0.93%(e)
Ratio of net investment income to average net
assets............................................. 2.85%(e) 3.32%(e)
Ratio of expenses to average net assets*............ 1.26%(e) 9.78%(e)
Portfolio turnover**................................ 21% 124%
</TABLE>
* During the period, certain fees were voluntarily reduced/reimbursed. If such
voluntary fee reductions/reimbursements had not occurred, the ratios would
have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Moderate Growth & Income Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 9, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ ------------
<S> <C> <C>
Net Asset Value, Beginning of Period............... $ 9.96 $10.00
------ ------
Investment Activities
Net investment income (loss)...................... 0.13 0.13
Net realized and unrealized gains (losses) from
investments with affiliates...................... 0.07 0.02
------ ------
Total from Investment Activities.................. 0.20 0.15
------ ------
Distributions
Net investment income............................. (0.12) (0.13)
Net realized gains................................ -- (0.06)
------ ------
Total Distributions............................... (0.12) (0.19)
------ ------
Net change in asset value.......................... 0.08 (0.04)
------ ------
Net Asset Value, End of Period..................... $10.04 $ 9.96
====== ======
Total Return (excludes redemption charge).......... 2.00%(d) 1.50%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000).................. $ 832 $ 941
Ratio of expenses to average net assets............ 1.55%(e) 1.54%(e)
Ratio of net investment income to average net
assets............................................ 2.19%(e) 2.80%(e)
Ratio of expenses to average net assets*........... 1.88%(e) 6.90%(e)
Portfolio turnover**............................... 21% 124%
</TABLE>
* During the period, certain fees were voluntarily reduced/reimbursed. If such
voluntary fee reductions/reimbursements had not occurred, the ratios would
have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Moderate Growth & Income Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from January 28, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
142
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Moderate Growth and Income Portfolio (a)
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ ------------
<S> <C> <C>
Net Asset Value, Beginning of Period............... $ 9.98 $ 9.88
------- -------
Investment Activities
Net investment income (loss)...................... 0.18 0.20
Net realized and unrealized gains (losses) from
investments with affiliates...................... 0.07 0.16
------- -------
Total from Investment Activities.................. 0.25 0.36
------- -------
Distributions
Net investment income............................. (0.15) (0.20)
Net realized gains................................ -- (0.06)
------- -------
Total Distributions............................... (0.15) (0.26)
------- -------
Net change in asset value.......................... 0.10 0.10
------- -------
Net Asset Value, End of Period..................... $ 10.08 $ 9.98
======= =======
Total Return....................................... 2.50%(d) 3.64%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000).................. $20,081 $21,384
Ratio of expenses to average net assets............ 0.74%(e) 0.73%(e)
Ratio of net investment income to average net
assets............................................ 3.03%(e) 4.46%(e)
Ratio of expenses to average net assets*........... 1.03%(e) 1.87%(e)
Portfolio turnover**............................... 21% 124%
</TABLE>
/\ Formerly Institutional Shares.
* During the period, certain fees were voluntarily reduced/reimbursed. If such
voluntary fee reductions/reimbursements had not occurred, the ratios would
have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Moderate Growth & Income Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 10, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
143
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Strategic Portfolios: Current Income Portfolio July 31, 2000
(Amounts in thousands, except shares)
Investments in Affiliates (98.9%)
<TABLE>
<CAPTION>
Market
Shares Value
------ ------
<S> <C> <C>
Investment Companies (98.9%)
AmSouth Bond Fund, Trust Shares.................................. 31,762 $334
AmSouth Limited Term Bond Fund, Trust Shares..................... 36,039 365
AmSouth Prime Money Market Fund, Trust Shares.................... 42,098 42
----
Total Investment Companies....................................... 741
----
TOTAL INVESTMENTS IN AFFILIATES
(Cost $743) (a) -- (98.9%)...................................... 741
Other assets in excess of liabilities -- (1.1%).................. 8
----
TOTAL NET ASSETS -- (100.0%)..................................... $749
====
---------
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of $1.
Cost for federal income tax purposes differs from value by net unrealized
depreciation of securities as follows:
Unrealized appreciation............................................... $ 2
Unrealized depreciation............................................... (5)
----
Net unrealized depreciation........................................... $ (3)
====
</TABLE>
See notes to financial statements
144
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Current Income Portfolio (a)
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments in affiliates, at value (cost $743)..................... $ 741
Receivable from investment adviser.................................. 6
Prepaid expenses and other assets................................... 10
-----
Total Assets....................................................... 757
Liabilities:
Accrued expenses and other payables................................. $ 8
---
Total Liabilities.................................................. 8
-----
Net Assets:
Capital............................................................. 767
Undistributed (distributions in excess of) net investment income.... 4
Undistributed (distributions in excess of) net realized gains....... (20)
Net unrealized appreciation (depreciation) from investments......... (2)
-----
Net Assets.......................................................... $ 749
=====
Class A Shares**
Net Assets......................................................... $ 3
Shares outstanding................................................. --
Redemption price per share*........................................ $9.52
=====
Class A Shares -- Maximum Sales Charge.............................. 4.00%
-----
Maximum Offering Price Per Share
(100%/(100% -- Maximum Sales Charge) of net asset value adjusted
to the nearest cent).............................................. $9.92
=====
Class B Shares***
Net Assets......................................................... $ 24
Shares outstanding................................................. 3
Offering price per share*.......................................... $9.47
=====
Trust Shares (b)****
Net Assets......................................................... $ 722
Shares outstanding................................................. 75
Offering and redemption price per share............................ $9.56
=====
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
** Net assets are actually $3,278.45 and shares outstanding are 344.438
shares.
*** Net assets are actually $24,222 and shares outstanding are 2,557 shares.
**** Net assets are actually $721,523 and shares outstanding are 75,448
shares.
(a) Formerly ISG Current Income Portfolio.
(b) Formerly Institutional Shares.
(c) For the period from January 1, 2000 through July 31, 2000.
(d) For the period from January 25, 1999 (commencement of operations) through
December 31, 1999.
Statements of Operations
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (c) 1999 (d)
------------ ------------
(Amounts in thousands)
<S> <C> <C>
Investment Income:
Dividend income from affiliates..................... $ 22 $ 23
Expenses:
Investment advisory fees............................ 1 1
Administration fees................................. 1 1
Shareholder servicing fees -- Trust Shares (b)..... -- 1
Custodian fees...................................... -- 1
Accounting fees..................................... 5 19
Transfer agent fees................................. 16 40
Registration and filing fees........................ 27 33
Audit fees.......................................... 6 12
Legal fees.......................................... -- 8
Other fees.......................................... -- 1
---- -----
Total expenses before voluntary fee
reductions/reimbursements......................... 56 117
Expenses voluntarily reduced/reimbursed............ (53) (114)
---- -----
Net expenses....................................... 3 3
---- -----
Net Investment Income............................... 19 20
---- -----
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment
transactions with affiliates....................... (3) (17)
Net change in unrealized appreciation (depreciation)
from investments................................... 7 (9)
---- -----
Net realized/unrealized gains (losses) from
investments........................................ 4 (26)
---- -----
Change in net assets resulting from operations...... $ 23 $ (6)
==== =====
</TABLE>
See notes to financial statements
145
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Current Income Portfolio (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ ------------
(Amounts in thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income............................... $ 19 $ 20
Net realized gains (losses) from investment
transactions with affiliates....................... (3) (17)
Net change in unrealized appreciation (depreciation)
from investments................................... 7 (9)
---- ----
Change in net assets resulting from operations....... 23 (6)
---- ----
Distributions to Class B Shareholders:
From net investment income.......................... -- (1)(d)
Distributions to Trust Shareholders (e):
From net investment income.......................... (15) (19)
---- ----
Change in net assets from shareholder distributions.. (15) (20)
---- ----
Change in net assets from capital transactions....... 93 674
---- ----
Change in net assets................................. 101 648
Net Assets:
Beginning of period................................. 648 --
---- ----
End of period....................................... $749 $648
==== ====
</TABLE>
---------
(a) Formerly ISG Current Income Portfolio.
(b) For the period January 1, 2000 through July 31, 2000.
(c) For the period from January 25, 1999 (commencement of operations) through
December 31, 1999.
(d) For the period from March 17, 1999 (commencement of operations) through
December 31, 1999.
(e) Formerly Institutional Shares.
See notes to financial statements
146
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Current Income Portfolio (a)
Financial Highlights, Class A Shares
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ ------------
<S> <C> <C>
Net Asset Value, Beginning of Period.............. $ 9.40 $ 9.88
------ ------
Investment Activities
Net investment income (loss)..................... 0.26 0.32
Net realized and unrealized gains (losses) from
investments with affiliates..................... 0.07 (0.48)
------ ------
Total from Investment Activities................. 0.33 (0.16)
------ ------
Distributions
Net investment income............................ (0.21) (0.32)
------ ------
Total Distributions.............................. (0.21) (0.32)
------ ------
Net change in asset value......................... 0.12 (0.48)
------ ------
Net Asset Value, End of Period.................... $ 9.52 $ 9.40
====== ======
Total Return (excludes sales charge).............. 3.56%(d) (1.63)%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)................. $ 3 $ 3
Ratio of expenses to average net assets........... 0.90%(e) 1.01%(e)
Ratio of net investment income to average net
assets........................................... 4.64%(e) 4.66%(e)
Ratio of expenses to average net assets*.......... 14.15%(e) 28.50%(e)
Portfolio turnover**.............................. 11% 96%
</TABLE>
* During the period, certain fees were voluntarily reduced/reimbursed. If
such voluntary fee reductions/reimbursements had not occurred, the ratios
would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Current Income Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 23, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ ------------
<S> <C> <C>
Net Asset Value, Beginning of Period.............. $ 9.44 $ 9.87
------ ------
Investment Activities
Net investment income (loss)..................... 0.20 0.27
Net realized and unrealized gains (losses) from
investments with affiliates..................... 0.02 (0.43)
------ ------
Total from Investment Activities................. 0.22 (0.16)
------ ------
Distributions
Net investment income............................ (0.19) (0.27)
------ ------
Total Distributions.............................. (0.19) (0.27)
------ ------
Net change in asset value......................... 0.03 (0.43)
------ ------
Net Asset Value, End of Period.................... $ 9.47 $ 9.44
====== ======
Total Return (excludes redemption charge)......... 2.38%(d) (1.66)%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)................. $ 24 $ --
Ratio of expenses to average net assets........... 1.58%(e) 1.51%(e)
Ratio of net investment income to average net
assets........................................... 3.72%(e) 4.07%(e)
Ratio of expenses to average net assets*.......... 12.17%(e) 31.04%(e)
Portfolio turnover**.............................. 11% 96%
</TABLE>
* During the period, certain fees were voluntarily reduced/reimbursed. If
such voluntary fee reductions/reimbursements had not occurred, the ratios
would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Current Income Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from March 17, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
147
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Current Income Portfolio (a)
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, December 31,
2000 (b) 1999 (c)
------------ ------------
<S> <C> <C>
Net Asset Value, Beginning of Period.............. $ 9.45 $10.00
------ ------
Investment Activities
Net investment income (loss)..................... 0.26 0.41
Net realized and unrealized gains (losses) from
investments with affiliates..................... 0.07 (0.55)
------ ------
Total from Investment Activities................. 0.33 (0.14)
------ ------
Distributions
Net investment income............................ (0.22) (0.41)
------ ------
Total Distributions.............................. (0.22) (0.41)
------ ------
Net change in asset value......................... 0.11 (0.55)
------ ------
Net Asset Value, End of Period.................... $ 9.56 $ 9.45
====== ======
Total Return...................................... 3.50%(d) (1.41)%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)................. $ 722 $ 645
Ratio of expenses to average net assets........... 0.77%(e) 0.68%(e)
Ratio of net investment income to average net
assets........................................... 4.73%(e) 4.88%(e)
Ratio of expenses to average net assets*.......... 13.85%(e) 27.99%(e)
Portfolio turnover**.............................. 11% 96%
</TABLE>
/\ Formerly Institutional Shares.
* During the period, certain fees were voluntarily reduced/reimbursed. If
such voluntary fee reductions/reimbursements had not occurred, the ratios
would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Current Income Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from January 25, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
148
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Bond Fund July 31, 2000
(Amounts in thousands, except shares)
Corporate Bonds (40.9%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ----------
<S> <C> <C>
Aerospace/Defense (0.9%)
Boeing Corp., 6.88%, 11/1/06............................. $ 3,000 $ 2,918
United Technologies Corp., 6.40%, 9/15/01................ 1,775 1,768
----------
4,686
----------
Aluminum (0.4%)
Alcoa, Inc., 7.38%, 8/1/10............................... 2,000 2,003
----------
Automotive -- Finance (2.5%)
Ford Motor Credit Co., 6.25%, 12/8/05.................... 3,485 3,280
Ford Motor Credit Co., 7.35%, 11/7/11, MTN............... 1,750 1,660
General Motors Acceptance Corp., 7.50%, 7/15/05.......... 3,000 2,989
General Motors Acceptance Corp., 6.15%, 4/7/07........... 2,000 1,843
Toyota Motor Credit Corp., 5.50%, 9/17/01................ 3,000 2,951
----------
12,723
----------
Banking (4.2%)
ABN AMRO Bank, 6.63%, 10/31/01........................... 1,575 1,563
Bank of America Corp., 9.50%, 4/1/01..................... 1,150 1,166
Bank One Corp., 7.00%, 7/15/05........................... 3,157 3,074
Bank One, Texas, 6.25%, 2/15/08.......................... 1,000 903
Fifth Third Bank, 6.75%, 7/15/05......................... 4,000 3,879
First Union Corp., 6.18%, 2/15/36........................ 1,500 1,397
J.P. Morgan & Co., 7.63%, 9/15/04........................ 3,856 3,884
NationsBank Corp., 7.75%, 8/15/15........................ 1,100 1,095
SunTrust Banks, Inc., 7.38%, 7/1/06...................... 3,159 3,127
Wachovia Corp., 6.61%, 10/1/25........................... 1,875 1,819
----------
21,907
----------
Beverages (0.7%)
Coca-Cola Enterprises, Inc., 6.38%, 8/1/01............... 3,500 3,483
----------
Brokerage Services (1.5%)
Bear Stearns & Co. Inc., 6.63%, 10/1/04.................. 2,910 2,797
Dean Witter Discover & Co., 6.50%, 11/1/05............... 3,500 3,339
Merrill Lynch & Co., Inc., 6.00%, 2/12/03................ 1,450 1,408
----------
7,544
----------
Building Products (0.7%)
Vulcan Materials Co., 5.75%, 4/1/04...................... 2,000 1,895
Vulcan Materials Co., 6.00%, 4/1/09...................... 2,000 1,818
----------
3,713
----------
Computers & Peripherals (0.3%)
IBM Corp., 6.50%, 1/15/28................................ 1,750 1,593
----------
Consumer Goods (0.6%)
Procter & Gamble Co., 6.88%, 9/15/09..................... 3,000 2,933
----------
Cosmetics/Personal Care (0.3%)
Kimberly-Clark Corp., 7.10%, 8/1/07...................... 1,700 1,695
----------
</TABLE>
Corporate Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ----------
<S> <C> <C>
Electronic Components/Instruments (0.8%)
Honeywell, Inc., 7.00%, 3/15/07.......................... $ 2,000 $ 1,968
Motorola, Inc., 6.50%, 11/15/28.......................... 2,225 1,988
----------
3,956
----------
Entertainment (0.5%)
Disney (Walt) Co., 5.13%, 12/15/03....................... 3,000 2,820
----------
Financial Services (4.1%)
American Express Credit Corp., 6.50%, 8/1/00............. 2,000 2,000
Ameritech Capital, 5.65%, 1/15/01........................ 3,500 3,473
Associates Corp. N.A., 7.32%, 1/13/03, MTN............... 800 799
Associates Corp. N.A., 5.75%, 10/15/03................... 2,000 1,895
Associates Corp. N.A., 5.75%, 11/1/03.................... 3,000 2,843
Commercial Credit Co., 7.38%, 3/15/02.................... 3,000 3,007
Commercial Credit Co., 6.50%, 8/1/04..................... 3,000 2,905
Countrywide Home Loan, 6.84%, 10/22/04, MTN.............. 2,125 2,043
Norwest Financial, Inc., 6.63%, 7/15/04.................. 2,000 1,953
----------
20,918
----------
Food Products & Services (0.8%)
Campbell Soup Co., 6.15%, 12/1/02........................ 2,750 2,713
Sara Lee Corp., 6.15%, 6/19/08, MTN...................... 1,625 1,515
----------
4,228
----------
Forest & Paper Products (0.6%)
Mead Corp., 6.60%, 3/1/02................................ 3,000 2,974
----------
Industrial Goods & Services (3.2%)
Air Products & Chemicals, Inc., 8.35%, 1/15/02........... 3,000 3,029
E. I. Dupont de Nemours & Co., 6.50%, 9/1/02............. 2,000 1,988
E. I. Dupont de Nemours & Co., 6.75%, 10/15/02........... 2,570 2,560
First Data Corp., 6.75%, 7/15/05......................... 2,000 1,928
H.J. Heinz Co., 6.38%, 7/15/28........................... 2,000 1,750
Reliance Electric Co., 6.80%, 4/15/03.................... 1,850 1,848
Rockwell International Corp., 6.63%, 6/1/05.............. 3,456 3,373
----------
16,476
----------
Insurance (1.5%)
Capital Holding Corp., 9.20%, 4/17/01.................... 1,600 1,622
Chubb Corp., 6.15%, 8/15/05.............................. 1,000 938
Hartford Life, Inc., 6.90%, 6/15/04...................... 3,100 3,026
Travelers/Aetna Property & Casualty, 6.75%, 4/15/01...... 2,000 1,995
----------
7,581
----------
Office Equipment & Services (0.4%)
Xerox Corp., 7.15%, 8/1/04............................... 2,200 2,068
----------
</TABLE>
Continued
149
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Bond Fund July 31, 2000
(Amounts in thousands, except shares)
Corporate Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ----------
<S> <C> <C>
Oil & Gas Exploration, Production, & Services (1.6%)
BP America, Inc., 9.38%, 11/1/00........................ $ 3,158 $ 3,178
Conoco Inc., 5.90%, 4/15/04............................. 1,500 1,436
Conoco Inc., 6.35%, 4/15/09............................. 1,000 935
Exxon Capital Corp., 7.45%, 12/15/01.................... 864 869
Phillips Petroleum Co., 6.38%, 3/30/09.................. 2,000 1,813
----------
8,231
----------
Pharmaceuticals (0.6%)
Warner-Lambert Co., 5.75%, 1/15/03...................... 3,000 2,921
----------
Photography (0.6%)
Eastman Kodak Co., 9.38%, 3/15/03....................... 3,100 3,267
----------
Retail (2.0%)
J.C. Penney & Co., 6.50%, 6/15/02, MTN.................. 1,500 1,434
J.C. Penney & Co., 6.13%, 11/15/03...................... 2,000 1,808
May Department Stores Co., 7.15%, 8/15/04............... 1,000 998
Nike, Inc., 6.38%, 12/1/03.............................. 3,000 2,920
Target Corp., 7.50%, 2/15/05............................ 2,000 2,033
Wal-Mart Stores, Inc., 6.75%, 5/15/02................... 1,000 998
----------
10,191
----------
Tools (0.4%)
Stanley Works, 5.75%, 3/1/04............................ 2,000 1,905
----------
Utilities -- Electric & Gas (7.6%)
Baltimore Gas & Electric, 7.50%, 1/15/07................ 3,100 3,118
Cincinnati Gas & Electric Co., 6.45%, 2/15/04........... 1,500 1,438
Consolidated Edison Co. of New York, Inc., 6.63%,
2/1/02................................................. 2,000 1,990
Florida Power Corp., 6.54%, 7/1/02, MTN................. 1,325 1,307
National Rural Utilities Corp., Series C, 6.49%,
7/10/02, MTN........................................... 1,425 1,409
National Rural Utilities Corp., 5.00%, 10/1/02.......... 3,500 3,355
National Rural Utilities Corp., 6.38%, 10/15/04......... 3,100 3,023
Northern States Power Co., 7.88%, 10/1/01............... 2,750 2,767
Northern States Power Co., 6.88%, 8/1/09................ 1,750 1,676
Oklahoma Gas & Electric Co., 6.25%, 10/15/00............ 2,250 2,244
Potomac Electric Power Corp., 6.00%, 4/1/04............. 2,325 2,209
SCANA Corp., Series B, 6.25%, 7/8/03, MTN............... 2,225 2,153
Smith Enron, 5.97%, 12/15/06............................ 1,829 1,758
Tampa Electric Co., 6.13%, 5/1/03....................... 2,000 1,943
Virginia Electric & Power Co., 6.63%, 4/1/03............ 2,000 1,958
Virginia Electric & Power Co., 8.00%, 3/1/04............ 2,500 2,531
</TABLE>
Corporate Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ----------
<S> <C> <C>
Utilities -- Electric & Gas, continued
Washington Gas Light, Series D, 6.85%, 3/9/28, MTN.... $ 1,500 $ 1,311
Wisconsin Electric Power, 6.63%, 11/15/06............. 3,500 3,346
----------
39,536
----------
Utilities -- Telecommunications (4.1%)
BellAtlantic Corp., 6.25%, 2/15/04.................... 2,000 1,925
BellSouth Telecommunications, 6.50%, 6/15/05.......... 3,500 3,399
Chesapeake & Potomac Telephone, 6.00%, 5/1/03......... 2,009 1,941
GTE California, Inc., 5.63%, 2/1/01................... 2,000 1,983
GTE Northwest, Inc., Series A, 7.38%, 5/1/01.......... 2,295 2,295
Southern New England Telecommunications Corp., 6.50%,
2/15/02.............................................. 2,000 1,975
Southwestern Bell Telephone, 6.63%, 4/1/05............ 2,000 1,948
US West Communications Group, 6.63%, 9/15/05.......... 4,000 3,834
WorldCom, Inc., 6.13%, 8/15/01........................ 2,000 1,980
----------
21,280
----------
TOTAL CORPORATE BONDS................................. 210,632
----------
Municipal Bonds (0.1%)
Georgia (0.1%)
Atlanta Downtown Development Lease Revenue Bond,
6.88%, 2/1/21........................................ 800 731
----------
TOTAL MUNICIPAL BONDS................................. 731
----------
U.S. Government Agencies (16.0%)
Fannie Mae (8.7%)
6.35%, 11/23/01....................................... 1,000 992
6.59%, 5/21/02........................................ 3,000 2,979
7.05%, 11/12/02....................................... 7,500 7,526
5.13%, 2/13/04........................................ 17,600 16,606
7.13%, 3/15/07........................................ 10,000 10,064
6.56%, 11/26/07....................................... 7,300 6,956
----------
45,123
----------
Freddie Mac (3.4%)
6.88%, 1/15/05........................................ 15,000 14,945
7.14%, 3/12/07........................................ 700 685
7.10%, 4/10/07........................................ 2,000 2,010
----------
17,640
----------
Government National Mortgage Assoc.
(3.2%)
6.50%, 8/15/11-4/20/29................................ 6,606 6,275
7.00%, 9/15/11-11/20/28............................... 9,377 9,090
7.50%, 8/15/11........................................ 534 536
8.00%, 5/15/10........................................ 312 318
----------
16,219
----------
</TABLE>
Continued
150
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Bond Fund July 31, 2000
(Amounts in thousands, except shares)
U.S. Government Agencies, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ----------
<S> <C> <C>
Tennessee Valley Authority (0.7%)
5.38%, 11/13/08......................................... $ 4,000 $ 3,567
----------
TOTAL U.S. GOVERNMENT AGENCIES.......................... 82,549
----------
U.S. Treasury Bonds (22.8%)
6.00%, 8/15/09.......................................... 48,500 48,181
7.50%, 11/15/16......................................... 34,000 38,718
8.13%, 8/15/21.......................................... 1,000 1,236
6.25%, 8/15/23.......................................... 28,660 29,260
----------
TOTAL U.S. TREASURY BONDS............................... 117,395
----------
U.S. Treasury Notes (16.6%)
5.13%, 8/31/00.......................................... 5,000 4,995
6.50%, 10/15/06......................................... 26,000 26,382
6.13%, 8/15/07.......................................... 54,000 53,831
----------
TOTAL U.S. TREASURY NOTES............................... 85,208
----------
Investment Companies (1.6%)
AmSouth Prime Money Market Fund......................... 8,142,013 8,142
AmSouth U.S. Treasury Money Market Fund................. 7 --*
----------
TOTAL INVESTMENT COMPANIES.............................. 8,142
----------
Short-Term Securities+ (55.6%)
Commercial Paper (36.0%)
Asset Backed -- Miscellaneous (7.1%)
Asset Securitization Corp., 6.60%, 9/6/00............... $ 8,945 8,792
Corporate Receivables, 6.62%, 8/1/00.................... 11,181 11,179
Falcon Asset Securitization Corp., 6.62%, 8/14/00....... 8,945 8,797
Mermaid, 6.87%, 8/10/00................................. 7,864 7,840
----------
36,608
----------
Financial Services (20.3%)
Golden Funding Corp., 6.55%-6.62%, 9/8/00-9/18/00....... 11,397 11,250
Liberty Street Funding Corp., 6.56%, 10/11/00........... 7,967 7,832
Moat Funding Corp., 6.54%-6.67%, 8/11/00-10/6/00........ 11,404 11,225
Orix Corp., 6.78%-6.85%, 8/10/00-9/1/00................. 9,346 9,247
Rabobank, 6.65%, 8/1/00................................. 20,689 20,685
Superior Funding Corp., 6.51%-6.53%, 8/21/00-8/29/00.... 12,299 12,229
TransAmerica, 6.65%, 9/5/00............................. 8,945 8,832
Trident, 6.70%, 8/4/00.................................. 11,181 11,104
UBS Finance, 6.57%-6.64%, 8/1/00-8/7/00................. 11,919 11,913
----------
104,317
----------
</TABLE>
Short-Term Securities+, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ----------
<S> <C> <C>
Commercial Paper, continued
Food -- Retail (1.1%)
Safeway, Inc., 6.70%, 8/15/00........................... $ 5,590 $ 5,550
----------
Miscellaneous (2.1%)
Tyco International, Ltd., 6.80%-6.91%, 8/7/00-8/21/00... 10,832 10,731
----------
Utilities -- Electrical & Gas (1.5%)
Dominion Resources, Inc., 6.88%, 8/7/00................. 7,827 7,735
----------
Utilities -- Telecommunications (3.9%)
Cox Communications, Inc., 6.72%, 8/22/00................ 9,331 9,260
Qwest Communications International, Inc., 6.80%,
9/5/00................................................. 11,181 11,054
----------
20,314
----------
Total Commercial Paper.................................. 185,255
----------
Floating Rate Notes (6.1%)
Financial Services (5.4%)
Ford Motor Credit Co., 6.71%**, 4/11/02, MTN............ 4,472 4,472
General Motors Acceptance Corp., 6.72%**, 4/5/02, MTN... 8,441 8,435
General Motors Acceptance Corp., 6.94%**, 11/13/00,
MTN.................................................... 2,683 2,683
KeyBank N.A., 6.66%**, 1/7/02........................... 10,345 10,353
KeyCorp, 6.94%**, 10/23/00, MTN......................... 2,236 2,236
----------
28,179
----------
Miscellaneous (0.7%)
Tyco International, Ltd., 7.47%**, 9/5/00 (b)........... 3,354 3,353
----------
Total Floating Rate Notes............................... 31,532
----------
Time Deposits (3.3%)
Amex Centurion, 6.56%-6.58%, 8/8/00-8/30/00............. 16,771 16,771
----------
Investment Companies (8.0%)
AIM Liquid Asset Money Market Fund...................... 41,323,356 41,323
----------
Repurchase Agreements (2.2%)
Lehman Brothers, 6.74%, 8/1/00, dated 7/31/00, with a
maturity value of $11,183 (See Significant Accounting
Policies, Securities Lending in the Notes to Financial
Statements for collateral description)................. $ 11,181 11,181
----------
TOTAL SHORT-TERM SECURITIES............................. 286,062
----------
TOTAL INVESTMENTS
(Cost $797,373) (a) -- (153.6%)........................ 790,719
Liabilities in excess of
other assets -- (-53.6%)............................... (276,033)
----------
TOTAL NET ASSETS -- (100.0%)............................ $ 514,686
==========
</TABLE>
Continued
151
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Bond Fund July 31, 2000
(Amounts in thousands, except shares)
---------
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of $12.
Cost for federal income tax purposes differs from value by net unrealized
depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.......................................... $ 5,801
Unrealized depreciation.......................................... (12,467)
--------
Net unrealized depreciation...................................... $ (6,666)
========
</TABLE>
(b) Represents a restricted security purchased under Rule 144A which is exempt
from registration under the Security Act of 1933, as amended.
* Due to rounding, figure was below thousand dollar threshold.
** Variable rate security. Rate represents rate in effect at July 31, 2000.
+ Represents securities purchased with cash collateral received on loaned
securities.
MTN -- Medium Term Note
See notes to financial statements
152
<PAGE>
AMSOUTH FUNDS
Bond Fund
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $786,192)....................... $779,538
Repurchase agreements, at cost.............................. 11,181
--------
Total Investments.......................................... 790,719
Interest and dividends receivable........................... 10,097
Receivable for capital shares issued........................ 21
Receivable for investments sold............................. 112
Prepaid expenses and other assets........................... 11
--------
Total Assets............................................... 800,960
Liabilities:
Payable for return of collateral held for securities on
loan....................................................... $286,062
Payable for capital shares redeemed......................... 6
Accrued expenses and other payables:
Investment advisory fees................................... 84
Administration fees........................................ 13
Distribution fees.......................................... 47
Custodian fees............................................. 12
Other...................................................... 50
--------
Total Liabilities.......................................... 286,274
--------
Net Assets:
Capital..................................................... 521,641
Undistributed (distributions in excess of) net investment
income..................................................... 1,179
Undistributed (distributions in excess of) net realized
gains...................................................... (1,480)
Net unrealized appreciation (depreciation) from
investments................................................ (6,654)
--------
Net Assets.................................................. $514,686
========
Class A Shares (a)
Net Assets................................................. $ 9,500
Shares outstanding......................................... 903
Redemption price per share................................. $ 10.52
========
Class A Shares -- Maximum Sales Charge...................... 4.00%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum
Sales Charge) of net asset value adjusted to the nearest
cent)..................................................... $ 10.96
========
Class B Shares
Net Assets................................................. $ 3,636
Shares outstanding......................................... 346
Offering price per share*.................................. $ 10.50
========
Trust Shares (b)
Net Assets................................................. $501,550
Shares outstanding......................................... 47,666
Offering and redemption price per share.................... $ 10.52
========
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2000
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income............................................... $27,439
Dividend income............................................... 375
Income from securities lending................................ 69
-------
Total Investment Income...................................... 27,883
Expenses:
Investment advisory fees...................................... $2,811
Administration fees........................................... 865
Distribution fees -- Class B Shares........................... 29
Shareholder servicing fees -- Class A Shares (a).............. 20
Shareholder servicing fees -- Trust Shares (b)................ 283
Custodian fees................................................ 91
Accounting fees............................................... 97
Transfer agent fees........................................... 132
Trustee fees and expenses..................................... 16
Other fees.................................................... 132
------
Total expenses before voluntary fee reductions............... 4,476
Expenses voluntarily reduced................................. (1,054)
-------
Net expenses................................................. 3,422
-------
Net Investment Income......................................... 24,461
-------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment transactions...... 151
Net change in unrealized appreciation (depreciation) from
investments.................................................. (118)
-------
Net realized/unrealized gains (losses) from investments....... 33
-------
Change in net assets resulting from operations................ $24,494
=======
</TABLE>
See notes to financial statements
153
<PAGE>
AMSOUTH FUNDS
Bond Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2000 1999
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................... $ 24,461 $ 19,836
Net realized gains (losses) from investment
transactions........................................... 151 3,588
Net change in unrealized appreciation (depreciation)
from investments....................................... (118) (15,033)
-------- --------
Change in net assets resulting from operations........... 24,494 8,391
-------- --------
Distributions to Class A Shareholders (a):
From net investment income.............................. (467) (385)
From net realized gains on investment transactions...... (15) (87)
Distributions to Class B Shareholders:
From net investment income.............................. (141) (77)
From net realized gains on investment transactions...... (5) (18)
Distributions to Trust Shareholders (b):
From net investment income.............................. (24,939) (18,671)
From net realized gains on investment transactions...... (795) (3,997)
-------- --------
Change in net assets from shareholder distributions...... (26,362) (23,235)
-------- --------
Change in net assets from capital transactions........... 126,737 69,257
-------- --------
Change in net assets..................................... 124,869 54,413
Net Assets:
Beginning of period..................................... 389,817 335,404
-------- --------
End of period........................................... $514,686 $389,817
======== ========
</TABLE>
---------
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
See notes to financial statements
154
<PAGE>
AMSOUTH FUNDS
Bond Fund
Financial Highlights, Class A Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2000 1999 1998 (a) 1997 1996
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $10.63 $11.05 $10.92 $ 10.54 $ 10.83
------ ------ ------ -------- --------
Investment Activities
Net investment income
(loss)................ 0.58 0.61 1.41 0.65 0.65
Net realized and
unrealized gains
(losses) from
investments........... (0.06) (0.32) (0.62) 0.42 (0.18)
------ ------ ------ -------- --------
Total from Investment
Activities............ 0.52 0.29 0.79 1.07 0.47
------ ------ ------ -------- --------
Distributions
Net investment income.. (0.61) (0.58) (0.63) (0.69) (0.65)
Net realized gains from
investment
transactions.......... (0.02) (0.13) (0.03) -- (0.11)
------ ------ ------ -------- --------
Total Distributions.... (0.63) (0.71) (0.66) (0.69) (0.76)
------ ------ ------ -------- --------
Net change in asset
value.................. (0.11) (0.42) 0.13 0.38 (0.29)
------ ------ ------ -------- --------
Net Asset Value, End of
Period................. $10.52 $10.63 $11.05 $ 10.92 $ 10.54
====== ====== ====== ======== ========
Total Return (excludes
sales charge).......... 5.10% 2.58% 7.45% 10.48% 4.40%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $9,500 $7,070 $7,032 $311,881 $132,737
Ratio of expenses to
average net assets..... 0.91% 0.81% 0.73% 0.75% 0.75%
Ratio of net investment
income to average net
assets................. 5.54% 5.46% 5.78% 6.10% 6.12%
Ratio of expenses to
average net assets*.... 1.21% 1.20% 0.95% 0.98% 0.98%
Portfolio turnover**.... 27% 18% 40% 35% 10%
</TABLE>
/\ Formerly Classic Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2000 1999 1998 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period....... $10.60 $11.04 $10.88
------ ------ ------
Investment Activities
Net investment income (loss).............. 0.49 0.50 0.46
Net realized and unrealized gains (losses)
from investments......................... (0.05) (0.31) 0.24
------ ------ ------
Total from Investment Activities.......... 0.44 0.19 0.70
------ ------ ------
Distributions
Net investment income..................... (0.52) (0.50) (0.51)
Net realized gains from investment
transactions............................. (0.02) (0.13) (0.03)
------ ------ ------
Total Distributions....................... (0.54) (0.63) (0.54)
------ ------ ------
Net change in asset value.................. (0.10) (0.44) 0.16
------ ------ ------
Net Asset Value, End of Period............. $10.50 $10.60 $11.04
====== ====== ======
Total Return (excludes redemption charge).. 4.30% 1.58% 6.58%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000).......... $3,636 $2,521 $ 442
Ratio of expenses to average net assets.... 1.74% 1.71% 1.74%(c)
Ratio of net investment income to average
net assets................................ 4.72% 4.63% 4.75%(c)
Ratio of expenses to average net assets*... 1.96% 1.95% 1.99%(c)
Portfolio turnover**....................... 27% 18% 40%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) For the period from September 16, 1997 (commencement of operations)
through July 31, 1998.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
155
<PAGE>
AMSOUTH FUNDS
Bond Fund
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2000 1999 1998 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period...... $ 10.63 $ 11.05 $ 10.72
-------- -------- --------
Investment Activities
Net investment income (loss)............. 0.59 0.61 0.57
Net realized and unrealized gains
(losses) from investments............... (0.06) (0.30) 0.38
-------- -------- --------
Total from Investment Activities......... 0.53 0.31 0.95
-------- -------- --------
Distributions
Net investment income.................... (0.62) (0.60) (0.59)
Net realized gains from investment
transactions............................ (0.02) (0.13) (0.03)
-------- -------- --------
Total Distributions...................... (0.64) (0.73) (0.62)
-------- -------- --------
Net change in asset value................. (0.11) (0.42) 0.33
-------- -------- --------
Net Asset Value, End of Period............ $ 10.52 $ 10.63 $ 11.05
======== ======== ========
Total Return.............................. 5.24% 2.68% 7.54%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000)......... $501,550 $380,226 $327,930
Ratio of expenses to average net assets... 0.78% 0.71% 0.73%(c)
Ratio of net investment income to average
net assets............................... 5.66% 5.57% 5.72%(c)
Ratio of expenses to average net assets*.. 1.03% 0.95% 0.97%(c)
Portfolio turnover**...................... 27% 18% 40%
</TABLE>
/\ Formerly Premier Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being relected as Classic Shares.
(b) Represents total return based on the activity of Classic Shares for the
period from August 1, 1997 to September 1, 1997 and the activity of
Premier Shares for the period from September 2, 1997 to July 31, 1998.
Total return for the Premier Shares for the period from September 2, 1997
(commencement of operations) through July 31, 1998 was 9.03%.
(c) Annualized.
See notes to financial statements
156
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Limited Term Bond Fund July 31, 2000
(Amounts in thousands, except shares)
Corporate Bonds (71.1%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- --------
<S> <C> <C>
Aerospace/Defense (0.9%)
United Technologies Corp., 6.40%, 9/15/01.................. $ 1,600 $ 1,594
--------
Automotive -- Finance (7.9%)
Chrysler Financial Corp., 6.08%, 4/6/01.................... 1,000 994
Ford Motor Credit Co., 6.50%, 2/28/02...................... 3,000 2,966
Ford Motor Credit Co., 6.63%, 6/30/03...................... 4,000 3,914
General Motors Acceptance Corp., 7.13%, 5/1/01............. 1,500 1,498
General Motors Acceptance Corp., 7.13%, 5/1/03............. 3,500 3,483
Toyota Motor Credit Corp., 5.50%, 9/17/01.................. 2,000 1,968
--------
14,823
--------
Banking (8.5%)
ABN AMRO Bank, 6.63%, 10/31/01............................. 2,500 2,481
Bank of America Corp., 9.50%, 4/1/01....................... 4,500 4,562
Bank One Corp., 6.25%, 9/1/00.............................. 3,000 3,000
Bankers Trust, 6.75%, 10/3/01.............................. 1,500 1,491
Firstar Bank, 6.25%, 12/1/02............................... 1,500 1,468
NationsBank Corp., 7.00%, 9/15/01.......................... 2,000 1,995
Wachovia Bank, 6.30%, 3/15/01.............................. 900 897
--------
15,894
--------
Beverages (1.0%)
Coca-Cola Co., 6.00%, 7/15/03.............................. 2,000 1,945
--------
Building Products (1.0%)
Vulcan Materials Co., 5.75%, 4/1/04........................ 2,000 1,895
--------
Computers & Peripherals (1.1%)
IBM Corp., 6.04%, 8/7/00, MTN.............................. 1,000 1,000
IBM Corp., 5.95%, 6/2/03................................... 1,000 970
--------
1,970
--------
Consumer Goods (1.0%)
Procter & Gamble Co., 5.25%, 9/15/03....................... 2,000 1,918
--------
Electronic Components/Instruments (1.6%)
Emerson Electric Co., 7.88%, 6/1/05........................ 2,000 2,062
Honeywell, Inc., 6.75%, 3/15/02............................ 850 848
--------
2,910
--------
Entertainment (0.8%)
Disney (Walt) Co., 6.38%, 3/30/01.......................... 1,500 1,496
--------
Farm Equipment (2.6%)
John Deere Capital Corp., 5.85%, 1/15/01................... 3,000 2,981
John Deere Capital Corp., 5.90%, 4/8/03.................... 2,000 1,920
--------
4,901
--------
Financial Services (11.8%)
Ameritech Capital Funding, 6.13%, 10/15/01................. 3,000 2,963
Associates Corp. of North America, 6.63%, 5/15/01.......... 4,200 4,185
Bear Stearns & Co., Inc., 6.13%, 2/1/03.................... 3,500 3,391
CIT Group Holdings, 6.38%, 10/1/02......................... 2,000 1,955
Commercial Credit Co., 8.26%, 11/1/01...................... 1,000 1,011
General Electric Capital Corp., 6.15%, 11/5/01............. 2,500 2,469
Household Netherlands, 6.20%, 12/1/03...................... 2,500 2,384
</TABLE>
Corporate Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- --------
<S> <C> <C>
Financial Services, continued
Merrill Lynch & Co., Inc., 6.00%, 1/15/01.................. $ 1,750 $ 1,741
Merrill Lynch & Co., Inc., 5.71%, 1/15/02.................. 2,000 1,948
--------
22,047
--------
Food Products & Services (1.8%)
Campbell Soup Co., 6.15%, 12/1/02.......................... 1,000 986
McDonald's Corp., 5.90%, 5/11/01........................... 1,000 990
McDonald's Corp., 6.00%, 6/23/02........................... 1,500 1,470
--------
3,446
--------
Forest & Paper Products (0.5%)
Mead Corp., 6.60%, 3/1/02.................................. 1,000 991
--------
Health Care (1.0%)
McKesson Corp., 6.88%, 3/1/02.............................. 2,000 1,935
--------
Industrial Goods & Services (5.3%)
Air Products & Chemicals, Inc., 8.35%, 1/15/02............. 2,000 2,020
Archer Daniels Midland, 6.25%, 5/15/03..................... 2,100 2,053
Caterpillar Financial Services, 6.02%, 4/15/02............. 1,000 978
E. I. Dupont de Nemours & Co., 6.50%, 9/1/02............... 3,000 2,980
Imperial Oil Ltd., 8.75%, 10/15/19......................... 1,767 1,829
--------
9,860
--------
Insurance (2.6%)
American General Finance, 5.75%, 11/1/03................... 2,000 1,910
St. Paul Cos., Inc., Series A, 6.17%, 1/15/01.............. 1,000 995
Travelers/Aetna Property & Casualty, 6.75%, 4/15/01........ 2,000 1,995
--------
4,900
--------
Office Equipment & Services (0.7%)
Xerox Corp., 8.13%, 4/15/02................................ 1,274 1,258
--------
Oil & Gas Exploration, Production, & Services (1.2%)
Amoco Co., 6.25%, 10/15/04................................. 2,200 2,156
--------
Photography (1.1%)
Eastman Kodak Co., Series A, 7.25%, 6/15/05, MTN........... 2,000 1,993
--------
Retail (4.3%)
Dayton Hudson Co., 6.40%, 2/15/03.......................... 2,500 2,458
J.C. Penney & Co., Inc., 7.25%, 4/1/02..................... 2,000 1,943
May Department Stores Co., 7.15%, 8/15/04.................. 1,750 1,746
Sears, Roebuck and Co., 6.00%, 3/20/03..................... 1,000 963
Target Corp., 7.50%, 2/15/05............................... 1,000 1,016
--------
8,126
--------
Telecommunications -- Equipment (0.5%)
Lucent Technologies, Inc., 6.90%, 7/15/01.................. 1,000 1,001
--------
Tools (0.5%)
Stanley Works, 7.38%, 12/15/02............................. 500 503
Stanley Works, 5.75%, 3/1/04............................... 500 476
--------
979
--------
</TABLE>
Continued
157
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Limited Term Bond Fund July 31, 2000
(Amounts in thousands, except shares)
Corporate Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- --------
<S> <C> <C>
Utilities -- Electric & Gas (10.2%)
Alabama Power Corp., 5.35%, 11/15/03..................... $ 3,750 $ 3,534
Baltimore Gas & Electric Co., 6.50%, 2/15/03............. 2,500 2,450
Cincinnati Gas & Electric Co., 6.45%, 2/15/04............ 1,300 1,246
Florida Power Corp., 6.54%, 7/1/02, MTN.................. 2,000 1,973
MidAmerican Energy, 6.50%, 12/15/01...................... 2,500 2,466
National Rural Utilities Corp., Series C, 6.49%, 7/10/02,
MTN..................................................... 2,000 1,978
Potomac Electric Power Corp., 6.00%, 4/1/04.............. 2,500 2,375
SCANA Corp., Series B, 6.25%, 7/8/03, MTN................ 2,000 1,935
Smith Enron, 5.97%, 12/15/06............................. 1,178 1,133
--------
19,090
--------
Utilities -- Telecommunications (3.2%)
AT&T Corp., 5.63%, 3/15/04............................... 1,500 1,418
BellSouth Telecommunications, 6.00%, 6/15/02............. 2,585 2,536
WorldCom, Inc., 6.13%, 8/15/01........................... 2,000 1,980
--------
5,934
--------
TOTAL CORPORATE BONDS.................................... 133,062
--------
U.S. Government Agencies (10.2%)
Fannie Mae (1.9%)
5.49%**, 8/4/00.......................................... 2,000 1,999
6.35%, 11/23/01.......................................... 1,500 1,489
--------
3,488
--------
Freddie Mac (3.6%)
6.88%, 1/15/05........................................... 5,000 4,981
6.75%, 4/1/08............................................ 2,000 1,910
--------
6,891
--------
Government National Mortgage
Assoc. (3.6%)
7.50%, 4/15/09-8/15/11................................... 2,168 2,178
8.00%, 12/15/07-4/15/10.................................. 3,525 3,582
8.50%, 9/15/09-12/15/09.................................. 944 966
--------
6,726
--------
Tennessee Valley Authority (1.1%)
6.00%, 9/24/02........................................... 2,000 1,968
--------
TOTAL U.S. GOVERNMENT AGENCIES........................... 19,073
--------
U.S. Treasury Notes (14.6%)
7.25%, 5/15/04........................................... 26,500 27,369
--------
TOTAL U.S. TREASURY NOTES................................ 27,369
--------
Investment Companies (2.5%)
AmSouth Prime Money Market Fund.......................... 4,594,658 4,595
AmSouth U.S. Treasury Money Market Fund ................. 355 --*
--------
TOTAL INVESTMENT COMPANIES............................... 4,595
--------
</TABLE>
Short-Term Securities + (46.1%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- --------
<S> <C> <C>
Commercial Paper (30.7%)
Asset Backed -- Miscellaneous (5.3%)
Asset Securitization Corp., 6.60%, 9/6/00.................. $ 578 $ 568
Corporate Receivables, 6.62%, 8/1/00....................... 722 722
Falcon Asset Securitization Corp., 6.62%, 8/14/00.......... 578 568
Mermaid, 6.87%, 8/10/00.................................... 8,007 7,983
--------
9,841
--------
Financial Services (16.0%)
Golden Funding Corp., 6.55%-6.62%, 9/8/00-9/18/00.......... 736 727
Liberty Street Funding Corp., 6.56%, 10/11/00.............. 515 506
Moat Funding Corp., 6.54%-6.67%, 8/11/00-10/6/00........... 737 725
Orix Corp., 6.78%-6.85%, 8/10/00-9/1/00.................... 4,185 4,143
Rabobank, 6.65%, 8/1/00.................................... 21,067 21,064
Superior Funding Corp., 6.51%-6.53%, 8/21/00-8/29/00....... 794 790
TransAmerica, 6.65%, 9/5/00................................ 578 570
Trident, 6.70%, 8/4/00..................................... 722 717
UBS Finance, 6.57%-6.64%, 8/1/00-8/7/00.................... 770 769
--------
30,011
--------
Food -- Retail (0.2%)
Safeway, Inc., 6.70%, 8/15/00.............................. 361 358
--------
Miscellaneous (3.5%)
Tyco International, Ltd., 6.80%-6.91%, 8/7/00-8/21/00...... 6,619 6,566
--------
Utilities -- Electrical & Gas (0.3%)
Dominion Resources, Inc., 6.88%, 8/7/00.................... 506 500
--------
Utilities -- Telecommunications (5.4%)
Cox Communications, Inc., 6.72%, 8/22/00................... 9,501 9,429
Qwest Communications International, Inc., 6.80%, 9/5/00.... 722 714
--------
10,143
--------
Total Commerical Paper..................................... 57,419
--------
Floating Rate Notes (9.5%)
Financial Services (9.4%)
Ford Motor Credit Co., 6.71%***, 4/11/02, MTN.............. 289 289
General Motors Acceptance Corp., 6.72%***, 4/5/02, MTN..... 6,464 6,458
General Motors Acceptance Corp., 6.94%***, 11/13/00, MTN... 173 173
KeyBank N.A., 6.66%***, 1/7/02............................. 10,533 10,541
KeyCorp, 6.94%***, 10/23/00, MTN........................... 144 144
--------
17,605
--------
Miscellaneous (0.1%)
Tyco International, Ltd., 7.47%***, 9/5/00 (b)............. 217 217
--------
Total Floating Rate Notes.................................. 17,822
--------
</TABLE>
Continued
158
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Limited Term Bond Fund July 31, 2000
(Amounts in thousands, except shares)
Short-Term Securities+, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- --------
<S> <C> <C>
Floating Rate Notes, continued
Time Deposits (0.6%)
Amex Centurion, 6.56%-6.58%, 8/8/00-8/30/00............... $ 1,083 $ 1,083
--------
Investment Companies (4.9%)
AIM Liquid Asset Money Market Fund........................ 9,093,247 9,093
--------
Repurchase Agreements (0.4%)
Lehman Brothers, 6.74%, 8/1/00, dated 7/31/00, with a
maturity value of $722 (See Significant Accounting
Policies, Securities Lending in the Notes to Financial
Statements for collateral description)................... $ 722 722
--------
TOTAL SHORT-TERM SECURITIES............................... 86,139
--------
TOTAL INVESTMENTS
(Cost $273,087) (a) -- (144.5%).......................... 270,238
Liabilities in excess of
other assets -- (-44.5%)................................. (83,187)
--------
TOTAL NET ASSETS -- (100.0%).............................. $187,051
========
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes
and differs from value by net unrealized depreciation of securities as
follows:
<TABLE>
<S> <C>
Unrealized appreciation.......................................... $ 252
Unrealized depreciation.......................................... (3,101)
-------
Net unrealized depreciation...................................... $(2,849)
=======
</TABLE>
(b) Represents a restricted security purchased under Rule 144A which is
exempt from registration under the Security Act of 1933, as amended.
* Due to rounding, figure was below thousand dollar threshold.
** Yield effective at purchase.
*** Variable rate security. Rate represents rate in effect at July 31, 2000.
+ Represents securities purchased with cash collateral received on loaned
securities.
MTN -- Medium Term Note
See notes to financial statements
159
<PAGE>
AMSOUTH FUNDS
Limited Term Bond Fund (a)
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $272,365)........................ $269,516
Repurchase agreements, at cost............................... 722
--------
Total Investments........................................... 270,238
Interest and dividends receivable............................ 2,977
Receivable for investments sold.............................. 72
Prepaid expenses and other assets............................ 7
--------
Total Assets................................................ 273,294
Liabilities:
Payable for return of collateral held for securities on
loan........................................................ $86,139
Payable for capital shares redeemed.......................... 22
Accrued expenses and other payables:
Investment advisory fees.................................... 31
Administration fees......................................... 5
Distribution fees........................................... 18
Custodian fees.............................................. 4
Other....................................................... 24
-------
Total Liabilities........................................... 86,243
--------
Net Assets:
Capital...................................................... 191,946
Undistributed (distributions in excess of) net investment
income...................................................... 342
Undistributed (distributions in excess of) net realized
gains....................................................... (2,388)
Net unrealized appreciation (depreciation) from investments.. (2,849)
--------
Net Assets................................................... $187,051
========
Class A Shares (b)
Net Assets.................................................. $ 7,913
Shares outstanding.......................................... 781
Redemption price per share.................................. $ 10.13
========
Class A Shares -- Maximum Sales Charge....................... 4.00%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum
Sales Charge) of net asset value adjusted to the nearest
cent)...................................................... $ 10.55
========
Class B Shares
Net Assets.................................................. $ 1,815
Shares outstanding.......................................... 180
Offering price per share*................................... $ 10.13
========
Trust Shares (c)
Net Assets.................................................. $177,323
Shares outstanding.......................................... 17,501
Offering and redemption price per share..................... $ 10.13
========
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly AmSouth Limited Maturity Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2000
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income.................................................. $9,074
Dividend income.................................................. 124
Income from securities lending................................... 6
------
Total Investment Income......................................... 9,204
Expenses:
Investment advisory fees......................................... $912
Administration fees.............................................. 281
Distribution fees -- Class B Shares.............................. 20
Shareholder servicing fees -- Class A Shares (b)................. 12
Shareholder servicing fees -- Trust Shares (c)................... 106
Custodian fees................................................... 31
Accounting fees.................................................. 41
Transfer agent fees.............................................. 66
Trustee fees and expenses........................................ 4
Other fees....................................................... 53
----
Total expenses before voluntary fee reductions.................. 1,526
Expenses voluntarily reduced.................................... (354)
------
Net expenses.................................................... 1,172
------
Net Investment Income............................................ 8,032
------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment transactions......... (687)
Net change in unrealized appreciation (depreciation) from
investments..................................................... (51)
------
Net realized/unrealized gains (losses) from investments.......... (738)
------
Change in net assets resulting from operations................... $7,294
======
</TABLE>
See notes to financial statements
160
<PAGE>
AMSOUTH FUNDS
Limited Term Bond Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2000 1999
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................ $ 8,032 $ 6,321
Net realized gains (losses) from investment
transactions........................................ (687) 464
Net change in unrealized appreciation (depreciation)
from investments.................................... (51) (2,240)
-------- --------
Change in net assets resulting from operations........ 7,294 4,545
-------- --------
Distributions to Class A Shareholders (b):
From net investment income........................... (264) (163)
Distributions to Class B Shareholders:
From net investment income........................... (102) (20)(d)
Distributions to Trust Shareholders (c):
From net investment income........................... (7,951) (5,930)
-------- --------
Change in net assets from shareholder distributions... (8,317) (6,113)
-------- --------
Change in net assets from capital transactions........ 74,205 4,953
-------- --------
Change in net assets.................................. 73,182 3,385
Net Assets:
Beginning of period.................................. 113,869 110,484
-------- --------
End of period........................................ $187,051 $113,869
======== ========
</TABLE>
---------
(a) Formerly AmSouth Limited Maturity Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
(d) For the period from January 21, 1999 (commencement of operations) through
July 31, 1999.
See notes to financial statements
161
<PAGE>
AMSOUTH FUNDS
Limited Term Bond Fund (a)
Financial Highlights, Class A Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2000 1999 1998 (b) 1997 1996
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $10.29 $10.43 $10.42 $ 10.31 $ 10.41
------ ------ ------ -------- -------
Investment Activities
Net investment income
(loss)................ 0.59 0.57 0.85 0.58 0.58
Net realized and
unrealized gains
(losses) from
investments........... (0.13) (0.15) (0.25) 0.14 (0.10)
------ ------ ------ -------- -------
Total from Investment
Activities............ 0.46 0.42 0.60 0.72 0.48
------ ------ ------ -------- -------
Distributions
Net investment income.. (0.62) (0.56) (0.59) (0.61) (0.57)
Net realized gains from
investment
transactions.......... -- -- -- -- (0.01)
------ ------ ------ -------- -------
Total Distributions.... (0.62) (0.56) (0.59) (0.61) (0.58)
------ ------ ------ -------- -------
Net change in asset
value.................. (0.16) (0.14) 0.01 0.11 (0.10)
------ ------ ------ -------- -------
Net Asset Value, End of
Period................. $10.13 $10.29 $10.43 $ 10.42 $ 10.31
====== ====== ====== ======== =======
Total Return (excludes
sales charge).......... 4.59% 4.01% 5.94% 7.25% 4.74%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $7,913 $2,716 $3,531 $138,675 $46,005
Ratio of expenses to
average net assets..... 0.96% 0.81% 0.74% 0.77% 0.76%
Ratio of net investment
income to average net
assets................. 5.60% 5.49% 5.65% 5.65% 5.48%
Ratio of expenses to
average net assets*.... 1.24% 1.23% 0.96% 1.02% 0.99%
Portfolio turnover**.... 34% 39% 39% 65% 30%
</TABLE>
/\ Formerly Classic Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly AmSouth Limited Maturity Fund.
(b) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Year Ended Period Ended
July 31, July 31,
2000 1999 (b)
---------- ------------
<S> <C> <C>
Net Asset Value, Beginning of Period................. $10.27 $10.58
------ ------
Investment Activities
Net investment income (loss)........................ 0.48 0.27
Net realized and unrealized gains (losses) from
investments........................................ (0.10) (0.30)
------ ------
Total from Investment Activities.................... 0.38 (0.03)
------ ------
Distributions
Net investment income............................... (0.52) (0.28)
------ ------
Total Distributions................................. (0.52) (0.28)
------ ------
Net change in asset value............................ (0.14) (0.31)
------ ------
Net Asset Value, End of Period....................... $10.13 $10.27
====== ======
Total Return (excludes redemption charge)............ 3.85% (0.33)%(c)
Ratios/Supplemental Data:
Net Assets at end of period (000).................... $1,815 $1,599
Ratio of expenses to average net assets.............. 1.76% 1.69%(d)
Ratio of net investment income to average net
assets.............................................. 4.79% 4.61%(d)
Ratio of expenses to average net assets*............. 1.99% 1.96%(d)
Portfolio turnover**................................. 34% 39%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly AmSouth Limited Maturity Fund.
(b) For the period from January 21, 1999 (commencement of operations) through
July 31, 1999.
(c) Not annualized.
(d) Annualized.
See notes to financial statements
162
<PAGE>
AMSOUTH FUNDS
Limited Term Bond Fund (a)
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2000 1999 1998 (b)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period...... $ 10.29 $ 10.43 $ 10.34
-------- -------- --------
Investment Activities
Net investment income (loss)............. 0.59 0.59 0.55
Net realized and unrealized gains
(losses) from investments............... (0.12) (0.16) 0.10
-------- -------- --------
Total from Investment Activities......... 0.47 0.43 0.65
-------- -------- --------
Distributions
Net investment income.................... (0.63) (0.57) (0.56)
-------- -------- --------
Total Distributions...................... (0.63) (0.57) (0.56)
-------- -------- --------
Net change in asset value................. (0.16) (0.14) 0.09
-------- -------- --------
Net Asset Value, End of Period............ $ 10.13 $ 10.29 $ 10.43
======== ======== ========
Total Return.............................. 4.71% 4.14% 6.04%(c)
Ratios/Supplemental Data:
Net Assets at end of period (000)......... $177,323 $109,554 $106,953
Ratio of expenses to average net assets... 0.82% 0.71% 0.73%(d)
Ratio of net investment income to average
net assets............................... 5.74% 5.60% 5.70%(d)
Ratio of expenses to average net assets*.. 1.07% 0.98% 0.98%(d)
Portfolio turnover**...................... 34% 39% 39%
</TABLE>
/\ Formerly Premier Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly AmSouth Limited Maturity Fund.
(b) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being relected as Classic Shares.
(c) Represents total return based on the activity of Classic Shares for the
period from August 1, 1997 to September 1, 1997 and the activity of Premier
Shares for the period from September 2, 1997 to July 31, 1998. Total return
for the Premier Shares for the period from September 2, 1997 (commencement
of operations) through July 31, 1998 was 6.37%.
(d) Annualized.
See notes to financial statements
163
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Government Income Fund July 31, 2000
(Amounts in thousands, except shares)
U.S. Government Agencies (56.6%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ---------
<S> <C> <C>
Fannie Mae (7.9%)
5.75%, 4/15/03............................................ $ 2,000 $ 1,944
6.46%, 5/9/05, Callable 5/9/01 @ 100...................... 5,000 4,846
6.94%, 9/5/07, Callable 9/5/02 @ 100...................... 2,000 1,948
6.27%, 2/5/08, Callable 2/5/03 @ 100, MTN................. 5,000 4,706
6.00%, 5/15/08............................................ 7,000 6,551
7.50%, 4/1/15-6/1/15...................................... 8,826 8,807
---------
28,802
---------
Federal Farm Credit Bank (8.4%)
6.20%, 7/1/02............................................. 10,000 9,882
5.07%, 12/15/03........................................... 15,000 14,176
5.70%, 9/3/08............................................. 7,000 6,392
---------
30,450
---------
Federal Home Loan Bank (9.3%)
5.35%, 12/1/03............................................ 3,000 2,855
5.30%, 2/18/04............................................ 5,000 4,743
6.34%, 6/29/04............................................ 2,250 2,202
7.25%, 5/13/05............................................ 10,000 10,110
5.80%, 9/2/08............................................. 10,000 9,206
5.89%, 3/30/09............................................ 5,000 4,602
---------
33,718
---------
Freddie Mac (10.1%)
5.00%, 1/15/04............................................ 10,000 9,409
5.75%, 3/15/09............................................ 10,000 9,125
7.00%, 3/23/09............................................ 5,000 4,784
6.75%, 5/4/09............................................. 10,000 9,465
7.40%, 6/9/14, Callable 8/25/00 @ 100..................... 4,000 3,796
---------
36,579
---------
Government National Mortgage
Assoc. (16.4%)
7.00%, 12/15/26-2/20/29................................... 9,179 8,925
7.50%, 3/15/23-7/20/30.................................... 28,285 28,023
8.00%, 7/15/26-6/20/30.................................... 21,037 21,146
8.50%, 12/15/19-2/15/23................................... 146 149
9.00%, 6/15/18-9/15/27.................................... 660 680
9.50%, 5/15/18-8/15/21.................................... 507 525
---------
59,448
---------
Private Export Funding (1.8%)
6.31%, 9/30/04, Series C.................................. 2,000 1,953
6.49%, 7/15/07, Series B.................................. 2,000 1,943
5.87%, 7/31/08, Series D.................................. 3,000 2,778
---------
6,674
---------
Tennessee Valley Authority (2.7%)
6.13%, 7/15/03............................................ 3,682 3,585
5.38%, 11/13/08........................................... 1,500 1,337
6.75%, 11/1/25............................................ 5,000 4,832
---------
9,754
---------
TOTAL U.S. GOVERNMENT AGENCIES............................ 205,425
---------
</TABLE>
U.S. Treasury Bonds (15.8%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ---------
<S> <C> <C>
7.50%, 11/15/16.......................................... $ 7,900 $ 8,996
7.25%, 8/15/22........................................... 7,000 7,967
7.63%, 11/15/22.......................................... 7,000 8,286
7.13%, 2/15/23........................................... 9,000 10,125
6.88%, 8/15/25........................................... 10,000 11,041
6.75%, 8/15/26........................................... 10,000 10,919
---------
TOTAL U.S. TREASURY BONDS................................ 57,334
---------
U.S. Treasury Notes (23.2%)
5.75%, 10/31/00-8/15/03.................................. 18,000 17,840
7.75%, 2/15/01........................................... 9,000 9,068
8.00%, 5/15/01........................................... 9,000 9,110
7.88%, 8/15/01........................................... 7,000 7,103
7.50%, 5/15/02........................................... 10,000 10,191
6.50%, 8/15/05........................................... 15,000 15,182
7.00%, 7/15/06........................................... 15,000 15,580
---------
TOTAL U.S. TREASURY NOTES................................ 84,074
---------
Investment Companies (2.0%)
AIM Treasury Money Market Fund........................... 100,999 101
AmSouth Treasury Reserve Money Market Fund .............. 7,293,977 7,294
---------
TOTAL INVESTMENT COMPANIES............................... 7,395
---------
Short-Term Securities+ (37.3%)
Commercial Paper (23.9%)
Asset Backed -- Miscellaneous (5.0%)
Asset Securitization Corp., 6.60%, 9/6/00................ $ 5,636 5,539
Corporate Receivables, 6.62%, 8/1/00..................... 7,044 7,043
Falcon Asset Securitization Corp., 6.62%, 8/14/00........ 5,636 5,542
---------
18,124
---------
Financial Services (13.9%)
Golden Funding Corp., 6.55%-6.62%, 9/8/00-9/18/00........ 7,181 7,088
Liberty Street Funding Corp., 6.56%, 10/11/00............ 5,020 4,935
Moat Funding Corp., 6.54%-6.67%, 8/11/00-10/6/00......... 7,185 7,072
Orix Corp., 6.85%, 8/10/00............................... 3,522 3,483
Superior Funding Corp., 6.51%-6.53%, 8/21/00-8/29/00..... 7,749 7,704
TransAmerica, 6.65%, 9/5/00.............................. 5,636 5,565
Trident, 6.70%, 8/4/00................................... 7,044 6,996
UBS Finance, 6.57%-6.64%, 8/1/00-8/7/00.................. 7,509 7,505
---------
50,348
---------
Food -- Retail (1.0%)
Safeway, Inc., 6.70%, 8/15/00............................ 3,522 3,497
---------
Miscellaneous (0.8%)
Tyco International, Ltd., 6.91%, 8/7/00.................. 2,914 2,881
---------
</TABLE>
Continued
164
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Government Income Fund July 31, 2000
(Amounts in thousands, except shares)
Short-Term Securities+, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
----------- ---------
<S> <C> <C>
Commercial Paper, continued
Utilities -- Electrical & Gas (1.3%)
Dominion Resources, Inc., 6.88%, 8/7/00................. $ 4,931 $ 4,874
---------
Utilities -- Telecommunications (1.9%)
Qwest Communications International, Inc., 6.80%,
9/5/00................................................. 7,044 6,965
---------
Total Commercial Paper.................................. 86,689
---------
Floating Rate Notes (2.6%)
Financial Services (2.0%)
Ford Motor Credit Co., 6.71%*, 4/11/02, MTN............. 2,818 2,817
General Motors Acceptance Corp., 6.72%*, 4/5/02, MTN.... 1,408 1,408
General Motors Acceptance Corp., 6.94%*, 11/13/00, MTN.. 1,691 1,691
KeyCorp, 6.94%*, 10/23/00, MTN.......................... 1,409 1,409
---------
7,325
---------
Miscellaneous (0.6%)
Tyco International, Ltd., 7.47%*, 9/5/00 (b)............ 2,113 2,113
---------
Total Floating Rate Notes............................... 9,438
---------
Time Deposits (2.9%)
Amex Centurion, 6.56%-6.58%, 8/8/00-8/30/00............. 10,567 10,567
---------
Investment Companies (6.0%)
AIM Liquid Asset Money Market Fund...................... 21,791,175 21,791
---------
</TABLE>
Short-Term Securities+, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ---------
<S> <C> <C>
Repurchase Agreements (1.9%)
Lehman Brothers, 6.74%, 8/1/00, dated 7/31/00, with a
maturity value of $7,046 (See Significant Accounting
Policies, Securities Lending in the Notes to Financial
Statements for collateral description).................. $ 7,044 $ 7,044
---------
TOTAL SHORT-TERM SECURITIES.............................. 135,529
---------
TOTAL INVESTMENTS
(Cost $491,292) (a) -- (134.9%)......................... 489,757
Liabilities in excess of
other assets -- (-34.9%)................................ (126,716)
---------
TOTAL NET ASSETS -- (100.0%)............................. $ 363,041
=========
</TABLE>
---------
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of $21.
Cost for federal income tax purposes differs from value by net unrealized
depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.......................................... $ 7,420
Unrealized depreciation.......................................... (8,976)
--------
Net unrealized depreciation...................................... $ (1,556)
========
</TABLE>
(b) Represents a restricted security purchased under Rule 144A which is exempt
from registration under the Security Act of 1933, as amended.
* Variable rate security. Rate represents rate in effect at July 31, 2000.
+ Represents securities purchased with cash collateral received on loaned
securities.
MTN -- Medium Term Note
See notes to financial statements
165
<PAGE>
AMSOUTH FUNDS
Government Income Fund
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $484,248)....................... $482,713
Repurchase agreements, at cost.............................. 7,044
--------
Total Investments.......................................... 489,757
Interest and dividends receivable........................... 5,841
Receivable for investments sold............................. 3,107
Prepaid expenses and other assets........................... 14
--------
Total Assets............................................... 498,719
Liabilities:
Payable for return of collateral held for securities on
loan....................................................... $135,529
Accrued expenses and other payables:
Investment advisory fees................................... 61
Administration fees........................................ 9
Distribution fees.......................................... 32
Custodian fees............................................. 9
Other...................................................... 38
--------
Total Liabilities.......................................... 135,678
--------
Net Assets:
Capital..................................................... 370,359
Undistributed (distributions in excess of) net investment
income..................................................... 632
Undistributed (distributions in excess of) net realized
gains...................................................... (6,415)
Net unrealized appreciation (depreciation) from
investments................................................ (1,535)
--------
Net Assets.................................................. $363,041
========
Class A Shares (a)
Net Assets................................................. $ 5,879
Shares outstanding......................................... 612
Redemption price per share................................. $ 9.60
========
Class A Shares -- Maximum Sales Charge...................... 4.00%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum
Sales Charge) of net asset value adjusted to the nearest
cent)..................................................... $ 10.00
========
Class B Shares
Net Assets................................................. $ 520
Shares outstanding......................................... 54
Offering price per share*.................................. $ 9.61
========
Trust Shares (b)
Net Assets................................................. $356,642
Shares outstanding......................................... 37,130
Offering and redemption price per share.................... $ 9.61
========
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
(c) For the period from March 13, 2000 (commencement of operations) through
July 31, 2000.
Statement of Operations
For the year ended July 31, 2000
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income................................................. $ 9,314
Dividend income................................................. 298
Income from securities lending.................................. 69
-------
Total Investment Income........................................ 9,681
Expenses:
Investment advisory fees........................................ $964
Administration fees............................................. 297
Distribution fees -- Class B Shares (c)......................... 2
Shareholder servicing fees -- Class A Shares (a)................ 13
Shareholder servicing fees -- Trust Shares (b).................. 211
Custodian fees.................................................. 61
Accounting fees................................................. 32
Transfer agent fees............................................. 58
Trustee fees and expenses....................................... 4
Other fees...................................................... 41
----
Total expenses before voluntary fee reductions/reimbursements.. 1,683
Expenses voluntarily reduced/reimbursed........................ (424)
-------
Net expenses................................................... 1,259
-------
Net Investment Income........................................... 8,422
-------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment transactions........ (3,175)
Net change in unrealized appreciation (depreciation) from
investments.................................................... 7,276
-------
Net realized/unrealized gains (losses) from investments......... 4,101
-------
Change in net assets resulting from operations.................. $12,523
=======
</TABLE>
See notes to financial statements
166
<PAGE>
AMSOUTH FUNDS
Government Income Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2000 1999
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................ $ 8,422 $ 513
Net realized gains (losses) from investment
transactions........................................ (3,175) 51
Net change in unrealized appreciation (depreciation)
from investments.................................... 7,276 (283)
-------- -------
Change in net assets resulting from operations........ 12,523 281
-------- -------
Distributions to Class A Shareholders (a):
From net investment income........................... (276) (360)
Distributions to Class B Shareholders:
From net investment income........................... (8)(c) --
Distributions to Trust Shareholders (b):
From net investment income........................... (7,506) (141)
-------- -------
Change in net assets from shareholder distributions... (7,790) (501)
-------- -------
Change in net assets from capital transactions........ 349,722 (1,891)
-------- -------
Change in net assets.................................. 354,455 (2,111)
Net Assets:
Beginning of period.................................. 8,586 10,697
-------- -------
End of period........................................ $363,041 $ 8,586
======== =======
</TABLE>
---------
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
(c) For the period from March 13, 2000 (commencement of operations) through
July 31, 2000.
See notes to financial statements
167
<PAGE>
AMSOUTH FUNDS
Government Income Fund
Financial Highlights, Class A Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2000 1999 1998 (a) 1997 1996
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 9.62 $ 9.88 $ 9.75 $ 9.40 $ 9.54
------ ------ ------ ------- -------
Investment Activities
Net investment income
(loss)................ 0.56 0.54 0.63 0.58 0.66
Net realized and
unrealized gains
(losses) from
investments........... (0.04) (0.28) 0.09 0.35 (0.20)
------ ------ ------ ------- -------
Total from Investment
Activities............ 0.52 0.26 0.72 0.93 0.46
------ ------ ------ ------- -------
Distributions
Net investment income.. (0.54) (0.52) (0.53) (0.58) (0.59)
In excess of net
investment income..... -- -- (0.06) -- --
Tax return of capital.. -- -- -- -- (0.01)
------ ------ ------ ------- -------
Total Distributions.... (0.54) (0.52) (0.59) (0.58) (0.60)
------ ------ ------ ------- -------
Net change in asset
value.................. (0.02) (0.26) 0.13 0.35 (0.14)
------ ------ ------ ------- -------
Net Asset Value, End of
Period................. $ 9.60 $ 9.62 $ 9.88 $ 9.75 $ 9.40
====== ====== ====== ======= =======
Total Return (excludes
sales charge).......... 5.55% 2.62% 7.58% 10.21% 4.91%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $5,879 $5,436 $8,176 $11,622 $15,752
Ratio of expenses to
average net assets..... 0.85% 0.70% 0.71% 0.69% 0.65%
Ratio of net investment
income to average net
assets................. 5.77% 5.35% 5.95% 5.98% 6.81%
Ratio of expenses to
average net assets*.... 1.30% 1.90% 1.77% 1.29% 1.10%
Portfolio turnover**.... 42% 27% 35% 3% 78%
</TABLE>
/\ Formerly Classic Shares.
* During the period, certain fees were voluntarily reduced/reimbursed. If
such voluntary fee reductions/reimbursements had not occurred, the ratios
would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Period Ended
July 31,
2000 (a)
------------
<S> <C>
Net Asset Value, Beginning of Period.............................. $ 9.48
------
Investment Activities
Net investment income (loss)..................................... 0.18
Net realized and unrealized gains (losses) from investments...... 0.10
------
Total from Investment Activities................................. 0.28
------
Distributions
Net investment income............................................ (0.15)
------
Total Distributions.............................................. (0.15)
------
Net change in asset value......................................... 0.13
------
Net Asset Value, End of Period.................................... $ 9.61
======
Total Return (excludes redemption charge)......................... 2.98%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000)................................. $ 520
Ratio of expenses to average net assets........................... 1.75%(c)
Ratio of net investment income to average net assets.............. 4.77%(c)
Ratio of expenses to average net assets*.......................... 1.98%(c)
Portfolio turnover**.............................................. 42%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) For the period from March 13, 2000 (commencement of operations) through
July 31, 2000.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
168
<PAGE>
AMSOUTH FUNDS
Government Income Fund
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2000 1999 1998 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period....... $ 9.62 $ 9.87 $ 9.66
-------- ------ ------
Investment Activities
Net investment income (loss).............. 0.57 0.54 0.59
Net realized and unrealized gains (losses)
from investments......................... (0.03) (0.26) 0.17
-------- ------ ------
Total from Investment Activities.......... 0.54 0.28 0.76
-------- ------ ------
Distributions
Net investment income..................... (0.55) (0.53) (0.49)
In excess of net investment income........ -- -- (0.06)
-------- ------ ------
Total Distributions....................... (0.55) (0.53) (0.55)
-------- ------ ------
Net change in asset value.................. (0.01) (0.25) 0.21
-------- ------ ------
Net Asset Value, End of Period............. $ 9.61 $ 9.62 $ 9.87
======== ====== ======
Total Return............................... 5.91% 2.72% 7.58%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000).......... $356,642 $3,150 $2,521
Ratio of expenses to average net assets.... 0.85% 0.60% 0.63%(c)
Ratio of net investment income to average
net assets................................ 5.68% 5.44% 5.72%(c)
Ratio of expenses to average net assets*... 1.13% 1.65% 1.80%(c)
Portfolio turnover**....................... 42% 27% 35%
</TABLE>
/\ Formerly Premier Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
(b) Represents total return based on the activity of Classic Shares for the
period from August 1, 1997 to September 1, 1997 and the activity of
Premier Shares for the period from September 2, 1997 to July 31, 1998.
Total return for the Premier Shares for the period from September 2, 1997
(commencement of operations) through July 31, 1998 was 8.04%.
(c) Annualized.
See notes to financial statements
169
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Limited Term U.S. Government Fund July 31, 2000
(Amounts in thousands, except shares)
U.S. Government Agencies (59.6%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- -------
<S> <C> <C>
Fannie Mae (9.9%)
6.05%, 10/20/00........................................... $ 1,000 $ 999
5.38%, 3/15/02............................................ 1,000 978
5.98%, 11/12/02........................................... 500 490
5.63%, 5/14/04............................................ 500 478
5.75%, 6/15/05............................................ 250 238
6.44%, 8/14/07............................................ 500 483
6.65%, 11/14/07........................................... 500 479
-------
4,145
-------
Federal Farm Credit Bank (9.7%)
5.76%, 7/7/03............................................. 750 727
5.07%, 12/15/03........................................... 2,500 2,362
6.15%, 3/23/05............................................ 1,000 961
-------
4,050
-------
Federal Home Loan Bank (11.0%)
5.20%, 9/8/00............................................. 1,500 1,499
5.55%, 1/28/02............................................ 1,000 981
5.39%, 3/8/02............................................. 1,000 978
6.34%, 6/29/04............................................ 750 734
6.00%, 9/15/04............................................ 400 384
-------
4,576
-------
Freddie Mac (10.1%)
5.95%*, 8/4/00............................................ 500 500
6.16%, 9/25/02............................................ 500 493
5.89%, 7/17/03............................................ 400 388
5.00%, 1/15/04............................................ 1,000 941
6.25%, 5/18/04............................................ 1,000 970
6.53%, 3/3/08............................................. 1,000 947
-------
4,239
-------
Government National Mortgage Assoc. (5.8%)
9.00%, 12/15/01, Pool #152718............................. 11 12
9.00%, 2/15/03, Pool #248038.............................. 62 65
7.50%, 5/15/10, Pool #407408.............................. 476 478
7.00%, 8/15/11, Pool #423984.............................. 512 507
7.50%, 8/15/11, Pool #423914.............................. 534 535
7.00%, 9/15/11, Pool #423923.............................. 480 475
7.50%, 10/15/11, Pool #431451............................. 362 363
-------
2,435
-------
Private Export Funding (2.3%)
6.45%, 9/30/04............................................ 1,000 981
-------
Tennessee Valley Authority (10.8%)
6.50%, 8/20/01............................................ 1,000 996
5.28%, 9/14/01............................................ 2,000 1,965
6.00%, 9/24/02............................................ 1,000 984
5.38%, 11/13/08........................................... 600 535
-------
4,480
-------
TOTAL U.S. GOVERNMENT AGENCIES............................ 24,906
-------
</TABLE>
U.S. Treasury Notes (36.1%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- -------
<S> <C> <C>
6.63%, 7/31/01.............................................. $ 4,000 $ 4,009
7.50%, 11/15/01............................................. 6,500 6,586
6.63%, 4/30/02.............................................. 1,500 1,506
7.50%, 5/15/02.............................................. 1,000 1,019
6.25%, 6/30/02.............................................. 750 749
5.63%, 12/31/02............................................. 1,000 985
6.50%, 10/15/06............................................. 250 254
-------
TOTAL U.S. TREASURY NOTES................................... 15,108
-------
Investment Companies (3.1%)
AIM Treasury Money Market Fund.............................. 1,008 1
AmSouth Treasury Reserve Money Market Fund.................. 1,286,171 1,286
-------
TOTAL INVESTMENT COMPANIES.................................. 1,287
-------
TOTAL INVESTMENTS
(Cost $42,067) (a) -- (98.8%).............................. 41,301
Other assets in excess of
liabilities -- (1.2%)...................................... 516
-------
TOTAL NET ASSETS -- (100.0%)................................ $41,817
=======
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes
and differs from value by net unrealized depreciation of securities as
follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................ $ 67
Unrealized depreciation............................................ (833)
-------
Net unrealized depreciation........................................ $ (766)
=======
</TABLE>
* Yield effective at purchase.
See notes to financial statements
170
<PAGE>
AMSOUTH FUNDS
Limited Term U.S. Government Fund (a)
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $42,067).............................. $41,301
Interest and dividends receivable................................. 530
Prepaid expenses and other assets................................. 11
-------
Total Assets..................................................... 41,842
Liabilities:
Accrued expenses and other payables:
Investment advisory fees......................................... $ 7
Administration fees.............................................. 1
Distribution fees................................................ 4
Custodian fees................................................... 1
Other............................................................ 12
---
Total Liabilities................................................ 25
-------
Net Assets:
Capital........................................................... 45,983
Undistributed (distributions in excess of) net investment income.. 67
Undistributed (distributions in excess of) net realized gains..... (3,467)
Net unrealized appreciation (depreciation) from investments....... (766)
-------
Net Assets........................................................ $41,817
=======
Class A Shares
Net Assets....................................................... $ 3,791
Shares outstanding............................................... 383
Redemption price per share....................................... $ 9.89
=======
Class A Shares -- Maximum Sales Charge............................ 4.00%
-------
Maximum Offering Price Per Share (100%/(100% -- Maximum Sales
Charge) of net asset value adjusted to the nearest cent)........ $ 10.30
=======
Class B Shares
Net Assets....................................................... $ 378
Shares outstanding............................................... 38
Offering price per share*........................................ $ 9.90
=======
Trust Shares (b)
Net Assets....................................................... $37,648
Shares outstanding............................................... 3,807
Offering and redemption price per share.......................... $ 9.89
=======
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG Limited Term U.S. Government Fund.
(b) Formerly Institutional Shares.
(c) For the period from January 1, 2000 through July 31, 2000.
Statements of Operations
<TABLE>
<CAPTION>
Period Ended Year Ended
July 31, December 31,
2000 (c) 1999
------------ ------------
(Amounts in thousands)
<S> <C> <C>
Investment Income:
Interest income..................................... $1,482 $ 2,711
Dividend income..................................... 58 101
------ -------
Total Investment Income............................ 1,540 2,812
Expenses:
Investment advisory fees............................ 154 238
Administration fees................................. 47 71
Distribution fees -- Class A Shares................. 2 7
Distribution fees -- Class B Shares................. 2 4
Shareholder servicing fees -- Class A Shares........ 5 4
Shareholder servicing fees -- Class B Shares........ -- 1
Shareholder servicing fees --Trust Shares (b)....... 35 66
Custodian fees...................................... 10 15
Accounting fees..................................... 7 29
Transfer agent fees................................. 22 48
Trustee fees and expenses........................... 1 1
Registration and filing fees........................ 20 43
Other fees.......................................... 12 27
------ -------
Total expenses before voluntary fee reductions..... 317 554
Expenses voluntarily reduced....................... (57) (85)
------ -------
Net expenses....................................... 260 469
------ -------
Net Investment Income............................... 1,280 2,343
------ -------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment
transactions....................................... (77) 22
Net change in unrealized appreciation (depreciation)
from investments................................... 153 (1,865)
------ -------
Net realized/unrealized gains (losses) from
investments........................................ 76 (1,843)
------ -------
Change in net assets resulting from operations...... $1,356 $ 500
====== =======
</TABLE>
See notes to financial statements
171
<PAGE>
AMSOUTH FUNDS
Limited Term U.S. Government Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended
July 31, December 31, December 31,
2000 (b) 1999 1998
------------ ------------ ------------
(Amounts in thousands)
<S> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income................. $ 1,280 $ 2,342 $ 1,120
Net realized gains (losses) from
investment transactions.............. (77) 22 148
Net change in unrealized appreciation
(depreciation) from investments...... 153 (1,865) 700
------- ------- -------
Change in net assets resulting from
operations............................ 1,356 499 1,968
------- ------- -------
Distributions to Class A Shareholders:
From net investment income............ (98) (144) (1,001)
From net realized gains on investment
transactions......................... -- (2) (10)
In excess of net realized gains....... -- (3) --
Distributions to Class B Shareholders:
From net investment income............ (9) (20) (8)(c)
Distributions to Trust Shareholders
(e):
From net investment income............ (1,091) (2,178) (112)(d)
From net realized gains on investment
transactions......................... -- (20) --
In excess of net realized gains....... -- (34) --
------- ------- -------
Change in net assets from shareholder
distributions......................... (1,198) (2,401) (1,131)
------- ------- -------
Change in net assets from capital
transactions.......................... (4,655) (995) 28,271
------- ------- -------
Change in net assets................... (4,497) (2,897) 29,108
Net Assets:
Beginning of period................... 46,314 49,211 20,103
------- ------- -------
End of period......................... $41,817 $46,314 $49,211
======= ======= =======
</TABLE>
---------
(a) Formerly ISG Limited Term U.S. Government Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) For the period from March 3, 1998 (commencement of operations) through
December 31, 1998.
(d) For the period from December 14, 1998 (commencement of operations) through
December 31, 1998.
(e) Formerly Institutional Shares.
See notes to financial statements
172
<PAGE>
AMSOUTH FUNDS
Limited Term U.S. Government Fund (a)
Financial Highlights, Class A Shares
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Period Ended
July 31, December 31, December 31, December 31,
2000 (b) 1999 1998 1997 (c)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period..... $ 9.85 $10.25 $10.12 $ 10.00
------ ------ ------ -------
Investment Activities
Net investment income
(loss)................. 0.28 0.50 0.53 0.42
Net realized and
unrealized gains
(losses) from
investments............ 0.02 (0.39) 0.14 0.12
------ ------ ------ -------
Total from Investment
Activities............. 0.30 0.11 0.67 0.54
------ ------ ------ -------
Distributions
Net investment income... (0.26) (0.50) (0.53) (0.42)
Net realized gains...... -- (0.01) (0.01) --
------ ------ ------ -------
Total Distributions..... (0.26) (0.51) (0.54) (0.42)
------ ------ ------ -------
Net change in asset
value................... 0.04 (0.40) 0.13 0.12
------ ------ ------ -------
Net Asset Value, End of
Period.................. $ 9.89 $ 9.85 $10.25 $ 10.12
====== ====== ====== =======
Total Return (excludes
sales charge)........... 3.11%(d) 1.08% 6.69% 5.54%(d)
Ratios/Supplemental Data:
Net Assets at end of
period (000)............ $3,791 $3,571 $2,437 $20,103
Ratio of expenses to
average net assets...... 1.09%(e) 0.98% 1.02% 1.00%(e)
Ratio of net investment
income to average net
assets.................. 4.89%(e) 4.93% 5.16% 5.34%(e)
Ratio of expenses to
average net assets*..... 1.36%(e) 1.40% 1.54% 1.62%(e)
Portfolio turnover**..... 4% 17% 86% 52%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Limited Term U.S. Government Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 28, 1997 (commencement of operations) through
December 31, 1997.
(d) Not annualized.
(e) Annualized.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
July 31, December 31, December 31,
2000 (b) 1999 1998 (c)
------------ ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.. $ 9.86 $10.26 $10.12
------ ------ ------
Investment Activities
Net investment income (loss)......... 0.25 0.41 0.35
Net realized and unrealized gains
(losses) from investments........... 0.01 (0.39) 0.15
------ ------ ------
Total from Investment Activities..... 0.26 0.02 0.50
------ ------ ------
Distributions
Net investment income................ (0.22) (0.41) (0.35)
Net realized gains................... -- (0.01) (0.01)
------ ------ ------
Total Distributions.................. (0.22) (0.42) (0.36)
------ ------ ------
Net change in asset value............. 0.04 (0.40) 0.14
------ ------ ------
Net Asset Value, End of Period........ $ 9.90 $ 9.86 $10.26
====== ====== ======
Total Return (excludes redemption
charge).............................. 2.67%(d) 0.22% 4.98%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)..... $ 378 $ 462 $ 430
Ratio of expenses to average net
assets............................... 1.88%(e) 1.83% 1.97%(e)
Ratio of net investment income to
average net assets................... 4.13%(e) 4.06% 4.01%(e)
Ratio of expenses to average net
assets*.............................. 2.06%(e) 1.99% 2.24%(e)
Portfolio turnover**.................. 4% 17% 86%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Limited Term U.S. Government Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from March 3, 1998 (commencement of operations) through
December 31, 1998.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
173
<PAGE>
AMSOUTH FUNDS
Limited Term U.S. Government Fund (a)
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
July 31, December 31, December 31,
2000 (b) 1999 1998 (c)
------------ ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period.............................. $ 9.85 $ 10.25 $ 10.29
------- ------- -------
Investment Activities
Net investment income (loss)........ 0.29 0.50 0.03
Net realized and unrealized gains
(losses) from investments.......... 0.02 (0.39) (0.04)
------- ------- -------
Total from Investment Activities.... 0.31 0.11 (0.01)
------- ------- -------
Distributions
Net investment income............... (0.27) (0.50) (0.03)
Net realized gains.................. -- (0.01) --
------- ------- -------
Total Distributions................. (0.27) (0.51) (0.03)
------- ------- -------
Net change in asset value............ 0.04 (0.40) (0.04)
------- ------- -------
Net Asset Value, End of Period....... $ 9.89 $ 9.85 $ 10.25
======= ======= =======
Total Return......................... 3.18%(d) 1.08% (0.14)%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000).... $37,648 $42,281 $46,344
Ratio of expenses to average net
assets.............................. 0.99%(e) 0.98% 0.69%(e)
Ratio of net investment income to
average net assets.................. 5.00%(e) 4.94% 5.29%(e)
Ratio of expenses to average net
assets*............................. 1.21%(e) 1.14% 0.96%(e)
Portfolio turnover**................. 4% 17% 86%
</TABLE>
/\ Formerly Institutional Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Limited Term U.S. Government Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from December 14, 1998 (commencement of operations) through
December 31, 1998.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
174
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Municipal Bond Fund July 31, 2000
(Amounts in thousands, except shares)
Municipal Bonds (97.0%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Alabama (44.7%)
Alabama State Agriculture & Mechanical University Revenue,
4.55%, 11/1/09, Callable 5/1/08 @ 102, MBIA................ $ 2,245 $ 2,163
Alabama State Agriculture & Mechanical University Revenue,
4.65%, 11/1/10, Callable 5/1/08 @ 102, MBIA................ 2,355 2,272
Alabama State Agriculture & Mechanical University Revenue,
6.50%, 11/1/25, Callable 11/1/05 @ 102, MBIA............... 2,035 2,243
Alabama State Corrections Institution, Series A, 4.90%,
4/1/03, MBIA............................................... 3,060 3,088
Alabama State Judicial Building Authority, Judicial
Facilties Project, 4.75%, 1/1/05, AMBAC.................... 3,700 3,715
Alabama State Judicial Building Authority, Judicial
Facilties Project, 4.85%, 1/1/06, AMBAC.................... 3,880 3,908
Alabama State Mental Health Finance Authority, Special Tax,
4.88%, 5/1/03, MBIA........................................ 2,000 2,017
Alabama State Public School & College Authority, 4.75%,
12/1/03, Callable 6/1/03 @ 103............................. 7,350 7,398
Alabama State Public School & College Authority, 5.00%,
12/1/05, Callable 6/1/03 @ 103............................. 3,390 3,446
Alabama State Public School & College Authority Revenue,
Series A, 4.38%, 8/1/04.................................... 10,000 9,891
Alabama State Public School & College Authority, Capital
Improvement, 4.75%, 11/1/06, Callable 11/1/05 @ 101........ 5,000 5,014
Alabama State Water Pollution Control Authority, Revolving
Fund, Series B, 5.25%, 8/15/08, Callable 8/15/06 @ 100..... 1,095 1,117
Alabama State Water Pollution Control Authority, Revolving
Fund, Series B, 5.38%, 8/15/10, Callable 8/15/06 @ 100..... 860 878
Alabama State Water Pollution Control Authority, Revolving
Fund, Series B, 5.40%, 8/15/11, Callable 8/15/06 @ 100..... 1,840 1,871
Alabama State Water Pollution Control Authority, Revolving
Fund, Series B, 5.50%, 8/15/16, Callable 8/15/06 @ 100..... 3,890 3,891
Alabama State, Series A, GO, 4.60%, 10/1/05................. 3,500 3,495
Auburn University, University Revenues, General Fee, 5.25%,
6/1/06, Callable 6/1/03 @ 102, MBIA........................ 1,000 1,024
Birmingham, Capital Improvement, Series B, GO, 4.80%,
10/1/08, Callable 4/1/07 @ 102............................. 1,040 1,040
</TABLE>
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Alabama, continued
Birmingham, Capital Improvements, Series A, GO, 4.75%,
10/1/10, Callable 4/1/08 @ 102............................ $ 1,340 $ 1,316
Birmingham, Capital Improvements, Series A, GO, 4.85%,
10/1/11, Callable 4/1/08 @ 102............................ 1,430 1,399
Birmingham, GO, 4.90%, 7/1/06.............................. 1,500 1,516
Birmingham, Industrial Water Board, Industrial Water
Supply, 5.50%, 3/1/06, Prerefunded 3/1/05 @ 100........... 1,300 1,345
Birmingham, Industrial Water Board, Industrial Water
Supply, 6.20%, 7/1/08, Prerefunded 1/1/07 @ 100........... 3,465 3,603
Birmingham, Industrial Water Board, Industrial Water
Supply, ETM, 5.30%, 3/1/04, Callable 3/1/03 @ 102......... 1,100 1,125
Birmingham, Industrial Water Board, Industrial Water
Supply, ETM, 5.40%, 3/1/05, Callable 3/1/03 @ 102......... 1,000 1,030
Birmingham, Special Care Facilities Funding Authority,
Series D, 4.95%, 11/1/14, Prerefunded 11/1/07 @ 100....... 3,045 3,055
Birmingham, Waterworks & Sewer Board, Water & Sewer
Revenue, 5.90%, 1/1/03, Callable 1/1/02 @ 102............. 1,375 1,429
Clark & Mobile County, Gas District, 5.60%, 12/1/17,
Callable 12/1/06 @ 102, MBIA.............................. 1,045 1,051
Daphne Special Care Facilities Financing Authority,
Presbyterian Retirement Corp., 7.30%, 8/15/18, Prerefunded
8/15/01 @ 100............................................. 9,500 9,761
Dothan, GO, 5.05%, 9/1/09, FSA............................. 905 918
Dothan, GO, 5.10%, 9/1/10, Callable 9/1/09 @ 101, FSA...... 1,515 1,536
Florence Water, Series B, 4.70%, 12/1/13, Callable 12/1/08
@ 102, FSA................................................ 1,025 953
Florence, Warrants, Series A, GO, 4.65%, 9/1/03, MBIA...... 2,845 2,854
Florence, Warrants, Series A, GO, 4.35%, 12/1/07, FSA...... 390 376
Florence, Warrants, Series A, GO, 4.40%, 12/1/08........... 405 389
Florence, Warrants, Series A, GO, 4.50%, 12/1/09........... 425 408
Florence, Warrants, Series A, GO, 4.60%, 12/1/10, Callable
12/1/08 @ 102............................................. 445 428
Florence, Warrants, Series B, GO, 4.35%, 12/1/07, FSA...... 790 762
Florence, Warrants, Series B, GO, 4.40%, 12/1/08, FSA...... 825 792
Florence, Warrants, Series B, GO, 4.50%, 12/1/09, Callable
12/1/08 @ 102, FSA........................................ 865 831
Florence, Warrants, Series B, GO, 4.60%, 12/1/10, Callable
12/1/08 @ 102, FSA........................................ 900 866
</TABLE>
Continued
175
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Municipal Bond Fund July 31, 2000
(Amounts in thousands, except shares)
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Alabama, continued
Gadsden, East Alabama Medical Clinic Board, Baptist Hospital
of Gadsden, Inc., Series A, 7.80%, 11/1/21, Prerefunded
11/1/01 @ 102.............................................. $ 4,700 $ 4,973
Hoover, Warrants, GO, 4.50%, 3/1/13, Prerefunded 3/1/03 @
100........................................................ 5,450 4,934
Huntsville, Series A, GO, 4.75%, 11/1/18, Callable 11/1/08 @
101........................................................ 1,445 1,282
Huntsville Electric, 4.60%, 12/1/09, Callable 12/1/07 @
102........................................................ 550 533
Huntsville Electric, 4.70%, 12/1/10, Callable 12/1/07 @
102........................................................ 660 641
Huntsville Electric, 4.80%, 12/1/11, Callable 12/1/07 @
102........................................................ 680 659
Huntsville, Warrants, Series B, GO, 4.00%, 11/1/05.......... 3,120 2,974
Huntsville, Warrants, Series B, GO, 4.00%, 11/1/06.......... 3,245 3,057
Huntsville, Warrants, Series B, GO, 4.10%, 11/1/07.......... 3,380 3,181
Huntsville, Water System, Warrants, 5.00%, 5/1/02, AMBAC.... 2,000 2,019
Jefferson County Board of Education, Capital Outlay, 5.40%,
2/15/10, Callable 2/15/03 @ 102, AMBAC..................... 1,000 1,039
Jefferson County, GO, 5.30%, 4/1/09, Prerefunded 4/1/03 @
102........................................................ 4,000 4,057
Jefferson County, Sewer Revenue Warrants, 5.40%, 9/1/04,
Prerefunded 3/1/03 @ 102, MBIA............................. 2,400 2,504
Jefferson County, Warrants, GO, 5.00%, 4/1/04, Callable
4/1/03 @ 102............................................... 5,000 5,056
Jefferson County, Warrants, GO, 5.10%, 2/15/10, FSA......... 1,000 1,009
Mobile County, Series A, GO, 5.00%, 2/1/04, Callable 2/1/03
@ 102...................................................... 1,350 1,366
Mobile County, Warrants, Series A, Limited GO, 5.00%,
2/1/04, Callable 2/1/03 @ 102.............................. 1,000 1,012
Mobile County, Warrants, Series A, Limited GO, 5.10%,
2/1/05, Callable 2/1/03 @ 102.............................. 5,000 5,083
Mobile, Warrants, GO, 6.50%, 2/15/05, AMBAC................. 1,630 1,751
Mobile, Warrants, GO, 6.50%, 2/15/06, AMBAC................. 1,685 1,830
Mobile, Warrants, GO, 4.85%, 2/15/09........................ 2,475 2,417
Mobile, Water & Sewer Commissioners, Water & Sewer Revenue,
5.00%, 1/1/05, FGIC........................................ 3,250 3,295
Montgomery County, Warrants, GO, 5.00%, 11/1/04, Callable
11/1/04 @ 102.............................................. 1,500 1,523
Montgomery, Warrants, Series A, GO, 5.00%, 5/1/05, Callable
5/1/03 @ 102............................................... 1,040 1,054
Montgomery, Warrants, Series A, GO, 5.00%, 5/1/06, Callable
5/1/03 @ 102............................................... 1,000 1,011
</TABLE>
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Alabama, continued
Montgomery, Waterworks & Sanitary Sewer Board, 5.50%,
9/1/08, Callable 9/1/06 @ 101, MBIA....................... $ 3,000 $ 3,126
Montgomery, Waterworks & Sanitary Sewer Board, Series B,
5.70%, 9/1/02............................................. 1,000 1,023
Montgomery, Waterworks & Sanitary Sewer Board, Series B,
6.25%, 9/1/08, Callable 9/1/02 @ 102...................... 2,500 2,617
Montgomery, Waterworks & Sanitary Sewer Board, Series B,
6.30%, 9/1/10, Callable 9/1/02 @ 102...................... 3,565 3,736
Shelby County, Warrants, Board of Education, Capital
Outlay, 4.80%, 2/1/10, Callable 2/1/09 @ 101, AMBAC....... 1,005 994
Shelby County, Warrants, Series A, 5.60%, 8/1/02, AMBAC.... 1,990 2,034
Shelby County, Warrants, Series A, 5.70%, 2/1/03, AMBAC.... 1,830 1,880
Talladega County, Industrial Development Board, Cyprus 1
Project, 9.75%, 12/1/13................................... 335 336
University Alabama General Fee, 4.60%, 6/1/09, Callable
6/1/07 @ 102, MBIA........................................ 1,200 1,169
University Alabama General Fee, 4.70%, 6/1/10, Callable
6/1/07 @ 102, MBIA........................................ 1,300 1,269
University Alabama General Fee, 4.75%, 6/1/11, Callable
6/1/07 @ 102, MBIA........................................ 1,500 1,451
University of South Alabama, University Revenues, Tuition,
4.70%, 11/15/08, Callable 5/15/06 @ 102, AMBAC............ 2,185 2,167
--------
176,276
--------
Arizona (0.3%)
Pima County, School District No. 16, Catalina Foothills,
GO, 5.75%, 7/1/06......................................... 1,200 1,268
--------
Arkansas (0.2%)
Arkansas State Capital Appreciation, College Savings,
Series C, GO, 0.00%, 6/1/11............................... 1,400 803
--------
California (1.9%)
California State, GO, 7.00%, 10/1/09....................... 1,285 1,516
Franklin-McKinley School District Refunding Bond, GO,
6.00%, 7/1/16, FSA........................................ 1,000 1,100
San Mateo County, Transit District Sales Tax Revenue,
Series A, 5.25%, 6/1/16, Callable 6/1/09 @ 101, FSA....... 4,765 4,771
--------
7,387
--------
Colorado (0.6%)
Jefferson County School District, GO, 6.25%, 12/15/08,
MBIA...................................................... 2,320 2,554
--------
Florida (7.1%)
Dade County, Series DD, GO, 7.70%, 10/1/12, AMBAC.......... 1,000 1,236
Dade County, Series DD, GO, 7.70%, 10/1/08, AMBAC.......... 1,760 2,102
</TABLE>
Continued
176
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Municipal Bond Fund July 31, 2000
(Amounts in thousands, except shares)
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Florida, continued
Florida State Board of Education, Capital Outlay, Series A,
GO, 5.00%, 6/1/08.......................................... $ 6,500 $ 6,603
Jacksonville, District Water & Sewer Revenue, 5.00%,
10/1/20, MBIA.............................................. 9,550 9,699
Reedy Creek, Improvement District, Series 1, 5.50%, 10/1/08,
Callable 10/1/07 @ 101, AMBAC.............................. 8,070 8,489
--------
28,129
--------
Georgia (1.1%)
Georgia State, Series A, GO, 6.10%, 2/1/03, Callable 2/1/01
@ 102...................................................... 1,000 1,028
Georgia State, Series B, GO, 7.20%, 3/1/06.................. 1,500 1,686
Savannah Hospital Authority Revenue, St. Josephs Hospital
Project, 6.20%, 7/1/23, Prerefunded 7/1/03 @ 102........... 1,500 1,591
--------
4,305
--------
Hawaii (1.0%)
Hawaii State, GO, 5.50%, 3/1/16, Prerefunded 3/1/07 @ 102,
FGIC....................................................... 3,625 3,831
--------
Illinois (0.8%)
Chicago, Metropolitan Water Reclamation District, Greater
Chicago Capital Improvements, GO, 6.90%, 1/1/07............ 1,830 2,042
Will County Forest Preservation District, Series B, GO,
0.00%, 12/1/18, FGIC....................................... 3,000 1,048
--------
3,090
--------
Kentucky (0.5%)
Carrollton & Henderson, Public Energy Authority Gas Revenue,
Series A, 5.00%, 1/1/09, FSA............................... 2,000 1,860
--------
Louisiana (0.3%)
Louisiana Local Government Environmental Facilities,
Community Development Authority Revenue, Capital Projects &
Equipment Acquisition, 5.25%, 12/1/18, AMBAC............... 1,085 1,054
--------
Michigan (1.8%)
Municipal Bond Authority Revenue, 5.00%, 12/1/05............ 7,000 7,119
--------
Minnesota (0.6%)
Centennial Independent School District, No. 12, Series A,
GO, 5.60%, 2/1/07, MBIA.................................... 2,175 2,282
--------
Mississippi (2.0%)
Jackson Water & Sewer System Revenue, 5.13%, 9/1/14, FGIC... 1,430 1,395
Medical Center Educational Building Corp., Mississippi
Revenue, University of Mississippi Medical Center Project,
5.90%, 12/1/23, Prerefunded 12/1/04 @ 102, MBIA............ 2,075 2,215
</TABLE>
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Mississippi, continued
Mississippi State, Series B, GO, 5.90%, 11/15/09........... $ 1,000 $ 1,077
Mississippi State Highway Revenue, Series 39, 5.25%,
6/1/07.................................................... 1,000 1,030
Mississippi State, Capital Improvements, Series A, GO,
5.20%, 8/1/11, Callable 8/1/03 @ 100...................... 2,000 2,008
--------
7,725
--------
Missouri (0.1%)
Missouri State, Water Pollution, Series B, GO, 5.00%,
8/1/07, Callable 8/1/03 @ 102............................. 560 569
--------
New Jersey (0.4%)
New Jersey Health Care Facilities Funding Authority
Revenue, Cathedral Health Services, 5.50%, 2/1/11, MBIA... 1,605 1,656
--------
New York (0.7%)
Hempstead Town, GO, 5.00%, 2/15/09, Callable 2/15/06 @
102....................................................... 1,150 1,164
Municipal Assistance Corp. for New York City, GO, 6.00%,
7/1/05.................................................... 1,500 1,592
--------
2,756
--------
North Carolina (1.9%)
Durham, Water & Sewer Revenue, 4.60%, 6/1/05............... 355 355
Durham, Water & Sewer Revenue, 4.60%, 6/1/06............... 675 672
Durham, Water & Sewer Revenue, 4.60%, 6/1/07............... 555 550
Durham, Water & Sewer Revenue, 4.60%, 6/1/08............... 765 753
North Carolina State, Series A, GO, 4.75%, 4/1/09, Callable
4/1/08 @ 100.5............................................ 5,000 5,012
--------
7,342
--------
Ohio (2.5%)
Ohio State Higher Education, Series A, GO, 5.20%, 2/1/10... 9,700 9,952
--------
Oklahoma (0.4%)
Moore Oklahoma Refunding, GO, 5.75%, 4/1/12, MBIA.......... 1,530 1,597
--------
Oregon (1.9%)
Salem, GO, 4.45%, 12/1/10, Callable 6/1/09 @ 100, FSA...... 2,365 2,247
Washington County, Criminal Justice Facilities, GO, 5.00%,
12/1/09, Callable 12/1/07 @ 100........................... 5,285 5,354
--------
7,601
--------
Pennsylvania (0.4%)
Bethlehem Area School District, GO, 6.00%, 3/1/16,
Prerefunded 3/1/06 @ 100, State Aid Withholding, MBIA..... 1,500 1,594
--------
</TABLE>
Continued
177
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Municipal Bond Fund July 31, 2000
(Amounts in thousands, except shares)
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Rhode Island (1.1%)
Rhode Island Port Authority & Economic Development Corp.
Revenue, Shepard Building Project, Series B, 6.75%,
6/1/25, Prerefunded 6/1/04 @ 102, AMBAC................... $ 1,000 $ 1,092
Rhode Island State, Series A, GO, 5.75%, 9/1/13, Callable
9/1/09 @ 101, FGIC........................................ 3,065 3,211
--------
4,303
--------
South Carolina (2.3%)
Beaufort County School District, Series B, GO, 4.10%,
2/1/09, Callable 2/1/07 @ 101, SCSDE...................... 5,525 5,111
Beaufort County School District, Series B, GO, 4.90%,
3/1/09, Callable 3/1/05 @ 101............................. 4,125 4,154
--------
9,265
--------
Tennessee (3.1%)
Jackson, Improvements, 5.00%, 3/1/10, Prerefunded 3/1/05 @
102....................................................... 2,000 2,011
Johnson City, 4.35%, 6/1/07, GO, FGIC...................... 1,000 968
Metropolitan Government, Nashville & Davidson County,
Industrial Development Board Revenue, Multi-Family
Housing, Arbor, Series C, 7.50%, 11/15/12, Prerefunded
5/15/12 @ 100............................................. 1,000 1,208
Metropolitan Government, Nashville & Davidson County
Industrial Development Board Revenue, Multi-Family
Housing, Arbor, Series B, 7.50%, 11/15/10, Prerefunded
5/15/10 @ 100............................................. 1,000 1,191
Tennessee State, Series B, GO, 5.00%, 5/1/15, Callable
5/1/08 @ 100.............................................. 1,500 1,455
Tennessee State, Series B, GO, 4.60%, 5/1/07, Callable
5/1/06 @ 100.............................................. 5,495 5,468
--------
12,301
--------
Texas (8.8%)
Cypress-Fairbanks Independent School District, Series A,
GO, 6.13%, 8/1/10, Prerefunded 8/1/03 @ 100, PSF-GTD...... 2,830 2,954
Dallas County, Series A, GO, 5.25%,........................ 3,000 3,077
El Paso, Series A, GO, 6.10%, 8/15/03, Callable 8/15/02 @
100, FGIC................................................. 1,000 1,029
Harris County, Housing Financial Corp., Multi-Family
Housing Revenue, Breton Mill Partners, 7.00%, 3/1/07,
Prerefunded 2/15/07 @ 100................................. 1,000 1,125
Katy Independent School District, Series A, GO, 4.50%,
2/15/20, Callable 2/15/08 @ 100, PSF-GTD.................. 3,600 3,040
Lubbock Health Facilities Development Corp., Hospital
Revenue, Methodist Hopsital, Series B, 6.75%, 12/1/10..... 1,000 1,140
Mesquite Independent School District, Series A, GO, 4.70%,
8/15/08, Callable 8/15/07 @ 100........................... 4,000 3,963
</TABLE>
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
Texas, continued
North Central Texas Health Facilities Development Corp.,
Baylor Health Care System, 6.25%, 5/15/10.................. $ 1,600 $ 1,712
Richardson Independent School District, Series C, 4.75%,
2/15/22, Callable 2/15/08 @ 100, PSF-GTD................... 1,000 875
San Antonio, Series A, GO, 4.75%, 2/1/19, Callable 2/1/09 @
100........................................................ 1,590 1,400
Texas State, Series B, GO, 5.25%, 10/1/08, Callable 10/1/03
@ 100...................................................... 5,000 5,058
University of Texas, 4.60%, 7/1/08, Callable 7/1/06 @ 100... 3,575 3,516
University of Texas, Series B, 4.25%, 8/15/09, Callable
8/15/07 @ 100.............................................. 5,455 5,079
Whitehouse Texas Independent School District, GO, 4.80%,
2/15/12, Callable 2/15/08 @ 100............................ 1,000 954
--------
34,922
--------
Utah (4.8%)
Davis County, School District, GO, 4.38%, 6/1/08, School
Board Guaranty............................................. 4,805 4,624
Jordan School District, GO, 4.80%, 6/15/08, Callable 6/15/07
@ 100...................................................... 3,810 3,815
Utah State, Series F, GO, 5.00%, 7/1/09, Callable 7/1/07 @
100........................................................ 5,200 5,253
Utah State, Series F, GO, 5.00%, 7/1/09, Callable 7/1/07 @
100........................................................ 5,000 5,226
--------
18,918
--------
Virginia (2.7%)
Virginia College Building Authority, Series A, 5.00%,
9/1/12, Callable 9/1/07 @ 101.............................. 2,000 1,990
Virginia State, GO, 5.00%, 6/1/08, Callable 6/1/07 @ 100.... 5,000 5,088
Virginia State, Public School Authority, Series S, 5.25%,
8/1/09..................................................... 3,500 3,615
--------
10,693
--------
Washington (2.0%)
King County Public Hospital District No. 002, GO, 5.25%,
12/1/13, MBIA.............................................. 1,095 1,088
Washington State, GO, 5.75%, 9/1/08......................... 6,500 6,903
--------
7,991
--------
West Virginia (0.3%)
Raleigh Fayette & Nicholas Counties, 6.20%, 8/1/04.......... 1,000 1,059
--------
Wisconsin (0.7%)
Wisconsin State Health & Educational Facilities Authority
Revenue, Wheaton Franciscan Services, Inc., 6.10%, 8/15/09,
MBIA....................................................... 2,420 2,605
--------
TOTAL MUNICIPAL BONDS....................................... 382,807
--------
</TABLE>
Continued
178
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Municipal Bond Fund July 31, 2000
(Amounts in thousands, except shares)
Investment Companies (1.5%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- --------
<S> <C> <C>
Federated Tax-Free Fund.................................... 4,641 $ 5
Goldman Sachs Tax-Free Fund................................ 6,057,979 6,058
--------
TOTAL INVESTMENT COMPANIES................................. 6,063
--------
TOTAL INVESTMENTS
(Cost $388,677) (a) -- (98.5%)............................ 388,870
Other assets in excess of liabilities -- (1.5%)............ 6,046
--------
TOTAL NET ASSETS -- (100.0%)............................... $394,916
========
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $ 4,620
Unrealized depreciation............................................. (4,427)
-------
Net unrealized appreciation......................................... $ 193
=======
</TABLE>
AMBAC -- Insured by AMBAC Indemnity Corp.
ETM -- Escrowed to Maturity
FGIC -- Insured by Financial Guaranty Insurance Corp.
FSA -- Insured by Financial Security Assurance Inc.
GO -- General Obligation
MBIA -- Insured by Municipal Bond Insurance Assoc.
PSF-GTD -- Permanent School Fund Guarantee
SCSDE -- South Carolina School District Enhancement
See notes to financial statements
179
<PAGE>
AMSOUTH FUNDS
Municipal Bond Fund
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $388,677)............................ $388,870
Interest and dividends receivable................................ 6,182
Receivable for capital shares issued............................. 2
Prepaid expenses and other assets................................ 8
--------
Total Assets.................................................... 395,062
Liabilities:
Accrued expenses and other payables:
Investment advisory fees........................................ $52
Administration fees............................................. 10
Distribution fees............................................... 35
Custodian fees.................................................. 9
Other........................................................... 40
---
Total Liabilities............................................... 146
--------
Net Assets:
Capital.......................................................... 394,482
Undistributed (distributions in excess of) net investment
income.......................................................... 603
Undistributed (distributions in excess of) net realized gains.... (362)
Net unrealized appreciation (depreciation) from investments...... 193
--------
Net Assets....................................................... $394,916
========
Class A Shares (a)...............................................
Net Assets...................................................... $ 6,516
Shares outstanding.............................................. 667
Redemption price per share...................................... $ 9.76
========
Class A Shares -- Maximum Sales Charge........................... 4.00%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum Sales
Charge) of net asset value adjusted to the nearest cent)....... $ 10.17
========
Class B Shares
Net Assets...................................................... $ 889
Shares outstanding.............................................. 91
Offering price per share*....................................... $ 9.75
========
Trust Shares (b).................................................
Net Assets...................................................... $387,511
Shares outstanding.............................................. 39,671
Offering and redemption price per share......................... $ 9.77
========
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2000
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income............................................... $17,304
Dividend income............................................... 308
-------
Total Investment Income...................................... 17,612
Expenses:
Investment advisory fees...................................... $2,322
Administration fees........................................... 715
Distribution fees -- Class B Shares........................... 4
Shareholder servicing fees -- Class A Shares (a).............. 11
Shareholder servicing fees -- Trust Shares (b)................ 222
Custodian fees................................................ 75
Accounting fees............................................... 94
Transfer agent fees........................................... 113
Trustee fees and expenses..................................... 14
Other fees.................................................... 89
------
Total expenses before voluntary fee reductions............... 3,659
Expenses voluntarily reduced................................. (1,227)
-------
Net expenses................................................. 2,432
-------
Net Investment Income......................................... 15,180
-------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment transactions...... (26)
Net change in unrealized appreciation (depreciation) from
investments.................................................. 12
-------
Net realized/unrealized gains (losses) from investments....... (14)
-------
Change in net assets resulting from operations................ $15,166
=======
</TABLE>
See notes to financial statements
180
<PAGE>
AMSOUTH FUNDS
Municipal Bond Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2000 1999
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................... $ 15,180 $ 13,414
Net realized gains (losses) from investment
transactions........................................... (26) 2,189
Net change in unrealized appreciation (depreciation)
from investments....................................... 12 (7,994)
-------- --------
Change in net assets resulting from operations........... 15,166 7,609
-------- --------
Distributions to Class A Shareholders (a):
From net investment income.............................. (169) (88)
From net realized gains on investment transactions...... (15) (21)
Distributions to Class B Shareholders:
From net investment income.............................. (13) --
From net realized gains on investment transactions...... (1) --
Distributions to Trust Shareholders (b):
From net investment income.............................. (14,994) (12,760)
From net realized gains on investment transactions...... (1,647) (3,342)
-------- --------
Change in net assets from shareholder distributions...... (16,839) (16,211)
-------- --------
Change in net assets from capital transactions........... 72,586 3,452
-------- --------
Change in net assets..................................... 70,913 (5,150)
Net Assets:
Beginning of period..................................... 324,003 329,153
-------- --------
End of period........................................... $394,916 $324,003
======== ========
</TABLE>
---------
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
See notes to financial statements
181
<PAGE>
AMSOUTH FUNDS
Municipal Bond Fund
Financial Highlights, Class A Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2000 1999 1998 (a) 1997 (b)
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period........................ $ 9.87 $10.13 $10.15 $ 10.00
------ ------ ------ --------
Investment Activities..........
Net investment income (loss).. 0.40 0.41 0.86 0.04
Net realized and unrealized
gains (losses) from
investments.................. (0.06) (0.17) (0.43) 0.15
------ ------ ------ --------
Total from Investment
Activities................... 0.34 0.24 0.43 0.19
------ ------ ------ --------
Distributions..................
Net investment income......... (0.40) (0.39) (0.42) (0.04)
Net realized gains from
investment transactions...... (0.05) (0.11) (0.03) --
------ ------ ------ --------
Total Distributions........... (0.45) (0.50) (0.45) (0.04)
------ ------ ------ --------
Net change in asset value...... (0.11) (0.26) (0.02) 0.15
------ ------ ------ --------
Net Asset Value, End of
Period........................ $ 9.76 $ 9.87 $10.13 $ 10.15
====== ====== ====== ========
Total Return (excludes sales
charge)....................... 3.62% 2.31% 4.30% 1.86%(c)
Ratios/Supplemental Data:
Net Assets at end of period
(000)......................... $6,516 $2,694 $2,689 $337,933
Ratio of expenses to average
net assets.................... 0.82% 0.71% 0.62% 0.71%(d)
Ratio of net investment income
to average net assets......... 4.12% 4.01% 4.26% 4.31%(d)
Ratio of expenses to average
net assets*................... 1.20% 1.20% 0.92% 1.04%(d)
Portfolio turnover**........... 9% 21% 29% 2%
</TABLE>
/\ Formerly Classic Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
(b) For the period from July 1, 1997 (commencement of operations) through July
31, 1997.
(c) Not annualized.
(d) Annualized.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Year Ended Period Ended
July 31, July 31,
2000 1999 (a)
---------- ------------
<S> <C> <C>
Net Asset Value, Beginning of Period................. $ 9.87 $10.28
------ ------
Investment Activities................................
Net investment income (loss)........................ 0.31 0.14
Net realized and unrealized gains (losses) from
investments........................................ (0.05) (0.41)
------ ------
Total from Investment Activities.................... 0.26 (0.27)
------ ------
Distributions........................................
Net investment income............................... (0.33) (0.14)
Net realized gains from investment transactions..... (0.05) --
------ ------
Total Distributions................................. (0.38) (0.14)
------ ------
Net change in asset value............................ (0.12) (0.41)
------ ------
Net Asset Value, End of Period....................... $ 9.75 $ 9.87
====== ======
Total Return (excludes redemption charge)............ 2.75% (2.60)%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000).................... $ 889 $ 16
Ratio of expenses to average net assets.............. 1.64% 1.60%(c)
Ratio of net investment income to average net
assets.............................................. 3.30% 3.17%(c)
Ratio of expenses to average net assets*............. 1.96% 1.87%(c)
Portfolio turnover**................................. 9% 21%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) For the period from February 3, 1999 (commencement of operations) through
July 31, 1999.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
182
<PAGE>
AMSOUTH FUNDS
Municipal Bond Fund
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2000 1999 1998 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period...... $ 9.87 $ 10.14 $ 10.04
-------- -------- --------
Investment Activities.....................
Net investment income (loss)............. 0.41 0.42 0.39
Net realized and unrealized gains
(losses) from investments............... (0.05) (0.18) 0.14
-------- -------- --------
Total from Investment Activities......... 0.36 0.24 0.53
-------- -------- --------
Distributions.............................
Net investment income.................... (0.41) (0.40) (0.40)
Net realized gains from investment
transactions............................ (0.05) (0.11) (0.03)
-------- -------- --------
Total Distributions...................... (0.46) (0.51) (0.43)
-------- -------- --------
Net change in asset value................. (0.10) (0.27) 0.10
-------- -------- --------
Net Asset Value, End of Period............ $ 9.77 $ 9.87 $ 10.14
======== ======== ========
Total Return.............................. 3.85% 2.30% 4.49%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000)......... $387,511 $321,293 $326,464
Ratio of expenses to average net assets... 0.68% 0.61% 0.64%(c)
Ratio of net investment income to average
net assets............................... 4.25% 4.11% 4.23%(c)
Ratio of expenses to average net assets*.. 1.02% 0.95% 0.97%(c)
Portfolio turnover**...................... 9% 21% 29%
</TABLE>
/\ Formerly Premier Shares.
* During the period, certain fees were voluntarily reduced/reimbursed. If
such voluntary fee reductions/reimbursements had not occurred, the ratios
would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
(b) Represents total return based on the activity of Classic Shares for the
period from August 1, 1997 to September 1, 1997 and the activity of
Premier Shares for the period from September 2, 1997 to July 31, 1998.
Total return for the Municipal Bond Fund Premier Shares for the period
from September 2, 1997 (commencement of operations) through July 31, 1998
was 5.27%.
(c) Annualized.
See notes to financial statements
183
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Florida Tax-Exempt Fund July 31, 2000
(Amounts in thousands, except shares)
Municipal Bonds (97.1%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- -------
<S> <C> <C>
Florida (97.1%)
Altamonte Springs, Health Facilities Authority, Hospital
Revenue, ETM, 5.60%, 10/1/10............................... $ 545 $ 576
Broward County Gas Tax Revenue, 5.25%, 9/1/09............... 500 517
Broward County School District, GO, 5.60%, 2/15/07, Callable
2/15/03 @ 102.............................................. 1,500 1,556
Broward County School District, GO, 6.00%, 2/15/07, Callable
2/15/02 @ 102.............................................. 2,000 2,076
Clearwater Utility Revenue, ETM, 6.10%, 12/1/07............. 700 762
Dade County School Board, Certificates of Participation,
Series C, 5.25%, 8/1/06, FSA............................... 1,500 1,545
Dade County School District, 5.75%, 8/1/03, AMBAC........... 1,000 1,035
Dade County School District, GO, 6.00%, 7/15/06............. 1,000 1,070
Dade County School District, GO, 5.00%, 2/15/14, Callable
2/15/07 @ 101, MBIA........................................ 1,000 975
Dade County, Aviation Authority, Series 1994 B, 6.25%,
10/1/04, AMBAC............................................. 1,000 1,063
Dade County, Public Services, Tax Revenue, 5.00%, 10/1/12,
Callable 10/1/09 @ 101, FSA................................ 1,115 1,109
Escambia County, Utility Authority, Utility System Revenue,
5.00%, 1/1/08, FGIC........................................ 1,000 1,016
Florida Housing Finance Agency, Homeowner Mortgages, Series
1995 A-1, 5.65%, 1/1/09, Callable 1/1/06 @ 102............. 705 729
Florida State Board of Education, GO, 5.00%, 6/1/10,
Callable 6/1/05 @ 101...................................... 1,000 1,006
Florida State Board of Education, Lottery Revenue, Series B,
5.25%, 7/1/09, Callable 7/1/08 @ 101, FGIC................. 1,000 1,033
Florida State Board of Education, Series A, GO, 5.00%,
1/1/15, Callable 1/1/08 @ 101.............................. 1,000 965
Florida State Board of Education, Series B, GO, 5.38%,
6/1/08, Callable 6/1/07 @ 101.............................. 2,000 2,080
Florida State Board of Education, Series E, GO, 5.10%,
6/1/13, Callable 6/1/03 @ 101.............................. 1,000 990
Florida State Department of Transportation, Right of Way,
Series B, GO, 5.50%, 7/1/08, Callable 7/1/07 @ 101......... 3,310 3,478
Florida State Division of Bond Finance, Department of
General Services, Preservation 2000, Series A, 5.50%,
7/1/08, FSA................................................ 1,000 1,050
Florida State Division of Bond Finance, Department of
General Services, Preservation 2000, Series A, 5.70%,
7/1/09, Callable 7/1/05 @ 101, AMBAC....................... 1,000 1,047
</TABLE>
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- -------
<S> <C> <C>
Florida, continued
Florida State Division of Bond Finance, Department of
General Services, Preservation 2000, Series A, 5.00%,
7/1/12, Callable 7/1/07 @ 101, AMBAC....................... $ 1,000 $ 1,002
Florida State Division of Bond Finance, Department of
General Services, Series B, 5.50%, 7/1/05, AMBAC........... 2,000 2,080
Florida State Division of Bond Finance, Department of
Natural Resources, Preservation 2000, Series A, 5.40%,
7/1/07, Callable 7/1/03 @ 101, FSA......................... 1,000 1,026
Florida State Division of Bond Finance, Department of
Natural Resources, Save Our Coast, 6.30%, 7/1/04, Callable
7/1/01 @ 101, MBIA......................................... 1,000 1,028
Florida State Turnpike Authority, Turnpike Revenue, Series
A, 5.50%, 7/1/11, Callable 7/1/05 @ 101, FGIC.............. 1,000 1,025
Florida State, GO, Senior Lien, Jacksonville Transportation,
6.25%, 7/1/06.............................................. 890 964
Florida State, GO, Senior Lien, Jacksonville Transportation,
5.00%, 7/1/11, Callable 7/1/09 @ 101, FSA.................. 1,000 1,004
Florida State, GO, Senior Lien, Jacksonville Transportation,
5.25%, 7/1/15, Callable 7/1/07 @ 101....................... 1,000 996
Ft. Lauderdale Park Improvement Project, GO, 5.50%, 7/1/17,
Callable 1/1/04 @ 101...................................... 1,250 1,255
Hillsborough County, Capital Improvement, County Center
Project, Series B, 5.00%, 7/1/13, Callable 7/1/06 @ 102,
MBIA....................................................... 1,000 981
Hillsborough County, Environmental Land, GO, 6.00%, 7/1/03*,
Callable 7/1/02 @ 102, AMBAC-TCRS.......................... 750 780
Hillsborough County, Solid Waste & Resource Recovery
Revenue, 5.30%, 10/1/03, MBIA.............................. 1,000 1,024
Jacksonville Electric Authority, St. John's River Issue 2,
Series 16, 5.00%, 10/1/10, Callable 10/1/03 @ 101.......... 1,000 1,003
Jacksonville Excise Tax Revenue, Series A, 5.50%, 10/1/05,
FGIC....................................................... 1,010 1,052
Jacksonville Health Facilities Authority, Hospital Revenue,
Series A, 5.50%, 8/15/06, MBIA............................. 1,000 1,038
Manatee County School Board, Certificates of Participation,
7/1/09, Callable 7/1/06 @ 102, MBIA........................ 500 536
Miami Beach, Water & Sewer Revenue, 5.38%, 9/1/08, Callable
9/1/05 @ 102............................................... 1,000 1,036
Miami-Dade County Educational Facilities Authority Revenue,
Series A, 5.75%, 4/1/13, Callable 4/1/10 @ 101, AMBAC...... 1,060 1,116
Okeechobee Utility Authority, Utility System Revenue, 5.25%
10/1/14, Callable 10/1/09 @ 101, FSA....................... 1,675 1,676
</TABLE>
Continued
184
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Florida Tax-Exempt Fund July 31, 2000
(Amounts in thousands, except shares)
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- -------
<S> <C> <C>
Florida, continued
Orange County, Sales Tax Revenue, 4.80%, 1/1/17, Callable
1/1/07 @ 101, FGIC......................................... $ 1,000 $ 922
Orange County, Tourist Development, Tax Revenue, 5.00%,
10/1/08, AMBAC............................................. 1,500 1,528
Orlando Utilities Commission, Water & Electric Revenue,
Series B, 5.10%, 10/1/11, Callable 10/1/06 @ 100........... 1,500 1,507
Palm Beach County, Criminal Justice Facilities, 5.38%,
6/1/10, FGIC............................................... 1,000 1,040
Pasco County, Water & Sewer Revenue, Series A, 5.50%,
10/1/03, Callable 10/1/02 @ 102, FGIC...................... 1,000 1,029
Port of Palm Beach, 6.25%, 9/1/08, Callable 9/1/02 @ 102,
MBIA....................................................... 1,000 1,050
Reedy Creek, Improvement District, Series A, GO, 5.60%,
6/1/10, Callable 6/1/05 @ 100, MBIA........................ 1,000 1,031
Seminole County, Local Option Gas Tax Revenue, 5.00%,
10/1/02, FGIC.............................................. 1,000 1,013
St. Johns River Management District, Land Acquisition,
5.10%, 7/1/09, Callable 7/1/05 @ 100, FSA.................. 1,000 1,011
St. Petersburg, Utility Tax Revenue, 5.85%, 6/1/02.......... 1,000 1,022
Sunshine Skyway Revenue, 6.60%, 7/1/08*, Callable 7/1/01 @
101........................................................ 1,000 1,026
Tallahassee, Consolidated Utility System Revenue, 5.80%,
10/1/08, Callable 10/1/03 @ 102............................ 1,000 1,048
Tampa, Water & Sewer Revenue, 5.25%, 10/1/12, Callable
10/1/05 @ 102, FGIC........................................ 750 756
Tampa Sports Authority, Local Option Sales Tax Revenue,
Stadium Project, 6.00%, 1/1/06, MBIA....................... 1,000 1,065
Tampa-Hillsborough County, Expressway, 5.00%, 7/1/10,
Callable 7/1/07 @ 101...................................... 1,000 1,009
Volusia County Sales Tax Revenue, 5.00%, 10/1/13, Callable
10/1/08 @ 101, MBIA........................................ 1,000 985
-------
63,342
-------
TOTAL MUNICIPAL BONDS....................................... 63,342
-------
</TABLE>
Investment Companies (4.2%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- -------
<S> <C> <C>
AmSouth Tax-Exempt Money Market Fund........................ 860,613 $ 861
Dreyfus Florida Money Market Fund........................... 1,876,216 1,876
-------
TOTAL INVESTMENT COMPANIES.................................. 2,737
-------
TOTAL INVESTMENTS
(Cost $66,104) (a) -- (101.3%)............................. 66,079
Liabilities in excess of other assets -- (-1.3%)............ (818)
-------
TOTAL NET ASSETS -- (100.0%)................................ $65,261
=======
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................... $ 723
Unrealized depreciation............................................... (748)
-----
Net unrealized depreciation........................................... $ (25)
=====
</TABLE>
* Put and demand features exist allowing the Fund to require the repurchase
of the instrument within variable time periods including daily, weekly,
monthly, or semiannually.
AMBAC -- Insured by AMBAC Indemnity Corp.
ETM -- Escrowed to Maturity
FGIC -- Insured by Financial Guaranty Insurance Corp.
FSA -- Insured by Financial Security Assurance Inc.
GO -- General Obligation
MBIA -- Insured by Municipal Bond Insurance Assoc.
TCRS -- Transferable Custodial Receipts
See notes to financial statements
185
<PAGE>
AMSOUTH FUNDS
Florida Tax-Exempt Fund (a)
Statement of Assets and Liabilities
(Amounts in thousands,except per share amounts)
July 31, 2000
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $66,104)........................... $66,079
Interest and dividends receivable.............................. 734
Prepaid expenses and other assets.............................. 3
-------
Total Assets.................................................. 66,816
Liabilities:
Payable for investments purchased.............................. $1,525
Accrued expenses and other payables:
Investment advisory fees...................................... 9
Administration fees........................................... 1
Distribution fees............................................. 6
Custodian fees................................................ 2
Other......................................................... 12
------
Total Liabilities............................................. 1,555
-------
Net Assets:
Capital........................................................ 65,606
Undistributed (distributions in excess of) net investment
income........................................................ 79
Undistributed (distributions in excess of) net realized gains.. (399)
Net unrealized appreciation (depreciation) from investments.... (25)
-------
Net Assets..................................................... $65,261
=======
Class A Shares (b)
Net Assets.................................................... $ 2,655
Shares outstanding............................................ 262
Redemption price per share.................................... $ 10.16
=======
Class A Shares -- Maximum Sales Charge......................... 4.00%
-------
Maximum Offering Price Per Share (100%/(100% -- Maximum Sales
Charge) of net asset value adjusted to the nearest cent)..... $ 10.58
=======
Class B Shares
Net Assets.................................................... $ 729
Shares outstanding............................................ 72
Offering price per share*..................................... $ 10.15
=======
Trust Shares (c)
Net Assets.................................................... $61,877
Shares outstanding............................................ 6,087
Offering and redemption price per share....................... $ 10.16
=======
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly AmSouth Florida Tax-Free Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
Statement of Operations
(Amounts in thousands)
For the year ended July 31, 2000
<TABLE>
<S> <C> <C>
Investment Income:
Interest income.................................................. $3,320
Dividend income.................................................. 55
------
Total Investment Income......................................... 3,375
Expenses:
Investment advisory fees......................................... $453
Administration fees.............................................. 139
Distribution fees -- Class B Shares.............................. 7
Shareholder servicing fees -- Class A Shares (b)................. 15
Shareholder servicing fees -- Trust Shares (c)................... 35
Custodian fees................................................... 14
Accounting fees.................................................. 49
Transfer agent fees.............................................. 47
Trustee fees and expenses........................................ 3
Other fees....................................................... 29
----
Total expenses before voluntary fee reductions.................. 791
Expenses voluntarily reduced.................................... (326)
------
Net expenses.................................................... 465
------
Net Investment Income............................................ 2,910
------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment transactions......... (399)
Net change in unrealized appreciation (depreciation) from
investments..................................................... 50
------
Net realized/unrealized gains (losses) from investments.......... (349)
------
Change in net assets resulting from operations................... $2,561
======
</TABLE>
See notes to financial statements
186
<PAGE>
AMSOUTH FUNDS
Florida Tax-Exempt Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2000 1999
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................. $ 2,910 $ 2,897
Net realized gains (losses) from investment
transactions......................................... (399) 376
Net change in unrealized appreciation (depreciation)
from investments..................................... 50 (2,004)
-------- -------
Change in net assets resulting from operations......... 2,561 1,269
-------- -------
Distributions to Class A Shareholders (b):
From net investment income............................ (253) (388)
From net realized gains on investment transactions.... (17) (50)
Distributions to Class B Shareholders:
From net investment income............................ (23) (4)(d)
From net realized gains on investment transactions.... (2) --
Distributions to Trust Shareholders (c):
From net investment income............................ (2,685) (2,374)
From net realized gains on investment transactions.... (176) (333)
-------- -------
Change in net assets from shareholder distributions.... (3,156) (3,149)
-------- -------
Change in net assets from capital transactions......... (10,456) 14,160
-------- -------
Change in net assets................................... (11,051) 12,280
Net Assets:
Beginning of period................................... 76,312 64,032
-------- -------
End of period......................................... $ 65,261 $76,312
======== =======
</TABLE>
---------
(a) Formerly AmSouth Florida Tax-Free Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
(d) For the period from March 16, 1999 (commencement of operations) through
July 31, 1999.
See notes to financial statements
187
<PAGE>
AMSOUTH FUNDS
Florida Tax-Exempt Fund (a)
Financial Highlights, Class A Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2000 1999 1998 (b) 1997 1996
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $10.22 $ 10.45 $10.50 $ 10.30 $ 10.32
------ ------- ------ ------- -------
Investment Activities
Net investment income
(loss)................ 0.44 0.41 0.45 0.45 0.45
Net realized and
unrealized gains
(losses) from
investments........... (0.06) (0.18) 0.01 0.24 (0.01)
------ ------- ------ ------- -------
Total from Investment
Activities............ 0.38 0.23 0.46 0.69 0.44
------ ------- ------ ------- -------
Distributions
Net investment income.. (0.41) (0.40) (0.44) (0.48) (0.45)
Net realized gains from
investment
transactions.......... (0.03) (0.06) (0.07) (0.01) (0.01)
------ ------- ------ ------- -------
Total Distributions.... (0.44) (0.46) (0.51) (0.49) (0.46)
------ ------- ------ ------- -------
Net change in asset
value.................. (0.06) (0.23) (0.05) 0.20 (0.02)
------ ------- ------ ------- -------
Net Asset Value, End of
Period................. $10.16 $ 10.22 $10.45 $ 10.50 $ 10.30
====== ======= ====== ======= =======
Total Return (excludes
sales charge).......... 3.99% 2.06% 4.46% 6.89% 4.24%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $2,655 $12,195 $8,883 $53,688 $48,869
Ratio of expenses to
average net assets..... 0.74% 0.59% 0.55% 0.57% 0.59%
Ratio of net investment
income to average net
assets................. 4.10% 4.00% 4.24% 4.36% 4.33%
Ratio of expenses to
average net assets*.... 1.30% 1.26% 1.06% 1.06% 1.04%
Portfolio turnover**.... 11% 34% 30% 24% 12%
</TABLE>
/\ Formerly Classic Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly AmSouth Florida Tax-Free Fund.
(b) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Year Ended Period Ended
July 31, July 31,
2000 1999 (b)
---------- ------------
<S> <C> <C>
Net Asset Value, Beginning of Period................. $10.20 $10.52
------ ------
Investment Activities
Net investment income (loss)........................ 0.32 0.12
Net realized and unrealized gains (losses) from
investments........................................ (0.01) (0.30)
------ ------
Total from Investment Activities.................... 0.31 (0.18)
------ ------
Distributions
Net investment income............................... (0.33) (0.14)
Net realized gains from investment transactions..... (0.03) --
------ ------
Total Distributions................................. (0.36) (0.14)
------ ------
Net change in asset value............................ (0.05) (0.32)
------ ------
Net Asset Value, End of Period....................... $10.15 $10.20
====== ======
Total Return (excludes redemption charge)............ 3.14% (1.77)%(c)
Ratios/Supplemental Data:
Net Assets at end of period (000).................... $ 729 $ 569
Ratio of expenses to average net assets.............. 1.62% 1.49%(d)
Ratio of net investment income to average net
assets.............................................. 3.22% 3.06%(d)
Ratio of expenses to average net assets*............. 2.05% 2.00%(d)
Portfolio turnover**................................. 11% 34%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly AmSouth Florida Tax-Free Fund.
(b) For the period from March 16, 1999 (commencement of operations) through
July 31, 1999.
(c) Not annualized.
(d) Annualized.
See notes to financial statements
188
<PAGE>
AMSOUTH FUNDS
Florida Tax-Exempt Fund (a)
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2000 1999 1998 (b)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period....... $ 10.22 $ 10.46 $ 10.39
------- ------- -------
Investment Activities
Net investment income (loss).............. 0.42 0.43 0.41
Net realized and unrealized gains (losses)
from investments......................... (0.02) (0.20) 0.14
------- ------- -------
Total from Investment Activities.......... 0.40 0.23 0.55
------- ------- -------
Distributions
Net investment income..................... (0.43) (0.41) (0.41)
Net realized gains from investment
transactions............................. (0.03) (0.06) (0.07)
------- ------- -------
Total Distributions....................... (0.46) (0.47) (0.48)
------- ------- -------
Net change in asset value.................. (0.06) (0.24) 0.07
------- ------- -------
Net Asset Value, End of Period............. $ 10.16 $ 10.22 $ 10.46
======= ======= =======
Total Return............................... 4.02% 2.16% 4.66%(c)
Ratios/Supplemental Data:
Net Assets at end of period (000).......... $61,877 $63,548 $55,369
Ratio of expenses to average net assets.... 0.65% 0.49% 0.49%(d)
Ratio of net investment income to average
net assets................................ 4.19% 4.10% 4.30%(d)
Ratio of expenses to average net assets*... 1.11% 1.01% 1.04%(d)
Portfolio turnover**....................... 11% 34% 30%
</TABLE>
/\ Formerly Premier Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly AmSouth Florida Tax-Free Fund.
(b) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being relected as Classic Shares.
(c) Represents total return based on the activity of Classic Shares for the
period from August 1, 1997 to September 1, 1997 and the activity of
Premier Shares for the period from September 2, 1997 to July 31, 1998.
Total return for the Premier Shares for the period from September 2, 1997
(commencement of operations) through July 31, 1998 was 5.40%.
(d) Annualized.
See notes to financial statements
189
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Tennessee Tax-Exempt Fund July 31, 2000
(Amounts in thousands, except shares)
Municipal Bonds (96.7%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- -------
<S> <C> <C>
Alabama (2.9%)
Jefferson County Sewer Revenue Refunded Warrants, Series A,
5.63%, 2/1/22, Callable 2/1/07 @ 101, FGIC.................. $1,995 $ 1,980
-------
Arkansas (1.6%)
North Little Rock Electric Power and Light Refunding, Series
A, 6.50%, 7/1/15, MBIA...................................... 1,000 1,125
-------
Tennessee (92.2%)
Bristol Health & Educational Facilities Revenue, Bristol
Memorial Hospital, 6.75%, 9/1/07, FGIC...................... 3,340 3,712
Chattanooga-Hamilton County Hospital Authority, Hospital
Revenue, 5.63%, 10/1/09, FSA................................ 1,000 1,048
Clarksville Water, Sewer & Gas, Natural Gas Utility
Improvements, 6.13%, 2/1/12, Callable 2/1/02 @ 102, MBIA.... 500 520
Dickson County School Improvements, 6.25%, 4/1/08, GO, FGIC.. 1,220 1,333
Harpeth Valley Utility District, Davidson & Williamson
Counties Revenue, 5.25%, 9/1/17, MBIA....................... 1,000 983
Humphreys County Industrial Development Board, Solid Waste
Disposable Revenue,
E.I. Dupont de Nemours & Co. Project,
6.70%, 5/1/24, Callable 5/1/04 @ 102........................ 1,455 1,555
Jackson Hospital Revenue Refunding and Improvement, 6.00%,
4/1/05, AMBAC............................................... 1,150 1,212
Knox County Health, Education & Housing Facilities Board
Hospital Facilities Revenue, Fort Sanders Alliance, 7.25%,
1/1/09, MBIA................................................ 2,000 2,310
Knox County Health, Education & Housing Facilities Board
Hospital Facilities Revenue, Fort Sanders Alliance, 6.25%,
1/1/13, MBIA................................................ 1,000 1,082
Knox County Health, Education & Housing Facilities Board
Hospital Facilities Revenue, Fort Sanders Alliance, 5.75%,
1/1/14, MBIA................................................ 1,125 1,168
Knox County Refunding, 6.50%, 4/1/04, Callable 4/1/03 @ 102,
GO.......................................................... 1,965 2,091
Knoxville Electric Revenue, Refunding & Improvement System,
Series S, 5.10%, 7/1/24, Callable 7/1/05 @ 101.............. 2,495 2,300
Memphis, 6.25%, 7/1/04, GO................................... 1,500 1,588
Memphis, 6.00%, 11/1/06, GO.................................. 1,000 1,070
Memphis, School Improvements, 5.25%, 10/1/14, Callable
10/1/06 @ 101, GO........................................... 2,800 2,790
Memphis-Shelby County Airport Authority, Revenue Bonds,
Series A, 6.25%, 2/15/09, MBIA.............................. 1,790 1,937
Metropolitan Government Nashville & Davidson County, 5.13%,
5/15/25, GO, Callable 5/15/07 @ 102......................... 1,000 926
</TABLE>
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- -------
<S> <C> <C>
Tennessee, continued
Metropolitan Government, Nashville & Davidson County Energy
Project, Series B, Revenue Bond, 6.00%, 7/1/10, AMBAC...... $1,335 $ 1,449
Metropolitan Government, Nashville & Davidson County Health
& Educational Facilities Board, Refunding & Improvements,
Vanderbilt University, Series B, 5.00%, 10/1/28, Callable
10/1/08 @ 101.............................................. 1,000 896
Metropolitan Government, Nashville & Davidson County
Industrial Development Board Revenue, Multi-Family Housing,
Arbor, Series B, 7.50%, 11/15/10, Prerefunded 5/15/10 @
100........................................................ 3,000 3,573
Metropolitan Government, Nashville & Davidson County Water &
Sewer Revenue, 6.50%, 4/1/03............................... 1,000 1,049
Metropolitan Government, Nashville & Davidson County Water &
Sewer Revenue, Series B, 5.25%, 1/1/14, FGIC............... 2,000 2,005
Rutherford County, Capital Outlay, Series A, 6.25%, 5/1/04,
GO......................................................... 2,000 2,113
Shelby County, Series A, 6.75%, 4/1/05, GO.................. 1,000 1,087
Shelby County, Series B, 6.00%, 12/1/05, GO................. 1,250 1,330
Shelby County, Series A, 5.10%, 3/1/22, Callable 3/1/08 @
100, GO.................................................... 1,000 932
Shelby County Health, Education & Housing Facilities Board,
Hospital Revenue, Methodist Health Systems, Inc., 6.25%,
8/1/07, MBIA............................................... 3,500 3,788
Tennergy Corp., Tennesee Gas Revenue,4.13%, 6/1/09, MBIA.... 2,000 1,735
Tennergy Corp., Tennessee Gas Revenue, 5.00%, 6/1/09, MBIA.. 1,000 961
Tennessee Energy Aquisition Corp. Gas Revenue, Series B,
5.00%, 9/1/07, AMBAC....................................... 2,000 1,891
Tennessee Housing Development Agency, Series A, 5.95%,
7/1/28, Callable 7/1/03 @ 102.............................. 1,000 1,002
Tennessee State, Refunded, Series B, 6.00%, 5/1/05, GO...... 1,500 1,589
Tennessee State, Refunded, Series B, 6.00%, 5/1/06, GO...... 1,000 1,068
Tennessee State, Refunded, Series A, 5.00%, 5/1/13, GO...... 2,000 1,988
Tennessee State, Series B, 5.50%, 5/1/27, Callable 5/1/07 @
101.5, GO.................................................. 1,000 991
Tennessee State School Board Authority, Unrefunded Balance,
Series A, 5.50%, 5/1/22, Callable 5/1/06 @ 101.5, FSA...... 1,000 981
White House Utility District, Robertson & Sumner Counties
Waterworks, Series B, 5.25%, 1/1/17, Callable 1/1/07 @ 100,
FGIC....................................................... 1,450 1,412
</TABLE>
Continued
190
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Tennessee Tax-Exempt Fund July 31, 2000
(Amounts in thousands, except shares)
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- -------
<S> <C> <C>
Tennessee, continued
Williamson County, 5.50%, 9/1/13, GO........................ $1,660 $ 1,725
Williamson County Public Improvements, 6.25%, 4/1/06, GO.... 1,000 1,078
Wilson County, Certificate of Participation Refunding,
5.25%, 6/30/15, Callable 6/30/09 @ 101, FSA................ 1,500 1,475
-------
63,743
-------
TOTAL MUNICIPAL BONDS....................................... 66,848
-------
Investment Companies (0.0%)
AIM Tax-Free Money Market Fund.............................. 6,772 7
AmSouth Tax-Exempt Money Market............................. 24,292 24
-------
TOTAL INVESTMENT COMPANIES.................................. 31
-------
TOTAL INVESTMENTS
(Cost $67,184) (a) -- (96.7%).............................. 66,879
Other assets in excess of liabilities -- (3.3%)............. 2,254
-------
TOTAL NET ASSETS -- (100.0%)................................ $69,133
=======
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation........................................... $ 687
Unrealized depreciation........................................... (992)
-------
Net unrealized depreciation....................................... $ (305)
=======
</TABLE>
AMBAC -- Insured by AMBAC Indemnity Corp.
FGIC -- Insured by Financial Guaranty Insurance Corp.
FSA -- Insured by Financial Security Assurance Inc.
GO -- General Obligation
MBIA -- Insured by Municipal Bond Insurance Assoc.
See notes to financial statements
191
<PAGE>
AMSOUTH FUNDS
Tennessee Tax-Exempt Fund (a)
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $67,184)............................. $66,879
Interest and dividends receivable................................ 1,053
Receivable for investments sold.................................. 2,145
Prepaid expenses and other assets................................ 15
-------
Total Assets.................................................... 70,092
Liabilities:
Payable for investments purchased................................ $924
Accrued expenses and other payables:
Investment advisory fees........................................ 11
Administration fees............................................. 2
Distribution fees............................................... 7
Custodian fees.................................................. 2
Other........................................................... 13
----
Total Liabilities............................................... 959
-------
Net Assets:
Capital.......................................................... 71,083
Undistributed (distributions in excess of) net investment
income.......................................................... 85
Undistributed (distributions in excess of) net realized gains.... (1,730)
Net unrealized appreciation (depreciation) from investments...... (305)
-------
Net Assets....................................................... $69,133
=======
Class A Shares
Net Assets...................................................... $ 2,919
Shares outstanding.............................................. 300
Redemption price per share...................................... $ 9.74
=======
Class A Shares -- Maximum Sales Charge........................... 4.00%
-------
Maximum Offering Price Per Share (100%/(100% -- Maximum Sales
Charge) of net asset value adjusted to the nearest cent)....... $ 10.15
=======
Class B Shares
Net Assets...................................................... $ 1,054
Shares outstanding.............................................. 108
Offering price per share*....................................... $ 9.76
=======
Trust Shares (b)
Net Assets...................................................... $65,160
Shares outstanding.............................................. 6,688
Offering and redemption price per share......................... $ 9.74
=======
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG Tennessee Tax-Exempt Fund.
(b) Formerly Institutional Shares.
(c) For the period from January 1, 2000 through July 31, 2000.
Statements of Operations
<TABLE>
<CAPTION>
Period Ended Year Ended
July 31, December 31,
2000 (c) 1999
------------ ------------
(Amounts in thousands)
<S> <C> <C>
Investment Income:
Interest income..................................... $2,099 $ 4,007
Dividend income..................................... 21 67
------ -------
Total Investment Income............................ 2,120 4,074
Expenses:
Investment advisory fees............................ 258 446
Administration fees................................. 79 134
Distribution fees -- Class A Shares................. 2 8
Distribution fees -- Class B Shares................. 6 11
Shareholder servicing fees -- Class A Shares....... 4 5
Shareholder servicing fees -- Class B Shares....... 1 4
Shareholder servicing fees -- Trust Shares (b)...... 61 127
Custodian fees...................................... 8 25
Accounting fees..................................... 8 29
Transfer agent fees................................. 24 43
Trustee fees and expenses........................... 1 2
Other fees.......................................... 39 80
------ -------
Total expenses before voluntary fee reductions/
reimbursements.................................... 491 914
Expenses voluntarily reduced/reimbursed............ (71) (7)
------ -------
Net expenses....................................... 420 907
------ -------
Net Investment Income............................... 1,700 3,167
------ -------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment
transactions....................................... (444) (1,286)
Net change in unrealized appreciation (depreciation)
from investments................................... 1,811 (4,484)
------ -------
Net realized/unrealized gains (losses) from
investments........................................ 1,367 (5,770)
------ -------
Change in net assets resulting from operations...... $3,067 $(2,603)
====== =======
</TABLE>
See notes to financial statements
192
<PAGE>
AMSOUTH FUNDS
Tennessee Tax-Exempt Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended
July 31, December 31, December 31,
2000 (b) 1999 1998
------------ ------------ ------------
(Amounts in thousands)
<S> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income................ $ 1,700 $ 3,167 $ 3,613
Net realized gains (losses) from
investment transactions............. (444) (1,286) 1,357
Net change in unrealized appreciation
(depreciation) from investments..... 1,811 (4,484) (525)
-------- -------- --------
Change in net assets resulting from
operations........................... 3,067 (2,603) 4,445
-------- -------- --------
Distributions to Class A Shareholders:
From net investment income........... (66) (103) (86)
From net realized gains on investment
transactions........................ -- (1) (19)
Distributions to Class B Shareholders:
From net investment income........... (19) (38) (17)(d)
From net realized gains on investment
transactions........................ -- -- (9)(d)
Distributions to Trust Shareholders
(c):
From net investment income........... (1,536) (3,025) (3,510)
From net realized gains on investment
transactions........................ -- (28) (638)
-------- -------- --------
Change in net assets from shareholder
distributions........................ (1,621) (3,195) (4,279)
-------- -------- --------
Change in net assets from capital
transactions......................... (12,462) (10,055) (6,575)
-------- -------- --------
Change in net assets.................. (11,016) (15,853) (6,409)
Net Assets:
Beginning of period.................. 80,149 96,002 102,411
-------- -------- --------
End of period........................ $ 69,133 $ 80,149 $ 96,002
======== ======== ========
</TABLE>
---------
(a) Formerly ISG Tennessee Tax-Exempt Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) Formerly Institutional Shares.
(d) For the period from February 24, 1998 (commencement of operations) through
December 31, 1998.
See notes to financial statements
193
<PAGE>
AMSOUTH FUNDS
Tennessee Tax-Exempt Fund (a)
Financial Highlights, Class A Shares
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, December 31, December 31, December 31, December 31, December 31,
2000 (b) 1999 1998 1997 1996 1995
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 9.55 $10.19 $10.18 $ 9.90 $ 10.19 $ 9.40
------ ------ ------ ------ ------- -------
Investment Activities
Net investment income
(loss)................ 0.21 0.33 0.35 0.44 0.42 0.45
Net realized and
unrealized gains
(losses) from
investments........... 0.18 (0.64) 0.08 0.25 (0.29) 0.79
------ ------ ------ ------ ------- -------
Total from Investment
Activities............ 0.39 (0.31) 0.43 0.69 0.13 1.24
------ ------ ------ ------ ------- -------
Distributions
Net investment income.. (0.20) (0.33) (0.35) (0.41) (0.42) (0.45)
Net realized gains..... -- -- (0.07) -- -- --
------ ------ ------ ------ ------- -------
Total Distributions.... (0.20) (0.33) (0.42) (0.41) (0.42) (0.45)
------ ------ ------ ------ ------- -------
Net change in asset
value.................. 0.19 (0.64) 0.01 0.28 (0.29) 0.79
------ ------ ------ ------ ------- -------
Net Asset Value, End of
Period................. $ 9.74 $ 9.55 $10.19 $10.18 $ 9.90 $ 10.19
====== ====== ====== ====== ======= =======
Total Return (excludes
sales charge).......... 4.15%(c) (3.07)% 4.25% 7.13% 1.39% 13.40%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $2,919 $3,324 $2,919 $1,669 $88,084 $94,143
Ratio of expenses to
average net assets..... 1.13%(d) 1.25% 1.20% 0.84% 0.86% 0.87%
Ratio of net investment
income to average net
assets................. 3.78%(d) 3.34% 3.37% 4.13% 4.29% 4.52%
Ratio of expenses to
average net assets*.... 1.27%(d) 1.26% 1.20% 1.09% 1.11% 1.12%
Portfolio turnover**.... 23% 64% 155% 253% 219% 188%
</TABLE>
* During the period, certain fees were voluntarily reduced/reimbursed. If such
voluntary fee reductions/reimbursements had not occurred, the ratios would
have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Tennessee Tax-Exempt Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end July 31.
(c) Not annualized.
(d) Annualized.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
July 31, December 31, December 31,
2000 (b) 1999 1998 (c)
------------ ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.. $ 9.57 $10.21 $10.22
------ ------ ------
Investment Activities
Net investment income (loss)......... 0.17 0.27 0.26
Net realized and unrealized gains
(losses) from investments........... 0.18 (0.64) 0.06
------ ------ ------
Total from Investment Activities..... 0.35 (0.37) 0.32
------ ------ ------
Distributions
Net investment income................ (0.16) (0.27) (0.26)
Net realized gains................... -- -- (0.07)
------ ------ ------
Total Distributions.................. (0.16) (0.27) (0.33)
------ ------ ------
Net change in asset value............. 0.19 (0.64) (0.01)
------ ------ ------
Net Asset Value, End of Period........ $ 9.76 $ 9.57 $10.21
====== ====== ======
Total Return (excludes redemption
charge).............................. 3.74%(d) (3.65)% 3.17%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)..... $1,054 $1,288 $1,397
Ratio of expenses to average net
assets............................... 1.83%(e) 1.84% 1.95%(e)
Ratio of net investment income to
average net assets................... 3.07%(e) 2.72% 2.50%(e)
Ratio of expenses to average net
assets*.............................. 1.96%(e) 1.85% (f)
Portfolio turnover**.................. 23% 64% 155%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Tennessee Tax-Exempt Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end July 31.
(c) For the period from February 24, 1998 (commencement of operations) through
December 31, 1998.
(d) Not annualized.
(e) Annualized.
(f) There were no fee reductions in this period.
See notes to financial statements
194
<PAGE>
AMSOUTH FUNDS
Tennessee Tax-Exempt Fund (a)
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Period Ended
July 31, December 31, December 31, December 31,
2000 (b) 1999 1998 1997 (c)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 9.55 $ 10.19 $ 10.18 $ 10.05
------- ------- ------- --------
Investment Activities
Net investment income
(loss)................ 0.22 0.35 0.37 0.10
Net realized and
unrealized gains
(losses) from
investments........... 0.18 (0.64) 0.08 0.13
------- ------- ------- --------
Total from Investment
Activities............ 0.40 (0.29) 0.45 0.23
------- ------- ------- --------
Distributions
Net investment income.. (0.21) (0.35) (0.37) (0.10)
Net realized gains..... -- -- (0.07) --
------- ------- ------- --------
Total Distributions.... (0.21) (0.35) (0.44) (0.10)
------- ------- ------- --------
Net change in asset
value.................. 0.19 (0.64) 0.01 0.13
------- ------- ------- --------
Net Asset Value, End of
Period................. $ 9.74 $ 9.55 $ 10.19 $ 10.18
======= ======= ======= ========
Total Return............ 4.26%(d) (2.83)% 4.52% 2.35%(d)
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $65,160 $75,537 $91,687 $100,742
Ratio of expenses to
average net assets..... 0.95%(e) 1.00% 0.95% 0.56%(e)
Ratio of net investment
income to average net
assets................. 3.95%(e) 3.57% 3.65% 4.22%(e)
Ratio of expenses to
average net assets*.... 1.11%(e) 1.00% 0.95% 0.87%(e)
Portfolio turnover**.... 23% 64% 155% 253%
</TABLE>
/\ Formerly Institutional Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Tennessee Tax-Exempt Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end July 31.
(c) For the period from October 3, 1997 (commencement of operations) through
December 31, 1997.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
195
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Limited Term Tennessee Tax-Exempt Fund July 31, 2000
(Amounts in thousands, except shares)
Municipal Bonds (97.9%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- -------
<S> <C> <C>
Arizona (6.5%)
Pima County, Unified School District, Series C, 6.60%,
7/1/03, Prerefunded 7/1/01 @ 101, GO, MBIA................. $ 1,000 $ 1,030
-------
Nevada (3.2%)
Reno Hospital Revenue, St. Mary's Regional Medical Center,
Series B, 4.40%*, 5/15/23, MBIA............................ 500 500
-------
Tennessee (88.2%)
Chattanooga, Health Education & Housing, Facilities Board
Revenue, Series A, 5.25%, 12/1/02.......................... 900 910
Hamilton County, 6.25%, 2/1/20, Prerefunded 2/1/05 @ 102,
GO......................................................... 490 529
Knox County, Health Education & Housing, Facilities Board
Hospital Revenue Refunding, 7.25%, 1/1/08, MBIA............ 750 857
Knox County Refunding, 6.50%, 4/1/04, Callable 4/1/03 @ 102,
GO......................................................... 750 798
Lenoir City Electrical System Revenue, 4.80%, 6/1/11,
Callable 6/1/08 @ 100, AMBAC............................... 1,000 975
Memphis, 6.00%, 7/1/03, GO.................................. 500 520
Memphis, 6.00%, 11/1/03, GO................................. 500 522
Memphis, 6.00%, 7/1/04, GO.................................. 1,000 1,050
Memphis, 5.50%, 4/1/09, Callable 4/1/08 @ 101, GO........... 1,000 1,048
Metropolitan Government, Nashville & Davidson County, Health
& Education Facilities Board Revenue, The Vanderbilt
University, Series A, 6.00%, 7/1/07........................ 625 671
Metropolitan Government, Nashville & Davidson County, Water
& Sewer Revenue, 6.00%, 1/1/06, MBIA....................... 750 796
Rutherford County Capital Outlay Notes, 6.00%, 4/1/04, GO... 1,370 1,435
Shelby County, Series B, 6.00%, 12/1/05, GO................. 750 798
Tennergy Corp., Tennessee Gas Revenue, 5.00%, 6/1/09, MBIA.. 900 865
Tennessee State, Series B, 6.50%, 6/1/03, Prerefunded 6/1/01
@ 102, GO.................................................. 750 774
Tennessee State, Series A, 5.30%, 3/1/06, Prerefunded 3/1/04
@ 101.5, GO................................................ 500 518
Williamson County, 6.00%, 3/1/08, GO........................ 785 846
-------
13,912
-------
TOTAL MUNICIPAL BONDS....................................... 15,442
-------
</TABLE>
Investment Companies (1.0%)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- -------
<S> <C> <C>
AIM Tax-Free Money Market Fund............................... 1,336 $ 1
AmSouth Tax-Exempt Money Market Fund......................... 155,835 156
-------
TOTAL INVESTMENT COMPANIES................................... 157
-------
TOTAL INVESTMENTS
(Cost $15,737) (a) -- (98.9%)............................... 15,599
Other assets in excess of liabilities -- (1.1%).............. 179
-------
TOTAL NET ASSETS -- (100.0%)................................. $15,778
=======
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation........................................... $ 60
Unrealized depreciation........................................... (198)
-------
Net unrealized depreciation....................................... $ (138)
=======
</TABLE>
* Variable rate security. Rate represents rate in effect at July 31, 2000.
AMBAC -- Insured by AMBAC Indemnity Corp.
GO -- General Obligation
MBIA -- Insured by Municipal Bond Insurance Assoc.
See notes to financial statements
196
<PAGE>
AMSOUTH FUNDS
Limited Term Tennessee Tax-Exempt Fund (a)
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $15,737).............................. $15,599
Interest and dividends receivable................................. 182
Prepaid expenses and other assets................................. 13
-------
Total Assets..................................................... 15,794
Liabilities:
Accrued expenses and other payables:
Investment advisory fees......................................... $ 3
Distribution fees................................................ 4
Other............................................................ 9
---
Total Liabilities................................................ 16
-------
Net Assets:
Capital........................................................... 16,193
Undistributed (distributions in excess of) net investment income.. 16
Undistributed (distributions in excess of) net realized gains..... (293)
Net unrealized appreciation (depreciation) from investments....... (138)
-------
Net Assets........................................................ $15,778
=======
Class A Shares
Net Assets....................................................... $15,489
Shares outstanding............................................... 1,579
Redemption price per share....................................... $ 9.81
=======
Class A Shares -- Maximum Sales Charge............................ 4.00%
-------
Maximum Offering Price Per Share
(100%/(100% -- Maximum Sales Charge) of net asset value adjusted
to the nearest cent)............................................ $ 10.22
=======
Class B Shares
Net Assets....................................................... $ 289
Shares outstanding............................................... 29
Offering price per share*........................................ $ 9.81
=======
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG Limited Term Tennessee Tax-Exempt Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
Statements of Operations
<TABLE>
<CAPTION>
Period Ended Year Ended
July 31, December 31,
2000 (b) 1999
------------ ------------
(Amounts in thousands)
<S> <C> <C>
Investment Income:
Interest income..................................... $444 $ 802
Dividend income..................................... 16 36
---- -----
Total Investment Income............................ 460 838
Expenses:
Investment advisory fees............................ 61 101
Administration fees................................. 19 30
Distribution fees -- Class A Shares................. 9 49
Distribution fees -- Class B Shares................. 2 6
Shareholder servicing fees -- Class A Shares........ 21 29
Shareholder servicing fees -- Class B Shares........ -- 2
Custodian fees...................................... 1 8
Accounting fees..................................... 2 16
Transfer agent fees................................. 13 28
Registration and filing fees........................ 17 34
Other fees.......................................... 11 16
---- -----
Total expenses before voluntary fee reductions..... 156 319
Expenses voluntarily reduced....................... (34) (93)
---- -----
Net expenses....................................... 122 226
---- -----
Net Investment Income............................... 338 612
---- -----
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment
transactions....................................... (202) (60)
Net change in unrealized appreciation (depreciation)
from investments................................... 380 (765)
---- -----
Net realized/unrealized gains (losses) from
investments........................................ 178 (825)
---- -----
Change in net assets resulting from operations...... $516 $(213)
==== =====
</TABLE>
See notes to financial statements
197
<PAGE>
AMSOUTH FUNDS
Limited Term Tennessee Tax-Exempt Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended
July 31, December 31, December 31,
2000 (b) 1999 1998
------------ ------------ ------------
(Amounts in thousands)
<S> <C> <C> <C>
From Investment Activities:
Operations:
Net Investment income................. $ 338 $ 612 $ 697
Net realized gains (losses) from
investment transactions.............. (202) (60) 155
Net change in unrealized appreciation
(depreciation) from investments...... 380 (765) (54)
------- ------- -------
Change in net assets resulting from
operations............................ 516 (213) 798
------- ------- -------
Distributions to Class A Shareholders:
From net investment income............ (316) (595) (688)
From net realized gains on investment
transactions......................... -- -- (152)
In excess of net realized gains....... -- (33) --
Distributions to Class B Shareholders:
From net investment income............ (6) (17) (9)(c)
From net realized gains on investment
transactions......................... -- -- (6)(c)
In excess of net realized gains....... -- (1) --
------- ------- -------
Change in net assets from shareholder
distributions......................... (322) (646) (855)
------- ------- -------
Change in net assets from capital
transactions.......................... (4,388) 660 (2,665)
------- ------- -------
Change in net assets................... (4,194) (199) (2,722)
Net Assets:
Beginning of period................... 19,972 20,171 22,893
------- ------- -------
End of period......................... $15,778 $19,972 $20,171
======= ======= =======
</TABLE>
---------
(a) Formerly ISG Limited Term Tennessee Tax-Exempt Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) For the period from February 3, 1998 (commencement of operations) through
December 31, 1998.
See notes to financial statements
198
<PAGE>
AMSOUTH FUNDS
Limited Term Tennessee Tax-Exempt Fund (a)
Financial Highlights, Class A Shares
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Period Ended
July 31, December 31, December 31, December 31,
2000 (b) 1999 1998 1997 (c)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period..... $ 9.69 $ 10.11 $ 10.13 $ 10.00
------- ------- ------- -------
Investment Activities
Net investment income
(loss)................. 0.19 0.30 0.32 0.29
Net realized and
unrealized gains
(losses) from
investments............ 0.11 (0.40) 0.06 0.13
------- ------- ------- -------
Total from Investment
Activities............. 0.30 (0.10) 0.38 0.42
------- ------- ------- -------
Distributions
Net investment income... (0.18) (0.30) (0.32) (0.29)
Net realized gains...... -- -- (0.08) --
In excess of net
realized gains......... -- (0.02) -- --
------- ------- ------- -------
Total Distributions..... (0.18) (0.32) (0.40) (0.29)
------- ------- ------- -------
Net change in asset
value................... 0.12 (0.42) (0.02) 0.13
------- ------- ------- -------
Net Asset Value, End of
Period.................. $ 9.81 $ 9.69 $ 10.11 $ 10.13
======= ======= ======= =======
Total Return (excludes
sales charge)........... 3.12%(d) (1.00%) 3.76% 4.26%(d)
Ratios/Supplemental Data:
Net Assets at end of
period (000)............ $15,489 $19,361 $19,439 $22,893
Ratio of expenses to
average net assets...... 1.16%(e) 1.08% 1.05% 0.98%(e)
Ratio of net investment
income to average net
assets.................. 3.29%(e) 3.07% 3.11% 3.48%(e)
Ratio of expenses to
average net assets*..... 1.49%(e) 1.55% 1.52% 1.52%(e)
Portfolio turnover**..... 20% 52% 189% 179%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Fomerly ISG Limited Term Tennessee Tax-Exempt Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 28, 1997 (commencement of operations) through
December 31, 1997.
(d) Not annualized.
(e) Annualized.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
July 31, December 31, December 31,
2000 (b)+ 1999 1998 (c)
------------ ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.. $ 9.68 $10.10 $10.18
------ ------ ------
Investment Activities
Net investment income (loss)......... 0.15 0.22 0.20
Net realized and unrealized gains
(losses) from investments........... 0.11 (0.40) --
------ ------ ------
Total from Investment Activities..... 0.26 (0.18) 0.20
------ ------ ------
Distributions
Net investment income................ (0.13) (0.22) (0.20)
Net realized gains................... -- -- (0.08)
In excess of net realized gains...... -- (0.02) --
------ ------ ------
Total Distributions.................. (0.13) (0.24) (0.28)
------ ------ ------
Net change in asset value............. 0.13 (0.42) (0.08)
------ ------ ------
Net Asset Value, End of Period........ $ 9.81 $ 9.68 $10.10
====== ====== ======
Total Return (excludes redemption
charge).............................. 2.74%(d) (1.84)% 1.94%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)..... $ 289 $ 612 $ 732
Ratio of expenses to average net
assets............................... 1.97%(e) 1.93% 2.05%(e)
Ratio of net investment income to
average net assets................... 2.50%(e) 2.21% 2.02%(e)
Ratio of expenses to average net
assets*.............................. 2.21%(e) 2.15% 2.27%(e)
Portfolio turnover**.................. 20% 52% 189%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
+ Net investment income (loss) is based on average shares outstanding during
the period.
(a) Formerly ISG Limited Term Tennessee Tax-Exempt Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 3, 1998 (commencement of operations) through
December 31, 1998.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
199
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Prime Money Market Fund July 31, 2000
(Amounts in thousands, except shares)
Commercial Paper -- Domestic* (64.2%)
<TABLE>
<CAPTION>
Principal Amortized
Amount Cost
--------- ----------
<S> <C> <C>
Aircraft Leasing (2.8%)
International Lease Finance Corp., 6.34%, 8/21/00......... $20,000 $ 19,931
International Lease Finance Corp., 6.20%, 8/21/00......... 20,000 19,930
----------
39,861
----------
Automotive -- Finance (4.9%)
Ford Motor Credit Co., 6.52%, 10/10/00.................... 35,000 34,556
General Motors Acceptance Corp., 6.64%, 9/5/00............ 35,000 34,774
----------
69,330
----------
Banking (4.9%)
Bank of America, 6.34%, 8/8/00............................ 20,000 19,975
Bank of America, 6.64%, 10/17/00.......................... 15,000 14,787
Wells Fargo & Co., 6.55%, 9/13/00......................... 35,000 34,726
----------
69,488
----------
Beverages (2.4%)
Coca-Cola Co., 6.42%, 8/10/00............................. 35,000 34,944
----------
Chemicals (2.4%)
E.I. du Pont de Nemours & Co., 6.54%, 9/11/00............. 35,000 34,739
----------
Consumer Goods (7.2%)
Heinz (H.J.) Co., 6.51%, 10/6/00.......................... 35,000 34,582
Kellogg Co., 6.51%, 8/30/00............................... 31,000 30,837
Procter & Gamble Co., 6.48%, 9/22/00...................... 35,000 34,672
----------
100,091
----------
Diversified Manufacturing (2.4%)
Minnesota Mining & Manufacturing Co., 6.48%, 10/19/00..... 35,000 34,502
----------
Electric Utilities (2.4%)
National Rural Utilities, 6.51%, 10/12/00................. 35,000 34,544
----------
Electronics/Electrical Equipment (2.1%)
Emerson Electric Co., 6.53%, 8/4/00 (b)................... 30,000 29,984
----------
Financial Services (15.9%)
American Express Credit Corp., 6.53%, 9/15/00............. 35,000 34,714
American General Finance Corp., 6.58%, 8/23/00............ 30,000 29,879
Associate Corp., 6.60%, 8/28/00........................... 35,000 34,828
GE Capital Corp., 6.57%, 8/25/00.......................... 20,000 19,912
GE Capital Corp., 6.52%, 10/24/00......................... 20,000 19,696
IBM Credit Corp., 6.46%, 9/21/00.......................... 35,000 34,680
Merrill Lynch & Co., 6.51%, 10/26/00...................... 35,000 34,456
USAA Capital Corp., 6.45%, 8/11/00........................ 12,000 11,979
----------
220,144
----------
Oil & Gas Exploration, Production, & Services (2.4%)
Texaco, Inc., 6.48%, 9/28/00.............................. 35,000 34,635
----------
Pharmaceuticals (2.2%)
Schering-Plough Corp., 6.55%, 8/1/00...................... 31,000 31,000
----------
</TABLE>
Commercial Paper -- Domestic*, continued
<TABLE>
<CAPTION>
Principal Amortized
Amount Cost
--------- ----------
<S> <C> <C>
Photography & Imaging (2.4%)
Eastman Kodak Co., 6.57%, 9/7/00.......................... $ 21,000 $ 20,858
Eastman Kodak Co., 6.51%, 10/11/00........................ 13,500 13,327
----------
34,185
----------
Retail (1.3%)
Wal-Mart Stores, Inc., 6.54%, 9/19/00 (b)................. 20,000 19,822
----------
Telecommunications (6.9%)
AT&T Corp., 6.67%, 10/2/00................................ 33,000 32,621
BellSouth Corp., 6.48%, 9/14/00........................... 35,000 34,723
Motorola, Inc., 6.58%, 9/26/00............................ 30,000 29,693
----------
97,037
----------
TOTAL COMMERCIAL PAPER --DOMESTIC......................... 884,306
----------
Commercial Paper -- Foreign* (4.7%)
Banking (2.2%)
Lloyds TSB Group PLC, 6.33%, 8/2/00....................... 30,000 29,995
----------
Pharmaceuticals (2.5%)
Glaxo Wellcome PLC, 6.53%, 10/17/00 (b)................... 35,000 34,511
----------
TOTAL COMMERCIAL PAPER --FOREIGN.......................... 64,506
----------
U.S. Government Agencies* (15.0%)
Fannie Mae (4.2%)
6.10%, 8/3/00............................................. 20,000 19,993
6.53%, 8/24/00............................................ 15,000 14,937
6.44%, 1/18/01............................................ 25,000 24,240
----------
59,170
----------
Federal Farm Credit Bank (2.8%)
6.40%, 10/4/00............................................ 40,000 39,545
----------
Federal Home Loan Bank (3.4%)
6.50%, 8/9/00............................................. 14,000 13,980
6.06%, 8/16/00............................................ 20,000 19,949
6.49%, 8/18/00............................................ 15,000 14,954
----------
48,883
----------
Freddie Mac (4.2%)
6.10%, 8/17/00............................................ 20,000 19,946
6.44%, 10/19/00........................................... 40,000 39,435
----------
59,381
----------
TOTAL U.S. GOVERNMENT AGENCIES............................ 206,979
----------
Repurchase Agreements (16.7%)
Goldman Sachs, 6.63%, 8/1/00, dated 7/31/00, with a
maturity value of $114,851 (Collateralized by $74,480
Fannie Mae 8.50%, 10/1/28, fair value -- $74,108; $50,000
Freddie Mac 6.15%, 3/15/24, fair value -- $44,167)....... 114,830 114,830
</TABLE>
Continued
200
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Prime Money Market Fund July 31, 2000
(Amounts in thousands, except shares)
Repurchase Agreements, continued
<TABLE>
<CAPTION>
Principal Amortized
Amount Cost
--------- ----------
<S> <C> <C>
Prudential, 6.64%, 8/1/00, dated 7/31/00, with a maturity
value of $114,851 (Collateralized by $22,310 U.S.
Treasury Bond, 8.75%, 5/15/17, fair value -- $28,788;
$31,062 Fannie Mae, 6.00%-7.78%, 3/18/12-1/25/24, fair
value -- $29,853; $65,400 Freddie Mac, 6.50%-7.49%,
12/15/08-11/15/23, fair value -- $59,634)............... $114,830 $ 114,830
----------
TOTAL REPURCHASE AGREEMENTS.............................. 229,660
----------
TOTAL INVESTMENTS (Cost $1,385,451) (a) -- (100.6%)...... 1,385,451
Liabilities in excess of other assets -- (-0.6%)......... (7,687)
----------
TOTAL NET ASSETS -- (100.0%)............................. $1,377,764
==========
</TABLE>
---------
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
(b) Represents a restricted security purchased under Section 4(2), which is
exempt from registration under the Security Act of 1933, as amended. These
securities have been deemed liquid under guidelines established by the
Board of Trustees.
* Rates disclosed represent yield effective at purchase.
PLC -- Public Limited Company
See notes to financial statements
201
<PAGE>
AMSOUTH FUNDS
Prime Money Market Fund (a)
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands,except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at amortized cost............................. $1,155,791
Repurchase Agreements, at cost............................. 229,660
----------
Total Investments......................................... 1,385,451
Interest and dividends receivable.......................... 42
Prepaid expenses and other assets.......................... 50
----------
Total Assets.............................................. 1,385,543
Liabilities:
Distributions payable...................................... $7,001
Accrued expenses and other payables:
Investment advisory fees.................................. 415
Administration fees....................................... 23
Distribution fees......................................... 200
Custodian fees............................................ 33
Other..................................................... 107
------
Total Liabilities......................................... 7,779
----------
Net Assets:
Capital.................................................... 1,377,822
Undistributed net realized gains from investment
transactions.............................................. (58)
----------
Net Assets................................................. $1,377,764
==========
Class A Shares (b)
Net Assets................................................ $ 645,275
Shares outstanding........................................ 645,321
Offering and redemption price per share................... $ 1.00
==========
Class B Shares
Net Assets................................................ $ 727
Shares outstanding........................................ 727
Offering price per share*................................. $ 1.00
==========
Trust Shares (c)
Net Assets................................................ $ 731,762
Shares outstanding........................................ 731,794
Offering and redemption price per share................... $ 1.00
==========
</TABLE>
---------
* Redemption price per share varies by length of time shares are held.
(a) Formerly AmSouth Prime Obligations Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2000
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income............. $58,898
Expenses:
Investment advisory fees.... $3,941
Administration fees......... 1,971
Distribution fees -- Class B
Shares..................... 7
Shareholder servicing
fees -- Class A
Shares (b)................. 867
Shareholder servicing
fees -- Trust Shares (c)... 443
Custodian fees.............. 220
Accounting fees............. 146
Transfer agent fees......... 258
Trustee fees and expenses... 24
Other fees.................. 234
------
Total expenses before
voluntary fee
reductions/reimbursements.. 8,111
Expenses voluntarily
reduced/reimbursed........ (1,245)
-------
Net expenses............... 6,866
-------
Net Investment Income....... 52,032
-------
Change in net assets
resulting from operations.. $52,032
=======
</TABLE>
See notes to financial statements
202
<PAGE>
AMSOUTH FUNDS
Prime Money Market Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, 2000 July 31, 1999
------------- -------------
(Amounts in thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income............................. $ 52,032 $ 31,049
Net realized gains (losses) from investment
transactions..................................... -- 2
---------- --------
Change in net assets resulting from operations..... 52,032 31,051
---------- --------
Distributions to Class A Shareholders (b):
From net investment income........................ (18,553) (5,916)
Distributions to Class B Shareholders:
From net investment income........................ (29) (5)
Distributions to Trust Shareholders (c):
From net investment income........................ (33,450) (25,128)
---------- --------
Change in net assets from shareholder
distributions..................................... (52,032) (31,049)
---------- --------
Change in net assets from capital transactions..... 704,563 76,264
---------- --------
Change in net assets............................... 704,563 76,266
Net Assets:
Beginning of period............................... 673,201 596,935
---------- --------
End of period..................................... $1,377,764 $673,201
========== ========
</TABLE>
---------
(a) Formerly AmSouth Prime Obligations Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
See notes to financial statements
203
<PAGE>
AMSOUTH FUNDS
Prime Money Market Fund (a)
Financial Highlights, Class A Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31, July 31,
2000 1999 1998 1997 1996 (b)
---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- --------
Investment Activities
Net investment income.. 0.051 0.044 0.049 0.048 0.016
-------- -------- -------- -------- --------
Total from Investment
Activities............ 0.051 0.044 0.049 0.048 0.016
-------- -------- -------- -------- --------
Distributions
Net investment income.. (0.051) (0.044) (0.049) (0.048) (0.016)
-------- -------- -------- -------- --------
Total Distributions.... (0.051) (0.044) (0.049) (0.048) (0.016)
-------- -------- -------- -------- --------
Net change in asset
value.................. -- -- -- -- --
-------- -------- -------- -------- --------
Net Asset Value, End of
Period................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ========
Total Return............ 5.20% 4.48% 4.99% 4.90% 5.07%(c)
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $645,275 $136,078 $116,960 $111,027 $125,075
Ratio of expenses to
average net assets..... 0.75% 0.78% 0.79% 0.78% 0.81%(d)
Ratio of net investment
income to average net
assets................. 5.35% 4.40% 4.88% 4.79% 4.61%(d)
Ratio of expenses to
average net assets*.... 0.94% 0.94% 0.95% 0.93% 0.96%(d)
</TABLE>
/\ Formerly Classic Shares.
* During the period, certain fees were voluntarily reduced/reimbursed. If
such voluntary fee reductions/reimbursements had not occurred, the ratios
would have been as indicated.
(a) Formerly AmSouth Prime Obligations Fund.
(b) Effective April 1, 1996, the Fund's existing shares, which were previously
unclassified, were designated as Premier Shares and the Fund commenced
offering Classic Shares.
(c) Represents total return for the Premier Shares for the period from August
1, 1995 to March 31, 1996 plus the total return for the Classic Shares for
the period from April 1, 1996 to July 31, 1996. Total return for the
Classic Shares for the period April 1, 1996 (commencement of operations)
to July 31, 1996 was 1.55%.
(d) Annualized.
Financial Highlights, Class B Shares
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2000 1999 1998 (b)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period...... $1.000 $1.000 $1.000
------ ------ ------
Investment Activities
Net investment income.................... 0.042 0.035 0.005
------ ------ ------
Total from Investment Activities......... 0.042 0.035 0.005
------ ------ ------
Distributions
Net investment income.................... (0.042) (0.035) (0.005)
------ ------ ------
Total Distributions...................... (0.042) (0.035) (0.005)
------ ------ ------
Net change in asset value................. -- -- --
------ ------ ------
Net Asset Value, End of Period............ $1.000 $1.000 $1.000
====== ====== ======
Total Return (excludes redemption
charge).................................. 4.31% 3.55% 0.49%(c)
Ratios/Supplemental Data:
Net Assets at end of period (000)......... $ 727 $ 224 $ 1
Ratio of expenses to average net assets... 1.61% 1.69% 1.85%(d)
Ratio of net investment income to average
net assets............................... 4.35% 4.51% 3.83%(d)
Ratio of expenses to average net assets*.. 1.69% 1.70% 1.88%(d)
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly AmSouth Prime Obligations Fund.
(b) For the period from June 15, 1998 (commencement of operations) through
July 31, 1998.
(c) Not annualized.
(d) Annualized.
See notes to financial statements
204
<PAGE>
AMSOUTH FUNDS
Prime Money Market Fund (a)
Financial Highlights, Trust Class/\
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2000 1999 1998 1997 1996 (b)
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- --------
Investment Activities
Net investment income.. 0.052 0.045 0.050 0.049 0.050
-------- -------- -------- -------- --------
Total from Investment
Activities............ 0.052 0.045 0.050 0.049 0.050
-------- -------- -------- -------- --------
Distributions
Net investment income.. (0.052) (0.045) (0.050) (0.049) (0.050)
-------- -------- -------- -------- --------
Total Distributions.... (0.052) (0.045) (0.050) (0.049) (0.050)
-------- -------- -------- -------- --------
Net change in asset
value.................. -- -- -- --
-------- -------- -------- -------- --------
Net Asset Value, End of
Period................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ========
Total Return............ 5.31% 4.59% 5.09% 5.00% 5.10%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $731,762 $536,899 $479,974 $416,966 $478,542
Ratio of expenses to
average net assets..... 0.67% 0.68% 0.69% 0.68% 0.71%
Ratio of net investment
income to average net
assets................. 5.24% 4.51% 4.98% 4.89% 5.00%
Ratio of expenses to
average net assets*.... 0.76% 0.69% 0.70% (c) (c)
</TABLE>
/\ Formerly Premier Shares.
* During the period, certain fees were voluntarily reduced/reimbursed. If
such voluntary fee reductions/reimbursements had not occurred, the ratios
would have been as indicated.
(a) Formerly AmSouth Prime Obligations Fund.
(b) Effective April 1, 1996, the Fund's existing shares, which were previously
unclassified, were designated as Premier Shares and the Fund commenced
offering Classic Shares.
(c) There were no fee reductions in this period.
See notes to financial statements
205
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
U.S. Treasury Money Market Fund July 31, 2000
(Amounts in thousands, except shares)
U.S. Treasury Bills* (36.3%)
<TABLE>
<CAPTION>
Principal Amortized
Amount Cost
--------- ---------
<S> <C> <C>
5.52%, 8/10/00............................................ $15,000 $ 14,979
5.80%, 9/14/00............................................ 15,000 14,894
5.62%, 9/28/00............................................ 13,000 12,882
5.68%, 10/5/00............................................ 15,000 14,846
6.08%, 10/19/00........................................... 15,000 14,800
6.01%, 11/2/00-12/14/00................................... 19,000 18,600
6.02%, 12/28/00........................................... 18,000 17,552
---------
TOTAL U.S. TREASURY BILLS................................. 108,553
---------
U.S. Treasury Notes (29.7%)
6.00%, 8/15/00............................................ 15,000 14,999
5.13%, 8/31/00............................................ 15,000 14,988
4.00%, 10/31/00........................................... 15,000 14,921
5.75%, 11/15/00........................................... 18,000 17,962
5.63%, 11/30/00........................................... 16,000 15,966
5.25%, 1/31/01............................................ 10,000 9,944
---------
TOTAL U.S. TREASURY NOTES................................. 88,780
---------
Repurchase Agreements (34.0%)
Goldman Sachs, 6.55%, 8/1/00, dated 7/31/00, with a
maturity value of $50,761 (Collateralized by $26,345 U.S.
Treasury Note 5.00%, 2/28/01, fair value --$26,686;
$18,116 U.S. Treasury Bond 13.88%, 5/15/11, fair value --
$25,081)................................................ 50,752 50,752
Salomon Smith Barney, 6.55%, 8/1/00, dated 7/31/00, with a
maturity value of $50,761 (Collateralized by $50,420 U.S.
Treasury Notes 6.00%, 8/15/00, fair value --$51,792)..... 50,751 50,751
---------
TOTAL REPURCHASE AGREEMENTS............................... 101,503
---------
</TABLE>
Short-Term Securities+ (24.1%)
<TABLE>
<CAPTION>
Principal Amortized
Amount Cost
--------- ---------
<S> <C> <C>
Repurchase Agreements (24.1%)
UBS Warburg, 6.57%, 8/1/00, dated 7/31/00, with a maturity
value of $72,013 (Collateralized by $70,592 Treasury
Inflation Index Note/Bond, 3.88%, 1/15/09-4/15/29, fair
value -- $73,440)........................................ $72,000 $ 72,000
---------
TOTAL SHORT-TERM SECURITIES............................... 72,000
---------
TOTAL INVESTMENTS (Cost $370,836) (a) -- (124.1%)......... 370,836
Liabilities in excess of other assets -- (-24.1%)......... (72,147)
---------
TOTAL NET ASSETS -- (100.0%).............................. $ 298,689
=========
</TABLE>
---------
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
* Rates disclosed represent yield effective at purchase.
+ Represents securities purchased with cash collateral received on loaned
securities.
See notes to financial statements
206
<PAGE>
AMSOUTH FUNDS
U.S. Treasury Money Market Fund (a)
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands,except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at amortized cost............................... $197,333
Repurchase agreements, at cost............................... 173,503
--------
Total Investments........................................... 370,836
Interest and dividends receivable............................ 1,283
Prepaid expenses and other assets............................ 27
--------
Total Assets................................................ 372,146
Liabilities:
Payable for return of collateral held for securities on
loan........................................................ $72,000
Distributions payable........................................ 1,306
Accrued expenses and other payables:
Investment advisory fees.................................... 84
Administration fees......................................... 9
Distribution fees........................................... 25
Custodian fees.............................................. 7
Other....................................................... 26
-------
Total Liabilities........................................... 73,457
--------
Net Assets:
Capital...................................................... 298,681
Undistributed (distributions in excess of) net investment
income...................................................... 7
Undistributed net realized gains from investment
transactions................................................ 1
--------
Net Assets................................................... $298,689
========
Class A Shares (b)
Net Assets.................................................. $ 11,817
Shares outstanding.......................................... 11,816
Offering and redemption price per share..................... $ 1.00
========
Trust Shares (c)
Net Assets.................................................. $286,872
Shares outstanding.......................................... 286,864
Offering and redemption price per share..................... $ 1.00
========
</TABLE>
---------
(a) Formerly AmSouth U.S. Treasury Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2000
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income................................................. $15,780
Income from securities lending.................................. 26
-------
Total Investment Income........................................ 15,806
Expenses:
Investment advisory fees........................................ $1,156
Administration fees............................................. 578
Shareholder servicing fees -- Class A
Shares (b)..................................................... 15
Shareholder servicing fees -- Trust Shares (c).................. 159
Custodian fees.................................................. 58
Accounting fees................................................. 62
Transfer agent fees............................................. 85
Trustee fees and expenses....................................... 13
Other fees...................................................... 106
------
Total expenses before voluntary fee reductions................. 2,232
Expenses voluntarily reduced................................... (123)
-------
Net expenses................................................... 2,109
-------
Net Investment Income........................................... 13,697
-------
Change in net assets resulting from operations.................. $13,697
=======
</TABLE>
See notes to financial statements
207
<PAGE>
AMSOUTH FUNDS
U.S. Treasury Money Market Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2000 1999
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................... $ 13,697 $ 12,933
-------- --------
Change in net assets resulting from operations........... 13,697 12,933
-------- --------
Distributions to Class A Shareholders (b):
From net investment income.............................. (291) (259)
Distributions to Trust Shareholders (c):
From net investment income.............................. (13,406) (12,674)
-------- --------
Change in net assets from shareholder distributions...... (13,697) (12,933)
-------- --------
Change in net assets from capital transactions........... (26,548) (34,888)
-------- --------
Change in net assets..................................... (26,548) (34,888)
Net Assets:
Beginning of period..................................... 325,237 360,125
-------- --------
End of period........................................... $298,689 $325,237
======== ========
</TABLE>
---------
(a) Formerly AmSouth U.S. Treasury Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
See notes to financial statements
208
<PAGE>
AMSOUTH FUNDS
U.S. Treasury Money Market Fund (a)
Financial Highlights, Class A Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31, July 31,
2000 1999 1998 1997 1996 (b)
---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- ------- -------
Investment Activities
Net investment income
...................... 0.046 0.040 0.046 0.045 0.015
------- ------- ------- ------- -------
Total from Investment
Activities............ 0.046 0.040 0.046 0.045 0.015
------- ------- ------- ------- -------
Distributions
Net investment income.. (0.046) (0.040) (0.046) (0.045) (0.015)
------- ------- ------- ------- -------
Total Distributions.... (0.046) (0.040) (0.046) (0.045) (0.015)
------- ------- ------- ------- -------
Net change in asset
value.................. -- -- -- -- --
------- ------- ------- ------- -------
Net Asset Value, End of
Period................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= ======= =======
Total Return............ 4.73% 4.06% 4.67% 4.60% 4.90%(c)
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $11,817 $ 4,390 $ 8,070 $ 9,885 $12,263
Ratio of expenses to
average net assets..... 0.85% 0.79% 0.80% 0.79% 0.82%(d)
Ratio of net investment
income to average net
assets................. 4.72% 4.03% 4.57% 4.50% 4.44%(d)
Ratio of expenses to
average net assets*.... 0.96% 0.95% 0.95% 0.94% 0.97%(d)
</TABLE>
/\ Formerly Classic Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Formerly AmSouth U.S. Treasury Fund.
(b) Effective April 1, 1996, the Fund's existing shares, which were previously
unclassified, were designated as Premier Shares and the Fund commenced
offering Classic Shares.
(c) Represents total return for the Premier Shares for the period from August
1, 1995 to March 31, 1996 plus the total return for the Classic Shares for
the period from April 1, 1996 to July 31, 1996. Total return for the
Classic Shares for the period April 1, 1996 (commencement of operations)
to July 31, 1996 was 1.49%.
(d) Annualized.
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2000 1999 1998 1997 1996 (b)
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- --------
Investment Activities
Net investment income.. 0.048 0.041 0.047 0.046 0.048
-------- -------- -------- -------- --------
Total from Investment
Activities............ 0.048 0.041 0.047 0.046 0.048
-------- -------- -------- -------- --------
Distributions
Net investment income.. (0.048) (0.041) (0.047) (0.046) (0.048)
-------- -------- -------- -------- --------
Total Distributions.... (0.048) (0.041) (0.047) (0.046) (0.048)
-------- -------- -------- -------- --------
Net change in asset
value.................. -- -- -- -- --
-------- -------- -------- -------- --------
Net Asset Value, End of
Period................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ========
Total Return............ 4.86% 4.16% 4.77% 4.70% 4.93%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $286,872 $320,847 $352,055 $309,361 $368,162
Ratio of expenses to
average net assets..... 0.73% 0.69% 0.70% 0.69% 0.71%
Ratio of net investment
income to average net
assets................. 4.74% 4.10% 4.67% 4.60% 4.82%
Ratio of expenses to
average net assets*.... 0.77% 0.70% 0.70% (c) (c)
</TABLE>
/\ Formerly Premier Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Formerly AmSouth U.S. Treasury Fund.
(b) Effective April 1, 1996, the Fund's existing shares, which were previously
unclassified, were designated as Premier Shares and the Fund commenced
offering Classic Shares.
(c) There were no fee reductions in this period.
See notes to financial statements
209
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Treasury Reserve Money Market Fund July 31, 2000
(Amounts in thousands, except shares)
U.S. Treasury Bills* (18.6%)
<TABLE>
<CAPTION>
Principal Amortized
Amount Cost
--------- ---------
<S> <C> <C>
5.80%, 9/14/00............................................. $20,000 $19,858
5.67%, 9/28/00............................................. 7,000 6,936
5.96%, 10/5/00............................................. 13,000 12,860
6.08%, 10/19/00............................................ 20,000 19,733
6.02%, 12/28/00............................................ 20,000 19,502
-------
TOTAL U.S. TREASURY BILLS.................................. 78,889
-------
U.S. Treasury Notes (37.2%)
6.00%, 8/15/00............................................. 20,000 20,000
6.25%, 8/31/00............................................. 25,000 25,004
4.00%, 10/31/00............................................ 25,000 24,861
5.75%, 11/15/00............................................ 18,000 17,961
4.63%, 11/30/00............................................ 25,000 24,876
5.25%, 1/31/01............................................. 25,000 24,860
7.75%, 2/15/01............................................. 20,000 20,137
-------
TOTAL U.S. TREASURY NOTES.................................. 157,699
-------
Repurchase Agreements (44.1%)
Goldman Sachs, 6.55%, 8/1/00, dated 7/31/00, with a
maturity value of $93,772 (Collateralized by $22,500 U.S.
Treasury Note 5.50%-7.88%, 7/31/01-8/15/01, fair value --
$22,469; $65,226 Treasury Inflation Index Note 3.38%,
1/15/07, fair value -- $67,985; $5,032 Treasury Inflation
Index Bond 3.63%, 4/15/28, fair value -- $5,177).......... 93,755 93,755
Salomon Smith Barney, 6.55%, 8/1/00, dated 7/31/00, with a
maturity value of $93,772 (Collateralized by $95,220 U.S.
Treasury Note 4.88%-5.75%, 3/31/01-4/30/03, fair value --
$95,671)................................................. 93,755 93,755
-------
TOTAL REPURCHASE AGREEMENTS................................ 187,510
-------
</TABLE>
Short-Term Securities+ (15.6%)
<TABLE>
<CAPTION>
Principal Amortized
Amount Cost
--------- ---------
<S> <C> <C>
Repurchase Agreements (15.6%)
UBS Warburg, 6.57%, 8/1/00, dated 7/31/00, with a maturity
value of $66,332 (Collateralized by $65,023 Treasury
Inflation Index Note/Bond, 3.88%, 1/15/09-4/15/29, fair
value -- $67,646)......................................... $66,320 $ 66,320
--------
TOTAL SHORT-TERM SECURITIES ............................... 66,320
--------
TOTAL INVESTMENTS (Cost $490,418) (a) -- (115.5%).......... 490,418
Other assets in excess
of liabilities -- (-15.5%)............................... 65,971
--------
TOTAL NET ASSETS -- (100.0%)............................... $424,447
========
</TABLE>
---------
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
* Rates disclosed represent yield effective at purchase.
+ Represents securities purchased with cash collateral received on loaned
securities.
See notes to financial statements
210
<PAGE>
AMSOUTH FUNDS
Treasury Reserve Money Market Fund (a)
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at amortized cost.............................. $236,588
Repurchase agreements, at cost.............................. 253,830
--------
Total Investments.......................................... 490,418
Interest and dividends receivable........................... 2,636
Receivable from investment adviser.......................... 11
Prepaid expenses and other assets........................... 26
--------
Total Assets............................................... 493,091
Liabilities:
Payable for return of collateral held for securities on
loan....................................................... $66,320
Distributions payable....................................... 2,061
Accrued expenses and other payables:
Investment advisory fees................................... 128
Administration fees........................................ 7
Distribution fees.......................................... 54
Other...................................................... 74
-------
Total Liabilities.......................................... 68,644
--------
Net Assets:
Capital..................................................... 424,450
Undistributed (distributions in excess of) net investment
income..................................................... 4
Accumulated net realized losses from investment
transactions............................................... (7)
--------
Net Assets................................................. $424,447
========
Class A Shares
Net Assets................................................. $143,901
Shares outstanding......................................... 143,908
Offering and redemption price per share.................... $ 1.00
========
Trust Shares (b)
Net Assets................................................. $280,546
Shares outstanding......................................... 280,562
Offering and redemption price per share.................... $ 1.00
========
</TABLE>
---------
(a) Formerly ISG Treasury Money Market Fund.
(b) Formerly Institutional Shares.
(c) For the period from January 1, 2000 through July 31, 2000.
Statements of Operations
<TABLE>
<CAPTION>
Period Ended Year Ended
July 31, December 31,
2000 (c) 1999
------------ ------------
(Amounts in thousands)
<S> <C> <C>
Investment Income:
Interest income...................................... $15,611 $23,619
Income from securities lending....................... 52 53
------- -------
Total Investment Income............................. 15,663 23,672
Expenses:
Investment advisory fees............................. 929 1,211
Administration fees.................................. 441 484
Shareholder servicing fees -- Class A Shares......... 209 398
Shareholder servicing fees -- Trust Shares (b)....... 276 484
Custodian fees....................................... 109 120
Accounting fees...................................... 3 21
Transfer agent fees.................................. 58 35
Trustee fees and expenses............................ 8 14
Other fees........................................... 93 314
------- -------
Total expenses before voluntary fee
reductions/reimbursements.......................... 2,126 3,081
Expenses voluntarily reduced/reimbursed............. (462) (215)
------- -------
Net expenses........................................ 1,664 2,866
------- -------
Net Investment Income................................ 13,999 20,806
------- -------
Change in net assets resulting from operations....... $13,999 $20,806
======= =======
</TABLE>
See notes to financial statements
211
<PAGE>
AMSOUTH FUNDS
Treasury Reserve Money Market Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended
July 31, December 31, December 31,
2000 (b) 1999 1998
------------ ------------ ------------
(Amounts in thousands)
<S> <C> <C> <C>
From Investment Activities:
Operations:
Net Investment income.................. $ 13,999 $ 20,806 $ 8,990
Net realized gains (losses) from
investment transactions............... -- -- (23)
-------- -------- --------
Change in net assets resulting from
operations............................. 13,999 20,806 8,967
-------- -------- --------
Distributions to Class A Shareholders:
From net investment income............. (4,361) (6,819) (4,199)
Distributions to Trust Shareholders (c):
From net investment income............. (9,638) (13,987) (4,791)
-------- -------- --------
Change in net assets from shareholder
distributions.......................... (13,999) (20,806) (8,990)
-------- -------- --------
Change in net assets from capital
transactions........................... (60,565) 7,558 286,237
-------- -------- --------
Change in net assets.................... (60,565) 7,558 286,214
Net Assets:
Beginning of period.................... 485,012 477,454 191,240
-------- -------- --------
End of period.......................... $424,447 $485,012 $477,454
======== ======== ========
</TABLE>
---------
(a) Formerly ISG Treasury Money Market Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) Formerly Institutional Shares.
See notes to financial statements
212
<PAGE>
AMSOUTH FUNDS
Treasury Reserve Money Market Fund (a)
Financial Highlights, Class A Shares
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, December 31, December 31, December 31, December 31, December 31,
2000 (b) 1999 1998 1997 1996 1995
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- ------- ------- --------
Investment Activities
Net investment income.. 0.030 0.043 0.046 0.047 0.047 0.053
-------- -------- -------- ------- ------- --------
Total from Investment
Activities............ 0.030 0.043 0.046 0.047 0.047 0.053
-------- -------- -------- ------- ------- --------
Distributions
Net investment income.. (0.030) (0.043) (0.046) (0.047) (0.047) (0.053)
-------- -------- -------- ------- ------- --------
Total Distributions.... (0.030) (0.043) (0.046) (0.047) (0.047) (0.053)
-------- -------- -------- ------- ------- --------
Net change in asset
value.................. -- -- -- -- -- --
-------- -------- -------- ------- ------- --------
Net Asset Value, End of
Period................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======= ======= ========
Total Return............ 3.07%(c) 4.38% 4.68% 4.78% 4.78% 5.41%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $143,901 $143,208 $167,475 $77,065 $78,308 $168,430
Ratio of expenses to
average net assets..... 0.65%(d) 0.60% 0.77% 0.75% 0.56% 0.50%
Ratio of net investment
income to average net
assets................. 5.21%(d) 4.28% 4.56% 4.68% 4.72% 5.28%
Ratio of expenses to
average net assets*.... 0.86%(d) 0.70% 0.78% (e) 0.74% 0.75%
</TABLE>
* During the period, certain fees were voluntarily reduced/reimbursed. If
such voluntary fee reductions/reimbursements had not occurred, the ratios
would have been as indicated.
(a) Formerly ISG Treasury Money Market Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) Not annualized.
(d) Annualized.
(e) There were no fee reductions in this period.
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Year Ended Period Ended
July 31, December 31, December 31, December 31, December 31,
2000 (b) 1999 1998 1997 1996 (c)
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- --------
Investment Activities
Net investment income.. 0.031 0.043 0.048 0.049 0.024
-------- -------- -------- -------- --------
Total from Investment
Activities............ 0.031 0.043 0.048 0.049 0.024
-------- -------- -------- -------- --------
Distributions
Net investment income.. (0.031) (0.043) (0.048) (0.049) (0.024)
-------- -------- -------- -------- --------
Total Distributions.... (0.031) (0.043) (0.048) (0.049) (0.024)
-------- -------- -------- -------- --------
Net change in asset
value.................. -- -- -- -- --
-------- -------- -------- -------- --------
Net Asset Value, End of
Period................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ========
Total Return............ 3.10%(d) 4.39% 4.93% 5.05% 2.43%(d)
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $280,546 $341,803 $309,979 $114,175 $109,698
Ratio of expenses to
average net assets..... 0.61%(e) 0.59% 0.53% 0.50% 0.52%(e)
Ratio of net investment
income to average net
assets................. 5.24%(e) 4.31% 4.78% 4.94% 4.78%(e)
Ratio of expenses to
average net assets*.... 0.76%(e) 0.60% (f) (f) (f)
</TABLE>
/\ Formerly Institutional Shares.
* During the period, certain fees were voluntarily reduced/reimbursed. If
such voluntary fee reductions/reimbursements had not occurred, the ratios
would have been as indicated.
(a) Formerly ISG Treasury Money Market Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from July 1, 1996 (commencement of operations) through
December 31, 1996.
(d) Not annualized.
(e) Annualized.
(f) There were no fee reductions in this period.
See notes to financial statements
213
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Tax-Exempt Money Market Fund July 31, 2000
(Amounts in thousands, except shares)
Corporate Bonds (0.9%)
<TABLE>
<CAPTION>
Shares or
Principal Amortized
Amount Cost
--------- ---------
<S> <C> <C>
Laurel Club, Certificates of Participation, Series 96A,
4.40%*, 8/3/00**......................................... $ 1,680 $ 1,680
--------
TOTAL CORPORATE BONDS..................................... 1,680
--------
Demand Notes (35.3%)
Alabama (10.1%)
Alabama Special Care Facilities Financing Authority,
Montgomery Hospital Revenue, 4.25%*, 8/2/00**, FGIC...... 2,100 2,100
Alabama State Housing Finance Authority, Multi Family
Housing Revenue, Rime Village Hoover Project, Series A,
4.25%*, 8/2/00**, FNMA................................... 2,000 2,000
Alabama State Housing Finance Authority, Multi Family
Housing Revenue, Rime Village Huntsville Project, Series
B, 4.25%*, 8/2/00**, FNMA................................ 1,500 1,500
Birmingham-Carraway Special Care Facilities Financing
Authority Revenue, Carraway Methodist Health, Series A,
4.25%*, 8/2/00**......................................... 500 500
City of Birmingham, Series 1992A, GO, 4.30%*, 8/2/00**.... 2,000 2,000
Columbia, Industrial Development Board, PCR, Alabama Power
Co. Project, Series D, 4.35%*, 8/1/00**.................. 350 350
Homewood Educational Building Authority Revenue,
Educational Facilities, Samford University, 4.25%*,
8/1/00**................................................. 2,000 2,000
Jacksonville Industrial Development Board, Industrial
Revenue, Parker Hannifin Corp., 4.30%*, 8/3/00**......... 1,000 1,000
Mobile Industrial Development Board, PCR, Alabama Power
Co. Project, Series B, 4.35%*, 8/3/00**.................. 2,000 2,000
North Alabama, Environmental Improvement Authority, PCR,
Reynolds Metals Co., 4.40%*, 8/1/00**.................... 2,800 2,800
Port City Medical Clinic Board, Infirmary Health Systems,
Series B, GO, 4.25%*, 8/3/00**, AMBAC.................... 1,000 1,000
Stevenson, Industrial Development Board, Environmental
Improvement Revenue, Mead Corp. Project, 4.30%*,
8/1/00**................................................. 2,465 2,465
--------
19,715
--------
Arkansas (1.6%)
University of Arkansas, University Revenues, 4.25%*,
8/2/00**, MBIA........................................... 3,000 3,000
--------
Connecticut (2.6%)
Connecticut State Health & Educational Facilities
Authority Revenue, Yale University, Series T-1, 4.05%*,
8/3/00**................................................. 5,000 5,000
--------
</TABLE>
Demand Notes, continued
<TABLE>
<CAPTION>
Shares or
Principal Amortized
Amount Cost
--------- ---------
<S> <C> <C>
Georgia (0.5%)
Cobb County Housing Authority, Multi Family Housing
Revenue, Post Mill Project, 4.25%*, 8/2/00**, FNMA....... $ 1,000 $ 1,000
--------
Illinois (5.1%)
Elmhurst Revenue, Joint Common Accredation, 4.25%*,
8/3/00**................................................. 4,785 4,785
Illinois Developmental Finance Authority Revenue, Provena
Health, Series C, 4.30%*, 8/2/00**....................... 5,000 5,000
--------
9,785
--------
Michigan (0.5%)
Delta County, Economic Development Corp., Environmental
Improvement Revenue, Mead Escanaba Paper, Series C,
4.25%*, 8/1/00**......................................... 900 900
--------
Mississippi (0.4%)
Jackson County PCR, International Paper Co. Project,
Series A, 4.20%, 8/1/00**................................ 790 791
--------
New York (3.1%)
Long Island Power Authority, Electric Systems Revenue,
Series 5, 4.15%*, 8/1/00**............................... 1,000 1,000
New York, Series F-3, GO, 4.00%*, 8/2/00**................ 5,000 5,000
--------
6,000
--------
Pennsylvania (2.6%)
Allegheny County Hospital Development Authority Revenue,
St. Francis Medical Center, 4.40%*, 8/3/00**............. 5,000 5,000
--------
Tennessee (3.6%)
Metropolitan Government, Nashville & Davidson County,
Industrial Development Board Revenue, Country Music Hall
of Fame, 4.25%*, 8/3/00**................................ 5,000 5,000
Shelby County Health, Educational & Housing Facilities
Board Revenue, Multi Family Housing, Wyndridge, 4.25%*,
8/2/00**................................................. 2,000 2,000
--------
7,000
--------
Texas (2.6%)
Denton Independent School District, GO, 4.33%, 2/1/01**,
PSF-GTD.................................................. 5,000 5,000
--------
Washington (2.6%)
Washington State, Series VR 96B, GO, 4.15%*, 8/2/00**..... 5,000 5,000
--------
TOTAL DEMAND NOTES........................................ 68,191
--------
Municipal Bonds (59.6%)
Alabama (3.1%)
Alabama State, Series A, GO, 5.50%, 10/1/00............... 1,315 1,318
Homewood, Warrants, GO, 4.00%, 8/1/00..................... 500 500
</TABLE>
Continued
214
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Tax-Exempt Money Market Fund July 31, 2000
(Amounts in thousands, except shares)
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Amortized
Amount Cost
--------- ---------
<S> <C> <C>
Alabama, continued
Hoover Board of Education, Special Tax School Warrants, Tax
Anticipation Warrants, 6.63%, 2/1/09, Prerefunded 2/1/01
@ 102, AMBAC.............................................. $ 2,000 $ 2,063
Mobile, Warrants, Convention Center Project, GO, 7.13%,
8/15/20, Prerefunded 8/15/00 @ 102........................ 2,000 2,042
--------
5,923
--------
Alaska (0.1%)
Anchorage Hospital Revenue, Sisters of Providence Project,
6.75%, 10/1/00............................................ 160 161
--------
Arizona (3.7%)
Central Arizona Water Conservation District, Contract
Revenue, Central Arizona Project, 6.00%, 11/1/00.......... 400 402
Central Arizona Water Conservation District, Contract
Revenue, Central Arizona Project, 7.20%, 11/1/00.......... 1,000 1,008
Salt River Project, Agriculture Improvement & Power
District, Electric System Revenue, Series B, 4.55%,
1/1/01.................................................... 4,000 4,004
Scottsdale Industrial Development Authority Hospital
Revenue, Scottsdale Memorial Hospital Project, Series A,
6.25%, 9/1/00, AMBAC...................................... 1,660 1,663
--------
7,077
--------
Arkansas (0.5%)
Arkansas State Development Finance Authority Revenue, State
Agency Facilities, Department of Corrections Project,
Series A, 5.00%, 11/1/00, FSA............................. 930 932
Springdale Residential Housing & Health Care Facilities
Board Revenue, Springdale Memorial Hospital Project,
5.55%, 10/1/00............................................ 100 100
--------
1,032
--------
Delaware (0.5%)
New Castle County, GO, 6.20%, 10/15/00..................... 1,000 1,004
--------
Florida (1.1%)
Florida State Board of Education Capital Outlay, Series A,
GO, 5.00%, 1/1/01......................................... 1,850 1,856
Jacksonville Electric Authority Revenue, Series 6B, Special
Obligation, 6.70%, 10/1/03, Prerefunded 10/1/00 @ 101.5... 300 306
--------
2,162
--------
Georgia (0.3%)
Burke County Development Authority, PCR, Georgia Power
Company Project, 6th Series, 4.38%, 11/1/00, AMBAC........ 250 250
Decatur County School District, GO, 4.63%, 10/1/00......... 300 300
--------
550
--------
</TABLE>
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Amortized
Amount Cost
--------- ---------
<S> <C> <C>
Hawaii (0.4%)
Honolulu City & County, Unrefunded Balance, Series B, GO,
4.70%, 10/1/00............................................ $ 750 $ 751
--------
Illinois (9.3%)
Chicago, Series C, GO, 5.40%, 10/31/00, MBIA............... 1,500 1,505
Hoffman Estates Park District, GO, 4.25%, 12/1/00.......... 275 275
Illinois State Sales Tax Revenue, Series Z, 4.00%,
6/15/01................................................... 1,980 1,972
Illinois State, GO, 5.13%, 12/1/00, FGIC................... 10,000 10,028
Rock Island, GO, 4.00%, 12/15/00, MBIA..................... 310 310
Winfield Waterworks & Sewer, Series A, GO, 4.30%, 1/1/01... 120 120
Winnebago & Boone Counties School District No. 205, GO,
ETM, 7.13%, 2/1/01, FSA................................... 3,800 3,853
--------
18,063
--------
Indiana (0.5%)
Hendricks County Courthouse Building Corporation, First
Mortgage, 4.15%, 1/15/01, MBIA............................ 205 205
Indiana Health Facilities Financing Authority, Hospital
Revenue, Lafayette Home Hospital Project, 4.75%, 8/1/00... 110 110
New Albany Floyd County School Building Corporation, First
Mortgage, 5.00%, 1/15/01, MBIA............................ 500 502
Noblesville Economic Development Infrastructure, Building
Corporation Redevelopment, 4.40%, 8/1/00, MBIA............ 150 150
--------
967
--------
Kansas (0.5%)
Johnson County Public Building Common Lease Revenue, 4.25%,
9/1/00.................................................... 1,000 1,000
--------
Kentucky (0.8%)
Ashland Independent School District Financing Corporation,
School Building Revenue, 5.35%, 12/1/00................... 145 145
Campbell County Public Properties Corporation Revenue,
Refinance & Improvement, First Mortgage, 4.75%, 11/1/00... 170 170
Frankfort Electric & Water Pollution Board Revenue,
Electric & Water, 5.10%, 12/1/00, AMBAC................... 385 386
Harlan County School District Financing Corporation, School
Building Revenue, 6.80%, 9/1/00........................... 100 100
Hopkins County School District Financing Corporation,
School Building Revenue, Series A, 4.70%, 9/1/00.......... 100 100
</TABLE>
Continued
215
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Tax-Exempt Money Market Fund July 31, 2000
(Amounts in thousands, except shares)
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Amortized
Amount Cost
--------- ---------
<S> <C> <C>
Kentucky, continued
Kentucky State Property & Buildings Community Revenues,
Project No. 55, 4.30%, 9/1/00, MBIA-IBC.................. $ 500 $ 501
Whitley County School District Financing Corporation,
School Building Revenue, 5.50%, 9/1/00................... 100 100
--------
1,502
--------
Louisiana (0.8%)
Louisiana Public Facilities Authority Revenue, Loyola
University Project, Series A, 7.20%, 10/1/00............. 500 502
Louisiana State, Series A, GO, 6.00%, 8/1/00, FGIC........ 500 500
Orleans Parish School Board, ETM, 8.50%, 2/1/01, MBIA..... 100 102
Plaquemines Parish, GO, 5.90%, 8/1/00, AMBAC.............. 350 350
St. Tammany Parish Wide School District No. 12, GO, 6.50%,
3/1/11, Prerefunded 3/1/01 @ 100, FGIC................... 170 172
--------
1,626
--------
Massachusetts (1.6%)
Shrewsbury, Bond Anticipation Notes, GO, 4.95%, 8/30/00... 3,100 3,102
--------
Michigan (2.3%)
Michigan Municipal Bond Authority Revenue, Government Lien
Program, 5.85%, 5/1/01, AMBAC............................ 1,000 1,012
University of Michigan, University Hospital Revenue,
6.38%, 12/1/24, Prerefunded 12/1/00 @ 100................ 3,500 3,525
--------
4,537
--------
Minnesota (4.3%)
Minneapolis Tax Increment, GO, 5.00%, 12/1/00............. 100 100
Minneapolis, GO, 5.00%, 12/1/00........................... 7,100 7,120
Rural Water Financing Corporation, Public Projects
Construction Notes, 4.25%, 9/1/00........................ 1,005 1,005
--------
8,225
--------
Missouri (2.6%)
Missouri Development Finance Board Infrastructure
Facilities Revenue, Science City, Union Station Project,
Series A, 4.20%, 12/1/00................................. 5,000 5,000
--------
Nebraska (0.1%)
Omaha Auditorium Facilities Corp., Lease Revenue, Omaha
Civic Auditorium Project, 4.35%, 8/15/00................. 200 200
--------
</TABLE>
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Amortized
Amount Cost
--------- ---------
<S> <C> <C>
Nevada (0.6%)
Clark County, Flood Control, GO, 5.90%, 11/1/00............ $ 500 $ 501
Clark County, Series B, GO, 4.00%, 12/1/00................. 200 200
Las Vegas, GO, 6.10%, 10/1/00.............................. 235 236
Nevada State, Project 57 thru 64, Series A, GO, 6.50%,
9/1/00.................................................... 275 276
--------
1,213
--------
New Hampshire (0.5%)
Rockingham County, Tax Anticipation Notes, GO, 4.50%,
12/29/00.................................................. 1,000 1,001
--------
New Jersey (1.0%)
West Deptford Township, Bond Anticipation Notes, Series C,
GO, 5.00%, 9/28/00........................................ 2,000 2,002
--------
New Mexico (0.2%)
Las Cruces School District No. 002, Series A, GO, 4.20%,
8/1/00.................................................... 300 300
--------
New York (5.1%)
Nassau County, General Improvements, Series A, GO, 4.00%,
6/1/01.................................................... 5,000 4,979
New York State Medical Care Facilities Finance Agency
Revenue, Series A, 7.70%, 2/15/25, Prerefunded 8/15/00
@ 102, FHA................................................ 400 409
New York State Power Authority Revenue, Series BB, ETM,
5.80%, 1/1/01............................................. 500 503
New York State, GO, 5.00%, 10/15/00........................ 2,000 2,004
New York State, GO, 7.50%, 11/15/00........................ 500 505
Oneida City School District, Revenue Anticipation Notes,
GO, 5.25%, 6/26/01........................................ 1,450 1,458
--------
9,858
--------
North Carolina (0.6%)
North Carolina Medical Care Community Health Care
Facilities Revenue, Novant Health Project, Series A,
3.95%, 10/1/00............................................ 250 250
North Carolina Medical Care Community Hospital Revenue,
Gaston Health Care Project,, 4.10%, 2/15/01............... 100 100
North Carolina Municipal Power Agency No. 1, Catawba
Electric Revenue, 5.50%, 1/1/01, FSA...................... 100 100
University System Pool Revenue, Series B, 4.25%, 10/1/00,
MBIA...................................................... 500 500
Wayne County Certificate of Participation, 6.80%, 8/1/05,
Prerefunded 8/1/00 @ 102, MBIA............................ 190 194
--------
1,144
--------
</TABLE>
Continued
216
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Tax-Exempt Money Market Fund July 31, 2000
(Amounts in thousands, except shares)
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Amortized
Amount Cost
--------- ---------
<S> <C> <C>
Ohio (0.5%)
Ohio State Building Authority, State Facilities, Art
Facilities Building Fund, Series A, 5.00%, 10/1/00....... $ 400 $ 400
Ohio State Building Authority, State Facilities, Ohio Art
Center, Series A, 4.85%, 10/1/00......................... 500 501
Ohio State Water Development Authority Revenue, Clean
Water Service, 5.15% 12/1/00, MBIA....................... 100 100
--------
1,001
--------
Oklahoma (0.3%)
Oklahoma City, GO, 4.85%, 8/1/00.......................... 500 500
--------
Oregon (1.6%)
Multnomah County, Series A, GO, 5.00%, 4/1/01............. 3,010 3,025
--------
Pennsylvania (1.2%)
Beaver Area School District, Series C, GO, 3.50%, 1/15/01,
FSA...................................................... 255 254
Lancaster County Hospital Authority Revenue, Health
Center, Masonic Homes Project, 4.50%, 11/15/00........... 100 100
Neshannock Township School District, GO, 5.25%, 9/1/09,
Prerefunded 9/1/00 @ 100, FGIC........................... 715 716
Neshannock Township School District, GO, 5.38%, 9/1/10,
Prerefunded 9/1/00 @ 100, FGIC........................... 755 756
Pennsylvania State Higher Educational Facilities
Authority, Health Services Revenue, Series B, 5.13%,
1/1/01................................................... 100 100
Pennsylvania State Turnpike, Community Turnpike Revenue,
Series P, 5.20%, 12/1/00................................. 100 100
Western Berks Water Authority, 5.25%, 11/15/09,
Prerefunded 11/15/00 @ 100, MBIA......................... 340 341
--------
2,367
--------
Rhode Island (1.0%)
Rhode Island State, Conservative Capital Development,
Series A, GO, 5.50%, 7/15/01............................. 1,880 1,901
--------
Tennessee (3.5%)
Bristol Health & Educational Facilities Board Revenue,
Bristol Memorial Hospital Project, ETM, 6.30%, 9/1/00,
FGIC..................................................... 200 200
Chattanooga Health Educational & Housing Facilities Board
Revenue, Catholic Health Initiatives, Series A, 5.00%,
12/1/00.................................................. 500 501
Chattanooga-Hamilton County Hospital Authority, Hospital
Revenue, Erlanger Medical Center Project, 5.00%, 10/1/00,
FSA...................................................... 350 350
</TABLE>
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Amortized
Amount Cost
--------- ---------
<S> <C> <C>
Tennessee, continued
Clarksville Public Building Authority Revenue, Pooled Loan
Program, 4.75%, 12/1/00.................................. $ 500 $ 500
Dayton Water & Sewer, GO, 4.15%,.......................... 110 110
Giles County, GO, 4.10%, 2/1/01, FGIC..................... 395 395
Knoxville Waste Water System Revenue, 4.38%, 4/1/01....... 2,000 2,000
Memphis Electric System Revenue, Series A, 5.25%, 1/1/01.. 100 100
Metropolitan Government, Nashville & Davidson County
Public Improvement, Series A, GO, 4.60%, 11/15/00........ 2,395 2,399
Newport Electric Systems Revenue, 4.60%, 3/1/01, AMBAC.... 235 235
--------
6,790
--------
Texas (4.0%)
Arlington Independent School District, GO, 5.25%, 2/15/01,
PSF-GTD.................................................. 805 809
Austin Utility System Revenue, Series A, 5.50%, 11/15/00,
FSA...................................................... 150 151
Bee County, GO, 4.10%, 2/15/01,........................... 200 200
Carrollton Farmers Branch Independent School District, GO,
6.50%, 2/15/03, Prerefunded 2/15/01 @ 100, FGIC.......... 650 658
Carrollton Farmers Branch Independent School District, GO,
6.50%, 2/15/04, Prerefunded 2/15/01 @ 100, FGIC.......... 650 658
Carrollton Farmers Branch Independent School District, GO,
6.50%, 2/15/05, Prerefunded 2/15/01 @ 100, FGIC.......... 450 455
Northside Independent School District, Public Property
Financial Contractual Obligation, GO, 4.38%, 2/15/01..... 250 250
Rockwall Waterworks & Sewer, GO, 4.75%, 8/1/01, FGIC...... 125 125
Texas Municipal Power Agency Revenue, 4.90%, 9/1/00,
MBIA..................................................... 200 200
Texas State Public Finance Authority, GO, 6.50%, 10/1/11,
Prerefunded 10/1/00 @ 100................................ 1,650 1,656
Texas State, Tax & Revenue Anticipation Notes, Series A,
4.50%, 8/31/00........................................... 2,000 2,000
University of Texas, University Revenue Constitutional
Appropriation, 6.00%, 8/15/00............................ 500 500
--------
7,662
--------
Utah (0.5%)
Intermountain Power Agency, Power Supply Revenue, Series
E, 5.25%, 7/1/01, FSA.................................... 500 504
Utah Water Finance Agency Revenue, Pooled Loan Financing
Program, Series A, 5.00%, 10/1/00, MBIA.................. 500 501
--------
1,005
--------
</TABLE>
Continued
217
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Tax-Exempt Money Market Fund July 31, 2000
(Amounts in thousands, except shares)
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal Amortized
Amount Cost
--------- ---------
<S> <C> <C>
Virginia (2.5%)
Danville, GO, 4.70%, 8/1/00, MBIA.......................... $ 100 $ 100
New River Valley Regional Jail Authority, Regional Jail
Facility Revenue, Grant Anticipation Notes, 4.25%,
10/1/00................................................... 250 250
Suffolk, GO, 5.10%, 8/1/00................................. 400 400
Virginia State Public School Authority, 5.90%, 1/1/01...... 3,500 3,525
Virginia State Public School Authority, School Financing,
Series A, 4.00%, 8/1/00................................... 540 540
--------
4,815
--------
Washington (3.2%)
Clark County School District No. 37, Vancouver, GO, 4.90%,
12/1/00................................................... 210 210
Everett, GO, 4.45%, 8/1/00, MBIA........................... 500 500
King County, Unrefunded Balance, Series A, GO, 5.00%,
1/1/01.................................................... 3,690 3,702
Kitsap County School District No. 401, Central Kitsap, GO,
6.05%, 12/1/00............................................ 1,800 1,810
--------
6,222
--------
West Virginia (0.1%)
Brooke County Board of Education, GO, ETM, 8.63%, 8/1/00,
AMBAC..................................................... 100 100
--------
Wisconsin (0.7%)
Menomonee Falls Sewer System Revenue, Bond Anticipation
Notes, 5.10%, 7/1/01...................................... 210 211
Milwaukee County, Series A, GO, 5.25%, 9/1/00.............. 200 200
Milwaukee Metropolitan Sewer District, Series A, GO, 7.00%,
9/1/00.................................................... 300 301
Wisconsin State Health & Educational Facilities Authority
Revenue, Waukesha Memorial Hospital Project, 5.60%,
8/15/00................................................... 150 150
Wisconsin State, Series 4, GO, 4.00%, 11/1/00.............. 500 499
--------
1,361
--------
TOTAL MUNICIPAL BONDS...................................... 115,149
--------
Tax Exempt Commercial Paper (2.6%)
Florida (2.6%)
Palm Beach Health, 4.25%, 8/3/00, MBIA..................... 5,000 5,000
--------
TOTAL TAX EXEMPT COMMERCIAL PAPER.......................... 5,000
--------
</TABLE>
Investment Companies (1.0%)
<TABLE>
<CAPTION>
Shares or
Principal Amortized
Amount Cost
--------- ---------
<S> <C> <C>
AIM Tax-Free Money Market Fund.............................. 2,007,767 $ 2,008
Goldman Sachs Tax-Free Fund................................. 1,000 1
--------
TOTAL INVESTMENT COMPANIES.................................. 2,009
--------
TOTAL INVESTMENTS (Cost $192,029) (a) -- (99.4%)............ 192,029
Other assets in excess of liabilities -- (0.6%)............. 1,105
--------
TOTAL NET ASSETS -- (100.0%)................................ $193,134
========
</TABLE>
---------
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
* Variable rate security. Rate presented represents rate in effect at July
31, 2000. Date presented reflects next rate change date.
** Put and demand features exist allowing the fund to require the repurchase
of the instrument within variable time periods including daily, weekly,
monthly, and semiannually.
AMBAC -- Insured by AMBAC Indemnity Corp.
ETM -- Escrowed to Maturity
FGIC -- Insured by Financial Guaranty Insurance Corp.
FHA -- Insured by Federal Housing Administration
FNMA -- Insured by Federal National Mortgage Assoc.
FSA -- Insured by Financial Security Assurance Inc.
GO -- General Obligation
MBIA -- Insured by Municipal Bond Insurance Assoc.
MBIA - IBC -- MBIA Insured Bond Certificates
PCR -- Pollution Control Revenue
PSF-GTD -- Permanent School Fund Guarantee
See notes to financial statements
218
<PAGE>
AMSOUTH FUNDS
Tax-Exempt Money Market Fund (a)
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands,except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at amortized cost.................................. $192,029
Interest and dividends receivable............................... 1,887
Prepaid expenses and other assets............................... 6
--------
Total Assets................................................... 193,922
Liabilities:
Distributions payable........................................... $580
Payable for investments purchased............................... 110
Accrued expenses and other payables:
Investment advisory fees....................................... 42
Administration fees............................................ 6
Distribution fees.............................................. 24
Custodian fees................................................. 5
Other.......................................................... 21
----
Total Liabilities.............................................. 788
--------
Net Assets:
Capital......................................................... 193,521
Accumulated net realized losses from investment transactions.... (387)
--------
Net Assets...................................................... $193,134
========
Class A Shares (b)
Net Assets..................................................... $ 51,260
Shares outstanding............................................. 51,338
Offering and redemption price per share........................ $ 1.00
========
Trust Shares (c)
Net Assets..................................................... $141,874
Shares outstanding............................................. 142,185
Offering and redemption price per share........................ $ 1.00
========
</TABLE>
---------
(a) Formerly AmSouth Tax-Exempt Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2000
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income.................................................... $5,013
Dividend income.................................................... 215
------
Total Investment Income........................................... 5,228
Expenses:
Investment advisory fees........................................... $541
Administration fees................................................ 271
Shareholder servicing fees -- Class A Shares (b)................... 94
Shareholder servicing fees -- Trust Shares (c)..................... 84
Custodian fees..................................................... 32
Accounting fees.................................................... 38
Transfer agent fees................................................ 48
Trustee fees and expenses.......................................... 3
Other fees......................................................... 39
----
Total expenses before voluntary fee reductions.................... 1,150
Expenses voluntarily reduced...................................... (307)
------
Net expenses...................................................... 843
------
Net Investment Income.............................................. 4,385
------
Realized Gains (Losses) from Investments:
Net realized gains (losses) from investment transactions........... (172)
------
Change in net assets resulting from operations..................... $4,213
======
</TABLE>
See notes to financial statements
219
<PAGE>
AMSOUTH FUNDS
Tax-Exempt Money Market Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2000 1999
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net Investment income................................... $ 4,385 $ 2,582
Net realized gains (losses) from investment
transactions........................................... (172) 1
-------- -------
Change in net assets resulting from operations........... 4,213 2,583
-------- -------
Distributions to Class A Shareholders (b):
From net investment income.............................. (1,179) (660)
Distributions to Trust Shareholders (c):
From net investment income.............................. (3,206) (1,922)
-------- -------
Change in net assets from shareholder distributions...... (4,385) (2,582)
-------- -------
Change in net assets from capital transactions........... 96,582 5,982
-------- -------
Change in net assets..................................... 96,410 5,983
Net Assets:
Beginning of period..................................... 96,724 90,741
-------- -------
End of period........................................... $193,134 $96,724
======== =======
</TABLE>
---------
(a) Formerly AmSouth Tax-Exempt Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
See notes to financial statements
220
<PAGE>
AMSOUTH FUNDS
Tax-Exempt Money Market Fund (a)
Financial Highlights, Class A Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31, July 31,
2000 1999 1998 1997 1996 (b)
---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- ------- -------
Investment Activities
Net investment income.. 0.031 0.026 0.030 0.030 0.010
Net realized and
unrealized gains
(losses) from
investments........... (0.002) (0.000) -- -- --
------- ------- ------- ------- -------
Total from Investment
Activities............ 0.029 0.026 0.030 0.030 0.010
------- ------- ------- ------- -------
Distributions
Net investment income.. (0.031) (0.026) (0.030) (0.030) (0.010)
------- ------- ------- ------- -------
Total Distributions.... (0.031) (0.026) (0.030) (0.030) (0.010)
------- ------- ------- ------- -------
Net change in asset
value.................. (0.002) -- -- -- --
------- ------- ------- ------- -------
Net Asset Value, End of
Period................. $ 0.998 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= ======= =======
Total Return............ 3.11% 2.66% 3.03% 3.04% 3.12%(c)
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $51,260 $22,844 $28,657 $27,926 $17,116
Ratio of expenses to
average net assets..... 0.71% 0.59% 0.60% 0.62% 0.68%(d)
Ratio of net investment
income to average net
assets................. 3.14% 2.64% 2.97% 3.00% 2.82%(d)
Ratio of expenses to
average net assets*.... 0.97% 0.98% 0.98% 0.97% 1.03%(d)
</TABLE>
/\ Formerly Classic Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Formerly AmSouth Tax-Exempt Fund.
(b) Effective April 1, 1996, the Fund's existing shares, which were previously
unclassified, were designated as Premier Shares and the Fund commenced
offering Classic Shares.
(c) Represents total return for the Premier Shares for the period from August
1, 1995 to March 31, 1996 plus the total return for the Classic Shares for
the period from April 1, 1996 to July 31, 1996. Total return for the
Classic Shares for the period April 1, 1996 (commencement of operations)
to July 31, 1996 was .95%.
(d) Annualized.
Financial Highlights, Trust Shares/\
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2000 1999 1998 1997 1996 (b)
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- ------- ------- ------- -------
Investment Activities
Net investment income.. 0.032 0.027 0.031 0.031 0.031
Net realized and
unrealized gains
(losses) from
investments........... (0.002) -- -- -- --
-------- ------- ------- ------- -------
Total from Investment
Activities............ 0.030 0.027 0.031 0.031 0.031
-------- ------- ------- ------- -------
Distributions
Net investment income.. (0.032) (0.027) (0.031) (0.031) (0.031)
-------- ------- ------- ------- -------
Total Distributions.... (0.032) (0.027) (0.031) (0.031) (0.031)
-------- ------- ------- ------- -------
Net change in asset
value.................. (0.002) -- -- -- --
-------- ------- ------- ------- -------
Net Asset Value, End of
Period................. $ 0.998 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======= ======= ======= =======
Total Return............ 3.23% 2.76% 3.13% 3.15% 3.15%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $141,874 $73,880 $62,084 $55,429 $43,611
Ratio of expenses to
average net assets..... 0.59% 0.49% 0.50% 0.52% 0.54%
Ratio of net investment
income to average net
assets................. 3.28% 2.71% 3.07% 3.10% 3.11%
Ratio of expenses to
average net assets*.... 0.80% 0.73% 0.73% 0.72% 0.74%
</TABLE>
/\ Formerly Premier Shares.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Formerly AmSouth Tax-Exempt Fund.
(b) Effective April 1, 1996, the Fund's existing shares, which were previously
unclassified, were designated as Premier Shares and the Fund commenced
offering Classic Shares.
See notes to financial statements
221
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Institutional Prime Obligations Fund July 31, 2000
(Amounts in thousands, except shares)
Commercial Paper -- Domestic* (59.4%)
<TABLE>
<CAPTION>
Shares or
Principal Amortized
Amount Cost
--------- ---------
<S> <C> <C>
Aircraft Leasing (1.6%)
International Lease Finance Corp., 6.20%, 8/21/00.......... $ 7,000 $ 6,975
--------
Automotive -- Finance (4.1%)
Ford Motor Credit Co., 6.52%, 10/10/00..................... 10,000 9,874
General Motors Acceptance Corp., 6.64%, 9/5/00............. 8,000 7,948
--------
17,822
--------
Banking (3.7%)
Bank of America, 6.34%, 8/8/00............................. 7,000 6,991
Wells Fargo & Co., 6.55%, 9/13/00.......................... 9,000 8,930
--------
15,921
--------
Beverages (1.6%)
Coca-Cola Co., 6.30%, 8/10/00.............................. 7,000 6,989
--------
Chemicals (2.1%)
E.I. du Pont de Nemours & Co., 6.54%, 9/11/00.............. 9,000 8,933
--------
Consumer Goods (8.2%)
Heinz (H.J.) Co., 6.51%, 10/6/00........................... 10,000 9,881
Hershey Foods Corp., 6.50%, 10/4/00........................ 7,159 7,076
Kellogg Co., 6.51%, 8/30/00................................ 9,000 8,953
Procter & Gamble Co., 6.48%, 9/22/00....................... 10,000 9,906
--------
35,816
--------
Diversified Manufacturing (2.3%)
Minnesota Mining & Manufacturing Co., 6.48%, 10/19/00...... 10,000 9,858
--------
Electric Utilities (2.3%)
National Rural Utilities, 6.51%, 10/12/00.................. 10,000 9,870
--------
Electronics/Electrical Equipment (2.1%)
Emerson Electric Co., 6.53%, 8/4/00 (b).................... 9,000 8,995
--------
Financial Services (14.5%)
American Express Credit Corp., 6.53%, 9/15/00.............. 10,000 9,918
American General Finance Corp., 6.58%, 8/23/00............. 8,000 7,968
Associate Corp., 6.60%, 8/28/00............................ 8,000 7,960
GE Capital Corp., 6.52%, 10/24/00.......................... 10,000 9,848
IBM Credit Corp., 6.46%, 9/21/00........................... 10,000 9,908
Merrill Lynch & Co., 6.51%, 10/26/00....................... 10,000 9,844
USAA Capital Corp., 6.45%, 8/11/00......................... 8,000 7,986
--------
63,432
Insurance (2.1%)
Greatwestern Annuity Life, 6.57%, 9/8/00................... 9,000 8,938
--------
Oil & Gas Exploration, Production & Services (2.3%)
Texaco, Inc., 6.48%, 9/28/00............................... 10,000 9,896
--------
Pharmaceuticals (2.0%)
Schering-Plough Corp., 6.55%, 8/1/00....................... 8,750 8,750
--------
Photography & Imaging (2.1%)
Eastman Kodak Co., 6.57%, 9/7/00........................... 9,000 8,939
--------
Retail (2.1%)
Wal-Mart Stores, Inc., 6.54%, 9/19/00 (b).................. 9,000 8,920
--------
</TABLE>
Commercial Paper -- Domestic*, continued
<TABLE>
<CAPTION>
Shares or
Principal Amortized
Amount Cost
--------- ---------
<S> <C> <C>
Telecommunications (6.3%)
AT&T Corp., 6.67%, 10/2/00................................. $ 9,000 $ 8,897
BellSouth Corp., 6.48%, 9/14/00............................ 10,000 9,920
Motorola, Inc., 6.58%, 9/26/00............................. 9,000 8,908
--------
27,725
--------
TOTAL COMMERCIAL PAPER --DOMESTIC.......................... 257,779
--------
Commercial Paper -- Foreign* (3.9%)
Banking (1.6%)
Lloyds TSB Group PLC, 6.33%, 8/2/00........................ 7,000 6,999
--------
Pharmaceuticals (2.3%)
Glaxo Wellcome PLC, 6.53%, 10/17/00 (b).................... 10,000 9,860
--------
TOTAL COMMERCIAL PAPER --FOREIGN........................... 16,859
--------
U.S. Government Agencies* (14.2%)
Fannie Mae (3.2%)
6.06%, 8/14/00............................................. 14,000 13,969
--------
Federal Farm Credit Bank (4.1%)
6.36%, 9/29/00............................................. 18,000 17,813
--------
Federal Home Loan Bank (3.2%)
6.07%, 8/16/00............................................. 14,000 13,965
--------
Freddie Mac (3.7%)
6.53%, 8/24/00............................................. 16,000 15,933
--------
TOTAL U.S. GOVERNMENT AGENCIES............................. 61,680
--------
Investment Companies (0.0%)
AmSouth Prime Money Market Fund............................ 19,380 19
AmSouth U.S. Treasury Money Market Fund.................... 16,015 16
--------
TOTAL INVESTMENT COMPANIES................................. 35
--------
Repurchase Agreements (23.0%)
Prudential, 6.64%, 8/1/00, dated 7/31/00, with a maturity
value of $50,029 (Collateralized by $43,242 Fannie Mae,
6.50%-8.15%, 6/15/10-1/25/30, fair value -- $43,561;
$8,329 Freddie Mac, 6.50%-7.78%, 2/15/08-10/25/23, fair
value --$7,960)........................................... $50,019 50,019
Goldman Sachs, 6.63%, 8/1/00, dated 7/31/00, with a
maturity value of $50,029 (Collateralized by $82,227
Freddie Mac 5.00%-9.50%, 4/1/03-7/1/29, fair value --
$51,520).................................................. 50,020 50,020
--------
TOTAL REPURCHASE AGREEMENTS................................ 100,039
--------
</TABLE>
Continued
222
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Institutional Prime Obligations Fund July 31, 2000
(Amounts in thousands, except shares)
<TABLE>
<CAPTION>
Amortized
Cost
---------
<S> <C>
TOTAL INVESTMENTS
(Cost $436,392) (a) -- (100.5%)..................................... $436,392
Liabilities in excess of other assets -- (-0.5%)..................... (2,339)
--------
TOTAL NET ASSETS -- (100.0%)......................................... $434,053
========
</TABLE>
---------
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
(b) Represents a restricted security purchased under Section 4(2), which is
exempt from registration under the Security Act of 1933, as amended. These
securities have been deemed liquid under guidelines established by the
Board of Trustees.
* Rates disclosed represent yield effective at purchase.
PLC -- Public Limited Company
See notes to financial statements
223
<PAGE>
AMSOUTH FUNDS
Institutional Prime Obligations Fund
Statement of Assets and Liabilities
July 31, 2000
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at amortized cost............................... $336,353
Repurchase agreements, at cost............................... 100,039
--------
Total Investments........................................... 436,392
Interest and dividends receivable............................ 19
Prepaid expenses and other assets............................ 1
--------
Total Assets................................................ 436,412
Liabilities:
Distributions payable........................................ $2,189
Accrued expenses and other payables:
Investment advisory fees.................................... 25
Administration fees......................................... 2
Distribution fees........................................... 80
Custodian fees.............................................. 10
Other....................................................... 53
------
Total Liabilities........................................... 2,359
--------
Net Assets:
Capital...................................................... 434,049
Undistributed (distributions in excess of) net investment
income...................................................... 5
Accumulated net realized losses from investment
transactions................................................ (1)
--------
Net Assets................................................... $434,053
========
Class I Shares
Net Assets.................................................. $138,779
Shares outstanding.......................................... 138,779
Offering and redemption price per share..................... $ 1.00
========
Class II Shares
Net Assets.................................................. $180,873
Shares outstanding.......................................... 180,874
Offering and redemption price per share..................... $ 1.00
========
Class III Shares
Net Assets.................................................. $114,401
Shares outstanding.......................................... 114,401
Offering price per share.................................... $ 1.00
========
</TABLE>
Statement of Operations
For the year ended July 31, 2000
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income................................................... $15,482
Dividend income................................................... 2
-------
Total Investment Income.......................................... 15,484
Expenses:
Investment advisory fees.......................................... $513
Administration fees............................................... 257
Distribution fees -- Class II Shares.............................. 191
Distribution fees -- Class III Shares............................. 250
Custodian fees.................................................... 60
Accounting fees................................................... 51
Transfer agent fees............................................... 84
Trustee fees and expenses......................................... 9
Other fees........................................................ 87
----
Total expenses before voluntary fee reductions................... 1,502
Expenses voluntarily reduced..................................... (533)
-------
Net expenses..................................................... 969
-------
Net Investment Income............................................. 14,515
-------
Realized Gains (Losses) from Investments:
Net realized gains (losses) from investment transactions.......... (1)
-------
Change in net assets resulting from operations.................... $14,514
=======
</TABLE>
See notes to financial statements
224
<PAGE>
AMSOUTH FUNDS
Institutional Prime Obligations Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Period Ended
July 31, July 31,
2000 1999 (a)
---------- ------------
(Amounts in thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net Investment income............................... $ 14,515 $ 4,736
Net realized gains (losses) from investment
transactions....................................... (1) --
-------- --------
Change in net assets resulting from operations....... 14,514 4,736
-------- --------
Distributions to Class I Shareholders:
From net investment income.......................... (7,471) (4,300)
Distributions to Class II Shareholders:
From net investment income.......................... (4,334) (306)(b)
Distributions to Class III Shareholders:
From net investment income.......................... (2,710) (130)(c)
-------- --------
Change in net assets from shareholder distributions.. (14,515) (4,736)
-------- --------
Change in net assets from capital transactions....... 325,021 109,033
-------- --------
Change in net assets................................. 325,020 109,033
Net Assets:
Beginning of period................................. 109,033 --
-------- --------
End of period....................................... $434,053 $109,033
======== ========
</TABLE>
---------
(a) For the period from September 15, 1998 (commencement of operations)
through July 31, 1999.
(b) For the period from February 19, 1999 (commencement of operations) through
July 31, 1999.
(c) For the period from February 22, 1999 (commencement of operations) through
July 31, 1999.
See notes to financial statements
225
<PAGE>
AMSOUTH FUNDS
Institutional Prime Obligations Fund
Financial Highlights, Class I Shares
<TABLE>
<CAPTION>
Year Ended Period Ended
July 31, July 31,
2000 1999 (a)
---------- ------------
<S> <C> <C>
Net Asset Value, Beginning of Period................. $ 1.000 $ 1.000
-------- -------
Investment Activities
Net investment income............................... 0.057 0.042
-------- -------
Total from Investment Activities.................... 0.057 0.042
-------- -------
Distributions
Net investment income............................... (0.057) (0.042)
-------- -------
Total Distributions................................. (0.057) (0.042)
-------- -------
Net change in asset value............................ -- --
-------- -------
Net Asset Value, End of Period....................... $ 1.000 $ 1.000
======== =======
Total Return......................................... 5.82% 4.31%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000).................... $138,779 $69,458
Ratio of expenses to average net assets.............. 0.21% 0.22%(c)
Ratio of net investment income to average net
assets.............................................. 5.73% 4.82%(c)
Ratio of expenses to average net assets*............. 0.41% 0.45%(c)
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) For the period from September 15, 1998 (commencement of operations)
through July 31, 1999.
(b) Not annualized.
(c) Annualized.
Financial Highlights, Class II Shares
<TABLE>
<CAPTION>
Year Ended Period Ended
July 31, July 31,
2000 1999 (a)
---------- ------------
<S> <C> <C>
Net Asset Value, Beginning of Period................. $ 1.000 $ 1.00
-------- -------
Investment Activities
Net investment income............................... 0.054 0.020
-------- -------
Total from Investment Activities.................... 0.054 0.020
-------- -------
Distributions
Net investment income............................... (0.054) (0.020)
-------- -------
Total Distributions................................. (0.054) (0.020)
-------- -------
Net change in asset value............................ -- --
-------- -------
Net Asset Value, End of Period....................... $ 1.000 $ 1.000
======== =======
Total Return......................................... 5.55% 1.96%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000).................... $180,873 $26,000
Ratio of expenses to average net assets.............. 0.45% 0.49%(c)
Ratio of net investment income to average net
assets.............................................. 5.69% 4.45%(c)
Ratio of expenses to average net assets*............. 0.66% 0.72%(c)
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) For the period from February 19, 1999 (commencement of operations) through
July 31, 1999.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
226
<PAGE>
AMSOUTH FUNDS
Institutional Prime Obligations Fund
Financial Highlights, Class III Shares
<TABLE>
<CAPTION>
Year Ended Period Ended
July 31, July 31,
2000 1999 (a)
---------- ------------
<S> <C> <C>
Net Asset Value, Beginning of Period................. $ 1.000 $ 1.000
-------- -------
Investment Activities
Net investment income............................... 0.052 0.018
-------- -------
Total from Investment Activities.................... 0.052 0.018
-------- -------
Distributions
Net investment income............................... (0.052) (0.018)
-------- -------
Total Distributions................................. (0.052) (0.018)
-------- -------
Net change in asset value............................ -- --
-------- -------
Net Asset Value, End of Period....................... $ 1.000 $ 1.000
======== =======
Total Return......................................... 5.29% 1.84%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000).................... $114,401 $13,575
Ratio of expenses to average net assets.............. 0.71% 0.74%(c)
Ratio of net investment income to average net
assets.............................................. 5.43% 4.22%(c)
Ratio of expenses to average net assets*............. 0.91% 0.97%(c)
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions not occurred, the ratios would have been as indicated.
(a) For the period from February 22, 1999 (commencement of operations) through
July 31, 1999.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
227
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements
July 31, 2000
1.Organization:
AmSouth Funds (the "Trust") was organized on October 1, 1987, and is
registered under the Investment Company Act of 1940, as amended ("the 1940
Act"), as a diversified, open-end investment company established as a
Massachusetts business trust.
The Trust is authorized to issue an unlimited number of shares without par
value. The Trust currently offers shares of the AmSouth Value Fund, the AmSouth
Growth Fund, the AmSouth Capital Growth Fund, the AmSouth Large Cap Fund, the
AmSouth Mid Cap Fund, the AmSouth Small Cap Fund, the AmSouth Equity Income
Fund, the AmSouth Balanced Fund, the AmSouth Select Equity Fund, the AmSouth
Enhanced Market Fund, the AmSouth International Equity Fund, the AmSouth
Strategic Portfolios: Aggressive Growth Portfolio, the AmSouth Strategic
Portfolios: Growth Portfolio, the AmSouth Strategic Portfolios: Growth and
Income Portfolio, the AmSouth Strategic Portfolios: Moderate Growth and Income
Portfolio, the AmSouth Strategic Portfolios: Current Income Portfolio, the
AmSouth Bond Fund, the AmSouth Limited Term Bond Fund, the AmSouth Government
Income Fund, the AmSouth Limited Term U.S. Government Fund, the AmSouth
Municipal Bond Fund, the AmSouth Florida Tax-Exempt Fund, the AmSouth Tennessee
Tax-Exempt Fund, the AmSouth Limited Term Tennessee Tax-Exempt Fund,
(collectively, "the variable net asset funds"), the AmSouth Prime Money Market
Fund, the AmSouth U.S. Treasury Money Market Fund, the AmSouth Treasury Reserve
Money Market Fund, the AmSouth Tax-Exempt Money Market Fund and the AmSouth
Institutional Prime Obligations Fund (collectively, "the money market funds")
(collectively, "the Funds" and individually "a Fund").
The investment objectives of the Funds are as follows:
The VALUE FUND (formerly known as the AmSouth Equity Fund) -- seeks capital
growth by investing primarily in a diversified portfolio of common stocks and
securities convertible into common stock, such as convertible bonds and
convertible preferred stock.
The GROWTH FUND (formerly known as the AmSouth Capital Growth Fund) -- seeks
long-term capital appreciation by investing in a diversified portfolio of
common stocks and securities convertible into common stocks such as convertible
bonds and convertible preferred stocks.
The CAPITAL GROWTH FUND (formerly known as the ISG Capital Growth Fund) --
seeks to provide investors with capital growth.
The LARGE CAP FUND (formerly known as the ISG Large-Cap Equity Fund) -- seeks
to provide investors with long-term capital appreciation and, as a secondary
objective, current income.
The MID CAP FUND (formerly known as the ISG Mid-Cap Fund) -- seeks to provide
investors with capital appreciation.
The SMALL CAP FUND -- seeks capital appreciation by investing in a
diversified portfolio of securities consisting of common stocks and securities
convertible into common stocks such as convertible bonds and convertible
preferred stocks.
The EQUITY INCOME FUND -- seeks above average income and capital appreciation
by investing primarily in a diversified portfolio of common stocks, preferred
stocks, and securities that are convertible into common stocks, such as
convertible bonds and convertible preferred stock.
The BALANCED FUND -- seeks to obtain long-term capital growth and produce a
reasonable amount of current income through a moderately aggressive investment
strategy.
The SELECT EQUITY FUND -- seeks long-term growth of capital by investing
primarily in common stocks and securities convertible into common stocks such
as convertible bonds and convertible preferred stocks.
The ENHANCED MARKET FUND -- seeks long-term growth of capital by investing
primarily in a diversified portfolio of common stock and securities convertible
into common stocks such as convertible bonds and convertible preferred stock.
Continued
228
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
The INTERNATIONAL EQUITY FUND (formerly known as the ISG International Equity
Fund) -- seeks to provide investors with capital appreciation.
The STRATEGIC PORTFOLIOS: AGGRESSIVE GROWTH PORTFOLIO (formerly known as the
ISG Aggressive Growth Portfolio) -- seeks to provide investors with capital
growth.
The STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO (formerly known as the ISG Growth
Portfolio) -- seeks to provide investors with long-term capital growth.
The STRATEGIC PORTFOLIOS: GROWTH AND INCOME PORTFOLIO (formerly known as the
ISG Growth & Income Portfolio) -- seeks to provide investors with long-term
capital growth and a moderate level of current income.
The STRATEGIC PORTFOLIOS: MODERATE GROWTH AND INCOME PORTFOLIO (formerly
known as the ISG Moderate Growth & Income Portfolio) -- seeks to provide
investors with current income and a moderate level of capital growth.
The STRATEGIC PORTFOLIOS: CURRENT INCOME PORTFOLIO (formerly known as the ISG
Current Income Portfolio) -- seeks to provide investors with current income.
The BOND FUND -- seeks current income consistent with the preservation of
capital.
The LIMITED TERM BOND FUND (formerly known as the AmSouth Limited Maturity
Fund) -- seeks current income consistent with the preservation of capital.
The GOVERNMENT INCOME FUND -- seeks current income consistent with the
preservation of capital.
The LIMITED TERM U.S. GOVERNMENT FUND (formerly known as the ISG Limited Term
U.S. Government Fund) -- seeks to provide investors with high current income
without assuming undue risk.
The MUNICIPAL BOND FUND -- seeks to produce as high a level of current
Federal tax-exempt income, as is consistent with the preservation of capital.
The FLORIDA TAX-EXEMPT FUND (formerly known as the AmSouth Florida Tax-Free
Fund) -- seeks to produce as high a level of current interest income exempt
from federal income taxes and Florida intangible taxes as is consistent with
the preservation of capital.
The TENNESSEE TAX-EXEMPT FUND (formerly known as the ISG Tennessee Tax-Exempt
Fund) -- seeks to provide investors with current income exempt from Federal and
Tennessee income taxes without assuming undue risk.
The LIMITED TERM TENNESSEE TAX-EXEMPT FUND (formerly known as the ISG Limited
Term Tennessee Tax-Exempt Fund) -- seeks to provide investors with current
income exempt from Federal and Tennessee income taxes without assuming undue
risk.
The PRIME MONEY MARKET FUND (formerly known as the AmSouth Prime Obligations
Fund) -- seeks current income with liquidity and stability of principal.
The U.S. TREASURY MONEY MARKET FUND (formerly known as the AmSouth U.S.
Treasury Fund) -- seeks current income with liquidity and stability of
principal.
The TREASURY RESERVE MONEY MARKET FUND (formerly known as the ISG Treasury
Money Market Fund) --seeks to provide investors with as high a level of current
income as is consistent with the preservation of capital and the maintenance of
liquidity.
Continued
229
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
The TAX-EXEMPT MONEY MARKET FUND (formerly known as the AmSouth Tax-Exempt
Fund) -- seeks as high a level of current interest income exempt from federal
income taxes as is consistent with the preservation of capital and relative
stability of principal.
The INSTITUTIONAL PRIME OBLIGATIONS FUND -- seeks current income with
liquidity and stability of principal.
2.Reorganization:
The Funds entered into an Agreement and Plan of Reorganization with the ISG
Funds pursuant to which all of the assets and liabilities of each ISG Fund
transferred to a corresponding AmSouth Fund in exchange for shares of the
AmSouth Fund. Each ISG Fund listed below transferred all of its assets and
liabilities to the corresponding AmSouth Fund identified opposite its name in
exchange for shares of such AmSouth Fund and changed its fiscal year end to
July 31:
<TABLE>
<CAPTION>
ISG Funds AmSouth Funds
--------- -------------
<S> <C>
ISG Capital Growth Fund AmSouth Capital Growth Fund
ISG Large-Cap Equity Fund AmSouth Large Cap Fund
ISG Mid-Cap Fund AmSouth Mid Cap Fund
ISG Small-Cap Opportunity Fund AmSouth Small Cap Fund
ISG Equity Income Fund AmSouth Equity Income Fund
ISG International Equity Fund AmSouth International Equity Fund
ISG Aggressive Growth Portfolio AmSouth Strategic Portfolios: Aggressive Growth
Portfolio
ISG Growth Portfolio AmSouth Strategic Portfolios: Growth Portfolio
ISG Growth & Income Portfolio AmSouth Strategic Portfolios: Growth and Income
Portfolio
ISG Moderate Growth & Income Portfolio AmSouth Strategic Portfolios: Moderate Growth
and Income Portfolio
AmSouth Strategic Portfolios: Current Income
ISG Current Income Portfolio Portfolio
ISG Income Fund AmSouth Bond Fund
ISG Limited Term Income Fund AmSouth Limited Term Bond Fund
ISG Government Income Fund AmSouth Government Income Fund
ISG Limited Term U.S. Government Fund AmSouth Limited Term U.S. Government Fund
ISG Municipal Income Fund AmSouth Municipal Bond Fund
ISG Tennessee Tax-Exempt Fund AmSouth Tennessee Tax-Exempt Fund
ISG Limited Term Tennessee Tax-Exempt Fund AmSouth Limited Term Tennessee Tax-Exempt Fund
ISG Prime Money Market Fund AmSouth Prime Money Market Fund
ISG Treasury Money Market Fund AmSouth Treasury Reserve Money Market Fund
ISG Tax-Exempt Money Market Fund AmSouth Tax-Exempt Money Market Fund
</TABLE>
The reorganization, which qualified as a tax-free exchange for federal income
tax purposes, was completed on March 13, 2000 and was approved by shareholders
of the ISG Funds at a Special Meeting of Shareholders held on February 11,
2000. The following is a summary of shares outstanding, net assets, net asset
value per share, undistributed net investment income, accumulated net realized
gains (losses) and unrealized appreciation (depreciation) immediately before
and after the reorganization:
Continued
230
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
After
Before Reorganization Reorganization
--------------------------- --------------
ISG Capital AmSouth AmSouth
Growth Capital Growth Capital Growth
Fund Fund Fund
------------ -------------- --------------
<S> <C> <C> <C>
Class A
Shares............................. 779,629 -- 779,629
Net Assets......................... $ 10,814,963 $ -- $ 10,814,963
Net Asset Value.................... $ 13.87 $ -- $ 13.87
Class B
Shares............................. 591,438 -- 591,438
Net Assets......................... $ 7,949,059 $ -- $ 7,949,059
Net Asset Value.................... $ 13.44 $ -- $ 13.44
Trust
Shares............................. 19,602,706 -- 19,602,706
Net Assets......................... $270,349,507 $ -- $270,349,507
Net Asset Value.................... $ 13.79 $ -- $ 13.79
Unrealized Appreciation.............. $ 35,279,850 $ -- $ 35,279,850
<CAPTION>
After
Before Reorganization Reorganization
--------------------------- --------------
ISG Large-
Cap AmSouth AmSouth
Equity Large Cap Large Cap
Fund Fund Fund
------------ -------------- --------------
<S> <C> <C> <C>
Class A
Shares............................. 2,806,201 -- 2,806,201
Net Assets......................... $ 74,684,236 $ -- $ 74,684,236
Net Asset Value.................... $ 26.61 $ -- $ 26.61
Class B
Shares............................. 771,877 -- 771,877
Net Assets......................... $ 20,304,387 $ -- $ 20,304,387
Net Asset Value.................... $ 26.31 $ -- $ 26.31
Trust
Shares............................. 25,140,642 -- 25,140,642
Net Assets......................... $668,933,544 $ -- $668,933,544
Net Asset Value.................... $ 26.61 $ -- $ 26.61
Unrealized Appreciation.............. $378,072,734 $ -- $378,072,734
<CAPTION>
After
Before Reorganization Reorganization
--------------------------- --------------
ISG AmSouth AmSouth
Mid-Cap Mid Cap Mid Cap
Fund Fund Fund
------------ -------------- --------------
<S> <C> <C> <C>
Class A
Shares............................. 380,582 -- 380,582
Net Assets......................... $ 8,292,145 $ -- $ 8,292,145
Net Asset Value.................... $ 21.79 $ -- $ 21.79
Class B
Shares............................. 364,887 -- 364,887
Net Assets......................... $ 7,901,180 $ -- $ 7,901,180
Net Asset Value.................... $ 21.65 $ -- $ 21.65
Trust
Shares............................. 3,166,614 -- 3,166,614
Net Assets......................... $ 69,051,431 $ -- $ 69,051,431
Net Asset Value.................... $ 21.81 $ -- $ 21.81
Unrealized Appreciation.............. $ 27,860,513 $ -- $ 27,860,513
</TABLE>
Continued
231
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
After
Before Reorganization Reorganization
------------------------- --------------
ISG Small-Cap AmSouth AmSouth
Opportunity Small Cap Small Cap
Fund Fund Fund
------------- ----------- --------------
<S> <C> <C> <C>
Class A
Shares............................. 506,220 142,537 707,025
Net Assets......................... $ 7,699,370 $ 1,943,789 $ 9,643,159
Net Asset Value.................... $ 15.21 $ 13.64 $ 13.64
Class B
Shares............................. 29,990 100,342 133,766
Net Assets......................... $ 449,620 $ 1,349,633 $ 1,799,253
Net Asset Value.................... $ 14.99 $ 13.45 $ 13.45
Trust
Shares............................. 5,915,519 4,366,516 10,898,145
Net Assets......................... $89,677,800 $59,967,533 $149,645,333
Net Asset Value.................... $ 15.16 $ 13.73 $ 13.73
Unrealized Appreciation.............. $20,902,693 $17,944,996 $ 38,847,689
Accumulated Net Realized Gains
(Losses)............................ $(2,255,570) $ 1,300,016 $ (955,554)
The AmSouth Small Cap Fund retained its investment objective and financial
history after the reorganization.
<CAPTION>
After
Before Reorganization Reorganization
------------------------- --------------
ISG Equity AmSouth
Income Equity AmSouth Equity
Fund Income Fund Income Fund
------------- ----------- --------------
<S> <C> <C> <C>
Class A
Shares............................. 569,793 1,954,224 2,277,671
Net Assets......................... $ 4,902,199 $29,607,765 $ 34,509,964
Net Asset Value.................... $ 8.60 $ 15.15 $ 15.15
Class B
Shares............................. 727,946 878,275 1,293,141
Net Assets......................... $ 6,258,959 $13,249,379 $ 19,508,338
Net Asset Value.................... $ 8.60 $ 15.09 $ 15.09
Trust
Shares............................. 7,905,530 2,210,708 6,700,591
Net Assets......................... $68,064,110 $33,514,860 $101,578,970
Net Asset Value.................... $ 8.61 $ 15.16 $ 15.16
Unrealized Appreciation.............. $ 268,340 $10,112,984 $ 10,381,324
Undistributed Net Investment Income.. $ 8,124 $ 11,205 $ 19,329
Accumulated Net Realized Gains
(Losses)............................ $(1,414,076) $ 4,409,413 $ 2,995,337
</TABLE>
The AmSouth Equity Income Fund retained its investment objective and financial
history after the reorganization.
Continued
232
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
After
Before Reorganization Reorganization
-------------------------------- -----------------
ISG AmSouth AmSouth
International International International
Equity Fund Equity Fund Equity Fund
-------------- ----------------- -----------------
<S> <C> <C> <C>
Class A
Shares..................... 100,618 -- 100,618
Net Assets................. $ 1,258,163 $-- $ 1,258,163
Net Asset Value............ $ 12.50 $-- $ 12.50
Class B
Shares..................... 34,916 -- 34,916
Net Assets................. $ 433,831 $-- $ 433,831
Net Asset Value............ $ 12.43 $-- $ 12.43
Trust
Shares..................... 5,322,071 -- 5,322,071
Net Assets................. $66,536,927 $-- $66,536,927
Net Asset Value............ $ 12.50 $-- $ 12.50
Unrealized Appreciation...... $ 5,213,330 $-- $ 5,213,330
<CAPTION>
After
Before Reorganization Reorganization
-------------------------------- -----------------
AmSouth Strategic AmSouth Strategic
ISG Aggressive Portfolios: Portfolios:
Growth Aggressive Growth Aggressive Growth
Portfolio Portfolio Portfolio
-------------- ----------------- -----------------
<S> <C> <C> <C>
Class A
Shares..................... 42,393 -- 42,393
Net Assets................. $ 491,154 $-- $ 491,154
Net Asset Value............ $ 11.59 $-- $ 11.59
Class B
Shares..................... 45,939 -- 45,939
Net Assets................. $ 528,039 $-- $ 528,039
Net Asset Value............ $ 11.49 $-- $ 11.49
Trust
Shares..................... 1,661,023 -- 1,661,023
Net Assets................. $19,221,990 $-- $19,221,990
Net Asset Value............ $ 11.57 $-- $ 11.57
Unrealized Appreciation...... $ 703,404 $-- $ 703,404
<CAPTION>
After
Before Reorganization Reorganization
-------------------------------- -----------------
ISG AmSouth Strategic AmSouth Strategic
Growth Portfolios: Portfolios:
Portfolio Growth Portfolio Growth Portfolio
-------------- ----------------- -----------------
<S> <C> <C> <C>
Class A
Shares..................... 23,006 -- 23,006
Net Assets................. $ 242,623 $-- $ 242,623
Net Asset Value............ $ 10.55 $-- $ 10.55
Class B
Shares..................... 111,334 -- 111,334
Net Assets................. $ 1,171,560 $-- $ 1,171,560
Net Asset Value............ $ 10.52 $-- $ 10.52
Trust
Shares..................... 2,835,625 -- 2,835,625
Net Assets................. $30,021,188 $-- $30,021,188
Net Asset Value............ $ 10.59 $-- $ 10.59
Unrealized Appreciation...... $ 291,685 $-- $ 291,685
</TABLE>
Continued
233
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
After
Before Reorganization Reorganization
------------------------------------ --------------------
AmSouth Strategic AmSouth Strategic
ISG Portfolios: Portfolios:
Growth & Income Growth and Income Growth and Income
Portfolio Portfolio Portfolio
--------------- -------------------- --------------------
<S> <C> <C> <C>
Class A
Shares................ 49,048 -- 49,048
Net Assets............ $ 508,979 $-- $ 508,979
Net Asset Value....... $ 10.38 $-- $ 10.38
Class B
Shares................ 167,417 -- 167,417
Net Assets............ $ 1,737,834 $-- $ 1,737,834
Net Asset Value....... $ 10.38 $-- $ 10.38
Trust
Shares................ 8,303,516 -- 8,303,516
Net Assets............ $86,414,873 $-- $86,414,873
Net Asset Value....... $ 10.41 $-- $ 10.41
Unrealized
Depreciation........... $(2,411,311) $-- $(2,411,311)
<CAPTION>
After
Before Reorganization Reorganization
------------------------------------ --------------------
AmSouth Strategic AmSouth Strategic
ISG Moderate Portfolios: Portfolios:
Growth & Income Moderate Growth Moderate Growth
Portfolio and Income Portfolio and Income Portfolio
--------------- -------------------- --------------------
<S> <C> <C> <C>
Class A
Shares................ 14,049 -- 14,049
Net Assets............ $ 138,570 $-- $ 138,570
Net Asset Value....... $ 9.86 $-- $ 9.86
Class B
Shares................ 83,357 -- 83,357
Net Assets............ $ 821,149 $-- $ 821,149
Net Asset Value....... $ 9.85 $-- $ 9.85
Trust
Shares................ 2,194,361 -- 2,194,361
Net Assets............ $21,690,023 $-- $21,690,023
Net Asset Value....... $ 9.88 $-- $ 9.88
Unrealized
Depreciation........... $ (656,338) $-- $ (656,338)
</TABLE>
Continued
234
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
After
Before Reorganization Reorganization
-------------------------------- -----------------
AmSouth Strategic AmSouth Strategic
ISG Portfolios: Portfolios:
Current Income Current Income Current Income
Portfolio Portfolio Portfolio
-------------- ----------------- -----------------
<S> <C> <C> <C>
Class A
Shares................... 338 -- 338
Net Assets............... $ 3,177 $ -- $ 3,177
Net Asset Value.......... $ 9.39 $ -- $ 9.39
Class B
Shares................... 1 -- 1
Net Assets............... $ 10 $ -- $ 10
Net Asset Value.......... $ 9.36 $ -- $ 9.36
Trust
Shares................... 69,625 -- 69,625
Net Assets............... $ 656,745 $ -- $ 656,745
Net Asset Value.......... $ 9.43 $ -- $ 9.43
Unrealized Depreciation.... $ (8,887) $ -- $ (8,887)
<CAPTION>
After
Before Reorganization Reorganization
-------------------------------- -----------------
ISG Income
Fund AmSouth Bond Fund AmSouth Bond Fund
-------------- ----------------- -----------------
<S> <C> <C> <C>
Class A
Shares................... 318,629 667,565 960,642
Net Assets............... $ 3,032,083 $ 6,911,513 $ 9,943,596
Net Asset Value.......... $ 9.52 $ 10.35 $ 10.35
Class B
Shares................... 129,214 228,292 347,249
Net Assets............... $ 1,228,472 $ 2,358,638 $ 3,587,110
Net Asset Value.......... $ 9.51 $ 10.33 $ 10.33
Trust
Shares................... 9,630,807 36,878,722 45,727,898
Net Assets............... $91,584,025 $381,774,047 $473,358,072
Net Asset Value.......... $ 9.51 $ 10.35 $ 10.35
Unrealized Depreciation.... $(4,461,982) $ (8,912,776) $(13,374,758)
Accumulated Net Realized
Losses.................... $ (788,888) $ (986,569) $ (1,775,457)
</TABLE>
The AmSouth Bond Fund retained its investment objective and financial history
after the reorganization.
Continued
235
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
After
Before Reorganization Reorganization
------------------------- --------------
AmSouth
ISG Limited Limited AmSouth
Term Income Term Limited Term
Fund Bond Fund Bond Fund
------------ ----------- --------------
<S> <C> <C> <C>
Class A
Shares............................ 662,971 191,162 823,819
Net Assets........................ $ 6,362,409 $ 1,923,376 $ 8,285,785
Net Asset Value................... $ 9.60 $ 10.06 $ 10.06
Class B
Shares............................ 73,432 154,285 224,282
Net Assets........................ $ 703,619 $ 1,550,600 $ 2,254,219
Net Asset Value................... $ 9.58 $ 10.05 $ 10.05
Trust
Shares............................ 9,495,898 9,607,645 18,669,337
Net Assets........................ $ 91,125,732 $96,671,893 $187,797,625
Net Asset Value................... $ 9.60 $ 10.06 $ 10.06
Unrealized Depreciation............. $ (2,282,663) $(2,304,972) $ (4,587,635)
Accumulated Net Realized Losses..... $ (455,223) $(1,097,215) $ (1,552,438)
The AmSouth Limited Term Bond Fund retained its investment objective and
financial history after the reorganization.
<CAPTION>
After
Before Reorganization Reorganization
------------------------- --------------
ISG AmSouth AmSouth
Government Government Government
Income Fund Income Fund Income Fund
------------ ----------- --------------
<S> <C> <C> <C>
Class A
Shares............................ 339,412 384,924 728,990
Net Assets........................ $ 3,262,174 $ 3,649,318 $ 6,911,492
Net Asset Value................... $ 9.61 $ 9.48 $ 9.48
Class B
Shares............................ 57,876 -- 58,486
Net Assets........................ $ 554,307 $ -- $ 554,307
Net Asset Value................... $ 9.58 $ -- $ 9.48
Trust
Shares............................ 37,941,780 477,690 38,899,745
Net Assets........................ $364,289,541 $ 4,529,465 $368,819,006
Net Asset Value................... $ 9.60 $ 9.48 $ 9.48
Unrealized Appreciation
(Depreciation)..................... $ (8,765,840) $ (132,256) $ (8,898,096)
Accumulated Net Realized Losses..... $ (2,904,252) $ (363,265) $ (3,267,517)
</TABLE>
The AmSouth Government Income Fund retained its investment objective and
financial history after the reorganization.
Continued
236
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
After
Before Reorganization Reorganization
----------------------------- ---------------
ISG Limited AmSouth Limited AmSouth Limited
Term U.S. Term Term
Government U.S. Government U.S. Government
Fund Fund Fund
------------- --------------- ---------------
<S> <C> <C> <C>
Class A
Shares........................ 364,995 -- 364,995
Net Assets.................... $ 3,585,943 $ -- $ 3,585,943
Net Asset Value............... $ 9.82 $ -- $ 9.82
Class B
Shares........................ 42,704 -- 42,704
Net Assets.................... $ 419,745 $ -- $ 419,745
Net Asset Value............... $ 9.83 $ -- $ 9.83
Trust
Shares........................ 4,158,949 -- 4,158,949
Net Assets.................... $40,856,623 $ -- $ 40,856,623
Net Asset Value............... $ 9.82 $ -- $ 9.82
Unrealized Depreciation......... $(1,117,721) $ -- $ (1,117,721)
<CAPTION>
After
Before Reorganization Reorganization
----------------------------- ---------------
ISG Municipal AmSouth AmSouth
Income Municipal Bond Municipal Bond
Fund Fund Fund
------------- --------------- ---------------
<S> <C> <C> <C>
Class A
Shares........................ 210,434 417,146 635,513
Net Assets.................... $ 2,084,576 $ 3,983,416 $ 6,067,992
Net Asset Value............... $ 9.91 $ 9.55 $ 9.55
Class B
Shares........................ 32,044 28,789 61,975
Net Assets.................... $ 316,500 $ 274,706 $ 591,206
Net Asset Value............... $ 9.88 $ 9.54 $ 9.54
Trust
Shares........................ 3,549,511 37,084,082 40,767,397
Net Assets.................... $35,161,855 $354,205,658 $389,367,513
Net Asset Value............... $ 9.91 $ 9.55 $ 9.55
Unrealized Depreciation......... $(1,940,180) $ (6,216,118) $ (8,156,298)
Accumulated Net Realized Gains
(Losses)....................... $ (307,415) $ 26,244 $ (281,171)
</TABLE>
The AmSouth Municipal Bond Fund retained its investment objective and financial
history after the reorganization.
Continued
237
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
After
Before Reorganization Reorganization
------------------------------ ---------------
ISG Tennessee AmSouth AmSouth
Tax-Exempt Tennessee Tax- Tennessee Tax-
Fund Exempt Fund Exempt Fund
-------------- --------------- ---------------
<S> <C> <C> <C>
Class A
Shares....................... 333,704 -- 333,704
Net Assets................... $ 3,188,308 $ -- $ 3,188,308
Net Asset Value.............. $ 9.55 $ -- $ 9.55
Class B
Shares....................... 114,856 -- 114,856
Net Assets................... $ 1,099,417 $ -- $ 1,099,417
Net Asset Value.............. $ 9.57 $ -- $ 9.57
Trust
Shares....................... 7,645,018 -- 7,645,018
Net Assets................... $ 73,037,977 $ -- $ 73,037,977
Net Asset Value.............. $ 9.55 $ -- $ 9.55
Unrealized Depreciation........ $ (2,069,545) $ -- $ (2,069,545)
<CAPTION>
After
Before Reorganization Reorganization
------------------------------ ---------------
ISG Limited AmSouth Limited AmSouth Limited
Term Tennessee Term Tennessee Term Tennessee
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
-------------- --------------- ---------------
<S> <C> <C> <C>
Class A
Shares....................... 1,904,316 -- 1,904,316
Net Assets................... $ 18,428,450 $ -- $ 18,428,450
Net Asset Value.............. $ 9.68 $ -- $ 9.68
Class B
Shares....................... 54,544 -- 54,544
Net Assets................... $ 527,557 $ -- $ 527,557
Net Asset Value.............. $ 9.67 $ -- $ 9.67
Unrealized Depreciation........ $ (562,144) $ -- $ (562,144)
<CAPTION>
After
Before Reorganization Reorganization
------------------------------ ---------------
ISG Prime AmSouth Prime AmSouth Prime
Money Market Money Market Money Market
Fund Fund Fund
-------------- --------------- ---------------
<S> <C> <C> <C>
Class A
Shares....................... 454,104,522 216,565,899 670,670,421
Net Assets................... $454,062,155 $216,560,228 $670,622,383
Net Asset Value.............. $ 1.00 $ 1.00 $ 1.00
Class B
Shares....................... 568,390 659,801 1,228,191
Net Assets................... $ 568,348 $ 659,801 $ 1,228,149
Net Asset Value.............. $ 1.00 $ 1.00 $ 1.00
Trust
Shares....................... 280,189,093 556,247,163 836,436,256
Net Assets................... $280,170,931 $556,231,936 $836,402,867
Net Asset Value.............. $ 1.00 $ 1.00 $ 1.00
Accumulated Net Realized
Losses........................ $ (56,577) $ (6,231) $ (62,808)
</TABLE>
The AmSouth Prime Money Market Fund retained its investment objective and
financial history after the reorganization.
Continued
238
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
After
Before Reorganization Reorganization
-------------------------------- ----------------
ISG Treasury AmSouth Treasury AmSouth Treasury
Money Market Reserve Money Reserve Money
Fund Market Fund Market Fund
--------------- ---------------- ----------------
<S> <C> <C> <C>
Class A
Shares.................... 141,304,610 -- 141,304,610
Net Assets................ $141,297,122 $ -- $141,297,122
Net Asset Value........... $ 1.00 $ -- $ 1.00
Trust
Shares.................... 321,301,450 -- 321,301,450
Net Assets................ $321,287,256 $ -- $321,287,256
Net Asset Value........... $ 1.00 $ -- $ 1.00
<CAPTION>
After
Before Reorganization Reorganization
-------------------------------- ----------------
ISG Tax-Exempt AmSouth Tax- AmSouth Tax-
Money Market Exempt Money Exempt Money
Fund Market Fund Market Fund
--------------- ---------------- ----------------
<S> <C> <C> <C>
Class A
Shares.................... 4,913,597 51,851,926 56,765,523
Net Assets................ $ 4,901,137 $ 51,784,617 $ 56,685,754
Net Asset Value........... $ 1.00 $ 1.00 $ 1.00
Trust
Shares.................... 96,647,934 57,128,168 153,776,102
Net Assets................ $ 96,445,861 $ 57,010,917 $153,456,778
Net Asset Value........... $ 1.00 $ 1.00 $ 1.00
Accumulated Net Realized
Losses..................... $ (213,700) $ (184,560) $ (398,260)
The AmSouth Tax-Exempt Money Market Fund retained its investment objective and
financial history after the reorganization.
The Funds also entered into an Agreement and Plan of Reorganization pursuant
to which all of the assets and liabilities of the AmSouth Regional Equity Fund
transferred to the AmSouth Value Fund in exchange for shares of the AmSouth
Value Fund.
The reorganization, which qualified as a tax-free exchange for federal income
tax purposes, was completed on March 13, 2000 and was approved by shareholders
of the AmSouth Regional Equity Fund at a Special Meeting of Shareholders held
on February 22, 2000. The following is a summary of shares outstanding, net
assets, net asset value per share and unrealized appreciation immediately
before and after the reorganization:
<CAPTION>
After
Before Reorganization Reorganization
-------------------------------- ----------------
AmSouth AmSouth AmSouth
Regional Equity Value Value
Fund Fund Fund
--------------- ---------------- ----------------
<S> <C> <C> <C>
Class A
Shares.................... 615,920 2,511,863 2,926,161
Net Assets................ $ 7,617,190 $ 46,196,200 $ 53,813,390
Net Asset Value........... $ 12.37 $ 18.39 $ 18.39
Class B
Shares.................... 29,790 473,298 493,136
Net Assets................ $ 362,872 $ 8,657,687 $ 9,020,559
Net Asset Value........... $ 12.18 $ 18.29 $ 18.29
Trust
Shares.................... 1,786,915 31,177,615 32,378,290
Net Assets................ $ 22,071,696 $572,917,610 $594,989,306
Net Asset Value........... $ 12.35 $ 18.38 $ 18.38
Unrealized Appreciation..... $ 633,400 $122,964,346 $123,597,746
Accumulated Net Realized
Gains (Losses)............. $ (2,981) $ 75,074 $ 72,093
</TABLE>
The AmSouth Value Fund retained its investment objective and financial history
after the reorganization.
Continued
239
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
3.Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements. These policies are in
conformity with generally accepted accounting principles. The preparation of
financial statements 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 income and expenses for the
period. Actual results could differ from those estimates.
Securities Valuation:
Investments of the money market funds are valued at either amortized cost,
which approximates market value, or at original cost which, combined with
accrued interest, approximates market value. Under the amortized cost method,
discount or premium is amortized on a constant basis to the maturity of the
security.
Investments in common stocks, corporate bonds, municipal bonds, commercial
paper and U.S. Government securities of the variable net asset value funds are
valued on the basis of valuations provided by dealers or an independent pricing
service approved by the Board of Trustees. Investments in investment companies
are valued at their net asset values as reported by such companies. The
differences between cost and market values of such investments are reflected as
unrealized appreciation or depreciation.
Securities Transactions and Related Income:
Securities transactions are accounted for on the date the security is
purchased or sold (trade date). Interest income is recognized on the accrual
basis and includes, where applicable, the pro rata amortization of premium or
discount. Dividend income is recorded on the ex-dividend date. Realized gains
or losses from sales of securities are determined by comparing the identified
cost of the security lot sold with the net sales proceeds.
Financial Futures Contracts:
The Enhanced Market Fund invests in financial futures contracts for the
purpose of hedging their existing portfolio securities, or securities that they
intend to purchase, against fluctuations in fair value caused by changes in
prevailing market interest rates. Upon entering into a financial futures
contract, a Fund is required to pledge to the broker an amount of cash and/or
other assets equal to a certain percentage of the contract amount (initial
margin deposit). Subsequent payments, known as "variation margin," are made or
received by a Fund each day, depending on the daily fluctuations in the fair
value of the underlying security. A Fund recognizes a gain or loss equal to the
daily variation margin. Should market conditions move unexpectedly, the Fund
may not achieve the anticipated benefits of the financial futures contracts and
may realize a loss. The use of futures transactions involves the risk of
imperfect correlation in movements in the price of futures contracts, interest
rates, and the underlying hedged assets.
Repurchase Agreements:
The Funds may acquire repurchase agreements from member banks of the Federal
Deposit Insurance Corporation and from registered broker/dealers which AmSouth
Bank ("AmSouth"), deems creditworthy under guidelines approved by the Board of
Trustees, subject to the seller's agreement to repurchase such securities at a
mutually agreed-upon date and price. The repurchase price generally equals the
price paid by the Funds plus interest negotiated on the basis of current short-
term rates, which may be more or less than the rate on the underlying portfolio
securities. The seller, under a repurchase agreement, is required to maintain
the value of collateral held pursuant to the agreement at not less than the
repurchase price (including accrued interest). Securities subject to repurchase
agreements are held by the Funds' custodian or another qualified custodian or
in the Federal Reserve/Treasury book-entry system.
Foreign Currency Translation:
The market value of investment securities, other assets and liabilities of
the International Equity Fund denominated in a foreign currency are translated
into U.S. dollars at the current exchange rate. Purchases and sales of
securities, income receipts and expense payments are translated into U.S.
dollars at the exchange rate on the dates of the transactions.
Continued
240
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
The Fund does 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 gains or losses from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of fund securities, sales of foreign currencies, currency exchange
fluctuations between the trade and settlement dates of securities transactions,
and the difference between the amounts of assets and liabilities recorded 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, including investments in securities, resulting from
changes in currency exchange rates.
Risks Associated with Foreign Securities and Currencies:
Investments in securities of foreign issuers carry certain risks not
ordinarily associated with investments in securities of domestic issuers. Such
risks include future political and economic developments and the possible
imposition of exchange controls or other foreign governmental laws and
restrictions. In addition, with respect to certain countries, there is the
possibility of expropriation of assets, confiscatory taxation, political or
social instability or diplomatic developments which could adversely affect
investments in those countries.
Certain countries may also impose substantial restrictions on investments in
their capital markets by foreign entities, including restrictions on
investments in issuers or industries deemed sensitive to relevant national
interests. These factors may limit the investment opportunities available to
the International Equity Fund or result in a lack of liquidity and high price
volatility with respect to securities of issuers from developing countries.
Forward Currency Contracts:
The International Equity Fund may enter into a forward currency contract
("forward") which is an agreement between two parties to buy and sell a
currency at a set price on a future date. The market value of the forward
fluctuates with changes in currency exchange rates. The forward is marked-to-
market daily and the change in market value is recorded by the Fund as
unrealized appreciation or depreciation. When the forward is closed, the Fund
records a realized gain or loss equal to the difference between the value at
the time it was opened and the value at the time it was closed. The Fund could
be exposed to risk if a counterparty is unable to meet the terms of a forward
or if the value of the currency changes unfavorably.
Forwards may involve market or credit risk in excess of the amounts reflected
on the Fund's statement of assets and liabilities. The gain or loss from the
difference between the cost of original contracts and the amount realized upon
the closing of such contracts is included in net realized gains/losses from
investment and foreign currency transactions. Fluctuations in the value of
forwards held are recorded for financial reporting purposes as unrealized gains
and losses by the Fund. There were no forwards open at July 31, 2000.
Financial Instruments:
The Equity Income Fund may write call options only on securities that are
owned by the Fund ("covered calls"). A written call option gives a specified
counter-party the right to require the writer of the option to deliver the
agreed upon securities, at the agreed upon price, up until the expiration date
specified in the contract. For this right, a premium is paid to the writer of
the option. The premium received by the Fund for writing the option is booked
as realized gains to the Fund. The risks associated with writing a covered call
option are diminished compared to writing an uncovered call. The Fund does not
bear the risk of having to purchase the securities in the open market at a
price greater than the call price should the call option be exercised. Since
the Fund owns the securities on which the call has been written, the Fund bears
the risk of not receiving the fair market value of a security if the option is
exercised. They would be required to sell the securities at the agreed upon
price, which would presumably be lower than the fair market value of the
securities if the option is exercised.
The table below reflects the Equity Income Fund's activity in covered calls,
all of which were for purposes of earning additional income, during the year
ended July 31, 2000. The Premiums column represents the premiums paid by the
option counterparties to the Fund in connection with entering into the covered
calls.
Continued
241
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
Option activities for the year ended July 31, 2000:
Covered Call Options
<TABLE>
<CAPTION>
Number of
Options Premiums
Contracts Received
--------- --------
<S> <C> <C>
Contracts outstanding at July 31, 1999....................... -- --
Options written.............................................. 40 $49,378
Options expired.............................................. -- --
Options closed............................................... -- --
Options exercised............................................ -- --
--- -------
Contracts outstanding at July 31, 2000....................... 40 $49,378
=== =======
</TABLE>
Securities Lending:
To generate additional income, the Funds may lend up to 33 1/3% of total
assets pursuant to agreements requiring that the loan be continuously secured
by cash, U.S. government or U.S. government agency securities, shares of an
investment trust or mutual fund, or any combination of cash and such securities
as collateral equal at all times to at least 100% of the market value plus
accrued interest on the securities loaned based on prior days closing market
value. The Funds continue to earn interest and dividends on securities loaned
while simultaneously seeking to earn interest on the investment of collateral.
When cash is received as collateral for securities loaned, the Funds may
invest such cash in short-term U.S. government securities, repurchase
agreements, or other short-term corporate securities. The cash or subsequent
short-term investments are recorded as assets of the Funds, offset by a
corresponding liability to repay the cash at the termination of the loan. In
addition, the short-term securities purchased with the cash collateral are
included in the accompanying schedules of portfolio investments. Fixed income
securities received as collateral are not recorded as an asset or liability of
the Fund because the Fund does not have effective control of such securities.
There may be risks of delay in recovery of the securities or even loss of
rights in the collateral should the borrower of the securities fail
financially. However, loans will be made only to borrowers deemed by the
adviser to be of good standing and creditworthy under guidelines established by
the Board of Directors and when, in the judgment of the adviser, the
consideration which can be earned currently from such securities loans
justifies the attendant risks. Loans are subject to termination by the Funds or
the borrower at any time, and are, therefore, not considered to be illiquid
investments. As of July 31, 2000, the following Funds had securities with the
following market values on loan (amounts in thousands):
<TABLE>
<CAPTION>
Market Market Value Average
Value of of Loaned Market Value
Collateral Securities on Loan
---------- ------------ ------------
<S> <C> <C> <C>
Value Fund................................ $127,072 $121,934 $27,593
Growth Fund............................... 5,308 5,260 297
Capital Growth Fund....................... 112,124 109,306 105,481
Large Cap Fund............................ 268,531 259,151 353,266
Mid Cap Fund.............................. 12,340 12,617 5,625
Small Cap Fund............................ 11,844 11,538 11,656
Equity Income Fund........................ 14,197 13,900 11,446
Balanced Fund............................. 68,867 66,996 11,150
Select Equity Fund........................ 356 340 88
Enhanced Market Fund...................... 5,063 4,910 703
Bond Fund................................. 286,062 280,280 54,214
Limited Term Bond Fund.................... 86,139 84,070 8,835
Government Income Fund.................... 135,529 133,285 149,524
U.S. Treasury Money Market Fund........... 72,000 71,154 16,493
Treasury Reserve Money Market Fund........ 66,320 65,499 86,313
</TABLE>
Continued
242
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
The loaned securities were collateralized by cash which was invested in U.S.
government securities, commercial paper, investment companies, and repurchase
agreements at July 31, 2000.
As disclosed in the schedules of portfolio investments the Value, Growth,
Capital Growth, Large Cap, Mid Cap, Small Cap, Equity Income, Balanced, Select
Equity, Enhanced Market, Bond, Limited Term Bond, and Government Income Funds
collectively invested cash collateral in a Lehman Brothers Repurchase Agreement
with an interest rate of 6.74% and a maturity of 8/1/00 which was
collateralized by the following securities (amounts in thousands):
<TABLE>
<CAPTION>
Maturity Market
Principal Description Rate Date Value
--------- ----------- ------ -------- ------
<C> <S> <C> <C> <C>
$5,000 Bausch & Lomb, Inc. ......................... 6.56% 8/12/26 $4,908
3,755 Hughes Electronics........................... 0.00% 10/23/00 3,761
1,400 MBNA CORP-FRN................................ 7.13% 6/17/02 1,395
1,250 Developers Diversified....................... 6.84% 12/16/04 1,166
1,900 Quebecor World, Inc. ........................ 6.50% 8/1/27 1,756
1,150 CSX Corp. ................................... 7.95% 5/1/27 1,116
7,000 Time Warner Ent. ............................ 8.38% 7/15/33 7,241
107 Phillips Petroleum........................... 8.50% 5/25/05 111
1,400 Comcast Cable................................ 8.88% 5/1/17 1,525
7,000 Union Carbide Corp. ......................... 6.70% 4/1/09 6,635
5,400 Black & Decker............................... 7.50% 4/1/03 5,390
1,000 Viacom Intl., Inc. .......................... 10.25% 9/15/01 1,020
2,500 Tosco TR 00-E................................ 8.58% 3/1/10 2,509
4,375 Republic of Korea............................ 8.75% 4/15/03 4,468
500 Harcourt General, Inc. ...................... 7.30% 4/2/12 399
2,600 HRPT Properties.............................. 6.70% 2/23/05 2,429
2,200 IBJ Preferred Cap Co. ....................... 8.79% 12/29/49 1,992
2,500 HRPT Properties Trust........................ 6.75% 12/18/02 2,405
1,000 Highwoods Exer Put Opt. ..................... 7.19% 6/15/04 942
1,900 DTE Capital Corp. ........................... 7.11% 11/15/08 1,836
</TABLE>
Dividends to Shareholders:
Dividends from net investment income are declared daily and paid monthly for
the money market funds. Dividends from net investment income are declared and
paid monthly for the variable net asset value funds. Distributable net realized
gains, if any, are declared and distributed at least annually.
The amounts of dividends from net investment income and of distributions from
net realized gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the composition of net assets based on their federal
tax-basis treatment; temporary differences do not require reclassification.
Dividends and distributions to shareholders which exceed net investment income
and net realized capital gains for financial reporting purposes but not for tax
purposes are reported as dividends in excess of net investment income or
distributions in excess of net realized gains. To the extent they exceed net
investment income and net realized gains for tax purposes, they are reported as
distributions of capital.
Continued
243
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
As of July 31, 2000, the following reclassifications have been made to
increase (decrease) such amounts with offsetting adjustments made to capital
(amounts in thousands):
<TABLE>
<CAPTION>
Undistributed Accumulated Net
Net Investment Realized Gains
Income on Investments
-------------- ---------------
<S> <C> <C>
Value Fund....................................... $-- $(13,749)
Growth Fund...................................... 311 (311)
Capital Growth Fund.............................. 561 (561)
Large Cap Fund................................... 411 (411)
Mid Cap Fund..................................... 515 --
Small Cap Fund................................... 861 (861)
Equity Income Fund............................... (2) 2
Balanced Fund.................................... 433 (433)
Select Equity Fund............................... 2 --
Enhanced Market Fund............................. 17 (17)
International Equity Fund........................ 219 (219)
Bond Fund........................................ 844 (844)
Limited Term Bond Fund........................... 144 (144)
Government Income Fund........................... 98 (98)
Limited Term U.S. Government Fund................ (2) 2
Prime Money Market Fund.......................... -- 6
Treasury Reserve Money Market Fund............... -- 16
</TABLE>
Federal Income Taxes:
It is the policy of each Fund to continue to qualify as a regulated
investment company by complying with the provisions available to certain
investment companies, as defined in applicable sections of the Internal Revenue
Code (the "Code"), and to make distributions of net investment income and net
realized capital gains sufficient to relieve it from all, or substantially all,
federal income taxes.
Other:
Expenses that are directly related to one of the Funds are charged directly
to that Fund. Other operating expenses for the Trust are prorated to all the
Funds on the basis of relative net assets. Fees paid under a Fund's shareholder
servicing or distribution plans are borne by the specific class of shares to
which they apply.
Continued
244
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
4.Purchases and Sales of Securities:
Purchases and sales of securities (excluding short-term securities) for the
year ended July 31, 2000 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
Purchases Sales
--------- --------
<S> <C> <C>
Value Fund.................................................. $134,864 $469,982
Growth Fund................................................. 60,383 52,719
Capital Growth.............................................. 321,110 264,400
Large Cap Equity............................................ 76,789 78,637
Mid Cap Equity.............................................. 72,882 24,728
Small Cap Fund.............................................. 303,169 252,463
Equity Income Fund.......................................... 215,848 156,476
Balanced Fund............................................... 43,106 193,283
Select Equity Fund.......................................... 3,313 13,561
Enhanced Market Fund........................................ 48,485 16,864
International Equity Fund................................... 88,130 23,550
Aggressive Growth Portfolio................................. 3,741 3,776
Growth Portfolio............................................ 23,230 16,155
Growth and Income Portfolio................................. 18,605 17,310
Moderate Growth and Income Portfolio........................ 4,579 6,408
Current Income Portfolio.................................... 124 71
Bond Fund................................................... 149,674 113,646
Limited Term Bond Fund...................................... 45,444 61,456
Government Income Fund...................................... 105,944 57,124
Limited Term U.S. Government Fund........................... 1,493 2,093
Municipal Bond Fund......................................... 62,098 29,970
Florida Tax-Exempt Fund..................................... 7,445 17,711
Tennessee Tax-Exempt Fund................................... 16,719 29,423
Limited Term Tennessee Tax-Exempt........................... 3,368 6,437
</TABLE>
5.Capital Share Transactions:
The Trust has issued three classes of Fund shares: Class A Shares (formerly
Classic Shares), Trust Shares (formerly Premier Shares), and Class B Shares in
the Prime Money Market Fund and the variable net asset funds except for the
Limited Term Tennessee Tax-Exempt Fund. The Trust has issued three classes of
fund shares in the Institutional Prime Obligations Fund: Class I, Class II and
Class III. The Trust has issued two classes of Fund shares: Class A (formerly
Classic Shares) and Trust Shares in the Limited Term Tennessee Tax-Exempt Fund
and the money market funds. Each class of shares in a Fund has identical rights
and privileges except with respect to fees paid under shareholder servicing or
distribution plans, expenses allocable exclusively to each class of shares,
voting rights on matters affecting a single class of shares, and the exchange
privilege of each class of shares.
Continued
245
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
Transactions in capital shares for the Funds for the year ended July 31, 1999
and the year ended July 31, 2000, respectively, were as follows (amounts in
thousands):
<TABLE>
<CAPTION>
Value Fund (a) Growth Fund (d)
---------------------- ---------------------
Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31,
2000 1999 2000 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (b):
Proceeds from shares issued....... $ 7,669 $ 57,426 $ 4,756 $ 7,168
Proceeds from shares issued in
connection with AmSouth Fund
merger........................... 7,617 -- -- --
Dividends reinvested.............. 8,862 6,662 431 65
Cost of shares redeemed........... (34,656) (68,598) (6,452) (4,647)
--------- --------- -------- -------
(10,508) (4,510) (1,265) 2,586
--------- --------- -------- -------
Class B Shares:
Proceeds from shares issued....... 1,238 4,945 2,904 3,933
Proceeds from shares issued in
connection with AmSouth Fund
merger........................... 363 -- -- --
Dividends reinvested.............. 1,580 944 299 31
Cost of shares redeemed........... (4,882) (1,866) (1,843) (839)
--------- --------- -------- -------
(1,701) 4,023 1,360 3,125
--------- --------- -------- -------
Trust Shares (c):
Proceeds from shares issued....... 105,206 136,777 24,237 16,038
Proceeds from shares issued in
connection with AmSouth Fund
merger........................... 22,072 -- -- --
Dividends reinvested.............. 25,799 17,681 348 4
Cost of shares redeemed........... (345,378) (173,589) (16,274) (2,206)
--------- --------- -------- -------
(192,301) (19,131) 8,311 13,836
--------- --------- -------- -------
Total net increase (decrease) from
capital transactions.............. $(204,510) $ (19,618) $ 8,406 $19,547
========= ========= ======== =======
SHARE TRANSACTIONS:
Class A Shares (b):
Issued............................ 344 2,355 313 538
Issued in connection with AmSouth
Fund merger...................... 414 -- -- --
Reinvested........................ 438 296 29 5
Redeemed.......................... (1,682) (2,824) (427) (380)
--------- --------- -------- -------
(486) (173) (85) 163
--------- --------- -------- -------
Class B Shares:
Issued............................ 55 205 194 299
Issued in connection with AmSouth
Fund merger...................... 20 -- -- --
Reinvested........................ 79 42 21 3
Redeemed.......................... (237) (77) (123) (64)
--------- --------- -------- -------
(83) 170 92 238
--------- --------- -------- -------
Trust Shares (c):
Issued............................ 5,000 5,779 1,587 1,196
Issued in connection with AmSouth
Fund merger...................... 1,201 -- -- --
Reinvested........................ 1,275 787 24 --
Redeemed.......................... (16,782) (7,105) (1,061) (159)
--------- --------- -------- -------
(9,306) (539) 550 1,037
--------- --------- -------- -------
Total net increase (decrease) from
share transactions................ (9,875) (542) 557 1,438
========= ========= ======== =======
</TABLE>
---------
(a) Formerly AmSouth Equity Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
(d) Formerly AmSouth Capital Growth Fund.
Continued
246
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
Capital Growth Fund (a)
--------------------------------------
Period Ended Year Ended Year Ended
July 31, December 31, December 31,
2000 (b) 1999 1998
------------ ------------ ------------
<S> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares issued......... $ 27,710 $ 6,307 $ 3,358
Dividends reinvested................ -- 1,521 630
Cost of shares redeemed............. (24,349) (2,149) (390)
-------- -------- --------
3,361 5,679 3,598
-------- -------- --------
Class B Shares:
Proceeds from shares issued......... 1,774 4,808 2,771 (c)
Dividends reinvested................ -- 1,079 321 (c)
Cost of shares redeemed............. (865) (938) (256)(c)
-------- -------- --------
909 4,949 2,836
-------- -------- --------
Trust Shares (d):
Proceeds from shares issued......... 116,255 79,575 14,229
Dividends reinvested................ 12 37,171 25,470
Cost of shares redeemed............. (72,991) (53,058) (25,729)
-------- -------- --------
43,276 63,688 13,970
-------- -------- --------
Total net increase (decrease) from
capital transactions................ $ 47,546 $ 74,316 $ 20,404
======== ======== ========
SHARE TRANSACTIONS:
Class A Shares:
Issued.............................. 1,838 428 238
Reinvested.......................... -- 110 48
Redeemed............................ (1,611) (147) (27)
-------- -------- --------
227 391 259
-------- -------- --------
Class B Shares:
Issued.............................. 126 332 198 (c)
Reinvested.......................... -- 81 25 (c)
Redeemed............................ (61) (65) (18)(c)
-------- -------- --------
65 348 205
-------- -------- --------
Trust Shares (d):
Issued.............................. 8,063 5,482 1,021
Reinvested.......................... 1 2,719 1,969
Redeemed............................ (4,933) (3,581) (1,843)
-------- -------- --------
3,131 4,620 1,147
-------- -------- --------
Total net increase (decrease) from
share transactions.................. 3,423 5,359 1,611
======== ======== ========
</TABLE>
---------
(a) Formerly ISG Capital Growth Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) For the period from February 5, 1998 (commencement of operations) through
December 31, 1998.
(d) Formerly Institutional Shares.
Continued
247
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
Large Cap Fund (a) Mid Cap Fund (g)
------------------------------------------------------ -------------------------
Period Ended Year Ended Period Ended Year Ended Period Ended Period Ended
July 31, December 31, December 31, February 28, July 31, December 31,
2000 (b) 1999 1998 (c) 1998 2000 (b) 1999 (h)
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares
issued................ $ 26,077 $ 22,544 $ 114,374 $ 146,010 $11,322 $ 1,820
Dividends reinvested... 33 8,796 27,317 4,621 -- --
Cost of shares
redeemed.............. (24,193) (11,009) (882,188) (124,794) (1,254) (177)
--------- --------- --------- --------- ------- -------
1,917 20,331 (740,497) 25,837 10,068 1,643
--------- --------- --------- --------- ------- -------
Class B Shares:
Proceeds from shares
issued................ 8,640 17,650 97 (d) -- 12,303 1,738
Dividends reinvested... -- 2,255 -- -- -- --
Cost of shares
redeemed.............. (2,555) (992) -- -- (584) (28)
--------- --------- --------- --------- ------- -------
6,085 18,913 97 -- 11,719 1,710
--------- --------- --------- --------- ------- -------
Trust Shares (f):
Proceeds from shares
issued................ 91,011 170,115 740,608 (e) -- 37,775 27,414
Dividends reinvested... 314 69,492 -- -- -- --
Cost of shares
redeemed.............. (107,181) (335,885) (12,333)(e) -- (6,749) (729)
--------- --------- --------- --------- ------- -------
(15,856) (96,278) 728,275 -- 31,026 26,685
--------- --------- --------- --------- ------- -------
Total net increase
(decrease) from capital
transactions........... $ (7,854) $ (57,034) $ (12,125) $ 25,837 $52,813 $30,038
========= ========= ========= ========= ======= =======
SHARE TRANSACTIONS:
Class A Shares:
Issued................. 906 791 4,799 7,925 629 150
Reinvested............. 1 320 1,054 234 -- --
Redeemed............... (852) (381) (34,860) (6,449) (73) (14)
--------- --------- --------- --------- ------- -------
55 730 (29,007) 1,710 556 136
--------- --------- --------- --------- ------- -------
Class B Shares:
Issued................. 312 618 4 (d) -- 689 128
Reinvested............. -- 83 -- -- -- --
Redeemed............... (93) (35) -- -- (33) (2)
--------- --------- --------- --------- ------- -------
219 666 4 -- 656 126
--------- --------- --------- --------- ------- -------
Trust Shares (f):
Issued................. 3,253 5,916 29,010 (e) -- 2,051 2,193
Reinvested............. 11 2,527 -- -- -- --
Redeemed............... (3,813) (11,784) (455)(e) -- (377) (52)
--------- --------- --------- --------- ------- -------
(549) (3,341) 28,555 -- 1,674 2,141
--------- --------- --------- --------- ------- -------
Total net increase
(decrease) from share
transactions........... (275) (1,945) (448) 1,710 2,886 2,403
========= ========= ========= ========= ======= =======
</TABLE>
---------
(a) Formerly ISG Large-Cap Equity Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) For the period from March 1, 1998 through December 31, 1998.
(d) For the period from December 15, 1998 (commencement of operations) through
December 31, 1998.
(e) For the period from December 14, 1998 (commencement of operations) through
December 31, 1998.
(f) Formerly Institutional Shares.
(g) Formerly ISG Mid-Cap Fund.
(h) For the period from May 4, 1999 (commencement of operations) through
December 31, 1999.
Continued
248
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
Small Cap Fund Equity Income Fund
--------------------- ---------------------
Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31,
2000 1999 2000 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (a):
Proceeds from shares issued....... $ 77,911 $ 657 $ 22,503 $ 1,858
Proceeds from shares issued in
connection with ISG Fund merger.. 7,699 -- 4,902 --
Dividends reinvested.............. -- -- 1,354 790
Cost of shares redeemed........... (78,345) (835) (12,935) (10,017)
-------- ------- -------- --------
7,265 (178) 15,824 (7,369)
-------- ------- -------- --------
Class B Shares:
Proceeds from shares issued....... 1,400 474 15,851 1,204
Proceeds from shares issued in
connection with ISG Fund merger.. 450 -- 6,259 --
Dividends reinvested.............. -- -- 524 230
Cost of shares redeemed........... (439) (333) (2,667) (1,990)
-------- ------- -------- --------
1,411 141 19,967 (556)
-------- ------- -------- --------
Trust Shares (b):
Proceeds from shares issued....... 60,648 17,146 46,423 6,156
Proceeds from shares issued in
connection with ISG Fund merger.. 89,678 -- 68,064 --
Dividends reinvested.............. -- -- 431 135
Cost of shares redeemed........... (15,098) (1,058) (17,135) (4,389)
-------- ------- -------- --------
135,228 16,088 97,783 1,902
-------- ------- -------- --------
Total net increase (decrease) from
capital transactions.............. $143,904 $16,051 $133,574 $ (6,023)
======== ======= ======== ========
SHARE TRANSACTIONS:
Class A Shares (a):
Issued............................ 6,120 81 1,502 153
Issued in connection with ISG Fund
merger........................... 564 -- 324 --
Reinvested........................ -- -- 100 67
Redeemed.......................... (6,140) (103) (876) (821)
-------- ------- -------- --------
544 (22) 1,050 (601)
-------- ------- -------- --------
Class B Shares:
Issued............................ 109 60 1,067 101
Issued in connection with ISG Fund
merger........................... 34 -- 415 --
Reinvested........................ -- -- 39 20
Redeemed.......................... (42) (44) (184) (166)
-------- ------- -------- --------
101 16 1,337 (45)
-------- ------- -------- --------
Trust Shares (b):
Issued............................ 4,995 2,159 3,157 501
Issued in connection with ISG Fund
merger........................... 6,531 -- 4,490 --
Reinvested........................ -- -- 32 11
Redeemed.......................... (1,244) (132) (1,157) (360)
-------- ------- -------- --------
10,282 2,027 6,522 152
-------- ------- -------- --------
Total net increase (decrease) from
share transactions................ 10,927 2,021 8,909 (494)
======== ======= ======== ========
</TABLE>
---------
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
Continued
249
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
Balanced Fund Select Equity Fund
--------------------- -----------------------
Year
Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2000 1999 2000 1999 (c)
--------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (a):
Proceeds from shares issued... $ 1,091 $ 3,921 $ 436 $14,740
Dividends reinvested.......... 5,207 4,523 462 67
Cost of shares redeemed....... (21,295) (11,411) (6,784) (6,553)
--------- -------- ------- -------
(14,997) (2,967) (5,886) 8,254
--------- -------- ------- -------
Class B Shares:
Proceeds from shares issued... 2,135 5,756 174 2,006 (d)
Dividends reinvested.......... 1,412 680 112 2 (d)
Cost of shares redeemed....... (4,908) (1,533) (1,067) (63)(d)
--------- -------- ------- -------
(1,361) 4,903 (781) 1,945
--------- -------- ------- -------
Trust Shares (b):
Proceeds from shares issued... 49,753 57,092 946 11,128 (e)
Dividends reinvested.......... 20,079 18,818 516 25 (e)
Cost of shares redeemed....... (171,356) (82,279) (4,398) (708)(e)
--------- -------- ------- -------
(101,524) (6,369) (2,936) 10,445
--------- -------- ------- -------
Total net increase (decrease)
from capital transactions..... $(117,882) $ (4,433) $(9,603) $20,644
========= ======== ======= =======
SHARE TRANSACTIONS:
Class A Shares (a):
Issued........................ 80 261 44 1,391
Reinvested.................... 412 314 48 6
Redeemed...................... (1,628) (763) (667) (534)
--------- -------- ------- -------
(1,136) (188) (575) 863
--------- -------- ------- -------
Class B Shares:
Issued........................ 159 385 18 168 (d)
Reinvested.................... 112 47 12 --
Redeemed...................... (383) (102) (110) (5)(d)
--------- -------- ------- -------
(112) 330 (80) 163
--------- -------- ------- -------
Trust Shares (b):
Issued........................ 3,819 3,865 85 933 (e)
Reinvested.................... 1,589 1,305 54 2 (e)
Redeemed...................... (13,401) (5,514) (432) (58)(e)
--------- -------- ------- -------
(7,993) (344) (293) 877
--------- -------- ------- -------
Total net increase (decrease)
from share transactions....... (9,241) (202) (948) 1,903
========= ======== ======= =======
</TABLE>
---------
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
(c) For the period from September 1, 1998 (commencement of operations) through
July 31, 1999.
(d) For the period from September 2, 1998 (commencement of operations) through
July 31, 1999.
(e) For the period from December 3, 1998 (commencement of operations) through
July 31, 1999.
Continued
250
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
Enhanced Market International Equity
Fund Fund (f)
----------------------- -------------------------------------------------------
Year Ended Period Ended Period Ended Year Ended Period Ended Period Ended
July 31, July 31, July 31, December 31, December 31, February 28,
2000 1999 (a) 2000 (g) 1999 1998 (h) 1998 (i)
---------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (b):
Proceeds from shares
issued................ $ 14,020 $19,464 $ 1,082 $ 926 $ 7,649 $26,266
Dividends reinvested... 635 103 3 -- 48 18
Cost of shares
redeemed.............. (9,467) (8,488) (233) (185) (32,664) (867)
-------- ------- ------- ------- -------- -------
5,188 11,079 852 741 (24,967) 25,417
-------- ------- ------- ------- -------- -------
Class B Shares:
Proceeds from shares
issued................ 12,747 6,257 (d) 489 206 (j) -- --
Dividends reinvested... 299 5 (d) 1 -- -- --
Cost of shares
redeemed.............. (2,613) (343)(d) (98) -- -- --
-------- ------- ------- ------- -------- -------
10,433 5,919 392 206 -- --
-------- ------- ------- ------- -------- -------
Trust Shares (c):
Proceeds from shares
issued................ 27,362 14,504 (e) 68,781 16,408 26,756 (k) --
Dividends reinvested... 465 32 (e) 296 -- -- --
Cost of shares
redeemed.............. (11,755) (749)(e) (6,097) (6,232) (181)(k) --
-------- ------- ------- ------- -------- -------
16,072 13,787 62,980 10,176 26,575 --
-------- ------- ------- ------- -------- -------
Total net increase
(decrease) from capital
transactions........... $ 31,693 $30,785 $64,224 $11,123 $ 1,608 $25,417
======== ======= ======= ======= ======== =======
SHARE TRANSACTIONS:
Class A Shares (b):
Issued................. 980 1,655 86 80 694 2,623
Reinvested............. 45 8 -- -- 5 2
Redeemed............... (657) (627) (19) (16) (3,222) (88)
-------- ------- ------- ------- -------- -------
368 1,036 67 64 (2,523) 2,537
-------- ------- ------- ------- -------- -------
Class B Shares:
Issued................. 890 468 (d) 39 17 (j) -- --
Reinvested............. 21 -- -- -- -- --
Redeemed............... (179) (25)(d) (8) -- -- --
-------- ------- ------- ------- -------- -------
732 443 31 17 -- --
-------- ------- ------- ------- -------- -------
Trust Shares (c):
Issued................. 1,901 1,081 (e) 5,477 1,371 2,661 (k) --
Reinvested............. 32 2 (e) 22 -- -- --
Redeemed............... (804) (53)(e) (482) (541) (17)(k) --
-------- ------- ------- ------- -------- -------
1,129 1,030 5,017 830 2,644 --
-------- ------- ------- ------- -------- -------
Total net increase
(decrease) from share
transactions........... 2,229 2,509 5,115 911 121 2,537
======== ======= ======= ======= ======== =======
</TABLE>
---------
(a) For the period from September 1, 1998 (commencement of operations) through
July 31, 1999.
(b) Formerly Classic Shares for Enhanced Market Fund.
(c) Formerly Premier Shares for Enhanced Market Fund; formerly Institutional
shares for International Equity Fund.
(d) For the period from September 2, 1998 (commencement of operations) through
July 31, 1999.
(e) For the period from December 11, 1998 (commencement of operations) through
July 31, 1999.
(f) Formerly ISG International Equity Fund.
(g) For the period from January 1, 2000 through July 31, 2000.
(h) For the period from March 1, 1998 through December 31, 1998.
(i) For the period from August 15, 1997 (commencement of operations) through
February 28, 1998.
(j) For the period from February 2, 1999 (commencement of operations) through
December 31, 1999.
(k) For the period from December 14, 1998 (commencement of operations) through
December 31, 1998.
Continued
251
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
Strategic Portfolios: Strategic Portfolios:
Aggressive Growth Growth
Portfolio (a) Portfolio (g)
------------------------- -------------------------
Period Ended Period Ended Period Ended Period Ended
July 31, December 31, July 31, December 31,
2000 (b) 1999 (c) 2000 (b) 1999 (h)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares
issued................ $ 86 $ 413 $ 760 $ 162 (i)
Dividends reinvested... 5 1 3 --
Cost of shares
redeemed.............. (66) (8) (149) (9)(i)
------ ------- ------- -------
25 406 614 153
------ ------- ------- -------
Class B Shares:
Proceeds from shares
issued................ 99 504 (d) 353 987 (j)
Dividends reinvested... 4 1 (d) 15 6 (j)
Cost of shares
redeemed.............. (168) (117)(d) (111) (54)(j)
------ ------- ------- -------
(65) 388 257 939
------ ------- ------- -------
Trust Shares (f):
Proceeds from shares
issued................ 4,011 21,605 (e) 26,486 12,019
Dividends reinvested... 229 37 (e) 235 41
Cost of shares
redeemed.............. (2,565) (4,903)(e) (18,779) (1,370)
------ ------- ------- -------
1,675 16,739 7,942 10,690
------ ------- ------- -------
Total net increase
(decrease) from capital
transactions........... $1,635 $17,533 $ 8,813 $11,782
====== ======= ======= =======
SHARE TRANSACTIONS:
Class A Shares:
Issued................. 7 40 71 16 (i)
Reinvested............. -- -- -- --
Redeemed............... (5) -- (14) --
------ ------- ------- -------
2 40 57 16
------ ------- ------- -------
Class B Shares:
Issued................. 9 51 (d) 34 99 (j)
Reinvested............. -- -- 1 --
Redeemed............... (15) (11)(d) (11) (5)(j)
------ ------- ------- -------
(6) 40 24 94
------ ------- ------- -------
Trust Shares (f):
Issued................. 347 2,101 (e) 2,518 1,205
Reinvested............. 20 4 (e) 22 4
Redeemed............... (223) (470)(e) (1,756) (138)
------ ------- ------- -------
144 1,635 784 1,071
------ ------- ------- -------
Total net increase
(decrease) from share
transactions........... 140 1,715 865 1,181
====== ======= ======= =======
</TABLE>
---------
(a) Formerly ISG Aggressive Growth Portfolio.
(b) For the period January 1, 2000 through July 31, 2000.
(c) For the period from January 13, 1999 (commencement of operations) through
December 31, 1999.
(d) For the period from January 27, 1999 (commencement of operations) through
December 31, 1999.
(e) For the period from January 28, 1999 (commencement of operations) through
December 31, 1999.
(f) Formerly Institutional Shares.
(g) Fomerly ISG Growth Portfolio.
(h) For the period from February 1, 1999 (commencement of operations) through
December 31, 1999.
(i) For the period from February 11, 1999 (commencement of operations) through
December 31, 1999.
(j) For the period from February 15, 1999 (commencement of operations) through
December 31, 1999.
Continued
252
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
Strategic Portfolios: Strategic Portfolios:
Growth and Income Moderate Growth and
Portfolio (a) Income Portfolio (g)
------------------------- -------------------------
Period Ended Period Ended Period Ended Period Ended
July 31, December 31, July 31, December 31,
2000 (b) 1999 (c) 2000 (b) 1999 (h)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares
issued................ $ 35 $ 542 (d) $ 8 $ 171 (i)
Dividends reinvested... 9 2 (d) 1 --
Cost of shares
redeemed.............. (313) (31)(d) (134) --
------- ------- ------- -------
(269) 513 (125) 171
------- ------- ------- -------
Class B Shares:
Proceeds from shares
issued................ 152 1,975 152 1,027
Dividends reinvested... 22 4 17 8
Cost of shares
redeemed.............. (297) (318) (282) (100)
------- ------- ------- -------
(123) 1,661 (113) 935
------- ------- ------- -------
Trust Shares (f):
Proceeds from shares
issued................ 15,744 88,893 (e) 3,506 27,552 (j)
Dividends reinvested... 1,749 140 (e) 522 93 (j)
Cost of shares
redeemed.............. (17,178) (6,248)(e) (5,529) (6,667)(j)
------- ------- ------- -------
315 82,785 (1,501) 20,978
------- ------- ------- -------
Total net increase
(decrease) from capital
transactions........... $ (77) $84,959 $(1,739) $22,084
======= ======= ======= =======
SHARE TRANSACTIONS:
Class A Shares:
Issued................. 3 54 (d) 1 17 (i)
Reinvested............. 1 -- -- --
Redeemed............... (29) (3)(d) (13) --
------- ------- ------- -------
(25) 51 (12) 17
------- ------- ------- -------
Class B Shares:
Issued................. 15 195 15 104
Reinvested............. 2 -- 2 1
Redeemed............... (28) (31) (29) (10)
------- ------- ------- -------
(11) 164 (12) 95
------- ------- ------- -------
Trust Shares (f):
Issued................. 1,495 8,840 (e) 352 2,818 (j)
Reinvested............. 165 14 (e) 52 9 (j)
Redeemed............... (1,630) (604)(e) (554) (684)(j)
------- ------- ------- -------
30 8,250 (150) 2,143
------- ------- ------- -------
Total net increase
(decrease) from share
transactions........... (6) 8,465 (174) 2,255
======= ======= ======= =======
</TABLE>
---------
(a) Formerly ISG Growth & Income Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) For the period from January 27, 1999 (commencement of operations) through
December 31, 1999.
(d) For the period from March 8, 1999 (commencement of operations) through
December 31, 1999.
(e) For the period from February 8, 1999 (commencement of operations) through
December 31, 1999.
(f) Formerly Institutional Shares.
(g) Formerly ISG Moderate Growth & Income Portfolio.
(h) For the period from January 28, 1999 (commencement of operations) through
December 31, 1999.
(i) For the period from February 9, 1999 (commencement of operations) through
December 31, 1999.
(j) For the period from February 10, 1999 (commencement of operations) through
December 31, 1999.
Continued
253
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
Strategic Portfolios:
Current Income
Portfolio (a) Bond Fund
------------------------- ---------------------
Period Ended Period Ended Year Ended Year Ended
July 31, December 31, July 31, July 31,
2000 (b) 1999 (c) 2000 1999
------------ ------------ ---------- ----------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (g):
Proceeds from shares issued.. $ -- $ 3 (d) $ 2,266 $ 3,224
Proceeds from shares issued
in connection with ISG Fund
merger...................... -- -- 3,032 --
Dividends reinvested......... -- -- 351 406
Cost of shares redeemed...... -- -- (3,188) (3,293)
---- ------ -------- --------
-- 3 2,461 337
---- ------ -------- --------
Class B Shares:
Proceeds from shares issued.. 24 60 (e) 1,265 2,727
Proceeds from shares issued
in connection with ISG Fund
merger...................... -- -- 1,228 --
Dividends reinvested......... -- 1 (e) 89 64
Cost of shares redeemed...... -- (60)(e) (1,468) (587)
---- ------ -------- --------
24 1 1,114 2,204
---- ------ -------- --------
Trust Shares (f):
Proceeds from shares issued.. 119 1,052 112,521 116,935
Proceeds from shares issued
in connection with ISG Fund
merger...................... -- -- 91,584 --
Dividends reinvested......... 18 16 5,659 5,091
Cost of shares redeemed...... (68) (398) (86,602) (55,310)
---- ------ -------- --------
69 670 123,162 66,716
---- ------ -------- --------
Total net increase (decrease)
from capital transactions.... $ 93 $ 674 $126,737 $ 69,257
==== ====== ======== ========
SHARE TRANSACTIONS:
Class A Shares (g):
Issued....................... -- -- 216 289
Issued in connection with ISG
Fund merger................. -- -- 293 --
Reinvested................... -- -- 34 36
Redeemed..................... -- -- (305) (296)
---- ------ -------- --------
-- -- 238 29
---- ------ -------- --------
Class B Shares:
Issued....................... 3 6 (e) 121 245
Issued in connection with ISG
Fund merger................. -- -- 119 --
Reinvested................... -- -- 9 6
Redeemed..................... -- (6)(e) (141) (53)
---- ------ -------- --------
3 -- 108 198
---- ------ -------- --------
Trust Shares (f):
Issued....................... 13 108 10,782 10,625
Issued in connection with ISG
Fund merger................. -- -- 8,849 --
Reinvested................... 2 2 542 458
Redeemed..................... (8) (42) (8,285) (4,972)
---- ------ -------- --------
7 68 11,888 6,111
---- ------ -------- --------
Total net increase (decrease)
from share transactions...... 10 68 12,234 6,338
==== ====== ======== ========
</TABLE>
---------
(a) Formerly ISG Current Income Portfolio.
(b) For the period January 1, 2000 through July 31, 2000.
(c) For the period from January 25, 1999 (commencement of operations) through
December 31, 1999.
(d) For the period from February 23, 1999 (commencement of operations) through
December 31, 1999.
(e) For the period from March 17, 1999 (commencement of operations) through
December 31, 1999.
(f) Formerly Institutional Shares for Current Income Portfolio; formerly
Premier Shares for Bond Fund.
(g) Formerly Classic Shares for Bond Fund.
Continued
254
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
Limited Term Bond Government Income
Fund (a) Fund
--------------------- ------------------------
Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31,
2000 1999 2000 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (b):
Proceeds from shares
issued..................... $ 929 $ 2,211 $ 589 $ 1,349
Proceeds from shares issued
in connection with ISG Fund
merger..................... 6,362 -- 3,262 --
Dividends reinvested........ 229 159 165 240
Cost of shares redeemed..... (2,319) (3,166) (3,604) (4,187)
-------- -------- -------- -------
5,201 (796) 412 (2,598)
-------- -------- -------- -------
Class B Shares:
Proceeds from shares
issued..................... 950 1,706 (d) 109 (e) --
Proceeds from shares issued
in connection with ISG Fund
merger..................... 704 -- 554 (e) --
Dividends reinvested........ 79 16 (d) 5 (e) --
Cost of shares redeemed..... (1,484) (102)(d) (154)(e) --
-------- -------- -------- -------
249 1,620 514 --
-------- -------- -------- -------
Trust Shares (c):
Proceeds from shares
issued..................... 18,012 27,407 23,598 1,287
Proceeds from shares issued
in connection with ISG Fund
merger..................... 91,126 -- 364,290 --
Dividends reinvested........ 1,363 534 4,392 --
Cost of shares redeemed..... (41,746) (23,812) (43,484) (580)
-------- -------- -------- -------
68,755 4,129 348,796 707
-------- -------- -------- -------
Total net increase (decrease)
from capital transactions... $ 74,205 $ 4,953 $349,722 $(1,891)
======== ======== ======== =======
SHARE TRANSACTIONS:
Class A Shares (b):
Issued...................... 91 211 62 135
Issued in connection with
ISG Fund merger............ 633 -- 344 --
Reinvested.................. 23 15 17 24
Redeemed.................... (230) (300) (376) (423)
-------- -------- -------- -------
517 (74) 47 (264)
-------- -------- -------- -------
Class B Shares:
Issued...................... 93 164 (d) 12 (e) --
Issued in connection with
ISG Fund merger............ 70 -- 58 (e) --
Reinvested.................. 8 2 (d) -- --
Redeemed.................... (147) (10)(d) (16)(e) --
-------- -------- -------- -------
24 156 54 --
-------- -------- -------- -------
Trust Shares (c):
Issued...................... 1,781 2,612 2,474 131
Issued in connection with
ISG Fund merger............ 9,061 -- 38,422 --
Reinvested.................. 135 51 461 --
Redeemed.................... (4,123) (2,269) (4,555) (58)
-------- -------- -------- -------
6,854 394 36,802 73
-------- -------- -------- -------
Total net increase (decrease)
from share transactions..... 7,395 476 36,903 (191)
======== ======== ======== =======
</TABLE>
---------
(a) Formerly AmSouth Limited Maturity Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
(d) For the period from January 21, 1999 (commencement of operations) through
July 31, 1999.
(e) For the period from March 13, 2000 (commencement of operations) through
July 31, 2000.
Continued
255
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
Limited Term U.S.
Government Fund (a) Municipal Bond Fund
-------------------------------------- ---------------------
Period Ended Year Ended Year Ended Year Ended Year Ended
July 31, December 31, December 31, July 31, July 31,
2000 (b) 1999 1998 2000 1999
------------ ------------ ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (f):
Proceeds from shares
issued................ $ 769 $ 2,403 $33,332 $ 3,905 $ 1,032
Proceeds from shares
issued in connection
with ISG Fund merger.. -- -- -- 2,085 --
Dividends reinvested... 61 95 53 129 76
Cost of shares
redeemed.............. (626) (1,248) (52,019) (2,348) (1,049)
------- -------- ------- -------- --------
204 1,250 (18,634) 3,771 59
------- -------- ------- -------- --------
Class B Shares:
Proceeds from shares
issued................ 16 379 429 (d) 554 27 (g)
Proceeds from shares
issued in connection
with ISG Fund merger.. -- -- -- 317 --
Dividends reinvested... 6 14 6 (d) 10 --
Cost of shares
redeemed.............. (107) (341) (8)(d) (20) (11)(g)
------- -------- ------- -------- --------
(85) 52 427 861 16
------- -------- ------- -------- --------
Trust Shares (c):
Proceeds from shares
issued................ 1,347 8,315 47,243 (e) 91,946 51,374
Proceeds from shares
issued in connection
with ISG Fund merger.. -- -- -- 35,162 --
Dividends reinvested... 566 765 -- 334 189
Cost of shares
redeemed.............. (6,687) (11,377) (765)(e) (59,488) (48,186)
------- -------- ------- -------- --------
(4,774) (2,297) 46,478 67,954 3,377
------- -------- ------- -------- --------
Total net increase
(decrease) from capital
transactions........... $(4,655) $ (995) $28,271 $ 72,586 $ 3,452
======= ======== ======= ======== ========
SHARE TRANSACTIONS:
Class A Shares (a):
Issued................. 78 240 3,246 406 102
Issued in connection
with ISG Fund merger.. -- -- -- 219 --
Reinvested............. 6 9 5 13 8
Redeemed............... (64) (125) (4,999) (244) (103)
------- -------- ------- -------- --------
20 124 (1,748) 394 7
------- -------- ------- -------- --------
Class B Shares:
Issued................. 2 38 42 (d) 57 3 (g)
Issued in connection
with ISG Fund merger.. -- -- -- 33 --
Reinvested............. -- 1 1 (d) 1 --
Redeemed............... (11) (34) (1)(d) (2) (1)(g)
------- -------- ------- -------- --------
(9) 5 42 89 2
------- -------- ------- -------- --------
Trust Shares (c):
Issued................. 137 826 4,594 (e) 9,577 5,066
Issued in connection
with ISG Fund merger.. -- -- -- 3,683 --
Reinvested............. 58 76 -- 35 19
Redeemed............... (681) (1,129) (74)(e) (6,181) (4,732)
------- -------- ------- -------- --------
(486) (227) 4,520 7,114 353
------- -------- ------- -------- --------
Total net increase
(decrease) from share
transactions........... (475) (98) 2,814 7,597 362
======= ======== ======= ======== ========
</TABLE>
---------
(a) Formerly ISG Limited Term U.S. Government Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) Formerly Institutional Shares for Limited Term U.S. Government Fund;
formerly Premier Shares for Municipal Bond Fund.
(d) For the period from March 3, 1998 (commencement of operations) through
December 31, 1998.
(e) For the period from December 14, 1998 (commencement of operations) through
December 31, 1998.
(f) Formerly Classic Shares for Municipal Bond Fund.
(g) For the period from February 3, 1999 (commencement of operations) through
July 31, 1999.
Continued
256
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
Florida Tax-Exempt Tennessee Tax-Exempt
Fund (a) Fund (e)
--------------------- --------------------------------------
Year Ended Year Ended Period Ended Year Ended Year Ended
July 31, July 31, July 31, December 31, December 31,
2000 1999 2000 (f) 1999 1998
---------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (b):
Proceeds from shares
issued................ $ 83 $ 6,120 $ 1,040 $ 1,950 $ 1,753
Dividends reinvested... 236 425 35 44 50
Cost of shares
redeemed.............. (9,694) (2,685) (1,545) (1,382) (553)
-------- ------- -------- -------- --------
(9,375) 3,860 (470) 612 1,250
-------- ------- -------- -------- --------
Class B Shares:
Proceeds from shares
issued................ 255 577 (d) 16 288 1,467 (g)
Dividends reinvested... 6 1 (d) 15 21 11 (g)
Cost of shares
redeemed.............. (100) -- (285) (322) (85)(g)
-------- ------- -------- -------- --------
161 578 (254) (13) 1,393
-------- ------- -------- -------- --------
Trust Shares (c):
Proceeds from shares
issued................ 13,793 19,040 803 5,061 7,579
Dividends reinvested... 8 32 256 107 362
Cost of shares
redeemed.............. (15,043) (9,350) (12,797) (15,822) (17,159)
-------- ------- -------- -------- --------
(1,242) 9,722 (11,738) (10,654) (9,218)
-------- ------- -------- -------- --------
Total net increase (de-
crease) from capital
transactions........... $(10,456) $14,160 $(12,462) $(10,055) $ (6,575)
======== ======= ======== ======== ========
SHARE TRANSACTIONS:
Class A Shares (b):
Issued................. 8 580 108 196 172
Reinvested............. 24 40 4 4 5
Redeemed............... (964) (255) (160) (139) (54)
-------- ------- -------- -------- --------
(932) 365 (48) 61 123
-------- ------- -------- -------- --------
Class B Shares:
Issued................. 25 56 (d) 2 29 144 (g)
Reinvested............. 1 -- 1 2 1 (g)
Redeemed............... (10) -- (30) (33) (8)(g)
-------- ------- -------- -------- --------
16 56 (27) (2) 137
-------- ------- -------- -------- --------
Trust Shares (c):
Issued................. 1,375 1,811 84 503 746
Reinvested............. 1 3 27 11 35
Redeemed............... (1,507) (891) (1,336) (1,599) (1,682)
-------- ------- -------- -------- --------
(131) 923 (1,225) (1,085) (901)
-------- ------- -------- -------- --------
Total net increase (de-
crease) from share
transactions........... (1,047) 1,344 (1,300) (1,026) (641)
======== ======= ======== ======== ========
</TABLE>
---------
(a) Formerly AmSouth Florida Tax-Free Fund.
(b) Formerly Classic Shares for Florida Tax-Exempt Fund.
(c) Formerly Premier Shares for Florida Tax-Exempt Fund; formerly Institutional
Shares for Tennessee Tax-Exempt Fund.
(d) For the period from March 16, 1999 (commencement of operations) through
July 31, 1999.
(e) Formerly ISG Tennessee Tax-Exempt Fund.
(f) For the period from January 1, 2000 through July 31, 2000.
(g) For the period from February 24, 1998 (commencement of operations) through
December 31, 1998.
Continued
257
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
Limited Term Tennessee Tax- Prime
Exempt Fund (a) Money Market Fund (d)
---------------------------------------- ------------------------
Period Ended Year Ended Year Ended Year Ended Year Ended
July 31, December 31, December 31, July 31, July 31,
2000 (b) 1999 1998 2000 1999
------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (e):
Proceeds from shares
issued................ $ 1,283 $ 5,159 $ 3,962 $ 656,332 $ 282,648
Proceeds from shares
issued in connection
with ISG Fund merger.. -- -- -- 454,062 --
Dividends reinvested... 64 32 13 15,105 5,884
Cost of shares
redeemed.............. (5,408) (4,446) (7,373) (616,302) (269,414)
------- ------- ------- ----------- -----------
(4,061) 745 (3,398) 509,197 19,118
------- ------- ------- ----------- -----------
Class B Shares:
Proceeds from shares
issued................ -- 205 755 (c) 1,043 463
Proceeds from shares
issued in connection
with ISG Fund merger.. -- -- -- 568 --
Dividends reinvested... 5 11 9 (c) 23 4
Cost of shares
redeemed.............. (332) (301) (31)(c) (1,131) (244)
------- ------- ------- ----------- -----------
(327) (85) 733 503 223
------- ------- ------- ----------- -----------
Trust Shares (f):
Proceeds from shares
issued................ -- -- -- 2,189,421 1,556,708
Proceeds from shares
issued in connection
with ISG Fund merger.. -- -- -- 280,171 --
Dividends reinvested... -- -- -- 3,036 1,817
Cost of shares
redeemed.............. -- -- -- (2,277,765) (1,501,602)
------- ------- ------- ----------- -----------
-- -- -- 194,863 56,923
------- ------- ------- ----------- -----------
Total net increase
(decrease) from capital
transactions........... $(4,388) $ 660 $(2,655) $ 704,563 $ 76,264
======= ======= ======= =========== ===========
SHARE TRANSACTIONS:
Class A Shares (e):
Issued................. 132 518 391 656,329 282,648
Issued in connection
with ISG Fund merger.. -- -- -- 454,104 --
Reinvested............. 7 3 1 15,105 5,884
Redeemed............... (559) (446) (727) (616,302) (269,414)
------- ------- ------- ----------- -----------
(420) 75 (335) 509,236 19,118
------- ------- ------- ----------- -----------
Class B Shares:
Issued................. -- 20 75 (c) 1,043 463
Issued in connection
with ISG Fund merger.. -- -- -- 568 --
Reinvested............. 1 1 1 (c) 23 4
Redeemed............... (35) (31) (3)(c) (1,131) (244)
------- ------- ------- ----------- -----------
(34) (10) 73 503 223
------- ------- ------- ----------- -----------
Trust Shares (f):
Issued................. -- -- -- 2,189,421 1,556,708
Issued in connection
with ISG Fund merger.. -- -- -- 280,189 --
Reinvested............. -- -- -- 3,036 1,817
Redeemed............... -- -- -- (2,277,765) (1,501,602)
------- ------- ------- ----------- -----------
-- -- -- 194,881 56,923
------- ------- ------- ----------- -----------
Total net increase
(decrease) from share
transactions........... (454) 65 (262) 704,620 76,264
======= ======= ======= =========== ===========
</TABLE>
---------
(a) Formerly ISG Limited Term Tennessee Tax-Exempt Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) For the period from February 3, 1998 (commencement of operations) through
December 31, 1998.
(d) Formerly AmSouth Prime Obligations Fund.
(e) Formerly Classic Shares for Prime Money Market Fund.
(f) Formerly Premier Shares for Prime Money Market Fund.
Continued
258
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
U.S. Treasury Treasury Reserve
Money Market Fund (a) Money Market Fund (d)
---------------------- --------------------------------------
Year Ended Year Ended Period Ended Year Ended Year Ended
July 31, July 31, July 31, December 31, December 31,
2000 1999 2000 (e) 1999 1998
---------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (b):
Proceeds from shares
issued................ $ 31,035 $ 13,408 $ 191,826 $ 541,860 $ 451,868
Dividends reinvested... 265 270 790 893 394
Cost of shares
redeemed.............. (23,874) (17,357) (191,924) (567,020) (361,844)
--------- --------- --------- --------- ---------
7,426 (3,679) 692 (24,267) 90,418
--------- --------- --------- --------- ---------
Trust Shares (c):
Proceeds from shares
issued................ 705,296 753,782 299,903 605,138 382,986
Dividends reinvested... 191 639 1,412 277 11
Cost of shares
redeemed.............. (739,461) (785,630) (362,572) (573,590) (187,178)
--------- --------- --------- --------- ---------
(33,974) (31,209) (61,257) 31,825 195,819
--------- --------- --------- --------- ---------
Total net increase (de-
crease) from share
transactions........... $ (26,548) $ (34,888) $ (60,565) $ 7,558 $ 286,237
========= ========= ========= ========= =========
SHARE TRANSACTIONS:
Class A Shares (b):
Issued................. 31,035 13,408 191,826 541,860 451,868
Reinvested............. 265 270 790 893 394
Redeemed............... (23,874) (17,357) (191,924) (567,020) (361,844)
--------- --------- --------- --------- ---------
7,426 (3,679) 692 (24,267) 90,418
--------- --------- --------- --------- ---------
Trust Shares (c):
Issued................. 705,296 753,782 299,903 605,138 382,986
Reinvested............. 191 639 1,412 277 11
Redeemed............... (739,461) (785,630) (362,572) (573,590) (187,178)
--------- --------- --------- --------- ---------
(33,974) (31,209) (61,257) 31,825 195,819
--------- --------- --------- --------- ---------
Total net increase (de-
crease) from share
transactions........... (26,548) (34,888) (60,565) 7,558 286,237
========= ========= ========= ========= =========
</TABLE>
---------
(a) Formerly AmSouth U.S. Treasury Fund.
(b) Formerly Classic Shares for U.S. Treasury Money Market Fund.
(c) Formerly Premier Shares for U.S. Treasury Money Market Fund; formerly
Institutional Shares for Treasury Reserve Money Market Fund.
(d) Formerly ISG Treasury Money Market Fund.
(e) For the period from January 1, 2000 through July 31, 2000.
Continued
259
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
Tax-Exempt Institutional Prime
Money Market Fund (a) Obligations Fund
---------------------- ------------------------
Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2000 1999 2000 1999 (d)
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (b)*:
Proceeds from shares issued... $ 88,657 $ 55,604 $ 436,175 $ 387,727
Proceeds from shares issued in
connection with ISG Fund
merger....................... 4,901 -- -- --
Dividends reinvested.......... 1,064 686 -- --
Cost of shares redeemed....... (66,142) (62,103) (366,854) (318,269)
--------- --------- --------- ---------
28,480 (5,813) 69,321 69,458
--------- --------- --------- ---------
Class B Shares**:
Proceeds from shares issued... -- -- 463,214 56,608 (e)
Cost of shares redeemed....... -- -- (308,340) (30,608)(e)
--------- --------- --------- ---------
-- -- 154,874 26,000
--------- --------- --------- ---------
Trust Shares (c)***:
Proceeds from shares issued... 289,623 181,011 305,090 24,183 (f)
Proceeds from shares issued in
connection with ISG Fund
merger....................... 96,446 -- -- --
Dividends reinvested.......... 167 5 -- --
Cost of shares redeemed....... (318,134) (169,221) (204,264) (10,608)(f)
--------- --------- --------- ---------
68,102 11,795 100,826 13,575
--------- --------- --------- ---------
Total net increase (decrease)
from capital transactions.... $ 96,582 $ 5,982 $ 325,021 $ 109,033
========= ========= ========= =========
SHARE TRANSACTIONS:
Class A Shares (b)*:
Issued........................ 88,656 55,604 436,175 387,727
Issued in connection with ISG
Fund merger.................. 4,914 -- -- --
Reinvested.................... 1,065 686 -- --
Redeemed...................... (66,142) (62,103) (366,854) (318,269)
--------- --------- --------- ---------
28,493 (5,813) 69,321 69,458
--------- --------- --------- ---------
Class B Shares**:
Issued........................ -- -- 463,214 56,608 (e)
Redeemed...................... -- -- (308,340) (30,608)(e)
--------- --------- --------- ---------
-- -- 154,874 26,000
--------- --------- --------- ---------
Trust Shares (c)***:
Issued........................ 289,624 181,011 305,090 24,183 (f)
Issued in connection with ISG
Fund merger.................. 96,648 -- -- --
Reinvested.................... 167 5 -- --
Redeemed...................... (318,134) (169,221) (204,264) (10,608)(f)
--------- --------- --------- ---------
68,305 11,795 100,826 13,575
--------- --------- --------- ---------
Total net increase (decrease)
from share transactions....... 96,798 5,982 325,021 109,033
========= ========= ========= =========
</TABLE>
---------
(a) Formerly AmSouth Tax-Exempt Fund.
(b) Formerly Classic Shares for Tax-Exempt Money Market Fund.
(c) Formerly Premier Shares for Tax-Exempt Money Market Fund.
(d) For the period from September 15, 1998 (commencement of operations) through
July 31, 1999.
(e) For the period from February 19, 1999 (commencement of operations) through
July 31, 1999.
(f) For the period from February 22, 1999 (commencement of operations) through
July 31, 1999.
* Represents Class I Shares for Institutional Prime Obligations Fund.
** Represents Class II Shares for Institutional Prime Obligations Fund.
*** Represents Class III Shares for Institutional Prime Obligations Fund.
Continued
260
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
6.Related Party Transactions:
Investment advisory services are provided to each of the Funds by AmSouth.
Under the terms of the investment advisory agreement, AmSouth is entitled to
receive fees based on a percentage of the average daily net assets of each of
the Funds. AmSouth also serves as Custodian for the Trust, with the exception
of the International Equity Fund. Pursuant to the Custodian Agreement with the
Trust, AmSouth receives compensation from each Fund for such services in an
amount equal to an asset-based fee plus fixed fees charged for certain
portfolio transactions and out-of-pocket expenses.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS"),
an Ohio Limited Partnership, BISYS Fund Services Ohio, Inc. ("BISYS Ohio"), and
BISYS Fund Services, Inc. ("BISYS Inc.") are subsidiaries of the BISYS Group,
Inc.
ASO Services Company ("Administrator"), a wholly owned subsidiary of the
BISYS Group, Inc., serves the Funds as administrator. Under the terms of the
administration agreement, The Administrator receives a fee based on the average
daily net assets of each of the Funds. AmSouth and BISYS, with whom certain
officers and trustees of the Trust are affiliated, serve as the Funds' sub-
administrators. Such officers and trustees are paid no fees directly by the
Funds for serving as officers and trustees of the Trust. Pursuant to its
current agreement with the Administrator, AmSouth has assumed certain
Administrator's duties, for which AmSouth receives a fee, paid by the
Administrator, based on a percentage of each Fund's daily average net assets.
Pursuant to its agreement with the Administrator, BISYS, as sub-
administrator, is entitled to compensation as mutually agreed upon from time to
time by it and the Administrator. BISYS also serves as the Funds' distributor
and is entitled to receive commissions on sales of shares of the variable net
asset value funds. For the year ended July 31, 2000, BISYS received $787,517
from commissions earned on sales of shares of the Funds' variable net asset
value funds. BISYS reallowed $5,861 to affliated broker dealers of the Fund's
shares. BISYS receives no fees from the Funds for providing distribution
services to the Funds.
BISYS Ohio, serves the Funds as Transfer Agent and Mutual Fund Accountant.
Under the terms of the Transfer Agent Agreement, BISYS Ohio, receives a fee
based on a percentage of each funds average daily net assets, plus out of
pocket charges. The Mutual Fund Accountant fees are included in the
Administration Agreement, plus out of pocket costs.
Class A and Trust Shares of all Funds and Class B Shares of certain Funds of
the Trust are subject to a Shareholder Servicing Plan (the "Servicing Plan")
permitting payment of compensation to financial institutions that agree to
provide certain administrative support services for their customers or account
holders. The Trust has entered into a specific arrangement with BISYS for the
provision of such services and pays BISYS for these services, subject to a
maximum rate of 0.25% for Class A Shares, 0.25% for Class B Shares of certain
funds and 0.15% for Trust Shares of the average daily net assets of each of the
Funds.
Class B Shares, Class II Shares and Class III Shares of the Trust are subject
to a Distribution and Shareholder Servicing Plan (the "Distribution Plan")
permitting payment of compensation to a participating organization for its
services or expenses in connection with distribution assistance and shareholder
servicing with respect to the Funds' Class B Shares, Class II Shares and Class
III Shares to the participating organization's customers. The Trust has entered
into a specific arrangement with BISYS for the provision of such services and
pays BISYS for providing such services, subject to a maximum rate of up to
1.00% of the average daily net assets of the Class B Shares of each of the
Funds, which in the case of certain funds includes a Shareholder Servicing Fee
of 0.25% of the average daily net assets of the Class B Shares. Class II Shares
and Class III Shares are subject to a maximum rate of 0.25% and 0.50% of daily
average net assets, respectively, for such services.
BISYS Fund Services Ohio, Inc., also serves the Funds as administrator for
Securities Lending, and for the year ended July 31, 2000, received $474,935 in
fees for its services.
Continued
261
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
Fees may be voluntarily reduced to assist the Funds in maintaining
competitive expense ratios. Information regarding these transactions is as
follows for the period ended July 31, 2000 (amounts in thousands):
<TABLE>
<CAPTION>
Investment Advisory Fees
--------------------------------
Shareholder Shareholder
Annual Fee as 12B-1 Fees Servicing Fees Servicing Fees
a Percentage of Administration Class A Shares Class A Shares Trust Class Shares
Average Daily Fees Voluntarily Fees Voluntarily Voluntarily Voluntarily Voluntarily
Net Assets Reduced Reduced Reduced Reduced Reduced
--------------- ---------------- ---------------- -------------- -------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Value Fund............. 0.80% $ -- $ -- $-- $ -- $ 117
Growth Fund............ 0.80% -- 45 -- -- 6
Capital Growth......... 0.80% -- 63 -- -- 59
Large Cap Equity....... 0.80% 158 158 38 -- 138
Mid Cap Equity......... 1.00% -- 15 -- -- 12
Small Cap Fund......... 1.20% 63 56 -- -- 29
Equity Income Fund..... 0.80% -- 32 -- -- 20
Balanced Fund.......... 0.80% -- 42 -- -- 36
Select Equity Fund..... 0.80% -- 17 -- -- 1
Enhanced Market Fund... 0.45% -- 54 -- -- 6
International Equity
Fund.................. 1.25% 100 17 1 -- 17
Aggressive Growth
Portfolio............. 0.20% 12 8 -- -- 4
Growth Portfolio....... 0.20% 11 7 -- -- 3
Growth and Income
Portfolio............. 0.20% 53 -- -- -- 17
Moderate Growth and
Income Portfolio...... 0.20% 13 8 -- -- 4
Current Income
Portfolio............. 0.20% -- -- -- -- --
Bond Fund.............. 0.65% 649 288 -- 7 94
Limited Term Bond
Fund.................. 0.65% 211 90 -- 2 35
Government Income
Fund.................. 0.65% 232 77 -- 4 70
Limited Term U.S.
Government Fund....... 0.65% 39 8 2 -- 8
Municipal Bond Fund.... 0.65% 893 241 -- 3 74
Florida Tax-Exempt
Fund.................. 0.65% 199 70 -- 6 12
Tennessee Tax-Exempt
Fund.................. 0.65% 42 14 -- -- 13
Limited Term Tennessee
Tax-Exempt Fund....... 0.65% 14 11 9 -- --
Prime Money Market
Fund.................. 0.40% 273 545 -- 146 148
U.S. Treasury Money
Market Fund........... 0.40% 54 -- -- 5 53
Treasury Reserve Money
Market Fund........... 0.40% 87 173 -- -- 60
Tax-Exempt Money Market
Fund.................. 0.40% 233 -- -- 27 28
Institutional Prime
Obligations Fund...... 0.20% 334 180 -- -- --
</TABLE>
Continued
262
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
<TABLE>
<CAPTION>
Reimbursements
Shareholder Servicing Fund Accounting Transfer Agent ----------------------
Fees Class B Shares Fees Voluntarily Fees Voluntarily Class A Class B Trust
Voluntarily Reduced Reduced Reduced Shares Shares Shares
--------------------- ---------------- ---------------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Value Fund.............. $-- $ 5 $10 $-- $-- $--
Growth Fund............. -- 31 23 -- -- --
Capital Growth.......... -- -- -- -- 4 70
Large Cap Equity........ -- -- -- 39 -- 201
Mid Cap Equity.......... -- -- -- -- -- --
Small Cap Fund.......... -- 29 23 5 -- 30
Equity Income Fund...... -- 24 22 -- 5 2
Balanced Fund........... -- 5 11 -- -- --
Select Equity Fund...... -- 30 22 -- -- --
Enhanced Market Fund.... -- 24 22 -- -- --
International Equity
Fund................... -- -- -- -- -- --
Aggressive Growth Port-
folio.................. -- -- -- -- 1 15
Growth Portfolio........ -- -- -- 1 -- 16
Growth and Income Port-
folio.................. 1 -- -- -- -- 3
Moderate Growth and In-
come Portfolio......... -- -- -- -- 1 12
Current Income Portfo-
lio.................... -- -- -- 1 1 51
Bond Fund............... -- 5 11 -- -- --
Limited Term Bond Fund.. -- 5 11 -- -- --
Government Income Fund.. -- 25 15 1 -- --
Limited Term U.S. Gov-
ernment Fund........... -- -- -- -- -- --
Municipal Bond Fund..... -- 5 11 -- -- --
Florida Tax-Exempt
Fund................... -- 18 21 -- -- --
Tennessee Tax-Exempt
Fund................... -- -- -- -- -- 2
Limited Term Tennessee
Tax-Exempt Fund........ -- -- -- -- -- --
Prime Money Market
Fund................... -- 5 11 117 -- --
U.S. Treasury Money Mar-
ket Fund............... -- 3 8 -- -- --
Treasury Reserve Money
Market Fund............ -- -- -- 96 -- 46
Tax-Exempt Money Market
Fund................... -- 11 8 -- -- --
Institutional Prime Ob-
ligations Fund......... -- 8 11 -- -- --
</TABLE>
7. Concentration of Credit Risk
The Tennessee Tax Exempt Fund and Limited Term Tennessee Tax Exempt Fund
invest substantially all of their assets in a non-diversified portfolio of tax-
exempt debt obligations primarily consisting of securities issued by the State
of Tennessee, its municipalities, counties and other taxing districts. The
issuers' abilities to meet their obligations may be affected by Tennessee
economic, regional and political developments.
The Florida Tax-Exempt Fund invests substantially all of its assets in a non-
diversified portfolio of tax- exempt debt obligations primarily consisting of
securities issued by the State of Florida, its municipalities, counties and
other taxing districts. The issuers' abilities to meet their obligations may be
affected by Florida economic, regional and political developments.
Continued
263
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
8. Eligible Distributions: (Unaudited)
The AmSouth Funds designate the following eligible distributions for the
dividends received deductions for corporations for the year ended July 31,
2000:
<TABLE>
<CAPTION>
Percentage
----------
<S> <C>
Value Fund........................................................... 100.00%
Growth Fund.......................................................... 20.25%
Capital Growth Fund.................................................. 6.40%
Large Cap Fund....................................................... 100.00%
Equity Income Fund................................................... 87.54%
Balanced Fund........................................................ 32.16%
Select Equity Fund................................................... 48.07%
Enhanced Market Fund................................................. 35.34%
Strategic Portfolios: Aggressive Growth Portfolio.................... 2.42%
Strategic Portfolios: Growth Portfolio............................... 2.35%
Strategic Portfolios: Growth and Income Portfolio.................... 2.13%
Strategic Portfolios: Moderate Growth and Income Portfolio........... 2.27%
</TABLE>
9. Exempt-Interest Income Designations (Unaudited):
The AmSouth Funds designate the following exempt-interest dividends for the
taxable year ended July 31, 2000 (amounts in thousands):
<TABLE>
<CAPTION>
Tax-Exempt
Distribution
------------
<S> <C>
Municipal Bond Fund................................................ $15,175
Florida Tax-Exempt Fund............................................ 2,961
Tennessee Tax-Exempt Fund.......................................... 1,872
Limited Term Tenessee Tax-Exempt Fund.............................. 374
Tax-Exempt Money Market Fund....................................... 3,982
</TABLE>
10. Federal Income Tax Information (Unaudited):
The accompanying table details distributions from long-term capital gains for
the following funds for the year ended July 31, 2000 (amounts in thousands):
<TABLE>
<CAPTION>
Long-
Term
Capital
Gains
--------
<S> <C>
Value Fund............................................................ $148,619
Growth Fund........................................................... 722
Equity Income Fund.................................................... 1,740
Balanced Fund......................................................... 39,196
Select Equity Fund.................................................... 216
Enhanced Market Fund.................................................. 60
Bond Fund............................................................. 713
Municipal Bond Fund................................................... 1,589
Florida Tax-Exempt Fund............................................... 196
</TABLE>
Continued
264
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2000
At July 31, 2000, the following Funds have capital loss carryforwards, which
are available to offset future capital gains, if any on securities transactions
to the extent provided for in the Code (amounts in thousands):
<TABLE>
<CAPTION>
Amount Expires
------ -------
<S> <C> <C>
Value Fund..................................................... $2,206 2007
Mid Cap Fund................................................... 315 2007
3,640 2008
Equity Income Fund............................................. 1,059 2007
283 2008
Strategic Portfolios: Aggressive Growth Portfolio.............. 92 2008
Strategic Portfolios: Growth and Income Portfolio.............. 348 2008
Strategic Portfolios: Moderate Growth and Income Portfolio..... 126 2008
Strategic Portfolios: Current Income Portfolio................. 15 2007
3 2008
Bond Fund...................................................... 145 2006
632 2007
697 2008
Limited Term Bond Fund......................................... 65 2002
730 2003
4 2004
304 2005
117 2006
339 2007
49 2008
Government Income Fund......................................... 158 2001
468 2002
499 2003
972 2004
278 2005
858 2007
Limited Term U.S. Government Fund.............................. 758 2001
378 2002
77 2008
Municipal Bond Fund............................................ 279 2007
Florida Tax-Exempt Fund........................................ 147 2008
Tennessee Tax-Exempt Fund...................................... 831 2006
898 2008
Limited Term Tennessee Tax-Exempt Fund......................... 293 2008
Prime Money Market Fund........................................ 1 2001
4 2005
52 2006
Treasury Reserve Money Market Fund............................. 6 2003
Tax-Exempt Money Market Fund................................... 123 2006
92 2007
</TABLE>
Under current tax law, capital losses realized after October 31, within the
Fund's fiscal year may be deferred and treated as occurring on the first day of
the following fiscal year. The following deferred losses will be treated as
arising on the first day of the fiscal year ended July 31, 2000 (amounts in
thousands):
<TABLE>
<S> <C>
Equity Income Fund...................................................... $ 899
Select Equity Fund...................................................... 1,648
Limited Term Bond Fund.................................................. 784
Government Income Fund.................................................. 3,162
Municipal Bond Fund..................................................... 54
Florida Tax-Exempt Fund................................................. 252
Tax-Exempt Money Market................................................. 172
Institutional Prime Obligation Fund..................................... 1
</TABLE>
265
<PAGE>
[LOGO OF AMSOUTH FUNDS]
ANNUAL REPORT
JULY 31, 2000
Investment Advisor Distributor
---------------------------------- -------------------------------
AMSOUTH BISYS Fund Services
AmSouth Bank 3435 Stelzer Road
1901 Sixth Avenue North Columbus, OH 43219
Birmingham, AL 35203
Legal Counsel
Investment Sub-Advisors -------------------------------
----------------------------------
Ropes & Gray
(Capital Growth Fund Only) One Franklin Square
Peachtree Asset Management 1301 K Street, N.W.
A Division of Salomon Smith Barney Suite 800 East
Fund Management, LLC Washington, DC 20005
One Peachtree Center
Atlanta, GA 30308 Transfer Agent
-------------------------------
BISYS Fund Services Ohio, Inc.
(Mid Cap Fund Only) 3435 Stelzer Road
Bennett Lawrence Management, LLC Columbus, OH 43219
757 3rd Avenue, 19th Floor
New York, NY 10017 Auditors
-------------------------------
(Small Cap Fund Only) Ernst & Young LLP
Sawgrass Asset Management, LLC 10 West Broad St.
4337 Pablo Oaks Court Columbus, OH 43215
Jacksonville, FL 32224
(Equity Income Fund Only)
Rockhaven Asset Management, LLC
100 First Avenue, Suite 1050
Pittsburgh, PA 15222
(Select Equity and Enhanced Market Funds)
Oakbrook Investments, LLC
701 Warrenville Road, Suite 135
Lisle, IL 60532
(International Equity Fund Only)
Lazard Asset Management
30 Rockefeller Plaza 9/00
New York, NY 10112
