<PAGE>
<TABLE>
<CAPTION>
NORTH AMERICAN FUNDS
INDEX TO SEMI-ANNUAL REPORT
- --------------------------------------------------
Page
----
<S> <C>
Results of Special Meeting of Shareholders.. ii
Statements of Assets and Liabilities........ 1
Statements of Operations.................... 7
Statements of Changes in Net Assets......... 10
Financial Highlights........................ 14
Portfolio of Investments:
International Small Cap Fund............. 36
Small/Mid Cap Fund....................... 37
Global Equity Fund....................... 39
Growth Equity Fund....................... 40
International Growth and Income Fund..... 42
Growth and Income Fund................... 45
Equity-Income Fund....................... 47
Balanced Fund............................ 49
Strategic Income Fund.................... 51
Investment Quality Bond Fund............. 55
National Municipal Bond Fund............. 57
U.S. Government Securities Fund.......... 59
Money Market Fund........................ 60
Notes to Financial Statements............... 61
</TABLE>
<PAGE>
Results of Special Meeting of Shareholders
- --------------------------------------------------------------------------------
On December 20, 1996 a Special Meeting of Shareholders of the North
American Funds (the "Fund") was held for the purpose of considering and voting
upon:
Proposal 1 Election of Don B. Allen, Charles L. Bardelis, Samuel Hoar, Robert
- ---------- J. Myers, John D. Richardson and F. David Rolwing as Trustees of
the Fund;
Proposal 2 Approval of a new investment subadvisory agreement between NASL
- ---------- Financial Services, Inc., the Fund's investment adviser (the
"Adviser") and Morgan Stanley Asset Management Inc. for the Global
Equity Fund (only shareholders of the Global Equity Fund voted on
this proposal);
Proposal 3A Approval of a new investment subadvisory agreement between the
- ----------- Adviser and T. Rowe Price Associates, Inc. ("T. Rowe Price") for
the Equity-Income Fund (formerly known as the Value Equity Fund)
(only shareholders of the Equity-Income Fund voted on this
proposal);
Proposal 3B Approval of an amendment to the advisory agreement between the
- ----------- Fund and the Adviser for the Equity-Income Fund (only shareholders
of the Equity-Income Fund voted on this proposal);
Proposal 4A Approval of an amended subadvisory agreement between the Adviser
- ----------- and Founders Asset Management, Inc. ("Founders") for the Balanced
Fund (only shareholders of the Balanced Fund voted on this
proposal);
Proposal 4B Approval of an amendment to the advisory agreement between the
- ----------- Fund and the Adviser for the Balanced Fund (only shareholders of
the Balanced Fund voted on this proposal);
Proposal 5 Approval of a new investment subadvisory agreement between the
- ---------- Adviser and Manufacturers Adviser Corporation for the Money Market
Fund (only shareholders of the Money Market Fund voted on this
proposal);
Proposal 6 Approval of a change to the investment objective of the Equity-
- ---------- Income Fund to reflect the proposed investment strategy of T. Rowe
Price (only shareholders of the Equity-Income Fund voted on this
proposal);
Proposal 7 Approval of a change to the investment objective of the Balanced
- ---------- Fund to reflect the proposed investment strategy of Founders (only
shareholders of the Balanced Fund voted on this proposal);
Proposal 8 Approval of a proposal to permit the Adviser, in the future, to
- ---------- select and contract with subadvisers for the Portfolios after
obtaining the approval of the Board of Trustees but not of
shareholders;
Proposal 9 Approval of Coopers & Lybrand L.L.P. as independent accountants
- ---------- for the Fund for the fiscal year ending October 31, 1997.
At the meeting, all proposals were approved by shareholders of each Portfolio.
The number of votes cast FOR or AGAINST or which ABSTAINED from voting is set
forth below for each proposal:
<TABLE>
<CAPTION>
Shares
------------------------------------------
FOR Vote Withheld
-------------------- ---------------------
Proposal 1
----------
<S> <C> <C>
All Series of the Fund 261,636,393 10,969,413
</TABLE>
<TABLE>
<CAPTION>
Shares
-----------------------------------------------------------------
Portfolio FOR AGAINST ABSTAINED
-------------- -------------------- -------------------- ---------------------
Proposal 2
----------
<S> <C> <C> <C>
Global Equity Fund 4,544,790 36,299 207,635
Proposal 3A
-----------
Equity-Income Fund 3,232,049 75,808 275,865
</TABLE>
ii
<PAGE>
Results of Special Meeting of Shareholders
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares
-----------------------------------------------------------------
Portfolio FOR AGAINST ABSTAINED
-------------- ------------------- -------------------- ---------------------
<S> <C> <C> <C>
Proposal 3B
-----------
Equity-Income Fund 3,091,950 199,364 292,407
Proposal 4A
-----------
Balanced Fund 3,356,411 83,385 295,216
Proposal 4B
-----------
Balanced Fund 3,252,053 180,455 302,503
Proposal 5
----------
Money Market Fund 10,776,331 51,760 402,808
Proposal 6
----------
Equity-Income Fund 3,180,389 116,456 286,875
Proposal 7
----------
Balanced Fund 3,361,105 90,586 283,319
Proposal 8
----------
International Small Cap Fund 408,082 15,259 18,326
Small/Mid Cap Fund 557,273 21,179 41,380
Global Equity Fund 3,366,016 127,243 231,505
Growth Equity Fund 399,861 6,726 23,088
International Growth and Income Fund 978,682 53,862 94,680
Growth and Income Fund 3,129,842 136,768 227,169
Equity-Income Fund 3,090,790 197,186 295,745
Balanced Fund 3,284,312 141,947 308,751
Strategic Income Fund 2,838,160 150,165 253,588
Investment Quality Bond Fund 1,035,746 57,862 87,210
National Municipal Bond Fund 834,640 45,138 95,899
U.S. Government Securities Fund 4,672,141 297,134 420,211
Money Market Fund 9,923,589 496,419 446,481
Proposal 9
----------
All Series of the Fund 42,910,342 283,066 2,240,886
</TABLE>
iii
<PAGE>
NORTH AMERICAN FUNDS
STATEMENTS OF ASSETS AND LIABILITIES - APRIL 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International Small/Mid Cap Global Equity Growth Equity
Small Cap Fund Fund Fund Fund
--------------- --------------- -------------- --------------
ASSETS
<S> <C> <C> <C> <C>
Investments in securities, at value* (Includes
repurchase agreements of $3,398,000 and
$3,965,000 in the International Small Cap and
Growth Equity Funds, respectively)
(See accompanying portfolio of
investments)...................................... $16,207,512 $20,548,532 $113,707,345 $17,238,572
Receivable for forward foreign currency contracts to
sell (Notes 2 and 7).............................. 74,841 ------ 12,364,202 ------
Forward foreign currency contracts to buy, at value
(Cost: $68,860) (Notes 2 and 7)................... 68,137 ------ ------ ------
Cash................................................ 11,622 ------ ------ 160,601
Foreign currency (Cost: $58,210, $34,294 and $2,796
in the International Small Cap, Global Equity and
Growth Equity Funds, respectively)................ 57,760 ------ 33,953 2,714
Receivables:
Investments sold.............................. 74,604 383,255 ------ 73,444
Fund shares sold.............................. 47,779 7,000 39,076 106,997
Dividends..................................... 22,461 4,730 532,218 17,204
Interest...................................... 472 2,573 ------ 551
Foreign tax withholding reclaims.............. 2,823 ------ 69,764 411
From adviser (Note 5)......................... 5,073 9,815 53,060 7,665
Other assets........................................ 15,608 16,587 18,588 17,957
--------------- --------------- --------------- ---------------
Total assets............................. 16,588,692 20,972,492 126,818,206 17,626,116
--------------- --------------- --------------- ---------------
<CAPTION>
LIABILITIES
<S> <C> <C> <C> <C>
Forward foreign currency contracts to sell, at value
(Cost: $74,841 and $12,364,202 in the International
Small Cap and Global Equity Funds, respectively)
(Notes 2 and 7)................................... 74,604 ------ 11,449,797 ------
Payables:
Forward foreign currency contracts to buy
(Notes 2 and 7)............................. 68,860 ------ ------ ------
Investments purchased......................... 117,412 622,068 ------ 90,644
Fund shares redeemed.......................... 31,769 8,790 70,154 10,754
Dividend and interest withholding tax......... 4,412 ------ 59,531 810
Investment adviser............................ 13,850 15,379 83,859 12,353
Custodian and transfer agent fees............. 2,593 2,270 66,483 ------
Due to custodian.............................. ------ 12 75,918 ------
Other accrued expenses........................ ------ 174 1,274 ------
--------------- --------------- --------------- ---------------
Total liabilities........................ 313,500 648,693 11,807,016 114,561
--------------- --------------- --------------- ---------------
NET ASSETS.......................................... $16,275,192 $20,323,799 $115,011,190 $17,511,555
=============== =============== =============== ===============
Net assets consist of:
Undistributed net investment income (loss) (Note 2) ($61,969) ($149,272) ($409,677) $26,640
Accumulated undistributed net realized gain
(loss) on investments....................... (461,920) (1,498,055) 1,567,765 (129,223)
Unrealized appreciation (depreciation) on:
Investments................................. 1,060,329 679,623 9,965,925 1,498,785
Foreign currency and forward foreign currency
contracts................................. (714) ------ 901,760 (96)
Capital shares at par value of $.001 (Note 3). 1,190 1,666 7,966 1,202
Additional paid-in capital.................... 15,738,276 21,289,837 102,977,451 16,114,247
--------------- --------------- --------------- ---------------
Net assets............................... $16,275,192 $20,323,799 $115,011,190 $17,511,555
=============== =============== =============== ===============
*Investments in securities, at identified cost (Note 2) $15,147,183 $19,868,909 $103,741,420 $15,739,787
=============== =============== =============== ===============
</TABLE>
The accompanying notes are an integral part of the financial statements.
1
<PAGE>
NORTH AMERICAN FUNDS
STATEMENTS OF ASSETS AND LIABILITIES - APRIL 30, 1997 (Unaudited) - continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International Small/Mid Cap Global Equity Growth Equity
Small Cap Fund Fund Fund Fund
--------------- -------------- -------------- --------------
NET ASSET VALUES
<S> <C> <C> <C> <C>
Class A Shares
Net assets at value............................... $2,658,648 $2,989,011 $27,831,237 $2,420,695
Shares outstanding................................ 193,136 243,191 1,915,816 165,372
Net asset value (NAV) and redemption price per share $13.77 $12.29 $14.53 $14.64
====== ====== ====== ======
Public offering price per share (100/95.25 of NAV)
On sales of $100,000 or more the offering price
is reduced........................................ $14.46 $12.90 $15.25 $15.37
====== ====== ====== ======
Class B Shares
Net assets at value............................... $6,947,773 $7,526,559 $26,797,568 $6,972,654
Shares outstanding................................ 508,528 617,676 1,863,791 478,545
Net asset value, offering price and redemption price
per share......................................... $13.66 $12.19 $14.38 $14.57
====== ====== ====== ======
Class C Shares
Net assets at value............................... $6,668,771 $9,808,229 $60,382,385 $8,118,207
Shares outstanding................................ 488,284 804,250 4,185,965 557,408
Net asset value, offering price and redemption price
per share......................................... $13.66 $12.20 $14.42 $14.56
====== ====== ====== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
NORTH AMERICAN FUNDS
STATEMENTS OF ASSETS AND LIABILITIES - APRIL 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International
Growth and Growth and Equity-Income Balanced
Income Fund Income Fund Fund Fund
--------------- ------------- ---------------- ------------
ASSETS
<S> <C> <C> <C> <C>
Investments in securities, at value* (See
accompanying portfolio of investments)............ $28,282,499 $150,843,504 $146,394,296 $97,239,137
Receivable for forward foreign currency contracts to
sell (Notes 2 and 7).............................. 10,273,551 ------ ------ ------
Forward foreign currency contracts to buy, at value
(Cost: $3,893,459) (Notes 2 and 7)................ 3,822,769 ------ ------ ------
Cash................................................ 901 177 821 ------
Foreign currency (Cost: $1,666,522, $1,818, $19,854
and $108,802 in the International Growth and
Income, Growth and Income, Equity-Income and
Balanced Funds, respectively)..................... 1,656,253 1,518 19,788 106,989
Receivables:
Investments sold.............................. 162,597 ------ 318,137 8,637
Fund shares sold.............................. 2,525 108,775 26,867 11,023
Dividends..................................... 94,635 276,737 253,634 84,445
Interest...................................... 115,975 326 29 478,943
Foreign tax withholding reclaims.............. 40,868 ------ 3,242 6,784
From adviser (Note 5)......................... 3,166 22,866 15,934 17,358
Deferred organization expenses (Note 2)............. 4,379 ------ ------ ------
Other assets........................................ 16,916 23,524 23,078 17,712
-------------- -------------- -------------- --------------
Total assets............................. 44,477,034 151,277,427 147,055,826 97,971,028
-------------- -------------- -------------- --------------
<CAPTION>
LIABILITIES
<S> <C> <C> <C> <C>
Forward foreign currency contracts to sell, at value
(Cost: $10,273,551) (Notes 2 and 7)............... 10,012,848 ------ ------ ------
Payables:
Forward foreign currency contracts to buy
(Notes 2 and 7)............................. 3,893,459 ------ ------ ------
Investments purchased......................... 67,531 647,825 271,119 1,164,337
Fund shares redeemed.......................... 9,410 188,719 61,413 82,982
Dividend and interest withholding tax......... 11,900 2,958 315 2,393
Investment adviser............................ 22,144 81,663 86,423 57,424
Custodian and transfer agent fees............. 10,477 36,678 52,143 38,011
Due to custodian.............................. ------ ------ ------ 62,879
-------------- -------------- -------------- --------------
Total liabilities........................ 14,027,769 957,843 471,413 1,408,026
-------------- -------------- -------------- --------------
NET ASSETS.......................................... $30,449,265 $150,319,584 $146,584,413 $96,563,002
============== ============== ============== ==============
Net assets consist of:
Undistributed net investment
income (loss) (Note 2)...................... ($64,947) $231,301 $1,041,620 $931,071
Accumulated undistributed net realized gain
on investments.............................. 1,469,181 5,695,295 3,415,537 10,098,957
Unrealized appreciation (depreciation) on:
Investments................................. (38,463) 38,495,614 12,148,998 1,932,009
Foreign currency and forward foreign currency
contracts................................. 169,328 (300) (76) (1,848)
Capital shares at par value of $.001 (Note 3). 2,822 7,986 9,636 8,426
Additional paid-in capital.................... 28,911,344 105,889,688 129,968,698 83,594,387
-------------- -------------- -------------- --------------
Net assets............................... $30,449,265 $150,319,584 $146,584,413 $96,563,002
============== ============== ============== ==============
*Investments in securities, at identified cost (Note 2) $28,320,962 $112,347,890 $134,245,298 $95,307,128
============== ============== ============== ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
NORTH AMERICAN FUNDS
STATEMENTS OF ASSETS AND LIABILITIES - APRIL 30, 1997 (Unaudited) - continued
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International
Growth and Growth and Equity-Income
Income Fund Income Fund Fund Balanced Fund
--------------- --------------- -------------- --------------
NET ASSET VALUES
<S> <C> <C> <C> <C>
Class A Shares
Net assets at value............................... $5,173,255 $22,514,718 $30,640,119 $12,014,829
Shares outstanding................................ 478,452 1,194,771 2,007,370 1,052,464
Net asset value (NAV) and redemption price per share $10.81 $18.84 $15.26 $11.42
====== ====== ====== ======
Public offering price per share (100/95.25 of NAV)
On sales of $100,000 or more the offering price
is reduced........................................ $11.35 $19.78 $16.02 $11.99
====== ====== ====== ======
Class B Shares
Net assets at value............................... $16,243,722 $43,465,762 $30,577,828 $16,526,127
Shares outstanding................................ 1,505,867 2,315,341 2,019,312 1,453,405
Net asset value, offering price and redemption price
per share......................................... $10.79 $18.77 $15.14 $11.37
====== ====== ====== ======
Class C Shares
Net assets at value............................... $9,032,288 $84,339,104 $85,366,466 $68,022,046
Shares outstanding................................ 837,229 4,475,855 5,608,722 5,920,042
Net asset value, offering price and redemption price
per share......................................... $10.79 $18.84 $15.22 $11.49
====== ====== ====== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
NORTH AMERICAN FUNDS
STATEMENTS OF ASSETS AND LIABILITIES - APRIL 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Investment National U.S.
Strategic Quality Municipal Government Money
Income Bond Bond Securities Market
Fund Fund Fund Fund Fund
------------ ------------ ------------ ------------- ------------
ASSETS
<S> <C> <C> <C> <C> <C>
Investments in securities, at value* (Includes
repurchase agreements of $11,816,000 and
$29,577,000 in the Strategic Income and U.S.
Government Securities Funds, respectively)
(See accompanying portfolio of investments)....... $84,662,645 $19,094,058 $18,272,616 $128,537,096 $24,618,300
Receivable for forward foreign currency contracts
to sell (Notes 2 and 7)........................... 3,828,619 ------ ------ ------ ------
Forward foreign currency contracts to buy, at value
(Cost: $183,081) (Notes 2 and 7).................. 181,430 ------ ------ ------ ------
Cash............................................... 958 868 78,790 338 418
Foreign currency (Cost: $5,997).................... 5,985 ------ ------ ------ ------
Receivables:
Investments sold.............................. 1,327,500 185,768 ------ 28,269,404 ------
Fund shares sold.............................. 313,224 2,524 ------ 100,000 1,882
Dividends..................................... 867 ------ ------ ------ ------
Interest...................................... 1,394,382 324,686 298,712 463,098 ------
Foreign tax withholding reclaims.............. 8,601 ------ ------ ------ ------
From adviser (Note 5)......................... 5,964 4,359 4,782 50,754 6,076
Deferred organization expenses (Note 2)............ 3,778 ------ 3,128 ------ ------
Other assets....................................... 18,053 14,094 8,042 15,661 17,566
------------ ------------ ------------ ------------- ------------
Total assets............................ 91,752,006 19,626,357 18,666,070 157,436,351 24,644,242
------------ ------------ ------------ ------------- ------------
LIABILITIES
Forward foreign currency contracts to sell, at
value (Cost: $3,828,619) (Notes 2 and 7).......... 3,797,570 ------ ------ ------ ------
Payables:
Forward foreign currency contracts to buy
(Notes 2 and 7)............................... 183,081 ------ ------ ------ ------
Investments purchased.......................... 11,191,953 792,128 540,874 66,615,117 ------
Fund shares redeemed........................... 17,682 30,111 9,564 36,947 ------
Dividends...................................... 501,684 98,714 69,589 483,834 99,384
Dividend and interest withholding tax.......... 623 ------ ------ ------ ------
Investment adviser............................. 44,798 9,123 8,876 52,136 5,184
Custodian and transfer agent fees.............. 19,367 7,891 9,841 34,347 9,985
Other accrued expenses......................... ------ ------ ------ 1,208 671
Deferred mortgage dollar roll income............... 7,048 ------ ------ 32,487 ------
------------ ------------ ------------ ------------- ------------
Total liabilities....................... 15,763,806 937,967 638,744 67,256,076 115,224
------------ ------------ ------------ ------------- ------------
NET ASSETS......................................... $75,988,200 $18,688,390 $18,027,326 $90,180,275 $24,529,018
============ ============ ============ ============= ============
Net assets consist of:
Undistributed net investment
income (loss) (Note 2)...................... $72,326 $19,271 ($474) ($234,978) ------
Accumulated undistributed net realized
loss on investments......................... (884,237) (540,628) (319,927) (3,406,075) ------
Unrealized appreciation (depreciation) on:
Investments................................. 1,826,217 (214,232) 379,653 (354,629) ------
Foreign currency and forward foreign
currency contracts......................... 28,204 ------ ------ ------ ------
Capital shares at par value of $.001
(Note 3)................................... 7,971 1,841 1,857 9,303 $24,529
Additional paid-in capital................... 74,937,719 19,422,138 17,966,217 94,166,654 24,504,489
------------ ------------ ------------ ------------- ------------
Net assets.............................. $75,988,200 $18,688,390 $18,027,326 $90,180,275 $24,529,018
============ ============ ============ ============= ============
*Investments in securities, at identified cost
(Note 2).......................................... 82,836,428 19,308,290 17,892,963 128,891,725 24,618,300
============ ============ ============ ============= ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
NORTH AMERICAN FUNDS
STATEMENTS OF ASSETS AND LIABILITIES - APRIL 30, 1997 (Unaudited) - continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Investment National U.S.
Strategic Quality Municipal Government Money
Income Bond Bond Securities Market
Fund Fund Fund Fund Fund
------------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUES
Class A Shares
Net assets at value............................... $15,955,412 $7,582,769 $6,573,419 $58,676,316 $10,537,654
Shares outstanding................................ 1,673,492 746,527 677,329 6,053,817 10,537,654
Net asset value (NAV) and redemption price per share $9.53 $10.16 $9.70 $9.69 $1.00
===== ====== ===== ===== =====
Public offering price per share (100/95.25 of NAV)
On sales of $100,000 or more the offering price
is reduced........................................ $10.01 $10.67 $10.18 $10.17 -----
====== ====== ====== ====== =====
Class B Shares
Net assets at value............................... $32,605,367 $4,448,513 $6,303,424 $17,296,384 $3,643,526
Shares outstanding................................ 3,420,365 438,275 649,469 1,784,362 3,643,526
Net asset value, offering price and redemption price
per share......................................... $9.53 $10.15 $9.71 $9.69 $1.00
===== ====== ===== ===== =====
Class C Shares
Net assets at value............................... $27,427,421 $6,657,108 $5,150,483 $14,207,575 $10,347,838
Shares outstanding................................ 2,877,074 655,940 530,673 1,465,743 10,347,838
Net asset value, offering price and redemption price
per share......................................... $9.53 $10.15 $9.71 $9.69 $1.00
===== ====== ===== ===== =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
NORTH AMERICAN FUNDS
STATEMENTS OF OPERATIONS - FOR THE SIX MONTHS ENDED APRIL 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International Global Growth
Small Cap Small/Mid Equity Equity
Fund Cap Fund Fund Fund
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investment Income:
Interest........................................ $66,306 $40,495 $13,279 $55,296
Dividends (Net of $7,176, $1,041, $114,916 and
$1,705 withholding tax in the International
Small Cap, Small/Mid Cap, Global Equity and
Growth Equity Funds, respectively)............ 46,208 30,187 1,271,662 60,975
------------- ------------- ------------- -------------
Total income............................. 112,514 70,682 1,284,941 116,271
------------- ------------- ------------- -------------
Expenses:
Distribution for Class A........................ 4,493 5,338 47,441 4,367
Distribution for Class B........................ 30,090 37,105 133,068 29,428
Distribution for Class C........................ 30,984 46,512 317,235 38,588
Investment adviser fee (Note 5)................. 77,609 91,453 527,263 72,442
Custodian fee................................... 15,360 21,374 46,868 16,822
Transfer agent fee.............................. 13,404 20,694 125,502 13,448
Accounting/administration....................... 10,696 14,901 92,782 11,737
Audit and legal fees............................ 2,346 3,232 20,987 2,572
Miscellaneous................................... 19,248 20,581 56,348 19,184
------------- ------------- ------------- -------------
Expenses before reimbursement
by investment adviser......................... 204,230 261,190 1,367,494 208,588
Reimbursement of expenses by
investment adviser (Note 5)................... 24,079 41,236 49,564 31,539
------------- ------------- ------------- -------------
Net expenses............................. 180,151 219,954 1,317,930 177,049
------------- ------------- ------------- -------------
Net investment loss...................... (67,637) (149,272) (32,989) (60,778)
------------- ------------- ------------- -------------
Realized and unrealized gain (loss) on investments
and foreign currency:
Net realized gain (loss) on:
Investment transactions....................... (394,378) (726,448) 1,791,868 299,961
Foreign currency and forward foreign
currency contracts.......................... (9,308) ------ (47,300) (2,616)
Change in unrealized appreciation (depreciation) on:
Investments................................... 701,082 83,461 10,764,656 795,500
Translation of foreign currency and forward
foreign currency contracts.................. (936) ------ 981,825 (108)
------------- ------------- ------------- -------------
Net gain (loss) on investments and
foreign currency....................... 296,460 (642,987) 13,491,049 1,092,737
------------- ------------- ------------- -------------
Net increase (decrease) in net
assets resulting from operations.................. $228,823 ($792,259) $13,458,060 $1,031,959
============= ============= ============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
<TABLE>
<CAPTION>
NORTH AMERICAN FUNDS
STATEMENTS OF OPERATIONS - FOR THE SIX MONTHS ENDED APRIL 30, 1997 (Unaudited)
- ----------------------------------------------------------------------------------------------------------------------------------
International
Growth and Growth and Equity-
Income Income Income Balanced
Fund Fund Fund Fund
------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
Investment Income:
Interest............................................. $ 138,440 $ 72,396 $ 372,416 $ 1,395,649
Dividends (Net of $28,930, $5,095, $20,948 and
$9,682 withholding tax in the International Growth
and Income, Growth and Income, Equity-Income
and Balanced Funds, respectively).................. 226,900 1,448,863 2,091,048 725,280
------------- -------------- -------------- -------------
Total income.................................. 365,340 1,521,259 2,463,464 2,120,929
------------- -------------- -------------- -------------
Expenses:
Distribution for Class A............................. 8,845 36,610 52,890 19,634
Distribution for Class B............................. 78,538 196,980 144,293 81,502
Distribution for Class C............................. 46,050 401,947 432,951 353,710
Investment adviser fee (Note 5)...................... 134,874 487,279 524,404 360,186
Custodian fee........................................ 11,990 28,141 29,135 19,652
Transfer agent fee................................... 32,076 111,693 134,946 85,003
Accounting/administration............................ 23,238 106,159 112,981 77,853
Audit and legal fees................................. 5,181 23,827 25,436 17,293
Amortization of deferred organization expenses
(Note 2)........................................... 806 ------ ------ ------
Miscellaneous........................................ 15,064 25,415 26,544 21,875
------------- -------------- -------------- -------------
Expenses before reimbursement
by investment adviser.............................. 356,662 1,418,051 1,483,580 1,036,708
Reimbursement of expenses by
investment adviser (Note 5)........................ 12,610 85,616 132,309 94,837
------------- -------------- -------------- -------------
Net expenses.................................. 344,052 1,332,435 1,351,271 941,871
------------- -------------- -------------- -------------
Net investment income......................... 21,288 188,824 1,112,193 1,179,058
------------- -------------- -------------- -------------
Realized and unrealized gain on investments and
foreign currency:
Net realized gain (loss) on:
Investment transactions............................ 1,225,174 5,701,211 4,187,183 10,143,628
Foreign currency and forward foreign
currency contracts............................... 288,309 ------ 595 (38,575)
Change in unrealized appreciation (depreciation) on:
Investments........................................ (659,339) 12,143,658 10,004,062 (5,643,346)
Translation of foreign currency and forward
foreign currency contracts....................... 78,309 (175) (76) (2,001)
------------- -------------- -------------- -------------
Net gain on investments
and foreign currency........................ 932,453 17,844,694 14,191,764 4,459,706
------------- -------------- -------------- -------------
Net increase in net assets
resulting from operations.............................. $ 953,741 $18,033,518 $15,303,957 $ 5,638,764
============= ============== ============== =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
NORTH AMERICAN FUNDS
STATEMENTS OF OPERATIONS - FOR THE SIX MONTHS ENDED APRIL 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Investment National U.S.
Strategic Quality Municipal Government Money
Income Bond Bond Securities Market
Investment Income: Fund Fund Fund Fund Fund
------------- ---------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Interest (Net of $65 withholding tax in the
Strategic IncomeFund)......................... $3,290,683 $784,341 $544,249 $3,840,986 $558,067
Dividends....................................... 2,434 194 ------ ------ ------
------------- ---------- ----------- ----------- -------------
Total income............................. 3,293,117 784,535 544,249 3,840,986 558,067
Expenses: ------------- ---------- ----------- ----------- -------------
Distribution for Class A........................ 25,677 14,265 5,063 116,273 ------
Distribution for Class B........................ 159,473 23,159 30,455 91,483 ------
Distribution for Class C........................ 124,494 35,968 27,057 83,033 ------
Investment adviser fee (Note 5)................. 262,527 59,931 54,759 304,035 20,664
Custodian fee................................... 28,586 3,995 3,651 20,269 4,133
Transfer agent fee.............................. 48,183 23,252 10,519 82,974 31,677
Accounting/administration....................... 53,919 16,142 14,620 83,895 15,324
Audit and legal fees............................ 12,015 3,584 3,286 18,691 3,336
Amortization of deferred organization expenses
(Note 2)...................................... 1,247 ------ 1,247 ------ ------
Miscellaneous................................... 17,503 13,218 11,911 21,944 17,154
------------- ---------- ----------- ----------- -------------
Expenses before reimbursement
by investment adviser......................... 733,624 193,514 162,568 822,597 92,288
Reimbursement of expenses by
investment adviser (Note 5)................... 14,703 29,795 23,355 75,366 40,627
------------- ---------- ----------- ----------- -------------
Net expenses............................. 718,921 163,719 139,213 747,231 51,661
------------- ---------- ----------- ----------- -------------
Net investment income.................... 2,574,196 620,816 405,036 3,093,755 506,406
------------- ---------- ----------- ----------- -------------
Realized and unrealized loss on investments and
foreign currency:
Net realized gain (loss) on:
Investment transactions....................... (849,586) 19,976 105,313 (1,111,094) ------
Foreign currency and forward foreign
currency contracts.......................... (4,536) ------ ------ ------ ------
Change in unrealized appreciation (depreciation) on:
Investments................................... 718,603 (373,300) (152,383) (136,450) ------
Translation of foreign currency and forward
foreign currency contracts.................. 80,443 ------ ------ ------ ------
------------- ---------- ----------- ----------- -------------
Net loss on investments and
foreign currency....................... (55,076) (353,324) (47,070) (1,247,544) ------
------------- ---------- ----------- ----------- -------------
Net increase in net assets
resulting from operations......................... $2,519,120 $267,492 $357,966 $1,846,211 $506,406
============= ========== =========== =========== =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
NORTH AMERICAN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International
Small Cap Fund Small/Mid Cap Fund
---------------------------- ---------------------------
Six Months Six Months
Ended 03/04/96* Ended 03/04/96*
04/30/97 to 04/30/97 to
(Unaudited) 10/31/96 (Unaudited) 10/31/96
--------------- ------------ --------------- -----------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income (loss) ...... ($67,637) ($2,132) ($149,272) ($64,498)
Net realized gain (loss) on:
Investment transactions ......... (394,378) (62,589) (726,448) (771,607)
Foreign currency and forward
foreign currency contracts ..... (9,308) (2,661) -- --
Change in unrealized appreciation
(depreciation) on:
Investments ..................... 701,082 359,247 83,461 596,162
Foreign currency and forward
foreign currency contracts ..... (936) 222 -- --
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations ........... 228,823 292,087 (792,259) (239,943)
Net equalization credits
(charges) (Note 2) ................. 1,146 4,522 -- --
Distribution to shareholders from:
Net investment income
Class A ......................... -- -- -- --
Class B ......................... -- -- -- --
Class C ......................... -- -- -- --
Net realized gains on investments
and foreign currency transactions
Class A ......................... -- -- -- --
Class B ......................... -- -- -- --
Class C ......................... -- -- -- --
Increase (decrease) in net assets from
capital share transactions (Note 3)... 3,340,551 12,408,063 3,249,973 18,106,028
------------ ------------ ------------ ------------
Increase (decrease) in net assets .... 3,570,520 12,704,672 2,457,714 17,866,085
Net assets at beginning of period .... 12,704,672 -- 17,866,085 --
------------ ------------ ------------ ------------
Net assets at end of period .......... $16,275,192 $12,704,672 $20,323,799 $17,866,085
============ ============ ============ ============
Undistributed net
investment income (loss) ............ ($61,969) $4,522 ($149,272) --
============ ============ ============ ============
<CAPTION>
Global Equity Fund Growth Equity Fund
--------------------------- ---------------------------
Six Months Six Months
Ended Year Ended 03/04/96*
04/30/97 Ended 04/30/97 to
(Unaudited) 10/31/96 (Unaudited) 10/31/96
-------------- ------------- -------------- -----------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income (loss) ...... ($32,989) ($1,061,996) ($60,778) $187,173
Net realized gain (loss) on:
Investment transactions ......... 1,791,868 20,253,188 299,961 (423,274)
Foreign currency and forward
foreign currency contracts ..... (47,300) (2,845,571) (2,616) (4,508)
Change in unrealized appreciation
(depreciation) on:
Investments ..................... 10,764,656 (8,931,531) 795,500 703,285
Foreign currency and forward
foreign currency contracts ..... 981,825 384,459 (108) 12
------------- ------------- ------------ ------------
Net increase (decrease) in net assets
resulting from operations ........... 13,458,060 7,798,549 1,031,959 462,688
Net equalization credits
(charges) (Note 2) ................. (29,995) (222,342) 33,912 54,433
Distribution to shareholders from:
Net investment income
Class A ......................... (89,790) (370,905) (33,593) --
Class B ......................... -- (247,709) (63,216) --
Class C ......................... -- (588,999) (90,077) --
Net realized gains on investments
and foreign currency transactions
Class A ......................... (2,895,690) -- -- --
Class B ......................... (2,872,442) -- -- --
Class C ......................... (7,051,972) -- -- --
Increase (decrease) in net assets from
capital share transactions (Note 3).. (1,921,907) (20,505,106) 3,146,524 12,968,925
------------- ------------- ------------ ------------
Increase (decrease) in net assets .... (1,403,736) (14,136,512) 4,025,509 13,486,046
Net assets at beginning of period .... 116,414,926 130,551,438 13,486,046 --
Net assets at end of period .......... $115,011,190 $116,414,926 $17,511,555 $13,486,046
============= ============= ============ ============
Undistributed net
investment income (loss) ............ ($409,677) ($256,903) $26,640 $240,392
============= ============= ============ ============
</TABLE>
- ----------------------------
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
NORTH AMERICAN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------------
Equity-Income Fund
(formerly, the
International Value Equity Fund,
Growth and Income Fund Growth and Income Fund formerly, the Growth Fund)
----------------------- ------------------------- --------------------------
Six Months Six Months Six Months
Ended Year Ended Year Ended Year
04/30/97 Ended 04/30/97 Ended 04/30/97 Ended
(Unaudited) 10/31/96 (Unaudited) 10/31/96 (Unaudited) 10/31/96
----------- ----------- ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment income............... $21,288 $159,225 $188,824 $606,189 $1,112,193 $616,758
Net realized gain (loss) on:
Investment transactions........... 1,225,174 3,404,649 5,701,211 7,749,188 4,187,183 28,962,312
Foreign currency and forward foreign
currency contracts.............. 288,309 (986,073) ------ (40,894) 595 (6,379)
Change in unrealized appreciation
(depreciation) on:
Investments....................... (659,339) 947,754 12,143,658 12,987,230 10,004,062 (6,846,565)
Foreign currency and forward foreign
currency contracts.............. 78,309 (284,107) (175) 261 (76) ------
----------- ----------- ------------ ------------ ------------- ------------
Net increase in net assets
resulting from operations............
953,741 3,241,448 18,033,518 21,301,974 15,303,957 22,726,126
Net equalization credits (Note 2)......
20,683 6,318 10,550 14,902 203,318 44,707
Distribution to shareholders from:
Net investment income
Class A........................... (83,820) (56,090) (89,347) (186,049) (307,636) (216,448)
Class B........................... (180,637) (52,389) (53,469) (205,020) (123,016) (118,093)
Class C........................... (105,696) (34,562) (95,738) (430,616) (297,896) (187,978)
Net realized gains on investments and
foreign currency transactions
Class A........................... (332,915) (75,054) (1,114,556) (105,286) (6,143,038) (1,874,732)
Class B........................... (1,034,399) (104,218) (2,130,500) (184,505) (5,815,447) (1,711,898)
Class C........................... (616,566) (73,099) (4,448,214) (525,694) (17,766,497) (6,634,855)
Increase in net assets from capital share
transactions (Note 3).................. 2,803,720 4,531,170 12,370,571 13,771,553 22,147,482 1,737,386
----------- ----------- ------------ ------------ ------------- ------------
Increase in net assets................. 1,424,111 7,383,524 22,482,815 33,451,259 7,201,227 13,764,215
Net assets at beginning of period...... 29,025,154 21,641,630 127,836,769 94,385,510 139,383,186 125,618,971
----------- ----------- ------------ ------------ ------------- ------------
Net assets at end of period............ $30,449,265 $29,025,154 $150,319,584 $127,836,769 $146,584,413 $139,383,186
=========== =========== ============ ============ ============= ============
Undistributed net
investment income (loss)............. ($64,947) $263,235 $231,301 $270,481 $1,041,620 $454,658
=========== =========== ============ ============ ============= ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
NORTH AMERICAN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Balanced Fund Strategic Income Fund
---------------------------- ----------------------------
Six Months Six Months
Ended Year Ended Year
04/30/97 Ended 04/30/97 Ended
(Unaudited) 10/31/96 (Unaudited) 10/31/96
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income.................. $1,179,058 $2,810,880 $2,574,196 $4,313,039
Net realized gain (loss) on:
Investment transactions.............. 10,143,628 9,535,049 (849,586) 2,401,213
Futures contracts.................... ------ (80,559) ------ ------
Foreign currency and forward foreign
currency contracts................. (38,575) (1,438) (4,536) 80,533
Change in unrealized appreciation
(depreciation) on:
Investments.......................... (5,643,346) (344,241) 718,603 1,743,690
Futures contracts.................... ------ 4,372 ------ ------
Foreign currency and forward foreign
currency contracts................. (2,001) 153 80,443 56,961
------------- ------------ ------------- ------------
Net increase in net assets
resulting from operations............... 5,638,764 11,924,216 2,519,120 8,595,436
Net equalization credits (charges) (Note 2) 251,413 7,941 ------ ------
Distribution to shareholders from:
Net investment income
Class A.............................. (392,396) (342,751) (698,308) (944,160)
Class B.............................. (509,836) (316,830) (1,415,124) (2,001,770)
Class C.............................. (2,058,773) (2,066,083) (1,096,718) (1,367,107)
Net realized gains on investments,
futures and foreign currency
transactions
Class A.............................. (1,015,169) (646,271) (272,850) ------
Class B.............................. (1,534,515) (692,368) (599,725) ------
Class C.............................. (6,683,658) (4,999,304) (442,077) ------
Increase (decrease) in net assets from
capital share transactions (Note 3)..... 2,953,703 (3,488,924) 10,938,409 17,786,584
------------- ------------ ------------- ------------
Increase (decrease) in net assets......... (3,350,467) (620,374) 8,932,727 22,068,983
Net assets at beginning of period......... 99,913,469 100,533,843 67,055,473 44,986,490
------------- ------------ ------------- ------------
Net assets at end of period............... $96,563,002 $99,913,469 $75,988,200 $67,055,473
============= ============ ============= ============
Undistributed
net investment income................... $931,071 $2,461,605 $72,326 $708,280
============= ============ ============= ============
<CAPTION>
Investment Quality Bond Fund
------------------------------
Six Months
Ended Year
04/30/97 Ended
(Unaudited) 10/31/96
------------- ------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income.................. $620,816 $1,277,708
Net realized gain (loss) on:
Investment transactions.............. 19,976 137,744
Futures contracts.................... ------ ------
Foreign currency and forward foreign
currency contracts................. ------ ------
Change in unrealized appreciation
(depreciation) on:
Investments.......................... (373,300) (529,084)
Futures contracts.................... ------ ------
Foreign currency and forward foreign
currency contracts................. ------ ------
------------- ------------
Net increase in net assets
resulting from operations............... 267,492 886,368
Net equalization credits (charges) (Note 2) (880) 3,940
Distribution to shareholders from:
Net investment income
Class A.............................. (269,381) (633,961)
Class B.............................. (139,208) (264,717)
Class C.............................. (216,811) (418,906)
Net realized gains on investments,
futures and foreign currency
transactions
Class A.............................. ------ ------
Class B.............................. ------ ------
Class C.............................. ------ ------
Increase (decrease) in net assets from
capital share transactions (Note 3).... (2,229,576) 681,354
------------- -------------
Increase (decrease) in net assets......... (2,588,364) 254,078
Net assets at beginning of period......... 21,276,754 21,022,676
------------- -------------
Net assets at end of period...............
$18,688,390 $21,276,754
============= =============
Undistributed
net investment income................... $19,271 $24,735
============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
NORTH AMERICAN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
National Municipal U.S. Government
Bond Fund Securities Fund Money Market Fund
---------------------------- --------------------------- ----------------------------
Six Months Six Months Six Months
Ended Year Ended Year Ended Year
04/30/97 Ended 04/30/97 Ended 04/30/97 Ended
(Unaudited) 10/31/96 (Unaudited) 10/31/96 (Unaudited) 10/31/96
------------- ------------- ------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income................ $405,036 $902,673 $3,093,755 $6,347,417 $506,406 $961,436
Net realized gain (loss) on
investment transactions............. 105,313 51,281 (1,111,094) 692,635 ------ ------
Change in unrealized appreciation
(depreciation) on investments....... (152,383) 134,956 (136,450) (2,144,261) ------ ------
------------- ------------- ------------- ------------ ------------- -------------
Net increase in net assets
resulting from operations............. 357,966 1,088,910 1,846,211 4,895,791 506,406 961,436
Net equalization credits (Note 2)...... ------ ------ ------ 5 ------ ------
Distribution to shareholders from:
Net investment income
Class A............................. (167,840) (386,541) (2,008,616) (4,374,305) (201,138) (405,871)
Class B............................. (125,487) (252,541) (488,707) (943,899) (77,016) (88,592)
Class C............................. (111,614) (263,588) (448,056) (1,029,213) (228,252) (466,973)
Distribution to shareholders:
In excess of net investment income
Class A............................. ------ ------ ------ (502,592) ------ ------
Class B............................. ------ ------ ------ (108,446) ------ ------
Class C............................. ------ ------ ------ (118,254) ------ ------
Increase (decrease) in net assets from
capital share transactions (Note 3)... (1,459,152) (980,922) (20,947,711) (949,834) 3,539,889 (1,348,319)
------------- ------------- ------------- ------------ ------------- -------------
Increase (decrease) in net assets...... (1,506,127) (794,682) (22,046,879) (3,130,747) 3,539,889 (1,348,319)
Net assets at beginning of period...... 19,533,453 20,328,135 112,227,154 115,357,901 20,989,129 22,337,448
------------- ------------- ------------- ------------ ------------- -------------
Net assets at end of period............ $18,027,326 $19,533,453 $90,180,275 $112,227,154 $24,529,018 $20,989,129
============= ============= ============= ============ ============= =============
Undistributed
net investment loss................... ($474) ($569) ($234,978) ($383,354) ----- -----
============= ============= ============= ============ ============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International Small Cap Fund
--------------------------------------------------------------------------------------
Six Months Six Months Six Months
Ended 03/04/96* Ended 03/04/96* Ended 03/04/96*
4/30/97 to 4/30/97 to 4/30/97 to
(Unaudited) 10/31/96 (Unaudited) 10/31/96 (Unaudited) 10/31/96
Class A Class A Class B Class B Class C Class C
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......... $13.43 $12.50 $13.37 $12.50 $13.37 $12.50
Income (loss) from investment operations:
- ----------------------------------------
Net investment income (loss) (B) .............. (0.03) 0.05 (0.06) (0.01) (0.06) (0.01)
Net realized and unrealized gain on investments
and foreign currency transactions ........... 0.37 0.88 0.35 0.88 0.35 0.88
---- ---- ---- ---- ---- ----
Total from investment
operations ......................... 0.34 0.93 0.29 0.87 0.29 0.87
Net asset value, end of period ................ $13.77 $13.43 $13.66 $13.37 $13.66 $13.37
====== ====== ====== ====== ====== ======
Total return ......................... 2.53%+ 7.44%+ 2.17%+ 6.96%+ 2.17%+ 6.96%+
Net assets, end of period (000's) ............. $2,659 $2,120 $6,948 $5,068 $6,669 $5,517
Ratio of operating expenses to
average net assets (C) ...................... 1.90%(A) 1.90%(A) 2.55%(A) 2.55%(A) 2.55%(A) 2.55%(A)
Ratio of net investment income (loss) to
average net assets .......................... (0.38%)(A) 0.50%(A) (1.03%)(A) (0.15%)(A) (1.03%)(A) (0.15%)(A)
Portfolio turnover rate ....................... 51%(A) 67%(A) 51%(A) 67%(A) 51%(A) 67%(A)
Average commission rate per share (D) ......... $0.016 $0.016 $0.016 $0.016 $0.016 $0.016
</TABLE>
- -----------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
(B) After expense reimbursement by the adviser of $0.04, $0.02 and $0.02 per
share for the International Small Cap Fund - Classes A, B and C
respectively, for the six months ended April 30, 1997 and $0.11, $0.02 and
$0.02 per share for the International Small Cap Fund - Classes A, B and C
respectively, for the period March 4, 1996 (commencement of operations) to
October 31, 1996.
(C) The ratio of operating expenses, before reimbursement by the adviser, was
2.41%, 2.85% and 2.83% for the International Small Cap Fund, Classes A, B
and C respectively, for the six months ended April 30, 1997 and 3.07%,
3.27% and 3.25% for the International Small Cap Fund, Classes A, B and C
respectively, for the period March 4, 1996 (commencement of operations) to
October 31, 1996 on an annualized basis.
(D) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets the
relationship between the translated U.S. dollar price per share and
commission paid per share may vary from that of domestic markets.
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Small/Mid Cap Fund
-------------------------------------------------------------------------------------
Six Months Six Months Six Months
Ended 03/04/96* Ended 03/04/96* Ended 03/04/96*
4/30/97 to 4/30/97 to 4/30/97 to
(Unaudited) 10/31/96 (Unaudited) 10/31/96 (Unaudited) 10/31/96
Class A Class A Class B Class B Class C Class C
------------- ------------ ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $12.62 $12.50 $12.58 $12.50 $12.59 $12.50
Income (loss) from investment operations:
- ----------------------------------------
Net investment loss (B)...................... (0.06) (0.02) (0.09) (0.05) (0.09) (0.05)
Net realized and unrealized gain (loss)
on investments............................. (0.27) 0.14 (0.30) 0.13 (0.30) 0.14
----- ----- ----- ----- ----- -----
Total from investment
operations........................ (0.33) 0.12 (0.39) 0.08 (0.39) 0.09
Net asset value, end of period............... $12.29 $12.62 $12.19 $12.58 $12.20 $12.59
====== ====== ====== ====== ====== ======
Total return........................ (2.61%)+ 0.96%+ (3.10%)+ 0.64%+ (3.10%)+ 0.72%+
Net assets, end of period (000's)............ $2,989 $2,966 $7,527 $6,659 $9,808 $8,241
Ratio of operating expenses to
average net assets (C)..................... 1.675%(A) 1.675%(A) 2.325%(A) 2.325%(A) 2.325%(A) 2.325%(A)
Ratio of net investment loss to
average net assets......................... (0.96%)(A) (0.40%)(A) (1.61%)(A) (1.05%)(A) (1.61%)(A) (1.05%)(A)
Portfolio turnover rate...................... 149%(A) 92%(A) 149%(A) 92%(A) 149%(A) 92%(A)
Average commission rate per share (D)........ $0.069 $0.069 $0.069 $0.069 $0.069 $0.069
- -----------------------------
</TABLE>
* Commencement of operations
+ Non-annualized
(A) Annualized
(B) After expense reimbursement by the adviser of $0.04, $0.02 and $0.02 per
share for the Small/Mid Cap Fund - Classes A, B and C respectively, for
the six months ended April 30, 1997 and $0.06, $0.03 and $0.03 per share
for the Small/Mid Cap Fund - Classes A, B and C respectively, for the
period March 4, 1996 (commencement of operations) to October 31, 1996.
(C) The ratio of operating expenses, before reimbursement by the adviser, was
and 2.30%, 2.72% and 2.69% for the Small/Mid Cap Fund, Classes A, B and C
respectively, for the six months ended April 30, 1997 and 2.69%, 3.05% and
3.04% for the Small/Mid Cap Fund, Classes A, B and C respectively, for the
period March 4, 1996 (commencement of operations) to October 31, 1996 on
an annualized basis.
(D) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged.
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global Equity Fund
(formerly, the Global Growth Fund)
--------------------------------------------------------------------
Six Months
Ended Year Year 04/01/94*
04/30/97 Ended Ended to
(Unaudited) 10/31/96** 10/31/95 10/31/94
Class A Class A Class A Class A
---------- ---------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ... $14.50 $13.84 $14.82 $14.13
Income (loss) from investment operations
- ----------------------------------------
Net investment income (loss) (B) ....... 0.04 (0.04) ---- (0.01)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions ....................... 1.68 0.91 (0.54) 0.70
----- ----- ----- -----
Total from investment
operations .................. 1.72 0.87 (0.54) 0.69
Less distributions
- ------------------
Dividends from net investment income ... (0.05) (0.21) ---- ----
Distributions from capital gains ....... (1.64) ---- (0.44) ----
----- ----- ----- -----
Total distributions ........... (1.69) (0.21) (0.44) ----
----- ----- ----- -----
Net asset value, end of period ......... $14.53 $14.50 $13.84 $14.82
====== ====== ====== ======
Total return .................. 12.27%+ 6.33% (3.52%) 9.16%(E)
Net assets, end of period (000's) ...... $27,831 $25,924 $23,894 $18,152
Ratio of operating expenses
to average net assets (C) ............ 1.75%(A) 1.75% 1.75% 1.75%(A)
Ratio of net investment income
(loss) to average net assets ......... 0.42%(A) (0.30%) 0.03% (0.12%)(A)
Portfolio turnover rate ................ 24%(A) 165% 57% 54%
Average commission rate per share (D)... $0.031 $0.016 N/A N/A
<CAPTION>
Global Equity Fund
(formerly, the Global Growth Fund)
--------------------------------------------------------------------
Six Months
Ended Year Year 04/01/94*
04/30/97 Ended Ended to
(Unaudited) 10/31/96** 10/31/95** 10/31/94
Class B Class B Class B Class B
----------- ---------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ... $14.36 $13.73 $14.79 $14.13
Income (loss) from investment operations
- ----------------------------------------
Net investment income (loss) (B) ....... (0.01) (0.14) (0.09) (0.03)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions ....................... 1.67 0.91 (0.53) 0.69
----- ----- ----- -----
Total from investment
operations .................. 1.66 0.77 (0.62) 0.66
Less distributions
- ------------------
Dividends from net investment income ... ---- (0.14) ---- ----
Distributions from capital gains ....... (1.64) ---- (0.44) ----
----- ----- ----- -----
Total distributions ........... (1.64) (0.14) (0.44) ----
----- ---- ----- -----
Net asset value, end of period ......... $14.38 $14.36 $13.73 $14.79
====== ====== ====== ======
Total return .................. 11.93%+ 5.64% (4.09%) 8.94%(E)
Net assets, end of period (000's) ...... $26,798 $25,661 $23,317 $13,903
Ratio of operating expenses
to average net assets (C) ............ 2.40%(A) 2.40% 2.40% 2.40%(A)
Ratio of net investment income
(loss) to average net assets ......... (0.23%)(A) (0.95%) (0.61%) (0.77%)(A)
Portfolio turnover rate ................ 24%(A) 165% 57% 54%
Average commission rate per share (D)... $0.031 $0.016 N/A N/A
</TABLE>
- ------------------------------
* Commencement of operations
** Net investment income per share has been calculated using the average
shares method.
+ Non-annualized
(A) Annualized
(B) After expense reimbursement by the adviser of $0.01, $0.01, $0.02 and $0.01
per share for the Global Equity Fund - Class A and $0.01, $0.01, $0.02 and
$0.01 per share for the Global Equity Fund - Class B, for the six months
ended April 30, 1997, the years ended October 31, 1996 and 1995 and the
period April 1, 1994 to October 31, 1994, respectively.
(C) The ratio of operating expenses, before reimbursement by the adviser, was
1.84%, 1.83%, 1.92% and 1.97% for the Global Equity Fund - Class A and
2.49%, 2.48%, 2.58% and 2.71% for the Global Equity Fund - Class B, for the
six months ended April 30, 1997, the years ended October 31, 1996 and 1995
and the period April 1, 1994 to October 31, 1994 on an annualized basis,
respectively.
(D) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets the
relationship between the translated U.S. dollar price per share and
commission paid per share may vary from that of domestic markets.
(E) Historical total returns for Classes A and B shares are one year
performance returns which include Class C performance prior to April 1,
1994.
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global Equity Fund - Class C
(formerly, the Global Growth Fund - Class C)
----------------------------------------------------------------------------------------
Six Months
Ended Years Ended October 31,
04/30/97** -------------------------------------------------------------------------
(Unaudited) 1996** 1995** 1994 1993 1992 1991
----------- ---------- ---------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period..... $14.41 $13.73 $14.79 $13.74 $10.33 $10.76 $10.12
Income (loss) from investment operations
- ----------------------------------------
Net investment income (loss) (B)......... (0.01) (0.14) (0.09) (0.10) (0.01) (0.02) 0.25
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions........................... 1.66 0.92 (0.53) 1.15 3.43 (0.37) 0.63
------ ------ ------ ------ ------ ------ ------
Total from investment
operations...................... 1.65 0.78 (0.62) 1.05 3.42 (0.39) 0.88
Less distributions
- ------------------
Dividends from net investment income..... ---- (0.10) ---- ---- (0.01) ---- (0.24)
Distributions from capital gains......... (1.64) ---- (0.44) ---- ---- ---- ----
Distributions from capital............... ---- ---- ---- ---- ---- (0.04) ----
------ ------ ------ ------ ------ ------ ------
Total distributions.............. (1.64) (0.10) (0.44) ---- (0.01) (0.04) (0.24)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period........... $14.42 $14.41 $13.73 $14.79 $13.74 $10.33 $10.76
====== ====== ====== ====== ====== ====== ======
Total return..................... 11.81%+ 5.70% (4.09%) 8.94% 33.06% (3.57%) 8.80%
Net assets, end of period (000's)........ $60,382 $64,830 $83,340 $101,443 $63,503 $14,291 $8,828
Ratio of operating expenses
to average net assets (C).............. 2.40%(A) 2.40% 2.40% 2.40% 2.40% 2.52% 1.47%
Ratio of net investment income
(loss) to average net assets........... (0.23%)(A) (0.95%) (0.64%) (0.91%) (0.40%) (0.27%) 1.41%
Portfolio turnover rate.................. 24%(A) 165% 57% 54% 57% 69% 70%
Average commission rate per share (D).... $0.031 $0.016 N/A N/A N/A N/A N/A
- ------------------------------
</TABLE>
** Net investment income per share has been calculated using the average
shares method.
+ Non-annualized
(A) Annualized
(B) After expense reimbursement by the adviser of $0.02, $0.01, $0.02, $0.01,
$0.02, $0.02 and $0.05 per share for the Global Equity Fund - Class C for
the six months ended April 30, 1997 and the years ended October 31, 1996,
1995, 1994, 1993, 1992 and 1991, respectively.
(C) The ratio of operating expenses, before reimbursement by the adviser, was
2.48%, 2.48%, 2.53%, 2.52%, 2.72%, 2.78% and 4.37% for the Global Equity
Fund - Class C for the six months ended April 30, 1997 and the years ended
October 31, 1996, 1995, 1994, 1993, 1992 and 1991, respectively.
(D) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets the
relationship between the translated U.S. dollar price per share and
commission paid per share may vary from that of domestic markets.
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Growth Equity Fund
----------------------------------------------------------------------------------
Six Months Six Months Six Months
Ended 03/04/96* Ended 03/04/96* Ended 03/04/96*
4/30/97 to 4/30/97 to 4/30/97 to
(Unaudited) 10/31/96 (Unaudited) 10/31/96 (Unaudited) 10/31/96
Class A Class A Class B Class B Class C Class C
----------- -------- ----------- -------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $13.78 $12.50 $13.73 $12.50 $13.73 $12.50
Income from investment operations:
- ---------------------------------
Net investment income(B)..................... (0.01) 0.28 (0.06) 0.24 (0.06) 0.24
Net realized and unrealized gain on investments 1.06 1.00 1.06 0.99 1.06 0.99
---- ---- ---- ---- ---- ----
Total from investment
operations........................ 1.05 1.28 1.00 1.23 1.00 1.23
Less Distributions
- ------------------
Dividends from net investment income......... (0.19) -- (0.16) -- (0.17) --
---- ---- ----
Net asset value, end of period............... $14.64 $13.78 $14.57 $13.73 $14.56 $13.73
====== ====== ====== ====== ====== ======
Total return........................ 7.69%+ 10.24%+ 7.34%+ 9.84%+ 7.33%+ 9.84%+
Net assets, end of period (000's)............ $2,421 $2,244 $6,973 $4,748 $8,118 $6,494
Ratio of operating expenses to
average net assets(C)...................... 1.65%(A) 1.65%(A) 2.30%(A) 2.30%(A) 2.30%(A) 2.30%(A)
Ratio of net investment income (loss) to
average net assets......................... (0.22%)(A) 4.11%(A) (0.87%)(A) 4.18%(A) (0.87%)(A) 4.13%(A)
Portfolio turnover rate...................... 186%(A) 450%(A) 186%(A) 450%(A) 186%(A) 450%(A)
Average commission rate per share(D)......... $0.064 $0.043 $0.064 $0.043 $0.064 $0.043
</TABLE>
- -----------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
(B) After expense reimbursement by the adviser of $0.03, $0.03 and $0.02 per
share for the Growth Equity Fund - Classes A, B and C respectively, for
the six months ended April 30, 1997 and $0.07, $0.04 and $0.04 per share
for the Growth Equity Fund - Classes A, B and C respectively, for the
period March 4, 1996 (commencement of operations) to October 31, 1996.
(C) The ratio of operating expenses, before reimbursement by the adviser, was
2.27%, 2.68% and 2.63% for the Growth Equity Fund, Classes A, B and C
respectively, for the six months ended April 30, 1997 and 2.71%, 3.06% and
2.96% for the Growth Equity Fund, Classes A, B and C respectively, for the
period March 4, 1996 (commencement of operations) to October 31, 1996 on
an annualized basis.
(D) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets the
relationship between the translated U.S. dollar price per share and
commission paid per share may vary from that of domestic markets.
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International Growth and Income Fund
-------------------------------------------------------------------------------
Six Months Six Months
Ended Year 01/09/95* Ended Year
04/30/97** Ended to 04/30/97** Ended
(Unaudited) 10/31/96** 10/31/95 (Unaudited) 10/31/96**
Class A Class A Class A Class B Class B
----------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......... $11.35 $10.11 $10.00 $11.30 $10.10
Income from investment operations:
- ---------------------------------
Net investment income (B) ..................... 0.04 0.09 0.06 ---- 0.06
Net realized and unrealized gain on investments
and foreign currency transactions ........... 0.37 1.33 0.08 0.38 1.30
----- ----- ----- ----- -----
Total from investment
operations ......................... 0.41 1.42 0.14 0.38 1.36
Less distributions
- ------------------
Dividends from net investment income .......... (0.19) (0.08) (0.03) (0.13) (0.05)
Distributions from capital gains .............. (0.76) (0.10) ---- (0.76) (0.11)
----- ----- ----- ----- -----
Total distributions .................. (0.95) (0.18) (0.03) (0.89) (0.16)
----- ----- ----- ----- -----
Net asset value, end of period ................ $10.81 $11.35 $10.11 $10.79 $11.30
====== ====== ====== ====== ======
Total return ......................... 3.55%+ 14.25% 1.37%+ 3.31%+ 13.58%
Net assets, end of period (000's) ............. $5,173 $4,732 $6,897 $16,244 $15,217
Ratio of operating expenses to
average net assets (C) ...................... 1.75%(A) 1.75% 1.75%(A) 2.40% 2.40%(A)
Ratio of net investment income to
average net assets .......................... 0.68%(A) 0.84% 0.70%(A) 0.03% 0.57%(A)
Portfolio turnover rate ....................... 122% 170% 69%(A) 122% 170%
Average commission rate per share (D) ......... $0.003 $0.022 N/A $0.003 $0.022
<CAPTION>
International Growth and Income Fund
-----------------------------------------------------------------
Six Months
01/09/95* Ended Year 01/09/95*
to 04/30/97** Ended to
10/31/95 (Unaudited) 10/31/96** 10/31/95
Class B Class C Class C Class C
--------- ---------- ---------- ---------
<S> <C> <C> <C>
Net asset value, beginning of period .......... $10.00 $11.31 $10.10 $10.00
Income from investment operations:
- ---------------------------------
Net investment income (B) ..................... 0.01 ---- 0.06 0.01
Net realized and unrealized gain on investments
and foreign currency transactions ........... 0.12 0.37 1.30 0.12
----- ----- ----- -----
Total from investment
operations ......................... 0.13 0.37 1.36 0.13
Less distributions
- ------------------
Dividends from net investment income .......... (0.03) (0.13) (0.05) (0.03)
Distributions from capital gains .............. ---- (0.76) (0.10) ----
----- ----- ----- -----
Total distributions .................. (0.03) (0.89) (0.15) (0.03)
----- ----- ----- -----
Net asset value, end of period ................ $10.10 $10.79 $11.31 $10.10
====== ====== ====== ======
Total return ......................... 1.28%+ 3.19%+ 13.63% 1.28%+
Net assets, end of period (000's) ............. $8,421 $9,032 $9,076 $6,324
Ratio of operating expenses to
average net assets (C) ...................... 2.40%(A) 2.40%(A) 2.40% 2.40%(A)
Ratio of net investment income to
average net assets .......................... 0.15%(A) 0.03%(A) 0.51% 0.13%(A)
Portfolio turnover rate ....................... 69%(A) 122% 170% 69%(A)
Average commission rate per share (D) ......... N/A $0.003 $0.022 N/A
</TABLE>
- -----------------------------
* Commencement of operations
** Net investment income per share has been calculated using the average
shares method.
+ Non-annualized
(A) Annualized
(B) After expense reimbursement by the adviser of $0.01, $0.00 and $0.00 per
share for the International Growth and Income Fund - Classes A, B and C
respectively, for the six months ended April 30, 1997, $0.02, $0.02 and
$0.02 per share for the International Growth and Income Fund - Classes A,
B and C respectively, for the year ended October 31, 1996 and $0.04, $0.04
and $0.04 per share for the International Growth and Income Fund - Classes
A, B and C respectively, for the period January 9, 1995 (commencement of
operations) to October 31, 1995.
(C) The ratio of operating expenses, before reimbursement by the adviser, was
1.90%, 2.48% and 2.48% for the International Growth and Income Fund,
Classes A, B and C respectively, for the six months ended April 30, 1997,
1.97%, 2.60% and 2.60% for the International Growth and Income Fund,
Classes A, B and C respectively, for the year ended October 31, 1996 and
2.18%, 2.93% and 2.93% for the International Growth and Income Fund,
Classes A, B and C respectively, for the period January 9, 1995
(commencement of operations) to October 31, 1995 on an annualized basis.
(D) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets the
relationship between the translated U.S. dollar price per share and
commission paid per share may vary from that of domestic markets.
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Growth and Income Fund
-----------------------------------------------
Six
Months
Ended Year Year 04/01/94*
04/30/97 Ended Ended to
(Unaudited) 10/31/96 10/31/95** 10/31/94
Class A Class A Class A Class A
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.. $17.56 $14.72 $13.09 $12.29
Income from investment operations
- ---------------------------------
Net investment income (B)............. 0.08 0.18 0.26 0.12
Net realized and unrealized gain
on investments...................... 2.32 2.99 1.90 0.76
----- ----- ----- -----
Total from investment
operations................. 2.40 3.17 2.16 0.88
Less distributions
- ------------------
Dividends from net investment income.. (0.08) (0.21) (0.23) (0.08)
Distributions from capital gains...... (1.04) (0.12) (0.30) -----
----- ----- ----- -----
Total distributions.......... (1.12) (0.33) (0.53) (0.08)
----- ----- ----- -----
Net asset value, end of period........ $18.84 $17.56 $14.72 $13.09
====== ====== ====== ======
Total return................. 14.19%+ 21.84% 17.28% 5.06%(E)
Net assets, end of period (000's)..... $22,515 $18,272 $12,180 $8,134
Ratio of operating expenses to average
net assets (C)...................... 1.34%(A) 1.34% 1.34% 1.34%(A)
Ratio of net investment income to
average net assets.................. 0.82%(A) 1.10% 1.91% 1.72%(A)
Portfolio turnover rate............... 43%(A) 49% 40% 45%
Average commission rate per share (D). $0.054 $0.055 N/A N/A
<CAPTION>
Growth and Income Fund
-------------------------------------------------
Six
Months
Ended Year Year 04/01/94*
04/30/97 Ended Ended to
(Unaudited) 10/31/96** 10/31/95** 10/31/94
Class B Class B Class B Class B
----------- ---------- --------- ---------
Net asset value, beginning of period.. $17.50 $14.69 $13.08 $12.29
Income from investment operations
- ---------------------------------
Net investment income (B)............. 0.02 0.07 0.16 0.10
Net realized and unrealized gain
on investments...................... 2.31 2.99 1.94 0.77
----- ----- ----- -----
Total from investment
operations................. 2.33 3.06 2.10 0.87
Less distributions
- ------------------
Dividends from net investment income.. (0.02) (0.13) (0.19) (0.08)
Distributions from capital gains...... (1.04) (0.12) (0.30) -----
----- ----- ----- -----
Total distributions.......... (1.06) (0.25) (0.49) (0.08)
----- ----- ----- -----
Net asset value, end of period........ $18.77 $17.50 $14.69 $13.08
====== ====== ====== ======
Total return................. 13.81%+ 21.08% 16.73% 4.98%(E)
Net assets, end of period (000's)..... $43,466 $34,740 $19,052 $3,885
Ratio of operating expenses to average
net assets (C)...................... 1.99%(A) 1.99% 1.99% 1.99%(A)
Ratio of net investment income to
average net assets.................. 0.17%(A) 0.45% 1.14% 1.07%(A)
Portfolio turnover rate............... 43%(A) 49% 40% 45%
Average commission rate per share (D). $0.054 $0.055 N/A N/A
</TABLE>
- ------------------------------
* Commencement of operations
** Net investment income per share has been calculated using the average
shares method.
+ Non-annualized
(A) Annualized
(B) After expense reimbursement by the adviser of $0.01, $0.03, $0.05 and $0.05
per share for the Growth and Income Fund - Class A and $0.02, $0.03, $0.05
and $0.12 per share for the Growth and Income Fund - Class B, for the six
months ended April 30, 1997, the years ended October 31, 1996 and the
period April 1, 1994 to October 31, 1994, respectively.
(C) The ratio of operating expenses, before reimbursement by the adviser, was
1.47%, 1.56%, 1.69% and 2.08% for the Growth and Income Fund - Class A and
2.12%, 2.20%, 2.33% and 3.12% for the Growth and Income Fund - Class B, for
the six months ended April 30, 1997, the years ended October 31, 1996 and
1995 and the period April 1, 1994 to October 31, 1994 on an annualized
basis, respectively.
(D) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged.
(E) Historical total returns for Classes A and B shares are one year
performance returns which include Class C performance prior to April 1,
1994.
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Growth and Income Fund - Class C
-----------------------------------------------------------------------------------------
Six
Months Years Ended October, 31 05/01/91*
Ended to
04/30/97
--------------------------------------------------------------
(Unaudited) 1996 1995 1994 1993 1992 10/31/91
----------- ----------- ----------- ---------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $17.56 $14.71 $13.08 $12.71 $11.21 $10.51 $10.00
Income from investment operations
- ---------------------------------
Net investment income (B)............. 0.02 0.07 0.18 0.15 0.14 0.18 0.11
Net realized and unrealized gain
on investments...................... 2.32 3.00 1.90 0.46 1.48 0.70 0.47
----- ----- ----- ----- ----- ----- -----
Total from investment
operations................. 2.34 3.07 2.08 0.61 1.62 0.88 0.58
Less distributions
- ------------------
Dividends from net investment income.. (0.02) (0.10) (0.15) (0.13) (0.12) (0.18) (0.07)
Distributions from capital gains...... (1.04) (0.12) (0.30) (0.11) ------ ------ ------
----- ----- ----- ----- ------- ------- -------
Total distributions.......... (1.06) (0.22) (0.45) (0.24) (0.12) (0.18) (0.07)
----- ----- ----- ----- ----- ----- -----
Net asset value, end of period........ $18.84 $17.56 $14.71 $13.08 $12.71 $11.21 $10.51
====== ====== ====== ====== ====== ====== ======
Total return................. 13.80%+ 21.12% 16.56% 4.85% 14.57% 8.42% 5.88%+
Net assets, end of period (000's)..... $84,339 $74,825 $63,154 $46,078 $37,483 $10,821 $2,090
Ratio of operating expenses to average
net assets (C)...................... 1.99%(A) 1.99% 1.99% 1.99% 1.99% 1.94% 1.85%(A)
Ratio of net investment income to
average net assets.................. 0.17%(A) 0.45% 1.26% 1.11% 1.12% 1.51% 2.05%(A)
Portfolio turnover rate............... 43%(A) 49% 40% 45% 37% 48% 111%(A)
Average commission rate per share (D). $0.054 $0.055 N/A N/A N/A N/A N/A
</TABLE>
- ------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
(B) After expense reimbursement and waiver by the adviser of $0.01, $0.03,
$0.04, $0.05, $0.06, $0.15 and $0.37 per share for the Growth and Income
Fund - Class C for the six months ended April 30, 1997, the years ended
October 31, 1996, 1995, 1994, 1993 and 1992 and the period May 1, 1991
(commencement of operations) to October 31, 1991, respectively.
(C) The ratio of operating expenses, before reimbursement and waiver by the
adviser, was 2.11%, 2.20%, 2.26%, 2.38%, 2.46%, 3.18% and 10.69% for the
Growth and Income Fund - Class C for the six months ended April 30, 1997,
the years ended October 31, 1996, 1995, 1994, 1993 and 1992 and the period
May 1, 1991 (commencement of operations) to October 31, 1991 on an
annualized basis, respectively.
(D) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged.
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Equity-Income Fund
(formerly, the Value Equity Fund, formerly, the Growth Fund)
--------------------------------------------------------------------------------------
Six
Months Year Year 04/01/94*
Ended Ended Ended to
04/30/97 10/31/96 10/31/95** 10/31/94
(Unaudited)
Class A Class A Class A Class A
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.. $17.37 $15.94 14.78 $14.59
Income (loss) from investment operations
- ----------------------------------------
Net investment income (loss) (B)...... 0.20 0.16 0.12 0.02
Net realized and unrealized gain
on investments...................... 1.54 2.69 1.83 0.17
----- ----- ----- -----
Total from investment
operations................. 1.74 2.85 1.95 0.19
Less distributions
- ------------------
Distributions from net investment income ----- (0.18) (0.14) ------
Distributions from capital gains...... (3.67) (1.28) (0.79) ------
----- ----- ----- -------
Total distributions.......... (3.85) (1.42) (0.79) ------
----- ----- ----- -------
Net asset value, end of period........ $15.26 $17.37 $15.94 $14.78
====== ====== ====== ======
Total return................. 11.33%+ 19.23% 14.22% 4.82%(E)
Net assets, end of period (000's)..... $30,640 $28,470 $22,026 $16,326
Ratio of operating expenses to average
net assets (C)...................... 1.34%(A) 1.34% 1.34% 1.34%(A)
Ratio of net investment income (loss) to
average net assets.................. 2.04%(A) 0.98% 0.79% 0.13%(A)
Portfolio turnover rate............... 34%(A) 169% 54% 39%
Average commission rate per share (D). $0.042 $0.053 N/A N/A
<CAPTION>
Equity-Income Fund
(formerly, the Value Equity Fund, formerly, the Growth Fund)
--------------------------------------------------------------------------------------
Six
Months Year Year 04/01/94*
Ended Ended Ended to
04/30/97 10/31/96 10/31/95** 10/31/94
(Unaudited)
Class B Class B Class B Class B
----------- ---------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.. $17.22 $15.84 14.77 $14.59
Income (loss) from investment operations
- ----------------------------------------
Net investment income (loss) (B)...... 0.13 0.06 0.02 (0.02)
Net realized and unrealized gain
on investments...................... 1.54 2.69 1.84 0.20
----- ----- ----- -----
Total from investment
operations................. 1.67 2.75 1.86 0.18
Less distributions
- ------------------
Distributions from net investment income ------ (0.08) (0.09) ------
Distributions from capital gains...... (3.67) (1.28) (0.79) ------
----- ----- ----- -------
Total distributions.......... (3.75) (1.37) (0.79) (0.24)
----- ----- ----- -----
Net asset value, end of period........ $15.14 $17.22 $15.84 $14.77
====== ====== ====== ======
Total return................. 10.91%+ 18.59% 13.58% 4.75%(E)
Net assets, end of period (000's)..... $30,578 $27,058 $19,874 $5,054
Ratio of operating expenses to average
net assets (C)...................... 1.99%(A) 1.99% 1.99% 1.99%(A)
Ratio of net investment income (loss) to
average net assets.................. 1.39%(A) 0.33% 0.13% (0.52%)(A)
Portfolio turnover rate............... 34%(A) 169% 54% 39%
Average commission rate per share (D). $0.042 $0.053 N/A N/A
</TABLE>
- ------------------------------
* Commencement of operations
** Net investment income per share has been calculated using the average
shares method for fiscal year 1995.
+ Non-annualized
(A) Annualized
(B) After expense reimbursement by the adviser of $0.02, $0.04, $0.04 and $0.06
per share for the Equity-Income Fund - Class A and $0.02, $0.04, $0.05 and
$0.03 per share for the Equity-Income Fund - Class B, for the six months
ended April 30, 1997, the years ended October 31, 1996 and 1995 and the
period April 1, 1994 to October 31, 1994, respectively.
(C) The ratio of operating expenses, before reimbursement by the adviser, was
1.53%, 1.55%, 1.62% and 1.79% for the Equity-Income Fund - Class A and
2.18%, 2.20%, 2.32% and 2.82% for the Equity-Income Fund - Class B, for the
six months ended April 30, 1997, the years ended October 31, 1996 and 1995
the period April 1, 1994 to October 31, 1994 on an annualized basis,
respectively.
(D) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged.
(E) Historical total returns for Classes A and B shares are one year
performance returns which include Class C performance prior to April 1,
1994.
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Equity-Income Fund - Class C
(formerly, the Value Equity Fund - Class C, formerly, the Growth Fund - Class C)
------------------------------------------------------------------------------------------
Six Months
Ended Years Ended October 31, 08/28/89*
04/30/97 ---------------------------------------------------------------- to
(Unaudited) 1996 1995** 1994 1993 1992 1991 1990 10/31/89
------------ --------- -------- ------- -------- --------- --------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $17.27 $15.84 $14.77 $14.21 $12.05 $10.70 $ 8.22 $11.19 $12.25
Income (loss) from investment operations
- ----------------------------------------
Net investment income (loss) (B)........ 0.13 0.06 0.02 (0.07) 0.01 (0.01) 0.02 0.05 0.01
Net realized and unrealized gain
(loss) on investments................. 1.55 2.69 1.84 0.74 2.15 1.37 2.54 (2.39) (1.07)
----- ----- ----- ----- ----- ----- ----- ----- -----
Total from investment
operations................... 1.68 2.75 1.86 0.67 2.16 1.36 2.56 (2.34) (1.06)
Less distributions
- ------------------
Dividends from net investment income.... (0.06) (0.04) ---- (0.03) ---- ---- (0.03) (0.05) ----
Distributions from capital gains........ (3.67) (1.28) (0.79) (0.08) ---- ---- ---- (0.58) ----
Distributions from capital.............. ---- ---- ---- ---- ---- (0.01) (0.05) ---- ----
------- ------- ------- ------- ------ ----- ----- ------ -------
Total distributions............ (3.73) (1.32) (0.79) (0.11) ---- (0.01) (0.08) (0.63) ----
----- ----- ----- ----- ------ ----- ----- ----- -------
Net asset value, end of period.......... $15.22 $17.27 $15.84 $14.77 $14.21 $12.05 $10.70 $ 8.22 $11.19
====== ====== ====== ====== ====== ====== ====== ====== ======
Total return................... 10.95%+ 18.53% 13.58% 4.75% 17.93% 12.75% 31.32% (22.16%) (8.65%)+
Net assets, end of period (000's)....... $85,366 $83,855 $83,719 $71,219 $64,223 $24,291 $15,354 $19,370 $30,627
Ratio of operating expenses to average
net assets (C)........................ 1.99%(A) 1.99% 1.99% 1.99% 1.99% 2.47% 2.97% 2.85% 2.57%(A)
Ratio of net investment income (loss) to
average net assets.................... 1.39%(A) 0.33% 0.15% (0.49%) 0.27% (0.15%) 0.27% 0.43% 0.37%(A)
Portfolio turnover rate................. 34%(A) 169% 54% 39% 40% 91% 37% 58% 65%(A)
Average commission rate per share (D)... $0.042 $0.053 N/A N/A N/A N/A N/A N/A N/A
- ------------------------------
</TABLE>
* Commencement of operations
** Net investment income per share has been calculated using the average
shares method for fiscal year 1995.
+ Non-annualized
(A) Annualized
(B) After expense reimbursement and waiver by the adviser of $0.02, $0.03,
$0.04, $0.04, $0.02, $0.05 and $0.01 per share for the Equity-Income Fund -
Class C for the six months ended April 30, 1997 and the years ended October
31, 1996, 1995, 1994, 1993, 1992 and 1991, respectively.
(C) The ratio of operating expenses, before reimbursement and waiver by the
adviser, was 2.17%, 2.20%, 2.23%, 2.29%, 2.35%, 3.00% and 3.12% for the
Equity- Income Fund - Class C for the six months ended April 30, 1997 and
the years ended October 31, 1996, 1995, 1994, 1993, 1992 and 1991,
respectively.
(D) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged.
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Balanced Fund
(formerly, the Asset Allocation Fund)
--------------------------------------------------
Six
Months
Ended Year Year 04/01/94*
04/30/97 Ended Ended to
(Unaudited) 10/31/96** 10/31/95** 10/31/94
Class A Class A Class A Class A
---------- ---------- --------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.. $12.33 $12.02 $11.13 $11.06
Income (loss) from investment operations
- ----------------------------------------
Net investment income (B)............. 0.22 0.39 0.38 0.17
Net realized and unrealized gain
(loss) on investments............... 0.48 1.07 1.35 (0.10)
----- ----- ----- -----
Total from investment
operations................. 0.70 1.46 1.73 0.07
Less distributions
- ------------------
Dividends from net investment income.. (0.45) (0.40) (0.32) ----
Distributions from capital gains...... (1.16) (0.75) (0.52) ----
----- ----- ----- -----
Total distributions.......... (1.61) (1.15) (0.84) ----
----- ----- ----- -----
Net asset value, end of period........ $11.42 $12.33 $12.02 $11.13
====== ====== ====== ======
Total return................. 6.22%+ 13.10% 16.95% 0.76%(E)
Net assets, end of period (000's)..... $12,015 $10,873 $10,033 $7,830
Ratio of operating expenses to average
net assets (C)...................... 1.34%(A) 1.34% 1.34% 1.34%(A)
Ratio of net investment income to average
net assets.......................... 2.97%(A) 3.32% 3.39% 2.72%(A)
Portfolio turnover rate............... 236%(A) 253% 226% 246%
Average commission rate per share (D). $0.063 $0.059 N/A N/A
<CAPTION>
Balanced Fund
(formerly, the Asset Allocation Fund)
-------------------------------------------------
Six
Months
Ended Year Year 04/01/94*
04/30/97 Ended Ended to
(Unaudited) 10/31/96** 10/31/96** 10/31/94
Class B Class B Class B Class B
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.. $12.26 $11.98 $11.12 $11.06
Income (loss) from investment operations
- ----------------------------------------
Net investment income (B)............. 0.18 0.31 0.30 0.12
Net realized and unrealized gain
(loss) on investments............... 0.48 1.07 1.36 (0.06)
----- ----- ----- -----
Total from investment
operations................. 0.66 1.38 1.66 0.06
Less distributions
- ------------------
Dividends from net investment income.. (0.39) (0.35) (0.28) ----
Distributions from capital gains...... (1.16) (0.75) (0.52) ----
----- ----- ----- -----
Total distributions.......... (1.55) (1.10) (0.80) ----
----- ----- ----- -----
Net asset value, end of period........ $11.37 $12.26 $11.98 $11.12
====== ====== ====== ======
Total return................. 5.85%+ 12.35% 16.31% 0.67%(E)
Net assets, end of period (000's)..... $16,526 $16,219 $9,875 $4,760
Ratio of operating expenses to average
net assets (C)...................... 1.99%(A) 1.99% 1.99% 1.99%(A)
Ratio of net investment income to average
net assets.......................... 2.32%(A) 2.67% 2.69% 2.07%(A)
Portfolio turnover rate............... 236%(A) 253% 226% 246%
Average commission rate per share (D). $0.063 $0.059 N/A N/A
</TABLE>
- ------------------------------
* Commencement of operations
** Net investment income per share has been calculated using the average
shares method.
+ Non-annualized
(A) Annualized
(B) After expense reimbursement by the adviser of $0.02, $0.02, $0.04 and $0.03
for the Balanced Fund - Class A and $0.02, $0.02, $0.04 and $0.04 for the
Balanced Fund - Class B, for the six months ended April 30, 1997, the years
ended October 31, 1996 and 1995 and the period April 1, 1994 to October 31,
1994, respectively.
(C) The ratio of operating expenses, before reimbursement by the adviser, was
1.57%, 1.55%, 1.69% and 1.86% for the Balanced Fund - Class A and 2.20%,
2.20%, 2.37% and 2.73% for the Balanced Fund - Class B, for the six months
ended April 30, 1997, the years ended October 31, 1996 and 1995 and the
period April 1, 1994 to October 31, 1994 on an annualized basis,
respectively.
(D) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged.
(E) Historical total returns for Classes A and B shares are one year
performance returns which include Class C performance prior to April 1,
1994.
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
<TABLE>
<CAPTION>
Balanced Fund - Class C (E)
(formerly, the Asset Allocation Fund - Class C (E))
----------------------------------------------------------------------------------------------
Six Months
Ended Years Ended October 31, 08/28/89*
04/30/97 ---------------------------------------------------------------------- to
(Unaudited) 1996** 1995** 1994 1993 1992 1991 1990 10/31/89
------------ -------- ---------- --------- ------- -------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period. $12.35 $12.02 $11.12 $11.52 $10.20 $9.76 $8.12 $9.84 $10.17
Income (loss) from investment
- -----------------------------
operations
- ----------
Net investment income (B)............ 0.18 0.32 0.31 0.22 0.21 0.20 0.27 0.32 0.05
Net realized and unrealized gain
(loss) on investments.............. 0.48 1.07 1.35 (0.15) 1.30 0.87 1.70 (1.66) (0.38)
----- ----- ----- ----- ----- ----- ----- ----- -----
Total from investment
operations................ 0.66 1.39 1.66 0.07 1.51 1.07 1.97 (1.34) (0.33)
Less distributions
- ------------------
Dividends from net investment income. (0.36) (0.31) (0.24) (0.18) (0.09) (0.19) (0.33) (0.26) ----
Distributions from capital gains..... (1.16) (0.75) (0.52) (0.29) (0.10) (0.44) ---- ---- ----
Distributions from capital........... ---- ---- ---- ---- ---- ---- ---- (0.12) ----
----- ----- ----- ----- ----- ----- ----- ----- -----
Total distributions......... (1.52) (1.06) (0.76) (0.47) (0.19) (0.63) (0.33) (0.38) ----
----- ----- ----- ----- ----- ----- ----- ----- -----
Net asset value, end of period....... $11.49 $12.35 $12.02 $11.12 $11.52 $10.20 $9.76 $8.12 $9.84
====== ====== ====== ====== ====== ====== ===== ===== =====
Total return................ 5.81%+ 12.41% 16.25% 0.67% 15.02% 11.25% 24.53% (13.97%) (3.24%)+
Net assets, end of period (000's).... $68,022 $72,821 $80,626 $86,902 $96,105 $48,160 $30,724 $34,713 $43,915
Ratio of operating expenses to
average net assets (C)............. 1.99%(A) 1.99% 1.99% 1.99% 1.99% 2.40% 2.88% 2.63% 2.13%(A)
Ratio of net investment income to
average net assets................. 2.32%(A) 2.67% 2.76% 1.93% 1.96% 1.93% 2.77% 3.34% 3.09%(A)
Portfolio turnover rate.............. 236%(A) 253% 226% 246% 196% 171% 84% 73% 84%(A)
Average commission rate per share (D) $0.063 $0.059 N/A N/A N/A N/A N/A N/A N/A
</TABLE>
- -----------------------------
* Commencement of operations
** Net investment income per share has been calculated using the average
shares method.
+ Non-annualized
(A) Annualized
(B) After expense reimbursement and waiver by the adviser of $0.01, $0.01,
$0.03, $0.04, $0.03 and $0.04 for the Balanced Fund - Class C for the six
months ended April 30, 1997 and the years ended October 31, 1996, 1995,
1994, 1993 and 1992, respectively.
(C) The ratio of operating expenses, before reimbursement and waiver by the
adviser, was 2.18%, 2.20%, 2.24%, 2.22%, 2.28% and 2.89% for the Balanced
Fund - Class C for the six months ended April 30, 1997 and the years ended
October 31, 1996, 1995, 1994, 1993 and 1992, respectively.
(D) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged.
(E) On July 10, 1992, the Aggressive Fund and Conservative Fund portfolios of
the old Asset Allocation Funds were liquidated and shares were exchanged
for shares of the new Asset Allocation Fund. The new Asset Allocation Fund
is comprised of the Moderate Fund portfolio of the old Asset Allocation
Fund (the accounting "survivor") and the assets of the former Aggressive
and Conservative portfolios of the old Asset Allocation Funds. For purposes
of presenting financial highlights - selected per share data and ratios,
only the historical results of the old Moderate Fund have been presented
since it is considered the accounting survivor of the merger because, among
other reasons, the investment objective of the new Asset Allocation Fund is
substantially the same as that of the old Moderate Fund. At the date of the
merger, 3,567,198 shares of the old Moderate Fund with a per share value of
$8.11 were decreased to 2,891,572 shares with a per share value of $10.00,
similar to a reverse stock split, and re-named as shares of the new Asset
Allocation Fund. The historical per share data presented above has been
adjusted as though a reverse stock split had occurred at the beginning of
the earliest period presented which results in fewer shares outstanding at
a correspondingly higher net asset value per share.
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Strategic Income Fund - Class A
-----------------------------------------------------------
Six Months
Ended 11/01/93*
04/30/97 Years Ended October, 31 to
----------------------------
(Unaudited) 1996 1995 10/31/94
----------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period................. $9.80 $9.07 $8.90 $10.00
Income (loss) from investment operations
- ----------------------------------------
Net investment income(B)............................. 0.36 0.80 0.78 0.65
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions..................................... 0.01 0.72 0.18 (1.10)
----- ----- ----- -----
Total from investment
operations................................ 0.37 1.52 0.96 (0.45)
Less distributions
- ------------------
Dividends from net investment income................. (0.46) (0.79) (0.79) (0.65)
Distributions from Capital Gains..................... (0.18) ----- ----- -----
----- ----- ----- -----
Total Distributions............................. (0.64) (0.79) (0.79) (0.79)
----- ----- ----- -----
Net asset value, end of period....................... $9.53 $9.80 $9.07 $8.90
===== ===== ===== =====
Total return................................ 3.91%+ 17.35% 11.43% (3.79%)
Net assets, end of period (000's).................... $15,955 $13,382 $10,041 $15,507
Ratio of operating expenses to
average net assets(C).............................. 1.50%(A) 1.50% 1.07% 0.41%
Ratio of net investment income to
average net assets................................. 7.71%(A) 8.28% 9.08% 8.26%
Portfolio turnover rate.............................. 143%(A) 68% 180% 136%
</TABLE>
- ------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
(B) After expense reimbursement and waiver by the adviser of $0.002, $0.01,
$0.05 and $0.04 per share for the Strategic Income Fund - Class A for the
six months ended April 30, 1997 and the years ended October 31, 1996, 1995
and 1994, respectively.
(C) The ratio of operating expenses, before reimbursement and waiver by the
adviser, was 1.55%, 1.65%, 1.69% and 0.96% for the Strategic Income Fund -
Class A for the six months ended April 30, 1997 and the years ended October
31, 1996, 1995 and 1994, respectively.
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Strategic Income Fund
----------------------------------------------
Six Months
Ended Year Year 04/01/94*
04/30/97 Ended Ended to
(Unaudited) 10/31/96 10/31/95 10/31/94
Class B Class B Class B Class B
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.... $9.80 $9.07 $8.90 $9.31
Income (loss) from investment operations
- ----------------------------------------
Net investment income(B)................ 0.33 0.73 0.73 0.38
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions........................ 0.01 0.73 0.17 (0.41)
----- ----- ----- -----
Total from investment
operations................... 0.34 1.46 0.90 (0.03)
Less distributions
- ------------------
Dividends from net investment income.... (0.43) (0.73) (0.73) (0.38)
Distributions from Capital Gains........ (0.18) ---- ---- ----
----- ----- ----- -----
Total Distributions................ (0.61) (0.73) (0.73) (0.38)
----- ----- ----- -----
Net asset value, end of period.......... $9.53 $9.80 $9.07 $8.90
===== ===== ===== =====
Total return................... 3.58%+ 16.59% 10.72% (4.18%)(D)
Net assets, end of period (000's)....... $32,605 $30,890 $20,672 $5,440
Ratio of operating expenses to
average net assets(C)................. 2.15%(A) 2.15% 1.95% 1.00%(A)
Ratio of net investment income to
average net assets.................... 7.06%(A) 7.63% 8.10% 8.59%(A)
Portfolio turnover rate................. 143%(A) 68% 180% 136%
<CAPTION>
Strategic Income Fund
----------------------------------------------
Six Months
Ended Year Year 04/01/94*
04/30/97 Ended Ended to
(Unaudited) 10/31/96 10/31/95 10/31/94
Class C Class C Class C Class C
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.... $9.80 $9.07 $8.90 $9.31
Income (loss) from investment operations
- ----------------------------------------
Net investment income(B)................ 0.33 0.73 0.73 0.38
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions........................ 0.01 0.73 0.17 (0.41)
----- ----- ----- -----
Total from investment
operations................... 0.34 1.46 0.90 (0.03)
Less distributions
- ------------------
Dividends from net investment income.... (0.43) (0.73) (0.73) (0.38)
Distributions from Capital Gains........ (0.18) ---- ---- ----
----- ----- ----- -----
Total Distributions................ (0.61) (0.73) (0.73) (0.38)
----- ----- ----- -----
Net asset value, end of period.......... $9.53 $9.80 $9.07 $8.90
===== ===== ===== =====
Total return................... 3.58%+ 16.59% 10.72% (4.20%)(D)
Net assets, end of period (000's)....... $27,428 $22,783 $14,273 $8,439
Ratio of operating expenses to
average net assets(C)................. 2.15%(A) 2.15% 1.95% 1.00%(A)
Ratio of net investment income to
average net assets.................... 7.06%(A) 7.63% 8.25% 8.59%(A)
Portfolio turnover rate................. 143%(A) 68% 180% 136%
</TABLE>
- ------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
(B) After expense reimbursement and waiver by the adviser of $0.002, $0.01,
$0.04 and $0.05 for the Strategic Income Fund - Class B and $0.002, $0.01,
$0.05 and $0.04 for the Strategic Income Fund - Class C, for the six months
ended April 30, 1997, the years ended October 31, 1996 and 1995 and the
period April 1, 1994 to October 31, 1994, respectively.
(C) The ratio of operating expenses, before reimbursement and waiver by the
adviser, was 2.18%, 2.27%, 2.38% and 2.04% for the Strategic Income Fund -
Class B and 2.19%, 2.28%, 2.37% and 1.96% for the Strategic Income Fund -
Class C, for the six months ended April 30, 1997, the years ended October
31, 1996 and 1995 and the period April 1, 1994 to October 31, 1994 on an
annualized basis, respectively.
(D) Historical total returns for Classes B and C shares are one year
performance returns which include Class A performance prior to April 1,
1994.
The accompanying notes are an integral part of the financial statements.
27
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Investment Quality Bond Fund - Class A
-----------------------------------------------------------------------------------------
Six Months
Ended Years Ended October 31, 05/01/91*
04/30/97 ----------------------------------------------------------------- to
(Unaudited) 1996 1995 1994 1993 1992 10/31/91
------------ ---------- ---------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $10.34 $10.56 $9.74 $11.16 $10.56 $10.26 $10.00
Income (loss) from investment operations
- ----------------------------------------
Net investment income (B)............. 0.34 0.66 0.68 0.60 0.66 0.82 0.40
Net realized and unrealized gain (loss)
on investments...................... (0.18) (0.20) 0.82 (1.37) 0.64 0.27 0.30
----- ----- ----- ----- ----- ----- -----
Total from investment
operations................. 0.16 0.46 1.50 (0.77) 1.30 1.09 0.70
Less distributions
- ------------------
Dividends from net investment income.. (0.34) (0.68) (0.68) (0.56) (0.64) (0.79) (0.40)
Distributions from capital gains...... ---- ---- ---- (0.09) (0.06) ---- ----
Distributions from capital............ ---- ---- ---- ---- ---- ---- (0.04)
----- ----- ----- ----- ----- ----- -----
Total distributions.......... (0.34) (0.68) (0.68) (0.65) (0.70) (0.79) (0.44)
----- ----- ----- ----- ----- ----- -----
Net asset value, end of period........ $10.16 $10.34 $10.56 $9.74 $11.16 $10.56 $10.26
Total return................. 1.52%+ 4.52% 15.91% (7.08%) 12.66% 11.00% 7.21%+
Net assets, end of period (000's)..... $7,583 $9,056 $10,345 $11,150 $14,674 $6,773 $2,713
Ratio of operating expenses to
average net assets (C).............. 1.25%(A) 1.25% 1.25% 1.25% 0.98% 0.00% 0.00%(A)
Ratio of net investment income to
average net assets.................. 6.60%(A) 6.37% 6.72% 5.86% 5.82% 7.76% 7.08%(A)
Portfolio turnover rate............... 62%(A) 56% 132% 186% 41% 44% 39%(A)
</TABLE>
- ------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
(B) After expense reimbursement and waiver by the adviser of $0.01, $0.03,
$0.05, $0.06, $0.07, $0.27 and $0.19 per share for the Investment Quality
Bond Fund - Class A for the six months ended April 30, 1997, the years
ended October 31, 1996, 1995, 1994, 1993 and 1992 and the period May 1,
1991 (commencement of operations) to October 31, 1991, respectively.
(C) The ratio of operating expenses, before reimbursement and waiver by the
adviser, was 1.54%, 1.55%, 1.73%, 1.74%, 1.57%, 2.56% and 3.37% for the
Investment Quality Bond Fund - Class A for the six months ended April 30,
1997, the years ended October 31, 1996, 1995, 1994, 1993 and 1992 and the
period May 1, 1991 (commencement of operations) to October 31, 1991 on an
annualized basis, respectively.
The accompanying notes are an integral part of the financial statements.
28
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Investment Quality Bond Fund
------------------------------------------------------
Six
Months
Ended Year Year 04/01/94*
04/30/97 Ended Ended to
(Unaudited) 10/31/96 10/31/95 10/31/94
Class B Class B Class B Class B
------------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.... $10.33 $10.55 $9.74 $10.21
Income (loss) from investment operations
- ----------------------------------------
Net investment income (B)............... 0.30 0.60 0.61 0.33
Net realized and unrealized gain (loss)
on investments........................ (0.18) (0.20) 0.82 (0.51)
----- ----- ----- -----
Total from investment
operations................... 0.12 0.40 1.43 (0.18)
Less distributions
- ------------------
Dividends from net investment income.... (0.30) (0.62) (0.62) (0.29)
----- ----- ----- -----
Net asset value, end of period.......... $10.15 $10.33 $10.55 $9.74
====== ====== ====== =====
Total return................... 1.23%+ 3.92% 15.12% (7.34%)(D)
Net assets, end of period (000's)....... $4,448 $4,678 $3,472 $489
Ratio of operating expenses to
average net assets (C)................ 1.90%(A) 1.90% 1.90% 1.90%(A)
Ratio of net investment income to
average net assets.................... 5.95%(A) 5.72% 5.95% 5.70%(A)
Portfolio turnover rate................. 62%(A) 56% 132% 186%
<CAPTION>
INVESTMENT QUALITY BOND FUND
----------------------------------------------------
Six
Months
Ended Year Year 04/01/94*
04/30/97 Ended Ended to
(Unaudited) 10/31/96 10/31/95 10/31/94
Class C Class C Class C Class C
-------------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.... $10.33 $10.55 $9.74 $10.21
Income (loss) from investment operations
- ----------------------------------------
Net investment income (B)............... 0.30 0.60 0.61 0.33
Net realized and unrealized gain (loss)
on investments........................ (0.18) (0.20) 0.82 (0.51)
----- ----- ----- -----
Total from investment
operations................... 0.12 0.40 1.43 (0.18)
Less distributions
- ------------------
Dividends from net investment income.... (0.30) (0.62) (0.62) (0.29)
----- ----- ----- -----
Net asset value, end of period.......... $10.15 $10.33 $10.55 $9.74
====== ====== ====== =====
Total return................... 1.23%+ 3.92% 15.12% (7.34%)(D)
Net assets, end of period (000's)....... $6,657 $7,543 $7,206 $2,406
Ratio of operating expenses to
average net assets (C)................ 1.90%(A) 1.90% 1.90% 1.90%(A)
Ratio of net investment income to
average net assets.................... 5.95%(A) 5.72% 6.00% 5.70%(A)
Portfolio turnover rate................. 62%(A) 56% 132% 186%
</TABLE>
- ------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
(B) After expense reimbursement by the adviser of $0.02, $0.03, $0.08 and $0.19
per share for the Investment Quality Bond Fund - Class B and $0.01, $0.03,
$0.06 and $0.07 per share for the Investment Quality Bond Fund - Class C,
for the six months ended April 30, 1997, the years ended October 31, 1996
and 1995 and the period April 1, 1994 to October 31, 1994, respectively.
(C) The ratio of operating expenses, before reimbursement by the adviser, was
2.24%, 2.27%, 2.69%, 4.88% and for the Investment Quality Bond Fund - Class
B and 2.20%, 2.22%, 2.50% and 3.05% for the Investment Quality Bond Fund -
Class C, for the six months ended April 30, 1997, the years ended October
31, 1996 and 1995 and the period April 1, 1994 to October 31, 1994 on an
annualized basis, respectively.
(D) Historical total returns for Classes B and C shares are one year
performance returns which include Class A performance prior to April 1,
1994.
The accompanying notes are an integral part of the financial statements.
29
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
National Municipal Bond Fund - Class A
--------------------------------------------------------------------------------
Six Months
Ended Years Ended October 31, 07/06/93*
04/30/97 --------------------------------------------------- to
(Unaudited) 1996 1995 1994 10/31/93
-------------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $9.73 $9.62 $8.82 $10.25 $10.00
Income (loss) from investment operations
- ----------------------------------------
Net investment income (B).................... 0.24 0.48 0.51 0.51 0.17
Net realized and unrealized gain (loss)
on investments............................. (0.03) 0.11 0.80 (1.43) 0.24
----- ----- ----- ----- -----
Total from investment
operations........................ 0.21 0.59 1.31 (0.92) 0.41
Less distributions
- ------------------
Dividends from net investment income......... (0.24) (0.48) (0.51) (0.51) (0.16)
----- ----- ----- ----- -----
Net asset value, end of period............... $9.70 $9.73 $9.62 $8.82 $10.25
===== ===== ===== ===== ======
Total return........................ 2.17%+ 6.31% 15.26% (9.24%) 4.17%+
Net assets, end of period (000's)............ $6,573 $7,710 $7,618 $7,663 $9,131
Ratio of operating expenses to
average net assets (C)..................... 0.99%(A) 0.99% 0.80% 0.57% 0.23%(A)
Ratio of net investment income to
average net assets......................... 4.97%(A) 4.99% 5.55% 5.28% 4.86%(A)
Portfolio turnover rate...................... 23%(A) 49% 44% 6% 150%(A)
</TABLE>
- ------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
(B) After expense reimbursement and waiver by the adviser of $0.01, $0.03,
$0.05, $0.07 and $0.03 per share for the National Municipal Bond
Fund - Class A for the six months ended April 30, 1997, the years ended
October 31, 1996, 1995 and 1994 and the period July 6, 1993 (commencement
of operations) to October 31, 1993, respectively.
(C) The ratio of operating expenses, before reimbursement and waiver by the
adviser, was 1.23%, 1.25%, 1.34%, 1.26% and 1.10% for the National
Municipal Bond Fund - Class A for the six months ended April 30, 1997, the
years ended October 31, 1996, 1995 and 1994 and the period July 6, 1993
(commencement of operations) to October 31, 1993 on an annualized basis,
respectively.
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
National Municipal Bond Fund
---------------------------------------------------
Six Months
Ended Year Year 04/01/94*
04/30/97 Ended Ended to
(Unaudited) 10/31/96 10/31/95 10/31/94
Class B Class B Class B Class B
------------ ---------- --------- ---------
Net asset value, beginning of period.... $9.73 $9.62 $8.81 $9.30
Income (loss) from investment operations
- ----------------------------------------
Net investment income (B)............... 0.20 0.40 0.43 0.25
Net realized and unrealized gain (loss)
on investments........................ (0.02) 0.11 0.81 (0.49)
----- ----- ----- -----
Total from investment
operations................... 0.18 0.51 1.24 (0.24)
Less distributions
- ------------------
Dividends from net investment income.... (0.20) (0.40) (0.43) (0.25)
----- ----- ----- -----
Net asset value, end of period.......... $9.71 $9.73 $9.62 $8.81
===== ===== ===== =====
Total return................... 1.85%+ 5.41% 14.42% (9.71%)(D)
Net assets, end of period (000's)....... $6,303 $6,130 $5,876 $2,036
Ratio of operating expenses to
average net assets (C)................ 1.84%(A) 1.84% 1.70% 1.24%(A)
Ratio of net investment income to
average net assets.................... 4.12%(A) 4.14% 4.59% 4.62%(A)
Portfolio turnover rate................. 23%(A) 49% 44% 6%
<CAPTION>
National Municipal Bond Fund
----------------------------------------------------
Six Months
Ended Year Year 04/01/94*
04/30/97 Ended Ended to
(Unaudited) 10/31/96 10/31/95 10/31/94
Class C Class C Class C Class C
------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.... $9.73 $9.62 $8.81 $9.30
Income (loss) from investment operations
- ----------------------------------------
Net investment income (B)............... 0.20 0.40 0.43 0.25
Net realized and unrealized gain (loss)
on investments........................ (0.02) 0.11 0.81 (0.49)
----- ----- ----- -----
Total from investment
operations................... 0.18 0.51 1.24 (0.24)
Less distributions
- ------------------
Dividends from net investment income.... (0.20) (0.40) (0.43) (0.25)
----- ----- ----- -----
Net asset value, end of period.......... $9.71 $9.73 $9.62 $8.81
===== ===== ===== =====
Total return................... 1.85%+ 5.41% 14.42% (9.71%)(D)
Net assets, end of period (000's)....... $5,151 $5,693 $6,834 $1,911
Ratio of operating expenses to
average net assets (C)................ 1.84%(A) 1.84% 1.70% 1.24%(A)
Ratio of net investment income to
average net assets.................... 4.12%(A) 4.14% 4.53% 4.62%(A)
Portfolio turnover rate................. 23%(A) 49% 44% 6%
</TABLE>
- ------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
(B) After expense reimbursement and waiver by the adviser of $0.01, $0.03,
$0.07 and $0.09 per share for the National Municipal Bond Fund - Class B
and $0.01, $0.04, $0.09 and $0.09 per share for the National Municipal Bond
Fund - Class C, for the six months ended April 30, 1997, the years ended
October 31, 1996 and 1995 and the period April 1, 1994 to October 31, 1994,
respectively.
(C) The ratio of operating expenses, before reimbursement and waiver by the
adviser, was 2.10%, 2.11%, 2.41% and 2.81% for the National Municipal Bond
Fund - Class B and 2.11%, 2.25%, 2.63% and 2.78% for the National Municipal
Bond Fund - Class C, for the six months ended April 30, 1997, the years
ended October 31, 1996 and 1995 and the period April 1, 1994 to October 31,
1994 on an annualized basis, respectively.
(D) Historical total returns for Classes B and C shares are one year
performance returns which include Class A performance prior to April 1,
1994.
The accompanying notes are an integral part of the financial statements.
31
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. Government Securities Fund - Class A
-----------------------------------------------------------------------------------------
08/28/89*
Six Months Years Ended October 31,
Ended to
04/30/97 ---------------------------------------------------------------
(Unaudited) 1996** 1995 1994 1993 1992 1991 1990 10/31/89
------------- -------- ------ ------ ------ ------ ------ ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $9.80 $9.98 $9.45 $10.35 $10.04 $ 9.89 $ 9.47 $ 9.74 $9.73
Income (loss) from investment operations
- ----------------------------------------
Net investment income (B)............... 0.29 0.56 0.63 0.53 0.51 0.74 0.84 0.75 0.15
Net realized and unrealized gain (loss)
on investments........................ (0.11) (0.12) 0.57 (0.74) 0.34 0.13 0.42 (0.20) 0.01
----- ----- ----- ----- ----- ----- ----- ----- -----
Total from investment
operations................... 0.18 0.44 1.20 (0.21) 0.85 0.87 1.26 0.55 0.16
Less distributions
- ------------------
Dividends from net investment income.... (0.29) (0.56) (0.67) (0.50) (0.50) (0.72) (0.84) (0.75) (0.15)
Dividends in excess of net
investment income..................... ---- (0.06) ---- ---- ---- ---- ---- ---- ----
Distributions from capital gains........ ---- ---- ---- (0.19) (0.04) ---- ---- ---- ----
Distributions from capital.............. ---- ---- ---- ---- ---- ---- ---- (0.07) ----
----- ----- ----- ----- ----- ----- ----- ----- -----
Total distributions............ (0.29) (0.62) (0.67) (0.69) (0.54) (0.72) (0.84) (0.82) (0.15)
----- ----- ----- ----- ----- ----- ----- ----- -----
Net asset value, end of period.......... $9.69 $9.80 $9.98 $9.45 $10.35 $10.04 $9.89 $9.47 $9.74
===== ===== ===== ===== ====== ====== ===== ===== =====
Total return................... 1.84%+ 4.64% 13.15% (2.13%) 8.64% 9.15% 13.86% 5.90% 1.66%+
Net assets, end of period (000's)....... $58,676 $72,774 $81,179 $100,622 $163,296 $118,543 $45,662 $43,299 $56,069
Ratio of operating expenses to
average net assets (C)................ 1.25%(A) 1.25% 1.25% 1.25% 1.07% 0.24% 0.68% 2.28% 2.18%(A)
Ratio of net investment income to
average net assets.................... 6.33%(A) 5.71% 6.54% 5.39% 4.97% 7.21% 8.65% 7.89% 8.54%(A)
Portfolio turnover rate................. 248%(A) 477% 469% 279% 208% 108% 195% 71% 93%(A)
</TABLE>
- ------------------------------
* Commencement of operations
** Net investment income per share has been calculated using the average
shares method.
+ Non-annualized
(A) Annualized
(B) After expense reimbursement and waiver by the adviser of $0.01, $0.02,
$0.02, $0.02, $0.04, $0.19, $0.18 and $0.03 per share for the U.S.
Government Securities Fund - Class A for the six months ended April 30,
1997 and the years ended October 31, 1996, 1995, 1994, 1993, 1992, 1991 and
1990, respectively.
(C) The ratio of operating expenses, before reimbursement and waiver by the
adviser, was 1.39%, 1.41%, 1.45%, 1.47%, 1.42%, 2.13%, 2.61% and 2.57% for
the six months ended April 30, 1997 and the years ended October 31, 1996,
1995, 1994, 1993, 1992, 1991 and 1990, respectively.
The accompanying notes are an integral part of the financial statements.
32
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. Government Securities Fund
-------------------------------------------------------
Six Months
Ended Year Year 04/01/94*
04/30/97 Ended Ended to
(Unaudited) 10/31/96** 10/31/95 10/31/94
Class B Class B Class B Class B
------------- ------------ ---------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period........ $9.80 $9.98 $9.45 $9.77
Income (loss) from investment operations
- ----------------------------------------
Net investment income(B).................... 0.27 0.50 0.56 0.29
Net realized and unrealized gain (loss)
on investments............................ (0.13) (0.12) 0.58 (0.35)
----- ----- ----- -----
Total from investment
operations....................... 0.14 0.38 1.14 (0.06)
Less distributions
- ------------------
Dividends from net investment income........ (0.25) (0.50) (0.61) (0.26)
Dividends in excess of net investment income ----- (0.06) ----- -----
------- ------- ------- -------
Total distributions................ (0.25) (0.56) (0.61) (0.26)
----- ----- ----- -----
Net asset value, end of period.............. $9.69 $9.80 $9.98 $9.45
===== ===== ===== =====
Total return....................... 1.49%+ 3.97% 12.45% (2.44%)(D)
Net assets, end of period (000's)........... $17,296 $19,444 $13,993 $2,746
Ratio of operating expenses to average
net assets(C)............................. 1.90%(A) 1.90% 1.90% 1.90%(A)
Ratio of net investment income to average
net assets................................ 5.68%(A) 5.06% 5.53% 5.06%(A)
Portfolio turnover rate..................... 248%(A) 477% 469% 279%
<CAPTION>
U.S. Government Securities Fund
-------------------------------------------------------
Six Months
Ended Year Year 04/01/94*
04/30/97 Ended Ended to
(Unaudited) 10/31/96** 10/31/95 10/31/94
Class C Class C Class C Class C
------------- ------------ ---------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period........ $9.80 $9.98 $9.45 $9.77
Income (loss) from investment operations
- ----------------------------------------
Net investment income(B).................... 0.26 0.50 0.56 0.26
Net realized and unrealized gain (loss)
on investments............................ (0.11) (0.12) 0.58 (0.32)
----- ----- ----- -----
Total from investment
operations....................... 0.15 0.38 1.14 (0.06)
Less distributions
- ------------------
Dividends from net investment income........ (0.26) (0.50) (0.61) (0.26)
Dividends in excess of net investment income ----- (0.06) ----- -----
------- ------- ------- -------
Total distributions................ (0.26) (0.56) (0.61) (0.26)
----- ----- ----- -----
Net asset value, end of period.............. $9.69 $9.80 $9.98 $9.45
===== ===== ===== =====
Total return....................... 1.49%+ 3.97% 12.45% (2.44%)(D)
Net assets, end of period (000's)........... $14,208 $20,009 $20,186 $10,766
Ratio of operating expenses to average
net assets(C)............................. 1.90%(A) 1.90% 1.90% 1.90%(A)
Ratio of net investment income to average
net assets................................ 5.68%(A) 5.06% 5.74% 5.06%(A)
Portfolio turnover rate..................... 248%(A) 477% 469% 279%
</TABLE>
- ------------------------------
* Commencement of operations
** Net investment income per share has been calculated using the average
shares method.
+ Non-annualized
(A) Annualized
(B) After expense reimbursement by the adviser of $0.01, $0.02, $0.04 and $0.08
per share for the U.S. Government Securities Fund - Class B and $0.01,
$0.02, $0.03 and $0.03 per share for the U.S. Government Securities Fund -
Class C, for the six months ended April 30, 1997, the years ended October
31, 1996 and 1995 and the period April 1, 1994 to October 31, 1994,
respectively.
(C) The ratio of operating expenses, before reimbursement by the adviser, was
2.06%, 2.06%, 2.28% and 3.40% for the U.S. Government Securities Fund -
Class B and 2.07%, 2.06%, 2.15% and 2.44% for the U.S. Government
Securities Fund - Class C, for the six months ended April 30, 1997, the
years ended October 31, 1996 and 1995 and the period April 1, 1994 to
October 31, 1994 on an annualized basis, respectively.
(D) Historical total returns for Classes B and C shares are one year
performance returns which include Class A performance prior to April 1,
1994.
The accompanying notes are an integral part of the financial statements.
33
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Money Market Fund - Class A
--------------------------------------------------------------------------------------------
Six Months Years Ended October 31,
Ended 08/28/89*
04/30/97 ----------------------------------------------------------------- to
(Unaudited) 1996 1995 1994 1993 1992 1991 1990 10/31/89
----------- -------- ------ ------ ------ ------ ------ ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations
- ---------------------------------
Net investment income(B).............. 0.02 0.05 0.05 0.03 0.03 0.04 0.06 0.06 0.01
Less distributions
- ------------------
Dividends from net investment income.. (0.02) (0.05) (0.05) (0.03) (0.03) (0.04) (0.06) (0.06) (0.01)
----- ----- ----- ----- ----- ----- ----- ----- -----
Net asset value, end of period........ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== ===== ===== ===== =====
Total return................. 2.45%+ 5.16% 5.60% 3.48% 2.80% 3.69% 6.22% 5.76% 0.53%+
Net assets, end of period (000's)..... $10,538 $8,087 $11,379 $8,499 $18,109 $2,244 $3,421 $4,526 $7,781
Ratio of operating expenses to average
net assets(C)....................... 0.50%(A) 0.50% 0.50% 0.50% 0.50% 0.50% 1.00% 2.45% 1.96%(A)
Ratio of net investment income to
average net assets.................. 4.90%(A) 5.02% 5.45% 3.40% 2.75% 3.77% 6.01% 5.52% 6.59%(A)
</TABLE>
- ------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
(B) After expense reimbursement and waiver by the adviser of $0.002, $0.004,
$0.004, $0.0044, $0.0084, $0.0211, $0.0270 and $0.0002 per share for the
Money Market Fund - Class A for the six months ended April 30, 1997 and the
years ended October 31, 1996, 1995, 1994, 1993, 1992, 1991 and 1990,
respectively.
(C) The ratio of operating expenses, before reimbursement and waiver by the
adviser, was 0.85%, 0.95%, 0.96%, 0.95%, 1.32%, 2.71%, 2.68% and 2.47% for
the Money Market Fund - Class A for the six months ended April 30, 1997 and
the years ended October 31, 1996, 1995, 1994, 1993, 1992, 1991 and 1990,
respectively.
The accompanying notes are an integral part of the financial statements.
34
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Money Market Fund
--------------------------------------------------------
Six Months
Ended Year Year 04/01/94*
04/30/97 Ended Ended to
(Unaudited) 10/31/96 10/31/95 10/31/94
Class B Class B Class B Class B
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.. $1.00 $1.00 $1.00 $1.00
Income from investment operations
- ---------------------------------
Net investment income(B).............. 0.02 0.05 0.05 0.02
Less distributions
- ------------------
Dividends from net investment income.. (0.02) (0.05) (0.05) (0.02)
---- ---- ---- ----
Net asset value, end of period........ $1.00 $1.00 $1.00 $1.00
===== ===== ===== =====
Total return................. 2.45%+ 5.16% 5.60% 3.48%(D)
Net assets, end of period (000's)..... $3,643 $3,062 $1,564 $312
Ratio of operating expenses to average
net assets(C)....................... 0.50%(A) 0.50% 0.50% 0.50%(A)
Ratio of net investment income to
average net assets.................. 4.90%(A) 5.02% 5.52% 3.96%(A)
<CAPTION>
Money Market Fund
--------------------------------------------------------
Six Months
Ended Year Year 04/01/94*
04/30/97 Ended Ended to
(Unaudited) 10/31/96 10/31/95 10/31/94
Class C Class C Class C Class C
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.. $1.00 $1.00 $1.00 $1.00
Income from investment operations
- ---------------------------------
Net investment income(B).............. 0.02 0.05 0.05 0.02
Less distributions
- ------------------
Dividends from net investment income.. (0.02) (0.05) (0.05) (0.02)
----- ----- ----- -----
Net asset value, end of period........ $1.00 $1.00 $1.00 $1.00
===== ===== ===== =====
Total return................. 2.45%+ 5.16% 5.60% 3.48%(D)
Net assets, end of period (000's)..... $10,348 $9,840 $9,394 $12,170
Ratio of operating expenses to average
net assets(C)....................... 0.50%(A) 0.50% 0.50% 0.50%(A)
Ratio of net investment income to
average net assets.................. 4.90%(A) 5.02% 5.46% 3.96%(A)
</TABLE>
- ------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
(B) After expense reimbursement by the adviser of $0.002, $0.007, $0.009 and
$0.0228 per share for the Money Market Fund - Class B and $0.002, $0.005,
$0.005 and $0.0037 per share for the Money Market Fund - Class C, for the
six months ended April 30, 1997, the years ended October 31, 1996 and 1995
and the period April 1, 1994 to October 31, 1994, respectively.
(C) The ratio of operating expenses, before reimbursement by the adviser, was
0.94%, 1.18%, 1.41% and 4.83% for the Money Market Fund - Class B and
0.92%, 0.98%, 0.95% and 1.18% for the Money Market Fund - Class C, for the
six months ended April 30, 1997, the years ended October 31, 1996 and 1995
and the period April 1, 1994 to October 31, 1994 on an annualized basis,
respectively.
(D) Historical total returns for Classes B and C shares are one year
performance returns which include Class A performance prior to April 1,
1994.
The accompanying notes are an integral part of the financial statements.
35
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited)
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
International Small Cap Fund
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 75.56%
Agricultural Machinery - 1.70%
Kverneland AS 9,500 $274,813
-------
Agricultural Products - 0.73%
PT London Sumatra Indonesia 46,000 118,313
-------
Auto Parts - 0.79%
Sylea* 1,500 128,245
-------
Auto Service - 0.45%
Avis Europe PLC* 33,450 73,189
------
Banking - 3.07%
Banco de A. Edwards, ADR 5,975 125,475
Banco Latinoamericano
de Exportaciones SA 4,150 190,381
Bank Tiara* 150,000 182,099
-------
497,955
Broadcasting - 1.41%
Flextech PLC* 22,800 229,109
-------
Business Services - 2.88%
Altran Technologies SA* 675 234,773
Kobenhavns Lufthavne 2,300 232,767
-------
467,540
Computers & Business Equipment - 2.21%
Creative Technology, Ltd., ADR* 3,650 49,275
Enator AB* 6,000 120,846
Psion PLC 28,900 188,763
-------
358,884
Chemicals - 0.42%
Budi Acid Jaya 55,000 67,335
------
Conglomerates - 2.12%
Amer Group, Ltd. 5,525 94,555
Misys 8,050 160,478
Solid Group, Incorporated 419,000 88,980
-------
344,013
Containers & Glass - 2.57%
International Container Terminal
& Services* 307,500 180,745
SCHMALBACH LUBECA AG* 1,075 235,882
-------
416,627
Drugs & Health Care - 3.65%
British BioTechnology PLC* 39,050 153,795
Medeva PLC 12,275 236,294
Schwarz Pharma AG* 2,800 201,293
-------
591,382
Electronics - 2.41%
Elec & Eltek International
Holdings, Ltd. 300,000 77,454
Gold Peak Industries Holdings, Ltd.* 180,000 120,829
VTech Holdings, Ltd. 114,800 192,655
-------
390,938
Food & Beverages - 2.62%
Compania Cervecerias Unidas SA, ADR 9,025 200,806
Raison Tehtaat Oy 2,700 223,771
-------
424,577
Hotels & Restaurants - 6.23%
Doutor Coffee Company* 6,000 180,092
Grupo Posadas SA* 200,000 96,898
J.D. Wetherspoon PLC 13,458 251,929
Pizza Express 16,375 183,389
Regent Inns PLC 20,000 104,376
Tele Pizza* 4,225 193,615
---------
1,010,299
Household Appliances Furnishing - 5.39%
DFS Furniture Company* 27,800 250,515
Hunter Douglas* 4,200 342,760
Industrie Natuzzi SPA, ADR* 5,750 127,938
Laox Company* 12,800 152,267
-------
873,480
Industrial Machinery - 5.32%
IHC Caland* 4,450 219,725
KCI Konecranes International 5,125 197,100
Noritsu Koki Company* 7,200 306,866
Tomra Systems AS 7,150 138,558
-------
862,249
Insurance - 1.03%
Malaysian Assurance* 31,000 166,680
-------
International Oil - 4.63%
British-Borneo Petroleum
Syndicate PLC 10,700 $222,844
Cairn Energy PLC* 22,000 198,250
Gulf Canada Resources, Ltd.* 40,500 329,063
-------
750,157
Leisure Time - 3.73%
AAPC, Ltd.* 155,009 94,289
Capital Radio 15,000 131,767
Cinar Films, Incorporated, Class B* 5,825 132,519
Tiemco 2,000 99,263
Village Roadshow* 41,500 147,255
-------
605,093
Miscellaneous - 2.11%
Rofin-Sinar Technologies, Incorporated* 20,100 298,987
PT United Tractors 15,000 43,210
-------
342,197
Office Furnishings & Supplies - 1.89%
Guilbert SA* 975 152,017
Turbon International AG* 5,650 154,316
-------
306,333
Petroleum Services - 0.97%
Petroleum Geological Services AS* 4,100 157,850
-------
Publishing - 0.32%
Dorling Kindersley Holdings PLC 11,050 51,041
------
</TABLE>
The accompanying notes are an integral part of the financial statements.
36
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Retail Trade - 3.55%
Bulgari SPA* 9,700 $175,341
Matahari Putra Prima* 90,000 125,926
Next PLC* 25,900 273,482
-------
574,749
Software - 4.08%
Baan Company NV* 3,600 193,500
Dassault Systems SA* 3,100 190,361
JBA Holdings PLC* 21,000 277,391
-------
661,252
Telecommunication Services - 2.52%
Asia Satellite Telecommunications,
Holdings, ADR* 7,425 191,194
Esprit Telecom Group PLC, ADS* 7,500 43,125
Grupo Iusacell SA, ADR* 15,325 174,322
-------
408,641
Telephone - 2.21%
Cellular Communications International* 8,000 200,000
Netcom Systems AB, Class B* 11,550 157,539
-------
357,539
Toys, Amusements & Sporting Goods - 2.34%
Salomon SA* 3,475 245,063
Skis Rossignol SA* 5,850 134,811
-------
379,874
Transportation - 2.20%
ASG AB* 8,800 157,049
Tranz Rail Holdings, Ltd., ADR 11,250 199,688
-------
356,737
TOTAL COMMON STOCKS
(Cost $11,410,651) $12,247,091
----------
PREFERRED STOCKS - 3.47%
Automobiles - 1.36%
Porsche AG* 170 220,869
-------
Financial Services - 2.11%
Marschollek, Lautenschlaeger und
Partner AG* 1,690 341,552
-------
TOTAL PREFERRED STOCKS (Cost $338,532) $562,421
-------
<CAPTION>
Principal
Amount Value
------ -----
<S> <C>
REPURCHASE AGREEMENT - 20.97%
$3,398,000 Repurchase Agreement with State
Street Bank & Trust Company dated
04/30/97 at 5.00%, to be repurchased
at $3,398,472 on 05/01/97, collateralized
by $3,555,000 U.S. Treasury Notes,
5.625% due 02/28/01 (valued at
$3,501,856, including interest) $ 3,398,000
----------
TOTAL INVESTMENTS (International
Small Cap Fund) (Cost $15,147,183) $16,207,512
==========
<CAPTION>
Small/Mid Cap Fund
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 90.13%
Aerospace - 2.22%
BE Aerospace, Incorporated* 4,000 $98,500
Gulfstream Aerospace Corporation* 14,000 357,000
-------
455,500
Apparel & Textiles - 6.64%
Cintas Corporation 5,000 273,750
G & K Services, Class A 3,000 87,000
Gucci Group NV 6,000 416,250
Nautica Enterprises, 8,600 190,275
Incorporated*
Stage Stores, Incorporated* 4,700 97,525
Tommy Hilfiger Corporation* 3,800 151,050
Warnaco Group, Incorporated 5,200 148,200
---------
1,364,050
Business Services - 3.63%
CUC International, Incorporated* 18,500 390,812
The Loewen Group, Incorporated 1,600 46,000
Paychex, Incorporated 4,400 205,975
Service Corporation International 3,000 102,750
-------
745,537
Chemicals - 0.29%
Waters Corporation* 2,000 59,250
------
Computers & Business Equipment - 4.94%
Cisco Systems, Incorporated* 4,600 238,050
Ingram Micro, Incorporated, Class A* 4,000 91,000
Seagate Technology, Incorporated* 9,000 412,875
Sundstrand Corpration 5,600 273,000
---------
1,014,925
Drugs & Health Care - 7.31%
Becton, Dickinson & Company 3,000 138,000
BioChem Pharma, Incorporated* 3,500 62,945
Cardinal Health, Incorporated 2,000 106,500
Elan Corporation PLC, ADR* 9,000 306,000
McKesson Corporation 2,100 151,988
Mentor Corporation 1,400 32,375
Oxford Health Plans, Incorporated* 5,000 329,375
Phycor, Incorporated* 14,100 375,412
---------
1,502,595
Electrical Equipment - 0.89%
American Power Conversion Corporation 2,500 48,125
ASM Lithography Holdings NV* 1,700 135,150
-------
183,275
Electronics - 15.17%
Adaptec, Incorporated* 11,400 421,800
Altera Corporation* 11,000 545,188
Cambridge Technology Partners,
Incorporated* 3,000 79,875
Electronics For Imaging, 7,100 278,675
Incorporated*
Hologic, Incorporated* 6,700 139,025
Kulicke & Soffa Industries, Incorporated* 7,000 195,562
Linear Technology Corporation 7,700 386,925
</TABLE>
The accompanying notes are an integral part of the financial statements.
37
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Electronics - continued
Maxim Integrated Products,
Incorporated* 10,600 $560,475
Xilinx, Incorporated* 10,400 509,600
---------
3,117,125
Financial Services - 2.97%
Money Store, Incorporated 28,200 609,825
-------
Food & Beverages - 1.63%
Chiquita Brands
International,Incorporated 12,000 172,500
Pioneer Hi-Bred International,
Incorporated 2,300 162,437
-------
334,937
Hotels & Restaurants - 2.01%
Boston Market, Incorporated* 5,000 119,375
Landrys Seafood Restaurants* 4,500 63,211
Lone Star Steakhouse & Saloon,
Incorporated* 7,900 156,025
Mirage Resorts, Incorporated* 3,700 74,462
-------
413,073
Household Appliances Furnishing - 3.24%
Sunbeam Corporation 21,000 666,750
-------
Industrial Machinery - 4.00%
Applied Materials, Incorporated* 8,600 471,925
Tyco International, Ltd. 2,000 122,000
U.S. Filter Corporation* 7,500 227,812
-------
821,737
Insurance - 5.03%
Equifax, Incorporated 10,500 301,875
MGIC Investment Corporation 6,000 487,500
SunAmerica, Incorporated 5,300 243,800
---------
1,033,175
Investment Companies - 2.19%
The Charles Schwab Corporation 12,300 450,487
-------
Leisure Time - 3.10%
Carnival Corporation 2,800 103,250
Coach USA, Incorporated* 3,800 96,900
International Game Technology 27,500 436,563
-------
636,713
Metal & Metal Products - 0.95%
Special Metals Corporation* 2,900 40,963
Titanium Metals Corporation* 6,000 155,250
-------
196,213
Office Furnishings & Supplies - 0.47%
Avery Dennison Corporation 2,600 95,550
------
Petroleum Services - 3.66%
Global Marine, Incorporated* 8,000 161,000
Halliburton Company 3,200 226,000
Reading & Bates Corporation* 10,000 223,750
Smith International, Incorporated* 3,000 142,125
-------
752,875
Plastics - 1.51%
Sealed Air Corporation* 6,700 309,875
-------
Pollution Control - 1.79%
United Waste Systems, Incorporated* 5,000 168,750
USA Waste Services, Incorporated* 6,100 199,775
-------
368,525
Real Estate - 1.32%
CWM Mortgage Holdings, Incorporated 7,200 143,100
Vornado Realty Trust 2,000 127,250
-------
270,350
Retail Trade - 4.10%
Bed Bath & Beyond, Incorporated* 5,000 136,875
Borders Group, Incorporated* 5,400 114,750
Nine West Group, 2,400 95,100
Incorporated*
Rite Aid Corporation 3,600 165,600
TJX Companies, Incorporated 7,000 330,750
-------
843,075
Shipbuilding - 0.43%
West Marine, Incorporated* 3,400 88,400
------
Software - 3.47%
Parametric Technology Corporation* 10,200 461,550
Read-Rite Corporation* 3,000 77,625
Sterling Commerce, Incorporated* 6,700 173,363
-------
712,538
Telecommunication Services - 6.07%
Nokia Corporation, ADR 9,300 601,013
PairGain Technologies, Incorporated* 5,000 130,000
Tellabs, Incorporated* 10,400 414,700
Univision Communications,
Incorporated, Class A* 3,000 102,000
---------
1,247,713
Telephone - 0.86%
Worldcom, Incorporated 7,400 177,600
-------
Trucking & Freight - 0.23 %
Tidewater, Incorporated 1,200 48,151
------
TOTAL COMMON STOCKS
(Cost $17,840,196) $18,519,819
----------
<CAPTION>
Principal
Amount Value
-------- --------
<S> <C> <C>
SHORT TERM INVESTMENTS - 9.87%
Aristar, Incorporated,
5.54% due 05/06/97 $700,000 $699,461
Green Tree Financial Corporation,
5.57% due 05/08/97 700,000 699,242
Rembrandt International Company,
Incorporated, 5.58% due 05/12/97 300,000 299,489
Seven Seas Money Market Fund 330,521 330,521
---------
2,028,713
TOTAL INVESTMENTS
(Small/Mid Cap Fund) (Cost $19,868,909) $20,548,532
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
38
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
Global Equity Fund
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 100.00%
Air Travel - 1.80%
AMR Corporation* 22,000 $2,048,750
---------
Aluminum - 1.22%
Aluminum Company of America 19,800 1,383,525
---------
Auto Parts - 1.13%
Borg-Warner Automotive, Incorporated 30,500 1,281,000
---------
Automobiles - 3.38%
Peugeot SA 8,000 796,368
Volkswagen AG 4,800 3,051,622
---------
3,847,990
Banking - 11.39%
ABN AMRO Holdings NV 21,100 1,450,131
Bank of New York, Incorporated 55,700 2,200,150
Banque Nationale de Paris 30,900 1,318,273
First Chicago NBD Corporation 25,900 1,456,875
GreenPoint Financial Corporation 21,700 1,201,638
HSBC Holdings 72,200 1,818,457
Jardine Strategic Holdings, Ltd. 549,000 1,866,600
Mellon Bank Corporation 19,700 1,637,562
----------
12,949,686
Business Services - 0.58%
Intelidata Technologies Corporation* 119,200 551,300
NCR Corporation* 3,800 110,200
-------
661,500
Chemicals - 6.20%
Akzo Nobel NV, ADS 9,600 1,236,770
BASF AG 38,600 1,488,902
Bayer AG 57,000 2,267,756
Potash Corporation of Saskatchewan,
Incorporated* 26,700 2,061,271
---------
7,054,699
Computers & Business Equipment - 2.81%
Data General Corporation* 62,700 1,175,625
Olivetti & C. SPA* 960,000 280,345
Tandy Corporation 33,200 1,738,850
---------
3,194,820
Conglomerates - 1.12%
CSR, Ltd. 344,000 1,271,590
---------
Construction & Mining Equipment - 0.94%
Greenfield Industries, Incorporated 52,500 1,069,687
---------
Construction Materials - 1.09%
Holderbank Financier Glarus AG 1,600 1,244,963
---------
Containers & Glass - 0.64%
Toyo Seikan Kaisha 39,600 726,892
-------
Crude Petroleum & Natural Gas - 1.28%
Elf Aquitaine 15,000 1,454,639
---------
Domestic Oil - 0.50%
Pennzoil Company 11,600 $571,300
-------
Drugs & Health Care - 0.64%
Pharmacia & Upjohn, Incorporated 24,500 725,812
-------
Electric Utilities - 2.70%
Iberdrola SA 87,000 981,841
Southern Electric PLC 166,307 821,878
VEBA AG 24,500 1,261,924
---------
3,065,643
Electrical Equipment - 0.96%
Hitachi 121,000 1,096,230
---------
Electronics - 3.40%
Ascom Holdings AG* 560 571,359
GenRad, Incorporated* 60,000 990,000
SGS Thomson Microelectronics,
Incorporated* 12,200 940,632
TDK Corporation 19,000 1,369,599
---------
3,871,590
Financial Services - 5.72%
Enhance Financial Services Group,
Incorporated 22,450 864,325
Internationale Nederlanden Groep NV 56,150 2,204,730
PennCorp Financial Group,
Incorporated 43,300 1,488,438
UST Corporation 104,000 1,950,000
---------
6,507,493
Food & Beverages - 7.35%
Danone 4,000 582,541
Kao Corporation 108,000 1,259,227
Nestle SA 1,600 1,942,880
Reckitt & Colman PLC 200,897 2,735,065
Tate & Lyle PLC 245,846 1,836,872
---------
8,356,585
Household Appliances Furnishing - 2.15%
Matsushita Electric Industrial
Company, Ltd. 72,000 1,151,455
Philips Electronics NV 24,700 1,289,324
---------
2,440,779
Household Products - 2.34%
Unilever 101,300 2,661,382
---------
Industrial Machinery - 4.42%
Bobst AG 400 582,321
Schindler Holding AG 600 726,545
Sulzer AG 1,000 688,556
Sumitomo Rubber Industries 80,000 523,102
Tecumseh Products Company 21,600 1,166,400
Valeo 21,800 1,344,642
---------
5,031,566
</TABLE>
The accompanying notes are an integral part of the financial statements.
39
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Insurance - 6.98%
Irish Life 628,100 $3,054,704
MBIA, Incorporated 20,500 1,996,188
SCOR, ADS 16,550 646,518
Sumitomo Marine & Fire 148,000 910,608
Terra Nova Bermuda Holdings, Ltd. 100 1,875
WPP Group PLC, ADR 325,000 1,322,123
---------
7,932,016
Investment Companies - 0.30%
India Gateway Fund* 73,890 336,199
-------
Miscellaneous - 0.75%
Clondalkin Group PLC 85,700 847,277
-------
Paper - 1.51%
Boise Cascade Corporation 51,600 1,715,700
---------
Photography - 2.59%
Fuji Photo Film Company 77,000 2,942,057
---------
Pollution Control - 1.94%
Browning-Ferris Industries,
Incorporated 77,600 2,201,900
---------
Publishing - 2.55%
Houghton Mifflin Company 51,600 2,896,050
---------
Railroads & Equipment - 0.91%
East Japan Railway 240 1,038,012
---------
Retail Grocery - 0.35%
Albertsons, Incorporated 12,000 396,000
-------
Retail Trade - 6.57%
Coles Myer, Ltd. 322,347 1,566,109
Delhaize-Le Lion SA 21,100 1,059,426
G.I.B. Holdings, Ltd. 14,100 611,329
Karstadt AG 4,500 1,348,597
Toys R Us, Incorporated* 23,800 678,300
Waban, Incorporated* 82,500 2,206,875
---------
7,470,636
Software - 0.27%
Novell, Incorporated* 40,100 303,256
-------
Telecommunication Services - 1.89%
Comsat Corporation 103,500 2,147,625
---------
Telephone - 6.02%
American Telephone & Telegraph
Corporation 30,400 1,018,400
MCI Communications Corporation 55,900 2,131,188
STET 564,000 2,091,725
Telefonica de Espana SA 62,700 1,606,043
---------
6,847,356
Tobacco - 2.54%
B.A.T. Industries PLC 87,000 731,815
Philip Morris Companies, Incorporated 54,900 2,161,688
---------
2,893,503
Trucking & Freight - 1.07%
Peninsular & Oriental Steam
Navigation Company 125,000 1,221,637
---------
TOTAL COMMON STOCKS
(Cost $103,741,420) $113,707,345
-----------
TOTAL INVESTMENTS
(Global Equity Fund) (Cost $103,741,420) $113,707,345
===========
<CAPTION>
Growth Equity Fund
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 77.00%
Aerospace - 1.81%
Boeing Company 900 $88,763
Gulfstream Aerospace Corporation* 8,750 223,125
-------
311,888
Apparel & Textiles - 0.74%
Reebok International, Ltd.* 3,350 128,138
-------
Automobiles - 1.29%
Volkswagen AG 350 222,514
-------
Banking - 5.75%
BankAmerica Corporation 3,050 356,469
The Chase Manhattan Corporation 984 91,143
Citicorp 1,550 174,569
First Union Corporation 3,400 285,600
Mellon Bank Corporation 1,000 83,125
-------
990,906
Business Services - 0.69%
Fiserv, Incorporated* 3,150 118,913
-------
Computers & Business Equipment - 3.72%
Compaq Computer Corporation* 1,100 93,912
Oce-Van Der Grinten NV 1,550 187,515
Western Digital Corporation* 1,550 95,519
Xerox Corporation 4,300 264,450
-------
641,396
Domestic Oil - 0.31%
Phillips Petroleum Company 1,350 53,156
------
Drugs & Health Care - 17.54%
Astra AB 750 29,781
Bristol-Myers Squibb Company 4,950 324,225
Cardinal Health, Incorporated 3,061 162,998
Columbia/HCA Healthcare Corporation 5,825 203,875
Glaxo Wellcome PLC 2,800 110,250
</TABLE>
The accompanying notes are an integral part of the financial statements.
40
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Drugs & Health Care - continued
Johnson & Johnson 2,600 $159,250
Eli Lilly and Company 3,650 320,744
Medtronic, Incorporated 1,600 110,800
Merck & Company, Incorporated 1,450 131,225
Novartis AG 150 197,612
Phycor, Incorporated* 7,050 187,706
SmithKline Beecham PLC 4,275 344,672
Stryker Corporation 6,200 203,825
Tenet Healthcare Corporation* 1,125 29,250
Warner-Lambert Company 5,175 507,150
---------
3,023,363
Electrical Equipment - 2.06%
General Electric Company 3,200 354,800
-------
Electronics - 10.26%
Altera Corporation* 6,950 344,459
Intel Corporation 825 126,328
Maxim Integrated Products,
Incorporated* 4,600 243,225
Motorola, Incorporated 5,775 330,619
National Semiconductor Corporation* 6,475 161,875
Xilinx, Incorporated* 11,475 562,275
---------
1,768,781
Financial Services - 4.81%
Associates First Capital Corporation 4,750 243,438
Federal National Mortgage Association 5,075 208,709
Great Western Financial Corporation* 3,425 143,850
Student Loan Marketing Association* 1,975 233,544
-------
829,541
Food & Beverages - 2.56%
The Coca-Cola Company 3,750 238,594
Coca-Cola Enterprises, Incorporated 3,350 202,256
-------
440,850
Hotels & Restaurants - 0.75%
McDonald's Corporation 2,400 128,700
-------
Household Appliances Furnishing - 1.91%
Hunter Douglas NV 1,400 114,253
Sunbeam Corporation 6,800 215,900
-------
330,153
Household Products - 3.87%
Clorox Company 1,300 165,587
Dial Corporation 9,600 148,800
Gillette Company 2,667 226,695
Procter & Gamble Company 1,000 125,750
-------
666,832
Insurance - 2.39%
CIGNA Corporation* 850 127,819
Everest Reinsurance Holdings 3,525 101,344
The Progressive Corporation 2,400 182,700
-------
411,863
International Oil - 0.56%
Exxon Corporation 1,700 96,262
------
Newspapers - 0.73%
Gannett Company, Incorporated 1,450 126,512
-------
Petroleum Services - 1.65%
Global Marine, Incorporated* 4,800 96,600
Schlumberger, Ltd. 1,700 188,275
-------
284,875
Retail Grocery - 0.41%
Safeway, Incorporated* 1,575 70,284
------
Retail Trade - 1.07%
Tiffany & Company* 2,950 116,894
Wal-Mart Stores, Incorporated 2,400 67,800
-------
184,694
Software - 5.34%
BMC Software, Incorporated* 4,375 189,219
Microsoft Corporation* 2,325 282,487
Parametric Technology Corporation* 2,200 99,550
PeopleSoft, Incorporated* 4,875 202,312
Shared Medical System 3,475 146,384
-------
919,952
Telecommunication Services - 5.20%
Lucent Technologies, Incorporated 3,500 206,938
Nokia Corporation, ADR 2,750 177,719
QUALCOMM, Incorporated* 2,550 119,213
SK Telecom, Ltd., ADR 3,425 32,535
TeleCom Brazil-Telebras, ADR 1,225 140,569
Tellabs, Incorporated* 5,500 219,313
-------
896,287
Telephone - 0.39%
DDI Corporation 10 66,412
------
Tobacco - 1.20%
Philip Morris Companies, Incorporated 4,300 169,312
RJR Nabisco Holdings Corporation* 1,250 37,188
-------
206,500
TOTAL COMMON STOCKS
(Cost $11,774,787) $13,273,572
----------
<CAPTION>
Principal
Amount Value
------ -----
<S> <C>
REPURCHASE AGREEMENT - 23.00%
$3,965,000 Repurchase Agreement with State
Street Bank & Trust Company dated
04/30/97 at 5.00%, to be repurchased
at $3,965,551 on 05/01/97, collateralized
by $4,040,000 U.S. Treasury Notes,
6.125% due 07/31/00 (valued at
$4,108,651, including interest) $3,965,000
---------
TOTAL INVESTMENTS
(Growth Equity Fund) (Cost $15,739,787) $17,238,572
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
41
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
International Growth and Income Fund
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 79.04%
Aerospace - 1.78%
British Airways PLC 12,000 $137,115
CSF Thomson 5,600 172,706
Lucas Varity PLC, ADS* 63,700 193,062
-------
502,883
Apparel & Textiles - 0.76%
Christian Dior 1,150 170,436
Tomen Corporation 20,000 44,117
-------
214,553
Automobiles - 2.83%
Fiat SPA* 25,000 82,497
Nissan Motor Company, Ltd.* 31,000 182,432
Peugeot SA* 1,600 159,274
Toyota Motor Corporation 13,000 376,886
-------
801,089
Banking - 12.67%
Allied Irish Banks, ADS 10,250 71,544
Asahi Bank, Ltd. 13,000 79,576
The Ashikaga Bank, Ltd. 18,000 54,453
Bangkok Bank 9,000 83,376
Bank of East Asia 14,880 51,191
Bank of Ireland 20,850 217,514
PT Bank Niaga 69,500 194,486
Bank of Tokyo-Mitsubishi, ADS 6,000 95,009
Banco Popular Espanol SA 1,000 212,031
Banco Industrial Colombiano, ADR 1,700 30,813
Bayerische Hypotheken und
Wechsel Bank AG* 11,160 347,985
Daiwa Bank 23,000 74,290
Fuji Bank 7,000 78,859
Fukui Bank 16,000 57,982
HSBC Holdings 5,200 131,569
Istituto Mobiliare Italiano* 12,000 102,221
Lloyds TSB Group PLC* 27,900 254,582
The Mitsui Trust & Banking
Company, Ltd. 25,000 142,593
National Australia Bank, Ltd. 24,700 338,053
National Mortgage Bank* 1,200 80,524
Royal Bank of Scotland Group PLC 23,000 216,953
Sakura Bank 26,000 137,440
Sanwa Bank 6,000 64,285
Societe Generale* 1,623 181,863
Standard Chartered 16,700 251,718
Yapi ve Kredi Bankasi AS* 776,000 32,624
---------
3,583,534
Business Services - 0.71%
Eaux (Cie Generale Des)* 1,445 201,282
-------
Chemicals - 3.18%
Air Liquide* 1,197 180,273
Allied Colloids Group PLC 102,214 207,808
Bayer AG* 7,500 298,389
Henkel KGaA 2,032 102,550
Mitsui Toatsu Chemical* 19,000 53,138
Sekisui Chemical Company, Ltd. 6,000 57,667
-------
899,825
Computers & Business Equipment - 0.78%
Fujitsu, Ltd. 12,000 124,788
Ricoh Company, Ltd. 8,000 95,167
-------
219,955
Conglomerates - 1.95%
Koors Industries, Ltd., ADS 6,400 111,200
Swire Pacific, Ltd.* 30,000 231,395
Tomkins 48,300 208,230
-------
550,825
Construction & Mining Equipment - 0.48%
Asia Cement Corporation 4,600 83,984
Nishimatsu Construction* 9,000 50,695
-------
134,679
Construction Materials - 1.46%
Cemex SA 11,500 86,250
CRH 12,000 117,352
PT Semen Cibinong 35,000 95,422
Siam Cement Company* 4,200 112,547
-------
411,571
Crude Petroleum & Natural Gas - 1.54%
Elf Aquitaine* 2,450 237,591
ENI SPA, ADS* 39,000 197,941
-------
435,532
Drugs & Health Care - 4.12%
Daiichi Pharmaceutical Company 3,000 48,214
Elan PLC 1,300 43,550
Glaxo Wellcome* 15,700 308,656
Ono Pharmaceutical* 4,000 113,444
Seiren Company 21,000 83,712
Synthelabo* 1,750 208,387
Yamanouchi Pharmaceutical
Company, Ltd. 3,000 64,048
Zeneca Group PLC* 9,800 296,065
---------
1,166,076
Electric Utilities - 4.39%
Companhia Energetica de Minas Gerais 4,500 204,788
Empresa Nacional Electricidad SA 7,900 152,075
Hong Kong Electric* 21,500 76,047
Iberdrola SA 23,900 269,724
Scottish Power 53,000 321,264
Tokyo Electric Power 6,200 109,899
VEBA AG* 2,100 108,165
---------
1,241,962
Electrical Equipment - 1.93%
Hitachi, Ltd. 21,000 190,255
Mitsubishi Electric Company 19,000 104,030
Sanden Corporation 2,000 16,229
Siemens AG 4,370 236,693
-------
547,207
</TABLE>
The accompanying notes are an integral part of the financial statements.
42
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Electronics - 2.20%
Kyocera Corporation 1,000 $59,873
Murata Manufacturing Company, Ltd. 4,000 147,477
Nissei Sangyo Company 9,450 99,015
Racal Electronics 43,300 167,375
Samsung Electronics 3,100 149,203
-------
622,943
Financial Services - 0.21%
Alliance & Leicester PLC 6,400 59,332
------
Food & Beverages - 2.94%
Cadbury Schweppes, ADS 29,000 240,648
Greencore Group PLC 17,200 87,781
Itoham Foods, Incorporated* 14,000 70,587
Japan Tobacco, Incorporated 10 63,733
Lion Nathan, Ltd. 110,200 265,091
President Enterprises Corporation 5,850 103,838
-------
831,678
Forest Products - 0.25%
Sumitomo Forestry Company 7,000 71,139
------
Homebuilders - 0.42%
Bilfinger & Berger
Bauaktiengesellschaft AG* 1,200 44,624
Taisei Corporation 20,000 73,266
-------
117,890
Hotel & Restaurants - 0.32%
PT Jakarta International Hotels
& Development* 101,000 90,401
------
Household Appliances Furnishing - 1.03%
Matsushita Electric Industrial
Company, Ltd. 10,000 159,924
Sony Corporation 1,800 131,028
-------
290,952
Industrial Machinery - 1.96%
Daiken Corporation 19,000 103,880
Daikin Industries 5,000 39,272
Ebara Corporation 11,000 142,120
Mitsubishi Heavy Industries, Ltd. 17,000 112,231
Reliance Industries 8,500 158,100
-------
555,603
Insurance - 4.71%
Fortis AG* 1,080 192,739
Guardian Royal Exchange 40,600 181,285
Istituto Nazionale della Assicurazioni 116,000 155,486
Irish Life PLC 33,000 160,492
Munchener Ruckvers 158 382,729
Tokio Marine & Fire Insurance Company* 9,000 87,919
Union des Assurance Federales 1,440 171,473
---------
1,332,123
International Oil - 2.05%
The British Petroleum Company PLC* 21,154 $242,740
Cosmo Oil Company 13,000 52,948
Petrofina SA* 530 188,650
RWE AG 980 32,935
YPF Sociedad Anonima, ADR 2,290 63,261
-------
580,534
Investment Companies - 1.13%
Brierley Investment, Ltd. 170,000 149,671
Koc Holdings* 59,000 11,967
Nomura Securities* 14,000 156,615
-------
318,253
Leisure Time - 2.52%
Compass Group 24,000 262,950
Pathe SA* 760 177,483
Rank Group PLC, ADR 39,500 272,083
-------
712,516
Miscellaneous - 0.24%
Yue Yuen Industrial Holdings 30,800 67,989
------
Mining - 0.18%
Mitsui Mining & Smelting 13,000 51,002
------
Newspaper - 0.05%
Hurriyet Gazetecilik ve Matbaacilik 235,000 13,346
------
Non-Ferrous Metals - 0.69%
WMC, Ltd. 32,900 194,993
-------
Paper - 2.51%
Fletcher Challenge 170,500 378,232
OJI Paper Company 6,000 30,299
Pabrik Kertas Tjiwi Kimia 124,000 127,572
Jefferson Smurfit Group PLC 71,300 174,451
-------
710,554
Petroleum Services - 2.07%
Broken Hill Proprietary Company, Ltd. 24,100 339,802
Petroleo Brasileiro S/A-Petrobras, ADR 7,000 148,418
Repsol SA 2,300 96,433
-------
584,653
Photography - 0.57%
Canon Sales Company, Incorporated 2,200 45,582
Fuji Photo Film Company 3,000 114,626
-------
160,208
Publishing - 0.16%
Arnoldo Mondadori Editore 8,000 46,561
------
Railroads & Equipment - 0.59%
West Japan Railway Company 50 165,439
-------
</TABLE>
The accompanying notes are an integral part of the financial statements.
43
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Real Estate - 1.76%
Cheung Kong Holdings 21,000 $184,341
Daiwa Kosho Lease 11,000 73,573
Henderson Land Development Company, Ltd.* 9,000 75,809
Sumitomo Realty & Development* 11,000 78,079
Sun Hung Kai Properties 8,000 86,749
-------
498,551
Retail Grocery - 0.80%
Izumi Company* 4,000 51,680
J. Sainsbury PLC 32,800 175,961
-------
227,641
Retail Trade - 2.94%
Ava Allgemeine Handels-Der Verbr AG* 150 40,536
Cifra SA de CV 68,900 101,972
Douglas Holding AG* 1,700 55,463
FamilyMart Company 100 3,663
Izumiya Company 8,000 112,184
Promodes* 587 198,030
Sears PLC 203,200 253,588
Takashimaya Company, Ltd. 6,000 67,121
-------
832,557
Steel - 1.42%
Krupp AG Hoesch-Krupp* 950 174,717
Nippon Steel Corporation* 49,000 139,741
Rautaruukki OY 9,900 86,809
-------
401,267
Telecommunication Services - 0.29%
Portugal Telecom SA* 2,200 81,400
------
Telephone - 5.57%
Compania Anonima Nacional Telefonos
de Venezuela 1,700 51,000
Deutsche Telekom AG* 10,810 234,577
Philippine Long Distance Telephone Company 2,700 89,775
Telecom Corporation of New Zealand 56,000 251,175
Telecomunicacoes Brasileiras S/A-Telebras* 1,950 223,762
Telefonica De Argentina SA 4,600 152,950
Telefonos De Mexico SA 2,480 102,300
Telekom Italia* 78,000 205,230
Vodafone Group, ADR 59,100 264,370
---------
1,575,139
Tires & Rubber - 0.34%
Yokohama Rubber Company 24,000 94,915
------
Tobacco - 0.25%
ITC, Ltd. 5,900 71,538
------
Trucking & Freight - 0.29%
Nippon Express Company 12,000 82,720
------
TOTAL COMMON STOCKS
(Cost $22,222,486) $22,354,810
----------
PREFERRED STOCKS - 2.37%
Automobiles - 0.68%
Volkswagen AG* 390 $193,221
-------
Electronics - 0.29%
Nokia (AB) OY 1,299 81,031
------
Industrial Machinery - 0.40%
GEA AG* 250 85,172
M.A.N. AG 126 28,593
-------
113,765
Newspapers - 0.71%
News Corporation, Ltd., ADS 53,000 202,114
-------
Software - 0.29%
SAP AG* 440 81,023
------
TOTAL PREFERRED STOCKS
(Cost $575,063) $671,154
-------
WARRANTS - 0.93%*
Automobiles - 0.48%
Volkswagen International (Expiration
date 10/27/98; strike price DEM 221) 400 135,119
-------
Chemicals - 0.09%
Shin-Etsu Chemical (Expiration
date 08/01/00; strike price (YEN) 1917) 21 25,200
------
Financial Services - 0.35%
Veba International Finance BV (Expiration
date 04/06/98; strike price DEM 375) 346 100,296
-------
Mining - 0.01%
Dowa Mining Company (Expiration
date 12/09/97; strike price (YEN) 428) 17 2,125
-----
TOTAL WARRANTS (Cost $234,662) $262,740
-------
<CAPTION>
Principal
Amount Value
------ -----
<S> <C> <C>
CONVERTIBLE BONDS - 0.33%
Bot Cayman Finance,
4.25% due 03/31/49 (YEN) 10,000,000 $94,143
------
TOTAL CONVERTIBLE BONDS
(Cost $117,638) $94,143
------
CORPORATE BONDS - 1.71%
Treuhandanstalt,
7.125% due 01/29/03 DEM 650,000 412,752
7.75% due 10/01/02 110,000 71,680
-------
484,432
TOTAL CORPORATE BONDS
(Cost $556,962) $484,432
--------
</TABLE>
The accompanying notes are an integral part of the financial statements.
44
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
------ -----
<S> <C> <C>
FOREIGN GOVERNMENT OBLIGATIONS - 13.98%
Kingdom of Denmark - 0.18%
7.00% due 12/15/04 DKK 50,000 $7,913
8.00% due 11/15/01 260,000 43,710
------
51,623
Government of France - 1.90%
5.75% due 03/12/01 FRF 3,000,000 537,754
-------
Government of Germany - 3.17%
6.00% due 01/05/06 DEM 280,000 164,786
9.00% due 10/20/00 300,000 198,989
9.00% due 01/22/01 800,000 533,641
-------
897,416
Government of Great Britain - 5.66%
United Kingdom Treasury,
8.00% due 12/07/00 (POUNDS) 386,000 642,421
8.50% due 12/07/05 555,000 959,669
---------
1,602,090
Republic of Italy - 0.05%
6.50% due 06/28/01 ITL 25,000,000 15,258
------
Government of Netherlands - 2.39%
6.00% due 01/15/06 NLG 141,000 74,166
8.75% due 05/01/00 450,000 260,419
9.00% due 01/15/01 575,000 340,166
-------
674,751
Government of Spain - 0.62%
10.50% due 10/30/03 ESP 21,000,000 174,328
-------
TOTAL FOREIGN GOVERNMENT
OBLIGATIONS (Cost $4,152,151) $3,953,220
---------
<CAPTION>
Principal
Amount Value
------ -----
<S> <C> <C>
REPURCHASE AGREEMENT - 1.63%
$462,000 Repurchase Agreement with State Street Bank
& Trust Company dated 04/30/97 at 5.00%,
to be repurchased at $462,064 on 05/01/97,
collateralized by $465,000 U.S. Treasury
Notes, 6.25% due 07/31/98 (valued at $480,017,
including interest) $462,000
--------
TOTAL INVESTMENTS
(International Growth & Income Fund)
(Cost $28,320,962) $28,282,499
==========
Growth and Income Fund
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 98.21%
Aerospace - 3.46%
Boeing Company 21,000 $2,071,125
Northrop Grumman Corporation 18,200 1,519,700
United Technologies Corporation 21,600 1,633,500
---------
5,224,325
Agricultural Machinery - 1.37%
Deere & Company 45,000 2,070,000
---------
Air Travel - 0.95%
Southwest Airlines Company 52,000 1,430,000
---------
Aluminum - 1.00%
Aluminium Company of America 21,600 1,509,300
---------
Automobiles - 1.78%
Ford Motor Company 77,203 2,682,804
---------
Banking - 5.85%
Citicorp 30,200 3,401,275
First Union Corporation 33,200 2,788,800
NationsBank Corporation 43,600 2,632,350
---------
8,822,425
Broadcasting - 0.83%
Viacom, Incorporated* 47,000 1,257,250
---------
Business Services - 1.82%
Cognizant Corporation 26,000 848,250
First Data Corporation 55,000 1,897,500
---------
2,745,750
Chemicals - 3.01%
The Dow Chemical Company 23,400 1,986,075
E.I. Du Pont De Nemours & Company 11,600 1,231,050
Zeneca Group PLC, ADR 14,700 1,328,512
---------
4,545,637
Computers & Business Equipment - 4.91%
3Com Corporation* 12,400 359,600
Cisco Systems, Incorporated* 12,000 621,000
Hewlett-Packard Company 34,400 1,806,000
International Business Machines Corporation 17,000 2,732,750
Xerox Corporation 30,600 1,881,900
---------
7,401,250
Construction & Mining Equipment - 2.44%
Caterpillar, Incorporated 28,400 2,527,600
Foster Wheeler Corporation 30,000 1,158,750
---------
3,686,350
Containers & Glass - 0.64%
Crown Cork & Seal, Incorporated 17,500 958,125
-------
Crude Petroleum & Natural Gas - 0.55%
Union Pacific Resources Group, Incorporated 30,326 822,593
-------
Drugs & Health Care - 12.22%
Abbott Laboratories 44,000 2,684,000
American Home Products Corporation 10,000 662,500
Bristol-Myers Squibb Company 26,400 1,729,200
Columbia/HCA Healthcare Corporation 44,000 1,540,000
Johnson & Johnson 28,000 1,715,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
45
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Drugs & Health Care - continued
Merck & Company, Incorporated 15,500 $1,402,750
Pfizer, Incorporated 23,600 2,265,600
Pharmacia & Upjohn, Incorporated 44,000 1,303,500
Rhone Poulenc Rorer, Incorporated 26,200 1,889,675
Tenet Healthcare Corporation* 49,600 1,289,600
Warner-Lambert Company 20,000 1,960,000
----------
18,441,825
Electric Utilities - 2.38%
DPL, Incorporated 55,000 1,299,375
Duke Power Company 29,000 1,272,375
Texas Utilities Company 30,000 1,012,500
---------
3,584,250
Electrical Equipment - 2.76%
General Electric Company 37,600 4,168,900
---------
Electronics - 3.63%
AMP, Incorporated 41,000 1,470,875
Intel Corporation 15,200 2,327,500
Motorola, Incorporated 29,300 1,677,425
---------
5,475,800
Financial Services - 8.14%
Allstate Corporation 44,000 2,882,000
American Express Company 46,000 3,030,250
Dean Witter, Discover & Company 500 19,125
Federal National Mortgage Association 60,000 2,467,500
State Street Boston Corporation 12,500 984,375
Travelers Group, Incorporated 52,200 2,890,575
----------
12,273,825
Food & Beverages - 2.74%
General Mills, Incorporated 20,000 1,240,000
H.J. Heinz Company 13,000 539,500
Sara Lee Corporation 56,000 2,352,000
---------
4,131,500
Hotels & Restaurants - 1.60%
McDonald's Corporation 45,000 2,413,125
---------
Household Products - 2.83%
Colgate Palmolive Company 17,000 1,887,000
Procter & Gamble Company 19,000 2,389,250
---------
4,276,250
Insurance - 2.51%
ACE, Ltd. 28,800 1,728,000
American International Group,
Incorporated 16,000 2,056,000
---------
3,784,000
International Oil - 6.85%
Amoco Corporation 25,700 2,149,162
Chevron Corporation 39,000 2,671,500
Exxon Corporation 51,000 2,887,875
Royal Dutch Petroleum Company 14,600 2,631,650
----------
10,340,187
Liquor - 1.13%
Anheuser-Busch Companies, Incorporated 39,800 1,706,425
---------
Mining - 0.21%
Phelps Dodge Corporation 4,200 322,350
-------
Newspapers - 1.68%
Gannett, Incorporated 29,000 2,530,250
---------
Non-Ferrous Metals - 0.67%
Engelhard Corporation 47,825 1,004,325
---------
Paper - 4.27%
International Paper Company 56,000 2,366,000
Kimberly Clark Corporation 44,000 2,255,000
Minnesota Mining & Manufacturing Company 21,000 1,827,000
---------
6,448,000
Petroleum Services - 1.59%
Schlumberger, Ltd. 21,600 2,392,200
---------
Railroads & Equipment - 1.01%
Union Pacific Corporation 24,000 1,530,000
---------
Retail Trade - 4.62%
Dayton Hudson Corporation 46,000 2,070,000
Sears Roebuck & Company 55,000 2,640,000
Wal-Mart Stores, Incorporated 80,000 2,260,000
---------
6,970,000
Software - 0.97%
Microsoft Corporation* 12,000 1,458,000
---------
Telecommunication Services - 1.39%
Lucent Technologies, Incorporated 14,246 842,295
Nokia Corporation, ADR 19,500 1,260,188
---------
2,102,483
Telephone - 4.52%
NYNEX Corporation 47,000 2,432,250
SBC Communications, Incorporated 55,000 3,052,500
U.S. West, Incorporated 38,000 1,334,750
---------
6,819,500
Tires & Rubber - 0.77%
The Goodyear Tire and Rubber Company 22,000 1,157,750
---------
Tobacco - 1.10%
Philip Morris Companies, Incorporated 42,000 1,653,750
---------
TOTAL COMMON STOCKS
(Cost $109,681,690) $148,140,504
-----------
PREFERRED STOCKS - 0.36%
Software - 0.36%
Microsoft Corporation 6,400 548,000
-------
TOTAL PREFERRED STOCKS
(Cost $511,200) $548,000
-------
</TABLE>
The accompanying notes are an integral part of the financial statements.
46
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
------ -----
<S> <C>
REPURCHASE AGREEMENT - 1.43%
$2,155,000 Repurchase Agreement with Paine
Webber dated 04/30/97 at 5.45%, to
be repurchased at $2,155,326 on
05/01/97, collateralized by $1,965,000
U.S. Treasury Notes, 7.875% due
11/15/04 (valued at $2,170,253,including
interest) and $100,000 U.S. Treasury
Notes, 6.75% due 05/31/97 (valued at
$102,894, including interest) $2,155,000
---------
TOTAL INVESTMENTS
(Growth & Income Fund) (Cost $112,347,890) $150,843,504
===========
</TABLE>
Equity-Income Fund
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 92.60%
Aluminum - 0.89%
Reynolds Metals Company 19,200 $1,303,200
-----------
Auto Parts - 1.00%
Eaton Corporation 10,000 748,750
Genuine Parts Company 22,200 718,725
-----------
1,467,475
Automobiles - 0.95%
Ford Motor Company 11,200 389,200
General Motors Corporation 17,200 995,450
-----------
1,384,650
Banking - 8.83%
Banc One Corporation 14,500 614,438
BankBoston Corporation 15,300 1,113,075
Bankers Trust New York Corporation 15,100 1,228,762
Fleet Financial Group, Incorporated 20,800 1,268,800
Mellon Bank Corporation 29,000 2,410,625
Mercantile Bankshares Corporation 14,100 518,175
J.P. Morgan & Company, Incorporated 15,500 1,579,063
National City Corporation 17,400 848,250
PNC Bank Corporation 17,400 715,575
Signet Banking Corporation 20,000 617,500
U.S. Bancorp 11,300 645,512
Wells Fargo & Company 5,100 1,360,425
-----------
12,920,200
Business Services - 1.63%
H & R Block, Incorporated 37,800 1,219,050
Deluxe Corporation 9,000 275,625
R.R. Donnelley & Sons Company 25,900 887,075
-----------
2,381,750
Chemicals - 7.15%
Betz Dearborn, Incorporated 18,000 1,152,000
The Dow Chemical Company 27,900 2,368,013
E.I. Du Pont De Nemours & Company 17,300 1,835,962
FMC Corporation 5,800 389,325
Great Lakes Chemical Corporation 23,800 1,008,525
Imperial Chemical Industries PLC 12,500 579,687
Lubrizol Corporation 25,000 818,750
Nalco Chemical Company 24,000 $864,000
Witco Corporation 38,900 1,453,888
-----------
10,470,150
Computers & Business Equipment - 0.19%
Pitney Bowes, Incorporated 4,400 281,600
-----------
Conglomerates - 0.30%
Lonrho PLC 197,000 440,616
-----------
Construction Materials - 0.38%
Armstrong World Industries,
Incorporated 8,400 552,300
-----------
Cosmetics & Toiletries - 0.96%
International Flavors & Fragrances,
Incorporated 33,300 1,402,762
-----------
Domestic Oil - 2.41%
Atlantic Richfield Company 18,200 2,477,475
USX-Marathon Group 38,000 1,049,750
-----------
3,527,225
Drugs & Health Care - 7.70%
Abbott Laboratories 22,200 1,354,200
American Home Products Corporation 22,500 1,490,625
C.R. Bard, Incorporated 12,800 406,400
Bausch & Lomb, Incorporated 22,600 912,475
Baxter International, Incorporated 18,200 871,325
Novartis AG 1,066 1,404,363
Pharmacia & Upjohn, Incorporated 34,600 1,025,025
Quest Diagnostics, Incorporated* 3,625 63,891
SmithKline Beecham PLC, ADR 10,500 846,562
Tambrands, Incorporated 29,000 1,363,000
Warner-Lambert Company 15,600 1,528,800
-----------
11,266,666
Electric Utilities - 7.22%
Baltimore Gas & Electric Company 16,500 420,750
Centerior Energy Corporation 63,000 630,000
Central & South West Corporation 11,100 223,387
Dominion Resources, Incorporated 22,000 756,250
DQE, Incorporated 10,000 276,250
Duke Power Company 25,900 1,136,363
Edison International 25,800 541,800
Entergy Corporation 30,000 701,250
Florida Progress Corporation 9,000 276,750
GPU, Incorporated 9,000 290,250
Ohio Edison Company 20,000 400,000
Pacific Gas & Electric Company 27,900 669,600
PacifiCorp 40,000 795,000
PECO Energy Company 36,000 711,000
Public Service Enterprise Group,
Incorporated 24,500 591,062
Southern Company 37,400 762,025
Unicom Corporation 34,500 750,375
Western Resources, Incorporated 21,000 632,625
-----------
10,564,737
</TABLE>
The accompanying notes are an integral part of the financial statements.
47
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Electrical Equipment - 2.94%
Cooper Industries, Incorporated 19,000 $874,000
General Electric Company 21,500 2,383,813
Hubbell, Incorporated 24,100 1,048,350
-----------
4,306,163
Electronics - 0.68%
AMP, Incorporated 27,700 993,738
-----------
Financial Services - 4.96%
American Express Company 18,200 1,198,925
Chase Manhattan Corporation 22,400 2,074,800
Federal National Mortgage Association 28,800 1,184,400
Great Western Financial Corporation 15,100 634,200
Student Loan Marketing Association 7,200 851,400
Travelers Group, Incorporated 23,866 1,321,580
-----------
7,265,305
Food & Beverages - 5.48%
General Mills, Incorporated 27,500 1,705,000
H.J. Heinz Company 27,500 1,141,250
Kellogg Company 8,200 571,950
McCormick & Company, Incorporated 44,000 1,039,500
Quaker Oats Company 34,500 1,380,000
Sara Lee Corporation 17,000 714,000
Unilever NV 7,500 1,471,875
-----------
8,023,575
Forest Products - 1.06%
Georgia Pacific Corporation 19,900 1,552,200
-----------
Gold - 0.54%
Newmont Mining Corporation 22,900 792,913
-----------
Hotels & Restaurants - 0.90%
ITT Corporation* 22,200 1,315,350
-----------
Household Appliances Furnishing - 0.60%
Whirlpool Corporation 18,800 878,900
-----------
Household Products - 0.73%
Corning, Incorporated 22,200 1,071,150
-----------
Industrial Machinery - 0.40%
Pall Corporation 25,300 585,062
-----------
Insurance - 4.08%
American General Corporation 32,500 1,417,813
Exel, Ltd. 6,700 261,300
Lincoln National Corporation,
Incorporated 8,500 476,000
Provident Companies, Incorporated 8,000 447,000
SAFECO Corporation 21,300 852,000
St. Paul Companies, Incorporated 21,600 1,447,200
USF & G Corporation 30,000 600,000
Willis Corroon Group PLC 40,000 475,000
-----------
5,976,313
International Oil - 7.17%
Amoco Corporation 11,700 $978,413
The British Petroleum Company PLC 8,600 1,183,575
Chevron Corporation 23,600 1,616,600
Exxon Corporation 39,600 2,242,350
Mobil Corporation 9,800 1,274,000
Royal Dutch Petroleum Company 7,400 1,333,850
Texaco, Incorporated 17,700 1,867,350
-----------
10,496,138
Liquor - 1.53%
Anheuser-Busch Companies,
Incorporated 25,900 1,110,462
Brown-Forman Corporation, Class B 22,500 1,136,250
-----------
2,246,712
Newspapers - 1.68%
Dow Jones & Company, Incorporated 19,700 797,850
Gannett, Incorporated 7,300 636,925
Knight-Ridder, Incorporated 26,500 1,030,187
-----------
2,464,962
Paper - 3.48%
Consolidated Papers, Incorporated 22,800 1,225,500
International Paper Company 27,600 1,166,100
Minnesota Mining & Manufacturing
Company 12,900 1,122,300
Union Camp Corporation 32,400 1,575,450
-----------
5,089,350
Petroleum Services - 0.61%
McDermott International, Incorporated 5,900 109,150
Repsol SA 18,600 778,875
-----------
888,025
Publishing - 1.31%
Dun & Bradstreet Corporation 26,300 647,638
McGraw-Hill Companies, Incorporated 15,000 763,125
The Reader's Digest Association,
Incorporated 22,200 510,600
-----------
1,921,363
Railroads & Equipment - 1.67%
Burlington Northern Santa Fe
Corporation 12,600 992,250
GATX Corporation 5,000 273,750
Union Pacific Corporation 18,500 1,179,375
-----------
2,445,375
Real Estate - 1.55%
Rouse Company 2,800 75,950
Security Capital Pacific Trust 5,600 127,400
Simon DeBartolo Group, Incorporated 54,400 1,557,200
Weingarten Realty Investors 12,000 511,500
-----------
2,272,050
Retail Grocery - 0.50%
Fleming Companies, Incorporated 3,400 55,250
Grand Metropolitan PLC 20,000 685,000
-----------
740,250
</TABLE>
The accompanying notes are an integral part of the financial statements.
48
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Retail Trade - 1.60%
Limited, Incorporated 11,600 $210,250
May Department Stores Company 12,600 582,750
J.C. Penney Company, Incorporated 32,400 1,547,100
-----------
2,340,100
Telephone - 7.17%
ALLTEL Corporation 39,400 1,241,100
American Telephone & Telegraph
Corporation 45,000 1,507,500
BCE, Incorporated 17,500 815,938
Bell Atlantic Corporation 16,800 1,138,200
BellSouth Corporation 27,700 1,232,650
Frontier Corporation 29,000 460,375
GTE Corporation 26,700 1,224,862
SBC Communications, Incorporated 23,546 1,306,803
Southern New England
Telecommunications Corporation 14,100 514,650
Sprint Corporation 8,500 372,936
U.S. West, Incorporated 19,300 677,913
-----------
10,492,927
Tobacco - 2.12%
American Brands, Incorporated 22,900 1,230,875
Philip Morris Companies, Incorporated 23,700 933,188
UST, Incorporated 35,900 937,887
-----------
3,101,950
Trucking & Freight - 0.23%
Alexander & Baldwin, Incorporated 13,000 344,500
-----------
TOTAL COMMON STOCKS
(Cost $123,418,704) $135,567,702
-----------
<CAPTION>
Principal
Amount Value
------ -----
<S> <C> <C>
SHORT TERM INVESTMENTS - 7.25%
Federal Home Loan Bank,
5.34% due 05/12/97 $4,510,000 $4,502,641
Federal Home Loan Mortgage,
Corporation, 5.36% due 05/15/97 1,200,000 1,197,499
Duke Power Company,
5.60% due 05/01/97 1,625,000 1,625,000
Great Lakes Chemical Corporation,
5.50% due 05/12/97 3,300,000 3,294,454
------------
10,619,594
<CAPTION>
Principal
Amount Value
------ -----
<S> <C>
REPURCHASE AGREEMENT - 0.14%
$207,000 Repurchase Agreement with State
Street Bank & Trust Company dated
04/30/97 at 5.00%, to be repurchased
at $207,029 on 05/01/97, collateralized
by $175,000 U.S. Treasury Bonds, 9.25%
due 02/15/16 (valued at $220,074,
including interest) $207,000
-------
TOTAL INVESTMENTS (Equity -
Income Fund) (Cost $134,245,298) $146,394,296
===========
Balanced Fund
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 55.00%
Aerospace - 1.06%
AlliedSignal, Incorporated 3,700 $267,325
Boeing Company 3,500 345,187
Lockheed Martin Corporation 4,700 420,650
-----------
1,033,162
Agricultural Machinery - 0.21%
Deere & Company 4,400 202,400
-----------
Auto Parts - 0.32%
Echlin, Incorporated 9,600 313,200
-----------
Banking - 2.60%
Banc One Corporation 6,900 292,388
The Chase Manhattan Corporation 4,300 398,287
First Union Corporation 1,900 159,600
Mellon Bank Corporation 9,925 825,016
Norwest Corporation 17,100 852,862
-----------
2,528,153
Chemicals - 5.22%
Agrium, Incorporated - CAD 189,800 2,438,733
Agrium, Incorporated 28,500 366,938
ARCO Chemical Company 26,800 1,132,300
Dow Chemical Corporation 6,700 568,662
IMC Global, Incorporated 7,300 269,187
Millennium Chemicals, Incorporated 17,000 301,750
-----------
5,077,570
Computers & Business Equipment - 1.08%
3Com Corporation* 6,800 197,200
Hewlett-Packard Company 8,800 462,000
Sun Microsystems, Incorporated* 13,500 388,969
-----------
1,048,169
Cosmetics & Toiletries - 0.18%
Alberto-Culver Company, Class B 5,850 170,381
-----------
Domestic Oil - 1.83%
Atlantic Richfield Company 5,100 694,238
Kerr-McGee Corporation 2,500 150,937
PanEnergy Corporation 12,200 539,850
Phillips Petroleum Company 9,900 389,812
-----------
1,774,837
Drugs & Health Care - 12.82%
Abbott Laboratories 10,000 610,000
American Home Products Corporation 9,100 602,875
Amgen, Incorporated* 6,800 400,350
Baxter International Incorporated 10,300 493,113
Becton, Dickinson & Company 4,800 220,800
Bristol-Myers Squibb Company 32,700 2,141,850
</TABLE>
The accompanying notes are an integral part of the financial statements.
49
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Drugs & Health Care - continued
Columbia/HCA Healthcare Corporation 13,000 $455,000
Glaxo Wellcome PLC 12,700 500,063
Johnson & Johnson 17,675 1,082,594
Eli Lilly and Company 5,700 500,887
Mallinckrodt, Incorporated 11,300 411,037
Merck & Company, Incorporated 13,700 1,239,850
Novartis AG 2,500 3,293,535
Pfizer, Incorporated 5,400 518,400
-----------
12,470,354
Electric Utilities - 0.27%
Idaho Power Company 9,000 263,250
-----------
Electrical Equipment - 2.90%
Belden, Incorporated 3,700 113,775
Emerson Electric Company 7,400 375,550
General Electric Company 15,900 1,762,912
General Signal Corporation 3,100 121,675
Technitrol, Incorporated 16,800 338,100
Westinghouse Electric Corporation 6,100 103,700
-----------
2,815,712
Electronics - 0.42%
AMP, Incorporated 3,500 125,562
Motorola, Incorporated 5,000 286,250
-----------
411,812
Financial Services - 1.39%
Allstate Corporation 8,700 569,850
Federal National Mortgage Association 10,400 427,700
Travelers Group, Incorporated 6,400 354,400
-----------
1,351,950
Food & Beverages - 5.72%
CPC International, Incorporated 6,500 537,062
Nestle SA 2,400 2,914,321
PepsiCo, Incorporated 30,000 1,046,250
Pioneer Hi Bred International,
Incorporated 9,300 656,813
Unilever NV 2,100 412,125
-----------
5,566,571
Gas & Pipeline Utilities - 1.77%
Equitable Resourses, Incorporated 25,000 740,625
Questar Corporation 25,925 985,150
-----------
1,725,775
Hotel & Restaurants- 0.30%
Mirage Resorts, Incorporated* 9,900 199,238
Rio Hotel & Casino, Incorporated* 6,975 96,778
-----------
296,016
Household Products- 1.12%
Colgate Palmolive Company 3,100 344,100
Gillette Company 7,300 620,500
Procter & Gamble Company 1,000 125,750
-----------
1,090,350
Industrial Machinery - 0.12%
Thermo Electron Corporation* 3,500 120,750
-----------
Insurance - 1.76%
W.R. Berkley Corporation 20,200 $994,850
Chubb Corporation 6,000 346,500
General Re Corporation 1,000 167,250
USF & G Corporation 9,900 198,000
-----------
1,706,600
International Oil - 4.83%
Amoco Corporation 5,700 476,663
The British Petroleum Company PLC 3,900 536,737
Chevron Corporation 8,700 595,950
Exxon Corporation 16,200 917,325
Imperial Oil, Ltd. 10,000 456,250
Mobil Corporation 5,325 692,250
Royal Dutch Petroleum Company 3,300 594,825
Texaco, Incorporated 4,000 422,000
-----------
4,692,000
Investment Companies - 0.31%
The Charles Schwab Corporation 8,100 296,663
-----------
Mining - 0.14%
Potash Corporation of Saskatchewan,
Incorporated 1,800 138,375
-----------
Paper - 0.33%
Kimberly-Clark Corporation 6,200 317,750
-----------
Petroleum Services - 0.67%
Burlington Resources, Incorporated 2,100 88,988
Enron Corporation 7,600 285,950
Schlumberger, Ltd. 2,500 276,875
-----------
651,813
Railroads & Equipment - 0.41%
Canadian Pacific, Ltd. 16,200 394,875
-----------
Retail Grocery - 2.09%
Albertson's, Incorporated 23,200 765,600
Ingles Markets, Incorporated 92,125 1,266,719
-----------
2,032,319
Retail Trade - 0.14%
INBRAND Corporation 8,900 120,150
Pep Boys (Manny, Moe & Jack) 425 13,866
-----------
134,016
Telecommunication Services - 0.24%
Lucent Technologies, Incorporated 4,000 236,500
-----------
Telephone - 4.75%
Ameritech Corporation 7,600 464,550
Century Telephone Enterprises,
Incorporated 15,700 469,038
Cincinnati Bell, Incorporated 13,600 761,600
NYNEX Corporation 48,950 2,533,162
Southern New England
Telecommunications Corporation 10,800 394,200
-----------
4,622,550
</TABLE>
The accompanying notes are an integral part of the financial statements.
50
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
-----
<S> <C> <C>
TOTAL COMMON STOCKS
(Cost $51,646,053) $53,483,873
----------
Principal
Amount Value
------ -----
CORPORATE BONDS - 1.03%
Gas & Pipeline Utilities - 1.03%
Panhandle Eastern Corporation
7.25% due 05/15/05 $1,000,000 $1,005,480
---------
TOTAL CORPORATE BONDS
(Cost $1,038,200) $1,005,480
---------
U.S. TREASURY OBLIGATIONS - 29.68%
U.S. Treasury STRIPS - 0.42%
Principal Only due 08/15/99 470,000 407,105
-------
U.S. Treasury Bonds - 4.73%
6.50% due 11/15/26 320,000 300,550
7.125% due 02/15/23 1,485,000 1,498,231
7.25% due 08/15/22 1,900,000 1,941,857
8.75% due 05/15/17 730,000 862,882
---------
4,603,520
U.S Treasury Notes - 24.53%
5.875% due 01/31/99 1,320,000 1,312,569
5.875% due 02/15/00 6,800,000 6,708,608
5.875% due 02/15/04 650,000 622,986
6.125% due 07/31/00 830,000 822,090
6.25% due 02/15/07 1,580,000 1,528,650
6.375% due 04/30/99 1,400,000 1,402,618
6.625% due 03/31/02 4,500,000 4,508,415
6.625% due 04/30/02 2,400,000 2,405,616
6.875% due 08/31/99 1,700,000 1,718,853
6.875% due 05/15/06 2,800,000 2,823,632
----------
23,854,037
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $28,793,416) $28,864,662
----------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 7.05%
Government National
Mortgage Association - 7.05%
7.00% due 08/15/23 - 12/15/23 1,827,428 1,779,458
7.50% due 03/15/23 899,300 896,773
8.00% due 07/15/26 - 10/15/26 3,945,532 3,998,520
9.00% due 01/15/22 169,519 179,371
---------
6,854,122
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS (Cost $6,798,459) $6,854,122
---------
REPURCHASE AGREEMENT - 7.23%
$7,031,000 Repurchase Agreement with State Street Bank
& Trust Company dated
04/30/97 at 5.00%, to be repurchased
at $7,031,977 on 05/01/97, collateralized
by $7,170,000 U.S. Treasury Notes, 6.375%
due 04/30/99 (valued at
$7,400,781, including interest) $7,031,000
----------
TOTAL INVESTMENTS
(Balanced Fund) (Cost $95,307,128) $97,239,137
==========
Strategic Income Fund
Principal
Amount Value
------ -----
CORPORATE BONDS - 43.33%
Apparel & Textiles - 0.62%
Clark-Schwebel, Incorporated,
10.50% due 04/15/06 $500,000 $527,500
-------
Auto Parts - 0.61%
Speedy Muffler King, Incorporated,
10.875% due 10/01/06 500,000 517,500
-------
Business Services - 0.58%
Borg-Warner Security Corporation,
9.125% due 05/01/03 500,000 495,000
-------
Chemical Products - 1.40%
NL Industries, Incorporated,
Step up to 13.00% due 10/15/05 750,000 692,812
Revlon Worldwide Corporation,
Series B, zero coupon due 03/15/01 750,000 491,250
---------
1,184,062
Construction & Building Materials - 0.61%
Southdown, Incorporated, Series B,
10.00% due 03/01/06 500,000 518,750
-------
Crude Petroleum & Natural Gas - 2.06%
Cliffs Drilling Company,
10.25% due 05/15/03 250,000 259,375
Costilla Energy, Incorporated,
10.25% due 10/01/06 150,000 150,750
National Energy Group, Incorporated,
10.75% due 11/01/06 500,000 522,500
Occidental Petroleum Corporation,
9.25% due 08/01/19 700,000 814,338
---------
1,746,963
Drugs & Health Care - 0.65%
Dade International, Incorporated,
11.125% due 05/01/06 500,000 546,250
-------
</TABLE>
The accompanying notes are an integral part of the financial statements.
51
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
------ -----
<S> <C> <C>
Energy & Utilities - 0.63%
KSC Energy, Incorporated, Series B,
11.00% due 01/15/03 $500,000 $532,500
-------
Finance & Banking - 6.04%
Central Transport Rental Finance
Corporation, 9.50% due 04/30/03 500,000 462,500
Dollar Financial Group, Incorporated,
10.875% due 11/15/03 500,000 507,500
Foamex Capital Corporation,
11.875% due 10/01/04 500,000 536,250
Korea Development Bank,
9.60% due 12/01/00 1,000,000 1,083,360
Mellon Financial Company,
9.75% due 06/15/01 500,000 548,215
Midland Bank PLC,
7.65% due 05/01/25 500,000 515,520
Paine Webber Group, Incorporated,
7.00% due 03/01/00 400,000 400,728
U.S. West Capital Funding,
Incorporated, 6.85% due 01/15/02 700,000 692,881
Venture Holdings Trust,
9.75% due 04/01/04 390,000 367,575
---------
5,114,529
Food & Beverages - 2.43%
Dole Foods, Incorporated,
6.75% due 07/15/00 1,000,000 994,620
Smith's Food & Drug Centers,
11.25% due 05/15/07 500,000 556,250
Stroh Brewery Company,
11.10% due 07/01/06 500,000 508,750
---------
2,059,620
Food Stores - 0.78%
Big V Supermarkets, Incorporated,
Series B, 11.00% due 02/15/04 250,000 241,875
Carr Gottstein Foods Company,
12.00% due 11/15/05 400,000 420,500
-------
662,375
Forest Products - 0.55%
Doman Industries, Ltd.,
8.75% due 03/15/04 500,000 462,500
-------
General Obligation - 0.25%
United States Leasing International,
8.45% due 01/25/05 200,000 212,172
-------
Industrials - 12.52%
Alvey Systems, Incorporated,
11.375% due 01/31/03 500,000 515,000
Berry Plastics Corporation,
12.25% due 04/15/04 650,000 711,750
CFP Holdings, Incorporated,
11.625% due 01/15/04 $250,000 $253,750
Commonwealth Aluminum,
Corporation, 10.75% due 10/01/06 400,000 412,000
Doane Products Company,
10.625% due 03/01/06 500,000 520,000
Exide Electronics Group, Incorporated,
Series B, 11.50% due 03/15/06 500,000 520,000
Forest Oil Corporation,
11.25% due 09/01/03 500,000 527,500
Guitar Center Management Company,
Incorporated, 11.00% due 07/01/06 333,000 361,305
Harnischfeger Industries, Incorporated
6.875% due 02/15/27 300,000 292,008
Hollinger, Incorporated,
zero coupon, due 10/05/13 1,500,000 547,500
ICG Holdings, Incorporated,
Step up to 13.50% due 09/15/05 500,000 335,000
Jordan Industries, Incorporated,
10.375% due 08/01/03 500,000 492,500
Marcus Cable Company,
14.25% due 12/15/05 750,000 534,375
Norcal Waste Systems, Incorporated,
Series B, 13.00% due 11/15/05 500,000 555,000
Packard Bioscience Company,
9.375% due 03/01/07 250,000 246,250
Plastic Specialties & Technologies,
Incorporated, 11.25% due 12/01/03 500,000 540,000
Rayovac Corporation,
10.25% due 11/01/06 550,000 566,500
SC International Services,
Incorporated, 13.00% due 10/01/05 500,000 563,750
Specialty Equipment Companies,
Incorporated, 11.375% due 12/01/03 500,000 529,375
Talley Manufacturing & Technology,
Incorporated, 10.75% due 10/15/03 500,000 515,000
Terex Corporation,
13.75% due 05/15/02 500,000 549,375
Twin Laboratories, Incorporated,
10.25% due 05/15/06 500,000 513,750
----------
10,601,688
Leather Products - 0.22%
Samsonite Corporation, Series B,
11.125% due 07/15/05 167,000 184,535
-------
Leisure Time - 1.20%
Trump Atlantic City,
11.25% due 05/01/06 500,000 486,250
Wyndham Hotel Corporation,
10.50% due 05/15/06 500,000 530,000
---------
1,016,250
</TABLE>
The accompanying notes are an integral part of the financial statements.
52
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
------ -----
<S> <C> <C>
Other - 2.51%
American Media Operations,
Incorporated, 11.625% due 11/15/04 $500,000 $535,000
Herff Jones, Incorporated, Series B,
11.00% due 08/15/05 500,000 525,000
Hines Horticulture, Incorporated,
Series B, 11.75% due 10/15/05 500,000 530,000
Selmer Company, Incorporated,
11.00% due 05/15/05 500,000 535,000
---------
2,125,000
Paper - 0.30%
Pen-Tab Industries, Incorporated,
10.875% due 02/01/07 250,000 253,125
-------
Real Estate - 0.60%
Radnor Holdings Corporation,
10.00% due 12/01/03 500,000 505,000
-------
Retail Trade - 2.06%
Crown Paper Company,
11.00% due 09/01/05 250,000 245,625
Eye Care Centers of America,
Incorporated, 12.00% due 10/01/03 500,000 530,000
Finlay Fine Jewerly Corporation,
10.625% due 05/01/03 500,000 522,500
Hills Stores Company, Series B,
12.50% due 07/01/03 500,000 445,000
---------
1,743,125
Rubber & Plastic - 0.50%
Remington Product Company,
11.00% due 05/15/06 500,000 423,750
-------
Steel - 0.65%
Algoma Steel, Incorporated,
12.375% due 07/15/05 500,000 553,750
-------
Telephone - 0.93%
Telex Communications, Incorporated,
12.00% due 07/15/04 550,000 624,250
Wireless One, Incorporated,
13.00% due 10/15/03 250,000 162,500
-------
786,750
Telecommunication Services - 4.02%
Adelphia Communications
Corporation, 12.50% due 05/15/02 375,000 391,875
Cablevision Systems Corporation,
10.50% due 05/15/16 500,000 505,000
International Cabletel, Incorporated,
Step up to 11.50% due 02/01/06 1,000,000 655,000
Nextlink Communications,
12.50% due 04/15/06 250,000 258,125
SFX Broadcasting, Incorporated,
10.75% due 05/15/06 250,000 261,875
Telewest Communications PLC,
Step up to 11.00% due 10/01/07 750,000 506,250
United International Holdings,
Incorporated, zero coupon
due 11/15/99 750,000 543,750
Winstar Communications, Incorporated,
Step up to 14.00% due 10/15/05 500,000 278,750
---------
3,400,625
Transportation - 0.61%
Iron Mountain, Incorporated,
10.125% due 10/01/06 500,000 515,000
-------
TOTAL CORPORATE BONDS
(Cost $35,841,423) $36,688,319
----------
CONVERTIBLE BONDS - 0.29%
Fresenius Medical Care Capital
Trust, 9.00% due 12/01/06 250,000 247,500
-------
TOTAL CONVERTIBLE BONDS
(Cost $255,625) $247,500
-------
U.S. TREASURY OBLIGATIONS - 1.52%
U.S. Treasury Bonds - 0.34%
6.625% due 02/15/27 300,000 287,859
-------
U.S. Treasury Notes - 1.18%
6.50% due 08/31/01 1,000,000 997,810
-------
TOTAL U.S. TREASURY
OBLIGATIONS (Cost $1,278,750) $1,285,669
---------
U.S. GOVERNMENT
AGENCY OBLIGATIONS - 14.05%
Federal Home Loan Banks - 0.52%
5.89% due 07/24/00 450,000 440,788
-------
Federal Home Loan Mortgage Corporation - 2.32%
6.50% TBA** 700,000 661,276
8.50% due 05/01/08 565,068 585,970
10.00% due 05/15/20 672,436 720,555
---------
1,967,801
Federal National Mortgage Association - 10.67%
Interest Only due 03/17/20, REMIC 7,568,460 242,948
Interest Only due 10/17/36, REMIC 12,886,000 393,023
8.00% due 12/01/99 7,500,000 7,598,400
8.80% due 01/25/19, REMIC 500,000 518,435
10.40% due 04/25/19, REMIC 144,409 156,143
13.00% due 01/01/99 103,387 121,609
---------
9,030,558
Student Loan Marketing Association - 0.54%
7.20% due 11/09/00 450,000 458,086
-------
</TABLE>
The accompanying notes are an integral part of the financial statements.
53
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Value
-----
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS (Cost $12,123,881) $11,897,233
----------
Principal
Amount Value
------ -----
FOREIGN BOND - 1.56%
Russia Ian, 1.00% due 12/31/16 $1,900,000 $1,318,125
---------
TOTAL FOREIGN BOND
(Cost $1,322,875) $1,318,125
---------
FOREIGN GOVERNMENT OBLIGATIONS - 21.72%
Republic of Argentina - 2.79%
6.75% due 03/31/05 2,570,500 2,358,434
---------
Commonwealth of Australia - 0.06%
6.75% due 11/15/06 AUD 70,000 50,693
------
Federal Republic of Brazil - 5.40%
4.50% due 04/15/14 $2,745,583 2,083,211
5.25% due 04/15/24 1,500,000 956,250
6.00% due 09/15/13 750,000 566,719
6.875% due 04/15/24 1,200,000 964,500
---------
4,570,680
Government of Canada - 3.74%
6.25% due 09/15/98 CAD 3,400,000 2,490,321
7.00% due 12/01/06 360,000 264,524
7.50% due 09/01/00 550,000 415,618
---------
3,170,463
Government of Costa Rica - 0.28%
Series B, 6.25% due 05/21/15 $300,000 240,000
-------
Kingdom of Denmark - 0.33%
8.00% due 03/15/06 DKK 1,700,000 282,830
-------
Republic of Ecuador - 0.49%
3.25% due 02/27/15 $699,598 418,010
-------
Government of France - 0.38%
5.50% due 10/12/01 FRF 1,800,000 319,013
-------
Federal Republic of Germany - 0.51%
6.00% due 01/04/07 DEM 590,000 345,490
8.25% due 09/20/01 130,000 85,613
-------
431,103
Government of Mexico - 2.16%
Series B, 6.25% due 12/31/19 $1,500,000 1,085,625
11.50% due 05/15/26 700,000 738,937
---------
1,824,562
Principal
Amount Value
------ -----
Government of Morocco - 2.43%
6.375% due 01/01/09 $2,350,000 $2,054,781
---------
Government of Panama - 0.86%
3.50% due 07/17/14 1,000,000 729,500
-------
Republic of Venezuela - 2.29%
6.50% due 12/18/07 2,250,000 1,936,462
---------
TOTAL FOREIGN GOVERNMENT
OBLIGATIONS (Cost $17,197,856) $18,386,531
----------
Shares Value
------ -----
WARRANTS - 0.03%*
Electronics - 0.02%
Exide Electronics Group (Expiration
date 03/15/06; strike price $13.475) 500 $12,500
------
Financial Services - 0.01%
BPC Holdings Corporation (Expiration
date 04/15/04; strike price $18.797) 500 10,000
------
Telephone - 0.00%
Wireless One, Incorporated (Expiration
date 10/19/00; strike price $11.50) 750 750
---
TOTAL WARRANTS (Cost $0) $23,250
------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENT - 3.54%
Norinchukin Bank,
5.63% due 05/23/97 $3,000,000 $3,000,018
---------
Principal
Amount Value
------ -----
REPURCHASE AGREEMENT - 13.96%***
$11,816,000 Repurchase Agreement with State
Street Bank & Trust Company
dated 04/30/97 at 5.32%, to be
repurchased at $11,817,746
on 05/01/97, collateralized by
$11,235,000 U.S. Treasury Bonds,
7.50% due 11/15/16 (valued at
$12,445,453, including interest) $11,816,000
----------
TOTAL INVESTMENTS
(Strategic Income Fund) (Cost $82,836,428) $84,662,645
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
54
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Investment Quality Bond Fund
Principal
Amount Value
------ -----
<S> <C> <C>
CORPORATE BONDS - 32.59%
Apparel & Textiles - 0.39%
Collins & Aikman Products Company,
11.50% due 04/15/06 $50,000 $54,750
Dominion Textile (USA),
Incorporated, 9.25% due 04/01/06 20,000 20,400
------
75,150
Broadcasting - 0.31%
Chancellor Broadcasting Company,
9.375% due 10/01/04 10,000 9,900
Granite Broadcasting Corporation,
10.375% due 05/15/05 25,000 25,250
Young Broadcasting, Incorporated,
9.00% due 01/15/06 25,000 23,625
------
58,775
Chemical Products - 0.54%
Revlon Worldwide Corporation,
Series B, zero coupon due 03/15/01 40,000 26,200
Rexene Corporation,
11.75% due 12/01/04 50,000 55,250
Texas-Petro Chemical Corporation,
11.125% due 07/01/06 20,000 20,800
-------
102,250
Crude Petroleum & Natural Gas - 0.15%
Cross Timbers Oil Company,
9.25% due 04/01/07 30,000 29,550
------
Drug & Health Care - 2.08%
Allegiance Corporation,
7.00% due 10/15/26 250,000 246,932
Owens & Minor, Incorporated,
10.875% due 06/01/06 25,000 26,562
Quorum Health Group, Incorporated,
8.75% due 11/01/05 15,000 15,038
Tenet Healthcare Corporation,
7.875% due 01/15/03 110,000 108,900
-------
397,432
Educational Services - 0.05%
Kindercare Learning Centers,
Incorporated, 9.50% due 02/15/09 10,000 9,500
-----
Electric Utilities - 1.41%
Virginia Electric & Power Company,
9.375% due 06/01/98 262,000 270,077
-------
Finance & Banking - 13.79%
American General Finance
Corporation, 8.00% due 02/15/05 230,000 237,031
Amerus Capital I,
8.85% due 02/01/27 100,000 99,147
BankAmerica Corporation,
9.50% due 04/01/01 114,000 123,879
6.80% due 12/21/05 250,000 240,193
Beneficial Corporation,
8.40% due 05/15/08 75,000 82,155
First Financial Caribbean Corporation,
7.84% due 10/10/06 135,000 133,481
International Lease Finance
Corporation, 7.50% due 03/01/99 200,000 203,202
NBD Bancorp, 8.25% due 11/01/24 300,000 328,872
Neenah Corporation,
11.125% due 05/01/07 10,000 10,328
Olympic Financial, Ltd.,
11.50% due 03/15/07 15,000 14,250
Republic New York Corporation,
9.75% due 12/01/00 155,000 168,440
Sun Canada Financial Company,
7.25% due 12/15/15 200,000 184,986
Tembec Finance Corporation,
9.875% due 09/30/05 50,000 49,375
United Bankshares, Incorporated,
8.625% due 04/15/98 200,000 204,290
U.S. Bancorp, 7.50% due 06/01/26 300,000 307,329
U.S. West Capital Funding,
Incorporated, 6.95% due 01/15/37 250,000 246,040
---------
2,632,998
Industrials - 5.98%
Advanced Micro Devices,
Incorporated, 11.00% due 08/01/03 25,000 27,312
Armco, Incorporated,
9.375% due 11/01/00 50,000 50,000
Astor Corporation,
10.50% due 10/15/06 10,000 10,200
Bell & Howell Company, Series B,
Step-up to 11.50% due 03/01/05 30,000 23,100
Cablevision Systems Corporation,
9.25% due 11/01/05 15,000 14,625
Cabot Safety Acquisition
Corporation, 12.50% due 07/15/05 25,000 26,750
Cincinnati Milacron, Incorporated,
7.875% due 05/15/00 130,000 131,364
Consumers International,
Incorporated, 10.25% due 04/01/05 25,000 25,938
Container Corporation of America,
9.75% due 04/01/03 50,000 51,500
Dime Capital Trust 1,
9.33% due 05/06/27 150,000 151,669
Fairchild Semiconductor Corporation,
10.125% due 03/15/07 15,000 15,150
Fort Howard Corporation,
9.25% due 03/15/01 50,000 51,500
</TABLE>
The accompanying notes are an integral part of the financial statements.
55
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
--------- -----
<S> <C> <C>
Industrials - continued
Guitar Center Management Company,
Incorporated, 11.00% due 07/01/06 $17,000 $18,445
Harris Chemical North America,
Incorporated, 10.25% due 07/15/01 25,000 25,188
Key Plastics, Incorporated,
10.25% due 03/15/07 25,000 25,250
Marcus Cable Operating Company,
Step-up to 13.50% due 08/01/04 45,000 37,238
Moog, Incorporated, Series B,
10.00% due 05/01/06 50,000 51,500
News America Holdings,
Incorporated, 9.25% due 02/01/13 250,000 271,260
Nortek, Incorporated,
9.25% due 03/15/07 20,000 19,850
Plains Resources, Incorporated,
Series B, 10.25% due 03/15/06 50,000 52,000
Plitt Theaters, Incorporated,
10.875% due 06/15/04 25,000 25,375
Rifkin Acquisitions Partners, L.P.,
11.125% due 01/15/06 35,000 35,700
---------
1,140,914
Insurance - 2.63%
Jackson National Life Insurance
Company, 8.15% due 03/15/27 200,000 199,654
Ohio National Life Insurance
Company, 8.50% due 05/15/26 150,000 150,030
Security Benefit Life Company,
8.75% due 05/15/16 150,000 153,188
-------
502,872
Leisure Time - 0.15%
Trump Atlantic City,
11.25% due 05/01/06 30,000 29,175
------
Metal Products - 0.28%
Howmet Corporation, 10.00%, 12/01/03 50,000 53,250
------
Mining - 0.08%
Echo Bay Mines, Ltd.,
11.00% due 04/01/17 15,000 14,775
------
Non-Bank Finance - 1.13%
KFW International Financial, Incorporated,
9.125% due 05/15/01 200,000 216,314
-------
Publishing - 0.39%
S.D. Warren Company, Series B,
12.00% due 12/15/04 50,000 54,937
World Color Press, Incorporated,
9.125% due 03/15/03 20,000 20,025
------
74,962
Retail Trade - 1.08%
J.C. Penney Company, Incorporated,
7.40% due 04/01/37 $200,000 $205,660
-------
Steel - 0.13%
AK Steel Corporation,
9.125% due 12/15/06 15,000 14,813
Altos Hornos de Mexico SA,
11.875% due 04/30/04 10,000 10,125
------
24,938
Telecommunication Services - 0.33%
Comcast Corporation,
9.125% due 10/15/06 10,000 10,100
Heritage Media Services,
11.00% due 06/15/02 50,000 53,125
------
63,225
Telephone - 1.22%
Benedek Communications,
13.25% due 05/15/06 35,000 19,950
Comcast Cable Communications,
8.50% due 05/01/27 150,000 152,297
Lenfest Communications,
Incorporated, 8.375% due 11/01/05 25,000 23,906
MobileMedia Communications,
Incorporated, 9.375% due 11/01/07 50,000 9,000
Teleport Communications,
Step-up to 11.125% due 07/01/07 40,000 27,500
-------
232,653
Transportation - 0.17%
Southern Railway Company,
8.75% due 10/15/03 30,000 32,458
------
Transportation Equipment - 0.29%
Hayes Wheels International,
Incorporated, 11.00% due 07/15/06 10,000 10,775
Walbro Corporation, Series B,
9.875% due 07/15/05 45,000 44,550
------
55,325
TOTAL CORPORATE BONDS
(Cost $6,274,016) $6,222,253
---------
U.S. TREASURY OBLIGATIONS - 34.11%
U.S. Treasury Bonds - 33.04%
11.875% due 11/15/03 1,125,000 1,431,911
12.00% due 08/15/13 3,500,000 4,877,040
---------
6,308,951
U.S. Treasury Notes - 1.07%
7.50% due 10/31/99 200,000 205,063
-------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $6,650,579) $6,514,014
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
56
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
------ -----
<S> <C> <C>
U.S. GOVERNMENT
AGENCY OBLIGATIONS - 25.56%
Federal Home Loan
Mortgage Corporation - 14.94%
6.00% due 10/01/03 - 09/25/22 $703,189 $666,416
6.50% due 06/15/23 - 04/01/24 943,083 897,684
7.00% TBA** 485,000 484,239
7.00% due 10/01/25 826,861 804,635
---------
2,852,974
Federal National
Mortgage Association - 4.34%
4.50% due 01/25/98, REMIC 44,590 44,088
6.25% due 11/25/19, REMIC 500,000 486,875
6.60% due 09/25/18, REMIC 300,000 297,375
-------
828,338
Government National
Mortgage Association - 6.28%
7.00% due 06/15/23 - 10/15/23 738,729 719,337
8.00% due 08/15/23 470,931 480,053
---------
1,199,390
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS (Cost $4,894,189) $4,880,702
---------
FIXED INCOME - OTHER - 1.80%
Miscellaneous Asset Backed Securities - 1.80%
Premier Auto Trust, Series 1993,
Class A2, 4.65% due 11/02/99 40,220 39,855
Western Financial Grantor Trust, Series
1995, Class A1, 7.10% due 07/01/00 84,525 85,315
World Omni Automobile Lease, Series
1995, Class A, 6.05% due 11/25/01 164,860 164,756
World Omni Automobile Lease, Series
1994, Class A, 6.45% due 09/25/00 53,906 53,956
-------
343,882
TOTAL FIXED INCOME - OTHER
(Cost $341,932) $343,882
-------
FOREIGN BONDS - 1.17%
Argentina - 0.05%
Acindar Industria, Argentina,
11.25% due 02/15/04 10,000 10,137
------
Japan - 1.12%
Japan Financial Corporation,
9.125% due 10/11/00 200,000 213,070
-------
TOTAL FOREIGN BONDS
(Cost $237,574) $223,207
-------
<CAPTION>
Principal
Amount Value
------ -----
<C> <S> <C>
REPURCHASE AGREEMENT - 4.77%***
$910,000 Repurchase Agreement with Paine Webber
dated 04/30/97 at 5.45%,
to be repurchased at $910,138
on 05/01/97, collateralized
by $955,000 U.S. Treasury Bills, 5.33%
due 10/02/97 (valued at
$937,842, including interest) $910,000
-------
TOTAL INVESTMENTS
(Investment Quality Bond Fund)
(Cost $19,308,290) $19,094,058
==========
National Municipal Bond Fund
LONG-TERM INVESTMENTS - 95.07%
Alabama - 2.72%
Alabama Housing Finance Authority
Single Family Mortgage Revenue
Collateralized Home Mortgage Program,
Series B-2, 6.40%, 04/01/25 $485,000 $497,023
-------
California - 5.50%
California Housing Finance Agency
Revenue, Series H, 6.15%, 08/01/16 1,000,000 1,004,720
---------
Illinois - 11.58%
Illinois Health Facilities Authority
Revenue (Hospital Association
Project), 7.00%, 02/15/22 200,000 211,682
Chicago, Illinois,
6.00%, 01/01/08 500,000 526,120
Chicago, Illinois Skyway Toll Bridging
Revenue, 5.375%, 01/01/16 500,000 475,370
Chicago, Illinois Wastewater Transmission
Revenue, 5.125%, 01/01/25 1,000,000 902,380
---------
2,115,552
Indiana - 2.73%
Indiana Health Facility Financing
Authority Hospital Revenue,
5.90%, 08/15/07 500,000 498,045
-------
Iowa - 0.88%
Iowa Finance Authority Hospital Facility
Revenue Refunding (Trinity Regional
Hospital Project), 7.00%, 07/01/12 150,000 160,992
-------
</TABLE>
The accompanying notes are an integral part of the financial statements.
57
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
------ -----
<S> <C> <C>
Louisiana - 2.65%
Louisiana Public Facilities Authority Hospital
Revenue Refunding (Touro Infirmary
Project), Series B, 6.125%, 08/15/23 $500,000 $484,905
-------
Maine - 0.14%
Maine State Housing Authority Mortgage
Purchase, Series A-4, 6.375%, 11/15/12 25,000 25,503
------
Missouri - 2.77%
Missouri State Health & Educational
Facilities Authority Revenue,
6.25%, 02/15/11 500,000 505,930
-------
Nebraska - 6.90%
Nebraska Higher Education Loan Program
Income Revenue, 6.65%, 06/01/08 1,200,000 1,261,416
---------
Nevada - 5.05%
Nevada Housing Division, Single-Family
Program, 6.35%, 10/01/12 600,000 610,110
Nevada Housing Division, Single-Family
Program, Series B-2, 6.95%, 10/01/26 300,000 312,714
-------
922,824
New Jersey - 5.95%
New Jersey Economic Development
Authority Water Facilities Revenue
(New Jersey American Water
Company, Incorporated Project),
6.875%, 11/01/34 1,000,000 1,087,880
---------
New York - 22.85%
Metropolitan Transportation Authority,
New York Service Contract (Transit
Facilities), Series O, 6.25%, 07/01/14 375,000 394,455
New York State Local Government Assistance
Corporation, Series A, 6.00%, 04/01/16 1,000,000 1,008,860
New York State Dormitory Authority
Revenue, State University Educational
Facilities, Series A, 6.25%, 05/15/08 500,000 516,225
New York State Environmental Facilities
Corporation Pollution Control Revenue
Refunding (IBM Corporation Project),
7.125%, 07/01/12 580,000 622,624
New York State Mortgage Agency
Revenue, Series 40-A, 6.35%, 04/01/21 630,000 642,581
Triborough Bridging & Tunnel Authority
Revenue, Series Y, 5.50%, 01/01/17 1,000,000 990,430
----------
4,175,175
Pennsylvania - 8.49%
Monroeville, Pennsylvania Hospitals
Authority Hospitals Revenue,
6.25%, 10/01/15 1,000,000 1,011,380
Philadelphia, Pennsylvania Water
& Wastewater Revenue,
6.25%, 08/01/12 500,000 539,400
---------
1,550,780
South Carolina - 2.71%
Greenville Hospital Systems
Hospital Facilities Revenue,
Series B, 5.70%, 05/01/12 500,000 495,530
-------
Tennessee - 2.63%
Humphreys County, Tennessee Industrial
Development Board Solid Waste Disposal
Revenue (E.I. Du Pont De Nemours &
Company Project), 6.70%, 05/01/24 450,000 480,632
-------
Texas - 3.25%
Fort Worth, Texas,
Series A, 5.10%, 03/01/06 500,000 500,315
Texas State Veterans Housing
Assistance, 6.80%, 12/01/23 90,000 93,365
--------
593,680
Virginia - 1.69%
Virginia State Housing Development
Authority Commonwealth Mortgage,
Subseries I-1, 6.55%, 07/01/17 300,000 308,343
-------
Wisconsin - 6.59%
Wisconsin Housing & Economic
Development Authority Home Ownership
Revenue, Series D, 6.10%, 07/01/24 170,000 170,576
Wisconsin State Health & Educational
Facilities Authority Revenue, Mercy
Hospital of Janesville, Incorporated,
6.60%, 08/15/22 1,000,000 1,033,110
---------
1,203,686
TOTAL LONG-TERM INVESTMENTS
(Cost $16,992,963) $17,372,616
----------
SHORT-TERM INVESTMENTS - 4.93%
Alabama - 1.09%
Mcintosh, Alabama Industrial Development
Board Pollution Control Revenue,
VR, 4.00%, 07/01/04 200,000 200,000
-------
California - 0.55%
Los Angeles County, California
Industrial Development Authority
Industrial Development Revenue,
VR, 4.20%, 12/01/06 100,000 100,000
-------
</TABLE>
The accompanying notes are an integral part of the financial statements.
58
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
------ -----
<S> <C> <C>
Florida - 0.55%
Dade County, Florida
Industrial Development Authority,
Exempt Facilities Revenue,
VR, 4.00%, 06/01/21 $100,000 $100,000
-------
Idaho - 0.55%
Power County, Idaho Pollution Control
Revenue, VR, 4.00%, 12/01/10 100,000 100,000
-------
Louisiana - 1.64%
Louisiana State Offshore Term
Authority Deepwater Port Revenue,
VR, 3.90%, 09/01/08 300,000 300,000
-------
Utah - 0.55%
Carbon County, Utah Pollution
Control Revenue, VR, 4.00%, 11/01/24 100,000 100,000
-------
TOTAL INVESTMENTS
(National Municipal Bond Fund)
(Cost $17,892,963) $18,272,616
==========
U.S. Government Securities Fund
<CAPTION>
Principal
Amount Value
------ -----
<S> <C> <C>
U.S. TREASURY OBLIGATIONS - 4.01%***
U.S. Treasury Notes - 4.01%
5.00% due 01/31/98 $5,000,000 $4,967,200
6.25% due 02/15/07 200,000 193,437
---------
5,160,637
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $5,198,193) $5,160,637
---------
U.S. GOVERNMENT
AGENCY OBLIGATIONS - 56.18%
Federal Home Loan Mortgage Corporation - 23.13%
6.00% due 09/01/10 - 10/01/10 658,715 630,126
6.50% TBA** 4,000,000 3,778,720
7.00% TBA** 24,600,000 24,376,878
8.00% due 06/01/08 254,279 260,479
8.25% due 07/01/06 215,916 221,052
8.50% due 05/01/08 411,556 423,552
11.75% due 08/01/13 36,329 40,007
----------
29,730,814
Federal National Mortgage Association - 25.02%
6.50% due 12/01/03 - 04/01/26 $1,192,486 $1,176,129
6.783 due 01/17/03, REMIC 1,449,543 1,447,618
7.00% TBA** 5,525,000 5,352,344
7.00% due 05/01/26 4,157,862 4,036,993
7.148% due 10/17/09, REMIC 2,950,000 2,947,811
7.50% TBA** 5,150,000 5,111,375
7.52% due 08/26/05 1,000,000 1,000,189
8.00% due 08/01/04 67,936 68,784
8.25% due 03/25/06, REMIC 675,000 697,781
8.50% due 08/01/02 152,209 156,632
11.00% due 02/01/15 - 12/01/15 2,269,493 2,529,066
11.50% due 09/01/19 412,205 464,592
12.00% due 02/01/16 - 04/01/16 2,501,881 2,889,521
12.50% due 08/01/11 - 07/01/15 1,768,073 2,054,629
13.00% due 11/01/15 1,425,104 1,676,278
14.50% due 11/01/14 448,564 551,172
----------
32,160,914
Government National Mortgage Association - 8.03%
7.00% due 03/15/26 - 05/15/26*** 4,612,732 4,461,342
7.50% due 04/15/02 - 02/15/07 449,731 450,919
7.75% due 04/15/04 69,254 70,535
8.00% due 11/15/06 - 02/15/08 38,430 39,648
9.00% due 03/20/16 - 06/20/17 2,591,412 2,737,783
10.25% due 02/15/00 - 03/15/01 138,478 142,588
10.50% due 01/15/01 16,312 17,454
11.00% due 03/15/00 - 09/20/15 137,371 148,667
11.25% due 04/15/98 - 10/20/15 11,364 12,499
11.50% due 08/20/00 - 09/20/15 516,721 581,829
11.75% due 09/15/98 812 842
12.50% due 09/15/14 74,217 86,158
13.00% due 01/15/11 - 09/20/15 766,392 901,466
13.25% due 07/15/14 41,001 48,112
13.50% due 11/15/12 - 02/15/13 68,433 81,069
15.00% due 07/15/11 - 09/15/12 149,468 181,625
15.50% due 07/15/11 - 12/15/11 259,427 322,338
16.00% due 11/15/11 - 12/15/11 28,953 35,612
----------
10,320,486
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS (Cost $72,529,287) $72,212,214
----------
SHORT TERM INVESTMENTS - 16.79%
Federal Farm Credit Bank,
5.32% due 05/05/97 10,200,000 10,193,971
Federal Home Loan Bank,
5.31% due 05/05/97 11,400,000 11,393,274
----------
21,587,245
</TABLE>
The accompanying notes are an integral part of the financial statements.
59
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - April 30, 1997 - (Unaudited) - continued
(showing percentage of total value of investments)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
------ -----
<S> <C> <C>
REPURCHASE AGREEMENTS - 23.01%***
$29,577,000 Repurchase Agreement with State
Street Bank & Trust Company
dated 04/30/97 at 5.32%, to be
repurchased at $29,581,371
on 05/01/96, collateralized by
$28,115,000 U.S. Treasury Bonds,
7.50% due 11/15/16 (valued at
$31,144,095, including interest) $29,577,000
----------
TOTAL INVESTMENTS (U.S. Government
Securities Fund) (Cost $128,891,725) $128,537,096
===========
<CAPTION>
Money Market Fund
Principal
Amount Value
------ -----
<S> <C> <C>
U.S. GOVERNMENT
AGENCY OBLIGATIONS - 13.31%
Federal Home Loan Mortgage Association - 6.48%
5.22% due 05/05/97 $1,595,000 $1,594,075
---------
Federal National Mortgage Association - 6.83%
5.50% due 06/20/97 1,695,000 1,682,052
---------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS $3,276,127
---------
COMMERCIAL PAPER - 86.69%
Abbey National of North America,
5.27% due 08/11/97 900,000 886,561
Bankers Trust New York Corporation,
5.27% due 08/13/97 900,000 886,298
Block Financial Corporation,
5.63% due 07/15/97 1,000,000 988,271
Cregem of North America,
Incorporated, 5.30% due 06/26/97 900,000 892,580
Canadian Wheat Board,
5.52% due 06/25/97 1,000,000 991,567
CXC, Incorporated,
5.63% due 06/06/97 1,000,000 994,370
Dean Witter, Discover & Company,
5.55% due 06/26/97 1,000,000 991,367
Dow Chemical Company,
5.60% due 05/01/97 1,487,000 1,487,000
Englehard Corporation,
5.65% due 07/16/97 1,000,000 988,072
IBM Credit Corporation,
5.53% due 05/28/97 1,000,000 995,853
International Lease Finance
Corporation, 5.25% due 05/28/97 900,000 896,456
Lowes Companies, Incorporated,
5.56% due 05/27/97 1,000,000 995,985
Manitoba Hydro Electric Board,
5.30% due 05/22/97 900,000 897,217
Merrill Lynch & Company,
Incorporated, 5.27% due 08/11/97 900,000 886,562
NationsBank Corporation,
5.25% due 05/21/97 900,000 897,375
Pitney Bowes Credit Corporation,
5.57% due 07/11/97 1,000,000 989,015
Province of British Columbia,
5.27% due 05/12/97 900,000 898,551
Rubbermaid, Incorporated,
5.26% due 05/20/97 900,000 897,501
Sharp Electronics,
5.58% due 05/30/97 1,000,000 995,505
Triple A One Funding Corporation,
5.60% due 06/02/97 1,000,000 995,022
Weyerhaeuser Company,
5.55% due 06/10/97 1,000,000 993,833
Xerox Corporation,
5.31% due 05/22/97 900,000 897,212
TOTAL COMMERCIAL PAPER $21,342,173
----------
TOTAL INVESTMENTS
(Money Market Fund) $24,618,300
==========
</TABLE>
Key to Currency Abbreviations
- -----------------------------
AUD - Australian Dollar
CAD - Canadian Dollar
DKK - Danish Krone
FRF - French Franc
DEM - German Deustche Mark
HKD - Hong Kong Dollar
(POUND) - Great British Pound
ITL - Italian Lira
(YEN) - Japanese Yen
NLG - Netherland Guilder
NOK - Norwegian Krone
ESP - Spanish Peseta
Key to Security Abbreviations and Legend
- ----------------------------------------
ADR - American Depository Receipt
ADS - American Depository Shares
FRN - Floating Rate Note
REMIC - Real Estate Mortgage Investment Conduit
TBA - To Be Announced
VR - Variable Rate Demand Note (Rate effective as of April 30, 1997.)
* - Non-Income producing
** - Purchased on a forward commitment (Note 2)
*** - At April 30, 1997 a portion of this security was pledged to cover
forward commitments purchased.
The accompanying notes are an integral part of the financial statements.
60
<PAGE>
NORTH AMERICAN FUNDS
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. ORGANIZATION OF THE FUND. North American Funds (the "Fund") is an open-end,
diversified management investment company. The Fund is organized as a
Massachusetts business trust and is registered under the Investment Company Act
of 1940, as amended. It is a series company, which means it has several
portfolios, each with a stated investment objective which it pursues through
separate investment policies. As of April 30, 1997, the Fund offered the
following thirteen portfolios: the International Small Cap Fund, the Small/Mid
Cap Fund, the Global Equity Fund, the Growth Equity Fund, the International
Growth and Income Fund, the Growth and Income Fund, the Equity-Income Fund
(formerly, the Value Equity Fund), the Balanced Fund, the Strategic Income Fund,
the Investment Quality Bond Fund, the National Municipal Bond Fund, the U.S.
Government Securities Fund and the Money Market Fund.
On April 1, 1994, the multiple class structure as approved by the Board of
Trustees and shareholders was implemented. The Fund offers Class A, Class B and
Class C shares. Class A shares are sold with a front-end sales charge up to
4.75%. Class B shares are sold with a contingent deferred sales charge which
declines from 5% to zero depending on the period of time shares are held. Class
B shares will automatically convert to Class A shares of the same portfolio six
years after purchase. Class C shares are sold without an initial sales charge.
Class C shares will automatically convert to Class A shares of the same
portfolio ten years after purchase. All three classes of shares have identical
voting, dividend, liquidation and other rights, except that each class has
exclusive voting rights with respect to its distribution plan (See Note 5).
Class A, Class B and Class C of the Money Market Fund have the same expense
structure and no distribution expense.
NASL Financial Services, Inc. ("NASL Financial"), a wholly-owned subsidiary of
North American Security Life Insurance Company ("Security Life"), serves as
investment adviser, principal underwriter and distributor for the Fund.
2. SIGNIFICANT ACCOUNTING POLICIES. The policies described below are followed
when preparing the Funds' financial statements. These policies are in accordance
with generally accepted accounting principles ("GAAP").
Basis of Presentation. The accompanying unaudited financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of management, all
adjustments necessary for a fair presentation of the financial position and the
results of operations have been included. Results for the six months ended
April 30, 1997 are not necessarily indicative of annual results.
Security Valuation. Securities held by the Money Market Fund and money market
instruments with remaining maturities of 60 days or less held by the other
portfolios are valued at either the amortized cost basis or original cost plus
accrued interest, both of which approximate current market value. All other
securities held by the Fund are valued at the last sale price as of the close of
business on a principal securities exchange (domestic or foreign) or, lacking
any sales, at the closing bid price. Securities traded only in the
over-the-counter market are valued at the last bid price quoted by brokers
making markets in the securities at the close of trading on the Exchange. Other
assets and securities for which no such quotation or valuations are readily
available are valued at their fair value as determined in good faith under
consistently applied procedures established by and under the general supervision
of the Trustees.
Foreign Currency Translations. The accounting records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(i) market value of securities, other assets and other liabilities at
the current rate of exchange of such currencies against U.S.
dollars; and
(ii) purchases and sales of securities, income and expenses at the rate
of exchange quoted on the respective dates of such transactions.
Gains and losses that arise from changes in foreign exchange rates have been
segregated from gains and losses that arise from changes in the market prices of
investments. These gains and losses are included with gains and losses on
foreign currency and forward foreign currency contracts in the Statements of
Operations.
Forward Foreign Currency Contracts. All portfolios with the exception of the
U.S. Government Securities, National Municipal Bond and Money Market Funds may
purchase and sell forward foreign currency contracts in order to hedge a
specific transaction or portfolio position.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held at the end of the period and the resulting net unrealized
appreciation (depreciation) and related net receivable or payable amount are
determined using forward currency exchange rates supplied by a quotation
service. The Fund could be exposed to risks if the counterparties to the
contracts are unable to meet the terms of their contracts or if the value of the
foreign currency changes unfavorably.
61
<PAGE>
NORTH AMERICAN FUNDS
Notes to Financial Statements
- --------------------------------------------------------------------------------
Note 2 - continued
Net realized gains (losses) on forward foreign currency contracts, shown in the
Statements of Operations, includes net gains or losses realized by a portfolio
on contracts which have matured or which the portfolio has terminated by
entering into an offsetting commitment.
Futures. All portfolios other than the U.S. Government Securities and Money
Market Fund may purchase and sell financial futures contracts and options on
those contracts. The portfolios invest in contracts based on financial
instruments such as U.S. Treasury bonds or notes or on securities indices such
as the S&P 500 Index, in order to hedge against a decline in the value of
securities owned by the portfolios.
When a portfolio sells a futures contract based on a financial instrument, the
portfolio becomes obligated to deliver that kind of instrument at an agreed upon
date for a specified price. The portfolio realizes a gain or loss depending on
whether the price of an offsetting purchase is less or more than the price of
the initial sale or on whether the price of an offsetting sale is more or less
than the price of the initial purchase.The portfolio could be exposed to risks
if it could not close out futures positions because of an illiquid secondary
market or the inability of counterparties to meet the terms of their contracts.
Upon entering into futures contracts, the portfolio is required to deposit with
a broker an amount, initial margin, which represents 5% of the purchase price
indicated in the futures contract.
Payments to and from the broker, known as variation margin, are required to be
made on a daily basis as the price of the futures contract fluctuates, making
the long or short positions in the contract more or less valuable. If the
position is closed out by taking an opposite position prior to the settlement
date of the futures contract, a final determination of variation margin is made,
cash is required to be paid to or released by the broker, and the portfolio
realizes a gain or loss.
Forward Commitments. The Fund may make forward commitments to purchase and sell
securities. Delivery and payment for securities which have been purchased or
sold on a forward commitment basis can take place a month or more (not to exceed
120 days) after the date of the transaction. The price of the underlying
securities and the date when the securities will be delivered and paid for are
fixed at the time the transaction is negotiated. The value of the securities
underlying a forward commitment to purchase securities, and any subsequent
fluctuations in their value, is taken into account when determining the
portfolio's net asset value starting on the day the portfolio agrees to purchase
the securities. At April 30, 1997, forward commitments in the Strategic Income,
Investment Quality Bond and U.S. Government Securities Funds were valued at
$661,276, $484,239 and $38,619,317, respectively.
Mortgage Dollar Rolls. The Strategic Income and U. S. Government Securities
Funds may enter into mortgage dollar rolls in which they sell mortgage-backed
securities for normal delivery in the current month and simultaneously contract
to repurchase similar, but not identical, securities at the same price on an
agreed upon date. The portfolio receives compensation as consideration for
entering into the commitment to repurchase. The compensation is recorded as
deferred income and amortized to income over the roll period. As the holder, the
counterparty receives all principal and interest payments, including
prepayments, made with respect to the similar security. Mortgage dollar rolls
may be renewed with a new sale and repurchase price with a cash settlement made
at renewal without physical delivery of the securities subject to the contract.
Securities Lending. The Fund may lend its portfolio securities in amounts up to
33% of its total non-cash assets to brokers, dealers and other financial
institutions, provided such loans are callable at any time and are at all times
fully collateralized by cash, cash equivalents or securities issued or
guaranteed by the U.S. government or its agencies or instrumentalities, and
marked to market to the value of the loaned securities on a daily basis. The
portfolio may bear the risk of delay in recovery of, or even loss of rights in,
the securities loaned should the borrower of the securities fail financially.
Consequently, loans of portfolio securities will only be made to firms deemed by
the Subadvisers to be creditworthy.
The portfolio receives compensation for lending its securities either in the
form of fees or by retaining a portion of interest on the investment of any cash
received as collateral. Income generated from the investment of cash collateral
is included as interest income in the Statements of Operations. All collateral
received will be in an amount equal to at least 100% of the market value of the
loaned securities and must be maintained at that level during the period of the
loan. During the loan period, the portfolio continues to retain rights of
ownership, including dividends and interest of the loaned securities.
At April 30, 1997, the value of the securities loaned amounted to $2,851,086,
$17,453,362, $3,821,738, $9,588,134, $7,669,286, $23,315,051, $6,246,748,
$4,762,456 and $5,224,909 in the Small/Mid Cap, Global Equity, International
Growth and Income, Growth and Income, Equity-Income, Balanced, Strategic Income,
Investment Quality Bond and U.S. Government Securities Funds, respectively. At
April 30, 1997, the value of cash collateral amounted to $2,879,307,
$18,287,998, $3,984,740, $9,847,782, $7,858,184, $23,698,775, $6,452,513,
$4,839,193 and $5,309,060 in the Small/Mid Cap, Global Equity, International
Growth and Income, Growth and Income, Equity-Income, Balanced, Strategic Income,
Investment Quality Bond and U.S. Government Securities Funds, respectively.
62
<PAGE>
NORTH AMERICAN FUNDS
Notes to Financial Statements
- --------------------------------------------------------------------------------
Note 2 - continued
Organization Costs. Cost incurred by the Fund in connection with its
organization, its initial registration with the Securities and Exchange
Commission and with various states, and the initial public offering of its
shares is being amortized on a straight line basis over a five-year period for
the International Growth and Income, Strategic Income and the National Municipal
Bond Funds.
Federal Income Taxes. The Fund's policy is for each portfolio to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code, as
amended, and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required. Each portfolio is
treated as a separate taxpayer for federal income tax purposes.
Distributions of Income and Gains. Distribution of net investment income is
declared as a dividend to shareholders of record as of the close of business
each day and is paid monthly for the Investment Quality Bond and U.S. Government
Securities Funds, semi-annually to shareholders of the International Growth and
Income and Growth and Income Funds, and annually to shareholders of the
International Small Cap, Small/Mid Cap, Global Equity, Growth Equity,
Equity-Income and Balanced Funds. All of the net investment income of the
Strategic Income, National Municipal Bond and Money Market Funds is declared as
a dividend to shareholders of record as of the close of business each day and is
paid monthly. During any particular year, net realized gains from investment,
futures and foreign currency transactions for each portfolio, in excess of
available capital loss carryforwards of each portfolio, would be taxable to the
portfolio if not distributed and, therefore, will be distributed to
shareholders. An additional distribution may be made to the extent necessary to
avoid the payment of a four percent federal excise tax.
Equalization. The Fund follows the accounting practice known as equalization, by
which a portion of the proceeds from sales and costs of repurchases of the
Fund's shares are allocated, on a per share basis, to undistributed net
investment income. As a result, undistributed net investment income per share is
unaffected by sales or redemptions of the Fund's shares.
Repurchase and Reverse Repurchase Agreements. Each portfolio may enter into
repurchase agreements and, additionally, the U.S. Government Securities Fund may
enter into reverse repurchase agreements. When a portfolio enters into a
repurchase agreement through its custodian, it receives delivery of the
underlying securities, the amount of which at the time of purchase and each
subsequent business day is required to be maintained at such a level that the
market value is equal to 102% of the resale price, and such portfolio will take
constructive receipt of all securities underlying the repurchase agreements
until such agreements expire. If the seller defaults, a portfolio would suffer a
loss to the extent that proceeds from the sale of underlying securities were
less than the repurchase price. Under a reverse repurchase agreement, the U.S.
Government Securities Fund may sell a debt security and agree to repurchase it
at an agreed upon time and at an agreed upon price.
Other. Investment security transactions are accounted for on the trade date.
Interest income is accrued as earned. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. All original issue discounts
are accreted for financial and federal income tax reporting purposes. The Fund
uses the First In, First Out method for determining realized gain or loss on
investments, futures and foreign currency for both financial and federal income
tax reporting purposes. The preparation of financial statements in conformity
with GAAP requires management to make estimates and assumptions that affect the
reported amount of assets, liabilities, income and expenses. Actual results may
differ from these estimates.
Capital Accounts. The Fund reports the accumulated undistributed net investment
income (loss) and accumulated undistributed net realized gain (loss) accounts on
a basis approximating amounts available for future tax distributions (or to
offset future taxable realized gains when a capital loss carryforward is
available). Accordingly, each portfolio of the Fund may periodically make
reclassifications among certain capital accounts without impacting the net asset
value.
3. CAPITAL SHARES. Share activity for the six months ended April 30, 1997 is as
follows:
<TABLE>
<CAPTION>
Additional
Shares Par Value Paid-in Capital
-------------------- -------------------- ----------------------
<S> <C> <C> <C>
International Small Cap Fund-Class A
Outstanding at October 31, 1996................ 157,851 $158 $2,051,045
Sold........................................ 109,571 109 1,517,871
Redeemed.................................... (74,286) (74) (1,020,834)
------- ---- ---------
Net increase............................... 35,285 35 497,037
------- ---- ----------
Outstanding at April 30, 1997.................. 193,136 $193 $2,548,082
======= ==== ==========
</TABLE>
63
<PAGE>
NORTH AMERICAN FUNDS
Notes to Financial Statements
- --------------------------------------------------------------------------------
Note 3 - continued
<TABLE>
<CAPTION>
Additional
Shares Par Value Paid-in Capital
-------------------- -------------------- ----------------------
<S> <C> <C> <C>
International Small Cap Fund-Class B
Outstanding at October 31, 1996................ 378,970 $379 $4,964,896
Sold........................................ 191,795 192 2,642,496
Redeemed.................................... (62,237) (62) (850,807)
---------- ------ ----------
Net increase............................... 129,558 130 1,791,689
---------- ------ ----------
Outstanding at April 30, 1997.................. 508,528 $509 $6,756,585
========== ====== ==========
International Small Cap Fund-Class C
Outstanding at October 31, 1996................ 412,466 $413 $5,382,024
Sold........................................ 151,966 151 2,095,098
Redeemed.................................... (76,148) (76) (1,043,513)
------- ---- ----------
Net increase............................... 75,818 75 1,051,660
------- ---- ----------
Outstanding at April 30, 1997.................. 488,284 $488 $6,433,609
======= ==== ==========
Small/Mid Cap Fund-Class A
Outstanding at October 31, 1996................ 234,954 $235 $2,988,332
Sold........................................ 102,932 103 1,322,415
Redeemed.................................... (94,695) (95) (1,207,738)
------- ---- ----------
Net increase............................... 8,237 8 114,677
------- ---- ----------
Outstanding at April 30, 1997.................. 243,191 $243 $3,103,009
======= ==== ==========
Small/Mid Cap Fund-Class B
Outstanding at October 31, 1996................ 529,111 $529 $6,746,010
Sold........................................ 168,896 169 2,201,736
Redeemed.................................... (80,331) (80) (1,034,122)
------- ---- ----------
Net increase............................... 88,565 89 1,167,614
------- ---- ----------
Outstanding at April 30, 1997.................. 617,676 $618 $7,913,624
======= ==== ==========
Small/Mid Cap Fund-Class C
Outstanding at October 31, 1996................ 654,464 $655 $8,305,769
Sold........................................ 412,744 413 5,373,697
Redeemed.................................... 262,958) (263) (3,406,262)
-------- ---- -----------
Net increase............................... 149,786 150 1,967,435
--------- ---- -----------
Outstanding at April 30, 1997.................. 804,250 $805 $10,273,204
======== ==== ===========
Global Equity Fund-Class A
Outstanding at October 31, 1996................ 1,788,038 $1,788 $25,119,289
Sold........................................ 157,462 158 2,240,460
Reinvestment of distributions............... 208,420 208 2,882,091
Redeemed.................................... (238,104) (238) (3,402,575)
---------- ------ -----------
Net increase............................... 127,778 128 1,719,976
---------- ------ -----------
Outstanding at April 30, 1997.................. 1,915,816 $1,916 $26,839,265
========== ====== ===========
Global Equity Fund-Class B
Outstanding at October 31, 1996................ 1,786,687 $1,787 $25,125,716
Sold........................................ 161,825 162 2,292,231
Reinvestment of distributions............... 193,795 194 2,670,304
Redeemed.................................... (278,516) (279) (3,970,986)
---------- ------ -----------
Net increase............................... 77,104 77 991,549
---------- ------ -----------
Outstanding at April 30, 1997.................. 1,863,791 $1,864 $26,117,265
========== ====== ===========
Global Equity Fund-Class C
Outstanding at October 31, 1996................ 4,500,203 $4,500 $54,654,244
Sold........................................ 237,103 237 3,360,539
Reinvestment of distributions............... 469,266 470 6,461,328
Redeemed.................................... (1,020,607) (1,021) (14,455,190)
---------- ------ -----------
Net decrease............................... (314,238) (314) (4,633,323)
---------- ------ -----------
Outstanding at April 30, 1997.................. 4,185,965 $4,186 $50,020,921
========== ====== ===========
</TABLE>
64
<PAGE>
NORTH AMERICAN FUNDS
Notes to Financial Statements
- -------------------------------------------------------------------------------
Note 3 - continued
<TABLE>
<CAPTION>
Additional
Shares Par Value Paid-in Capital
-------------------- -------------------- ----------------------
<S> <C> <C> <C>
Growth Equity Fund-Class A
Outstanding at October 31, 1996................ 162,826 $163 $2,060,254
Sold........................................ 86,561 87 1,209,703
Reinvestment of distributions............... 2,321 2 31,710
Redeemed.................................... (86,336) (86) (1,231,324)
------- ---- ----------
Net increase............................... 2,546 3 10,089
------- ---- ----------
Outstanding at April 30, 1997.................. 165,372 $166 $2,070,343
======= ==== ==========
Growth Equity Fund-Class B
Outstanding at October 31, 1996................ 345,868 $346 $4,563,349
Sold........................................ 289,683 290 4,135,419
Reinvestment of distributions............... 3,748 4 51,175
Redeemed.................................... (160,754) (161) (2,264,776)
------- ---- ----------
Net increase............................... 132,677 133 1,921,818
------- ---- ----------
Outstanding at April 30, 1997.................. 478,545 $479 $6,485,167
======= ==== ==========
Growth Equity Fund-Class C
Outstanding at October 31, 1996................ 472,932 $473 $6,344,340
Sold........................................ 233,025 233 3,313,762
Reinvestment of distributions............... 6,399 6 87,583
Redeemed.................................... (154,948) (155) (2,186,948)
------- ---- ----------
Net increase............................... 84,476 84 1,214,397
------- ---- ----------
Outstanding at April 30, 1997.................. 557,408 $557 $7,558,737
======= ==== ==========
International Growth & Income Fund-Class A
Outstanding at October 31, 1996................ 416,908 $417 $4,100,641
Sold........................................ 98,521 99 1,051,527
Reinvestment of distributions............... 35,116 35 372,730
Redeemed.................................... (72,093) (72) (746,159)
------- ---- ----------
Net decrease............................... (61,544) (62) (678,098)
------- ---- ----------
Outstanding at April 30, 1997.................. 478,452 $479 $4,778,739
======= ==== ==========
International Growth & Income Fund-Class B
Outstanding at October 31, 1996................ 1,346,082 $1,346 $13,819,227
Sold........................................ 193,050 193 2,071,517
Reinvestment of distributions............... 98,555 99 1,060,871
Redeemed.................................... (131,820) (132) (1,405,899)
--------- ------ -----------
Net increase............................... 159,785 160 1,726,390
--------- ------ -----------
Outstanding at April 30, 1997.................. 1,505,867 $1,506 $15,545,617
========= ====== ===========
International Growth & Income Fund-Class C
Outstanding at October 31, 1996................ 802,784 $803 $8,188,012
Sold........................................ 120,074 120 1,291,637
Reinvestment of distributions............... 61,065 61 656,393
Redeemed.................................... (146,694) (147) (1,549,054)
------- ---- ----------
Net increase............................... 34,445 34 398,976
------- ---- ----------
Outstanding at April 30, 1997.................. 837,229 $837 $8,586,988
======= ==== ==========
Growth and Income Fund-Class A
Outstanding at October 31, 1996................ 1,040,832 $1,041 $14,197,108
Sold........................................ 309,257 309 5,619,864
Reinvestment of distributions............... 64,015 64 1,113,792
Redeemed.................................... (219,333) (219) (4,009,942)
--------- ------ -----------
Net increase............................... 153,939 154 2,723,714
--------- ------ -----------
Outstanding at April 30, 1997.................. 1,194,771 $1,195 $16,920,822
========= ====== ===========
</TABLE>
65
<PAGE>
NORTH AMERICAN FUNDS
Notes to Financial Statements
- --------------------------------------------------------------------------------
Note 3 - continued
<TABLE>
<CAPTION>
Additional
Shares Par Value Paid-in Capital
-------------------- -------------------- ----------------------
<S> <C> <C> <C>
Growth and Income Fund-Class B
Outstanding at October 31, 1996................ 1,985,111 $1,985 $28,284,278
Sold........................................ 389,714 390 7,128,753
Reinvestment of distributions............... 114,856 115 1,996,076
Redeemed.................................... (174,340) (175) (3,179,304)
--------- ------ -----------
Net increase............................... 330,230 330 5,945,525
--------- ------ -----------
Outstanding at April 30, 1997.................. 2,315,341 $2,315 $34,229,803
========= ====== ===========
Growth and Income Fund-Class C
Outstanding at October 31, 1996................ 4,261,109 $4,262 $51,038,429
Sold........................................ 445,404 445 8,144,815
Reinvestment of distributions............... 244,301 244 4,253,320
Redeemed.................................... (474,959) (475) (8,697,257)
--------- ------ -----------
Net increase............................... 214,746 214 3,700,634
--------- ------ -----------
Outstanding at April 30, 1997.................. 4,475,855 $4,476 $54,739,063
========= ====== ===========
Equity-Income Fund-Class A (formerly
the Value Equity Fund-Class A)
Outstanding at October 31, 1996................ 1,638,828 $1,639 $24,157,941
Sold........................................ 258,521 259 4,026,492
Reinvestment of distributions............... 442,599 442 6,257,693
Redeemed.................................... (332,578) (333) (5,066,872)
--------- ------ -----------
Net increase............................... 368,542 368 5,217,313
--------- ------ -----------
Outstanding at April 30, 1997.................. 2,007,370 $2,007 $29,375,254
========= ====== ===========
Equity-Income Fund-Class B (formerly
the Value Equity Fund-Class B)
Outstanding at October 31, 1996................ 1,571,748 $1,572 $23,937,037
Sold........................................ 270,021 270 4,228,831
Reinvestment of distributions............... 382,594 383 5,453,504
Redeemed.................................... (205,051) (205) (3,221,379)
--------- ------ -----------
Net increase............................... 447,564 448 6,460,956
--------- ------ -----------
Outstanding at April 30, 1997.................. 2,019,312 $2,020 $30,397,993
========= ====== ===========
Equity-Income Fund-Class C (formerly
the Value Equity Fund-Class C)
Outstanding at October 31,1995................. 4,854,997 $4,855 $59,727,808
Sold........................................ 444,185 444 6,949,384
Reinvestment of distributions............... 1,218,880 1,219 17,477,475
Redeemed.................................... (909,340) (909) (13,959,216)
--------- ------ -----------
Net increase............................... 753,725 754 10,467,643
--------- ------ -----------
Outstanding at April 30, 1997.................. 5,608,722 $5,609 $70,195,451
========= ====== ===========
Balanced Fund-Class A
Outstanding at October 31, 1996................ 881,735 $881 $9,706,078
Sold........................................ 137,455 137 1,561,102
Reinvestment of distributions............... 125,521 126 1,339,658
Redeemed.................................... (92,247) (92) (1,069,483)
--------- ------ -----------
Net increase............................... 170,729 171 1,831,277
--------- ------ -----------
Outstanding at April 30, 1997.................. 1,052,464 $1,052 $11,537,355
========= ====== ===========
Balanced Fund-Class B
Outstanding at October 31, 1996................ 1,322,501 $1,323 $14,801,575
Sold........................................ 191,883 192 2,192,381
Reinvestment of distributions............... 160,862 161 1,719,573
Redeemed.................................... (221,841) (222) (2,530,940)
--------- ------ -----------
Net increase............................... 130,904 131 1,381,014
--------- ------ -----------
Outstanding at April 30, 1997.................. 1,453,405 $1,454 $16,182,589
========= ====== ===========
</TABLE>
66
<PAGE>
NORTH AMERICAN FUNDS
Notes to Financial Statements
- --------------------------------------------------------------------------------
Note 3 - continued
<TABLE>
<CAPTION>
Additional
Shares Par Value Paid-in Capital
-------------------- -------------------- ----------------------
<S> <C> <C> <C>
Balanced Fund-Class C
Outstanding at October 31, 1996................ 5,896,688 $5,897 $56,133,356
Sold........................................ 233,719 234 2,696,545
Reinvestment of distributions............... 737,223 737 7,909,122
Redeemed.................................... (947,588) (948) (10,864,580)
--------- ------ -----------
Net increase (decrease).................... 23,354 23 (258,913)
--------- ------ -----------
Outstanding at April 30, 1997.................. 5,920,042 $5,920 $55,874,443
========= ====== ===========
Strategic Income Fund-Class A
Outstanding at October 31, 1996................ 1,364,948 $1,365 $14,413,293
Sold........................................ 528,559 529 5,108,710
Reinvestment of distributions............... 58,985 59 568,669
Redeemed.................................... (279,000) (279) (2,706,044)
--------- ------ -----------
Net increase............................... 308,544 309 2,971,335
--------- ------ -----------
Outstanding at April 30, 1997.................. 1,673,492 $1,674 $17,384,628
========= ====== ===========
Strategic Income Fund-Class B
Outstanding at October 31, 1996................ 3,151,002 $3,151 $28,388,171
Sold........................................ 469,422 469 4,552,872
Reinvestment of distributions............... 102,037 102 983,569
Redeemed.................................... (302,096) (302) (2,918,407)
--------- ------ -----------
Net increase............................... 269,363 269 2,618,034
--------- ------ -----------
Outstanding at April 30, 1997.................. 3,420,365 $3,420 $31,006,205
========= ====== ===========
Strategic Income Fund-Class C
Outstanding at October 31, 1996................ 2,324,147 $2,324 $21,198,977
Sold........................................ 794,676 795 7,685,925
Reinvestment of distributions............... 112,486 112 1,084,399
Redeemed.................................... (354,235) (354) (3,422,415)
--------- ------ -----------
Net increase............................... 552,927 553 5,347,909
--------- ------ -----------
Outstanding at April 30, 1997.................. 2,877,074 $2,877 $26,546,886
========= ====== ===========
Investment Quality Bond Fund-Class A
Outstanding at October 31, 1996................ 875,794 $876 $9,678,817
Sold........................................ 35,343 35 361,860
Reinvestment of distributions............... 17,919 18 184,076
Redeemed.................................... (182,529) (183) (1,878,549)
------- ---- ----------
Net decrease............................... (129,267) (130) (1,332,613)
------- ---- ----------
Outstanding at April 30, 1997.................. 746,527 $746 $8,346,204
======= ==== ==========
Investment Quality Bond Fund-Class B
Outstanding at October 31, 1996................ 452,815 $453 $4,618,912
Sold........................................ 58,001 58 598,401
Reinvestment of distributions............... 9,734 10 99,757
Redeemed.................................... (82,275) (82) (839,232)
------- ---- ----------
Net decrease............................... (14,540) (14) (141,132)
------- ---- ----------
Outstanding at April 30, 1997.................. 438,275 $439 $4,477,780
======= ==== ==========
Investment Quality Bond Fund-Class C
Outstanding at October 31, 1996................ 730,094 $730 $7,353,767
Sold........................................ 50,625 51 519,192
Reinvestment of distributions............... 16,201 16 166,107
Redeemed.................................... (140,980) (141) (1,440,912)
------- ---- ----------
Net decrease............................... (74,154) (74) (755,687)
------- ---- ----------
Outstanding at April 30, 1997.................. 655,940 $656 $6,598,154
======= ==== ==========
</TABLE>
67
<PAGE>
NORTH AMERICAN FUNDS
Notes to Financial Statements
- --------------------------------------------------------------------------------
Note 3 - continued
<TABLE>
<CAPTION>
Additional
Shares Par Value Paid-in Capital
------------- --------------- -----------------
<S> <C> <C> <C>
National Municipal Bond Fund-Class A
Outstanding at October 31, 1996............... 792,318 $792 $8,198,252
Sold......................................... 17,469 17 171,230
Reinvestment of distributions................ 7,683 8 74,991
Redeemed..................................... (140,141) (140) (1,366,573)
-------- ---- ----------
Net decrease................................ (114,989) (115) (1,120,352)
-------- ---- ----------
Outstanding at April 30, 1997................. 677,329 $677 $7,077,900
======== ==== ==========
National Municipal Bond Fund-Class B
Outstanding at October 31, 1996............... 629,916 $630 $5,803,994
Sold......................................... 88,304 88 860,072
Reinvestment of distributions................ 7,548 8 73,646
Redeemed..................................... (76,299) (76) (743,248)
------- ---- ----------
Net increase................................ 19,553 20 190,470
------- ---- ----------
Outstanding at April 30, 1997................. 649,469 $650 $5,994,464
======= ==== ==========
National Municipal Bond Fund-Class C
Outstanding at October 31, 1996............... 585,040 $585 $5,422,973
Sold......................................... 19,375 19 188,921
Reinvestment of distributions................ 7,404 7 72,256
Redeemed..................................... (81,146) (81) (790,297)
------- ---- ----------
Net decrease................................ (54,367) (55) (529,120)
------- ---- ----------
Outstanding at April 30, 1997................. 530,673 $530 $4,893,853
======= ==== ==========
U.S. Government Securities Fund-Class A
Outstanding at October 31, 1996............... 7,425,475 $7,425 $76,341,580
Sold......................................... 443,804 444 4,329,371
Reinvestment of distributions................ 112,151 112 1,094,638
Redeemed..................................... (1,927,613) (1,928) (18,795,903)
---------- ------ -----------
Net decrease................................ (1,371,658) (1,372) (13,371,894)
---------- ------ -----------
Outstanding at April 30, 1997................. 6,053,817 $6,053 $62,969,686
========== ====== ===========
U.S. Government Securities Fund-Class B
Outstanding at October 31, 1996............... 1,983,872 $1,984 $19,284,401
Sold......................................... 211,597 212 2,068,413
Reinvestment of distributions................ 26,337 26 256,996
Redeemed..................................... (437,444) (437) (4,270,161)
--------- ------ -----------
Net decrease................................ (199,510) (199) (1,944,752)
--------- ------ -----------
Outstanding at April 30, 1997................. 1,784,362 $1,785 $17,339,649
========= ====== ===========
U.S. Government Securities Fund-Class C
Outstanding at October 31, 1996............... 2,041,634 $2,041 $19,486,237
Sold......................................... 196,907 197 1,922,782
Reinvestment of distributions................ 33,329 33 325,416
Redeemed..................................... (806,127) (806) (7,877,116)
--------- ------ -----------
Net decrease................................ (575,891) (576) (5,628,918)
--------- ------ -----------
Outstanding at April 30, 1997................. 1,465,743 $1,465 $13,857,319
========= ====== ===========
Money Market Fund-Class A
Outstanding at October 31, 1996............... 8,086,668 $8,087 $8,078,581
Sold......................................... 12,418,317 12,419 12,405,898
Reinvestment of distributions................ 144,771 145 144,626
Redeemed..................................... (10,112,102) (10,112) (10,101,990)
----------- ------- -----------
Net increase................................ 2,450,986 2,452 2,448,534
----------- ------- -----------
Outstanding at April 30, 1997................. 10,537,654 $10,539 $10,527,115
=========== ======= ===========
</TABLE>
68
<PAGE>
NORTH AMERICAN FUNDS
Notes to Financial Statements
- --------------------------------------------------------------------------------
Note 3 - continued
<TABLE>
<CAPTION>
Additional
Shares Par Value Paid-in Capital
------------- --------------- -----------------
<S> <C> <C> <C>
Money Market Fund-Class B
Outstanding at October 31, 1996............... 3,062,351 $3,062 $3,059,289
Sold......................................... 6,530,217 6,530 6,523,687
Reinvestment of distributions................ 53,126 53 53,073
Redeemed..................................... (6,002,168) (6,002) (5,996,166)
---------- ------ ----------
Net increase................................ 581,175 581 580,594
---------- ------ ----------
Outstanding at April 30, 1997................. 3,643,526 $3,643 $3,639,883
========== ====== ==========
Money Market Fund-Class C
Outstanding at October 31, 1996............... 9,840,110 $9,840 $9,830,270
Sold......................................... 14,029,083 14,029 14,015,054
Reinvestment of distributions................ 167,606 167 167,439
Redeemed..................................... (13,688,961) (13,689) (13,675,272)
----------- ------- -----------
Net increase................................ 507,728 507 507,221
----------- ------- -----------
Outstanding at April 30, 1997................. 10,347,838 $10,347 $10,337,491
=========== ======= ===========
</TABLE>
4. PURCHASES AND SALES OF SECURITIES. The following table summarizes the
securities transactions (excluding short-term investments) for all portfolios,
excluding the Money Market Fund, for the six months ended April 30, 1997:
<TABLE>
<CAPTION>
Purchases Sales
----------------------------------------- ----------------------------------------
Portfolio U.S. Government Other Issues U.S. Government Other Issues
- -------------- ------------------- ---------------- ------------------- ----------------
<S> <C> <C> <C> <C>
International Small Cap.............. ------ $5,578,101 ------ $3,061,837
Small/Mid Cap........................ ------ 16,654,586 ------ 13,327,825
Global Equity........................ ------ 13,825,787 ------ 23,204,086
Growth Equity........................ ------ 13,370,996 ------ 12,601,405
International Growth & Income........ ------ 18,035,817 ------ 19,255,026
Growth and Income.................... ------ 34,498,797 ------ 29,606,458
Equity-Income........................ ------ 22,212,977 ------ 26,693,572
Balanced............................. $24,375,636 83,924,287 $21,193,410 96,530,552
Strategic Income..................... 48,503,914 35,560,532 51,101,304 22,175,053
Investment Quality Bond.............. 3,594,207 2,485,226 4,497,385 3,887,078
National Municipal Bond.............. ------ 2,040,260 ------ 3,969,153
U.S. Government Securities........... 304,773,710 ------ 338,299,827 1,638
</TABLE>
Purchases and sales (maturities) for the Money Market Fund for the six months
ended April 30, 1997 were $196,391,318 and $194,250,461, respectively.
At April 30, 1997, tax basis net unrealized appreciation was equal to the
aggregate gross unrealized appreciation for all securities in which there was an
excess of market value over tax cost and aggregate gross unrealized depreciation
for all securities in which there was an excess of tax cost over market value as
follows:
<TABLE>
<CAPTION>
Tax Basis Net
Unrealized Tax Basis Tax Basis
Tax Basis Appreciation Unrealized Unrealized
Portfolio Cost (Depreciation) Appreciation Depreciation
- -------------- -------------- ------------------ ---------------- ----------------
<S> <C> <C> <C> <C>
International Small Cap.............. $15,209,664 $997,848 $1,708,346 $710,498
Small/Mid Cap........................ 19,999,832 548,700 1,589,857 1,041,157
Global Equity........................ 103,776,714 9,964,243 13,786,227 3,821,984
Growth Equity........................ 15,760,993 1,477,578 1,739,934 262,356
International Growth and Income...... 28,389,259 (106,760) 1,945,242 2,052,002
Growth and Income.................... 112,347,962 38,495,542 40,603,847 2,108,305
Equity-Income........................ 135,008,042 11,386,255 15,355,163 3,968,908
Balanced............................. 95,371,245 1,867,892 3,324,513 1,456,621
Strategic Income..................... 82,953,616 1,709,030 2,602,332 893,302
Investment Quality Bond.............. 19,343,833 (249,775) 103,259 353,034
National Municipal Bond.............. 17,892,963 379,653 430,573 50,920
U.S. Government Securities........... 128,925,345 (388,249) 313,586 701,835
</TABLE>
69
<PAGE>
NORTH AMERICAN FUNDS
Notes to Financial Statements
- --------------------------------------------------------------------------------
5. INVESTMENT ADVISORY AGREEMENTS. The Fund maintains an Investment Advisory
Agreement with NASL Financial ("the Adviser"). The Adviser is responsible for
managing the corporate and business affairs of the Fund and for selecting and
compensating subadvisers to handle the investment and reinvestment of the assets
of each portfolio, subject to the supervision of the Trustees of the Fund. As
compensation for its services, the Adviser receives a fee from the Fund computed
separately for each portfolio at an annual percentage of average net assets as
follows:
<TABLE>
<CAPTION>
Between Between
$50,000,000 $200,000,000
First and and Excess over
Portfolio $50,000,000 $200,000,000 $500,000,000 $500,000,000
- ------------ --------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
International Small Cap.............. 1.050% 1.000% .900% .800%
Small/Mid Cap........................ .925% .900% .875% .850%
Global Equity........................ .900% .900% .700% .700%
Growth Equity........................ .900% .850% .825% .800%
International Growth and Income...... .900% .850% .800% .750%
Growth and Income.................... .725% .675% .625% .550%
Equity-Income........................ .800% .700% .600% .600%
Balanced............................. .775% .725% .675% .625%
Strategic Income..................... .750% .700% .650% .600%
Investment Quality Bond.............. .600% .600% .525% .475%
National Municipal Bond.............. .600% .600% .600% .600%
U.S. Government Securities........... .600% .600% .525% .475%
Money Market......................... .200% .200% .200% .145%
</TABLE>
For the six months ended April 30, 1997, the net investment advisory fees
retained by the Adviser after payment of subadvisory fees was $1,597,035,
allocated among the portfolios as follows:
<TABLE>
<CAPTION>
Dollar Value % of Net Assets
Retained Retained
Portfolio by Adviser by Adviser
- ------------ -------------- ---------------
<S> <C> <C>
International Small Cap.............. $29,565 .18%
Small/Mid Cap........................ 39,547 .19%
Global Equity........................ 251,235 .22%
Growth Equity........................ 32,196 .18%
International Growth and Income...... 59,944 .20%
Growth and Income.................... 281,412 .19%
Equity-Income........................ 291,344 .20%
Balanced............................. 196,524 .20%
Strategic Income..................... 142,932 .19%
Investment Quality Bond.............. 37,457 .20%
National Municipal Bond.............. 31,942 .18%
U.S. Government Securities........... 190,022 .21%
Money Market......................... 12,915 .05%
</TABLE>
For the six months ended April 30, 1997, the Adviser paid aggregate subadvisory
fees of $1,380,391, allocated among the portfolios as follows:
<TABLE>
<CAPTION>
Dollar Value % of Net Assets
Paid to Paid to
Portfolio Subadviser Subadviser
- ------------ -------------- ---------------
<S> <C> <C>
International Small Cap.............. $48,044 .30%
Small/Mid Cap........................ 51,906 .26%
Global Equity........................ 276,028 .24%
Growth Equity........................ 40,246 .23%
International Growth and Income...... 74,930 .25%
Growth and Income.................... 205,867 .14%
Equity-Income........................ 233,060 .16%
Balanced............................. 163,662 .17%
Strategic Income..................... 119,595 .16%
Investment Quality Bond.............. 22,474 .12%
National Municipal Bond.............. 22,817 .13%
U.S. Government Securities........... 114,013 .13%
Money Market......................... 7,749 .03%
</TABLE>
70
<PAGE>
NORTH AMERICAN FUNDS
Notes to Financial Statements
- --------------------------------------------------------------------------------
Note 5 - continued
Expense Reimbursement and Distribution Plan. Pursuant to the Investment
Advisory Agreement, NASL Financial will reduce the advisory fee or if necessary
reimburse each portfolio of the Fund (excluding taxes, portfolio brokerage
commissions, interest, certain litigation and indemnification expenses,
extraordinary expenses and all of the portfolio's distribution fees) for
expenses incurred in excess (Expense limitation) of the following annual
percentages of average net assets as highlighted in the table below.
The Fund has adopted a distribution plan (the "Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940 to use its assets to finance certain
activities relating to the distribution of its shares to investors. The Plan is
a "compensation" plan providing for the payment by each portfolio, other than
the Money Market Fund, of a monthly distribution fee to NASL Financial, as
principal underwriter for the Fund as highlighted in the table below:
<TABLE>
<CAPTION>
Portfolio Class A Class B Class C
----------- --------- --------- ---------
<S> <C> <C> <C>
International Small Cap
Management fees.................. 1.050% 1.050% 1.050%
Other expenses................... 0.500% 0.500% 0.500%
----- ----- -----
Expense limitation............... 1.550% 1.550% 1.550%
===== ===== =====
Rule 12b-1 fees.................. 0.350% 1.000% 1.000%
===== ===== =====
Small/Mid Cap
Management fees.................. 0.925% 0.925% 0.925%
Other expenses................... 0.400% 0.400% 0.400%
----- ----- -----
Expense limitation............... 1.325% 1.325% 1.325%
===== ===== =====
Rule 12b-1 fees.................. 0.350% 1.000% 1.000%
===== ===== =====
Global Equity
Management fees.................. 0.900% 0.900% 0.900%
Other expenses................... 0.500% 0.500% 0.500%
----- ----- -----
Expense limitation............... 1.400% 1.400% 1.400%
===== ===== =====
Rule 12b-1 fees.................. 0.350% 1.000% 1.000%
===== ===== =====
Growth Equity
Management fees.................. 0.900% 0.900% 0.900%
Other expenses................... 0.400% 0.400% 0.400%
----- ----- -----
Expense limitation............... 1.300% 1.300% 1.300%
===== ===== =====
Rule 12b-1 fees.................. 0.350% 1.000% 1.000%
===== ===== =====
International Growth and Income
Management fees.................. 0.900% 0.900% 0.900%
Other expenses................... 0.500% 0.500% 0.500%
----- ----- -----
Expense limitation............... 1.400% 1.400% 1.400%
===== ===== =====
Rule 12b-1 fees.................. 0.350% 1.000% 1.000%
===== ===== =====
Growth and Income
Management fees.................. 0.725% 0.725% 0.725%
Other expenses................... 0.265% 0.265% 0.265%
----- ----- -----
Expense limitation............... 0.990% 0.990% 0.990%
===== ===== =====
Rule 12b-1 fees.................. 0.350% 1.000% 1.000%
===== ===== =====
</TABLE>
71
<PAGE>
NORTH AMERICAN FUNDS
Notes to Financial Statements
- --------------------------------------------------------------------------------
Note 5 - continued
<TABLE>
<CAPTION>
Portfolio Class A Class B Class C
- ------------- --------- --------- ---------
<S> <C> <C> <C>
Equity-Income
Management fees.................. 0.800% 0.800% 0.800%
Other expenses................... 0.265% 0.265% 0.265%
----- ----- -----
Expense limitation............... 1.065% 1.065% 1.065%
===== ===== =====
Rule 12b-1 fees.................. 0.350% 1.000% 1.000%
===== ===== =====
Balanced
Management fees.................. 0.775% 0.775% 0.775%
Other expenses................... 0.265% 0.265% 0.265%
----- ----- -----
Expense limitation............... 1.040% 1.040% 1.040%
===== ===== =====
Rule 12b-1 fees.................. 0.350% 1.000% 1.000%
===== ===== =====
Strategic Income
Management fees.................. 0.750% 0.750% 0.750%
Other expenses................... 0.400% 0.400% 0.400%
----- ----- -----
Expense limitation............... 1.150% 1.150% 1.150%
===== ===== =====
Rule 12b-1 fees.................. 0.350% 1.000% 1.000%
===== ===== =====
Investment Quality Bond
Management fees.................. 0.600% 0.600% 0.600%
Other expenses................... 0.300% 0.300% 0.300%
----- ----- -----
Expense limitation............... 0.900% 0.900% 0.900%
===== ===== =====
Rule 12b-1 fees.................. 0.350% 1.000% 1.000%
===== ===== =====
National Municipal Bond
Management fees.................. 0.600% 0.600% 0.600%
Other expenses................... 0.240% 0.240% 0.240%
----- ----- -----
Expense limitation............... 0.840% 0.840% 0.840%
===== ===== =====
Rule 12b-1 fees.................. 0.150% 1.000% 1.000%
===== ===== =====
U.S. Government Securities
Management fees.................. 0.600% 0.600% 0.600%
Other expenses................... 0.300% 0.300% 0.300%
----- ----- -----
Expense limitation............... 0.900% 0.900% 0.900%
===== ===== =====
Rule 12b-1 fees.................. 0.350% 1.000% 1.000%
===== ===== =====
Money Market
Management fees.................. 0.200% 0.200% 0.200%
Other expenses................... 0.300% 0.300% 0.300%
----- ----- -----
Expense limitation............... 0.500% 0.500% 0.500%
===== ===== =====
</TABLE>
In accordance with the Investment Advisory agreement, NASL Financial, in
addition to providing advisory services, provides accounting and administrative
services for which NASL Financial charged $634,247 to the Fund, before
reimbursement based on expense limitations, for the six months ended April 30,
1997.
6. TRUSTEE'S FEES. The Fund pays each Trustee who is not an employee or a
director of the Adviser or its affiliates a fee of $750 plus travel expenses for
each Board of Trustees meeting attended and an annual retainer of $3,000.
72
<PAGE>
NORTH AMERICAN FUNDS
Notes to Financial Statements
- --------------------------------------------------------------------------------
7. COMMITMENTS. At April 30, 1997, the International Small Cap, Global Equity,
International Growth and Income and Strategic Income Funds had entered into
forward foreign currency contracts which contractually obligate the portfolio to
deliver currencies at future dates. Open sale and purchase contracts at April
30, 1997 were as follows:
<TABLE>
<CAPTION>
Net
Contracts Unrealized
to In Exchange Settlement Appreciation
Deliver For Date Value (Depreciation)
----------- ------------- ------------ ------- ---------------
<S> <C> <C> <C> <C> <C>
International Small Cap
Sales
German Deutsche Mark ............ 35,700 $20,665 05/02/97 $20,614 $51
Finland Markka................... 4,484 860 05/02/97 862 (2)
Finland Markka................... 6,674 1,281 05/05/97 1,284 (3)
French Franc..................... 302,588 52,035 05/30/97 51,844 191
------- ------- ----
$74,841 $74,604 $237
======= ======= ----
Purchases
$68,860 DEM 117,999 05/02/97 $68,137 $(723)
======= ======= -----
$(486)
=====
Global Equity
Sales
Netherlands Guilder.............. 35,088 $17,992 05/01/97 $18,009 ($17)
Netherlands Guilder.............. 11,000,000 5,884,870 08/25/97 5,694,410 190,460
French Franc..................... 33,000,000 6,461,340 12/03/97 5,737,378 723,962
------------ ----------- --------
$12,364,202 $11,449,797 $914,405
============ =========== ========
International Growth and Income
Sales
French Franc..................... 520,965 $91,946 05/23/97 $89,396 $ 2,550
German Deutsche Mark............. 4,261,687 2,539,079 05/23/97 2,464,859 74,220
Hong Kong Dollar................. 8,861,695 1,143,275 05/23/97 1,143,859 (584)
Italian Lira..................... 763,181,060 456,383 05/23/97 445,347 11,036
Japanese Yen..................... 635,733,275 5,163,684 05/23/97 5,025,350 138,334
Spanish Peseta................... 32,685,008 228,244 05/23/97 223,574 4,670
Norwegian Krone.................. 3,306,432 495,940 05/23/97 465,029 30,911
Thailand Baht.................... 4,067,200 155,000 05/23/97 155,435 (435)
----------- ----------- --------
$10,273,551 $10,012,848 $260,703
=========== =========== --------
Purchases
$93,000 AUD 118,562 05/23/97 $92,440 ($560)
91,946 FRF 532,658 05/23/97 91,402 (1,598)
1,120,000 DEM 1,909,295 05/23/97 1,104,291 (15,709)
237,459 HKD 1,840,000 05/23/97 237,505 46
434,000 ITL 740,085,320 05/23/97 431,870 (2,130)
1,219,000 YEN 149,609,424 05/23/97 1,182,633 (36,366)
480,000 NOK 3,316,416 05/23/97 466,433 (13,567)
217,000 ESP 31,606,050 05/23/97 216,193 (807)
---------- ---------- --------
$3,893,459 $3,822,769 (70,690)
========== ========== --------
$190,012
========
Strategic Income
Sales
German Deutsche Mark............. 492,788 $290,000 06/27/97 $285,749 $4,251
French Franc..................... 1,910,010 341,683 07/03/97 328,654 13,029
Australian Dollar................ 67,642 52,490 07/16/97 52,725 (235)
Canadian Dollar.................. 3,966,064 2,865,653 07/16/97 2,853,597 12,055
Danish Krone.................... 1,816,613 278,793 07/16/97 276,845 1,948
---------- ---------- -------
$3,828,619 $3,797,570 $31,049
========== ========== -------
Purchases
$183,081 DEM 312,886 06/27/97 $181,430 ($1,651)
========== ======== -------
$29,398
=======
</TABLE>
73
<PAGE>
NORTH AMERICAN FUNDS
Notes to Financial Statements
- --------------------------------------------------------------------------------
8. SUBSEQUENT EVENT - NASL Financial, the investment adviser to the Fund, and
its parent, Security Life, have signed a binding letter of intent with
CypressTree Investments, Inc. (Cypress) pursuant to which it is expected that
Cypress will purchase a portion of NASL Financial's business relating to the
rendering of investment advisory and distribution services to the Fund. The
completion of the transaction is subject to several conditions including (i) the
signing of a definite agreement regarding the sale, (ii) the approval of an
advisory agreement between the Fund and CypressTree Asset Management
Corporation, Inc. (CAM), an affiliate of Cypress, by the Board of Trustees of
the Fund and shareholders of the applicable Fund portfolio, (iii) the approval
of a subadvisory agreement between CAM and the current subadviser to each Fund
portfolio by the Board of Trustees of the Fund and the shareholders of the
applicable Fund portfolio and (iv) the requirement that the aggregate net asset
value of the Fund at the closing be not less than $750 million. Cypress does not
currently intend to recommend any changes to the existing subadvisers to the
Fund or any fees or expense limitations applicable to the Fund. The closing for
the transaction is expected to occur on or before September 30, 1997. Cypress,
located in Boston, Massachusetts was formed in 1996 to acquire, advise and
distribute mutual funds through broker-dealers, banks and other intermediaries.
74
