<PAGE>
A NORTH AMERICAN FUNDS
N A specialized family of mutual funds
N managed by experts
U with your dreams in mind.
A [VARIOUS FUND COMPANY LOGOS ARE
SCREENED IN BACKGROUND]
L
OCTOBER 31, 2000
R
E AUDITED
FINANCIAL
P STATEMENTS
O
R
T AMERICAN
|GENERAL
|FINANCIAL GROUP
<PAGE>
NORTH AMERICAN FUNDS
President's Message
-------------------------------------------------------------------------------
Dear Shareholders,
What's New at North American Funds
October 31, 2000 marks the end of an exciting fiscal year for the North
American Funds. This year, North American Funds became part of the American
General Financial Group, one of the nation's largest diversified financial
services organizations with assets of $123 billion. We believe the strength of
our new organization will only enhance our ability to build and deliver high
quality investment products to help you pursue your investment dreams.
The Strength Behind our Multi-Manager Strategy
Our extensive line-up of funds and managers was carefully selected to offer a
wide choice of options to meet your investment needs and help you build a
well-diversified portfolio. We believe our multi-manager approach offers a
strong advantage--providing oversight by a team of investment research
professionals with extensive knowledge and an average of 18 years of investing
experience. The team, made up of a chief economist, investment managers,
mutual fund strategists, and analysts actively oversee the managers, ensuring
adherence to investment style and the pursuit of competitive, risk-adjusted
returns. Not only do our research specialists spend time choosing the right
sub-advisors for our funds, but they go one step further. They actively
monitor these managers to ensure they are meeting expectations. This strong
combination of an experienced research team, a rigorous selection process and
ongoing monitoring offers you peace of mind in knowing your investments are in
the hands of experienced, knowledgeable and accountable investment
professionals.
Market Conditions
The twelve month period ending October 31, 2000 witnessed a big change in
investor sentiment. In the fourth quarter of 1999 and through most of the
first quarter of 2000, the equity markets continued their long rally, led by
low inflation, robust growth and rising confidence. Strength came from within
the growth universe as exceptional gains in many U.S.-based large-cap
technology stocks set the pace and investors continued to invest in "dot com"
companies based on the future earnings potential the internet could provide.
While investors continued to clamor for growth stocks, demand for US value
stocks paled.
Equity Markets
Because of possible inflation fears the Federal Reserve continued a series of
increasing interest rates in hopes of slowing the economy. The market gains of
the first quarter quickly evaporated during the second quarter as the market
grew concerned about future growth prospects. Additionally, the previous
euphoria over the Internet and its impact on the economy gave way to the hard
reality that eventually even Internet companies must generate profits in order
to remain in business. Each of the major indices, the S&P 500, the Dow and
NASDAQ all finished the second quarter down.
Stubbornly rising oil prices, a surprisingly weak Euro, and a string of
earnings and revenue disappointments by a number of large U.S. multinational
companies led to a roller coaster-like equity market during the third quarter.
As a result, the S&P 500, the Dow and NASDAQ all finished down for the second
straight quarter. Technology, telecommunications and media, the three leaders
of last year, were particularly weak performers while health care, financials
and energy did quite well. In a reversal from the previous year, small caps
outperformed large caps and value outperformed growth as investors began to
pay attention to valuations after many months of wanting growth at any price.
<PAGE>
NORTH AMERICAN FUNDS
President's Message continued
-------------------------------------------------------------------------------
This is evidenced by the fact that from January 1, 2000 to October 31, 2000,
the Russell 1000 Value Index returned 9.43%, while the Russell 1000 Growth was
down -1.42%.
In the U.S. domestic equity markets for the entire fiscal year ended October
31, 2000, mid cap stocks were the best performing equity class followed by
small caps and then large caps. The S&P 400 Index, a benchmark for mid cap
stocks, gained 30.17% over the year, followed by the small cap Russell 2000
Index return of 17.26%. The S&P 500 Index, which is dominated by large cap
stocks, returned 6.09%. In regards to growth and value stocks, for the twelve
month period ending October 31, 2000, the Russell 1000 Growth Index returned
9.32%, while the Russell 1000 Value Index returned 5.54%.
The same trends of technology and communications that drove the equity markets
in the U.S., along with an overall theme of restructuring throughout the rest
of the world, led equity markets in both Europe and Asia to increase at the
end of 1999 and the beginning of 2000. As the U.S. markets began to
deteriorate because of strong energy prices, a weak euro, weaker than expected
corporate earnings and interest rate increases in the second quarter of 2000,
the non-U.S. market followed. The benchmarks for the international markets,
the Morgan Stanley International (MSCI) EAFE Index and the MSCI World Index
reflect this trend, returning -2.66% and 1.39% respectively.
Fixed Income Markets
The fixed income markets, having taken a back seat to the equity markets in
recent years, witnessed a "flight to quality" during the second part of 2000,
with U.S. Treasuries and high quality corporate bonds substantially
outperforming lower quality issues. The Lehman Brothers Aggregate Bond Index
returned 7.30% and the Lehman Brothers Corporate Bond Index returned 5.38% for
the year ending October 31, 2000. During the same twelve month period, the
Credit Suisse High Yield Index, a benchmark for the high yield bond market,
returned 6.31%.
During times of increased market volatility it is understandable to become a
bit unsettled. We strongly encourage you to consult your investment advisor.
Contacting your advisor also presents an opportunity to do a portfolio "check
up" to ensure that your current investment strategy is in line with your
goals.
We appreciate your continued business with North American Funds and if you
have any questions about your investments, simply call us at 800-872-8037. Or,
you can obtain up-to-date information on any North American Fund, including
performance information, daily pricing and other facts, on our website at
www.northamericanfunds.com.
Sincerely,
/s/ Alice T. Kane
Alice T. Kane
Chairman and President
North American Funds
2
<PAGE>
NORTH AMERICAN FUNDS
INDEX TO ANNUAL REPORT
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Fund Performance and Portfolio Manager's Commentary........................ iii
Report of Independent Accountants.......................................... 1
Statements of Assets and Liabilities....................................... 2
Statements of Operations................................................... 12
Statements of Changes in Net Assets........................................ 17
Financial Highlights....................................................... 25
Portfolio of Investments
Growth & Income Fund..................................................... 50
Large Cap Growth Fund.................................................... 51
Mid Cap Growth Fund...................................................... 53
Mid Cap Value Fund....................................................... 55
Science & Technology Fund................................................ 57
Small Cap Growth Fund.................................................... 57
Small Cap Index Fund..................................................... 59
Socially Responsible Fund................................................ 78
Stock Index Fund......................................................... 82
Global Equity Fund....................................................... 88
International Equity Fund................................................ 89
International Small Cap Fund............................................. 96
Balanced Fund............................................................ 99
Core Bond Fund........................................................... 101
High Yield Bond Fund..................................................... 104
Municipal Bond Fund...................................................... 108
Strategic Income Fund.................................................... 110
U.S. Government Securities Fund.......................................... 114
Money Market Fund........................................................ 115
Municipal Money Market Fund.............................................. 116
Aggressive Growth LifeStyle Fund......................................... 117
Moderate Growth LifeStyle Fund........................................... 117
Conservative Growth LifeStyle Fund....................................... 118
Notes to Financial Statements.............................................. 119
</TABLE>
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE>
NORTH AMERICAN FUNDS
FUND PERFORMANCE AND PORTFOLIO MANAGER'S COMMENTARY
-------------------------------------------------------------------------------
Fund Performance
In the following pages we have set forth information regarding the performance
of each portfolio of the North American funds, except the Money Market Fund
and Municipal Money Market Fund. There are several ways to evaluate a Fund's
historical performance. One can look at the total percentage change in value,
the average annual percentage change, or the growth of a hypothetical $10,000
investment. With respect to all the performance information presented, it is
important to understand that past performance does not guarantee future
results. Return and principal fluctuate, and shares, when redeemed, may be
worth more or less than their original cost.
Performance Tables
The Performance Tables show two types of total return information: cumulative
and average annual total returns. A cumulative total return is an expression
of a Fund's total change in share value in percentage terms over ten years (or
since the Fund's inception if less than ten years). An average annual total
return takes the Fund's cumulative total return over a set period of time -
one, five and ten years (or since the Fund's inception if less than ten
years) and shows what would have happened if the Fund had performed at a
constant rate each year. For all share classes, the tables show cumulative and
average annual total returns both net of the possible maximum applicable
front-end or back-end sales charge, as well as without giving effect to such
possible maximum charges (at net asset value "NAV"). For each Fund, if certain
expenses were not reimbursed, performance would be lower.
Graph - Change in Value of $10,000 Investment and Comparative Indices
The performance graph for each Fund shows the change in value of a $10,000
investment over the life of the Fund's Class A shares. Each Fund's performance
is compared to the performance of one or more broad-based securities indices
as a "benchmark". Fund results (which include the reinvestment of dividends
and capital gains distributions as well as the deduction of ongoing management
and distribution fees and operating expenses) reflect the deduction of the
current maximum sales charge applicable to each Fund's Class A shares. Please
note that effective April 1, 1994, Class B and Class C shares were offered.
Performance of these share classes will differ. Historical performance prior
to April 1, 1994 is that of the Fund before it adopted the current multi-class
structure. On July 7, 2000 the North American Funds merged with the American
General Series Portfolio Company 2 (AGSPC2), adding nine new North American
Funds. They are as follows: Mid Cap Value, Science & Technology, Socially
Responsible, Stock Index, Aggressive Growth LifeStyle, Moderate Growth
LifeStyle, Conservative Growth LifeStyle, High Yield Bond and Municipal Money
Market. Performance information for those Funds shown for periods prior to
July 7, 2000, is that of the corresponding series of American General Series
Portfolio Company 2 (the "AGSPC2 Fund") that was reorganized into the Fund on
July, 7 2000. Each AGSPC2 Fund had the same investment objective and
investment strategies and policies as does the corresponding North American
Fund, and was also managed by the same portfolio managers. Benchmarks used for
comparison are unmanaged and do not reflect any fees or expenses.
Portfolio Manager's Commentary
Finally, we have provided a commentary by each Fund's portfolio manager
regarding each Fund's performance during the fiscal year ended October 31,
2000. All performance results referenced in the commentary are Class A share
returns.
iii
<PAGE>
Growth & Income Fund
Investment Seeks to provide long-term growth of capital and income
Objective: consistent with prudent investment risk by investing
primarily in a diversified portfolio of common stocks of
U.S. issuers that the portfolio manager believes are of
high quality.
Subadvisor: Wellington Management Company LLP ("Wellington")
Portfolio Matthew E. Megargel
Manager:
Inception Date: May 1, 1991
[GRAPH]
NAV 5.75% Sales MSCI World Index
Charge
Apr-91 10,000 9,425 10,000
May-91 10,240 9,651 10,428
Jun-91 9,879 9,311 9,951
Jul-91 10,201 9,614 10,417
Aug-91 10,352 9,757 10,662
Sep-91 10,205 9,618 10,487
Oct-91 10,588 9,979 10,628
Nov-91 10,175 9,590 10,198
Dec-91 11,088 10,450 11,364
Jan-92 10,775 10,155 11,153
Feb-92 10,876 10,250 11,295
Mar-92 10,642 10,030 11,074
Apr-92 10,805 10,183 11,396
May-92 10,845 10,222 11,458
Jun-92 10,779 10,159 11,292
Jul-92 11,217 10,572 11,747
Aug-92 11,146 10,505 11,509
Sep-92 11,400 10,745 11,642
Oct-92 11,480 10,820 11,684
Nov-92 11,777 11,100 12,077
Dec-92 12,007 11,317 12,236
Jan-93 12,162 11,463 12,325
Feb-93 12,286 11,579 12,491
Mar-93 12,677 11,948 12,760
Apr-93 12,430 11,715 12,447
May-93 12,657 11,929 12,783
Jun-93 12,656 11,928 12,826
Jul-93 12,625 11,899 12,765
Aug-93 13,008 12,260 13,252
Sep-93 12,956 12,211 13,154
Oct-93 13,153 12,396 13,421
Nov-93 12,884 12,143 13,294
Dec-93 13,112 12,358 13,458
Jan-94 13,574 12,793 13,909
Feb-94 13,406 12,635 13,533
Mar-94 12,892 12,150 12,945
Apr-94 13,028 12,279 13,113
May-94 13,259 12,497 13,327
Jun-94 12,932 12,188 12,997
Jul-94 13,481 12,706 13,428
Aug-94 13,871 13,074 13,974
Sep-94 13,607 12,825 13,637
Oct-94 13,819 13,024 13,950
Nov-94 13,196 12,437 13,438
Dec-94 13,421 12,650 13,634
Jan-95 13,432 12,660 13,988
Feb-95 13,957 13,154 14,531
Mar-95 14,263 13,443 14,961
Apr-95 14,700 13,855 15,397
May-95 15,137 14,267 16,005
Jun-95 15,458 14,569 16,381
Jul-95 15,876 14,963 16,926
Aug-95 16,008 15,088 16,972
Sep-95 16,482 15,534 17,683
Oct-95 16,206 15,275 17,621
Nov-95 16,845 15,876 18,397
Dec-95 17,117 16,133 18,737
Jan-96 17,520 16,513 19,374
Feb-96 17,565 16,555 19,554
Mar-96 17,856 16,829 19,742
Apr-96 18,113 17,072 20,032
May-96 18,516 17,451 20,549
Jun-96 18,499 17,435 20,627
Jul-96 17,801 16,778 19,715
Aug-96 18,195 17,149 20,131
Sep-96 19,218 18,113 21,265
Oct-96 19,747 18,611 21,852
Nov-96 21,231 20,010 23,504
Dec-96 20,826 19,628 23,038
Jan-97 21,963 20,700 24,478
Feb-97 22,190 20,914 24,669
Mar-97 21,328 20,102 23,655
Apr-97 22,549 21,253 25,065
May-97 23,842 22,471 26,589
Jun-97 25,146 23,701 27,780
Jul-97 27,109 25,551 29,989
Aug-97 25,637 24,163 28,309
Sep-97 26,990 25,438 29,858
Oct-97 26,056 24,558 28,860
Nov-97 27,241 25,675 30,197
Dec-97 27,549 25,965 30,716
Jan-98 27,861 26,259 31,057
Feb-98 29,729 28,020 33,296
Mar-98 31,222 29,426 35,001
Apr-98 31,637 29,818 35,355
May-98 30,806 29,035 34,746
Jun-98 32,013 30,172 36,157
Jul-98 31,844 30,013 35,774
Aug-98 27,264 25,696 30,608
Sep-98 28,912 27,249 32,570
Oct-98 31,481 29,671 35,218
Nov-98 33,207 31,298 37,352
Dec-98 34,771 32,771 39,504
Jan-99 35,875 33,812 41,155
Feb-99 35,053 33,038 39,875
Mar-99 36,575 34,472 41,470
Apr-99 38,097 35,906 43,075
May-99 37,046 34,916 42,058
Jun-99 39,013 36,769 44,393
Jul-99 37,935 35,754 43,008
Aug-99 37,693 35,525 42,793
Sep-99 36,562 34,459 41,620
Oct-99 38,757 36,528 44,270
Nov-99 39,080 36,833 45,172
Dec-99 40,869 38,519 47,830
Jan-00 38,992 36,750 45,427
Feb-00 37,966 35,783 44,568
Mar-00 42,042 39,625 48,928
Apr-00 40,854 38,505 47,455
May-00 40,253 37,939 46,482
Jun-00 40,884 38,533 47,627
Jul-00 40,004 37,704 46,883
Aug-00 42,350 39,915 49,795
Sep-00 39,931 37,635 47,167
Oct-00 39,681 37,400 46,967
Performance Table
<TABLE>
<CAPTION>
Average Annual Total Cumulative
Return Total Return
----------------------- ------------
1 5 Since Since
Year Years Inception Inception
Periods Ending October 31, 2000 ------ ------ --------- ------------
<S> <C> <C> <C> <C>
S&P 500 Index/1/ 6.09% 21.67% 17.17% 369.67%
Growth & Income Fund Class A (NAV) 2.39% 19.61% 18.61% 296.81%
Growth & Income Fund Class A (net of
5.75% sales charge) -3.50% 18.20% 17.54% 274.00%
Growth & Income Fund Class B (NAV) 1.75% 18.90% 17.97% 197.07%
Growth & Income Fund Class B (net of
CDSC)/2/ -3.25% 18.70% 17.97% 197.07%
Growth & Income Fund Class C (NAV) 1.74% 18.89% 15.13% 281.87%
Growth & Income Fund Class C (net of
CDSC)/3/ 0.74% 18.89% 15.13% 281.87%
Growth & Income Fund Institutional Class
I/4/ N/A N/A -4.04% -4.04%
</TABLE>
-----------------------------------------------
/1/All since inception returns for indices begin on the month-end closest to
the actual inception date of the Fund.
/2/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/3/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/4/Inception date is 7/10/2000.
iv
<PAGE>
Portfolio Manager's Commentary
The Growth and Income Fund Class A share performance for the year-ended
October 31, 2000 was 2.39% as compared to the S&P 500 Index return of 6.09%.
The last 12 months proved to be extraordinary for the equity markets as the
gains of 1999 were quickly wiped out by severe losses in 2000. The first ten
months of the year were especially difficult for investors as the euphoria
over the Internet and its impact on the economy gave way to the hard reality
that eventually even Internet companies must generate profits in order to
remain in business. This pop in the technology valuation bubble coupled with a
series of short-term interest rate increases by the Federal Reserve led to
tough times for the equity markets. The sectors that outperformed during this
difficult time period included non-cyclical sectors such as health care, food
and beverage, tobacco and electric utilities. Financial services stocks also
performed well during this time period. After a long awaited period, value
stocks rallied as investors fled to stocks with more reasonable valuations.
Within the Fund, our underweight position within Technology helped the Fund
during the sector's decline, but results were mixed as some of our holdings
such as VeriSign, Analog Devices and Micron Technology suffered larger than
expected declines. Additionally, the unexpectedly weak Euro and a string of
earnings and revenues disappointments for large US multinational firms hurt
performance. Conversely, our overweight positions within health care and
energy positively contributed to the Fund's performance. Examples of positive
performers within the Fund were Merck & Co, Kimberly-Clark Corp. and SBC
Communications.
Going forward, with inflation estimates rising, earnings estimates falling,
and political uncertainty mounting, it seems appropriate to directionally move
the Fund towards relatively stable and generally predictable growth sectors
such as: health care, financial services, consumer products, and computer
services. The biggest positive on the horizon is the possibility that the Fed
may begin to cut interest rates later next year if evidence continues to grow
that the economy is slowing. However, political considerations and continual
upward revisions in the CPI may stay the Fed's easing hand near-term. In the
meantime, equity market liquidity remains fairly high; the dollar continues as
the currency of choice, and while valuations in some sectors seem stretched,
we remain cautiously optimistic about equities. Technology, telecommunications
and media remain volatile with near term decelerating earnings growth and
concerns about too much capital chasing the same market opportunities. We have
selectively reduced our overall exposure to some of these sectors, but we
remain alert for price opportunities given the solid absolute earnings per
share growth and positive long-term outlook.
v
<PAGE>
Large Cap Growth Fund
Investment Seeks to provide long-term capital appreciation by
Objective: investing at least 65% of its assets in common stocks of
well-established, high-quality growth companies.
Subadvisor: Founders Asset Management LLC ("Founders")
Portfolio Scott Chapman, Tom Arrington
Managers:
Inception Date: March 4, 1996
[GRAPH]
NAV 5.75% Sales Charge S&P 500
Mar-96 10,000 9,425 10,000
Mar-96 10,080 9,500 10,096
Apr-96 10,680 10,066 10,245
May-96 11,168 10,526 10,509
Jun-96 11,040 10,405 10,549
Jul-96 10,216 9,629 10,083
Aug-96 10,560 9,953 10,296
Sep-96 11,104 10,466 10,875
Oct-96 11,024 10,390 11,175
Nov-96 11,712 11,039 12,021
Dec-96 11,305 10,655 11,783
Jan-97 11,994 11,304 12,519
Feb-97 11,702 11,029 12,617
Mar-97 11,329 10,678 12,100
Apr-97 11,872 11,190 12,821
May-97 12,578 11,855 13,601
Jun-97 13,243 12,481 14,210
Jul-97 14,419 13,590 15,341
Aug-97 13,713 12,925 14,482
Sep-97 14,419 13,590 15,275
Oct-97 13,794 13,001 14,766
Nov-97 13,932 13,131 15,449
Dec-97 14,173 13,358 15,714
Jan-98 14,323 13,500 15,887
Feb-98 15,253 14,376 17,033
Mar-98 16,068 15,144 17,904
Apr-98 16,325 15,386 18,084
May-98 16,086 15,161 17,774
Jun-98 16,945 15,971 18,495
Jul-98 16,644 15,687 18,299
Aug-98 13,756 12,965 15,656
Sep-98 14,615 13,775 16,659
Oct-98 15,705 14,802 18,013
Nov-98 16,476 15,528 19,105
Dec-98 17,734 16,714 20,205
Jan-99 18,959 17,868 21,049
Feb-99 18,450 17,389 20,396
Mar-99 19,467 18,348 21,211
Apr-99 19,185 18,081 22,033
May-99 18,375 17,318 21,513
Jun-99 19,627 18,499 22,706
Jul-99 18,949 17,860 21,999
Aug-99 18,977 17,886 21,889
Sep-99 18,657 17,584 21,290
Oct-99 20,192 19,031 22,614
Nov-99 21,247 20,025 23,075
Dec-99 24,539 23,128 24,433
Jan-00 23,705 22,342 23,205
Feb-00 26,015 24,519 22,766
Mar-00 26,549 25,023 24,993
Apr-00 23,417 22,070 24,241
May-00 21,524 20,286 23,744
Jun-00 23,235 21,899 24,329
Jul-00 22,732 21,425 23,949
Aug-00 25,159 23,713 25,436
Sep-00 23,491 22,141 24,094
Oct-00 21,335 20,109 23,785
Performance Tab
<TABLE>
<CAPTION>
Average Annual Cumulative
Total Return Total Return
---------------- ------------
1 Since Since
Year Inception Inception
Periods Ending October 31, 2000 ------ --------- ------------
<S> <C> <C> <C>
S&P 500 Index/4/ 6.09% 20.37% 137.85%
Large Cap Growth Fund Class A (NAV) 5.66% 17.65% 113.35%
Large Cap Growth Fund Class A (net of 5.75%
sales charge) -0.41% 16.16% 101.09%
Large Cap Growth Fund Class B (NAV) 5.01% 16.91% 107.21%
Large Cap Growth Fund Class B (net of CDSC)/1/ 0.01% 16.67% 105.21%
Large Cap Growth Fund Class C (NAV) 5.06% 16.90% 107.16%
Large Cap Growth Fund Class C (net of CDSC)/2/ 4.06% 16.90% 107.16%
Large Cap Growth Fund Institutional Class I/3/ N/A -9.04% -9.04%
</TABLE>
-----------------------------------------------
/1/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/2/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/3/Inception date is 7/10/2000.
/4/All since-inception returns for indices begin on the month-end closest to
the actual inception date of the fund.
vi
<PAGE>
Portfolio Managers' Commentary
For the fiscal year ended October 31, 2000, the Large Cap Growth Fund's Class
A shares posted an average annual return of 5.66%, compared to the unmanaged
Standard & Poor's Index's return of 6.09%.
The period between November 1, 1999 and October 31, 2000 was marked by extreme
market volatility. Although the end of 1999 and first quarter of 2000 were
very favorable periods for large-cap growth stocks, by late March, the market
turned and the environment became extremely challenging. Through October,
investors showed concern about the impact of a number of high-profile earnings
warnings, high oil prices, election uncertainties, slower economic growth, the
Federal Reserve Board's six rate hikes since June 1999, and the potential for
inflation with unemployment at a 30-year low. Unfortunately, the positive
influences of the budget surplus and the growth of companies meeting the
demand of Internet data traffic doubling every 90 days are events that have
yet to dominate the investor's mindset.
In spite of these difficulties, the Fund did particularly well in the most
recent quarter of 2000, thanks to strong stock picking within the technology
sector. Furthermore, we have been consistently pleased with the earnings
reports from the companies in the portfolio, and see growth opportunities in
several areas, such as fiberoptics and media. It should be noted that
investors have been bearish of late, and therefore many companies in the Fund
have not received the recognition we believe they are due. However, in our
opinion, if we continue to invest in high-quality companies that are producing
solid earnings, shareholders will eventually be rewarded, as stock prices have
historically followed earnings.
vii
<PAGE>
Mid Cap Growth Fund
Investment Seeks to provide long-term capital appreciation by
Objective: investing primarily in common stocks of mid-sized
companies--those with market capitalizations ranging from
approximately $2 billion to $15 billion at the time of
purchase. The core of the Fund's portfolio will be
invested in securities of established companies that are
leaders in growth markets with a history of strong
returns.
Subadvisor: INVESCO Funds Group, Inc. ("INVESCO")
Portfolio Tim Miller, Thomas Wald
Managers:
Inception Date: March 4, 1996/4/
[GRAPH]
NAV 5.75% Sales Charge S&P 500
Mar-96 10,000 9,425 10,000
Mar-96 10,168 9,583 10,120
Apr-96 10,584 9,975 10,429
May-96 10,768 10,149 10,569
Jun-96 10,352 9,757 10,411
Jul-96 9,312 8,777 9,707
Aug-96 9,792 9,229 10,267
Sep-96 10,328 9,734 10,714
Oct-96 10,096 9,515 10,745
Nov-96 10,696 10,081 11,350
Dec-96 10,504 9,900 11,363
Jan-97 10,944 10,315 11,789
Feb-97 10,240 9,651 11,692
Mar-97 9,688 9,131 11,194
Apr-97 9,832 9,267 11,485
May-97 10,600 9,991 12,488
Jun-97 11,248 10,601 12,839
Jul-97 12,328 11,619 14,110
Aug-97 12,184 11,483 14,092
Sep-97 13,080 12,328 14,902
Oct-97 12,408 11,695 14,254
Nov-97 12,448 11,732 14,465
Dec-97 12,173 11,473 15,027
Jan-98 12,156 11,457 14,740
Feb-98 13,287 12,523 15,961
Mar-98 14,166 13,352 16,681
Apr-98 14,109 13,298 16,985
May-98 13,653 12,868 16,221
Jun-98 14,695 13,850 16,323
Jul-98 14,410 13,582 15,691
Aug-98 11,489 10,828 12,773
Sep-98 12,286 11,580 13,965
Oct-98 13,092 12,339 15,211
Nov-98 14,052 13,244 15,970
Dec-98 15,782 14,875 17,898
Jan-99 15,623 14,724 17,202
Feb-99 14,869 14,014 16,302
Mar-99 16,146 15,218 16,757
Apr-99 16,217 15,285 18,078
May-99 16,323 15,385 18,157
Jun-99 17,565 16,555 19,128
Jul-99 16,652 15,694 18,722
Aug-99 16,164 15,234 18,080
Sep-99 16,031 15,109 17,523
Oct-99 16,430 15,485 18,415
Nov-99 18,275 17,224 19,382
Dec-99 20,864 19,665 20,533
Jan-00 20,254 19,089 19,955
Feb-00 23,750 22,385 21,350
Mar-00 23,099 21,771 23,136
Apr-00 20,699 19,509 22,329
May-00 19,168 18,066 22,050
Jun-00 22,085 20,815 22,374
Jul-00 21,247 20,025 22,728
Aug-00 24,516 23,106 25,264
Sep-00 24,154 22,765 25,091
Oct-00 22,161 20,887 24,240
Performance Table
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total Return
---------------------------- -------------------------
1 Since Since Since Since
Periods Ending October Year Inception 3/13/00/4/ Inception 3/13/00/4/
31, 2000 ------ --------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
S&P 400 Midcap Index/1/ 31.63% 20.89% 13.53% 142.40% 13.53%
Mid Cap Growth Fund
Class A (NAV) 35.03% 18.61% -12.20% 121.61% -12.20%
Mid Cap Growth Fund
Class A (net of 5.75%
sales charge) 27.27% 17.11% -17.25% 108.87% -17.25%
Mid Cap Growth Fund
Class B (NAV) 34.04% 17.75% -12.57% 114.26% -12.57%
Mid Cap Growth Fund
Class B (net of
CDSC)/2/ 29.04% 17.52% -16.94% 112.26% -16.94%
Mid Cap Growth Fund
Class C (NAV) 33.95% 17.77% -12.60% 114.45% -12.60%
Mid Cap Growth Fund
Class C (net of
CDSC)/3/ 32.95% 17.77% -13.46% 114.45% -13.46%
Mid Cap Growth Fund
Institutional Class
I/5/ N/A -0.85% -0.85% -0.85% -0.85%
</TABLE>
-----------------------------------------------
/1/All since inception returns for indices begin on the month-end closest to
the actual inception date of the Fund.
/2/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/3/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/4/Current investment subadvisor assignment became effective 3/13/00.
/5/Inception date is 7/10/2000.
viii
<PAGE>
Portfolio Managers' Commentary
The Mid Cap Growth Fund Class A share performance for the year-ended October
31, 2000 was 35.03% outperforming the S&P 400 Midcap Index return of 31.63%.
After exhibiting strong returns at the beginning of the fiscal year, domestic
equities have came under renewed--and at times, intense--selling pressure
beginning in March. Market jitters, including interest rate fears, political
uncertainty, and negative earnings pre-announcements, pulled the market lower.
By the end of November, most of the major market indices stood considerably
below their highs from earlier in the year.
On a positive note, signs of a cooling economy raised hopes that the Federal
Reserve might abandon its restrictive policy bias, laying the groundwork for
potential interest rate cuts in 2001. The bad news, however, was that
investors were fed a steady diet of negative earnings pre-announcements,
alongside steadily increasing oil and gas prices. Nevertheless, the two
valuation props for stocks--earnings growth expectations and P/E ratios--
continued to provide the market with solid support.
The Fund's performance suffered over this period, as many of its holdings
across economic sectors were caught in the market's downward volatility. The
Fund's large exposure to technology and communications services holdings
proved particularly troublesome, as many of these companies saw their
valuations drop sharply on concerns about overcapacity and a potential
slowdown in telecommunications-related investment. In our opinion, valuations
in the sector are now fully appreciating a slowdown that still appears to be
only a possibility, suggesting the likelihood of a strong rebound should the
worst not occur.
Meanwhile, the Fund's diversification helped cushion performance from the
pressure in technology-related sectors, as we benefited from relatively stable
performance by investments in energy, financial services, and pharmaceutical
sectors.
In part, our performance was aided by our recent moves into areas where growth
is accelerating. Oil exploration companies such as Apache Corp have thrived
recently from surging oil prices. Analysts concluded that such firms should
enjoy high growth rates over the coming years as the world's oil producers
strive to increase production to meet demand.
Financial services holdings also helped returns. While the apparent end to
this round of official interest rate increases has aided most financial
stocks, our particular focus on fee-based financial companies was rewarded.
One standout was Northern Trust, a bank with a strong foothold in trust
management and other fee-based businesses.
Additionally, a number of our specialty pharmaceutical holdings, including
Forest Laboratories and King Pharmaceuticals also contributed positively to
performance. Investors have rewarded these companies for their earnings
predictability, which has been especially appealing in the recent uncertain
environment.
Going forward, we plan to keep our focus on those high-growth mid-cap
companies that we believe can continue to perform well, even in an economic
slowdown. In an effort to maintain diversification and dampen volatility, we
plan to seek these companies out in a variety of sectors.
ix
<PAGE>
Mid Cap Value Fund
Investment Seeks to provide long-term capital appreciation by
Objective: investing at least 65% of the Fund's total assets in
equity securities of medium capitalization companies
using a value oriented investment approach. Medium
capitalization companies include those with the
characteristics of companies included in the Russell
MidcapTM Index, which as of December 31, 1999 had an
average market capitalization of approximately $4.4
billion.
Subadvisor: Neuberger Berman Management, Inc. ("NBM")
Portfolio Robert Gendelman, S. Basu Mullick
Managers:
Inception Date: November 2, 1998/4/
[GRAPH]
NAV 5.75% Sales Charge Russell MidCap
Nov-98 10,000 9,425 10,000
Nov-98 10,500 9,896 10,351
Dec-98 10,753 10,135 10,666
Jan-99 11,034 10,399 10,417
Feb-99 10,883 10,258 10,188
Mar-99 11,385 10,730 10,334
Apr-99 12,410 11,696 11,313
May-99 12,831 12,093 11,360
Jun-99 13,272 12,509 11,489
Jul-99 13,132 12,377 11,202
Aug-99 12,329 11,621 10,815
Sep-99 11,768 11,091 10,267
Oct-99 12,023 11,332 10,570
Nov-99 12,204 11,502 10,376
Dec-99 13,329 12,563 10,654
Jan-00 12,819 12,082 10,017
Feb-00 13,261 12,498 9,598
Mar-00 14,620 13,779 10,762
Apr-00 14,031 13,224 10,805
May-00 14,337 13,512 10,990
Jun-00 14,348 13,523 10,581
Jul-00 14,982 14,121 10,828
Aug-00 15,945 15,028 11,492
Sep-00 16,251 15,316 11,602
Oct-00 16,374 15,432 11,822
Performance Table
<TABLE>
<CAPTION>
Average Annual Cumulative
Total Return Total Return
---------------- ------------
1 Since Since
Year Inception Inception
Periods Ending October 31, 2000/4/ ------ --------- ------------
<S> <C> <C> <C>
Russell Midcap Value Index/5/ 11.85% 8.74% 18.22%
Mid Cap Value Fund Class A (NAV) 35.42% 28.00% 63.74%
Mid Cap Value Fund Class A (net of 5.75% sales
charge) 27.63% 24.26% 54.32%
Mid Cap Value Fund Class B (NAV) 34.26% 26.59% 60.15%
Mid Cap Value Fund Class B (net of CDSC)/1/ 29.26% 24.60% 55.15%
Mid Cap Value Fund Class C (NAV)/3/ N/A 9.53% 9.53%
Mid Cap Value Fund Class C (net of CDSC)/2/,/3/ N/A 8.53% 8.53%
Mid Cap Value Fund Institutional Class I 36.17% 27.97% 63.65%
</TABLE>
-----------------------------------------------
/1/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/2/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/3/Inception date is 7/31/2000.
/4/Performance information shown for periods prior to July 7, 2000 is that of
corresponding series of American General Series Portfolio Company 2 (the
"AGSPC2 Fund") that was reorganized into the Fund on July 7, 2000. The
AGSPC2 Fund had the same investment objective, and investment strategies
and policies as does the Fund, and was also managed by the same portfolio
managers.
/5/All since-inception returns for indices begin on the month-end closest to
the actual inception date of the fund.
x
<PAGE>
Portfolio Managers' Commentary
The Mid Cap Value Fund Class A share performance for the year-ended October
31, 2000 was 35.42% significantly outperforming the Russell Midcap Value Index
return of 11.85%.
Financial market performance for the 12-month period ended October 2000
reflected innumerable shifts in the actual and perceived condition of the
economy, the outlook for corporate earnings trends, and investor sentiment and
expectations. For the entire period, financial market returns were generally
positive, although lower than the out-sized equity market returns that have
been characteristic of the last several years; the broad market as measured by
the Wilshire 5000 appreciated 8.10% while the S&P 500 Index returned 6.09%.
Sectors within the S&P 500 generating the strongest returns over the period
include utilities, capital goods, health care and financials. Total return
performance for style specific areas, growth and value, are positive for the
12-month period, with most growth sectors generating somewhat stronger returns
(i.e. the Russell 1000 Growth Index returned 9.33% versus a 5.52% return for
the Russell 1000 Value Index). However, over the course of the entire 12-month
period a shift in market leadership appears to have taken place.
The market environment for value stocks in the third quarter of 2000 was quite
favorable, particularly in the mid-cap segment of the market. Investors
continued to emphasize more conservative market sectors, shifting their focus
from high-priced growth stocks with limited earnings visibility to less
expensive shares with more stable earnings records. A steady interest rate
environment and strong economic growth throughout the year has helped many
companies in the value category build their businesses. Earnings shortfalls
and concerns about longer-term growth in some of the faster-growing areas of
the market also contributed to value's attractiveness.
The Fund's financial holdings made the largest contribution to its total
return. Reinsurer XL Capital made a positive impact, as did property and
casualty insurance provider ACE Limited. Both stocks benefited from an
emerging turn in the insurance cycle. The portfolio's utility and health care
holdings also performed quite nicely.
Technology had the least favorable impact on portfolio total return. Satellite
communications company Loral Space & Communications detracted the most from
returns followed by technology services provider Comdisco and Apple Computer.
Communications Services (there were no remaining positions in this sector on
9/30/00) also had a small negative impact on total return.
We are pleased with the broadening of returns that has occurred over the last
several months in the equity markets. Concerns over the direction of interest
rates and long-term corporate earnings have refocused investors' attention on
company fundamentals, which has benefited many of the value stocks in which we
invest. Looking ahead, we are encouraged by the recent outperformance of value
investments over their growth counterparts. If the Federal Reserve Board
continues to hold interest rate levels steady, against a backdrop of modest
economic growth, we believe value stocks have the potential to remain in the
spotlight.
xi
<PAGE>
Science & Technology Fund
Investment Seeks to provide long-term growth of capital by investing
Objective: at least 65% of the Fund's total assets in the common
stocks and equity-related securities of companies that
are expected to benefit from scientific breakthroughs and
advancements in technology.
Subadvisor: T. Rowe Price Associates, Inc. ("TRowe")
Portfolio Chip Morris
Manager:
Inception Date: March 10, 2000/4/
[GRAPH]
NAV 5.75% Sales Charges S&P 500 Index
1-Mar 10,000 9,425 10,000
31-Mar 9,960 9,387 10,978
28-Apr 8,940 8,426 10,648
31-May 7,850 7,399 10,429
30-Jun 8,740 8,237 10,687
31-Jul 8,370 7,889 10,520
31-Aug 9,920 9,350 11,173
29-Sep 8,750 8,247 10,583
31-Oct 8,080 7,615 10,538
Performance Table
<TABLE>
<CAPTION>
Average Annual Cumulative
Total Return Total Return
-------------- ------------
Since Since
Inception Inception
Period Ending October 31, 2000/4/ -------------- ------------
<S> <C> <C>
S&P 500 Index/1/ 5.38% 5.38%
Science & Technology Fund Class A (NAV) -19.20% -19.20%
Science & Technology Fund Class A (net of 5.75%
sales charge) -23.85% -23.85%
Science & Technology Fund Class B (NAV) -19.70% -19.70%
Science & Technology Fund Class B (net of CDSC)/2/ -23.72% -23.72%
Science & Technology Fund Class C (NAV) -7.78% -7.78%
Science & Technology Fund Class C (net of CDSC)/3/ -8.71% -8.71%
Science & Technology Fund Institutional Class I -19.20% -19.20%
</TABLE>
-----------------------------------------------
/1/All since inception returns for indices begin on the month-end closest to
the actual inception date of the Fund.
/2/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/3/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/4/Performance information shown for periods prior to July 7, 2000 is that of
corresponding series of American General Series Portfolio Company 2 (the
"AGSPC2 Fund") that was reorganized into the Fund on July 7, 2000. The
AGSPC2 Fund had the same investment objective, and investment strategies and
policies as does the Fund, and was also managed by the same portfolio
managers.
xii
<PAGE>
Portfolio Manager's Commentary
As of the year-ended October 31, 2000, the Science & Technology Fund Class A
share performance since inception was -19.20% as compared to the S&P 500 Index
return of 5.38% for the same time period.
Investors entered 2000 with much enthusiasm for dot.com names as Internet
stocks returned 27.90% from the beginning of January to March 10. However,
poor earnings prospects coupled with an increasing number of dot.com failures
caused aggressive technology stocks to plunge as quickly as they had soared
earlier in the year. From 3/10/00 - 10/31/00, the Morgan Stanley Internet
Index declined 59.07%. Losses, however, were not isolated to the Internet
sector alone. During the second and third quarter, many high profile
technology companies such as Intel, Nokia, Dell Computer, and Apple Computer
warned investors about weaker earnings growth moving forward. Record high
valuation levels and news of potentially softer profitability caused investors
to rotate out of the sector in favor of more reasonably priced areas such as
health care, financial services, and utilities.
In this environment the Science & Technology Fund has focused on holding only
the highest quality names in the technology sector as we believe that lower
quality firms will get "steam rolled" in an increasingly competitive
environment. We feel the technology sector is experiencing a significant shift
as the dominance of the PC gives way to communications-based computing. Top
holdings such as Ariba, Oracle, and Cisco Systems reflects fund management's
commitment to high quality companies that will benefit from the trend towards
networking and the buildout of the Internet.
We have made some changes to holdings during the third quarter, initiating
positions in LSI Logic, SDL, and Corning, and adding to existing holdings such
as Applied Materials. We eliminated WorldCom, Dell Computer, and Softbank, and
trimmed back on Sun Microsystems and CIENA after their run-up.
Despite the recent selling, we believe science and technology represents the
premier opportunity for growth during the next three to five years, and should
continue to be the most rapidly growing segment of the global economy. The
Fund will remain focused on the migration from PC-based computing to
communications-driven market forces. Accordingly, we will continue to identify
the leading companies involved in building the infrastructure for the
Internet, and in the transmission of wire and wireless data and
communications. We remain optimistic about the long-term prospects for the
Fund.
xiii
<PAGE>
Small Cap Growth Fund
Investment Seeks to provide maximum capital appreciation by
Objective: investing primarily in a portfolio of equity securities
of domestic companies. Under normal conditions, the Fund
will be mainly invested in common stocks or warrants of
emerging growth companies that represent attractive
opportunities for maximum capital appreciation.
Subadvisor: Credit Suisse Asset Management/Warburg Pincus ("CSAM")
Portfolio Elizabeth B. Dater, Stephen P. Lurito
Managers:
Inception Date: January 6, 1998
[GRAPH]
NAV 5.75% Sales Charge Russell 2000 Growth
Jan-98 10,000 9,425 10,000
Jan-98 9,990 9,416 9,953
Feb-98 10,690 10,075 10,832
Mar-98 11,160 10,518 11,286
Apr-98 11,270 10,622 11,356
May-98 10,640 10,028 10,531
Jun-98 10,940 10,311 10,638
Jul-98 9,910 9,340 9,750
Aug-98 7,890 7,436 7,499
Sep-98 8,470 7,983 8,260
Oct-98 8,880 8,369 8,690
Nov-98 9,410 8,869 9,364
Dec-98 10,090 9,510 10,212
Jan-99 10,350 9,755 10,651
Feb-99 9,530 8,982 9,695
Mar-99 10,090 9,510 10,040
Apr-99 10,290 9,698 10,927
May-99 10,350 9,755 10,944
Jun-99 11,630 10,961 11,521
Jul-99 11,530 10,867 11,165
Aug-99 11,450 10,792 10,747
Sep-99 11,970 11,282 10,954
Oct-99 12,810 12,073 11,235
Nov-99 14,470 13,638 12,423
Dec-99 17,469 16,464 14,612
Jan-00 17,519 16,512 14,476
Feb-00 23,560 22,205 17,845
Mar-00 21,479 20,244 15,969
Apr-00 18,263 17,213 14,356
May-00 16,544 15,593 13,099
Jun-00 20,052 18,899 14,792
Jul-00 17,911 16,881 13,524
Aug-00 20,746 19,553 14,946
Sep-00 19,650 18,520 14,204
Oct-00 18,398 17,340 13,051
Performance Table
<TABLE>
<CAPTION>
Average Annual Cumulative
Total Return Total Return
---------------- ------------
1 Since Since
Year Inception Inception
Periods Ending October 31, 2000 ------ --------- ------------
<S> <C> <C> <C>
Russell 2000 Growth Index 16.16% 9.91% 30.51%
Small Cap Growth Fund Class A (NAV) 43.62% 24.14% 83.98%
Small Cap Growth Fund Class A (net of 5.75%
sales charge) 35.36% 21.56% 73.40%
Small Cap Growth Fund Class B (NAV) 42.62% 23.01% 79.28%
Small Cap Growth Fund Class B (net of CDSC)/1/ 37.62% 22.03% 75.28%
Small Cap Growth Fund Class C (NAV) 42.54% 22.98% 79.17%
Small Cap Growth Fund Class C (net of CDSC)/2/ 41.54% 22.98% 79.17%
Small Cap Growth Fund Institutional Class I/3/ N/A -7.34% -7.34%
</TABLE>
-----------------------------------------------
/1/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/2/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/3/Inception date is 7/10/2000.
xiv
<PAGE>
Portfolio Managers' Commentary
The Small Cap Growth Fund Class A share performance for the year-ended October
31, 2000 was 43.62%, significantly outperforming the Russell 2000 Growth Index
return of 16.16%.
The fourth quarter of 1999 was a spectacular one for small company growth
stocks, with technology and communications shares displaying particular
strength. Despite a rise in bond yields, the group outperformed large-cap
stocks by a healthy margin, supported by optimism regarding smaller companies'
earnings prospects and by investors' dissipating worries over the Y2K computer
bug and attendant risk factors. This momentum continued in the beginning of
the New Year although its strength made a dramatic reversal in March as
significant valuation disparities between technology and non-technology
companies signaled a wringing out of speculative excess. Following two
quarters of solid performance, small cap growth stocks retreated during the
second quarter, caused by continued uncertainty regarding the future course of
monetary policy. Small-capitalization stocks continued to struggle in the
third quarter, hampered by growing profit uncertainties that restrained stocks
broadly. While fears of rising interest rates subsided, evidence of a slowing
economy began to weigh on the market. Adding to the pressure was an upward
spike in oil prices and a declining euro. As in the large-cap area, technology
and communications stocks led the decline. Certain "defensive" sectors such as
health care, performed well, as did value-type stocks generally.
The most noteworthy change in the Fund's sector allocation during the third
quarter of 2000 was a significant increase in its health care exposure (health
care stocks accounted for about 25% of the Fund as of September 30, including
pharmaceutical stocks). Companies we purchased included both service providers
and more-aggressive biotechnology companies. On the service side, we deemed
certain managed-care and hospital names to be attractive, based in part on the
industry's overall supportive fundamentals. In addition, while the group's
earnings-growth prospects are relatively modest, these companies have good
potential to meet expectations over the near-to-intermediate term. We believe
that investors will continue to reward companies that can deliver such
consistency. In the pharmaceutical/biotech area, we added several companies
that stand to benefit over the longer term from breakthroughs in gene research
and the launch of new products.
We maintained a modest overweighting in technology stocks, defined to include
telecommunications, electronics and computer companies (combined, these
sectors accounted for roughly 41% of the Fund at the end of the third
quarter). While the group could continue to be hampered over the next few
months by growth uncertainties, (e.g., in the cellular-handset area), we have
a positive long-term outlook on these stocks and on "wireless" names in
particular.
Elsewhere of note, we remained modestly overweighted in the energy area, where
we continued to emphasize oil-services providers. We believe these companies
will continue to benefit from demand for their services, even if oil prices
begin to decline. In our view, oil prices would have to fall dramatically to
throttle activity in the oil-services industry.
Despite the recent weakness in small caps, and the potential for choppy waters
over the near term, we have a positive longer-term outlook on the group. We
remain of the view that these stocks - and the group's growth-oriented names
in particular - will benefit in due course from a historically supportive
combination of benign inflation, relatively stable interest rates and modest
economic growth. In addition, small caps currently trade at compelling
valuations versus those of larger-cap stocks, which should only add to their
appeal from a risk-reward perspective.
xv
<PAGE>
Small Cap Index Fund
Investment Seeks to provide investment results that are similar to
Objective: the total return of the Russell 2000 Index. The Index is
a sub-index of the Russell 3000 Index, which follows the
3,000 largest U.S. based companies based on total market
capitalization. The Index measures the performance of the
2,000 smallest companies in the Russell 3000 Index, and
represents about 8% of the total market capitalization of
the Russell 3000 Index.
Subadvisor: American General Investment Management, L.P. ("AGIM")
Portfolio Magali Azema-Barac
Manager:
Inception Date: November 2, 1998/3/
[GRAPH]
NAV 5.75% Sales Charge Russell 2000
Nov-98 10,000 9,425 10,000
Nov-98 10,370 9,774 10,524
Dec-98 10,977 10,345 11,175
Jan-99 11,104 10,465 11,324
Feb-99 10,242 9,653 10,406
Mar-99 10,352 9,757 10,569
Apr-99 11,219 10,574 11,516
May-99 11,409 10,753 11,684
Jun-99 11,851 11,170 12,213
Jul-99 11,561 10,897 11,877
Aug-99 11,129 10,489 11,438
Sep-99 11,088 10,451 11,440
Oct-99 11,132 10,492 11,487
Nov-99 11,748 11,072 12,173
Dec-99 12,990 12,243 13,551
Jan-00 12,684 11,955 13,333
Feb-00 14,497 13,663 15,535
Mar-00 13,507 12,730 14,510
Apr-00 12,739 12,007 13,637
May-00 11,947 11,260 12,842
Jun-00 12,918 12,175 13,962
Jul-00 12,516 11,796 13,513
Aug-00 13,439 12,667 14,544
Sep-00 13,014 12,266 14,116
Oct-00 12,439 11,724 13,486
Performance Table
<TABLE>
<CAPTION>
Average Annual Cumulative
Total Return Total Return
---------------- ------------
1 Since Since
Year Inception Inception
Periods Ending October 31, 2000/3/ ------ --------- ------------
<S> <C> <C> <C>
Russell 2000 Index 17.41% 16.15% 34.86%
Small Cap Index Fund Class A (NAV) 11.74% 11.55% 24.39%
Small Cap Index Fund Class A (net of 5.75% sales
charge) 5.31% 8.29% 17.24%
Small Cap Index Fund Class B (NAV) 10.83% 10.69% 22.49%
Small Cap Index Fund Class B (net of CDSC)/1/ 5.83% 8.41% 17.49%
Small Cap Index Fund Class C (NAV)/4/ N/A -3.07% -3.07%
Small Cap Index Fund Class C (net of CDSC)/2/ N/A -3.98% -3.98%
</TABLE>
-----------------------------------------------
/1/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/2/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/3/Performance information shown for periods prior to July 7, 2000 is that of
corresponding series of American General Series Portfolio Company 2 (the
"AGSPC2 Fund") that was reorganized into the Fund on July, 7 2000. The
AGSPC2 Fund had the same investment objective, and investment strategies and
policies as does the Fund, and was also managed by the same portfolio
managers.
/4/Inception date is 8/23/00.
xvi
<PAGE>
Portfolio Manager's Commentary
The Small Cap Index Fund Class A share performance for the year-ended October
31, 2000 was 11.74% as compared to the Russell 2000 Index return of 17.41%.
The increased volatility in the equity markets was felt the strongest in the
small cap sector. While the small cap index showed gains of 17% in February
2000, the same index was down -6.59% the following month. This pattern of
market ups and downs continued through the fiscal year. In addition to the
volatility within the small cap sector itself, the small cap universe faced
added volatility due to liquidity shortages brought about by the extreme
spread in returns between small caps and the large caps.
In general, we expect volatility to continue throughout next year, especially
with the introduction of Regulation FD (Fair Disclosure) by the SEC. This
regulation may generate more earnings surprises from public companies, as
financial analysts at Wall Street firms receive less timely information from
these companies and must begin playing on the same level as other investors.
xvii
<PAGE>
Socially Responsible Fund
Investment Seeks to obtain growth of capital by investing at least
Objective: 80% of the Fund's total assets in the equity securities
of companies meeting social criteria established for the
Fund. To determine which companies meet the Fund's social
criteria, AGIM relies on industry classifications and
research services such as the Investor Responsibility
Research Center.
Subadvisor: American General Investment Management, L.P. ("AGIM")
Portfolio Magali Azema-Barac
Manager:
Inception Date: November 2, 1998/4/
[GRAPH]
NAV 5.75% Sales Charge S&P 500
Nov-98 10,000 9,425 10,000
Nov-98 10,450 9,849 10,606
Dec-98 11,042 10,407 11,217
Jan-99 11,430 10,773 11,685
Feb-99 11,139 10,499 11,323
Mar-99 11,550 10,886 11,775
Apr-99 11,994 11,304 12,231
May-99 11,713 11,039 11,943
Jun-99 12,305 11,598 12,605
Jul-99 11,881 11,197 12,213
Aug-99 11,760 11,084 12,152
Sep-99 11,448 10,789 11,819
Oct-99 12,253 11,548 12,567
Nov-99 12,445 11,729 12,823
Dec-99 13,063 12,312 13,577
Jan-00 12,421 11,707 12,895
Feb-00 12,253 11,548 12,551
Mar-00 13,335 12,569 13,889
Apr-00 12,842 12,104 13,471
May-00 12,506 11,786 13,194
Jun-00 12,769 12,034 13,520
Jul-00 12,642 11,915 13,309
Aug-00 13,366 12,597 14,135
Sep-00 12,617 11,891 13,389
Oct-00 12,564 11,842 13,332
Performance Table
<TABLE>
<CAPTION>
Average Annual Cumulative
Total Return Total Return
---------------- ------------
1 Since Since
Periods Ending October 31, 2000/4/ Year Inception Inception
------ --------- ------------
<S> <C> <C> <C>
S&P 500 Index 6.09% 15.49% 33.32%
Socially Responsible Fund Class A (NAV) 2.54% 12.11% 25.64%
Socially Responsible Fund Class A (net of 5.75%
sales charge) -3.36% 8.83% 18.42%
Socially Responsible Fund Class B (NAV) 1.88% 11.27% 23.78%
Socially Responsible Fund Class B (net of
CDSC)/1/ -3.12% 9.00% 18.78%
Socially Responsible Fund Class C (NAV)/3/ N/A -0.11% -0.11%
Socially Responsible Fund Class C (net of
CDSC)/2/,/3/ N/A -1.11% -1.11%
Socially Responsible Fund Institutional Class I 2.72% 12.30% 26.07%
</TABLE>
-----------------------------------------------
/1/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/2/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/3/Inception date is 7/28/2000.
/4/Performance information shown for periods prior to July 7, 2000 is that of
corresponding series of American General Series Portfolio Company 2 (the
"AGSPC2 Fund") that was reorganized into the Fund on July 7, 2000. The
AGSPC2 Fund had the same investment objective, and investment strategies
and policies as does the Fund, and was also managed by the same portfolio
managers.
xviii
<PAGE>
Portfolio Manager's Commentary
The Socially Responsible Fund performance for the year ending October 31, 2000
was 2.54%, as compared to the S&P 500 index return of 6.09%.
In line with its social mandate, the fund generally underweights its energy
position vs. the energy weighting within the S&P 500 Index. Although this
underweighting has been detrimental to short term returns over the past six
months, we believe the current health care sector overweighting (vs. the S&P
500 Index weighting) will help the Fund going forward into the new fiscal
year.
After performing strongly for the fiscal year in 1999, the large cap equity
market in the fiscal year 2000 suffered from an increase in volatility,
finishing the year with a return of approximately 6%. This volatility is
apparent when you look at the monthly returns of the S&P 500 over this period.
For example, in December 1999 the S&P 500 returned 5.99% followed by a -5.02%
in January 2000. To magnify the issue, the volatility phenomenon has been
particularly strong in the technology sector, which constitutes more than 25%
of the large cap market.
The fiscal year ending October 31, 2000 also saw a reversal of the growth
versus value dominance. During 1999 growth was the dominant theme in large
caps, with a return of 25% over value. However, with uncertainty in the
markets and in the earnings capacity of growth oriented technology stocks
being questioned, value took over as the dominant style and outperformed
growth by 11.88% for the first three quarter's in 2000.
xix
<PAGE>
Stock Index Fund
Investment Seeks to provide investment results that are similar to
Objective: the total return of the S&P 500 Index. The Index is
composed of 500 common stocks chosen by Standard &
Poor's, and approximates the general distribution of
industries in the U.S. economy and captures the price
performance of a large cross-section of the publicly
traded stock market.
Subadvisor: American General Investment Management, L.P. ("AGIM")
Portfolio Magali Azema-Barac
Managers:
Inception Date: November 2, 1998/4/
[GRAPH]
NAV 5.75% Sales Charge S&P 500
Nov-98 10,000 9,425 10,000
Nov-98 10,530 9,925 10,606
Dec-98 11,116 10,477 11,217
Jan-99 11,559 10,894 11,685
Feb-99 11,198 10,554 11,323
Mar-99 11,639 10,970 11,775
Apr-99 12,084 11,389 12,231
May-99 11,853 11,172 11,943
Jun-99 12,495 11,777 12,605
Jul-99 12,111 11,415 12,213
Aug-99 12,051 11,358 12,152
Sep-99 11,699 11,026 11,819
Oct-99 12,436 11,721 12,567
Nov-99 12,658 11,930 12,823
Dec-99 13,382 12,612 13,577
Jan-00 12,709 11,978 12,895
Feb-00 12,454 11,738 12,651
Mar-00 13,666 12,880 13,889
Apr-00 13,236 12,475 13,471
May-00 12,960 12,215 13,194
Jun-00 13,256 12,494 13,520
Jul-00 13,032 12,282 13,309
Aug-00 13,835 13,039 14,135
Sep-00 13,098 12,345 13,389
Oct-00 13,047 12,297 13,332
Performance Table
<TABLE>
<CAPTION>
Average Annual Cumulative
Total Return Total Return
---------------- ------------
Since Since
Periods Ending October 31, 2000/4/ 1 Year Inception Inception
------ --------- ------------
<S> <C> <C> <C>
S&P 500 Index 6.09% 15.49% 33.32%
Stock Index Fund Class A (NAV) 4.91% 14.24% 30.47%
Stock Index Fund Class A (net of 5.75% sales
charge) -1.12% 10.91% 22.97%
Stock Index Fund Class B (NAV) 4.21% 13.03% 27.70%
Stock Index Fund Class B (net of CDSC)/1/ -0.79% 10.79% 22.70%
Stock Index Fund Class C (NAV)/3/ N/A -5.21% -5.21%
Stock Index Fund Class C (net of CDSC)/2/,/3/ N/A -6.16% -6.16%
</TABLE>
-----------------------------------------------
/1/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/2/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/3/Inception date is 7/28/2000.
/4/Performance information shown for periods prior to July 7, 2000 is that of
corresponding series of American General Series Portfolio Company 2 (the
"AGSPC2 Fund") that was reorganized into the Fund on July 7, 2000. The
AGSPC2 Fund had the same investment objective, and investment strategies
and policies as does the Fund, and was also managed by the same portfolio
managers.
xx
<PAGE>
Portfolio Managers' Commentary
The Stock Index Fund Class A share performance for the year-ended October 31,
2000 was 4.91% as compared to the S&P 500 Index return of 6.09%.
After performing strongly for the fiscal year in 1999, the large cap equity
market in the fiscal year 2000 suffered from an increase in volatility,
finishing the year with a return of approximately 6%. This volatility is
apparent when you look at the monthly returns of the S&P 500 over this period.
For example, in December 1999 the S&P 500 returned 5.99% followed by a -5.02%
in January 2000. To magnify the issue, the volatility phenomenon has been
particularly strong in the technology sector, which constitutes more than 25%
of the large cap market.
The fiscal year ending October 31, 2000 also saw a reversal of the growth
versus value dominance. During 1999 growth was the dominant theme in large
caps, with a return of 25% over value. However, with uncertainty in the
markets and in the earnings capacity of growth oriented technology stocks
being questioned, value took over as the dominant style and outperformed
growth by 11.88% for the first three quarter's in 2000.
xxi
<PAGE>
Global Equity Fund
Investment Seeks to provide long-term capital appreciation by
Objective: investing primarily in a globally diversified portfolio
of growth equity securities.
Subadvisor: Founders Asset Management LLC ("Founders")
Portfolio Douglas A. Loeffler, Scott Chapman, Tom Arrington
Managers:
Inception Date: November 1, 1990/4/
[GRAPH]
NAV 5.75% Sales Charge MSCI World Index
Oct-90 10,000 9,425 10,000
Nov-90 9,921 9,350 9,838
Dec-90 10,024 9,448 10,046
Jan-91 10,272 9,682 10,415
Feb-91 10,927 10,298 11,381
Mar-91 10,629 10,018 11,047
Apr-91 10,659 10,046 11,136
May-91 10,847 10,224 11,390
Jun-91 10,233 9,645 10,688
Jul-91 10,698 10,083 11,195
Aug-91 10,597 9,988 11,161
Sep-91 10,719 10,102 11,456
Oct-91 10,880 10,255 11,644
Nov-91 10,466 9,864 11,138
Dec-91 11,161 10,519 11,951
Jan-92 11,141 10,500 11,733
Feb-92 11,181 10,538 11,532
Mar-92 10,725 10,108 10,991
Apr-92 11,049 10,414 11,146
May-92 11,587 10,921 11,592
Jun-92 11,252 10,605 11,206
Jul-92 11,049 10,414 11,237
Aug-92 11,060 10,424 11,513
Sep-92 10,776 10,156 11,409
Oct-92 10,491 9,888 11,102
Nov-92 10,836 10,213 11,303
Dec-92 10,841 10,218 11,397
Jan-93 10,871 10,246 11,437
Feb-93 11,004 10,371 11,710
Mar-93 11,633 10,965 12,392
Apr-93 12,243 11,539 12,968
May-93 12,843 12,104 13,269
Jun-93 12,710 11,980 13,160
Jul-93 13,036 12,286 13,434
Aug-93 13,716 12,928 14,052
Sep-93 13,757 12,966 13,794
Oct-93 13,960 13,157 14,176
Nov-93 13,117 12,363 13,377
Dec-93 14,046 13,238 14,034
Jan-94 14,920 14,062 14,961
Feb-94 14,982 14,120 14,770
Mar-94 14,529 13,694 14,136
Apr-94 14,910 14,052 14,576
May-94 14,684 13,839 14,615
Jun-94 14,848 13,994 14,577
Jul-94 15,177 14,304 14,857
Aug-94 15,640 14,741 15,307
Sep-94 15,074 14,207 14,908
Oct-94 15,239 14,363 15,334
Nov-94 14,272 13,452 14,672
Dec-94 14,256 13,436 14,817
Jan-95 13,459 12,685 14,598
Feb-95 13,459 12,685 14,806
Mar-95 13,969 13,166 15,517
Apr-95 14,288 13,466 16,074
May-95 14,330 13,506 16,214
Jun-95 14,298 13,476 16,212
Jul-95 15,095 14,227 17,026
Aug-95 14,999 14,137 16,650
Sep-95 15,137 14,267 17,138
Oct-95 14,702 13,856 16,870
Nov-95 14,819 13,967 17,459
Dec-95 15,266 14,388 17,973
Jan-96 15,395 14,510 18,301
Feb-96 15,546 14,652 18,417
Mar-96 15,934 15,018 18,722
Apr-96 16,495 15,546 19,166
May-96 16,312 15,374 19,185
Jun-96 16,279 15,343 19,285
Jul-96 15,309 14,429 18,606
Aug-96 15,622 14,723 18,824
Sep-96 15,719 14,815 19,564
Oct-96 15,632 14,734 19,696
Nov-96 16,646 15,689 20,796
Dec-96 17,007 16,029 20,459
Jan-97 17,043 16,063 20,702
Feb-97 17,490 16,485 20,936
Mar-97 17,345 16,348 20,518
Apr-97 17,551 16,541 21,185
May-97 18,734 17,657 22,489
Jun-97 19,652 18,522 23,607
Jul-97 20,462 19,285 24,690
Aug-97 19,447 18,329 23,034
Sep-97 20,534 19,353 24,282
Oct-97 19,713 18,579 23,000
Nov-97 19,809 18,670 23,403
Dec-97 20,500 19,321 23,684
Jan-98 20,552 19,370 24,341
Feb-98 22,172 20,897 25,983
Mar-98 23,453 22,104 27,076
Apr-98 23,570 22,215 27,337
May-98 23,348 22,006 26,990
Jun-98 23,074 21,747 27,627
Jul-98 22,721 21,415 27,578
Aug-98 19,128 18,028 23,896
Sep-98 19,755 18,619 24,315
Oct-98 21,467 20,232 26,509
Nov-98 22,277 20,996 28,081
Dec-98 22,809 21,498 29,448
Jan-99 22,640 21,339 30,090
Feb-99 21,572 20,331 29,287
Mar-99 21,951 20,689 30,502
Apr-99 23,414 22,067 31,701
May-99 23,034 21,710 30,538
Jun-99 23,751 22,386 31,958
Jul-99 23,906 22,531 31,859
Aug-99 23,653 22,293 31,798
Sep-99 22,584 21,285 31,486
Oct-99 22,668 21,365 33,105
Nov-99 22,992 21,670 34,032
Dec-99 23,476 22,126 36,782
Jan-00 22,391 21,104 34,672
Feb-00 21,760 20,508 34,761
Mar-00 21,889 20,631 37,160
Apr-00 19,558 18,433 35,584
May-00 18,635 17,563 34,679
Jun-00 19,946 18,799 35,842
Jul-00 19,153 18,052 34,829
Aug-00 20,157 18,998 35,958
Sep-00 18,829 17,747 34,042
Oct-00 17,890 16,861 33,467
Performance Table
<TABLE>
<CAPTION>
Cumulative
Average Annual Total Return Total Return
--------------------------------- ------------------
1 5 Since Since/4/ Since Since/4/
Periods Ending October Year Years Inception 3/13/00 Inception 3/13/00
31, 2000 ------- ------ --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
MSCI World Index/1/ 1.09% 15.03% 12.49% -9.78% 224.56% -9.78%
Global Equity Fund Class
A (NAV) -21.08% 4.00% 5.99% -17.23% 78.90% -17.23%
Global Equity Fund Class
A (net of 5.75% sales
charge) -25.62% 2.78% 5.36% -21.99% 68.61% -21.99%
Global Equity Fund Class
B (NAV) -21.44% 3.44% 5.62% -17.41% 72.74% -17.41%
Global Equity Fund Class
B (net of CDSC)/2/ -25.37% 3.09% 5.62% -21.54% 72.74% -21.54%
Global Equity Fund Class
C (NAV) -21.42% 3.45% 5.62% -17.34% 72.79% -17.34%
Global Equity Fund Class
C (net of CDSC)/3/ -22.20% 3.45% 5.62% -18.17% 72.79% -18.17%
</TABLE>
-----------------------------------------------
/1/All since inception returns for indices begin on the month-end closest to
the actual inception date of the Fund.
/2/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/3/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/4/Current investment subadvisor assignment became effective 3/13/00.
xxii
<PAGE>
Portfolio Managers' Commentary
For the fiscal year ended October 31, 2000, the NAF Global Equity Fund's Class
A shares had an annual return of -21.08%, compared to the unmanaged MSCI World
Index's return of 1.09%.
A change in the Fund's management occurred midway through the period between
November 1, 1999 and October 31, 2000. This led to greater emphasis on
telecommunication and technology stocks, which we invested in heavily right as
the market was peaking in March. Unfortunately, this caused the Fund to
underperform its peers, as these sectors were subsequently hit by heavy
profit-taking. We've also experienced the ill effects of a weak euro--which
has resulted in declining rates of return when converting the euro assets in
the Fund into U.S. dollars--rising oil prices, and the underperformance of
growth-oriented stocks relative to value-oriented stocks. Part of the NAF
Global Equity Portfolio's performance is due to the Fund's purchase of
securities sold in initial public offerings (IPOs). There is no guarantee that
the Fund's investments in IPOs, if any, will continue to have a similar impact
on performance.
We have been pleased, however, to see strong earnings reports from most
companies in the Fund. Also, we've been taking advantage of price volatility.
While we can't help being affected by falls in growth stocks globally, we have
been striving to add value to the portfolio by initiating or increasing
positions in strong companies at attractive valuations. Using this strategy,
we've been modestly increasing our weightings in areas such as semiconductors
and telecommunications equipment, where we think stocks have over-reacted to
the downside. And, as always, we continue to emphasize companies from around
the globe with demonstrated track records of sustainable earnings growth and
considerable competitive advantages that we believe will endure over time.
xxiii
<PAGE>
International Equity Fund
Investment Seeks to provide long-term capital appreciation by
Objective: investing primarily in accordance with country and sector
weightings determined by MSAM in equity securities of
non-U.S. issuers which, in the aggregate, replicate broad
market indices.
Subadvisor: Morgan Stanley Asset Management ("MSAM")
Portfolio Barton M. Biggs, Ann Thievierge
Managers:
Inception Date: January 9, 1995/4/
[GRAPH]
NAV 5.75% Sales Charge MSCI All Country U.S.MSCA EAFE
1/9/95 10,000 9,425 10,000 10,000
1/31/95 9,800 9,237 9,605 9,616
2/28/95 9,590 9,039 9,599 9,588
3/31/95 10,030 9,453 10,190 10,186
4/30/95 10,350 9,755 10,566 10,569
5/30/95 10,150 9,566 10,460 10,443
6/30/95 9,977 9,403 10,290 10,260
7/31/95 10,488 9,885 10,913 10,899
8/31/95 10,228 9,639 10,512 10,483
9/30/95 10,308 9,715 10,708 10,688
10/31/95 10,137 9,554 10,428 10,401
11/30/95 10,338 9,743 10,721 10,690
12/31/95 10,786 10,165 11,141 11,121
1/31/96 10,888 10,262 11,206 11,166
2/29/96 10,857 10,233 11,239 11,204
3/31/96 11,041 10,406 11,477 11,442
4/30/96 11,265 10,617 11,816 11,775
5/31/96 11,235 10,589 11,614 11,558
6/30/96 11,367 10,714 11,664 11,623
7/31/96 11,102 10,464 11,322 11,283
8/31/96 11,214 10,569 11,365 11,308
9/30/96 11,510 10,848 11,673 11,609
10/31/96 11,581 10,916 11,595 11,490
11/30/96 12,010 11,319 12,073 11,947
12/31/96 12,093 11,397 11,906 11,793
1/31/97 11,849 11,167 11,535 11,380
2/28/97 11,926 11,241 11,710 11,567
3/31/97 12,004 11,314 11,721 11,609
4/30/97 11,993 11,303 11,793 11,670
5/31/97 12,503 11,784 12,571 12,430
6/30/97 12,947 12,203 13,242 13,115
7/31/97 13,091 12,339 13,485 13,327
8/31/97 12,270 11,565 12,492 12,332
9/30/97 12,736 12,004 13,193 13,023
10/31/97 11,993 11,303 12,198 12,022
11/30/97 11,838 11,157 12,062 11,899
12/31/97 12,036 11,344 12,176 12,003
1/30/98 12,368 11,657 12,695 12,552
2/27/98 13,166 12,409 13,522 13,357
3/31/98 13,707 12,919 13,966 13,769
4/30/98 13,940 13,139 14,075 13,878
5/31/98 13,756 12,965 14,001 13,810
6/30/98 13,559 12,780 14,076 13,915
7/31/98 13,608 12,826 14,168 14,056
8/31/98 11,312 10,661 12,358 12,314
9/30/98 10,771 10,152 12,005 11,937
10/31/98 12,073 11,379 13,255 13,181
11/30/98 12,712 11,981 13,927 13,856
12/31/98 13,022 12,273 14,461 14,403
1/31/99 13,219 12,459 14,464 14,361
2/28/99 12,837 12,099 14,100 14,018
3/31/99 13,601 12,819 14,688 14,604
4/30/99 14,032 13,225 15,318 15,195
5/31/99 13,305 12,540 14,544 14,413
6/30/99 13,823 13,028 15,113 14,975
7/31/99 14,143 13,330 15,548 15,420
8/31/99 14,192 13,376 15,592 15,476
9/30/99 14,266 13,446 15,760 15,632
10/31/99 14,648 13,806 16,369 16,217
11/30/99 15,239 14,363 16,942 16,781
12/31/99 16,706 15,745 18,500 18,287
1/31/00 15,486 14,596 17,376 17,125
2/29/00 15,996 15,076 17,868 17,586
3/31/00 16,384 15,442 18,601 18,268
4/28/00 15,473 14,583 17,637 17,306
5/31/00 15,205 14,331 17,209 16,884
6/30/00 15,580 14,684 17,953 17,544
7/31/00 14,776 13,927 17,267 16,808
8/31/00 15,058 14,192 17,492 16,954
9/29/00 14,482 13,649 16,586 16,129
10/31/00 14,053 13,245 16,134 15,748
Performance Table
<TABLE>
<CAPTION>
Cumulative
Average Annual Total Return Total Return
-------------------------------- -------------------
1 5 Since Since Since Since
Periods Ending October 31, Year Years Inception 4/1/99/4/ Inception 4/1/99/4/
2000 ------ ----- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
MSCI EAFE Index/3/ -2.90% 8.65% 8.12% 4.87% 57.48% 7.84%
MSCI All Country World ex
U.S. Index/6/ -1.44% 9.12% 8.58% 6.10% 61.34% 9.84%
International Equity Fund
Class A (NAV) -4.00% 6.75% 6.03% 2.08% 40.53% 3.33%
International Equity Fund
Class A
(net of 5.75% sales charge) -9.58% 5.49% 4.95% -1.66% 32.45% -2.63%
International Equity Fund
Class B (NAV) -4.78% 6.05% 5.41% 1.36% 35.83% 2.17%
International Equity Fund
Class B (net of CDSC)/1/ -9.29% 5.73% 5.27% -1.79% 34.83% -2.83%
International Equity Fund
Class C (NAV) -5.05% 5.97% 5.34% 1.18% 35.34% 1.88%
International Equity Fund
Class C (net of CDSC)/2/ -5.96% 5.97% 5.34% 1.18% 35.34% 1.88%
International Equity Fund
Institutional Class 1/3/ N/A N/A -10.82% -10.82% -10.82% -10.82%
</TABLE>
-----------------------------------------------
/1/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/2/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/3/Inception date is 7/10/2000.
/4/Current investment subadvisor assignment became effective 4/1/99.
/5/The benchmark became MSCI EAFE Index on 4/1/99 when Morgan Stanley Asset
Management assumed management of the Fund.
/6/All since-inception returns for indices begin on the month-end closest to
the actual inception date of the fund.
xxiv
<PAGE>
Portfolio Managers' Commentary
The International Equity Fund Class A share performance for the year-ended
October 31, 2000 was -4.00% as compared to the MSCI EAFE Index return of -
2.90%.
The same trends of technology and communications that drove the equity markets
in the U.S., along with an overall theme of restructuring throughout the rest
of the world, led equity markets in both Europe and Asia to increase in both
the end of 1999 and in the beginning of 2000. However, as the U.S. markets
began to deteriorate because of strong energy prices, a weak euro, weaker than
expected corporate earnings and interest rate increases in the second quarter
of 2000, the non-U.S. market followed.
The second half of the fiscal year ending October 31, 2000 was particularly
volatile. The value sectors of the markets continued to offer some protection
to investors relative to the continued sharp sell off in the growth sectors.
We believe that global economic growth peaked over the summer as the result of
central bank tightenings, higher energy costs and the NASDAQ. The U.S.
economic slowdown has been more biting than the markets had anticipated, and
we are concerned about the effect on corporate profit growth as a result.
In Japan, economic growth is anemic and the outlook of fiscal spending for
next year is questionable, which has for some time provided a floor to the
economy. During the second half of the fiscal year-ended October 31, 2000 we
scaled back our position in Japan and are now neutral relative to our
benchmark.
In Europe we are now neutrally weighted in the U.K. and overweight in
Switzerland. We added to our positions in both markets as they offer good
relative value and have high defensive sector weightings (financials and
pharmaceuticals, low exposure to technology). In the U.K. we believe that
short-term interest rates are near their peak and the weakening of the
sterling relative to the euro should provide some relief to the manufacturing
sector. In addition, euro intervention has been effective so far and tax
reform has been positive, but the economic bite from 225 basis points of
short-term interest rate increases since November 1999 could be harsher than
expected.
In sum, we are wary about the global economic outlook and have raised some
cash as we look for safe havens in the global market turmoil. We continue to
underweight the Technology, Media and Telecom sectors - despite noticeably
better valuations. The implication for a global economic slowdown is that we
can no longer expect strong growth to sustain a healthy advance in earnings.
Corporate earnings are leveraged to growth and the leverage works on the
upside as well as the downside. To us, most global equity valuations still
appear extended and reliant on enthusiastic forward earnings estimates.
xxv
<PAGE>
International Small Cap Fund
Investment Seeks to provide long-term capital appreciation by
Objective: investing primarily in equity securities issued by
foreign companies that have total market capitalization
or annual revenue of $1 billion or less.
Subadvisor: Founders Asset Management LLC ("Founders")
Portfolio Tracy P. Stouffer
Manager:
Inception Date: March 4, 1996
[GRAPH]
NAV 5.75% Sales Charge MSCI World EX US Index
Mar-96 10,000 9,425 10,000
Mar-96 10,224 9,636 10,212
Apr-96 10,552 9,945 10,513
May-96 10,760 10,141 10,334
Jun-96 10,776 10,156 10,379
Jul-96 10,368 9,772 10,075
Aug-96 10,440 9,840 10,113
Sep-96 10,536 9,930 10,387
Oct-96 10,744 10,126 10,317
Nov-96 10,928 10,300 10,743
Dec-96 11,040 10,405 10,594
Jan-97 11,144 10,503 10,263
Feb-97 11,352 10,699 10,419
Mar-97 11,312 10,662 10,430
Apr-97 11,016 10,383 10,494
May-97 11,520 10,858 11,185
Jun-97 11,680 11,008 11,783
Jul-97 11,632 10,963 11,999
Aug-97 11,176 10,533 11,115
Sep-97 11,608 10,941 11,739
Oct-97 11,088 10,450 10,854
Nov-97 11,152 10,511 10,732
Dec-97 11,000 10,368 10,834
Jan-98 11,256 10,609 11,296
Feb-98 11,832 11,152 12,032
Mar-98 12,560 11,838 12,427
Apr-98 12,896 12,154 12,523
May-98 13,376 12,607 12,458
Jun-98 13,376 12,607 12,524
Jul-98 13,368 12,599 12,606
Aug-98 11,344 10,692 10,996
Sep-98 10,664 10,051 10,682
Oct-98 11,128 10,488 11,794
Nov-98 11,608 10,941 12,392
Dec-98 12,120 11,423 12,867
Jan-99 12,536 11,815 12,870
Feb-99 11,920 11,235 12,546
Mar-99 12,488 11,770 13,069
Apr-99 13,040 12,290 13,630
May-99 12,576 11,853 12,941
Jun-99 13,104 12,351 13,447
Jul-99 13,592 12,810 13,834
Aug-99 13,720 12,931 13,874
Sep-99 14,320 13,497 14,023
Oct-99 15,064 14,198 14,565
Nov-99 19,496 18,375 15,075
Dec-99 23,567 22,212 16,461
Jan-00 24,863 23,433 15,461
Feb-00 32,035 30,193 15,899
Mar-00 27,125 25,565 16,551
Apr-00 22,117 20,846 15,693
May-00 20,087 18,932 15,313
Jun-00 21,373 20,144 15,974
Jul-00 20,542 19,360 15,364
Aug-00 21,963 20,700 15,564
Sep-00 20,638 19,452 14,758
Oct-00 18,579 17,511 14,356
Performance Table
<TABLE>
<CAPTION>
Average Annual Cumulative
Total Return Total Return
---------------- ------------
1 Since Since
Periods Ending October 31, 2000 Year Inception Inception
------ --------- ------------
<S> <C> <C> <C>
MSCI World ex US Index/3/ -1.44% 8.06% 43.56%
International Small Cap Fund Class A (NAV) 23.34% 14.21% 85.79%
International Small Cap Fund Class A (net of
5.75% sales charge) 16.24% 12.77% 75.11%
International Small Cap Fund Class B (NAV) 22.16% 13.34% 79.33%
International Small Cap Fund Class B (net of
CDSC)/1/ 17.16% 13.07% 77.33%
International Small Cap Fund Class C (NAV) 22.43% 13.42% 79.92%
International Small Cap Fund Class C (net of
CDSC)/2/ 21.43% 13.42% 79.92%
</TABLE>
-----------------------------------------------
/1/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/2/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/3/All since-inception returns for indices begin on the month-end closest to
the actual inception date of the fund.
xxvi
<PAGE>
Portfolio Manager's Commentary
For the fiscal year ended October 31, 2000, the International Small Cap Fund's
Class A shares had an NAV total return of 23.34%, compared to the unmanaged
MSCI World ex U.S. Index's decline of -1.44%.
Significant macroeconomic events during the period between November 1, 1999
and October 31, 2000--such as the highly scrutinized NASDAQ's erratic behavior
and a hefty rise in oil prices--helped trigger a sharp swing from investor
confidence to widespread uncertainty. Before this swing, the Fund benefited in
late 1999 and early 2000 from exceptionally strong stock performance, most
notably from growth companies representing the technology sector. Japanese and
other Asian companies were particularly strong contributors. Part of the
International Small Cap Fund's performance is due to the Fund's purchase of
securities sold in initial public offerings (IPOs). There is no guarantee that
the Fund's investments in IPOs, if any, will continue to have a similar impact
on performance.
However, by mid-March the landscape had shifted. Investors began questioning
the valuations of many technology companies, choosing to gravitate toward
large companies with high liquidity rather than stay in the more volatile
international small-cap arena. Furthermore, the euro's weakness resulted in
declining rates of return when converting the euro assets in the Fund into
U.S. dollars (the currency in which the Fund is priced), and the Japanese
market lost ground even after it appeared to have reached bottom. The very
types of companies that aided the Fund's performance prior to March--namely
technology and Japanese firms--proved burdensome as the markets spiraled
downward.
In response, the team has been reducing the Fund's positions in technology and
pursuing more attractive opportunities elsewhere. For example, the world's
voracious appetite for energy shows no signs of weakening at this juncture,
and therefore the team has added to the Fund's positions in the oil services
sector. Healthcare stocks are also showing strong long-term growth potential,
due in large part to the aging of the world's population. Meanwhile, the team
remains dedicated to its bottom-up approach, which it continues to apply
during these volatile times.
xxvii
<PAGE>
Balanced Fund
Investment Seeks to provide current income and capital appreciation
Objective: by investing in a combination of common stocks and fixed-
income securities, including preferred stocks,
convertible securities and bonds. The Fund normally
invests the majority of its total assets in U.S. and
foreign growth-oriented common stocks and approximately
25% of its total assets in investment grade debt
securities.
Subadvisor: INVESCO Funds Group, Inc. ("INVESCO")
Portfolio Charles Mayer, Jerry Paul, Peter Lovell
Managers:
Inception Date: August 28, 1989/5/
[GRAPH]
5.75% Sales S&P 500 LB Aggregate 50%/50%
NAV Charge Index Bond Index Composite Index
Oct-90 10,000 9,425 10,000 10,000 10,000
Nov-90 10,394 9,796 10,646 10,215 10,431
Dec-90 10,735 10,118 10,943 10,374 10,659
Jan-91 11,074 10,437 11,420 10,503 10,962
Feb-91 11,614 10,946 12,237 10,592 11,414
Mar-91 11,752 11,076 12,533 10,665 11,599
Apr-91 11,827 11,147 12,563 10,781 11,672
May-91 11,965 11,277 13,101 10,843 11,972
Jun-91 11,674 11,003 12,502 10,838 11,670
Jul-91 12,006 11,316 13,087 10,988 12,038
Aug-91 12,274 11,569 13,395 11,226 12,310
Sep-91 12,249 11,545 13,175 11,454 12,314
Oct-91 12,453 11,737 13,351 11,581 12,466
Nov-91 12,287 11,581 12,812 11,687 12,250
Dec-91 13,037 12,288 14,276 12,034 13,155
Jan-92 13,102 12,348 14,011 11,871 12,941
Feb-92 13,411 12,640 14,190 11,948 13,069
Mar-92 13,231 12,470 13,912 11,881 12,896
Apr-92 13,450 12,676 14,317 11,966 13,142
May-92 13,720 12,931 14,394 12,193 13,293
Jun-92 13,514 12,737 14,186 12,361 13,273
Jul-92 13,814 13,020 14,757 12,613 13,685
Aug-92 14,968 14,108 14,459 12,740 13,600
Sep-92 13,746 12,956 14,625 12,892 13,759
Oct-92 13,855 13,058 14,678 12,721 13,699
Nov-92 14,398 13,570 15,173 12,723 13,948
Dec-92 14,718 13,872 15,371 12,925 14,148
Jan-93 14,870 14,015 15,484 13,174 14,329
Feb-93 14,801 13,950 15,693 13,404 14,548
Mar-93 15,202 14,328 16,030 13,460 14,745
Apr-93 14,912 14,054 15,637 13,555 14,596
May-93 15,175 14,302 16,060 13,572 14,816
Jun-93 15,396 14,511 16,113 13,818 14,965
Jul-93 15,548 14,654 16,037 13,897 14,967
Aug-93 15,714 14,810 16,648 14,140 15,394
Sep-93 15,880 14,967 16,525 14,178 15,351
Oct-93 15,935 15,019 16,860 14,230 15,545
Nov-93 15,852 14,941 16,702 14,110 15,406
Dec-93 16,200 15,269 16,907 14,186 15,546
Jan-94 16,503 15,554 17,473 14,377 15,925
Feb-94 16,489 15,540 17,002 14,127 15,564
Mar-94 15,955 15,037 16,262 13,778 15,020
Apr-94 15,897 14,983 16,473 13,668 15,071
May-94 15,940 15,024 16,742 13,667 15,204
Jun-94 15,738 14,833 16,328 13,636 14,982
Jul-94 15,969 15,051 16,869 13,908 15,388
Aug-94 16,416 15,472 17,555 13,925 15,740
Sep-94 16,214 15,282 17,132 13,720 15,426
Oct-94 16,056 15,133 17,525 13,707 15,616
Nov-94 15,551 14,657 16,882 13,677 15,279
Dec-94 15,762 14,856 17,128 13,772 15,450
Jan-95 15,903 14,988 17,573 14,044 15,809
Feb-95 16,637 15,680 18,255 14,379 16,317
Mar-95 16,887 15,916 18,796 14,466 16,631
Apr-95 17,231 16,240 19,343 14,669 17,006
May-95 17,777 16,755 20,107 15,237 17,672
Jun-95 18,012 16,976 20,579 15,348 17,963
Jul-95 18,324 17,271 21,264 15,314 18,289
Aug-95 18,637 17,565 21,322 15,499 18,411
Sep-95 18,887 17,801 22,215 15,650 18,932
Oct-95 18,777 17,698 22,137 15,853 18,995
Nov-95 19,199 18,095 23,111 16,091 19,601
Dec-95 19,601 18,474 23,539 16,316 19,928
Jan-96 19,843 18,702 24,339 16,427 20,383
Feb-96 19,894 18,750 24,566 16,141 20,353
Mar-96 19,894 18,750 24,801 16,028 20,415
Apr-96 19,946 18,799 25,166 15,939 20,552
May-96 20,135 18,978 25,815 15,907 20,861
Jun-96 20,118 18,961 25,913 16,120 21,017
Jul-96 19,911 18,767 24,768 16,163 20,466
Aug-96 20,170 19,010 25,291 16,136 20,713
Sep-96 20,790 19,594 26,715 16,417 21,566
Oct-96 21,238 20,017 27,452 16,781 22,116
Nov-96 21,961 20,698 29,527 17,068 23,298
Dec-96 21,728 20,479 28,943 16,909 22,926
Jan-97 22,301 21,019 30,751 16,962 23,857
Feb-97 22,262 20,982 30,991 17,004 23,998
Mar-97 21,867 20,609 29,718 16,815 23,267
Apr-97 22,558 21,261 31,489 17,068 24,278
May-97 23,427 22,080 33,403 17,230 25,317
Jun-97 24,158 22,769 34,900 17,435 26,167
Jul-97 24,889 23,458 37,674 17,906 27,790
Aug-97 24,059 22,676 35,565 17,753 26,659
Sep-97 25,067 23,625 37,510 18,016 27,763
Oct-97 24,849 23,420 36,257 18,277 27,267
Nov-97 25,146 23,700 37,936 18,361 28,149
Dec-97 25,454 23,990 38,588 18,547 28,568
Jan-98 26,135 24,632 39,017 18,784 28,900
Feb-98 26,962 25,412 41,830 18,769 30,299
Mar-98 27,473 25,894 43,971 18,833 31,402
Apr-98 27,717 26,123 44,416 18,931 31,673
May-98 27,571 25,985 43,652 19,111 31,381
Jun-98 27,984 26,375 45,424 19,273 32,349
Jul-98 27,303 25,733 44,942 19,314 32,128
Aug-98 25,697 24,219 38,453 19,629 29,041
Sep-98 27,035 25,481 40,917 20,088 30,503
Oct-98 27,936 26,329 44,244 19,981 32,113
Nov-98 28,544 26,903 46,925 20,095 33,510
Dec-98 28,967 27,301 49,628 20,156 34,892
Jan-99 28,592 26,948 51,703 20,299 36,001
Feb-99 27,789 26,191 50,095 19,943 35,019
Mar-99 28,217 26,595 52,098 20,053 36,076
Apr-99 28,806 27,150 54,115 20,117 37,116
May-99 28,673 27,024 52,838 19,940 36,389
Jun-99 29,047 27,377 55,770 19,876 37,823
Jul-99 28,405 26,772 54,030 19,793 36,911
Aug-99 28,458 26,822 53,760 19,783 36,771
Sep-99 27,816 26,216 52,287 20,013 36,150
Oct-99 28,271 26,645 55,615 20,086 37,851
Nov-99 27,923 26,317 56,748 20,084 38,416
Dec-99 28,068 26,454 60,088 19,988 40,038
Jan-00 27,117 25,558 57,070 19,922 38,496
Feb-00 28,353 26,723 55,989 20,163 38,076
Mar-00 29,747 28,036 61,467 20,429 40,948
Apr-00 28,860 27,200 59,617 20,370 39,993
May-00 28,163 26,543 58,394 20,360 39,377
Jun-00 29,081 27,409 59,833 20,783 40,308
Jul-00 29,303 27,618 58,899 20,972 39,935
Aug-00 31,077 29,290 62,557 21,276 41,916
Sep-00 30,380 28,633 59,254 21,410 40,332
Oct-00 29,873 28,730 59,004 21,552 40,278
Performance Table
<TABLE>
<CAPTION>
Average Annual Cumulative
Total Return Total Return
------------------------------- ------------------
1 5 10 Since 10 Since
Periods Ending October 31, Year Years Years 3/13/00/5/ Years 3/13/00/5/
2000 ------ ------ ------ ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
S&P 500 Index/1/ 6.09% 21.67% 19.44% -4.00% 490.04% -4.00%
Lehman Brothers Aggregate
Bond Index/1/ 7.30% 6.33% 7.98% 5.50% 115.52% 5.50%
50%/50% Composite/1/,/2/ 6.41% 13.02% 12.36% 0.45% 302.78% 0.45%
Balanced Fund Class A (NAV) 5.67% 9.73% 11.56 2.06% 198.73% 2.06%
Balanced Fund Class A (net
of 5.75% sales charge) -0.41% 8.44% 11.12 -3.81% 187.30% -3.81%
Balanced Fund Class B (NAV) 5.17% 9.07% 11.15 1.85% 187.99% 1.85%
Balanced Fund Class B (net
of CDSC)/3/ 0.17% 8.78% 11.15 -3.15% 187.99% -3.15%
Balanced Fund Class C (NAV) 4.86% 9.00% 11.12% 1.50% 186.95% 1.50%
Balanced Fund Class C (net
of CDSC)/4/ 3.86% 9.00% 11.12% 0.50% 186.95% 0.50%
Balanced Fund Institutional
Class I/6/ N/A N/A N/A 1.07% 1.07% 1.07%
</TABLE>
-----------------------------------------------
/1/All since inception returns for indices begin on the month-end closest to
the actual inception date of the Fund.
/2/Comprised of 50% of the return of the S&P 500 Index and 50% of the return
of the Lehman Brothers Aggregate Bond Index.
/3/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/4/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/5/Current investment subadvisor assignment became effective 3/13/00.
/6/Inception date is 7/10/2000.
xxviii
<PAGE>
Portfolio Managers' Commentary
Despite a high level of market volatility in the spring and fall, the Fund
ended the period with a solid gain. The Balanced Fund Class A share
performance for the year-ended October 31, 2000 was 5.67% as compared to the
S&P 500 Index return of 6.09%. The Lehman Brothers Aggregate Bond Index
returned 7.30% for the same time period. Both the bond and equity portions of
the Fund contributed positively to returns.
Many high-growth sectors, particularly telecommunications and technology,
pulled back sharply in recent months. Nevertheless, the drop was not sharp
enough to erase the significant gains we had recorded in many of our holdings
in these areas. Our investment in the satellite television provider GM Hughes,
for example, was significantly higher for the year, as was our holding in the
semiconductor maker Maxim. On the other hand, with the notable exception of
the German firm SAP, most of our software holdings were lower for the period.
Several of our leading health care holdings were also strong performers, with
pharmaceutical stocks Warner-Lambert (Pfizer) and Forest Labs advancing.
Meanwhile, many of our investments in so-called "Old Economy" sectors moved
higher. Our electric utility holdings flourished, as did many of our energy
investments. Incumbent regional Bell telephone companies SBC Communications
and Verizon Communications gained ground even as many long distance and
wireless firms suffered. Our retailing holdings proved a disappointment, with
even leading discounters such as Wal-Mart and Target moving lower in response
to worries about a slowing economy. Our energy holdings were generally strong,
with exploration and service firms benefiting most from signs that the sector
was entering a long-term expansion cycle.
In the fixed-income market, a pattern of peaking and then declining long-term
government interest rates was offset partially by increased credit spreads
between Treasury and corporate debt. Within the Fund's bond allocation, we
maintained a roughly one-third exposure to electric utilities bonds. The de-
leveraging and associated credit improvement achieved by many of our electric
utility holdings validated our large allocation to the sector.
Given the risk of additional market volatility, we believe investors will be
well served by our broad industry diversification and our focus on high-
quality companies. In this environment, we have reduced our total number of
holdings to focus on those companies that earn our highest confidence. We
believe this approach can help us provide consistent performance to our
investors, in any kind of market.
For the fixed-income portion of the Fund, we remain focused on credit risk
analysis, and our themes of electric utilities' deregulation and special
situations. Issue-specific security selection and/or avoidance will drive
performance throughout the remainder of the year.
xxix
<PAGE>
Core Bond Fund
Investment Seeks a high level of current income consistent with the
Objective: maintenance of principal and liquidity. To achieve this
objective, AGIM invests at least 65% of the Fund's total
assets in medium to high quality fixed-income securities,
or in securities issued or guaranteed by the U.S.
Government, mortgage-backed, or asset-backed securities.
Subadvisor: American General Investment Management, L.P. ("AGIM")
Portfolio Robert Kase
Manager:
Inception Date: May 1, 1991/5/
[GRAPH]
4.75% Sales LB Aggregate 50%/50% Composite
NAV Charge Bond Index Index
May-91 10,000 9,525 10,000 10,000
May-91 10,085 9,606 10,058 10,054
Jun-91 10,080 9,602 10,053 10,046
Jul-91 10,157 9,674 10,193 10,178
Aug-91 10,395 9,901 10,413 10,411
Sep-91 10,614 10,110 10,624 10,627
Oct-91 10,721 10,212 10,742 10,724
Nov-91 10,808 10,294 10,841 10,831
Dec-91 11,200 10,668 11,163 11,192
Jan-92 10,991 10,469 11,011 11,035
Feb-92 11,085 10,558 11,083 11,110
Mar-92 11,018 10,495 11,021 11,053
Apr-92 11,065 10,540 11,100 11,116
May-92 11,320 10,782 11,310 11,343
Jun-92 11,511 10,964 11,466 11,513
Jul-92 11,791 11,231 11,700 11,811
Aug-92 11,915 11,349 11,818 11,912
Sep-92 12,085 11,511 11,959 12,069
Oct-92 11,901 11,335 11,800 11,874
Nov-92 11,930 11,363 11,802 11,874
Dec-92 12,127 11,551 11,990 12,083
Jan-93 12,382 11,794 12,220 12,353
Feb-93 12,604 12,006 12,434 12,619
Mar-93 12,676 12,074 12,486 12,662
Apr-93 12,757 12,151 12,573 12,759
May-93 12,769 12,162 12,590 12,760
Jun-93 13,016 12,397 12,817 13,057
Jul-93 13,051 12,431 12,891 13,144
Aug-93 13,312 12,680 13,116 13,454
Sep-93 13,372 12,737 13,152 13,496
Oct-93 13,408 12,771 13,200 13,555
Nov-93 13,192 12,565 13,088 13,397
Dec-93 13,254 12,624 13,159 13,463
Jan-94 13,437 12,799 13,336 13,686
Feb-94 13,081 12,459 13,104 13,380
Mar-94 12,654 12,053 12,781 13,023
Apr-94 12,524 11,929 12,678 12,909
May-94 12,517 11,923 12,677 12,876
Jun-94 12,474 11,881 12,649 12,845
Jul-94 12,706 12,103 12,901 13,126
Aug-94 12,712 12,109 12,916 13,135
Sep-94 12,503 11,909 12,726 12,920
Oct-94 12,459 11,867 12,715 12,900
Nov-94 12,428 11,838 12,687 12,878
Dec-94 12,534 11,939 12,775 12,971
Jan-95 12,749 12,143 13,028 13,230
Feb-95 13,056 12,436 13,338 13,563
Mar-95 13,130 12,506 13,419 13,662
Apr-95 13,322 12,689 13,607 13,867
May-95 13,841 13,184 14,133 14,474
Jun-95 13,929 13,267 14,237 14,595
Jul-95 13,883 13,224 14,205 14,536
Aug-95 14,039 13,372 14,377 14,739
Sep-95 14,182 13,509 14,517 14,897
Oct-95 14,422 13,736 14,705 15,106
Nov-95 14,648 13,952 14,926 15,369
Dec-95 14,869 14,163 15,135 15,606
Jan-96 14,933 14,223 15,235 15,704
Feb-96 14,636 13,940 14,970 15,356
Mar-96 14,504 13,815 14,865 15,227
Apr-96 14,373 13,690 14,782 15,115
May-96 14,325 13,644 14,752 15,088
Jun-96 14,503 13,814 14,950 15,297
Jul-96 14,526 13,836 14,990 15,330
Aug-96 14,506 13,817 14,965 15,290
Sep-96 14,774 14,072 15,225 15,580
Oct-96 15,073 14,357 15,563 15,965
Nov-96 15,359 14,629 15,829 16,276
Dec-96 15,192 14,470 15,682 16,079
Jan-97 15,215 14,492 15,731 16,099
Feb-97 15,268 14,543 15,770 16,145
Mar-97 15,054 14,339 15,595 15,932
Apr-97 15,303 14,576 15,829 16,168
May-97 15,432 14,699 15,979 16,330
Jun-97 15,638 14,895 16,169 16,538
Jul-97 16,135 15,368 16,606 17,078
Aug-97 15,929 15,173 16,465 16,865
Sep-97 16,185 15,416 16,708 17,140
Oct-97 16,364 15,587 16,951 17,396
Nov-97 16,436 15,655 17,029 17,489
Dec-97 16,602 15,813 17,201 17,674
Jan-98 16,878 16,077 17,421 17,910
Feb-98 16,872 16,071 17,407 17,884
Mar-98 16,913 16,110 17,466 17,943
Apr-98 16,971 16,165 17,557 18,040
May-98 17,157 16,342 17,724 18,230
Jun-98 17,280 16,459 17,874 18,400
Jul-98 17,289 16,468 17,912 18,404
Aug-98 17,332 16,509 18,204 18,681
Sep-98 17,801 16,955 18,630 19,236
Oct-98 17,613 16,776 18,531 19,053
Nov-98 17,838 16,991 18,637 19,238
Dec-98 17,865 17,016 18,693 19,287
Jan-99 17,975 17,122 18,825 19,440
Feb-99 17,548 16,714 18,496 18,978
Mar-99 17,693 16,853 18,598 19,083
Apr-99 17,755 16,911 18,657 19,133
May-99 17,526 16,693 18,493 18,919
Jun-99 17,433 16,605 18,434 18,850
Jul-99 17,357 16,532 18,356 18,783
Aug-99 17,280 16,459 18,347 18,760
Sep-99 17,413 16,586 18,560 18,939
Oct-99 17,446 16,617 18,629 18,999
Nov-99 17,452 16,623 18,627 18,996
Dec-99 17,409 16,582 18,537 18,885
Jan-00 17,384 16,558 18,476 18,863
Feb-00 17,575 16,740 18,700 19,084
Mar-00 17,785 16,940 18,947 19,331
Apr-00 17,559 16,725 18,892 19,217
May-00 17,460 16,631 18,882 19,187
Jun-00 17,821 16,975 19,275 19,600
Jul-00 17,906 17,056 19,450 19,814
Aug-00 18,104 17,244 19,732 20,084
Sep-00 18,260 17,393 19,857 20,167
Oct-00 18,205 17,340 19,988 20,265
Performance Table
<TABLE>
<CAPTION>
Cumulative
Average Annual Total Return Total Return
--------------------------------- --------------------
1 5 Since Since Since Since
Periods Ending October Year Years Inception 3/13/00/5/ Inception 3/13/00/5/
31, 2000 ------ ----- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Lehman Brothers
Aggregate Bond Index/1/ 7.30% 6.33% 7.55% 5.80% 99.88% 5.80%
50%/50% Composite/1/,/2/ 6.67% 6.05% 7.71% 5.45% 102.65% 5.45%
Core Bond Fund Class A
(NAV) 4.35% 4.74% 6.50% 3.33% 82.05% 3.33%
Core Bond Fund Class A
(net of 4.75% sales
charge) -0.61% 3.73% 5.96% -1.58% 73.40% -1.58%
Core Bond Fund Class B
(NAV) 3.70% 4.15% 5.07% 2.92% 38.54% 2.92%
Core Bond Fund Class B
(net of CDSC)/3/ -1.30% 3.81% 5.07% -2.08% 38.54% -2.08%
Core Bond Fund Class C
(NAV) 3.70% 4.15% 5.07% 2.92% 38.54% 2.92%
Core Bond Fund Class C
(net of CDSC)/4/ 2.70% 4.15% 5.07% 1.92% 38.54% 1.92%
Core Bond Fund
Institutional Class
I/6/ N/A N/A 1.85% 1.85% 1.85% 1.85%
Core Bond Fund
Institutional Class
II/6/ N/A N/A 1.81% 1.81% 1.81% 1.81%
</TABLE>
-----------------------------------------------
/1/All since inception returns for indices begin on the month-end closest to
the actual inception date of the Fund.
/2/Comprised of 50% of the return of of the Lehman Brothers Corporate Bond
Index and 50% of the return of the Lehman Brothers Government Bond Index.
/3/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/4/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/5/Current investment subadvisor assignment became effective 3/13/00.
/6/Inception date is 7/10/2000.
xxx
<PAGE>
Portfolio Manager's Commentary
The Core Bond Fund Class A share performance for the year-ended October 31,
2000 was 4.35% as compared to the Lehman Brothers Aggregate Bond Index return
of 7.30%.
The Fund's performance is the result of a few key factors. One of these
factors was our overweight in corporate bonds versus the Lehman Brothers
Aggregate Index. Investors abandoned the corporate bond market because of the
volatility in the equity markets and a fear that corporations have become too
leveraged. Therefore, U.S. Government bonds performed well over the past year
because of the turmoil in the equity and the corporate bond markets. These
events have increased participation in the Government securities market
because of its reputation as a safe harbor from outside events. This caused
Government bonds to be the best performing sector in the market over this time
period. Another factor that had a positive effect on the Fund was our
concentration of bonds in the intermediate maturities. The intermediate
maturities have performed well over this period - especially since the Federal
Reserve stopped raising rates in the spring of 2000.
On the economic front, it seems as if the economy is slowing enough to keep
the Federal Reserve on hold for a while. The Fed has been on hold since the
spring of 2000 but has kept a tightening bias. The only real negative during
the quarter was the continued strength in the Oil markets. OPEC has increased
production three times and the U.S. has arranged a swap of 30 million barrels
out of the strategic reserve to try to lower oil prices. The current thinking
in the market place is that higher oil prices act like an "economic tax"
taking money away from consumer spending which accounts for 2/3 of economic
growth thereby cutting economic growth. The problem is no one knows how much
growth will be affected. Another problem is that in the short run it may be a
"economic tax" but in the long run if prices stay high, businesses will not be
able to continue to absorb the higher cost and must either charge higher
prices or cut somewhere else. Another event that may affect the economy is the
stock market. Over the past few years consumer spending, which accounts for
approximately 2/3 of GDP, has tended to move with changes in the stock market.
Therefore with the weak stock market over the past year consumer spending
should slow. Either way the economy will most likely slow in the 4th quarter
2000, and quite possibly stay that way into the first part of 2001.
Therefore, since a slower economy tends to be good for bonds, with the Federal
Reserve on hold and Government agency and mortgage-backed securities still
extremely attractive going forward we see value in continuing to have an
overweight in these products with a concentration of the funds holdings in
intermediate maturities.
xxxi
<PAGE>
High Yield Bond Fund
Investment Seeks the highest possible total return consistent with
Objective: conservation of capital through investment in a
diversified portfolio of high yielding, high-risk fixed-
income securities. To achieve this objective, AGIM
invests at least 65% of the Fund's total assets in below
investment-grade U.S. and foreign junk bonds. These high
yielding, high-risk fixed-income securities are rated
below Baa3 by Moody's and BBB- by S&P or comparable
investment quality at the time of purchase.
Subadvisor: American General Investment Management, L.P. ("AGIM")
Portfolio Gordon Massie
Manager:
Inception Date: November 2, 1998/5/
[GRAPH]
NAV 4.75% Sales Charge High Yield Market Index
Nov-98 10,000 9,525 10,000
Nov-98 10,149 9,667 10,502
Dec-98 10,106 9,626 10,494
Jan-99 10,262 9,775 10,652
Feb-99 10,305 9,815 10,562
Mar-99 10,499 10,000 10,651
Apr-99 10,793 10,280 10,874
May-99 10,544 10,044 10,703
Jun-99 10,518 10,019 10,680
Jul-99 10,566 10,064 10,703
Aug-99 10,424 9,929 10,575
Sep-99 10,359 9,867 10,495
Oct-99 10,228 9,742 10,424
Nov-99 10,404 9,909 10,587
Dec-99 10,515 10,016 10,676
Jan-00 10,418 9,923 10,588
Feb-00 10,420 9,925 10,613
Mar-00 10,195 9,710 10,397
Apr-00 10,274 9,786 10,439
May-00 10,211 9,726 10,293
Jun-00 10,394 9,901 10,524
Jul-00 10,442 9,946 10,639
Aug-00 10,645 10,140 10,718
Sep-00 10,546 10,045 10,603
Oct-00 10,232 9,746 10,289
Performance Table
<TABLE>
<CAPTION>
Average Annual Cumulative
Total Return Total Return
---------------- ------------
1 Since Since
Periods Ending October 31, 2000/5/ Year Inception Inception
------ --------- ------------
<S> <C> <C> <C>
Salomon Smith Barney High Yield Market Index/1/ -1.29% 1.44% 2.89%
High Yield Bond Fund Class A (NAV) 0.04% 1.15% 2.32%
High Yield Bond Fund Class A (net of 4.75% sales
charge) -4.71% -1.28% -2.54%
High Yield Bond Fund Class B (NAV) -0.83% 0.34% 0.69%
High Yield Bond Fund Class B (net of CDSC)/2/ -5.79% -2.18% -4.31%
High Yield Bond Fund Class C (NAV)/4/ N/A -3.29% -3.29%
High Yield Bond Fund Class C (net of
CDSC)/3/,/4/ N/A -4.26% -4.26%
High Yield Bond Fund Institutional Class I 0.04% 1.23% 2.48%
High Yield Bond Fund Institutional Class II 0.30% 1.51% 3.04%
</TABLE>
-----------------------------------------------
/1/All since inception returns for indices begin on the month-end closest to
the actual inception date of the Fund.
/2/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/3/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/4/Inception date is 8/21/2000.
/5/Performance information shown for periods prior to July 7, 2000 is that of
corresponding series of American General Series Portfolio Company 2 (the
"AGSPC2 Fund") that was reorganized into the Fund on July 7, 2000. The
AGSPC2 Fund had the same investment objective, and investment strategies
and policies as does the Fund, and was also managed by the same portfolio
managers.
xxxii
<PAGE>
Portfolio Manager's Commentary
The High Yield Bond Fund performance for the year ended October 31, 2000 was
0.04%, as compared to the Salomon Smith Barney High Yield Market Index return
of -1.29%. This resulted in an outperformance of 1.33% versus the index.
Returns for November and December 1999 were strong and the average yield on
the high yield index declined from low 12% to mid 11%. Increasing corporate
earnings primarily fueled this declination. However, in January, 2000,
forecasted and actual high yield default rates along with mutual fund outflows
began to increase which put pressure on high yield prices. For the ten months
ended October 31, 2000, the mutual fund outflows were approximately $3.5
billion compared to an average inflow of over $10 billion per year for the
previous four years. During this ten-month period, the average price for the
high yield index decreased from 83 to 79 and the average yield on the index
increased from mid 11% to mid 13%.
The Fund outperformed the high yield index due to positive contributions from
the Energy, Gaming, Healthcare (ex-skilled nursing facilities), Homebuilding,
Textile, Telco - Wireless/Wireline and Automobile industries. This was
partially offset by negative contributions from the European Cable, European
Telco, Cinema, Chemicals and Metals industries.
Currently, the high yield market faces several challenges from higher than
normal default rates, market illiquidity, continued mutual fund outflows and
restricted access to the capital markets. We believe returns in the overall
high yield market will depend on several key macro trends including worldwide
GDP growth, bank lending standards and high yield market inflows/outflows.
We believe there are opportunities to outperform the high yield market with
superior credit and industry selection. We are currently focused on companies
and industries with improving credit fundamentals, strong asset values and no
need to access the capital markets in the near term.
xxxiii
<PAGE>
Municipal Bond Fund
Investment Seeks to provide a high level of current income that is
Objective: exempt from regular federal income taxes, consistent with
the preservation of capital, by investing primarily in a
portfolio of municipal obligations. The Fund will invest
at least 80% of total assets in investment grade,
municipal fixed-income securities. Investment grade
securities are those rated at least Baa3 by Moody's or
BBB- by S&P or Fitch, or of comparable quality at the
time of purchase.
Subadvisor: American General Investment Management, L.P. ("AGIM")
Portfolio Robert Kase
Manager:
Inception Date: July 6, 1993/3/
[GRAPH]
NAV 4.75% Sales Charge LB Municipal Bond Index
Jul-93 10,000 9,525 10,000
Jul-93 10,020 9,544 10,013
Aug-93 10,261 9,774 10,221
Sep-93 10,373 9,881 10,338
Oct-93 10,417 9,922 10,357
Nov-93 10,300 9,811 10,266
Dec-93 10,457 9,960 10,483
Jan-94 10,616 10,112 10,602
Feb-94 10,302 9,813 10,328
Mar-94 9,665 9,206 9,907
Apr-94 9,742 9,280 9,992
May-94 9,839 9,372 10,079
Jun-94 9,756 9,293 10,020
Jul-94 9,944 9,472 10,204
Aug-94 9,943 9,471 10,239
Sep-94 9,709 9,248 10,089
Oct-94 9,454 9,005 9,909
Nov-94 9,158 8,723 9,730
Dec-94 9,494 9,043 9,944
Jan-95 9,766 9,302 10,228
Feb-95 10,106 9,626 10,526
Mar-95 10,195 9,711 10,647
Apr-95 10,209 9,724 10,660
May-95 10,587 10,085 11,000
Jun-95 10,435 9,939 10,904
Jul-95 10,514 10,015 11,008
Aug-95 10,649 10,143 11,147
Sep-95 10,717 10,208 11,218
Oct-95 10,897 10,380 11,380
Nov-95 11,147 10,618 11,569
Dec-95 11,273 10,737 11,680
Jan-96 11,307 10,770 11,769
Feb-96 11,227 10,694 11,689
Mar-96 11,055 10,530 11,539
Apr-96 10,998 10,475 11,507
May-96 11,009 10,486 11,503
Jun-96 11,149 10,619 11,628
Jul-96 11,242 10,708 11,734
Aug-96 11,254 10,719 11,731
Sep-96 11,443 10,899 11,896
Oct-96 11,585 11,035 12,030
Nov-96 11,787 11,227 12,250
Dec-96 11,739 11,182 12,199
Jan-97 11,727 11,170 12,222
Feb-97 11,837 11,274 12,334
Mar-97 11,727 11,170 12,170
Apr-97 11,837 11,274 12,273
May-97 11,995 11,425 12,457
Jun-97 12,130 11,554 12,590
Jul-97 12,486 11,893 12,939
Aug-97 12,375 11,787 12,817
Sep-97 12,511 11,917 12,970
Oct-97 12,610 12,011 13,053
Nov-97 12,672 12,070 13,130
Dec-97 12,872 12,260 13,321
Jan-98 13,009 12,391 13,458
Feb-98 12,996 12,379 13,462
Mar-98 13,020 12,401 13,475
Apr-98 12,955 12,340 13,414
May-98 13,146 12,521 13,626
Jun-98 13,197 12,570 13,679
Jul-98 13,118 12,495 13,713
Aug-98 13,324 12,691 13,926
Sep-98 13,427 12,789 14,100
Oct-98 13,372 12,737 14,100
Nov-98 13,335 12,701 14,149
Dec-98 13,382 12,747 14,185
Jan-99 13,523 12,881 14,353
Feb-99 13,454 12,815 14,290
Mar-99 13,437 12,798 14,310
Apr-99 13,486 12,846 14,346
May-99 13,389 12,753 14,263
Jun-99 13,225 12,597 14,057
Jul-99 13,249 12,619 14,108
Aug-99 13,137 12,513 13,995
Sep-99 13,122 12,498 14,001
Oct-99 12,970 12,354 13,850
Nov-99 13,036 12,417 13,997
Dec-99 12,938 12,324 13,893
Jan-00 12,825 12,216 13,832
Feb-00 13,018 12,399 13,993
Mar-00 13,254 12,625 14,299
Apr-00 13,195 12,568 14,215
May-00 13,136 12,512 14,141
Jun-00 13,458 12,819 14,516
Jul-00 13,624 12,977 14,717
Aug-00 13,804 13,148 14,944
Sep-00 13,728 13,076 14,866
Oct-00 13,852 13,194 15,028
Performance Table
<TABLE>
<CAPTION>
Cumulative
Average Annual Total Return Total Return
-------------------------------- --------------------
1 5 Since Since Since Since
Periods Ending October 31, Year Years Inception 3/13/00/3/ Inception 3/13/00/3/
2000 ----- ----- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Lehman Brothers Municipal
Bond Index/4/ 8.51% 5.72% 5.72% 5.10% 50.28% 5.10%
Municipal Bond Fund Class A
(NAV) 6.80% 4.91% 4.55% 5.79% 38.52% 5.79%
Municipal Bond Fund Class A
(net of 4.75% sales charge) 1.73% 3.90% 3.86% 0.76% 31.94% 0.76%
Municipal Bond Fund Class B
(NAV) 5.92% 4.05% 4.75% 5.23% 35.79% 5.23%
Municipal Bond Fund Class B
(net of CDSC)/1/ 0.92% 3.70% 4.75% 0.23% 35.79% 0.23%
Municipal Bond Fund Class C
(NAV) 5.91% 4.04% 4.75% 5.22% 35.76% 5.22%
Municipal Bond Fund Class C
(net of CDSC)/2/ 4.91% 4.04% 4.75% 4.22% 35.76% 4.22%
</TABLE>
-----------------------------------------------
/1/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/2/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/3/Current investment subadvisor assignment became effective 3/13/00.
/4/All since-inception returns for indices begin on the month-end closest to
the actual inception date of the fund.
xxxiv
<PAGE>
Portfolio Manager's Commentary
The North American Municipal Bond Fund rose 6.80%, net of expenses, for the
year-ended October 31, 2000 as compared to the 8.51% return posted by the
Lehman Brothers Municipal Bond Index.
As of October 31, 2000, the Fund had an average maturity of 14.7 years.
Additionally, the top five industry sectors of the Fund were General
Obligation, Housing, Industrial Development, Hospital, and Transportation. The
top five states of the Fund were New York, Texas, Pennsylvania, Illinois, and
Colorado.
During the year-ended October 31, 2000, 10-year AAA-rated municipal bond
yields fell by 34 basis points. Yields fell year over year due to
supply/demand dynamics in the municipal market. Year over year, new issue
supply declined by approximately 20% while demand for municipals among
individuals, mutual funds, Property and Casualty insurance companies, and
other buyers of municipal bonds remained strong overall. In addition, the
slope of the municipal curve flattened by 82 basis points. In contrast, the
10-year Treasury note fell by 27 basis points. The municipal market benefited
from limited new issue supply and increased demand from individual investors
buying municipal bonds.
Toward the end of the 2nd half of the year, the Fund's average maturity was
lengthened slightly to take advantage of favorable demand/supply picture in
the municipal bond market. The Fund continues to explore for opportunities to
enhance yield among investment grade municipal bonds.
xxxv
<PAGE>
Strategic Income Fund
Investment Seeks a high level of total return consistent with
Objective: preservation of capital. To achieve this objective, AGIM
invests at least 65% of the Fund's total assets in a
broad range of fixed-income securities. Those securities
include investment grade bonds, U.S. Government and
agency obligations, mortgage-backed securities, and U.S.,
Canadian, and foreign high-risk, high-yield bonds
(commonly known as "junk bonds").
Subadvisor: American General Investment Management, L.P. ("AGIM")
Portfolio Steve Guterman
Manager:
Inception Date: November 1, 1993/3/
[GRAPH]
NAV 4.75% Sales Charge LB Municipal Bond Index
1-Nov-93 10,000 9,525 10,000
30-Nov-93 10,019 9,543 9,915
31-Dec-93 10,122 9,641 9,969
31-Jan-94 10,283 9,795 10,103
28-Feb-94 10,001 9,526 9,927
31-Mar-94 9,539 9,086 9,682
30-Apr-94 9,444 8,996 9,605
31-May-94 9,567 9,113 9,604
30-Jun-94 9,522 9,070 9,583
31-Jul-94 9,564 9,110 9,773
31-Aug-94 9,615 9,158 9,785
30-Sep-94 9,638 9,180 9,641
31-Oct-94 9,621 9,164 9,632
30-Nov-94 9,561 9,107 9,611
31-Dec-94 9,435 8,986 9,678
31-Jan-95 9,448 8,999 9,869
28-Feb-95 9,543 9,090 10,104
31-Mar-95 9,592 9,137 10,166
30-Apr-95 9,899 9,429 10,308
30-May-95 10,244 9,758 10,707
30-Jun-95 10,381 9,888 10,785
31-Jul-95 10,428 9,933 10,761
31-Aug-95 10,463 9,966 10,892
30-Sep-95 10,642 10,137 10,997
31-Oct-95 10,720 10,211 11,140
30-Nov-95 10,906 10,388 11,307
31-Dec-95 11,187 10,655 11,466
31-Jan-96 11,685 11,130 11,541
29-Feb-96 11,497 10,951 11,341
31-Mar-96 11,502 10,956 11,261
30-Apr-96 11,645 11,092 11,198
31-May-96 11,737 11,180 11,176
30-Jun-96 11,868 11,304 11,325
31-Jul-96 11,924 11,358 11,356
31-Aug-96 12,108 11,532 11,337
30-Sep-96 12,494 11,901 11,534
31-Oct-96 12,580 11,982 11,790
30-Nov-96 12,812 12,204 11,992
31-Dec-96 12,845 12,235 11,880
31-Jan-97 13,005 12,387 11,917
28-Feb-97 13,153 12,528 11,947
31-Mar-97 12,926 12,312 11,814
30-Apr-97 13,072 12,451 11,991
31-May-97 13,356 12,722 12,105
30-Jun-97 13,518 12,876 12,249
31-Jul-97 13,886 13,227 12,580
31-Aug-97 13,835 13,178 12,473
30-Sep-97 14,112 13,441 12,658
31-Oct-97 13,910 13,249 12,841
30-Nov-97 14,090 13,421 12,900
31-Dec-97 14,226 13,550 13,031
30-Jan-98 14,383 13,700 13,197
27-Feb-98 14,498 13,809 13,187
31-Mar-98 14,567 13,875 13,232
30-Apr-98 14,602 13,909 13,300
31-May-98 14,595 13,902 13,427
30-Jun-98 14,561 13,869 13,541
31-Jul-98 14,615 13,921 13,569
31-Aug-98 13,617 12,970 13,791
30-Sep-98 14,025 13,358 14,113
31-Oct-98 13,941 13,279 14,038
30-Nov-98 14,304 13,625 14,118
31-Dec-98 14,329 13,648 14,161
31-Jan-99 14,274 13,596 14,261
28-Feb-99 14,188 13,514 14,012
31-Mar-99 14,405 13,720 14,089
30-Apr-99 14,678 13,980 14,134
31-May-99 14,356 13,674 14,010
30-Jun-99 14,310 13,630 13,965
31-Jul-99 14,232 13,556 13,906
31-Aug-99 14,071 13,403 13,899
30-Sep-99 14,210 13,535 14,060
31-Oct-99 14,234 13,558 14,112
30-Nov-99 14,408 13,724 14,111
31-Dec-99 14,524 13,834 14,043
31-Jan-00 14,513 13,824 13,997
29-Feb-00 14,623 13,928 14,166
31-Mar-00 14,716 14,017 14,353
28-Apr-00 14,508 13,819 14,312
31-May-00 14,405 13,721 14,304
30-Jun-00 14,747 14,047 14,602
31-Jul-00 14,956 14,246 14,735
31-Aug-00 15,222 14,499 14,949
29-Sep-00 15,149 14,430 15,043
31-Oct-00 14,817 14,113 15,142
Performance Table
<TABLE>
<CAPTION>
Cumulative
Average Annual Total Return Total Return
--------------------------------- --------------------
1 5 Since Since Since Since
Periods Ending October 31, Year Years Inception 3/13/00/3/ Inception 3/13/00/3/
2000 ------ ----- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Lehman Brothers Aggregate
Bond Index/5/ 7.30% 6.33% 6.10% 5.50% 51.42% 5.50%
Strategic Income Fund Class
A (NAV) 4.09% 6.69% 5.78% 0.19% 48.17% 0.19%
Strategic Income Fund Class
A
(net of 4.75% sales charge) -0.85% 5.65% 5.04% -4.57% 41.13% -4.57%
Strategic Income Fund Class
B (NAV) 3.33% 6.00% 6.22% -0.31% 48.86% -0.31%
Strategic Income Fund Class
B (net of CDSC)/1/ -1.67% 5.69% 6.22% -5.30% 48.86% -5.30%
Strategic Income Fund Class
C (NAV) 3.32% 6.00% 6.22% -0.32% 48.82% -0.32%
Strategic Income Fund Class
C (net of CDSC)/2/ 2.32% 6.00% 6.22% -1.32% 48.82% -1.32%
Strategic Income Fund
Institutional Class I/4/ N/A N/A -0.10% -0.10% -0.10% -0.10%
</TABLE>
-----------------------------------------------
/1/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/2/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/3/Current investment subadvisor assignment became effective 3/13/00.
/4/Inception date is 7/10/2000.
/5/All since-inception returns for indices begin on the month-end closest to
the actual inception date of the fund.
xxxvi
<PAGE>
Portfolio Manager's Commentary
The Strategic Income Fund Class A share performance for the year-ended October
31, 2000 was 4.09% as compared to the Lehman Brothers Aggregate Bond Index
return of 7.30%.
Over the last 12 months, the global fixed income markets have been impacted by
a large number of world events. The factors impacting the market are very
dynamic and have changed substantially from one year ago.
The year started with the market reacting to the Federal Reserve raising the
Federal Funds Rate in their continued attempt to slow the U.S. economic growth
to sustainable levels. The Fed has clearly succeeded and concern today has
shifted to worrying if the Fed has overshot the goal. We believe it has, and
we also think there now may be a need for the Fed to ease during the year
2001.
The U.S. was benefiting from some of the lowest oil prices in decades only a
year ago. Today oil is trading at $30-$35 a barrel, double to triple the
levels of those low prices. This has reduced discretionary spending and added
to observed and anticipated inflation levels. With U.S. economic growth
slowing, however, oil prices should at worst stabilize if not go down. We
believe the worst of the oil induced inflationary impact should now be behind
us.
Despite a very large trade deficit, the U.S. dollar has strengthened over the
year. The offset to the trade deficit was the large amount of investment by
foreign entities and individuals in the U.S. Over the short run, the trade
deficit will not change dramatically. However, the recent volatility and
negative equity returns should dampen the investment flow, weakening the
dollar especially relative to the Euro. This will benefit the Fund's small
non-dollar exposure.
Emerging market countries economic conditions have continued to improve over
the year, providing the backdrop for very strong performance, over 18% return
from the emerging market debt (EMD) component. This will be the second year in
a row that EMD is the best performing fixed-income asset class. The Fund
reduced exposure from 25% to slightly below 20% in EMD in order to lock in
some of these gains.
And finally, the weakness we have seen in the corporate bond markets,
investment grade and high yield was driven by a widening in the credit yield
spreads and increased levels of defaults. Relative to treasuries, the
additional yield investors receive for purchasing corporate bonds provides
more compensation than any time in the last 10 years. So while we think
defaults will continue in 2001 at similar levels to 2000, we are maintaining
the 40% allocation to high yield due to the ample compensation, over 700 basis
points, which the market provides.
xxxvii
<PAGE>
U.S. Government Securities Fund
Investment Seeks a high level of current income consistent with the
Objective: preservation of capital and maintenance of liquidity by
investing in securities issued or guaranteed by the U.S.
Government, its agencies, or instrumentalities.
American General Investment Management, L.P. ("AGIM")
Subadvisor:
Portfolio
Managers: Robert Kase
August 28, 1989/4/
Inception Date:
[GRAPH]
NAV 4.75% Sales Charge LB Municipal Bond Index
Oct-90 10,000 9,525 10,000
Nov-90 10,203 9,719 10,149
Dec-90 10,355 9,864 10,293
Jan-91 10,487 9,989 10,397
Feb-91 10,554 10,053 10,452
Mar-91 10,612 10,108 10,509
Apr-91 10,724 10,215 10,617
May-91 10,788 10,276 10,678
Jun-91 10,786 10,273 10,689
Jul-91 10,951 10,431 10,804
Aug-91 11,118 10,589 11,006
Sep-91 11,285 10,749 11,193
Oct-91 11,386 10,845 11,320
Nov-91 11,487 10,941 11,453
Dec-91 11,739 11,182 11,732
Jan-92 11,602 11,051 11,614
Feb-92 11,676 11,121 11,658
Mar-92 11,584 11,034 11,611
Apr-92 11,726 11,169 11,717
May-92 11,904 11,339 11,884
Jun-92 12,084 11,510 12,056
Jul-92 12,301 11,716 12,280
Aug-92 12,419 11,829 12,421
Sep-92 12,587 11,989 12,593
Oct-92 12,428 11,838 12,438
Nov-92 12,367 11,780 12,383
Dec-92 12,517 11,923 12,546
Jan-93 12,739 12,134 12,781
Feb-93 12,899 12,286 12,972
Mar-93 13,009 12,391 13,021
Apr-93 13,087 12,465 13,124
May-93 13,039 12,419 13,085
Jun-93 13,233 12,605 13,273
Jul-93 13,274 12,644 13,300
Aug-93 13,445 12,806 13,503
Sep-93 13,486 12,845 13,561
Oct-93 13,502 12,860 13,585
Nov-93 13,426 12,788 13,520
Dec-93 13,474 12,834 13,573
Jan-94 13,597 12,951 13,708
Feb-94 13,411 12,774 13,513
Mar-94 13,252 12,622 13,324
Apr-94 13,254 12,625 13,233
May-94 13,243 12,614 13,247
Jun-94 13,219 12,591 13,256
Jul-94 13,373 12,737 13,421
Aug-94 13,417 12,779 13,463
Sep-94 13,253 12,624 13,355
Oct-94 13,214 12,587 13,358
Nov-94 13,181 12,555 13,291
Dec-94 13,259 12,630 13,341
Jan-95 13,480 12,840 13,563
Feb-95 13,759 13,106 13,822
Mar-95 13,839 13,182 13,898
Apr-95 13,992 13,327 14,057
May-95 14,508 13,819 14,459
Jun-95 14,589 13,896 14,554
Jul-95 14,539 13,849 14,563
Aug-95 14,681 13,984 14,683
Sep-95 14,779 14,077 14,782
Oct-95 14,951 14,241 14,947
Nov-95 15,125 14,407 15,134
Dec-95 15,285 14,559 15,288
Jan-96 15,385 14,654 15,419
Feb-96 15,150 14,431 15,246
Mar-96 15,037 14,323 15,173
Apr-96 14,985 14,273 15,125
May-96 14,919 14,211 15,117
Jun-96 15,088 14,371 15,265
Jul-96 15,116 14,398 15,312
Aug-96 15,128 14,410 15,328
Sep-96 15,362 14,633 15,523
Oct-96 15,645 14,902 15,776
Nov-96 15,865 15,112 15,970
Dec-96 15,750 15,002 15,883
Jan-97 15,827 15,076 15,943
Feb-97 15,857 15,103 15,961
Mar-97 15,739 14,992 15,878
Apr-97 15,932 15,176 16,056
May-97 16,061 15,298 16,180
Jun-97 16,190 15,421 16,319
Jul-97 16,502 15,718 16,626
Aug-97 16,448 15,667 16,555
Sep-97 16,646 15,855 16,738
Oct-97 16,828 16,029 16,932
Nov-97 16,842 16,042 16,971
Dec-97 17,008 16,200 17,115
Jan-98 17,210 16,393 17,346
Feb-98 17,207 16,389 17,323
Mar-98 17,255 16,435 17,380
Apr-98 17,338 16,515 17,458
May-98 17,457 16,627 17,576
Jun-98 17,541 16,708 17,698
Jul-98 17,590 16,754 17,768
Aug-98 17,834 16,987 18,122
Sep-98 18,168 17,305 18,550
Oct-98 18,075 17,217 18,592
Nov-98 18,090 17,230 18,523
Dec-98 18,158 17,296 18,592
Jan-99 18,245 17,378 18,681
Feb-99 18,023 17,167 18,394
Mar-99 18,127 17,266 18,529
Apr-99 18,179 17,315 18,585
May-99 18,009 17,154 18,461
Jun-99 17,968 17,115 18,494
Jul-99 17,835 16,987 18,514
Aug-99 17,831 16,984 18,550
Sep-99 18,090 17,231 18,697
Oct-99 18,124 17,263 18,726
Nov-99 18,063 17,205 18,737
Dec-99 17,983 17,129 18,694
Jan-00 17,884 17,034 18,639
Feb-00 18,092 17,232 18,785
Mar-00 18,262 17,395 19,019
Apr-00 18,239 17,372 19,016
May-00 18,157 17,294 19,094
Jun-00 18,546 17,665 19,367
Jul-00 18,621 17,737 19,496
Aug-00 18,856 17,960 19,698
Sep-00 19,051 18,147 19,847
Oct-00 19,168 18,257 19,966
Performance Table
<TABLE>
<CAPTION>
Cumulative
Average Annual Total Return Total Return
----------------------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Periods Ending October 31, 1 5 10 Since 10 Since
2000 Year Years Years 3/13/00/4/ Years 3/13/00/4/
------ ----- ----- ---------- ------ ----------
Merrill Lynch 1-10 Year Gov-
ernment Index/1/ 6.68% 5.97% 7.16% 5.04% 99.66% 5.04%
U.S. Government Securities
Fund Class A (NAV) 5.76% 5.09% 6.72% 5.85% 91.68% 5.85%
U.S. Government Securities
Fund Class A (net of 4.75%
sales charge) 0.74% 4.08% 6.20% 0.82% 82.57% 0.82%
U.S. Government Securities
Fund Class B (NAV) 4.91% 4.44% 6.29% 5.38% 84.05% 5.38%
U.S. Government Securities
Fund Class B (net of CDSC)/2/ -0.09% 4.10% 6.29% 0.38% 84.05% 0.38%
U.S. Government Securities
Fund Class C (NAV) 4.91% 4.44% 6.29% 5.38% 84.05% 5.38%
U.S. Government Securities
Fund Class C (net of CDSC)/3/ 3.91% 4.44% 6.29% 4.38% 84.05% 4.38%
</TABLE>
-----------------------------------------------
/1/All since inception returns for indices begin on the month-end closest to
the actual inception date of the Fund.
/2/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/3/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/4/Current investment subadvisor assignment became effective 3/13/00.
xxxviii
<PAGE>
Portfolio Managers' Commentary
The U.S. Government Securities Fund Class A share performance for the year-
ended October 31, 2000 was 5.76% as compared to the Merrill Lynch 1-10 Year
Government Index return of 6.68%.
U.S. Government bonds performed well over the past year as equity prices
faltered and the Federal Reserve stopped increasing interest rates earlier in
2000. These events have increased participation in the Government securities
market because of its reputation for a safe harbor from outside events.
The Fund's performance is the result of a couple of factors. One of these
factors was the overweight in government agency and mortgage-backed bonds
versus the index. The other factor that helped returns was our overweight in
the intermediate part of the yield curve as the inversion of rates subsided (a
yield curve is said to be inverted if short-term rates are higher than long
term rates).
On the economic front it seems as if the economy is slowing enough to keep the
Federal Reserve on hold for a while. The Fed has been on hold since the spring
of 2000 but has kept a tightening bias. The only real negative during the
quarter was the continued strength in the Oil markets. OPEC has increased
production three times and the U.S. has arranged a swap of 30 million barrels
out of the strategic reserve in an attempt to lower oil prices. The current
thinking in the market place is that higher oil prices act like an "economic
tax" taking money away from consumer spending - which accounts for 2/3 of
economic growth - thereby cutting economic growth. The problem is no one knows
just how much growth will be affected. Another problem I see is that in the
short run it may be a "economic tax" but in the long run if prices stay high,
businesses will not be able to continue to absorb the higher cost and will
either have to charge higher prices or cut some where else. Another event that
may affect the economy is the stock market. Over the past few years consumer
spending, which accounts for approximately 2/3 of GDP, has tended to move with
changes in the stock market. Therefore with the weak stock market over the
past year consumer spending should slow. Either way the economy will most
likely slow in the 4th quarter 2000 and quite possibly into the first part of
2001.
Therefore going forward, since a slower economy tends to be good for bonds,
with the Federal Reserve on hold and Government agency and mortgage-backed
securities still extremely attractive, at this time we see value in continuing
to have an overweight in these products with a concentration of the Fund's
holdings in intermediate maturities.
xxxix
<PAGE>
Aggressive Growth Lifestyle Fund
Investment Seeks to provide growth of capital through investments in
Objective: a combination of the North American Funds. The Fund is
suitable for investors seeking the potential growth of
capital that a fund investing predominantly in equity
securities may offer
Subadvisor: American General Investment Management, L.P. ("AGIM")
Portfolio Steve Guterman, Magali Azema-Barac, William Trimbur
Managers:
Inception Date: November 2, 1998/5/
[GRAPH]
NAV 5.75% Sales Charge S&P 500 Blended Benchmark Index
Nov-98 10,000 9,425 10,000 10,000
Nov-98 10,350 9,755 10,606 10,487
Dec-98 10,794 10,173 11,217 10,976
Jan-99 11,004 10,371 11,685 11,111
Feb-99 10,563 9,956 11,323 10,708
Mar-99 10,904 10,277 11,775 11,019
Apr-99 11,387 10,732 12,231 11,653
May-99 11,247 10,600 11,943 11,469
Jun-99 11,818 11,138 12,605 11,903
Jul-99 11,781 11,104 12,213 11,733
Aug-99 11,620 10,952 12,152 11,561
Sep-99 11,550 10,886 11,819 11,421
Oct-99 11,968 11,280 12,567 11,854
Nov-99 12,711 11,981 12,823 12,187
Dec-99 13,914 13,114 13,577 12,998
Jan-00 13,473 12,699 12,895 12,519
Feb-00 14,132 13,320 12,651 12,952
Mar-00 14,655 13,813 13,889 13,544
Apr-00 13,869 13,072 13,471 13,072
May-00 13,408 12,637 13,194 12,695
Jun-00 14,257 13,437 13,520 13,222
Jul-00 13,942 13,141 13,309 12,920
Aug-00 14,955 14,095 14,135 13,577
Sep-00 14,462 13,631 13,389 13,008
Oct-00 13,915 13,115 13,332 12,760
Performance Table
<TABLE>
<CAPTION>
Average Annual Cumulative
Total Return Total Return
---------------- ------------
1 Since Since
Periods Ending October 31, 2000/5/ Year Inception Inception
------ --------- ------------
<S> <C> <C> <C>
Aggressive Growth LifeStyle Blended Benchmark
Index/1/ 7.64% 12.98% 27.60%
S&P 500 Index 6.09% 15.49% 33.32%
Aggressive Growth LifeStyle Fund Class A (NAV) 16.27% 17.99% 39.15%
Aggressive Growth LifeStyle Fund Class A (net of
5.75% sales charge) 9.58% 14.54% 31.15%
Aggressive Growth LifeStyle Fund Class B (NAV) 16.30% 17.93% 39.00%
Aggressive Growth LifeStyle Fund Class B (net of
CDSC)/2/ 11.30% 15.78% 34.00%
Aggressive Growth LifeStyle Fund Class C
(NAV)/4/ N/A -1.77% -1.77%
Aggressive Growth LifeStyle Fund Class C (net of
CDSC)/3/,/4/ N/A -2.75% -2.75%
Aggressive Growth LifeStyle Fund Institutional
Class I 16.22% 17.98% 39.13%
</TABLE>
-----------------------------------------------
/1/As of 05/01/00, benchmark for the Aggressive Growth Lifestyle consists of
10% Lehman Aggregate, 25% EAFE, and 65% Wilshire 5000. Prior to 05/01/00;
Benchmark for Growth Lifestyle consists of 15% EAFE, 15% Salomon Brothers
Primary Market Index, 13% S&P 500, 12% Russell 1000 Value, 10% Russell 2000
Growth, 10% Russell 2000 Value, 10% Lehman Aggregate, 8% Russell MidCap
Value, 7% Russell MidCap Growth.
/2/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/3/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/4/Inception date is 8/10/2000.
/5/Performance information shown for periods prior to July 7, 2000 is that of
corresponding series of American General Series Portfolio Company 2 (the
"AGSPC2 Fund") that was reorganized into the Fund on July 7, 2000. The
AGSPC2 Fund had the same investment objective, and investment strategies
and policies as does the Fund, and was also managed by the same portfolio
managers.
xl
<PAGE>
Portfolio Managers' Commentary
The Aggressive Growth LifeStyle Fund Class A share performance for the year-
ended October 31, 2000 was 16.27% significantly outperforming the Aggressive
Growth LifeStyle Blended Benchmark Index (10% Lehman Aggregate, 25% EAFE, and
65% Wilshire 5000) return of 7.64%.
The financial markets had remarkably different return and volatility patterns
over the twelve months ended October 31, 2000. From November 1999 through
March 2000, growth stock performance was strong. Driven largely by the
telecommunication, media, and technology sectors (TMTs), growth stocks reached
very high valuations on the expectation that they were uniquely placed to
provide the equipment and content to the Internet. Over this period the
Russell 2000 Growth Index returned 22.7% while its value counterpart returned
8.2%. Value stocks are typically in traditional economy sectors such as steel
and pharmaceuticals. As bonds were a largely ignored asset class, fixed income
as measured by the Lehman Aggregate Bond Index returned 1.4%.
The next six months witnessed a brutal sell off in TMTs, a flight to safety, a
bond rally, and investors rediscovering value stocks. All of these activities
combined to bring us to October 31, 2000. Over this period the Russell 2000
Growth Index declined 7.0%, the Lehman Aggregate Bond Index rose 5.7%, and the
Russell 2000 Value Index increased 8.3%. We believe the sell off in the growth
sector has yet to run its course. Investors remain very skeptical that
Internet equipment and content related names can raise the necessary funds to
grow and that the time needed to achieve profitable growth is difficult to
predict.
The Lifestyle Funds did well throughout this volatile period. Three aspects
were particularly beneficial. First, most of the constituent mutual funds held
in the Lifestyle Funds outperformed their benchmarks. Second, during the month
of April 2000, the Lifestyle management team reconfigured holdings to scale
back growth investments and add to value investments. Finally, the Lifestyle
concept worked well as it is suited to periods of asset class and/or sector
rotation since we maintain representation in all classes and do not attempt to
time short term rotations.
xli
<PAGE>
Moderate Growth Lifestyle Fund
Investment Seeks to provide growth of capital and current income
Objective: through investments in a combination of the North
American Funds. The Fund is suitable for investors who
wish to invest in equity securities, but are not willing
to assume the substantial market risks of the Aggressive
Growth LifeStyle Fund.
Subadvisor: American General Investment Management, L.P. ("AGIM")
Portfolio Steve Guterman, Magali Azema-Barac, William Trimbur
Managers:
Inception Date: November 2, 1998/5/
[GRAPH]
NAV 5.75% Sales Charge S&P 500 Blended Benchmark Index
Nov-98 10,000 9,425 10,000 10,000
Nov-98 10,310 9,717 10,606 10,410
Dec-98 10,764 10,145 11,217 10,821
Jan-99 10,942 10,313 11,685 10,954
Feb-99 10,521 9,916 11,323 10,604
Mar-99 10,812 10,190 11,775 10,857
Apr-99 11,242 10,595 12,231 11,410
May-99 11,131 10,491 11,943 11,275
Jun-99 11,563 10,898 12,605 11,621
Jul-99 11,446 10,788 12,213 11,424
Aug-99 11,264 10,617 12,152 11,255
Sep-99 11,184 10,541 11,819 11,122
Oct-99 11,520 10,858 12,567 11,502
Nov-99 11,996 11,306 12,823 11,734
Dec-99 12,772 12,038 13,577 12,312
Jan-00 12,407 11,693 12,895 11,947
Feb-00 12,825 12,087 12,651 12,227
Mar-00 13,379 12,609 13,889 12,812
Apr-00 12,875 12,135 13,471 12,472
May-00 12,592 11,868 13,194 12,184
Jun-00 13,126 12,371 13,520 12,638
Jul-00 12,980 12,233 13,309 12,451
Aug-00 13,741 12,951 14,135 13,019
Sep-00 13,395 12,625 13,389 12,614
Oct-00 13,049 12,299 13,332 12,447
Performance Table
<TABLE>
<CAPTION>
Average Annual Cumulative
Total Return Total Return
---------------- ------------
1 Since Since
Periods Ending October 31, 2000/5/ Year Inception Inception
------ --------- ------------
<S> <C> <C> <C>
Moderate Growth LifeStyle Blended Benchmark
Index/1/ 8.22% 11.58% 24.47%
S&P 500 Index 6.09% 15.49% 33.32%
Moderate Growth LifeStyle Fund Class A (NAV) 13.27% 14.25% 30.49%
Moderate Growth LifeStyle Fund Class A (net of
5.75% sales charge) 6.76% 10.92% 22.99%
Moderate Growth LifeStyle Fund Class B (NAV) 13.22% 14.26% 30.50%
Moderate Growth LifeStyle Fund Class B (net of
CDSC)/2/ 8.22% 12.04% 25.50%
Moderate Growth LifeStyle Fund Class C (NAV)/4/ N/A -2.30% -2.30%
Moderate Growth LifeStyle Fund Class C (net of
CDSC)/3/,/4/ N/A -3.28% -3.28%
Moderate Growth LifeStyle Fund Institutional
Class I 13.10% 14.24% 30.47%
</TABLE>
-----------------------------------------------
/1/As of 05/01/00, benchmark for the Moderate Growth Lifestyle consists of 30%
Lehman Aggregate, 15% EAFE, and 55% Wilshire 5000. Prior to 05/01/00;
Benchmark for Moderate Growth Lifestyle consists of 7% EAFE, 8% Salomon
Brothers Primary Market Index, 15% S&P 500, 15% Russell 1000 Value, 7%
Russell 2000 Growth, 8% Russell 2000 Value, 25% Lehman Aggregate, 8%
Russell MidCap Value, 7% Russell MidCap Growth.
/2/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/3/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/4/Inception date is 7/12/2000.
/5/Performance information shown for periods prior to July 7, 2000 is that of
corresponding series of American General Series Portfolio Company 2 (the
"AGSPC2 Fund") that was reorganized into the Fund on July 7, 2000. The
AGSPC2 Fund had the same investment objective, and investment strategies
and policies as does the Fund, and was also managed by the same portfolio
managers.
xlii
<PAGE>
Portfolio Managers' Commentary
The Moderate Growth LifeStyle Fund Class A share performance for the year-
ended October 31, 2000 was 13.27% outperforming the Moderate Growth LifeStyle
Blended Benchmark Index (30% Lehman Aggregate, 15% EAFE, and 55% Wilshire
5000) return of 8.22%.
The financial markets had remarkably different return and volatility patterns
over the twelve months ended October 31, 2000. From November 1999 through
March 2000, growth stock performance was strong. Driven largely by the
telecommunication, media, and technology sectors (TMTs), growth stocks reached
very high valuations on the expectation that they were uniquely placed to
provide the equipment and content to the Internet. Over this period the
Russell 2000 Growth Index returned 22.7% while its value counterpart returned
8.2%. Value stocks are typically in traditional economy sectors such as steel
and pharmaceuticals. As bonds were a largely ignored asset class, fixed income
as measured by the Lehman Aggregate Bond Index returned 1.4%.
The next six months witnessed a brutal sell off in TMTs, a flight to safety, a
bond rally, and investors rediscovering value stocks. All of these activities
combined to bring us to October 31, 2000. Over this period the Russell 2000
Growth Index declined 7.0%, the Lehman Aggregate Bond Index rose 5.7%, and the
Russell 2000 Value Index increased 8.3%. We believe the sell off in the growth
sector has yet to run its course. Investors remain very skeptical that
Internet equipment and content related names can raise the necessary funds to
grow and that the time needed to achieve profitable growth is difficult to
predict.
The Lifestyle Funds did well throughout this volatile period. Three aspects
were particularly beneficial. First, most of the constituent mutual funds held
in the Lifestyle Funds outperformed their benchmarks. Second, during the month
of April 2000, the Lifestyle management team reconfigured holdings to scale
back growth investments and add to value investments. In the Moderate Growth
Lifestyle Fund, we additionally increased the allocation to fixed income.
Finally, the Lifestyle concept worked well as it is suited to periods of asset
class and/or sector rotation since we maintain representation in all classes
and do not attempt to time short term rotations.
xliii
<PAGE>
Conservative Growth Lifestyle Fund
Seeks current income and low to moderate growth of
Investment capital through investments in a combination of the North
Objective: American Funds. The Fund is suitable for investors who
wish to invest in equity securities, but are not willing
to assume the substantial market risks of either the
Aggressive Growth LifeStyle Fund or the Moderate Growth
LifeStyle Fund.
American General Investment Management, L.P. ("AGIM")
Subadvisor:
Portfolio
Managers: Steve Guterman, Magali Azema-Barac, William Trimbur
November 2, 1998/5/
Inception Date:
[GRAPH]
NAV 5.75% Sales Charge S&P 500 Blended Benchmark Index
Nov-98 10,000 9,425 10,000 10,000
Nov-98 10,270 9,679 10,606 10,343
Dec-98 10,663 10,050 11,217 10,674
Jan-99 10,837 10,214 11,685 10,809
Feb-99 10,455 9,854 11,323 10,508
Mar-99 10,697 10,081 11,775 10,724
Apr-99 11,055 10,419 12,231 11,165
May-99 10,924 10,296 11,943 11,032
Jun-99 11,267 10,619 12,605 11,299
Jul-99 11,137 10,496 12,213 11,127
Aug-99 10,995 10,363 12,152 10,994
Sep-99 10,934 10,305 11,819 10,906
Oct-99 11,230 10,584 12,567 11,232
Nov-99 11,576 10,910 12,823 11,399
Dec-99 12,123 11,426 13,577 11,808
Jan-00 11,812 11,133 12,895 11,520
Feb-00 12,106 11,410 12,651 11,696
Mar-00 12,589 11,865 13,889 12,224
Apr-00 12,273 11,567 13,471 11,964
May-00 12,104 11,408 13,194 11,762
Jun-00 12,484 11,766 13,520 12,147
Jul-00 12,421 11,706 13,309 12,057
Aug-00 12,999 12,251 14,135 12,521
Sep-00 12,782 12,047 13,389 12,266
Oct-00 12,534 11,813 13,332 12,174
Performance Table
<TABLE>
<CAPTION>
Average Annual Cumulative
Total Return Total Return
---------------- ------------
1 Since Since
Year Inception Inception
Periods Ending October 31, 2000/5/ ------ --------- ------------
<S> <C> <C> <C>
Conservative Growth LifeStyle Blended Benchmark
Index/1/ 8.38% 10.34% 21.74%
S&P 500 Index 6.09% 15.49% 33.32%
Conservative Growth LifeStyle Fund Class A (NAV) 11.61% 11.97% 25.34%
Conservative Growth LifeStyle Fund Class A (net
of 5.75% sales charge) 5.19% 8.70% 18.13%
Conservative Growth LifeStyle Fund Class B (NAV) 11.66% 11.95% 25.29%
Conservative Growth LifeStyle Fund Class B (net
of CDSC)/2/ 6.66% 9.69% 20.29%
Conservative Growth LifeStyle Fund Class C
(NAV)/4/ N/A 0.06% 0.06%
Conservative Growth LifeStyle Fund Class C (net
of CDSC)/3/,/4/ N/A -0.94% -0.94%
Conservative Growth LifeStyle Fund Institutional
Class I 11.54% 11.90% 25.19%
</TABLE>
-----------------------------------------------
/1/As of 05/01/00, benchmark for the Conservative Growth Lifestyle consists of
50% Lehman Aggregate, 8% EAFE, and 42% Wilshire 5000. Prior to 05/01/00;
Benchmark for Conservative Growth Lifestyle consists of 5% EAFE, 5% Salomon
Brothers Primary Market Index, 15% S&P 500, 15% Russell 1000 Value, 5%
Russell 2000 Growth, 5% Russell 2000 Value, 40% Lehman Aggregate, 5%
Russell MidCap Value, 5% Russell MidCap Growth
/2/The returns reflect the applicable Contingent Deferred Sales Charge of 5%,
5%, 4%, 3%, 2%, 1%.
/3/The returns reflect the applicable Contingent Deferred Sales Charge of 1%.
/4/Inception date is 7/20/2000.
/5/Performance information shown for periods prior to July 7, 2000 is that of
corresponding series of American General Series Portfolio Company 2 (the
"AGSPC2 Fund") that was reorganized into the Fund on July 7, 2000. The
AGSPC2 Fund had the same investment objective, and investment strategies
and policies as does the Fund, and was also managed by the same portfolio
managers.
xliv
<PAGE>
Portfolio Managers' Commentary:
The Conservative Growth LifeStyle Fund Class A share performance for the year-
ended October 31, 2000 was 11.61% outperforming the Conservative Growth
LifeStyle Blended Benchmark (50% Lehman Aggregate, 8% EAFE, and 42% Wilshire
5000) return of 8.38%.
The financial markets had remarkably different return and volatility patterns
over the twelve months ended October 31, 2000. From November 1999 through
March 2000, growth stock performance was strong. Driven largely by the
telecommunication, media, and technology sectors (TMTs), growth stocks reached
very high valuations on the expectation that they were uniquely placed to
provide the equipment and content to the Internet. Over this period the
Russell 2000 Growth Index returned 22.7% while its value counterpart returned
8.2%. Value stocks are typically in traditional economy sectors such as steel
and pharmaceuticals. As bonds were a largely ignored asset class, fixed income
as measured by the Lehman Aggregate Bond Index returned 1.4%.
The next six months witnessed a brutal sell off in TMTs, a flight to safety, a
bond rally, and investors rediscovering value stocks. All of these activities
combined to bring us to October 31, 2000. Over this period the Russell 2000
Growth Index declined 7.0%, the Lehman Aggregate Bond Index rose 5.7%, and the
Russell 2000 Value Index increased 8.3%. We believe the sell off in the growth
sector has yet to run its course. Investors remain very skeptical that
Internet equipment and content related names can raise the necessary funds to
grow and that the time needed to achieve profitable growth is difficult to
predict.
The Lifestyle funds did well throughout this volatile period. Three aspects
were particularly beneficial. First, most of the constituent mutual funds held
in the Lifestyle Funds outperformed their benchmarks. Second, during the month
of April 2000, the Lifestyle management team reconfigured holdings to scale
back growth investments and add to value investments. Finally, the Lifestyle
concept worked well as it is suited to periods of asset class and/or sector
rotation since we maintain representation in all classes and do not attempt to
time short term rotations.
xlv
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE>
Report of Independent Accountants
-------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of North American Funds:
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the Growth &
Income, Large Cap Growth (formerly Growth Equity), Mid Cap Growth (formerly
Small/Mid Cap), Science & Technology, Small Cap Growth (formerly Emerging
Growth), Global Equity, International Equity, International Small Cap,
Balanced, Core Bond (formerly Investment Quality Bond), Municipal Bond
(formerly National Municipal Bond), Strategic Income, U.S. Government
Securities and Money Market Funds (portfolios of North American Funds) at
October 31, 2000, the results of their operations, the changes in their net
assets and the financial highlights for the periods indicated therein, in
conformity with accounting principles generally accepted in the United States
of America. Also, in our opinion, the accompanying statements of assets and
liabilities, including the portfolios of investments, and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Mid Cap Value, Small Cap Index, Socially Responsible, Stock Index, High
Yield Bond, Municipal Money Market, Aggressive Growth LifeStyle (formerly
Growth LifeStyle), Moderate Growth LifeStyle and Conservative Growth LifeStyle
(portfolios of North American Funds) at October 31, 2000, the results of their
operations, the changes in their net assets and the financial highlights for
the year ended October 31, 2000, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the North American Funds' management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with auditing
standards generally accepted in the United States of America which require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 2000, by correspondence with the
custodian, provide a reasonable basis for our opinion. The financial
statements of the Mid Cap Value, Small Cap Index, Socially Responsible, Stock
Index, High Yield Bond, Municipal Money Market, Aggressive Growth LifeStyle
(formerly Growth LifeStyle), Moderate Growth LifeStyle and Conservative Growth
LifeStyle Funds for the year ended October 31, 1999 were audited by other
independent accountants whose report dated December 13, 1999 expressed an
unqualified opinion on those statements.
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 27, 2000
1
<PAGE>
NORTH AMERICAN FUNDS
STATEMENT OF ASSETS AND LIABILITIES - OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Growth & Large Cap Mid Cap Mid Cap Science &
Income Growth Growth Value Technology
Fund Fund Fund Fund Fund
------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, at
value* (See accompanying
Portfolio of Investments)... $333,300,824 $86,189,813 $77,111,681 $22,924,503 $22,083,768
Cash......................... 923 110 782 224 980
Foreign currency (Cost: $542
and $283, respectively)..... - - 518 - 283
Investment in State Street
Bank & Trust Company
Navigator Securities Lending
Trust held as collateral for
securities on loan, at value
(Note 2).................... 2,052,000 7,577,734 10,716,980 - -
Receivables:
Investments sold............ 4,161,693 1,325,950 474,806 420,357 44,083
Fund shares sold............ 145,018 405,976 228,668 147,878 138,849
Dividends................... 255,031 13,016 5,293 10,429 274
Interest.................... 493 579 346 230 272
Other assets................. 7,383 75,011 53,023 39,261 30,401
------------ ----------- ----------- ----------- -----------
Total assets............... 339,923,365 95,588,189 88,592,097 23,542,882 22,298,910
------------ ----------- ----------- ----------- -----------
LIABILITIES:
Payables:
Investments purchased....... 2,293,964 1,476,785 1,165,001 804,789 64,491
Fund shares redeemed........ 940,332 162,238 293,339 307,472 113,480
Investment adviser.......... 192,834 102,567 68,236 62,685 20,601
Custodian and transfer agent
fees....................... 221,447 15,188 7,143 8,669 4,502
Securities lending.......... 2,052,000 7,577,734 10,716,980 - -
Distribution fee............ 192,588 72,825 63,525 20,486 23,805
Other accrued expenses...... 441,975 25,117 21,345 6,081 5,552
------------ ----------- ----------- ----------- -----------
Total liabilities.......... 6,335,140 9,432,454 12,335,569 1,210,182 232,431
------------ ----------- ----------- ----------- -----------
NET ASSETS................... $333,588,225 $86,155,735 $76,256,528 $22,332,700 $22,066,479
------------ ----------- ----------- ----------- -----------
NET ASSETS CONSIST OF:
Accumulated undistributed
net realized gain/(loss) on
investments, foreign
currency and forward
foreign currency
contracts.................. $25,728,686 ($316,096) ($363,899) $44,739 ($1,715,633)
Unrealized
appreciation/(depreciation)
on:
Investments................ 85,568,850 1,157,123 7,457,274 2,959,117 (779,663)
Foreign currency and
forward foreign currency
contracts................. - (14) (24) - -
Capital shares at par value
of $.001 (Note 3).......... 12,563 4,818 4,406 1,656 2,748
Additional paid-in capital.. 222,278,126 85,309,904 69,158,771 19,327,188 24,559,027
------------ ----------- ----------- ----------- -----------
Net assets................. $333,588,225 $86,155,735 $76,256,528 $22,332,700 $22,066,479
------------ ----------- ----------- ----------- -----------
*Investments in securities,
at identified cost (Note
2).......................... $247,731,974 $85,032,690 $69,654,407 $19,965,386 $22,863,431
------------ ----------- ----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
NORTH AMERICAN FUNDS
STATEMENT OF ASSETS AND LIABILITIES continued - OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Growth & Large Cap Mid Cap Mid Cap Science &
Income Growth Growth Value Technology
Fund Fund Fund Fund Fund
------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUES:
Class A Shares
Net assets at value.... $46,580,678 $9,547,691 $11,718,178 $2,746,501 $4,622,919
Shares outstanding..... 1,721,209 521,966 654,743 201,837 572,254
Net asset value (NAV)
and redemption price
per share.............. $27.06 $18.29 $17.90 $13.61 $8.08
------ ------ ------ ------ -----
Public offering price
per share (100/94.25 of
NAV)
On sales of $100,000 or
more the offering price
is reduced............. $28.71 $19.41 $18.99 $14.44 $8.57
------ ------ ------ ------ -----
Class B Shares
Net assets at value.... $106,463,563 $34,711,428 $29,976,891 $7,471,390 $15,839,856
Shares outstanding..... 4,035,746 1,965,599 1,760,271 561,191 1,973,058
Net asset value,
offering price and
redemption price per
share.................. $26.38 $17.66 $17.03 $13.31 $8.03
------ ------ ------ ------ -----
Class C Shares
Net assets at value.... $170,276,805 $22,779,735 $22,913,853 $613,863 $1,065,033
Shares outstanding..... 6,426,827 1,291,420 1,342,815 46,297 136,184
Net asset value,
offering price and
redemption price per
share.................. $26.49 $17.64 $17.06 $13.26 $7.82
------ ------ ------ ------ -----
Class I Shares
Net assets at value.... $10,267,179 $19,116,881 $11,647,606 $11,500,946 $538,671
Shares outstanding..... 378,695 1,037,755 648,263 846,972 66,676
Net asset value,
offering price and
redemption price per
share.................. $27.11 $18.42 $17.97 $13.58 $8.08
------ ------ ------ ------ -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
NORTH AMERICAN FUNDS
STATEMENT OF ASSETS AND LIABILITIES continued - OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Small Cap Small Cap Socially Stock Global
Growth Index Responsible Index Equity
Fund Fund Fund Fund Fund
----------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, at
value* (Includes a
repurchase agreements of
$2,102,000 and $3,808,000 in
Socially Responsible and
Stock Index, respectively)
(See accompanying Portfolio
of Investments)............. $38,937,294 $7,953,661 $11,611,496 $34,142,115 $36,898,026
Receivable for forward
foreign currency contracts
to sell (Notes 2 and 8)..... - - - - 717,071
Forward foreign currency
contracts to buy, at value
(Cost: $219,249)............ - - - - 217,431
Cash......................... - 111 194 58 -
Foreign currency (Cost:
$2,683)..................... - - - - 2,681
Investment in State Street
Bank & Trust Company
Navigator Securities Lending
Trust held as collateral for
securities on loan, at value
(Note 2).................... 9,908,134 - - - 1,416,057
Variation margin receivable
for open futures contracts.. - 29,175 46,400 84,100 -
Unamortized organization
costs....................... 14,261 - - - -
Receivables:
Investments sold............ 999,844 35,226 - - 1,266,555
Fund shares sold............ 131,375 7,391 1,779 45,867 1,150,138
Dividends................... - 3,919 8,104 20,598 10,065
Interest.................... 21,827 138 1,045 1,301 -
Foreign tax withholding
reclaims................... - - - - 19,449
Other assets................. 50,283 37,959 19,122 40,290 890
----------- ---------- ----------- ----------- -----------
Total assets............... 50,063,018 8,067,580 11,688,140 34,334,329 41,698,363
----------- ---------- ----------- ----------- -----------
LIABILITIES:
Forward foreign currency
contracts to sell, at value
(Cost: $717,071) (Notes 2
and 8)...................... - - - - 717,010
Payables:
Forward foreign currency
contracts to buy (Notes 2
and 8)..................... - - - - 219,249
Investments purchased....... 1,018,933 3,967 - - 593,084
Fund shares redeemed........ 189,683 41,709 57,664 164,679 237,621
Dividend and interest
withholding tax............ - - - - 1,535
Investment adviser.......... 60,375 35,423 36,556 93,530 51,636
Custodian and transfer agent
fees....................... 5,949 1,806 6,339 21,023 14,788
Securities lending.......... 9,908,134 - - - 1,416,057
Distribution fee............ 31,808 7,540 14,916 37,747 20,833
Due to custodian............ - - - - 143,764
Other accrued expenses...... 8,361 4,817 4,927 8,118 34,707
----------- ---------- ----------- ----------- -----------
Total liabilities.......... 11,223,243 95,262 120,402 325,097 3,450,284
----------- ---------- ----------- ----------- -----------
NET ASSETS................... $38,839,775 $7,972,318 $11,567,738 $34,009,232 $38,248,079
----------- ---------- ----------- ----------- -----------
NET ASSETS CONSIST OF:
Undistributed net investment
income/(loss) (Note 2)..... - $6,179 $20,177 $83,714 $1,969
Accumulated undistributed
net realized gain/(loss) on
investments, futures
contracts, foreign currency
and forward foreign
currency contracts......... ($64,448) 125,433 (75,225) 70,776 (2,739,883)
Unrealized
appreciation/(depreciation)
on:
Investments................ 1,290,240 (488,290) 976,085 2,048,889 102,353
Futures Contracts.......... - (38,528) (83,859) (109,045) -
Foreign currency and
forward foreign currency
contracts................. - - - - (4,266)
Capital shares at par value
of $.001 (Note 3).......... 2,275 815 971 2,685 3,523
Additional paid-in capital.. 37,611,708 8,366,709 10,729,589 31,912,213 40,884,383
----------- ---------- ----------- ----------- -----------
Net assets................. $38,839,775 $7,972,318 $11,567,738 $34,009,232 $38,248,079
----------- ---------- ----------- ----------- -----------
*Investments in securities,
at identified cost (Note
2).......................... $37,647,054 $8,441,951 $10,635,411 $32,093,226 $36,795,673
----------- ---------- ----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
NORTH AMERICAN FUNDS
STATEMENT OF ASSETS AND LIABILITIES continued - OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Small Cap Small Cap Socially Stock Global
Growth Index Responsible Index Equity
Fund Fund Fund Fund Fund
----------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUES:
Class A Shares
Net assets at value.... $6,795,064 $3,360,828 $1,896,053 $8,543,466 $8,610,142
Shares outstanding..... 393,395 343,283 159,215 670,245 778,783
Net asset value (NAV)
and redemption price
per share.............. $17.27 $9.79 $11.91 $12.75 $11.06
------ ----- ------ ------ ------
Public offering price
per share (100/94.25 of
NAV)
On sales of $100,000 or
more the offering price
is reduced............. $18.33 $10.39 $12.64 $13.53 $11.73
------ ------ ------ ------ ------
Class B Shares
Net assets at value.... $14,553,548 $4,573,755 $3,649,346 $24,965,810 $10,088,926
Shares outstanding..... 866,492 468,428 307,412 1,974,862 936,500
Net asset value,
offering price and
redemption price per
share.................. $16.80 $9.76 $11.87 $12.64 $10.77
------ ----- ------ ------ ------
Class C Shares
Net assets at value.... $3,336,826 $37,735 $56,685 $499,956 $19,549,011
Shares outstanding..... 198,694 3,820 4,696 39,853 1,806,947
Net asset value,
offering price and
redemption price per
share.................. $16.79 $9.88 $12.07 $12.55 $10.82
------ ----- ------ ------ ------
Class I Shares
Net assets at value.... $14,154,337 $5,965,654
Shares outstanding..... 816,824 499,990
Net asset value,
offering price and
redemption price per
share.................. $17.33 $11.93
------ ------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
NORTH AMERICAN FUNDS
STATEMENT OF ASSETS AND LIABILITIES continued - OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International International Core High Yield
Equity Small Cap Balanced Bond Bond
Fund Fund Fund Fund Fund
------------- ------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, at
value* (Includes a
repurchase agreement of
$6,787,000 in High Yield
Bond) (See accompanying
Portfolio of Investments)... $47,980,421 $26,808,623 $66,800,468 $431,901,204 $63,318,402
Receivable for forward
foreign currency contracts
to sell (Notes 2 and 8)..... 584,627 258,982 - - -
Forward foreign currency
contracts to buy, at value
(Cost: $556,332 and
$330,807, respectively)..... 548,472 330,924 - - -
Cash......................... 644 - 983 826 302
Foreign currency (Cost:
$53,621, $128,688 and
$1,604, respectively)....... 52,945 128,630 1,457 - -
Investment in State Street
Bank & Trust Company
Navigator Securities Lending
Trust held as collateral for
securities on loan, at value
(Note 2).................... 3,410,912 - 17,427,484 -
Variation margin receivable
for open futures contracts.. 51,155 - - - -
Receivables:
Investments sold............ - 1,105,269 292,193 11,420,062 63,352
Fund shares sold............ 416,095 891,803 3,745 10,789 137,722
Dividends................... 55,611 6,044 31,304 - -
Interest.................... 428 1,597 387,256 4,438,437 1,852,245
Foreign tax withholding
reclaims................... 32,529 9,079 4,128 - 952
From adviser................ - 164,939 - - -
Other assets................. 83,622 61,136 510 37,063 32,209
----------- ----------- ----------- ------------ -----------
Total assets............... 53,217,461 29,767,026 67,522,044 465,235,865 65,405,184
----------- ----------- ----------- ------------ -----------
LIABILITIES:
Forward foreign currency
contracts to sell, at value
(Cost: $584,627 and
$258,982, respectively)
(Notes 2 and 8)............. 582,532 259,926 - - -
Payables:
Forward foreign currency
contracts to buy (Notes 2
and 8)..................... 556,332 330,807 - - -
Investments purchased....... 1,219,757 1,048,764 85,994 96,726,740 -
Fund shares redeemed........ 241,939 24,033 590,711 148,866 -
Investment Adviser.......... 49,134 - 52,057 1,365,248 219,338
Dividends................... - - 9,525 5,877
Dividend and interest
withholding tax............ 7,248 796 1,016 7,755 -
Custodian and transfer agent
fees....................... - 94,219 43,900 79,311 22,622
Securities lending.......... 3,410,912 - - 17,427,484 -
Distribution fee............ 46,691 - 36,696 24,303 2,108
Due to custodian............ - 448,129 - - -
Other accrued expenses...... 4,149 - 29,360 60,631 15,003
----------- ----------- ----------- ------------ -----------
Total liabilities.......... 6,118,694 2,206,674 839,734 115,849,863 264,948
----------- ----------- ----------- ------------ -----------
NET ASSETS................... $47,098,767 $27,560,352 $66,682,310 $349,386,002 $65,140,236
----------- ----------- ----------- ------------ -----------
NET ASSETS CONSIST OF:
Undistributed net investment
income/(loss) (Note 2)..... $6,160 - $438,881 ($509,240) $215,412
Accumulated undistributed
net realized gain/(loss) on
investments, futures,
foreign currency and
forward foreign currency
contracts.................. 6,167,288 $1,309,881 (2,422,897) (21,638,294) (3,790,696)
Unrealized
appreciation/(depreciation)
on:
Investments................ (2,165,972) 146,747 3,507,783 (2,494,282) (6,592,689)
Futures contracts.......... (42,740) - - - -
Foreign currency and
forward foreign currency
contracts................. (10,866) (2,026) (986) - -
Capital shares at par value
of $.001 (Note 3).......... 4,524 1,480 7,049 36,398 7,622
Additional paid-in capital.. 43,140,373 26,104,269 65,152,480 373,991,420 75,300,587
----------- ----------- ----------- ------------ -----------
Net assets................. $47,098,967 $27,581,354 $66,682,310 $349,386,002 $65,140,236
----------- ----------- ----------- ------------ -----------
*Investments in securities,
at identified cost (Note
2).......................... $50,146,393 $27,560,352 $63,292,685 $434,395,486 $69,911,091
----------- ----------- ----------- ------------ -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
NORTH AMERICAN FUNDS
STATEMENT OF ASSETS AND LIABILITIES continued - OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International International Core High Yield
Equity Small Cap Balanced Bond Bond
Fund Fund Fund Fund Fund
------------- ------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUES:
Class A Shares
Net assets at value.... $7,471,715 $6,002,818 $7,910,310 $3,857,920 $286,231
Shares outstanding..... 712,135 312,546 838,420 402,043 33,446
Net asset value (NAV)
and redemption price
per share.............. $10.49 $19.21 $9.43 $9.60 $8.56
------ ------ ----- ----- -----
Public offering price
per share (100/94.25 of
NAV for International
Equity, International
Small Cap and Balanced,
and 100/95.25 of NAV
for Core Bond and High
Yield Bond) On sales of
$100,000 or more the
offering price is
reduced................ $11.17 $20.38 $10.01 $10.07 $8.99
------ ------ ------ ------ -----
Class B Shares
Net assets at value.... $18,204,011 $11,664,559 $15,566,482 $4,936,719 $1,593,671
Shares outstanding..... 1,759,614 633,026 1,659,500 514,777 186,386
Net asset value,
offering price and
redemption price per
share.................. $10.34 $18.43 $9.38 $9.59 $8.55
------ ------ ----- ----- -----
Class C Shares
Net assets at value.... $4,766,873 $9,892,975 $37,282,021 $2,778,003 $544,543
Shares outstanding..... 462,134 534,732 3,924,460 289,674 63,680
Net asset value,
offering price and
redemption price per
share.................. $10.31 $18.50 $9.50 $9.59 $8.55
------ ------ ----- ----- -----
Class I Shares
Net assets at value.... $16,656,168 $5,923,497 $19,971,183 $14,073
Shares outstanding..... 1,590,271 626,796 2,075,207 1,645
Net asset value,
offering price and
redemption price per
share.................. $10.47 $9.45 $9.62 $8.56
------ ----- ----- -----
Class II Shares
Net assets at value.... $317,842,177 $62,701,718
Shares outstanding..... 33,115,963 7,337,180
Net asset value,
offering price and
redemption price per
share.................. $9.60 $8.55
----- -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
NORTH AMERICAN FUNDS
STATEMENT OF ASSETS AND LIABILITIES continued - OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U. S Municipal
Municipal Strategic Government Money Money
Bond Income Securities Market Market
Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, at
value* (Includes a
repurchase agreement of
$6,938,000 in U.S.
Government Securities) (See
accompanying Portfolio of
Investments)................ $16,523,743 $36,880,649 $61,252,269 $46,628,413 $7,288,376
Cash......................... - 528 691 787 18,590
Foreign currency (Cost:
$505,575)................... - 480,239 - - -
Investment in State Street
Bank & Trust Company
Navigator Securities Lending
Trust held as collateral for
securities on loan, at value
(Note 2).................... - 3,385,257 - -
Receivables:
Investments sold............ - 1,371,839 2,602,098 - -
Fund shares sold............ 5 - 61,597 744,423 23,004
Dividends................... - 867 - - -
Interest.................... 227,895 760,100 410,839 70,534 58,541
Foreign tax withholding
reclaims................... - 7,984 - - -
Other assets................. 63,922 46,609 38,077 92,216 30,353
----------- ----------- ----------- ----------- ----------
Total assets............... 16,815,565 42,934,072 64,365,571 47,536,373 7,418,864
----------- ----------- ----------- ----------- ----------
LIABILITIES:
Payables:
Investments purchased....... - 2,000,312 19,131,437 - -
Fund shares redeemed........ 129,319 131,804 82,022 388,321 38,493
Dividends................... 15,335 1,635 436,647 13,703 1,938
Dividend and interest
withholding tax............ - 35 - - -
Investment adviser.......... 37,574 52,216 19,053 90,543 35,139
Custodian and transfer agent
fees....................... 16,639 38,760 21,810 3,763 6,375
Securities lending.......... - 3,385,257 - - -
Distribution fee............ 6,247 6,144 14,850 - -
Due to custodian............ 123,341 - - - -
Other accrued expenses...... - 55,952 19,181 14,561 -
----------- ----------- ----------- ----------- ----------
Total liabilities.......... 328,455 5,672,115 19,725,000 510,891 81,945
----------- ----------- ----------- ----------- ----------
NET ASSETS................... $16,487,110 $37,261,957 $44,640,571 $47,025,482 $7,336,919
----------- ----------- ----------- ----------- ----------
NET ASSETS CONSIST OF:
Undistributed net investment
income/(loss) (Note 2)..... - ($1,756) ($433,764) - -
Accumulated undistributed
net realized gain/(loss) on
investments, foreign
currency and forward
foreign currency
contracts.................. ($303,708) (7,471,052) (2,750,356) - -
Unrealized
appreciation/(depreciation)
on:
Investments................ (54,068) (2,495,990) (529,978) - -
Foreign currency and
forward foreign currency
contracts................. - (30,487) - - -
Capital shares at par value
of $.001 (Note 3).......... 1,709 4,663 4,700 $20,621 $7,337
Additional paid-in capital.. 16,843,177 47,256,579 48,349,969 47,004,861 7,329,582
----------- ----------- ----------- ----------- ----------
Net assets................. $16,487,110 $37,261,957 $44,640,571 $47,025,482 $7,336,919
----------- ----------- ----------- ----------- ----------
*Investments in securities,
at identified cost (Note
2).......................... $16,577,811 $39,376,639 $61,782,247 $46,628,413 $7,288,376
----------- ----------- ----------- ----------- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
NORTH AMERICAN FUNDS
STATEMENT OF ASSETS AND LIABILITIES continued - OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U. S Municipal
Municipal Strategic Government Money Money
Bond Income Securities Market Market
Fund Fund Fund Fund Fund
---------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUES:
Class A Shares
Net assets at value.... $7,773,704 $6,438,551 $29,468,222 $25,609,709 $4,452,080
Shares outstanding..... 805,872 805,948 3,102,743 25,608,997 4,452,080
Net asset value (NAV)
and redemption price
per share.............. $9.65 $7.99 $9.50 $1.00 $1.00
----- ----- ----- ----- -----
Public offering price
per share (100/95.25 of
NAV)
On sales of $100,000 or
more the offering price
is reduced............. $10.13 $8.39 $9.97
------ ----- -----
Class B Shares
Net assets at value.... $6,416,271 $15,131,090 $8,326,332 $8,096,254 $2,776,525
Shares outstanding..... 665,106 1,893,633 876,444 8,096,025 2,776,525
Net asset value,
offering price and
redemption price per
share.................. $9.65 $7.99 $9.50 $1.00 $1.00
----- ----- ----- ----- -----
Class C Shares
Net assets at value.... $2,297,135 $13,056,267 $6,846,017 $7,194,654 $108,314
Shares outstanding..... 238,150 1,634,043 720,664 7,194,049 108,314
Net asset value,
offering price and
redemption price per
share.................. $9.65 $7.99 $9.50 $1.00 $1.00
----- ----- ----- ----- -----
Class I Shares
Net assets at value.... $2,636,049 $6,124,865
Shares outstanding..... 329,457 6,110,797
Net asset value,
offering price and
redemption price per
share.................. $8.00 $1.00
----- -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
NORTH AMERICAN FUNDS
STATEMENT OF ASSETS AND LIABILITIES continued - OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Aggressive Moderate Conservative
Growth Growth Growth
LifeStyle LifeStyle LifeStyle
Fund Fund Fund
----------- ----------- ------------
<S> <C> <C> <C>
ASSETS:
Investments in securities, at
value* (See accompanying Portfolio
of Investments)................... $23,146,799 $20,901,375 $18,296,458
Cash............................... - 5,788 172,952
Receivables:
Investments sold.................. 142,097 121,286 79,305
Fund shares sold.................. 10,627 9,532 4,809
Dividends......................... 14,443 39,254 57,690
Other assets....................... 46,971 51,251 42,661
----------- ----------- -----------
Total assets..................... 23,360,937 21,128,486 18,653,875
----------- ----------- -----------
LIABILITIES:
Payables:
Investments purchased............. 192,861 161,490 151,057
Fund shares redeemed.............. 116,091 103,917 91,974
Investment adviser................ 2,175 2,033 1,847
Due to custodian.................. 347,278 - -
----------- ----------- -----------
Total liabilities................ 658,405 267,440 244,878
----------- ----------- -----------
NET ASSETS......................... $22,702,532 $20,861,046 $18,408,997
----------- ----------- -----------
NET ASSETS CONSIST OF:
Undistributed net investment
income/(loss) (Note 2)........... $217,388 $217,410 $224,479
Accumulated undistributed net
realized gain (loss) on
investments, foreign currency and
forward foreign currency
contracts........................ 2,769,504 1,951,208 1,402,045
Unrealized appreciation
(depreciation) on:
Investments...................... (1,674,053) (854,933) (527,011)
Capital shares at par value of
$.001 (Note 3)................... 1,784 1,726 1,585
Additional paid-in capital........ 21,387,909 19,545,635 17,307,899
----------- ----------- -----------
Net assets....................... $22,702,532 $20,861,046 $18,408,997
----------- ----------- -----------
*Investments in securities, at
identified cost (Note 2).......... $24,820,852 $21,756,308 $18,823,469
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
NORTH AMERICAN FUNDS
STATEMENT OF ASSETS AND LIABILITIES continued - OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Aggressive Moderate Conservative
Growth Growth Growth
LifeStyle LifeStyle LifeStyle
Fund Fund Fund
----------- ----------- ------------
<S> <C> <C> <C>
NET ASSET VALUES:
Class A Shares
Net assets at value...................... $4,063,959 $3,396,397 $3,420,482
Shares outstanding....................... 319,639 281,384 295,187
Net asset value (NAV) and redemption price
per share................................ $12.71 $12.07 $11.59
------ ------ ------
Public offering price per share (100/94.25
of NAV)
On sales of $100,000 or more the offering
price is reduced......................... $13.49 $12.81 $12.30
------ ------ ------
Class B Shares
Net assets at value...................... $13,450,317 $11,842,757 $10,354,089
Shares outstanding....................... 1,056,857 980,147 890,264
Net asset value, offering price and
redemption price per share............... $12.73 $12.08 $11.63
------ ------ ------
Class C Shares
Net assets at value...................... $184,340 $182,778 $150,158
Shares outstanding....................... 14,397 15,094 12,844
Net asset value, offering price and
redemption price per share............... $12.80 $12.11 $11.69
------ ------ ------
Class I Shares
Net assets at value...................... $5,003,916 $5,439,114 $4,484,268
Shares outstanding....................... 393,158 450,821 386,770
Net asset value, offering price and
redemption price per share................ $12.73 $12.06 $11.59
------ ------ ------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
NORTH AMERICAN FUNDS
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Growth & Large Cap Mid Cap Mid Cap Science &
Income Growth Growth Value Technology
Fund Fund Fund Fund/1/ Fund/2/
----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest.................... $113,030 $194,309 $110,005 $72,091 $50,131
Dividends (Net of $15,844,
$1,016, $213 and $267
withholding tax in the
Growth & Income, Large Cap
Growth, Mid Cap Growth and
Science & Technology Funds,
respectively).............. 3,419,656 179,137 66,781 137,350 2,694
----------- ----------- ----------- ---------- -----------
Total income............... 3,532,686 373,446 176,786 209,441 52,825
----------- ----------- ----------- ---------- -----------
EXPENSES:
Distribution for Class A.... 141,047 26,687 30,089 6,708 6,270
Distribution for Class B.... 1,077,287 269,230 247,274 68,846 68,010
Distribution for Class C.... 1,627,385 250,016 232,919 494 1,345
Service fee for Class I..... 6,405 9,860 7,458 11,389 909
Investment adviser fee (Note
5)......................... 2,086,628 571,885 555,072 122,473 84,190
Custodian fee............... 257,560 58,596 55,806 13,766 7,782
Transfer agent fee.......... 638,191 137,166 130,916 42,114 24,539
Accounting/administration... 488,309 92,681 87,397 8,719 6,217
Audit and legal fees........ 165,777 32,309 30,160 7,927 4,093
Miscellaneous............... 262,554 69,988 64,881 55,954 75,678
----------- ----------- ----------- ---------- -----------
Expenses before
reimbursement by investment
adviser.................... 6,751,143 1,518,418 1,441,972 338,390 279,033
Reimbursement of expenses by
investment adviser
(Note 5)................... 460,894 220,117 143,698 72,036 115,911
----------- ----------- ----------- ---------- -----------
Net expenses............... 6,290,249 1,298,301 1,298,274 266,354 163,122
----------- ----------- ----------- ---------- -----------
Net investment loss........ (2,757,563) (924,855) (1,121,488) (56,913) (110,297)
----------- ----------- ----------- ---------- -----------
REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS,
FUTURES CONTRACTS, FOREIGN
CURRENCY AND FORWARD FOREIGN
CURRENCY CONTRACTS:
Net realized gain/(loss) on:
Investment transactions..... 34,507,070 8,263,343 13,547,675 1,363,892 (1,715,633)
Futures contracts........... - (12,436) - - -
Foreign currency and
forward foreign currency
contracts.................. - (1,518) (184) - (2,189)
Change in unrealized
appreciation/(depreciation)
on:
Investments................. (28,936,197) (9,827,527) 1,554,570 3,297,838 (779,663)
Translation of foreign
currency and forward
foreign currency
contracts.................. 12 (12) (24) - -
----------- ----------- ----------- ---------- -----------
Net gain/(loss) on
investments, futures
contracts, foreign
currency and forward
foreign currency
contracts................. 5,570,885 (1,578,150) 15,102,037 4,661,730 (2,497,485)
----------- ----------- ----------- ---------- -----------
Net increase/(decrease) in
net assets resulting from
Operations.................. $2,813,322 ($2,503,005) $13,980,549 $4,604,817 ($2,607,782)
----------- ----------- ----------- ---------- -----------
</TABLE>
---------------------
/1/Includes the financial results of the AGSPC2 Mid Cap Value Fund, which was
reorganized into North American Mid Cap Value Fund on July 7, 2000.
/2/Includes the financial results of the AGSPC2 Science & Technology Fund,
which was reorganized into North American Science & Technology Fund on July
7, 2000.
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
NORTH AMERICAN FUNDS
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Small Cap Small Cap Socially Stock Global
Growth Index Responsible Index Equity
Fund Fund/1/ Fund/2/ Fund/3/ Fund
------------ --------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest.................... $93,537 $68,820 $69,382 $267,836 $86,866
Dividends (Net of $47, $353,
$1,418 and $73,360
withholding tax in the
Small Cap Index, Socially
Responsible, Stock Index
and Global Equity Funds,
respectively).............. 8,594 90,683 106,473 271,627 760,190
------------ --------- --------- --------- ------------
Total income............... 102,131 159,503 175,855 539,463 847,056
------------ --------- --------- --------- ------------
EXPENSES:
Distribution for Class A.... 8,617 9,656 5,204 20,596 32,316
Distribution for Class B.... 57,253 43,890 35,777 210,484 178,789
Distribution for Class C.... 22,481 41 91 549 310,964
Service fee for Class I..... 8,767 - 8,708 - -
Investment adviser fee (Note
5)......................... 139,442 21,961 39,173 76,517 523,879
Custodian fee............... 33,048 7,370 9,671 28,261 104,939
Transfer agent fee.......... 32,653 24,252 29,316 87,283 155,674
Accounting/administration... 16,007 4,283 5,538 15,821 100,111
Amortization of organization
expense.................... 6,581 - - - -
Audit and legal fees........ 6,381 4,315 6,386 20,672 32,589
Miscellaneous............... 21,122 34,322 56,860 64,649 71,031
------------ --------- --------- --------- ------------
Expenses before
reimbursement by investment
adviser.................... 352,352 150,090 196,724 524,832 1,510,292
Reimbursement of expenses by
investment adviser
(Note 5)................... 107,930 48,995 84,144 154,890 115,350
------------ --------- --------- --------- ------------
Net expenses............... 244,422 101,095 112,580 369,942 1,394,942
------------ --------- --------- --------- ------------
Net investment
income/(loss)............. (142,291) 58,408 63,275 169,521 (547,886)
------------ --------- --------- --------- ------------
REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS,
FUTURES CONTRACTS, FOREIGN
CURRENCY AND FORWARD FOREIGN
CURRENCY CONTRACTS:
Net realized gain/(loss) on:
Investment transactions..... 2,190,821 1,029,508 (33,597) 8,715 (2,278,794)
Futures contracts........... - (27,491) (41,626) 164,278 -
Foreign currency and
forward foreign currency
contracts.................. - - - - 592,673
Change in unrealized
appreciation/(depreciation)
on:
Investments................. (4,046,826) (367,543) 212,439 678,065 (9,923,239)
Futures contracts........... - (15,728) (83,859) (211,262) -
Translation of foreign
currency and forward
foreign currency
contracts.................. - - - - (149,268)
------------ --------- --------- --------- ------------
Net gain/(loss) on
investments, futures
contracts, foreign
currency and forward
foreign currency
contracts................. (1,856,005) 618,746 53,357 639,796 (11,758,628)
------------ --------- --------- --------- ------------
Net increase/(decrease) in
net assets resulting from
operations.................. ($1,998,296) $677,154 $116,632 $809,317 ($12,306,514)
------------ --------- --------- --------- ------------
</TABLE>
---------------------
/1/Includes the financial results of the AGSPC2 Small Cap Index Fund, which was
reorganized into North American Small Cap Index Fund on July 7, 2000.
/2/Includes the financial results of the AGSPC2 Socially Responsible Fund,
which was reorganized into North American Socially Responsible Fund on July
7, 2000.
/3/Includes the financial results of the AGSPC2 Stock Index Fund, which was
reorganized into North American Stock Index Fund on July 7, 2000.
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
NORTH AMERICAN FUNDS
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International International High Yield
Equity Small Cap Balanced Core Bond Bond
Fund Fund Fund Fund Fund/1/
------------- ------------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest (Net of $1,016 and
$32,919 withholding tax in
Balanced and Core Bond,
respectively)................. $46,926 $65,197 $1,577,723 $8,261,351 $7,379,039
Dividends (Net of $65,003,
$22,423 and $1,082
withholding tax in the
International Equity,
International Small Cap and
Balanced Funds,
respectively).............. 417,741 168,556 341,045 4,063 -
---------- ---------- ---------- ----------- ----------
Total income............... 464,667 233,753 1,918,768 8,265,414 7,379,039
---------- ---------- ---------- ----------- ----------
EXPENSES:
Distribution for Class A.... 19,093 21,276 20,979 12,104 573
Distribution for Class B.... 162,244 129,910 127,489 44,808 12,030
Distribution for Class C.... 63,986 114,276 434,292 35,079 744
Service fee for Class I..... 10,494 - 2,974 12,555 109
Investment adviser fee (Note
5)......................... 299,101 320,210 486,301 663,440 480,165
Custodian fee............... 59,663 138,873 61,474 95,737 60,357
Transfer agent fee.......... 80,226 69,971 143,751 108,293 169,844
Accounting/administration... 48,918 46,369 101,734 130,390 35,128
Audit and legal fees........ 17,244 15,796 34,097 54,788 34,380
Miscellaneous............... 46,224 70,082 70,265 119,016 102,017
---------- ---------- ---------- ----------- ----------
Expenses before
reimbursement by investment
adviser.................... 807,193 926,763 1,483,356 1,276,210 895,347
Reimbursement of expenses by
investment adviser
(Note 5)................... 101,244 166,768 169,480 66,001 257,818
---------- ---------- ---------- ----------- ----------
Net expenses............... 705,949 759,995 1,313,876 1,210,209 637,529
---------- ---------- ---------- ----------- ----------
Net investment
income/(loss)............. (241,282) (526,242) 604,892 7,055,205 6,741,510
---------- ---------- ---------- ----------- ----------
REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS,
FUTURES CONTRACTS, FOREIGN
CURRENCY AND FORWARD FOREIGN
CURRENCY CONTRACTS:
Net realized gain/(loss) on:
Investment transactions..... 6,800,924 2,239,050 (2,311,814) (6,875,365) (3,080,092)
Futures contracts........... (90,708) - - - -
Foreign currency and
forward foreign currency
contracts.................. (99,012) (237,008) 52,789 - (132)
Change in unrealized
appreciation/(depreciation)
on:
Investments................. (4,312,320) (1,519,207) 4,340,304 (1,935,720) (3,547,402)
Futures contracts........... (14,920) - - - -
Translation of foreign
currency and forward
foreign currency
contracts.................. 1,648 (1,205) (853) - -
---------- ---------- ---------- ----------- ----------
Net gain/(loss) on
investments, futures
contracts, foreign
currency and forward
foreign currency
contracts................. 2,285,612 481,630 2,080,426 (8,811,085) (6,627,626)
---------- ---------- ---------- ----------- ----------
Net increase/(decrease) in
net assets resulting from
operations.................. $2,044,330 ($44,612) $2,685,318 ($1,755,880) $113,884
---------- ---------- ---------- ----------- ----------
</TABLE>
---------------------
/1/Includes the financial results of the AGSPC2 High Yield Bond Fund, which was
reorganized into North American High Yield Bond Fund on July 7, 2000.
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
NORTH AMERICAN FUNDS
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U. S. Municipal
Municipal Strategic Government Money Money
Bond Income Securities Market Market
Fund Fund Fund Fund Fund/1/
--------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ................... $737,484 $4,369,896 $3,568,734 $1,774,475 $290,562
--------- ---------- ---------- ---------- ---------
Total income............... 737,484 4,369,896 3,568,734 1,774,475 290,562
--------- ---------- ---------- ---------- ---------
EXPENSES:
Distribution for Class A.... 7,687 26,192 110,086 - 8,121
Distribution for Class B.... 46,249 180,981 98,571 - 21,856
Distribution for Class C.... 30,606 165,037 87,079 - -
Service fee for Class I..... - 1,662 - - -
Investment adviser fee (Note
5)......................... 76,875 322,001 300,110 56,326 32,947
Custodian fee............... 32,625 82,851 51,183 40,040 7,013
Transfer agent fee.......... 29,045 98,918 112,589 76,553 22,674
Accounting/administration... 19,678 70,665 81,338 41,454 3,882
Audit and legal fees........ 6,787 23,561 26,995 14,844 4,163
Miscellaneous............... 23,687 51,799 60,651 37,653 35,676
--------- ---------- ---------- ---------- ---------
Expenses before
reimbursement by investment
adviser.................... 273,239 1,023,667 928,602 266,870 136,332
Reimbursement of expenses by
investment adviser
(Note 5)................... 77,977 133,830 181,196 72,800 49,099
--------- ---------- ---------- ---------- ---------
Net expenses............... 195,262 889,837 747,406 194,070 87,233
--------- ---------- ---------- ---------- ---------
Net investment income...... 542,222 3,480,059 2,821,328 1,580,405 203,329
--------- ---------- ---------- ---------- ---------
REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS,
FOREIGN CURRENCY, FUTURES
CONTRACTS AND FORWARD
FOREIGN CURRENCY CONTRACTS:
Net realized gain/(loss) on:
Investment transactions..... 3,924 (3,322,029) (1,146,358) - -
Foreign currency, forward
foreign currency contracts
and options................ - (340,136) - - -
Change in unrealized
appreciation/(depreciation)
on:
Investments................. 228,763 7,259,822 759,341 -
Translation of foreign
currency and forward
foreign currency
contracts.................. - (26,116) - - -
--------- ---------- ---------- ---------- ---------
Net loss on investments,
foreign currency and
forward foreign currency
contracts................. 232,687 3,571,541 (387,017) - -
--------- ---------- ---------- ---------- ---------
Net increase in net assets
resulting from operations... $774,909 $7,051,600 $2,434,311 $1,580,405 $203,329
--------- ---------- ---------- ---------- ---------
</TABLE>
---------------------
/1/Includes the financial results of the AGSPC2 Municipal Money Market Fund,
which was reorganized into North American Municipal Money Market Fund on July
7, 2000.
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
NORTH AMERICAN FUNDS
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED OCTOBER 31, 2000
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Aggressive Moderate Conservative
Growth Growth Growth
LifeStyle LifeStyle LifeStyle
Fund/1/ Fund/2/ Fund/3/
---------- ---------- ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest................................. $942 - $615
Dividends................................ 1,927,279 $1,409,608 1,116,617
---------- ---------- ----------
Total income............................ 1,928,221 1,409,608 1,117,232
---------- ---------- ----------
EXPENSES:
Distribution for Class A................. 1,213 479 454
Distribution for Class B................. 29,870 26,882 24,671
Distribution for Class C................. 175 107 79
Investment adviser fee (Note 5).......... 17,053 16,346 15,126
---------- ---------- ----------
Expenses before reimbursement by
investment adviser...................... 48,311 43,814 40,330
Reimbursement of expenses by investment
adviser (Note 5)........................ 15,187 12,863 12,047
---------- ---------- ----------
Net expenses............................ 33,124 30,951 28,283
---------- ---------- ----------
Net investment income................... 1,895,097 1,378,657 1,088,949
---------- ---------- ----------
REALIZED AND UNREALIZED GAIN/(LOSS) ON
INVESTMENTS
Net realized gain/(loss) on:
Investment transactions.................. 2,315,208 1,725,763 1,266,446
Change in unrealized
appreciation/(depreciation) on:
Investments.............................. (2,664,043) (1,594,261) (993,763)
---------- ---------- ----------
Net gain/(loss) on investments.......... (348,835) 131,502 272,683
---------- ---------- ----------
Net increase in net assets resulting from
operations............................... $1,546,262 $1,510,159 $1,361,632
---------- ---------- ----------
</TABLE>
---------------------
/1/Includes the financial results of the AGSPC2 Aggressive Growth LifeStyle
Fund, which was reorganized into North American Aggressive Growth LifeStyle
Fund on July 7, 2000.
/2/Includes the financial results of the AGSPC2 Moderate Growth LifeStyle
Fund, which was reorganized into North American Moderate Growth LifeStyle
Fund on July 7, 2000.
/3/Includes the financial results of the AGSPC2 Conservative Growth LifeStyle
Fund, which was reorganized into North American Conservative Growth
LifeStyle Fund on July 7, 2000.
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
NORTH AMERICAN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Growth & Income Large Cap Growth Mid Cap Growth
Fund Fund Fund
---------------------------- ------------------------- -------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99
------------ ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................. ($2,757,563) ($1,248,402) ($924,855) ($560,560) ($1,121,488) ($725,375)
Net realized gain (loss)
on:
Investment
transactions........... 34,507,070 29,073,940 8,263,343 6,256,855 13,547,675 8,025,646
Futures contracts....... - - (12,436) - - -
Foreign currency and
forward foreign
currency contracts..... - (244) (1,518) (2,574) (184) 8
Change in unrealized
appreciation
(depreciation) on:
Investments............. (28,936,197) 27,366,787 (9,827,527) 2,622,980 1,554,570 1,370,689
Foreign currency and
forward foreign
currency contracts..... 12 153 (12) (7) (24) -
------------ ------------ ----------- ----------- ----------- -----------
Net increase (decrease)
in net assets resulting
from operations......... 2,813,322 55,192,234 (2,503,005) 8,316,694 13,980,549 8,670,968
DISTRIBUTIONS FROM:
Net realized gains on
investments and foreign
currency transactions
Class A................. (3,116,646) (1,712,771) (1,540,626) (265,199) (2,829,727) (460,517)
Class B................. (9,002,149) (3,082,778) (5,453,064) (781,956) (8,060,558) (1,326,329)
Class C................. (13,236,487) (4,839,860) (4,765,012) (851,533) (7,126,908) (1,510,893)
Class I................. - - (1,547,819) - (1,875,158) -
Return of capital
Class A................. - - (13,112) -
Class B................. - - (37,349) -
Class C................. - - (33,023) -
Class I................. - - (8,689) -
Class II................ - - - - - -
Increase/(decrease) in
net assets from capital
share transactions (Note
3)...................... 58,168,030 11,521,213 59,674,609 7,329,284 40,167,528 1,712,126
------------ ------------ ----------- ----------- ----------- -----------
Increase/(decrease) in
net assets.............. 35,626,070 57,078,038 43,865,083 13,747,290 34,163,553 7,085,355
Net assets at beginning
of period............... 297,962,155 240,884,117 42,290,652 28,543,362 42,092,975 35,007,620
------------ ------------ ----------- ----------- ----------- -----------
Net assets at end of
period.................. $333,588,225 $297,962,155 $86,155,735 $42,290,652 $76,256,528 $42,092,975
------------ ------------ ----------- ----------- ----------- -----------
Undistributed net
investment income
(loss).................. - - - - - -
------------ ------------ ----------- ----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
NORTH AMERICAN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Science &
Mid Cap Value Technology Small Cap Growth
Fund/1/ Fund/2/ Fund
------------------------ ----------- ------------------------
Year Year 3/01/00* Year Year
Ended Ended to Ended Ended
10/31/00 10/31/99 10/31/00 10/31/00 10/31/99
----------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ ($56,913) $23,827 ($110,297) ($142,291) ($19,249)
Net realized gain
(loss) on:
Investment
transactions.......... 1,363,892 1,208,461 (1,715,633) 2,190,821 63,202
Foreign currency and
forward foreign
currency contracts.... - (2,189) - -
Change in unrealized
appreciation
(depreciation) on:
Investments............ 3,297,838 (338,721) (779,663) (4,046,826) 309,851
----------- ---------- ----------- ----------- ----------
Net increase (decrease)
in net assets resulting
from operations........ 4,604,817 893,567 (2,607,782) (1,998,296) 353,804
DISTRIBUTIONS FROM:
Net investment income
Class A................ - (6,396) - - -
Class B................ - (2,384) - - -
Class C................ - - - - -
Class I................ - (7,955) - - -
Class II............... - (12,262) - - -
Net realized gains on
investments and
foreign currency
transactions
Class A................ (379,796) - - (358,063) -
Class B................ (1,040,334) - - (816,827) -
Class C................ (29,983) - - (187,658) -
Class I................ (845,335) - - (762,342) -
Class II............... (181,253) - - -
Increase/(decrease) in
net assets from capital
share transactions
(Note 3)............... 10,957,731 8,378,333 24,674,261 41,638,630 323,343
----------- ---------- ----------- ----------- ----------
Increase/(decrease) in
net assets............. 13,085,847 9,242,903 22,066,479 37,515,444 677,147
Net assets at beginning
of period.............. 9,246,853 3,950 - 1,324,331 647,184
----------- ---------- ----------- ----------- ----------
Net assets at end of
period................. $22,332,700 $9,246,853 $22,066,479 $38,839,775 $1,324,331
----------- ---------- ----------- ----------- ----------
Undistributed net
investment income
(loss)................. - - ($1,715,633) - -
----------- ---------- ----------- ----------- ----------
</TABLE>
---------------------
* Commencement of operations
/1/Includes the financial results of the AGSPC2 Mid Cap Value Fund, which was
reorganized into North American Mid Cap Value Fund on July 7, 2000.
/2/Includes the financial results of the AGSPC2 Science & Technology Fund,
which was reorganized into North American Science & Technology Fund on
July 7, 2000.
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
NORTH AMERICAN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Small Cap Index Socially Responsible Stock Index
Fund/1/ Fund/2/ Fund/3/
---------------------- ------------------------ -------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99
---------- ---------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $58,408 $33,820 $63,275 $48,228 $169,521 $68,733
Net realized gain
(loss) on:
Investment
transactions.......... 1,029,508 653,965 (33,597) 348,904 8,715 54,301
Futures contracts..... (27,491) - (41,626) - 164,278 -
Change in unrealized
appreciation
(depreciation) on:
Investments........... (367,543) (143,547) 212,439 763,646 678,065 1,473,041
Futures contracts..... (15,728) - (83,859) - (211,262) -
---------- ---------- ----------- ---------- ----------- -----------
Net increase (decrease)
in net assets resulting
from operations........ 677,154 544,238 116,632 1,160,778 809,317 1,596,075
DISTRIBUTIONS FROM:
Net investment income
Class A................ (32,955) (26,235) (9,931) (12,791) (52,418) (41,597)
Class B................ (18,087) (6,614) (2,167) (2,406) (35,387) (25,119)
Class C................ - - (1) - (19) -
Class I................ - - (23,067) (15,583) - -
Class II............... - - (7,932) (17,934) - -
Net realized gains on
investments and
foreign currency
transactions
Class A................ (669,531) - (68,557) - (42,201) -
Class B................ (858,236) - (132,478) - (114,330) -
Class C................ (3,142) - - - - -
Class I................ - - (85,308) - - -
Class II............... - - (62,077) - - -
Increase/(decrease) in
net assets from capital
share transactions
(Note 3)............... 2,615,184 5,745,542 3,600,867 7,124,693 12,770,017 19,139,894
---------- ---------- ----------- ---------- ----------- -----------
Increase/(decrease) in
net assets............. 1,710,387 6,256,931 3,325,981 8,236,757 13,334,979 20,669,253
Net assets at beginning
of period.............. 6,261,931 5,000 8,241,757 5,000 20,674,253 5,000
---------- ---------- ----------- ---------- ----------- -----------
Net assets at end of
period................. $7,972,318 $6,261,931 $11,567,738 $8,241,757 $34,009,232 $20,674,253
---------- ---------- ----------- ---------- ----------- -----------
Undistributed net
investment income
(loss)................. $6,179 $971 $20,177 - $83,714 $2,017
---------- ---------- ----------- ---------- ----------- -----------
</TABLE>
---------------------
/1/Includes the financial results of the AGSPC2 Small Cap Index Fund, which was
reorganized into North American Small Cap Index Fund on July 7, 2000.
/2/Includes the financial results of the AGSPC2 Socially Responsible Fund,
which was reorganized into North American Socially Responsible Fund on July
7, 2000.
/3/Includes the financial results of the AGSPC2 Stock Index Fund, which was
reorganized into North American Stock Index Fund on July 7, 2000.
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
NORTH AMERICAN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global Equity International Equity International Small Cap
Fund Fund Fund
------------------------- ------------------------- ---------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99
----------- ----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ ($547,886) ($93,660) ($241,282) ($93,263) ($526,242) ($218,092)
Net realized gain
(loss) on:
Investment
transactions.......... (2,278,794) 15,363,203 6,800,924 2,202,524 2,239,050 4,674,222
Futures contracts...... - - (90,708) (105,083) - -
Foreign currency and
forward foreign
currency contracts.... 592,673 (270,661) (99,012) (41,996) (237,008) (58,974)
Change in unrealized
appreciation
(depreciation) on:
Investments............ (9,923,239) (8,810,322) (10,872,098) 2,780,190 (1,519,207) 127,096
Futures contracts...... - - (14,920) (27,820) - -
Foreign currency and
forward foreign
currency contracts.... (149,268) 365,478 548,727 152,371 (1,205) (958)
----------- ----------- ----------- ----------- ------------ ------------
Net increase (decrease)
in net assets resulting
from operations........ (12,306,514) 6,554,038 (3,968,369) 4,866,923 (44,612) 4,523,294
DISTRIBUTIONS FROM:
Net investment income
Class A................ - - (33,276) - - -
Class B................ - - (19,674) - - -
Class C................ - - (9,233) - - -
Net realized gains on
investments and
foreign currency
transactions
Class A................ (1,483,161) (2,303,340) (307,060) (12,093) (662,245) -
Class B................ (3,256,058) (2,219,820) (1,068,998) (44,312) (1,814,636) -
Class C................ (5,705,060) (4,228,655) (499,719) (25,387) (1,423,034) -
Increase/(decrease) in
net assets from capital
share transactions
(Note 3)............... (22,339,662) (33,579,885) 28,059,117 (5,598,242) 15,806,860 (4,278,804)
----------- ----------- ----------- ----------- ------------ ------------
Increase/(decrease) in
net assets............. (45,090,455) (35,777,662) 22,152,788 (813,111) 11,862,333 244,490
Net assets at beginning
of period.............. 83,338,534 119,116,196 24,945,979 25,759,090 15,698,019 15,453,529
----------- ----------- ----------- ----------- ------------ ------------
Net assets at end of
period................. $38,248,079 $83,338,534 $47,098,767 $24,945,979 $27,560,352 $15,698,019
----------- ----------- ----------- ----------- ------------ ------------
Undistributed net
investment income
(loss)................. $1,969 ($147,081) $6,160 $53,768 - -
----------- ----------- ----------- ----------- ------------ ------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
NORTH AMERICAN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Balanced Core Bond High Yield Bond
Fund Fund Fund/1/
------------------------- --------------------------- -------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99
----------- ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................. $604,892 $1,525,974 $7,055,205 $937,686 $6,741,510 $5,380,873
Net realized gain (loss)
on:
Investment
transactions........... (2,311,814) 9,063,680 (6,875,365) (205,464) (3,080,092) (710,603)
Foreign currency and
forward foreign
currency contracts..... 52,789 (43,308) - - (132) -
Change in unrealized
appreciation
(depreciation) on:
Investments............. 4,340,304 (9,389,607) 5,847,043 (979,000) (3,547,402) (3,045,287)
Foreign currency and
forward foreign
currency contracts..... (853) (920) - - - -
----------- ----------- ------------ ----------- ----------- -----------
Net increase (decrease)
in net assets resulting
from operations......... 2,685,318 1,155,819 6,026,883 (246,778) 113,884 1,624,983
DISTRIBUTIONS FROM:
Net investment income
Class A................. (155,664) (284,543) (207,981) (366,860) (19,839) (5,419)
Class B................. (275,166) (243,851) (243,095) (279,710) (108,244) (24,330)
Class C................. (1,059,003) (835,387) (192,049) (326,493) (6,579) -
Class I................. (18) - (348,474) - (1,395) (4.874)
Class II................ - - (5,963,986) - (6,393,004) (5,346,250)
Net realized gains on
investments and foreign
currency transactions
Class A................. (714,922) (1,061,187) - - - -
Class B................. (1,649,177) (1,381,136) - - - -
Class C................. (6,385,744) (4,691,171) - - - -
Distributions in excess
of net investment
income
Class A................. - - (4,740) - - -
Class B................. - - (5,541) - - -
Class C................. - - (4,377) - - -
Class I................. - - (7,943) - - -
Class II................ - - (135,934) - - -
Return of Capital
Class A................. - - (23,205) - - -
Class B................. - - (27,123) - - -
Class C................. - - (21,427) - - -
Class I................. - - (38,880) - - -
Class II................ - - (665,413) - - -
Increase (decrease) in
net assets from capital
share transactions (Note
3)...................... 673,750 (17,488,266) 338,854,539 (3,491,641) 8,349,306 66,956,997
----------- ----------- ------------ ----------- ----------- -----------
Increase (decrease) in
net assets.............. (6,880,626) (24,829,722) 336,991,254 (4,711,482) 1,934,129 63,201,107
Net assets at beginning
of period............... 73,562,936 98,392,658 12,394,748 17,106,230 63,206,107 5,000
----------- ----------- ------------ ----------- ----------- -----------
Net assets at end of
period.................. $66,682,310 $73,562,936 $349,386,002 $12,394,748 $65,140,236 $63,206,107
----------- ----------- ------------ ----------- ----------- -----------
Undistributed net
investment income
(loss).................. $438,881 $1,271,183 ($509,240) ($20,882) $215,412 $1,323
----------- ----------- ------------ ----------- ----------- -----------
</TABLE>
---------------------
/1/Includes the financial results of the AGSPC2 High Yield Bond Fund, which was
reorganized into North American High Yield Bond Fund on July 7, 2000.
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
NORTH AMERICAN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Municipal Bond Strategic Income U. S. Government Securities
Fund Fund Fund
------------------------- ------------------------- -----------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99
----------- ----------- ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $542,222 $594,894 $3,480,059 $5,106,661 $2,821,328 $3,700,215
Net realized gain
(loss) on:
Investment
transactions.......... 3,924 (75,958) (3,322,029) (3,377,733) (1,146,358) (821,237)
Foreign currency and
forward foreign
currency contracts ... - - (340,136) (246,365) - -
Change in unrealized
appreciation
(depreciation) on:
Investments............ 228,763 (1,012,148) 7,259,822 (281,966) 759,341 (2,669,738)
Foreign currency and
forward foreign
currency contracts ... - - (26,116) 255,346 - -
----------- ----------- ----------- ----------- ------------- -------------
Net increase (decrease)
in net assets resulting
from operations........ 774,909 (493,212) 7,051,600 1,455,943 2,434,311 209,240
DISTRIBUTIONS FROM :
Net investment income
Class A................ (241,752) (241,991) (563,766) (985,588) (1,814,535) (2,291,801)
Class B................ (179,259) (182,925) (1,257,549) (2,027,623) (500,572) (622,804)
Class C................ (120,948) (169,977) (1,150,833) (2,174,265) (442,305) (572,045)
Class I................ - - (58,485) - - -
Net realized gains on
investments and
foreign currency
transactions
Class A................ - - - (94,062) - -
Class B................ - - - (189,150) - -
Class C................ - - - (202,710) - -
In excess of net
investment income
Class A................ - - (24,282) - - (166,512)
Class B................ - - (54,164) - - (45,250)
Class C................ - - (49,567) - - (41,562)
Class I................ - - (2,519) - - -
Return of capital
Class A................ - - (78,951) - (119,523) (127,295)
Class B................ - - (176,110) - (32,973) (34,593)
Class C................ - - (161,165) - (29,135) (31,774)
Class I ............... - - (8,190) - - -
Increase/(decrease) in
net assets from capital
share transactions
(Note 3)............... 3,691,639 (2,589,104) (17,290,100) (22,740,011) (13,043,070) (18,269,612)
----------- ----------- ----------- ----------- ------------- -------------
Increase/(decrease) in
net assets............. 3,924,589 (3,677,209) (13,824,081) (26,957,466) (13,547,802) (21,994,008)
Net assets at beginning
of period.............. 12,562,521 16,239,730 51,086,038 78,043,504 58,188,373 80,182,381
----------- ----------- ----------- ----------- ------------- -------------
Net assets at end of
period................. $16,487,110 $12,562,521 $37,261,957 $51,086,038 $44,640,571 $58,188,373
----------- ----------- ----------- ----------- ------------- -------------
Undistributed net
investment income
(loss)................. - ($263) ($1,756) ($94,527) ($433,764) ($488,884)
----------- ----------- ----------- ----------- ------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
NORTH AMERICAN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Money Market Municipal Money Market
Fund Fund/1/
------------------------- ------------------------
Year Year Year Year
Ended Ended Ended Ended
10/31/00 10/31/99 10/31/00 10/31/99
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $1,580,405 $986,731 $203,329 $99,461
Net realized gain
(loss) on:
Investment
transactions.......... - 572 - -
----------- ----------- ----------- -----------
Net increase (decrease)
in net assets resulting
from operations........ 1,580,405 987,303 203,329 99,461
DISTRIBUTIONS FROM:
Net investment income
Class A................ (772,737) (390,560) (132,291) (61,916)
Class B................ (290,963) (226,689) (70,804) (37,545)
Class C................ (407,623) (370,054) (234) -
Class I................ (109,082) - - -
Class II............... - - - -
Increase (decrease) in
net assets from capital
share transactions
(Note 3)............... 27,800,384 (5,226,114) 844,619 6,487,300
----------- ----------- ----------- -----------
Increase (decrease) in
net assets............. 27,800,384 (5,226,114) 844,619 6,487,300
Net assets at beginning
of period.............. 19,225,098 24,451,212 6,492,300 5,000
----------- ----------- ----------- -----------
Net assets at end of
period................. $47,025,482 $19,225,098 $7,336,919 $6,492,300
----------- ----------- ----------- -----------
Undistributed net
investment income
(loss)................. - - - -
----------- ----------- ----------- -----------
</TABLE>
---------------------
/1/Includes the financial results of the AGSPC2 Municipal Money Market Fund,
which was reorganized into North American Municipal Money Market Fund on July
7, 2000.
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
NORTH AMERICAN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Aggressive Growth Moderate Growth Conservative Growth
LifeStyle Fund/1/ LifeStyle Fund/2/ LifeStyle Fund/3/
------------------------ ------------------------- -------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99
----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................. $1,895,097 $43,845 $1,378,657 $98,624 $1,088,949 $144,689
Net realized gain (loss)
on:
Investment
transactions........... 2,315,208 131,422 1,725,763 87,982 1,266,446 99,813
Change in unrealized
appreciation
(depreciation) on:
Investments............ (2,664,043) 989,990 (1,594,261) 739,328 (993,763) 466,752
----------- ---------- ----------- ----------- ----------- -----------
Net increase (decrease)
in net assets resulting
from operations......... 1,546,262 1,165,257 1,510,159 925,934 1,361,632 711,254
DISTRIBUTIONS FROM:
Net investment income...
Class A................. (226,879) (7,843) (169,786) (18,579) (124,818) (28,694)
Class B................. (689,398) (13,419) (519,113) (35,672) (414,293) (52,880)
Class C................. - - (187) - (67) -
Class I................. (262,331) (7,389) (208,960) (18,006) (156,504) (25,850)
Class II................ (52,621) (7,384) (48,561) (15,562) (42,954) (25,592)
Net realized gains on
investments and foreign
currency transactions..
Class A................. (24,592) - (15,414) - (16,902) -
Class B................. (68,467) - (48,559) - (57,065) -
Class C................. - - - - - -
Class I................. (19,815) - (12,830) - (14,923) -
Class II................ (18,542) - (11,178) - (12,830) -
Increase (decrease) in
net assets from capital
share transactions (Note
3)...................... 12,632,538 8,752,155 9,937,957 9,604,403 7,305,706 9,998,777
----------- ---------- ----------- ----------- ----------- -----------
Increase (decrease) in
net assets.............. 12,816,155 9,881,377 10,413,528 10,442,518 7,826,982 10,577,015
Net assets at beginning
of period............... 9,886,377 5,000 10,447,518 5,000 10,582,015 5,000
----------- ---------- ----------- ----------- ----------- -----------
Net assets at end of
period.................. $22,702,532 $9,886,377 $20,861,046 $10,447,518 $18,408,997 $10,582,015
----------- ---------- ----------- ----------- ----------- -----------
Undistributed net
investment income
(loss).................. $217,388 $7,810 $217,410 $10,805 $224,479 $11,673
----------- ---------- ----------- ----------- ----------- -----------
</TABLE>
---------------------
/1/Includes the financial results of the AGSPC2 Aggressive Growth LifeStyle
Fund, which was reorganized into North Aggressive Growth LifeStyle Fund on
July 7, 2000.
/2/Includes the financial results of the AGSPC2 Moderate Growth LifeStyle
Fund, which was reorganized into North American Moderate Growth LifeStyle
Fund on July 7, 2000.
/3/Includes the financial results of the AGSPC2 Conservative Growth LifeStyle
Fund, which was reorganized into North American Conservative Growth
LifeStyle Fund on July 7, 2000.
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>
Growth & Income Fund
---------------------------------------------------
Class A
---------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
10/31/00* 10/31/99* 10/31/98 10/31/97 10/31/96*
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $28.78 $24.26 $21.77 $17.56 $14.72
--------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) (0.09) 0.03 0.08 0.14 0.18
Net realized and
unrealized gain/(loss) on
investments and foreign
currency 0.80 5.45 4.14 5.26 2.99
<CAPTION>
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total from investment
operations 0.71 5.48 4.22 5.40 3.17
<CAPTION>
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income - - - (0.15) (0.21)
Distributions from
realized capital gains (2.43) (0.96) (1.70) (1.04) (0.12)
Distributions in excess of
net investment income - - (0.03) - -
<CAPTION>
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total distributions (2.43) (0.96) (1.73) (1.19) (0.33)
--------------------------------------------------------------------------------
Net Asset Value, End of
Period $27.06 $28.78 $24.26 $21.77 $17.56
--------------------------------------------------------------------------------
Total Return 2.39% 23.11% 20.82% 31.95% 21.84%
--------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------------------
Net assets, end of period
(000's) $46,581 $37,210 $42,916 $34,186 $18,272
--------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 1.45% 1.34% 1.34% 1.34% 1.34%
--------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets (0.33%) 0.11% 0.34% 0.66% 1.10%
--------------------------------------------------------------------------------
Portfolio turnover rate 31% 28% 18% 39% 49%
--------------------------------------------------------------------------------
Expense ratio before
expense reimbursement by
adviser 1.61% 1.49% 1.45% 1.50% 1.56%
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Growth & Income Fund
---------------------------------------------------
Class B
---------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
10/31/00* 10/31/99* 10/31/98 10/31/97 10/31/96*
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $28.28 $24.01 $21.67 $17.50 $14.69
--------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) (0.26) (0.15) (0.07) 0.01 0.07
Net realized and
unrealized gain/(loss) on
investments and foreign
currency 0.79 5.38 4.11 5.23 2.99
<CAPTION>
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total from investment
operations 0.53 5.23 4.04 5.24 3.06
<CAPTION>
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income - - - (0.03) (0.13)
Distributions from
realized capital gains (2.43) (0.96) (1.70) (1.04) (0.12)
<CAPTION>
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total distributions (2.43) (0.96) (1.70) (1.07) (0.25)
--------------------------------------------------------------------------------
Net Asset Value, End of
Period $26.38 $28.28 $24.01 $21.67 $17.50
--------------------------------------------------------------------------------
Total Return 1.75% 22.28% 20.04% 31.40% 21.08%
--------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------------------
Net assets, end of period
(000's) $106,464 $104,695 $75,574 $54,871 $34,740
--------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 2.10% 1.99% 1.99% 1.99% 1.99%
--------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets (0.97%) (0.54%) (0.32%) 0.01% 0.45%
--------------------------------------------------------------------------------
Portfolio turnover rate 31% 28% 18% 39% 49%
--------------------------------------------------------------------------------
Expense ratio before
expense reimbursement by
adviser 2.27% 2.13% 2.10% 2.15% 2.20%
--------------------------------------------------------------------------------
</TABLE>
* Net investment income per share has been calculated using the average share
method
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>
Growth & Income Fund
-----------------------------------------------------------------
Class C Class I
----------------------------------------------------- ----------
Year Year Year 7/10/00*
Year Ended Year Ended Ended Ended Ended to
10/31/00** 10/31/99 ** 10/31/98 10/31/97 10/31/96 10/31/00**
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $28.39 $24.10 $21.75 $17.56 $14.71 $28.25
---------------------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) (0.27) (0.15) (0.07) 0.01 0.07 (0.02)
Net realized and
unrealized gain/(loss)
on investments and
foreign currency 0.80 5.40 4.12 5.25 3.00 (1.12)
-------------------------------------------------------
Total from investment
operations 0.53 5.25 4.05 5.26 3.07 (1.14)
-------------------------------------------------------
Distributions
Dividends from net
investment income - - - (0.03) (0.10)
Distributions from
realized capital gains (2.43) (0.96) (1.70) (1.04) (0.12)
-------------------------------------------------------
Total distributions (2.43) (0.96) (1.70) (1.07) (0.22)
---------------------------------------------------------------------------------------------
Net Asset Value, End of
Period $26.49 $28.39 $24.10 $21.75 $17.56 $27.11
---------------------------------------------------------------------------------------------
Total Return 1.74% 22.28% 20.00% 31.37% 21.12% (4.04%)+
---------------------------------------------------------------------------------------------
Ratios/Supplemental Data
---------------------------------------------------------------------------------------------
Net assets, end of
period (000's) $170,277 $156,056 $122,395 $98,250 $74,825 $10,267
---------------------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 2.10% 1.99% 1.99% 1.99% 1.99% 1.27%#
---------------------------------------------------------------------------------------------
Ratio of net investment
income (loss) to
average net assets (0.97%) (0.54%) (0.31%) 0.01% 0.45% (0.26%)#
---------------------------------------------------------------------------------------------
Portfolio turnover rate 31% 28% 18% 39% 49% 31%+
---------------------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by adviser 2.27% 2.13% 2.10% 2.13% 2.20% 1.44%#
---------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Large Cap Growth Fund
(formerly Growth Equity Fund)
-----------------------------------------------------
Class A
-----------------------------------------------------
Year Year 3/04/96*
Year Ended Year Ended Ended Ended to
10/31/00** 10/31/99 ** 10/31/98 10/31/97 10/31/96
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $21.44 $17.73 $17.01 $13.78 $12.50
--------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) (0.21) (0.19) (0.07) (0.03) 0.28
Net realized and
unrealized gain/(loss)
on investments and
foreign currency 1.72 5.05 2.22 3.45 1.00
----------------------------------
Total from investment
operations 1.51 4.86 2.15 3.42 1.28
----------------------------------
Distributions
Dividends from net
investment income - - - (0.19) -
Distributions from
realized capital gains (4.66) (1.15) (1.43) - -
----------------------------------
Total distributions (4.66) (1.15) (1.43) (0.19)
--------------------------------------------------------------------------------
Net Asset Value, End of
Period $18.29 $21.44 $17.73 $17.01 $13.78
--------------------------------------------------------------------------------
Total Return 5.66% 28.57% 13.85% 25.13% 10.24%+
--------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------------------
Net assets, end of
period (000's) $9,548 $5,656 $3,919 $3,053 $2,244
--------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 1.51% 1.65% 1.65% 1.65% 1.65%#
--------------------------------------------------------------------------------
Ratio of net investment
income/(loss) to
average net assets (0.93%) (0.94) (0.43%) (0.17%) 4.11%#
--------------------------------------------------------------------------------
Portfolio turnover rate 196% 145% 115% 181% 450%#
--------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by adviser 1.85% 1.90% 1.91% 2.28% 2.71%#
--------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
** Net investment income per share has been calculated using the average share
method
# Annualized
+ Non-annualized
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>
Large Cap Growth Fund
(formerly Growth Equity Fund)
-----------------------------------------------------
Class B
-----------------------------------------------------
Year Year 3/04/96*
Year Ended Year Ended Ended Ended to
10/31/00** 10/31/99 ** 10/31/98 10/31/97 10/31/96
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $20.96 $17.46 $16.90 $13.73 $12.50
--------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) (0.34) (0.31) (0.18) (0.13) 0.24
Net realized and
unrealized gain/(loss)
on investments and
foreign currency 1.70 4.96 2.17 3.46 0.99
---------------------------------------------------
Total from investment
operations 1.36 4.65 1.99 3.33 1.23
---------------------------------------------------
Distributions
Dividends from net
investment income - - - (0.16) -
Distributions from
realized capital gains (4.66) (1.15) (1.43) - -
---------------------------------------------------
Total distributions (4.66) (1.15) (1.43) (0.16)
--------------------------------------------------------------------------------
Net Asset Value, End of
Period $17.66 $20.96 $17.46 $16.90 $13.73
--------------------------------------------------------------------------------
Total Return 5.01% 27.77% 12.93% 24.50% 9.84%+
--------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------------------
Net assets, end of
period (000's) $34,711 $17,171 $11,659 $9,040 $4,748
--------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 2.15% 2.30% 2.30% 2.30% 2.30%#
--------------------------------------------------------------------------------
Ratio of net investment
income/(loss) to
average net assets (1.57%) (1.58%) (1.07%) (0.82%) 4.18%#
--------------------------------------------------------------------------------
Portfolio turnover rate 196% 145% 115% 181% 450%#
--------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by adviser 2.50% 2.52% 2.56% 2.78% 3.06%#
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Large Cap Growth Fund
(formerly Growth Equity Fund)
----------------------------------------------------------------
Class C Class I
---------------------------------------------------- ----------
Year Year 3/04/96* 7/10/00*
Year Ended Year Ended Ended Ended to to
10/31/00** 10/31/99** 10/31/98 10/31/97 10/31/96 10/31/00**
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $20.93 $17.44 $16.89 $13.73 $12.50 $22.08
--------------------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) (0.35) (0.31) (0.20) (0.13) 0.24 (0.03)
Net realized and
unrealized gain/(loss)
on investments and
foreign currency 1.72 4.95 2.18 3.46 0.99 (1.93)
-------------------------------------------------------------
Total from investment
operations 1.37 4.64 1.98 3.33 1.23 (1.96)
-------------------------------------------------------------
Distributions
Dividends from net
investment income - - - (0.17) -
Distributions from
realized capital gains (4.66) (1.15) (1.43) - - (1.70)
-------------------------------------------------------------
Total distributions (4.66) (1.15) (1.43) (0.17) (1.70)
--------------------------------------------------------------------------------------------
Net Asset Value, End of
Period $17.64 $20.93 $17.44 $16.89 $13.73 $18.42
--------------------------------------------------------------------------------------------
Total Return 5.06% 27.75% 12.87% 24.50% 9.84%+ (9.04%)+
--------------------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------------------------------
Net assets, end of
period (000's) $22,780 $19,463 $12,965 $12,766 $6,494 $19,117
--------------------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 2.23% 2.30% 2.30% 2.30% 2.30%# 1.07%#
--------------------------------------------------------------------------------------------
Ratio of net investment
income/(loss) to
average net assets (1.64%) (1.58%) (1.06%) (0.82%) 4.13%# (0.47%)#
--------------------------------------------------------------------------------------------
Portfolio turnover rate 196% 145% 115% 181% 450%# 196%+
--------------------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by adviser 2.52% 2.52% 2.56% 2.75% 2.96%# 1.64%#
--------------------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
** Net investment income per share has been calculated using the average share
method
# Annualized
+ Non-annualized
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>
Mid Cap Growth Fund
(formerly Small/Mid Cap Fund)
----------------------------------------------------
Class A
----------------------------------------------------
Year Year Year Year 3/04/96*
Ended Ended Ended Ended to
10/31/00** 10/31/99** 10/31/98 10/31/97 10/31/96
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $18.52 $16.09 $15.51 $12.62 $12.50
--------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) (0.27) (0.21) (0.15) (0.14) (0.02)
Net realized and
unrealized gain/(loss)
on investments and
foreign currency 6.33 4.12 0.97 3.03 0.14
<CAPTION>
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total from investment
operations 6.06 3.91 0.82 2.89 0.12
<CAPTION>
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Distributions
Distributions from
realized capital gains (6.68) (1.48) (0.24) - -
--------------------------------------------------------------------------------
Net Asset Value, End of
Period $17.90 $18.52 $16.09 $15.51 $12.62
--------------------------------------------------------------------------------
Total Return 35.03% 25.50% 5.51% 22.90% 0.96%+
--------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------------------
Net assets, end of
period (000's) $11,718 $5,970 $4,814 $4,170 $2,966
--------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 1.59% 1.68% 1.68% 1.68% 1.68%#
--------------------------------------------------------------------------------
Ratio of net investment
income (loss) to
average net assets (1.30%) (1.15%) (0.90%) (1.02%) (0.40%)#
--------------------------------------------------------------------------------
Portfolio turnover rate 210% 181% 162% 145% 92%#
--------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by adviser 1.88% 1.89% 1.93% 2.24% 2.69%#
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Mid Cap Growth Fund
(formerly Small/Mid Cap Fund)
------------------------------------------------------
Class B
------------------------------------------------------
Year Year Year Year 3/04/96*
Ended Ended Ended Ended to
10/31/00** 10/31/99** 10/31/98 10/31/97** 10/31/96
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $17.99 $15.77 $15.33 $12.58 $12.50
----------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) (0.41) (0.32) (0.25) (0.23) (0.05)
Net realized and
unrealized gain/(loss)
on investments and
foreign currency 6.13 4.02 0.93 2.98 0.13
<CAPTION>
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total from investment
operations 5.72 3.70 0.68 2.75 0.08
<CAPTION>
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Distributions
Distributions from
realized capital gains (6.68) (1.48) (0.24) - -
----------------------------------------------------------------------------------
Net Asset Value, End of
Period $17.03 $17.99 $15.77 $15.33 $12.58
----------------------------------------------------------------------------------
Total Return 34.04% 24.62% 4.65% 21.86% 0.64%+
----------------------------------------------------------------------------------
Ratios/Supplemental Data
----------------------------------------------------------------------------------
Net assets, end of
period (000's) $29,978 $17,184 $13,972 $11,802 $6,659
----------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 2.31% 2.33% 2.33% 2.33% 2.33%#
----------------------------------------------------------------------------------
Ratio of net investment
income (loss) to
average net assets (2.01%) (1.80%) (1.55%) (1.67%) (1.05%)#
----------------------------------------------------------------------------------
Portfolio turnover rate 210% 181% 162% 145% 92%#
----------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by adviser 2.54% 2.54% 2.58% 2.79% 3.05%#
----------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
** Net investment income per share has been calculated using the average share
method
# Annualized
+ Non-annualized
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>
Mid Cap Growth Fund
(formerly Small/Mid Cap Fund)
-------------------------------------------------------------------
Class C Class I
------------------------------------------------------ ----------
Year Year Year Year 3/04/96* 7/10/00*
Ended Ended Ended Ended to to
10/31/00** 10/31/99** 10/31/98 10/31/97** 10/31/96 10/31/00**
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $18.02 $15.79 $15.35 $12.59 $12.50 $21.70
-----------------------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) (0.41) (0.32) (0.25) (0.23) (0.05) (0.08)
Net realized and
unrealized gain/(loss)
on investments and
foreign currency 6.13 4.03 0.93 2.99 0.14 (0.15)
<CAPTION>
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total from investment
operations 5.72 3.71 0.68 2.76 0.09 (0.23)
<CAPTION>
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Distributions
Distributions from
realized capital gains (6.68) (1.48) (0.24) - - (3.50)
-----------------------------------------------------------------------------------------------
Net Asset Value, End of
Period $17.06 $18.02 $15.79 $15.35 $12.59 $17.97
-----------------------------------------------------------------------------------------------
Total Return 33.95% 24.65% 4.64% 21.92% 0.72%+ (0.85%)+
-----------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------------
Net assets, end of
period (000's) $22,913 $18,939 $16,221 $13,471 $8,241 $11,647
-----------------------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 2.33% 2.33% 2.33% 2.33% 2.33%# 1.37%#
-----------------------------------------------------------------------------------------------
Ratio of net investment
income (loss) to
average net assets (2.02%) (1.80%) (1.55%) (1.67%) (1.05%)# (1.14%)#
-----------------------------------------------------------------------------------------------
Portfolio turnover rate 210% 181% 162% 145% 92%# 210%+
-----------------------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by adviser 2.54% 2.54% 2.58% 2.78% 3.04%# 1.67%#
-----------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Mid Cap Value Fund/1/
----------------------------------------------------------------------------
Class A Class B Class C Class I
-------------------- -------------------- ---------- --------------------
Year Year Year Year 7/31/00* Year Year
Ended Ended Ended Ended to Ended Ended
10/31/00** 10/31/99 10/31/00** 10/31/99 10/31/00** 10/31/00** 10/31/99
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $11.98 $10.00 $11.85 $10.00 $12.88 $11.95 $10.00
-------------------------------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) - 0.06 (0.09) - (0.05) (0.02) 0.07
Net realized and
unrealized gain/(loss)
on investments and
foreign currency 3.87 1.97 3.79 1.87 1.23 3.89 1.94
<CAPTION>
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total from investment
operations 3.87 2.03 3.70 1.87 1.18 3.87 2.01
<CAPTION>
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income - (0.05) - (0.02) - (0.06)
Distributions from
realized capital gains (2.24) (2.24) (0.80) (2.24)
<CAPTION>
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total distributions (2.24) (0.05) (2.24) (0.02) (0.80) (2.24) (0.06)
-------------------------------------------------------------------------------------------------------
Net Asset Value, End of
Period $13.61 $11.98 $13.31 $11.85 $13.26 $13.58 $11.95
-------------------------------------------------------------------------------------------------------
Total Return 35.42% 20.23% 34.26% 18.71% 9.53%+ 36.17% 20.18%
-------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-------------------------------------------------------------------------------------------------------
Net assets, end of
period (000's) $2,747 $1,728 $7,471 $4,555 $614 $11,501 $1,507
-------------------------------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 1.45% 1.29% 2.17% 2.04% 2.31%# 1.49% 1.17%
-------------------------------------------------------------------------------------------------------
Ratio of net investment
income/(loss) to
average net assets (0.04%) 0.51% (0.75%) (0.26%) (1.18%)# (0.17%) 0.64%
-------------------------------------------------------------------------------------------------------
Portfolio turnover rate 191% 177% 191% 177% 191%+ 191% 177%
-------------------------------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by advisor 1.95% 2.43% 2.67% 2.77% 2.37%# 1.78% 2.51%
-------------------------------------------------------------------------------------------------------
</TABLE>
/1/The financial information for the fiscal periods prior to July 7, 2000
reflect the financial information for the AGSPC2 Mid Cap Value Fund, which
was reorganized into North American Mid Cap Value Fund on that date.
* Commencement of Operations
** Net investment income per share has been calculated using the average share
method
# Annualized
+ Non-annualized
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>
Science & Technology Fund/1/
-------------------------------------------------
Class A Class B Class C Class I
---------- ---------- ---------- ----------
3/01/00* 3/01/00* 7/12/00* 3/01/00*
to to to to
10/31/00** 10/31/00** 10/31/00** 10/31/00**
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $10.00 $10.00 $8.48 $10.00
--------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) (0.04) (0.07) (0.03) (0.03)
Net realized and unrealized
gain/(loss) on investments
and foreign currency (1.88) (1.90) (0.63) (1.89)
<CAPTION>
-------------------------------------------------
<S> <C> <C> <C> <C>
Total from investment
operations (1.92) (1.97) (0.66) (1.92)
--------------------------------------------------------------------------------
Net Asset Value, End of
Period $8.08 $8.03 $7.82 $8.08
--------------------------------------------------------------------------------
Total Return (19.20%)+ (19.70%)+ (7.78%)+ (19.20%)+
--------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------------------
Net assets, end of period
(000's) $4,623 $15,840 $1,065 $539
--------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 1.24%# 1.91%# 1.71%# 1.20%#
--------------------------------------------------------------------------------
Ratio of net investment
income/(loss) to average
net assets (0.64%)# (1.37%)# (1.11%)# (0.48%)#
--------------------------------------------------------------------------------
Portfolio turnover rate 120%+ 120%+ 120%+ 120%+
--------------------------------------------------------------------------------
Expense ratio before
expense reimbursement by
advisor 1.92%# 2.59%# 2.37%# 1.88%#
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Small Cap Growth Fund
(formerly Emerging Growth Fund)
---------------------------------------------
Class A Class I
-------------------------------- ----------
Year Year 1/06/98* 7/10/00*
Ended Ended to to
10/31/00** 10/31/99** 10/31/98 10/31/00**
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $12.81 $8.88 $10.00 $19.82
--------------------------------------------------------------------------------
Investment Operations:
Net investment income/(loss) (0.12) (0.15) (0.08) (0.07)
Net realized and unrealized
gain/(loss) on investments and
foreign currency 5.66 4.08 (1.04) (1.42)
<CAPTION>
---------------------------------------------
<S> <C> <C> <C> <C>
Total from investment
operations 5.54 3.93 (1.12) (1.49)
Distributions
Distributions from realized
capital gains (1.08) (1.00)
--------------------------------------------------------------------------------
Net Asset Value, End of Period $17.27 $12.81 $8.88 $17.33
--------------------------------------------------------------------------------
Total Return 43.62% 44.26% (11.20%)+ (7.34%)+
--------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------------------
Net assets, end of period
(000's) $6,795 $224 $146 $14,154
--------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 1.35% 1.70% 1.70%# 1.11%#
--------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (0.66%) (1.43%) (1.00%)# (0.37%)#
--------------------------------------------------------------------------------
Portfolio turnover rate 222% 129% 52%+ 222%+
--------------------------------------------------------------------------------
Expense ratio before expense
reimbursement by adviser 2.10% 6.96% 15.48%# 1.69%#
--------------------------------------------------------------------------------
</TABLE>
/1/The financial information for the fiscal periods prior to July 7, 2000
reflect the financial information for the AGSPC2 Science & Technology Fund,
which was reorganized into North American Science & Technology Fund on that
date.
* Commencement of Operations
** Net investment income per share has been calculated using the average month-
end share method
# Annualized
+ Non-annualized
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>
Small Cap Growth Fund
(formerly Emerging Growth Fund)
-------------------------------------------------------------------
Class B Class C
-------------------------------- --------------------------------
Year Year 1/06/98* Year Year 1/06/98*
Ended Ended to Ended Ended to
10/31/00** 10/31/99** 10/31/98 10/31/00** 10/31/99** 10/31/98
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $12.57 $8.83 $10.00 $12.57 $8.84 $10.00
-----------------------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) (0.24) (0.21) (0.12) (0.29) (0.21) (0.12)
Net realized and
unrealized gain/(loss)
on investments and
foreign currency 5.55 3.95 (1.05) 5.59 3.94 (1.04)
<CAPTION>
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total from investment
operations 5.31 3.74 (1.17) 5.30 3.73 (1.16)
<CAPTION>
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Distributions
Distributions from
realized capital gains (1.08) (1.08)
-----------------------------------------------------------------------------------------------
Net Asset Value, End of
Period $16.80 $12.57 $8.83 $16.79 $12.57 $8.84
-----------------------------------------------------------------------------------------------
Total Return 42.62% 42.36% (11.70%)+ 42.54% 42.19% (11.60%)+
-----------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------------
Net assets, end of
period (000's) $14,554 $660 $263 $3,337 $440 $238
-----------------------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 2.00% 2.35% 2.35%# 2.21% 2.35% 2.35%#
-----------------------------------------------------------------------------------------------
Ratio of net investment
income/(loss) to
average net assets (1.31%) (2.04%) (1.76%)# (1.56%) (2.03%) (1.67%)#
-----------------------------------------------------------------------------------------------
Portfolio turnover rate 222% 129% 52%# 222% 129% 52%#
-----------------------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by adviser 2.75% 7.58% 16.48%# 3.17% 7.60% 15.78%#
-----------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Small Cap Index Fund/1/
------------------------------------------------------
Class A Class B Class C
-------------------- -------------------- ----------
Year Year Year Year 8/23/00*
Ended Ended Ended Ended to
10/31/00** 10/31/99 10/31/00** 10/31/99 10/31/00**
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $11.03 $10.00 $11.03 $10.00 $11.56
----------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) 0.13 0.10 0.05 0.02 -
Net realized and
unrealized gain/(loss)
on investments and
foreign currency 1.08 1.03 1.07 1.03 (0.43)
<CAPTION>
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total from investment
operations 1.21 1.13 1.12 1.05 (0.43)
<CAPTION>
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income (0.11) (0.10) (0.05) (0.02) -
Distributions from
realized capital gains (2.34) - (2.34) - (1.25)
<CAPTION>
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total distributions (2.45) (0.10) (2.39) (0.02) (1.25)
----------------------------------------------------------------------------------
Net Asset Value, End of
Period $9.79 $11.03 $9.76 $11.03 $9.88
----------------------------------------------------------------------------------
Total Return 11.74% 11.32% 10.83% 10.53% (3.07%)+
----------------------------------------------------------------------------------
Ratios/Supplemental Data
----------------------------------------------------------------------------------
Net assets, end of
period (000's) $3,361 $2,900 $4,574 $3,361 $38
----------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 0.89% 0.83% 1.61% 1.58% 1.64%#
----------------------------------------------------------------------------------
Ratio of net investment
income to average net
assets 1.15% 0.97% 0.43% 0.23% 0.17%#
----------------------------------------------------------------------------------
Portfolio turnover rate 63% 48% 63% 48% 63%+
----------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by advisor 1.19% 1.69% 1.91% 2.37% 2.02%#
----------------------------------------------------------------------------------
</TABLE>
/1/The financial information for the fiscal periods prior to July 7, 2000
reflect the financial information for the AGSPC2 Small Cap Index Fund, which
was reorganized into North American Small Cap Index Fund on that date.
* Commencement of Operations
** Net investment income per share has been calculated using the average month-
end share method
# Annualized
+ Non-annualized
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>
Socially Responsible Fund/1/
------------------------------------------
Class A Class B
-------------------- --------------------
Year Year Year Year
Ended Ended Ended Ended
10/31/00** 10/31/99 10/31/00** 10/31/99
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $12.15 $10.00 $12.13 $10.00
---------------------------------------------------------------------------------
Investment Operations:
Net investment income/(loss) 0.10 0.10 0.01 0.02
Net realized and unrealized
gain/(loss) on Investments and
foreign currency 0.21 2.15 0.23 2.13
<CAPTION>
------------------------------------------
<S> <C> <C> <C> <C>
Total from investment operations 0.31 2.25 0.24 2.15
<CAPTION>
------------------------------------------
<S> <C> <C> <C> <C>
Distributions
Dividends from net investment
income (0.06) (0.10) (0.01) (0.02)
Distributions from realized capital
gains (0.49) - (0.49) -
<CAPTION>
------------------------------------------
<S> <C> <C> <C> <C>
Total distributions (0.55) (0.10) (0.50) (0.02)
---------------------------------------------------------------------------------
Net Asset Value, End of Period $11.91 $12.15 $11.87 $12.13
---------------------------------------------------------------------------------
Total Return 2.53% 22.53%+ 1.88% 21.50%+
---------------------------------------------------------------------------------
Ratios/Supplemental Data
---------------------------------------------------------------------------------
Net assets, end of period (000's) $1,896 $1,663 $3,649 $2,943
---------------------------------------------------------------------------------
Ratio of total expenses to average
net assets 0.94% 0.80% 1.65% 1.55%
---------------------------------------------------------------------------------
Ratio of net investment income to
average net assets 0.81% 0.87% 0.10% 0.09%
---------------------------------------------------------------------------------
Portfolio turnover rate 52% 24% 52% 24%
---------------------------------------------------------------------------------
Expense ratio before expense
reimbursement by advisor 1.24% 1.97% 1.96% 2.49%
---------------------------------------------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Socially Responsible Fund/1/
---------------------------------
Class C Class I
---------- --------------------
7/28/00* Year Year
to Ended Ended
10/31/00** 10/31/00** 10/31/99
------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $12.09 $12.16 $10.00
------------------------------------------------------------------------------
Investment Operations:
Net investment income/(loss) (0.01) 0.11 0.11
Net realized and unrealized gain/(loss) on
Investments and foreign currency 0.23 2.16
<CAPTION>
---------------------------------
<S> <C> <C> <C>
Total from investment operations (0.01) 0.34 2.27
<CAPTION>
---------------------------------
<S> <C> <C> <C>
Distributions
Dividends from net investment income (0.01) (0.08) (0.11)
Distributions from realized capital gains - (0.49) -
<CAPTION>
---------------------------------
<S> <C> <C> <C>
Total distributions (0.01) (0.57) (0.11)
------------------------------------------------------------------------------
Net Asset Value, End of Period $12.07 $11.93 $12.16
------------------------------------------------------------------------------
Total Return (0.11%)+ 2.72% 22.73%
------------------------------------------------------------------------------
Ratios/Supplemental Data
------------------------------------------------------------------------------
Net assets, end of period (000's) $57 $5,966 $2,098
------------------------------------------------------------------------------
Ratio of total expenses to average net
assets 2.23%# 0.88% 0.68%
------------------------------------------------------------------------------
Ratio of net investment income/(loss) to
average net assets (0.17%)# 0.97% 0.97%
------------------------------------------------------------------------------
Portfolio turnover rate 52%+ 52% 24%
------------------------------------------------------------------------------
Expense ratio before expense reimbursement
by advisor 2.23%# 1.25% 1.89%
------------------------------------------------------------------------------
</TABLE>
/1/The financial information for the fiscal periods prior to July 7, 2000
reflect the financial information for the AGSPC2 Socially Responsible Fund,
which was reorganized into North American Socially Responsible Fund on that
date.
* Commencement of Operations
** Net investment income per share has been calculated using the average
month-end share method
# Annualized
+ Non-annualized
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>
Stock Index Fund/1/
------------------------------------------------------
Class A Class B Class C
-------------------- -------------------- ----------------
Year Year Year Year 7/17/00*
Ended Ended Ended Ended to
10/31/00** 10/31/99 10/31/00** 10/31/99 10/31/00**
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $12.32 $10.00 $12.23 $10.00 $13.38
--------------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) 0.14 0.11 0.05 0.02 0.01
Net realized and
unrealized gain/(loss)
on investments and
foreign currency 0.47 2.32 0.46 2.23 (0.83)
<CAPTION>
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total from investment
operations 0.61 2.43 0.51 2.25 (0.82)
<CAPTION>
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income (0.10) (0.11) (0.02) (0.02) (0.01)
Distributions from
realized capital gains (0.08) - (0.08) -
<CAPTION>
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total distributions (0.18) (0.11) (0.10) (0.02) (0.01)
--------------------------------------------------------------------------------------
Net Asset Value, End of
Period $12.75 $12.32 $12.64 $12.23 $12.55
--------------------------------------------------------------------------------------
Total Return 4.91% 24.36% 4.21% 22.55% (5.21%)+
--------------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------------------------
Net assets, end of
period (000's) $8,543 $5,634 $24,966 $15,040 $500
--------------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 0.78% 0.82% 1.49% 1.57% 1.35%#
--------------------------------------------------------------------------------------
Ratio of net investment
income to average net
assets 1.12% 1.08% 0.42% 0.37% 0.30%#
--------------------------------------------------------------------------------------
Portfolio turnover rate 2% 14% 2% 14% 2%+
--------------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by advisor 1.12% 1.53% 1.83% 1.98% 1.84%#
--------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global Equity Fund
---------------------------------------------------
Class A
---------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
10/31/00** 10/31/99 10/31/98 10/31/97 10/31/96
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $16.12 $16.43 $16.32 $14.50 $13.84
--------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) (0.06) 0.08 0.02 0.06 (0.04)
Net realized and
unrealized gain/(loss) on
investments and foreign
currency (2.86) 0.82 1.34 3.45 0.91
<CAPTION>
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total from investment
operations (2.92) 0.90 1.36 3.51 0.87
<CAPTION>
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income - - (0.22) (0.05) (0.21)
Distributions from
realized capital gains (2.14) (1.21) (1.03) (1.64) -
<CAPTION>
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total distributions (2.14) (1.21) (1.25) (1.69) (0.21)
--------------------------------------------------------------------------------
Net Asset Value, End of
Period $11.06 $16.12 $16.43 $16.32 $14.50
--------------------------------------------------------------------------------
Total Return (21.08)% 5.60% 8.90% 26.10% 6.33%
--------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------------------
Net assets, end of period
(000's) $8,610 $12,757 $31,055 $30,960 $25,924
--------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 1.86% 1.75% 1.75% 1.75% 1.75%
--------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets (0.42%) 0.47% 0.09% 0.33% (0.30%)
--------------------------------------------------------------------------------
Portfolio turnover rate 207% 38% 20% 28% 165%
--------------------------------------------------------------------------------
Expense ratio before
expense reimbursement by
adviser 2.06% 1.84% 1.75% 1.81% 1.83%
--------------------------------------------------------------------------------
</TABLE>
/1/The financial information for the fiscal periods prior to July 7, 2000
reflect the financial information for the AGSPC2 Stock Index Fund, which was
reorganized into North American Stock Index Fund on that date.
* Commencement of Operations
** Net investment income per share has been calculated using the average month-
end share method
# Annualized
+ Non-annualized
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>
Global Equity Fund
--------------------------------------------------
Class B
--------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
10/31/00** 10/31/99 10/31/98 10/31/97 10/31/96
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $15.83 $16.24 $16.14 $14.36 $13.73
--------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) (0.14) (0.04) (0.11) (0.05) (0.14)
Net realized and unrealized
gain/(loss) on investments
and foreign currency (2.78) 0.84 1.35 3.47 0.91
-------------------------------------------------
Total from investment
operations (2.92) 0.80 1.24 3.42 0.77
--------------------------------------------------------------------------------
Distributions
Dividends from net
investment income - - (0.11) (0.14)
Distributions from realized
capital gains (2.14) (1.21) (1.03) (1.64) -
-------------------------------------------------
Total distributions (2.14) (1.21) (1.14) (1.64) (0.14)
--------------------------------------------------------------------------------
Net Asset Value, End of
Period $10.77 $15.83 $16.24 $16.14 $14.36
--------------------------------------------------------------------------------
Total Return (21.44%) 5.01% 8.17% 25.63% 5.64%
--------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------------------
Net assets, end of period
(000's) $10,089 $25,381 $30,287 $31,833 $25,661
--------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 2.51% 2.40% 2.40% 2.40% 2.40%
--------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets (1.04%) (0.25%) (0.55%) (0.32%) (0.95%)
--------------------------------------------------------------------------------
Portfolio turnover rate 207% 38% 20% 28% 165%
--------------------------------------------------------------------------------
Expense ratio before
expense reimbursement by
adviser 2.71% 2.50% 2.40% 2.47% 2.48%
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global Equity Fund
--------------------------------------------------
Class C
--------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
10/31/00** 10/31/99 10/31/98 10/31/97 10/31/96
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $15.89 $16.30 $16.19 $14.41 $13.73
--------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) (0.14) (0.04) (0.10) (0.05) (0.14)
Net realized and unrealized
gain/(loss) on investments
and foreign currency (2.79) 0.84 1.35 3.47 0.92
-------------------------------------------------
Total from investment
operations (2.93) 0.80 1.25 3.42 0.78
--------------------------------------------------------------------------------
Distributions
Dividends from net
investment income - - (0.11) - (0.10)
Distributions from realized
capital gains (2.14) (1.21) (1.03) (1.64) -
-------------------------------------------------
Total distributions (2.14) (1.21) (1.14) (1.64) (0.10)
--------------------------------------------------------------------------------
Net Asset Value, End of
Period $10.82 $15.89 $16.30 $16.19 $14.41
--------------------------------------------------------------------------------
Total Return (21.42%) 4.99% 8.21% 25.54% 5.70%
--------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------------------
Net assets, end of period
(000's) $19,549 $45,201 $57,774 $61,245 $64,830
--------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 2.51% 2.40% 2.40% 2.40% 2.40%
--------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets (1.05%) (0.24%) (0.56%) (0.32%) (0.95%)
--------------------------------------------------------------------------------
Portfolio turnover rate 207% 38% 20% 28% 165%
--------------------------------------------------------------------------------
Expense ratio before
expense reimbursement by
adviser 2.71% 2.50% 2.40% 2.46% 2.48%
--------------------------------------------------------------------------------
</TABLE>
** Net investment income per share has been calculated using the average share
method
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>
International Equity Fund
--------------------------------------------------------
Class A
--------------------------------------------------------
Year
Year Ended Year Ended Ended Year Ended Year Ended
10/31/00** 10/31/99** 10/31/98 10/31/97** 10/31/96**
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $11.89 $9.83 $10.81 $11.35 $10.11
-----------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) (0.03) 0.02 0.03 0.06 0.09
Net realized and
unrealized gain/(loss)
on investments and
foreign currency (0.35) 2.07 0.02 0.35 1.33
<CAPTION>
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total from investment
operations (0.38) 2.09 0.05 0.41 1.42
<CAPTION>
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income (0.10) - (0.13) (0.19) (0.08)
Distributions from
realized capital gains (0.92) (0.03) (0.90) (0.76) (0.10)
<CAPTION>
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total distributions (1.02) (0.03) (1.03) (0.95) (0.18)
-----------------------------------------------------------------------------------
Net Asset Value, End of
Period $10.49 $11.89 $9.83 $10.81 $11.35
-----------------------------------------------------------------------------------
Total Return (4.00%) 21.33% 0.67% 3.55% 14.25%
-----------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------------------
Net assets, end of
period (000's) $7,471 $3,997 $3,769 $4,461 $4,732
-----------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 1.71% 1.75% 1.75% 1.75% 1.75%
-----------------------------------------------------------------------------------
Ratio of net investment
income (loss) to
average net assets (0.27%) 0.18% 0.44% 0.97% 0.84%
-----------------------------------------------------------------------------------
Portfolio turnover rate 126% 142% 173% 146% 170%
-----------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by adviser 2.02% 1.98% 1.87% 1.96% 1.97%
-----------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International Equity Fund
--------------------------------------------------------
Class B
--------------------------------------------------------
Year
Year Ended Year Ended Ended Year Ended Year Ended
10/31/00** 10/31/99** 10/31/98 10/31/97** 10/31/96**
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $11.74 $9.77 $10.75 $11.30 $10.10
-----------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) (0.11) (0.05) (0.02) 0.03 0.06
Net realized and
unrealized gain/(loss)
on investments and
foreign currency (0.35) 2.05 0.00 0.31 1.30
<CAPTION>
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total from investment
operations (0.46) 2.00 (0.02) 0.34 1.36
<CAPTION>
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income (0.02) - (0.06) (0.13) (0.05)
Distributions from
realized capital gains (0.92) (0.03) (0.90) (0.76) (0.11)
<CAPTION>
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total distributions (0.94) (0.03) (0.96) (0.89) (0.16)
-----------------------------------------------------------------------------------
Net Asset Value, End of
Period $10.34 $11.74 $9.77 $10.75 $11.30
-----------------------------------------------------------------------------------
Total Return (4.78%) 20.53% (0.03%) 2.92% 13.58%
-----------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------------------
Net assets, end of
period (000's) $18,204 $14,269 $14,030 $16,334 $15,217
-----------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 2.38% 2.40% 2.40% 2.40% 2.40%
-----------------------------------------------------------------------------------
Ratio of net investment
income (loss) to
average net assets (0.96%) (0.45%) (0.18%) 0.32% 0.57%
-----------------------------------------------------------------------------------
Portfolio turnover rate 126% 142% 173% 146% 170%
-----------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by adviser 2.66% 2.63% 2.52% 2.54% 2.60%
-----------------------------------------------------------------------------------
</TABLE>
** Net investment income per share has been calculated using the average share
method
The accompanying notes are an integral part of the financial statements.
35
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International Equity Fund
--------------------------------------------------------------------
Class C Class I
-------------------------------------------------------- ----------
Year Year Year Year Year 7/10/00*
Ended Ended Ended Ended Ended to
10/31/00** 10/31/99** 10/31/98 10/31/97** 10/31/96** 10/31/00**
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $11.74 $9.77 $10.76 $11.31 $10.10 $ 11.74
-----------------------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) (0.11) (0.05) (0.02) 0.03 0.06 (0.01)
Net realized and
unrealized gain/(loss)
on
investments and
foreign currency (0.38) 2.05 (0.01) 0.31 1.30 (1.26)
<CAPTION>
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total from investment
operations (0.49) 2.00 (0.03) 0.34 1.36 (1.27)
<CAPTION>
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income (0.02) - (0.06) (0.13) (0.05)
Distributions from
realized capital gains (0.92) (0.03) (0.90) (0.76) (0.10)
<CAPTION>
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total distributions (0.94) (0.03) (0.96) (0.89) (0.15)
-----------------------------------------------------------------------------------------------
Net Asset Value, End of
Period $10.31 $11.74 $9.77 $10.76 $11.31 $ 10.47
-----------------------------------------------------------------------------------------------
Total Return (5.05%) 20.53% (0.13%) 2.91% 13.63% (10.82%)+
-----------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------------
Net assets, end of
period (000's) $4,765 $6,680 $7,960 $8,460 $9,076 $ 16,656
-----------------------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 2.43% 2.40% 2.40% 2.40% 2.40%# 1.39%#
-----------------------------------------------------------------------------------------------
Ratio of net investment
income (loss) to
average net assets (0.96%) (0.49%) (0.19%) 0.32% 0.51%# (0.19%)#
-----------------------------------------------------------------------------------------------
Portfolio turnover rate 126% 142% 173% 146% 170% 126%
-----------------------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by adviser 2.68% 2.62% 2.52% 2.57% 2.60%# 1.83%#
-----------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International Small Cap Fund
----------------------------------------------------
Class A
----------------------------------------------------
Year Year 3/04/96*
Year Ended Year Ended Ended Ended to
10/31/00** 10/31/99** 10/31/98 10/31/97 10/31/96
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $18.83 $13.91 $13.86 $13.43 $12.50
--------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) (0.30) (0.14) (0.02) (0.03) 0.05
Net realized and
unrealized gain/(loss)
on investments and
foreign currency 5.35 5.06 0.07 0.46 0.88
--------------------------------------------------
Total from investment
operations 5.05 4.92 0.05 0.43 0.93
--------------------------------------------------
Distributions
Distributions from
realized capital gains (4.67) - - - -
--------------------------------------------------------------------------------
Net Asset Value, End of
Period $19.21 $18.83 $13.91 $13.86 $13.43
--------------------------------------------------------------------------------
Total Return 23.34% 35.37% 0.36% 3.20% 7.44%+
--------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------------------
Net assets, end of
period (000's) $6,003 $2,309 $2,173 $3,225 $2,120
--------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 1.97% 1.90% 1.90% 1.90% 1.90%#
--------------------------------------------------------------------------------
Ratio of net investment
income/(loss) to
average net assets (1.21%) (0.87%) (0.12%) (0.19%) (0.50%)#
--------------------------------------------------------------------------------
Portfolio turnover rate 537% 202% 54% 75% 67%#
--------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by adviser 2.21% 2.24% 2.23% 2.46% 3.07%#
--------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
** Net investment income per share has been calculated using the average share
method
# Annualized
+ Non-annualized
The accompanying notes are an integral part of the financial statements.
36
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International Small Cap Fund
--------------------------------------------------
Class B
--------------------------------------------------
Year Year Year 3/04/96*
Year Ended Ended Ended Ended to
10/31/00** 10/31/99 10/31/98 10/31/97 10/31/96
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $18.35 $13.66 $13.71 $13.37 $12.50
--------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) (0.43) (0.27) (0.12) (0.11) (0.01)
Net realized and
unrealized gain/(loss) on
investments and foreign
currency 5.18 4.96 0.07 0.45 0.88
------------------------------------------------
Total from investment
operations 4.75 4.69 (0.05) 0.34 0.87
------------------------------------------------
Distributions
Distributions from
realized capital gains (4.67) - - - -
--------------------------------------------------------------------------------
Net Asset Value, End of
Period $18.43 $18.35 $13.66 $13.71 $13.37
--------------------------------------------------------------------------------
Total Return 22.16% 34.33% (0.36%) 2.54% 6.96%+
--------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------------------
Net assets, end of period
(000's) $11,665 $7,417 $7,073 $7,369 $5,068
--------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 2.62% 2.55% 2.55% 2.55% 2.55%#
--------------------------------------------------------------------------------
Ratio of net investment
income/(loss) to average
net assets (1.87%) (1.53%) (0.79%) (0.84%) (0.15%)#
--------------------------------------------------------------------------------
Portfolio turnover rate 537% 202% 54% 75% 67%#
--------------------------------------------------------------------------------
Expense ratio before
expense reimbursement by
adviser 2.85% 2.89% 2.88% 2.98% 3.27%#
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International Small Cap Fund
--------------------------------------------------
Class C
--------------------------------------------------
Year Year Year 3/04/96*
Year Ended Ended Ended Ended to
10/31/00** 10/31/99 10/31/98 10/31/97 10/31/96
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $18.37 $13.66 $13.71 $13.37 $12.50
--------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) (0.43) (0.31) (0.12) (0.11) (0.01)
Net realized and
unrealized gain/(loss) on
investments and foreign
currency 5.23 5.02 0.07 0.45 0.88
<CAPTION>
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total from investment
operations 4.80 4.71 (0.05) 0.34 0.87
<CAPTION>
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
Distributions
Distributions from
realized capital gains (4.67) - - - -
--------------------------------------------------------------------------------
Net Asset Value, End of
Period $18.50 $18.37 $13.66 $13.71 $13.37
--------------------------------------------------------------------------------
Total Return 22.43% 34.48% (0.36%) 2.54% 6.96%+
--------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------------------
Net assets, end of period
(000's) $9,893 $5,972 $6,195 $7,025 $5,517
--------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 2.62% 2.55% 2.55% 2.55% 2.55%#
--------------------------------------------------------------------------------
Ratio of net investment
income/(loss) to average
net assets (1.84%) (1.53%) (0.78%) (0.84%) (0.15%)#
--------------------------------------------------------------------------------
Portfolio turnover rate 537% 202% 54% 75% 67%#
--------------------------------------------------------------------------------
Expense ratio before
expense reimbursement by
adviser 2.86% 2.89% 2.88% 2.96% 3.25%#
--------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
** Net investment income per share has been calculated using the average share
method
# Annualized
+ Non-annualized
The accompanying notes are an integral part of the financial statements.
37
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Balanced Fund
------------------------------------------------------
Class A
------------------------------------------------------
Year Year
Year Ended Year Ended Ended Ended Year Ended
10/31/00** 10/31/99** 10/31/98 10/31/97 10/31/96**
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $10.56 $11.48 $12.58 $12.33 $12.02
---------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) 0.14 0.24 0.25 0.34 0.39
Net realized and
unrealized gain/(loss)
on investments and
foreign currency 0.32 (0.09) 1.04 1.52 1.07
<CAPTION>
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total from investment
operations 0.46 0.15 1.29 1.86 1.46
<CAPTION>
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income (0.28) (0.23) (0.32) (0.45) (0.40)
Distributions from
realized capital gains (1.31) (0.84) (2.07) (1.16) (0.75)
<CAPTION>
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total distributions (1.59) (1.07) (2.39) (1.61) (1.15)
---------------------------------------------------------------------------------
Net Asset Value, End of
Period $9.43 $10.56 $11.48 $12.58 $12.33
---------------------------------------------------------------------------------
Total Return 5.67% 1.20% 12.42% 17.01% 13.10%
---------------------------------------------------------------------------------
Ratios/Supplemental Data
---------------------------------------------------------------------------------
Net assets, end of
period (000's) $7,910 $5,936 $14,415 $12,294 $10,873
---------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 1.50% 1.39% 1.39% 1.34% 1.34%
---------------------------------------------------------------------------------
Ratio of net investment
income (loss) to
average net assets 1.54% 2.18% 2.11% 2.74% 3.32%
---------------------------------------------------------------------------------
Portfolio turnover rate 217% 198% 185% 211% 253%
---------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by adviser 1.76% 1.60% 1.53% 1.59% 1.55%
---------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Balanced Fund
--------------------------------------------------------
Class B
--------------------------------------------------------
Year Year
Ended Year Ended Ended Year Ended Year Ended
10/31/00** 10/31/99** 10/31/98 10/31/97** 10/31/96**
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $10.49 $11.40 $12.49 $12.26 $11.98
-----------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) 0.08 0.18 0.18 0.25 0.31
Net realized and
unrealized gain/(loss)
on investments and
foreign currency 0.34 (0.10) 1.04 1.53 1.07
<CAPTION>
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total from investment
operations 0.42 0.08 1.22 1.78 1.38
<CAPTION>
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income (0.22) (0.15) (0.24) (0.39) (0.35)
Distributions from
realized capital gains (1.31) (0.84) (2.07) (1.16) (0.75)
<CAPTION>
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total distributions (1.53) (0.99) (2.31) (1.55) (1.10)
-----------------------------------------------------------------------------------
Net Asset Value, End of
Period $9.38 $10.49 $11.40 $12.49 $12.26
-----------------------------------------------------------------------------------
Total Return 5.17% 0.57% 11.71% 16.27% 12.35%
-----------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------------------
Net assets, end of
period (000's) $15,566 $13,958 $18,929 $17,140 $16,219
-----------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 2.15% 2.04% 2.04% 1.99% 1.99%
-----------------------------------------------------------------------------------
Ratio of net investment
income (loss) to
average net assets 0.87% 1.60% 1.46% 2.09% 2.67%
-----------------------------------------------------------------------------------
Portfolio turnover rate 217% 198% 185% 211% 253%
-----------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by adviser 2.41% 2.25% 2.18% 2.23% 2.20%
-----------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
** Net investment income per share has been calculated using the average share
method
# Annualized
+ Non-annualized
The accompanying notes are an integral part of the financial statements.
38
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Balanced Fund
----------------------------------------------------------------
Class C Class I
---------------------------------------------------- ----------
Year Year Year 7/10/00*
Year Ended Year Ended Ended Ended Ended to
10/31/00** 10/31/99** 10/31/98 10/31/97 10/31/96 10/31/00**
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $10.63 $11.54 $12.62 $12.35 $12.02 $ 9.34
-------------------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) 0.08 0.17 0.18 0.25 0.32 0.14
Net realized and
unrealized gain/(loss)
on investments and
foreign currency 0.32 (0.09) 1.05 1.54 1.07 (0.04)
<CAPTION>
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total from investment
operations 0.40 0.08 1.23 1.79 1.39 0.10
<CAPTION>
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income (0.22) (0.15) (0.24) (0.36) (0.31) -
Distributions from
realized capital gains (1.31) (0.84) (2.07) (1.16) (0.75) -
<CAPTION>
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total distributions (1.53) (0.99) (2.31) (1.52) (1.06) -
-------------------------------------------------------------------------------------------
Net Asset Value, End of
Period $9.50 $10.63 $11.54 $12.62 $12.35 $9.45
-------------------------------------------------------------------------------------------
Total Return 4.86% 0.58% 11.68% 16.21% 12.41% 1.07%+
-------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-------------------------------------------------------------------------------------------
Net assets, end of
period (000's) $37,282 $53,669 $65,049 $68,261 $72,821 $5,923
-------------------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 2.15% 2.04% 2.04% 1.99% 1.99% 1.41%#
-------------------------------------------------------------------------------------------
Ratio of net investment
income (loss) to
average net assets 0.88% 1.55% 1.47% 2.09% 2.67% 1.47%#
-------------------------------------------------------------------------------------------
Portfolio turnover rate 217% 198% 185% 211% 253% 217%+
-------------------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by adviser 2.43% 2.25% 2.18% 2.20% 2.20% 1.54%#
-------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Core Bond Fund
(formerly Investment Quality Bond Fund)
----------------------------------------------------
Class A
----------------------------------------------------
Year Year Year
Year Ended Year Ended Ended Ended Ended
10/31/00** 10/31/99** 10/31/98 10/31/97 10/31/96
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $9.85 $10.63 $10.52 $10.34 $10.56
---------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) 0.62 0.66 0.68 0.67 0.66
Net realized and
unrealized gain/(loss)
on investments and
foreign currency (0.21) (0.77) 0.10 0.18 (0.20)
<CAPTION>
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total from investment
operations 0.41 (0.11) 0.78 0.85 0.46
<CAPTION>
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income (0.66) (0.67) (0.67) (0.67) (0.68)
---------------------------------------------------------------------------------
Net Asset Value, End of
Period $9.60 $9.85 $10.63 $10.52 $10.34
---------------------------------------------------------------------------------
Total Return 4.35% (1.08%) 7.63% 8.57% 4.52%
---------------------------------------------------------------------------------
Ratios/Supplemental Data
---------------------------------------------------------------------------------
Net assets, end of period
(000's) $3,858 $3,507 $6,730 $7,110 $9,056
---------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 1.29% 1.25% 1.25% 1.25% 1.25%
---------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets 6.45% 4.77% 6.45% 6.54% 6.37%
---------------------------------------------------------------------------------
Portfolio turnover rate 94% 43% 48% 65% 56%
---------------------------------------------------------------------------------
Expense ratio before
expense reimbursement by
adviser 1.78% 1.70% 1.54% 1.62% 1.55%
---------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
** Net investment income per share has been calculated using the average share
method
# Annualized
+ Non-annualized
The accompanying notes are an integral part of the financial statements.
39
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Core Bond Fund
(formerly Investment Quality Bond Fund)
------------------------------------------------------
Class B
------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
10/31/00** 10/31/99** 10/31/98 10/31/97 10/31/96**
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $9.85 $10.62 $10.52 $10.33 $10.55
---------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) 0.58 0.59 0.61 0.60 0.60
Net realized and
unrealized gain/(loss)
on investments and
foreign currency (0.24) (0.75) 0.10 0.20 (0.20)
<CAPTION>
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total from investment
operations 0.34 (0.16) 0.71 0.80 0.40
<CAPTION>
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income (0.60) (0.61) (0.61) (0.61) (0.62)
---------------------------------------------------------------------------------
Net Asset Value, End of
Period $9.59 $9.85 $10.62 $10.52 $10.33
---------------------------------------------------------------------------------
Total Return 3.70% (1.56%) 6.93% 8.05% 3.92%
---------------------------------------------------------------------------------
Ratios/Supplemental Data
---------------------------------------------------------------------------------
Net assets, end of
period (000's) $4,937 $4,295 $4,845 $4,613 $4,678
---------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 1.95% 1.90% 1.90% 1.90% 1.90%
---------------------------------------------------------------------------------
Ratio of net investment
income (loss) to
average net assets 5.95% 5.71% 5.81% 5.89% 5.72%
---------------------------------------------------------------------------------
Portfolio turnover rate 94% 43% 48% 65% 56%
---------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by adviser 2.45% 2.39% 2.20% 2.33% 2.27%
---------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Core Bond Fund
(formerly Investment Quality Bond Fund)
------------------------------------------------------------------------------
Class C Class I Class II
------------------------------------------------------ ---------- ----------
Year Year Year Year Year 7/10/00* 7/10/00*
Ended Ended Ended Ended Ended to to
10/31/00** 10/31/99** 10/31/98 10/31/97 10/31/96** 10/31/00** 10/31/00**
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $9.85 $10.62 $10.52 $10.33 $10.55 $9.65 $9.64
---------------------------------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) 0.57 0.59 0.61 0.60 0.60 0.19 0.19
Net realized and
unrealized gain/(loss)
on investments and
foreign currency (0.23) (0.75) 0.10 0.20 (0.20) (0.02) (0.03)
<CAPTION>
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total from investment
operations 0.34 (0.16) 0.71 0.80 0.40 0.17 0.16
<CAPTION>
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income (0.60) (0.61) (0.61) (0.61) (0.62) (0.20) (0.20)
---------------------------------------------------------------------------------------------------------
Net Asset Value, End of
Period $9.59 $9.85 $10.62 $10.52 $10.33 $9.62 $9.60
---------------------------------------------------------------------------------------------------------
Total Return 3.70% (1.56%) 6.93% 8.05% 3.92% 1.85%+ 1.81%+
---------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
---------------------------------------------------------------------------------------------------------
Net assets, end of
period (000's) $2,778 $4,593 $5,532 $6,109 $7,543 $19,971 $317,842
---------------------------------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 1.95% 1.90% 1.90% 1.90% 1.90% 1.16%# 0.95%#
---------------------------------------------------------------------------------------------------------
Ratio of net investment
income (loss) to
average net assets 5.84% 5.70% 5.81% 5.89% 5.72% 6.18%# 6.39%#
---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 94% 43% 48% 65% 56% 94%+ 94%+
---------------------------------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by adviser 2.49% 2.38% 2.20% 2.29% 2.22% 1.16%# 0.96%#
---------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
** Net investment income per share has been calculated using the average share
method
+ Not annualized
# Annualized
The accompanying notes are an integral part of the financial statements.
40
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
High Yield Bond Fund/1/
------------------------------------------------------
Class A Class B Class C
-------------------- -------------------- ----------
Year Year Year Year 8/21/00*
Ended Ended Ended Ended to
10/31/00** 10/31/99 10/31/00** 10/31/99 10/31/00**
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $9.43 $10.00 $9.43 $10.00 $9.00
----------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) 0.88 0.81 0.82 0.74 0.20
Net realized and
unrealized gain/(loss)
on Investments and
foreign currency (0.87) (0.57) (0.88) (0.57) (0.49)
<CAPTION>
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total from investment
operations 0.01 0.24 (0.06) 0.17 (0.29)
<CAPTION>
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income (0.88) (0.81) (0.82) (0.74) (0.16)
----------------------------------------------------------------------------------
Net Asset Value, End of
Period $8.56 $9.43 $8.55 $9.43 $8.55
----------------------------------------------------------------------------------
Total Return 0.04% 2.28% (0.83%) 1.53% (3.29%)+
----------------------------------------------------------------------------------
Ratios/Supplemental Data
----------------------------------------------------------------------------------
Net assets, end of
period (000's) $286 $34 $1,594 $652 $545
----------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 1.38% 1.25% 2.10% 2.00% 2.07%#
----------------------------------------------------------------------------------
Ratio of net investment
income to average net
assets 10.13% 5.69% 9.41% 7.30% 9.10%#
----------------------------------------------------------------------------------
Portfolio turnover rate 57% 72% 57% 72% 57%
----------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by advisor 1.81% 2.01% 2.52% 2.37% 2.07%#
----------------------------------------------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
High Yield Bond Fund/1/
------------------------------------------
Class I Class II
-------------------- --------------------
Year Year
Year Ended Ended Year Ended Ended
10/31/00** 10/31/99 10/31/00** 10/31/99
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $9.43 $10.00 $9.43 $10.00
-------------------------------------------------------------------------------
Investment Operations:
Net investment income/(loss) 0.93 0.83 0.95 0.86
Net realized and unrealized
gain/(loss) on Investments and
foreign currency (0.90) (0.57) (0.91) (0.57)
-----------------------------------------
Total from investment operations 0.03 0.26 0.04 0.29
-----------------------------------------
Distributions
Dividends from net investment
income (0.90) (0.83) (0.92) (0.86)
-------------------------------------------------------------------------------
Net Asset Value, End of Period $8.56 $9.43 $8.55 $9.43
-------------------------------------------------------------------------------
Total Return 0.04% 2.44% 0.30% 2.74%
-------------------------------------------------------------------------------
Ratios/Supplemental Data
-------------------------------------------------------------------------------
Net assets, end of period (000's) $14 $14 $62,702 $62,506
-------------------------------------------------------------------------------
Ratio of total expenses to average
net assets 1.22% 1.13% 0.96% 0.88%
-------------------------------------------------------------------------------
Ratio of net investment income to
average net assets 10.14% 5.57% 10.41% 8.84%
-------------------------------------------------------------------------------
Portfolio turnover rate 57% 72% 57% 72%
-------------------------------------------------------------------------------
Expense ratio before expense
reimbursement by advisor 1.79% 2.05% 1.56% 1.35%
-------------------------------------------------------------------------------
</TABLE>
/1/The financial information for the fiscal periods prior to July 7, 2000
reflect the financial information for the AGSPC2 High Yield Bond Fund, which
was reorganized into North American High Yield Bond Fund on that date.
* Commencement of Operations
** Net investment income per share has been calculated using the average
month-end share method
# Annualized
+ Non-annualized
The accompanying notes are an integral part of the financial statements.
41
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Municipal Bond Fund
(formerly National Municipal Bond)
------------------------------------------------
Class A
------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $9.48 $10.22 $10.09 $9.73 $9.62
---------------------------------------------------------------------------------
Investment Operations:
Net investment income/(loss) 0.45 0.45 0.47 0.48 0.48
Net realized and unrealized
gain/(loss) on investments
and foreign currency 0.18 (0.74) 0.13 0.36 0.11
----------------------------------------------
Total from investment
operations 0.63 (0.29) 0.60 0.84 0.59
----------------------------------------------
Distributions
Dividends from net investment
income (0.46) (0.45) (0.47) (0.48) (0.48)
---------------------------------------------------------------------------------
Net Asset Value, End of Period $9.65 $9.48 $10.22 $10.09 $9.73
---------------------------------------------------------------------------------
Total Return 6.80% (2.95%) 6.04% 8.85% 6.31%
---------------------------------------------------------------------------------
Ratios/Supplemental Data
---------------------------------------------------------------------------------
Net assets, end of period
(000's) $7,774 $4,435 $5,820 $6,347 $7,710
---------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 1.01% 1.00% 1.00% 0.99% 0.99%
---------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average net
assets 4.74% 4.52% 4.60% 4.87% 4.99%
---------------------------------------------------------------------------------
Portfolio turnover rate 48% 46% 43% 29% 49%
---------------------------------------------------------------------------------
Expense ratio before expense
reimbursement by adviser 1.61% 1.41% 1.23% 1.23% 1.25%
---------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Municipal Bond Fund
(formerly National Municipal Bond)
------------------------------------------------
Class B
------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $9.48 $10.22 $10.09 $9.73 $9.62
---------------------------------------------------------------------------------
Investment Operations:
Net investment income/(loss) 0.37 0.37 0.38 0.40 0.40
Net realized and unrealized
gain/(loss) on investments
and foreign currency 0.18 (0.74) 0.13 0.36 0.11
----------------------------------------------
Total from investment
operations 0.55 (0.37) 0.51 0.76 0.51
----------------------------------------------
Distributions
Dividends from net investment
income (0.38) (0.37) (0.38) (0.40) (0.40)
---------------------------------------------------------------------------------
Net Asset Value, End of Period $9.65 $9.48 $10.22 $10.09 $9.73
---------------------------------------------------------------------------------
Total Return 5.92% (3.77%) 5.15% 7.94% 5.41%
---------------------------------------------------------------------------------
Ratios/Supplemental Data
---------------------------------------------------------------------------------
Net assets, end of period
(000's) $6,416 $4,197 $5,273 $6,532 $6,130
---------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 1.88% 1.85% 1.85% 1.84% 1.84%
---------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average net
assets 3.89% 3.67% 3.75% 4.02% 4.14%
---------------------------------------------------------------------------------
Portfolio turnover rate 48% 46% 43% 29% 49%
---------------------------------------------------------------------------------
Expense ratio before expense
reimbursement by adviser 2.47% 2.26% 2.08% 2.15% 2.11%
---------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
42
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Municipal Bond Fund
(formerly National Municipal Bond)
------------------------------------------------
Class C
------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $9.48 $10.22 $10.09 $9.73 $9.62
---------------------------------------------------------------------------------
Investment Operations:
Net investment income/(loss) 0.38 0.37 0.38 0.40 0.40
Net realized and unrealized
gain/(loss) on investments
and foreign currency 0.17 (0.74) 0.13 0.36 0.11
----------------------------------------------
Total from investment
operations 0.55 (0.37) 0.51 0.76 0.51
----------------------------------------------
Distributions
Dividends from net investment
income (0.38) (0.37) (0.38) (0.40) (0.40)
---------------------------------------------------------------------------------
Net Asset Value, End of Period $9.65 $9.48 $10.22 $10.09 $9.73
---------------------------------------------------------------------------------
Total Return 5.93% (3.77%) 5.15% 7.94% 5.41%
---------------------------------------------------------------------------------
Ratios/Supplemental Data
---------------------------------------------------------------------------------
Net assets, end of period
(000's) $2,297 $3,931 $5,147 $5,305 $5,693
---------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 1.87% 1.85% 1.85% 1.84% 1.84%
---------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average net
assets 3.97% 3.67% 3.75% 4.02% 4.14%
---------------------------------------------------------------------------------
Portfolio turnover rate 48% 46% 43% 29% 49%
---------------------------------------------------------------------------------
Expense ratio before expense
reimbursement by adviser 2.53% 2.26% 2.08% 2.15% 2.25%
---------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Strategic Income Fund
------------------------------------------------
Class A
------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $8.40 $8.99 $9.76 $9.80 $9.07
---------------------------------------------------------------------------------
Investment Operations:
Net investment income/(loss) 0.72 0.72 0.67 0.70 0.80
Net realized and unrealized
gain/(loss) on investments
and foreign currency (0.38) (0.53) (0.63) 0.28 0.72
<CAPTION>
------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total from investment
operations 0.34 0.19 0.04 0.98 1.52
<CAPTION>
------------------------------------------------
<S> <C> <C> <C> <C> <C>
Distributions
Dividends from net investment
income (0.75) (0.73) (0.67) (0.84) (0.79)
Distributions from realized
capital gains - (0.05) (0.14) (0.18) -
<CAPTION>
------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total distributions (0.75) (0.78) (0.81) (1.02) (0.79)
---------------------------------------------------------------------------------
Net Asset Value, End of Period $7.99 $8.40 $8.99 $9.76 $9.80
---------------------------------------------------------------------------------
Total Return 4.09% 2.10% 0.22% 10.57% 17.35%
---------------------------------------------------------------------------------
Ratios/Supplemental Data
---------------------------------------------------------------------------------
Net assets, end of period
(000's) $6,439 $8,997 $15,296 $15,924 $13,382
---------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 1.55% 1.50% 1.50% 1.50% 1.50%
---------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average net
assets 8.70% 8.21% 7.02% 7.25% 8.28%
---------------------------------------------------------------------------------
Portfolio turnover rate 46% 119% 162% 193% 68%
---------------------------------------------------------------------------------
Expense ratio before expense
reimbursement by adviser 1.87% 1.67% 1.56% 1.61% 1.65%
---------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
43
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Strategic Income Fund
------------------------------------------------
Class B
------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $8.41 $8.99 $9.76 $9.80 $9.07
---------------------------------------------------------------------------------
Investment Operations:
Net investment income/(loss) 0.67 0.66 0.61 0.64 0.73
Net realized and unrealized
gain/(loss) on investments
and foreign currency (0.39) (0.52) (0.63) 0.28 0.73
<CAPTION>
------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total from investment
operations 0.28 0.14 (0.02) 0.92 1.46
<CAPTION>
------------------------------------------------
<S> <C> <C> <C> <C> <C>
Distributions
Dividends from net investment
income (0.70) (0.67) (0.61) (0.78) (0.73)
Distributions from realized
capital gains - (0.05) (0.14) (0.18) -
<CAPTION>
------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total distributions (0.70) (0.72) (0.75) (0.96) (0.73)
---------------------------------------------------------------------------------
Net Asset Value, End of Period $7.99 $8.41 $8.99 $9.76 $9.80
---------------------------------------------------------------------------------
Total Return 3.33% 1.56% (0.43%) 9.86% 16.59%
---------------------------------------------------------------------------------
Ratios/Supplemental Data
---------------------------------------------------------------------------------
Net assets, end of period
(000's) $15,131 $21,340 $29,210 $34,590 $30,890
---------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 2.20% 2.15% 2.15% 2.15% 2.15%
---------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average net
assets 8.00% 7.58% 6.39% 6.60% 7.63%
---------------------------------------------------------------------------------
Portfolio turnover rate 46% 119% 162% 193% 68%
---------------------------------------------------------------------------------
Expense ratio before expense
reimbursement by adviser 2.52% 2.32 2.21% 2.23% 2.27%
---------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Strategic Income Fund
----------------------------------------------------------
Class C Class I
------------------------------------------------ --------
Year Year Year Year Year 7/10/00*
Ended Ended Ended Ended Ended to
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96 10/31/00
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $8.41 $8.99 $9.76 $9.80 $9.07 $8.22
--------------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) 0.67 0.66 0.61 0.64 0.73 0.20
Net realized and
unrealized gain/(loss)
on investments and
foreign currency (0.39) (0.52) (0.63) 0.28 0.73 (0.20)
--------------------------------------------------------
Total from investment
operations 0.28 0.14 (0.02) 0.92 1.46 -
--------------------------------------------------------
Distributions
Dividends from net
investment income (0.70) (0.67) (0.61) (0.78) (0.73) (0.22)
Distributions from
realized capital gains - (0.05) (0.14) (0.18) - -
--------------------------------------------------------
Total distributions (0.70) (0.72) (0.75) (0.96) (0.73) (0.22)
--------------------------------------------------------------------------------------
Net Asset Value, End of
Period $7.99 $8.41 $8.99 $9.76 $9.80 $8.00
--------------------------------------------------------------------------------------
Total Return 3.32% 1.56% (0.43%) 9.86% 16.59% (0.10%)+
--------------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------------------------
Net assets, end of
period (000's) $13,056 $20,749 $33,537 $32,683 $22,783 $2,636
--------------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 2.20% 2.15% 2.15% 2.15% 2.15% 1.45%#
--------------------------------------------------------------------------------------
Ratio of net investment
income (loss) to
average net assets 8.04% 7.57% 6.37% 6.60% 7.63% 7.87%#
--------------------------------------------------------------------------------------
Portfolio turnover rate 46% 119% 162% 193% 68% 46%+
--------------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by adviser 2.52% 2.32% 2.21% 2.24% 2.28% 1.71%#
--------------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
# Annualized
+ Non-annualized
The accompanying notes are an integral part of the financial statements.
44
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. Government Securities Fund
--------------------------------------------------
Class A
--------------------------------------------------
Year Year Year Year
Year Ended Ended Ended Ended Ended
10/31/00** 10/31/99 10/31/98 10/31/97 10/31/96
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $9.55 $10.08 $9.94 $9.80 $9.98
--------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) 0.55 0.53 0.56 0.59 0.56
Net realized and unrealized
gain/(loss) on investments
and foreign currency (0.02) (0.48) 0.16 0.13 (0.12)
<CAPTION>
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total from investment
operations 0.53 0.05 0.72 0.72 0.44
<CAPTION>
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income (0.58) (0.58) (0.58) (0.58) (0.56)
Distributions in excess of
net investment income - - - - (0.06)
<CAPTION>
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total distributions (0.58) (0.58) (0.58) (0.58) (0.62)
--------------------------------------------------------------------------------
Net Asset Value, End of
Period $9.50 $9.55 $10.08 $9.94 $9.80
--------------------------------------------------------------------------------
Total Return 5.76% 0.48% 7.41% 7.56% 4.64%
--------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------------------
Net assets, end of period
(000's) $29,468 $35,495 $49,624 $53,235 $72,774
--------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 1.25% 1.25% 1.25% 1.25% 1.25%
--------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets 5.90% 5.64% 5.65% 6.20% 5.71%
--------------------------------------------------------------------------------
Portfolio turnover rate 193% 63% 116% 364% 477%
--------------------------------------------------------------------------------
Expense ratio before
expense reimbursement by
adviser 1.62% 1.46% 1.40% 1.42% 1.41%
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. Government Securities Fund
--------------------------------------------------
Class B
--------------------------------------------------
Year Year Year Year
Year Ended Ended Ended Ended Ended
10/31/00** 10/31/99 10/31/98 10/31/97 10/31/96
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $9.56 $10.07 $9.94 $9.80 $9.98
--------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) 0.49 0.47 0.49 0.54 0.50
Net realized and unrealized
gain/(loss) on investments
and foreign currency (0.04) (0.47) 0.15 0.11 (0.12)
<CAPTION>
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total from investment
operations 0.45 0.00 0.64 0.65 0.38
<CAPTION>
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income (0.51) (0.51) (0.51) (0.51) (0.50)
Distributions in excess of
net investment income - - - - (0.06)
<CAPTION>
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total distributions (0.51) (0.51) (0.51) (0.51) (0.56)
--------------------------------------------------------------------------------
Net Asset Value, End of
Period $9.50 $9.56 $10.07 $9.94 $9.80
--------------------------------------------------------------------------------
Total Return 4.91% 0.01% 6.60% 6.84% 3.97%
--------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------------------
Net assets, end of period
(000's) $8,326 $12,072 $17,850 $16,659 $19,444
--------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 1.90% 1.90% 1.90% 1.90% 1.90%
--------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets 5.27% 5.00% 4.99% 5.55% 5.06%
--------------------------------------------------------------------------------
Portfolio turnover rate 193% 63% 116% 364% 477%
--------------------------------------------------------------------------------
Expense ratio before
expense reimbursement by
adviser 2.27% 2.11% 2.05% 2.09% 2.06%
--------------------------------------------------------------------------------
</TABLE>
** Net investment income per share has been calculated using the average share
method
The accompanying notes are an integral part of the financial statements.
45
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. Government Securities Fund
----------------------------------------------------
Class C
----------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
10/31/00** 10/31/99 10/31/98 10/31/97 10/31/96**
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $9.56 $10.07 $9.94 $9.80 $9.98
---------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) 0.49 0.47 0.49 0.54 0.50
Net realized and
unrealized gain/(loss)
on investments and
foreign currency (0.04) (0.47) 0.15 0.11 (0.12)
<CAPTION>
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total from investment
operations 0.45 0.00 0.64 0.65 0.38
<CAPTION>
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income (0.51) (0.51) (0.51) (0.51) (0.50)
Distributions in excess
of net investment income - - - - (0.06)
<CAPTION>
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total distributions (0.51) (0.51) (0.51) (0.51) (0.56)
---------------------------------------------------------------------------------
Net Asset Value, End of
Period $9.50 $9.56 $10.07 $9.94 $9.80
---------------------------------------------------------------------------------
Total Return 4.91% 0.01% 6.60% 6.84% 3.97%
---------------------------------------------------------------------------------
Ratios/Supplemental Data
---------------------------------------------------------------------------------
Net assets, end of period
(000's) $6,846 $10,817 $12,708 $14,716 $20,009
---------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 1.90% 1.90% 1.90% 1.90% 1.90%
---------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets 5.27% 5.00% 5.00% 5.55% 5.06%
---------------------------------------------------------------------------------
Portfolio turnover rate 193% 63% 116% 364% 477%
---------------------------------------------------------------------------------
Expense ratio before
expense reimbursement by
adviser 2.28% 2.11% 2.05% 2.09% 2.06%
---------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Money Market Fund
------------------------------------------------
Class A
------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $1.00 $1.00 $1.00 $1.00 $1.00
---------------------------------------------------------------------------------
Investment Operations:
Net investment income/(loss) 0.05 0.04 0.05 0.05 0.05
Distributions
Dividends from net investment
income (0.05) (0.04) (0.05) (0.05) (0.05)
---------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00
---------------------------------------------------------------------------------
Total Return 5.57% 4.56% 5.18% 5.13% 5.16%
---------------------------------------------------------------------------------
Ratios/Supplemental Data
---------------------------------------------------------------------------------
Net assets, end of period
(000's) $25,610 $6,030 $10,295 $11,057 $8,087
---------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.69% 0.50% 0.50% 0.50% 0.50%
---------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average net
assets 5.72% 4.46% 5.06% 5.02% 5.02%
---------------------------------------------------------------------------------
Expense ratio before expense
reimbursement by adviser 0.94% 0.95% 0.92% 0.96% 0.95%
---------------------------------------------------------------------------------
</TABLE>
** Net investment income per share has been calculated using the average month-
end share method
The accompanying notes are an integral part of the financial statements.
46
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Money Market Fund
------------------------------------------------
Class B
------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $1.00 $1.00 $1.00 $1.00 $1.00
---------------------------------------------------------------------------------
Investment Operations:
Net investment income/(loss) 0.05 0.04 0.05 0.05 0.05
Distributions
Dividends from net investment
income (0.05) (0.04) (0.05) (0.05) (0.05)
---------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00
---------------------------------------------------------------------------------
Total Return 5.57% 4.56% 5.18% 5.13% 5.16%
---------------------------------------------------------------------------------
Ratios/Supplemental Data
---------------------------------------------------------------------------------
Net assets, end of period
(000's) $8,096 $4,551 $5,919 $3,332 $3,062
---------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.67% 0.50% 0.50% 0.50% 0.50%
---------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average net
assets 5.54% 4.47% 5.02% 5.02% 5.02%
---------------------------------------------------------------------------------
Expense ratio before expense
reimbursement by adviser 0.93% 0.99% 0.98% 1.05% 1.18%
---------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Money Market Fund
----------------------------------------------------------
Class C Class I
------------------------------------------------ --------
Year Year Year Year Year 7/10/00*
Ended Ended Ended Ended Ended to
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96 10/31/00
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
-------------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) 0.05 0.04 0.05 0.05 0.05 0.02
Distributions
Dividends from net
investment income (0.05) (0.04) (0.05) (0.05) (0.05) (0.02)
-------------------------------------------------------------------------------------
Net Asset Value, End of
Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
-------------------------------------------------------------------------------------
Total Return 5.57% 4.56% 5.18% 5.13% 5.16% 1.84%+
-------------------------------------------------------------------------------------
Ratios/Supplemental Data
-------------------------------------------------------------------------------------
Net assets, end of
period (000's) $7,195 $8,644 $8,237 $7,539 $9,840 $6,125
-------------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 0.67% 0.50% 0.50% 0.50% 0.50% 0.77%#
-------------------------------------------------------------------------------------
Ratio of net investment
income (loss) to
average net assets 5.37% 4.48% 5.05% 5.01% 5.02% 5.88%#
-------------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by adviser 1.00% 1.01% 0.94% 1.00% 0.98% 0.80%#
-------------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
+ Non-annualized
# Annualized
The accompanying notes are an integral part of the financial statements.
47
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Municipal Money Market Fund/1/
------------------------------------------------
Class A Class B Class C
------------------ ------------------ --------
Year Year Year Year 8/10/00*
Ended Ended Ended Ended to
10/31/00 10/31/99 10/31/00 10/31/99 10/31/00
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $1.00 $1.00 $1.00 $1.00 $1.00
---------------------------------------------------------------------------------
Investment Operations:
Net investment income/(loss) 0.03 0.02 0.03 0.01 0.01
Distributions
Dividends from net investment
income (0.03) (0.02) (0.03) (0.01) (0.01)
---------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00
---------------------------------------------------------------------------------
Total Return 3.06% 2.18% 2.48% 1.42% 0.71%+
---------------------------------------------------------------------------------
Ratios/Supplemental Data
---------------------------------------------------------------------------------
Net assets, end of period
(000's) $4,452 $3,651 $2,777 $2,841 $108
---------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.97% 1.05% 1.54% 1.80% 0.75%#
---------------------------------------------------------------------------------
Ratio of net investment
income to average net assets 3.03% 2.18% 2.44% 1.42% 2.78%#
---------------------------------------------------------------------------------
Expense ratio before expense
reimbursement by advisor 1.44% 1.89% 2.00% 2.69% 1.16%#
---------------------------------------------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Aggressive Growth LifeStyle Fund/2/
-----------------------------------------------------------------------------
Class A Class B Class C Class I
-------------------- -------------------- ---------- --------------------
Year Year Year Year 8/10/00* Year
Ended Ended Ended Ended to Year Ended Ended
10/31/00** 10/31/99 10/31/00** 10/31/99 10/31/00** 10/31/00** 10/31/99
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $11.92 $10.00 $11.90 $10.00 $13.03 $11.91 $10.00
--------------------------------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) 1.39 0.07 1.46 0.06 0.86 1.59 0.07
Net realized and
unrealized gain/(loss)
on investments 0.53 1.91 0.48 1.89 (1.09) 0.34 1.90
<CAPTION>
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total from investment
operations 1.92 1.98 1.94 1.95 (0.23) 1.93 1.97
Distributions
Dividends from net
investment income (0.98) (0.06) (0.96) (0.05) - (0.96) (0.06)
Distributions from
realized capital gains (0.15) - (0.15) - - (0.15)
<CAPTION>
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total distributions (1.13) (0.06) (1.11) (0.05) - (1.11) (0.06)
--------------------------------------------------------------------------------------------------------
Net Asset Value, End of
Period $12.71 $11.92 $12.73 $11.90 $12.80 $12.73 $11.91
--------------------------------------------------------------------------------------------------------
Total Return 16.27% 19.65% 16.30% 19.52% (1.77%)+ 16.22% 19.71%
--------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------------------------------------------
Net assets, end of
period (000's) $4,064 $1,929 $13,450 $4,915 $184 $5,004 $1,547
--------------------------------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 0.12% 0.10% 0.24% 0.10% 0.73%# 0.15% 0.10%
--------------------------------------------------------------------------------------------------------
Ratio of net investment
income to average net
assets 10.81% 0.63% 11.51% 0.66% 39.30%# 12.62% 0.62%
--------------------------------------------------------------------------------------------------------
Portfolio turnover rate 53% 9% 53% 9% 53%# 53% 9%
--------------------------------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by advisor 0.14% 0.10% 0.41% 0.10% 0.89%# 0.15% 0.10%
--------------------------------------------------------------------------------------------------------
</TABLE>
/1/The financial information for the fiscal periods prior to July 7, 2000
reflect the financial information for the AGSPC2 Municipal Money Market
Fund, which was reorganized into North American Municipal Money Market Fund
on that date.
/2/The financial information for the fiscal periods prior to July 7, 2000
reflect the financial information for the AGSPC2 Aggressive Growth LifeStyle
Fund, which was reorganized into North American Aggressive Growth LifeStyle
Fund on that date.
* Commencement of Operations
** Net investment income per share has been calculated using the average
month-end share method
# Annualized
+ Non-annualized
The accompanying notes are an integral part of the financial statements.
48
<PAGE>
NORTH AMERICAN FUNDS
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Moderate Growth LifeStyle Fund/1/
----------------------------------------------------------------------------
Class A Class B Class C Class I
-------------------- -------------------- ---------- --------------------
Year Year Year Year 7/12/00* Year
Ended Ended Ended Ended to Year Ended Ended
10/31/00** 10/31/99 10/31/00** 10/31/99 10/31/00** 10/31/00** 10/31/99
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $11.40 $10.00 $11.42 $10.00 $12.77 $11.39 $10.00
-------------------------------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) 0.99 0.14 1.02 0.12 0.73 1.16 0.15
Net realized and
unrealized gain/(loss)
on investments 0.50 1.39 0.47 1.41 (1.03) 0.32 1.38
<CAPTION>
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total from investment
operations 1.49 1.53 1.49 1.53 (0.30) 1.48 1.53
<CAPTION>
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income (0.73) (0.13) (0.74) (0.11) (0.36) (0.72) (0.14)
Distributions from
realized capital gains (0.09) - (0.09) - (0.09)
<CAPTION>
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total distributions (0.82) (0.13) (0.83) (0.11) (0.36) (0.81) (0.14)
-------------------------------------------------------------------------------------------------------
Net Asset Value, End of
Period $12.07 $11.40 $12.08 $11.42 $12.11 $12.06 $11.39
-------------------------------------------------------------------------------------------------------
Total Return 13.27% 15.20% 13.22% 15.26% (2.30%) 13.10% 15.35%
-------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-------------------------------------------------------------------------------------------------------
Net assets, end of
period (000's) $3,396 $1,918 $11,843 $5,553 $183 $5,439 $1,537
-------------------------------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 0.12% 0.10% 0.23% 0.10% 0.80%# 0.15% 0.10%
-------------------------------------------------------------------------------------------------------
Ratio of net investment
income to average net
assets 8.27% 1.33% 8.53% 1.40% 19.82%# 9.91% 1.42%
-------------------------------------------------------------------------------------------------------
Portfolio turnover rate 47% 11% 47% 11% 47% 47% 11%
-------------------------------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by advisor 0.12% 0.10% 0.23% 0.10% 0.80%# 0.15% 0.10%
-------------------------------------------------------------------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Conservative Growth LifeStyle Fund/1/
----------------------------------------------------------------------------
Class A Class B Class C Class I
-------------------- -------------------- ---------- --------------------
Year Year Year Year 7/20/00* Year Year
Ended Ended Ended Ended to Ended Ended
10/31/00** 10/31/99 10/31/00** 10/31/99 10/31/00** 10/31/00** 10/31/99
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $11.03 $10.00 $11.06 $10.00 $11.95 $11.03 $10.00
-------------------------------------------------------------------------------------------------------
Investment Operations:
Net investment
income/(loss) 0.87 0.21 0.81 0.18 0.74 0.91 0.21
Net realized and
unrealized gain/(loss)
on investments 0.39 1.02 0.45 1.05 (0.73) 0.33 1.02
<CAPTION>
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total from investment
operations 1.26 1.23 1.26 1.23 0.01 1.24 1.23
<CAPTION>
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Distributions
Dividends from net
investment income (0.60) (0.20) (0.59) (0.17) (0.27) (0.58) (0.20)
Distributions from
realized capital gains (0.10) - (0.10) - - (0.10)
<CAPTION>
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total distributions (0.70) (0.20) (0.69) (0.17) (0.27) (0.68) (0.20)
-------------------------------------------------------------------------------------------------------
Net Asset Value, End of
Period $11.59 $11.03 $11.63 $11.06 $11.69 $11.59 $11.03
-------------------------------------------------------------------------------------------------------
Total Return 11.61% 12.30% 11.66% 12.21% 0.06% 11.54% 12.24%
-------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-------------------------------------------------------------------------------------------------------
Net assets, end of
period (000's) $3,420 $1,790 $10,354 $5,880 $150 $4,484 $1,508
-------------------------------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 0.12% 0.10% 0.23% 0.10% 0.86%# 0.15% 0.10%
-------------------------------------------------------------------------------------------------------
Ratio of net investment
income to average net
assets 7.62% 2.01% 7.15% 2.11% 22.43%# 8.15% 2.01%
-------------------------------------------------------------------------------------------------------
Portfolio turnover rate 45% 10% 45% 10% 45% 45% 10%
-------------------------------------------------------------------------------------------------------
Expense ratio before
expense reimbursement
by advisor 0.12% 0.10% 0.23% 0.10% 0.86%# 0.15% 0.10%
-------------------------------------------------------------------------------------------------------
</TABLE>
/1/The financial information for the fiscal periods prior to July 7, 2000
reflect the financial information for the AGSPC2 Conservative Growth
LifeStyle Fund, which was reorganized into North American Conservative
Growth LifeStyle Fund on that date.
* Commencement of operations
** Net investment income per share has been calculated using the average
month-end share method
# Annualized
+ Non-annualized
The accompanying notes are an integral part of the financial statements.
49
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Growth & Income Fund
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 99.19%
Aerospace & Defense - 1.33%
Boeing Co. 2,300 $155,969
Honeywell International, Inc. 30,400 1,635,900
United Technologies Corp. 37,600 2,624,950
------------
4,416,819
Banks - 3.08%
Bank One Corp. 38,700 1,412,550
Chase Manhattan Corp. 45,150 2,054,325
U.S. Bancorp 147,900 3,577,331
Wachovia Corp. 59,600 3,218,400
------------
10,262,606
Beverages - 2.67%
Coca Cola Co. 78,900 4,763,588
Pepsico, Inc. 85,400 4,136,563
------------
8,900,151
Business Services - 2.00%
Automatic Data Processing, Inc. 62,500 4,082,031
First Data Corp. 51,400 2,576,425
------------
6,658,456
Chemicals - 1.34%
Dow Chemical Co. 50,400 1,543,500
E.I. Du Pont de Nemours & Co. 64,033 2,905,497
------------
4,448,997
Communications Equipment - 6.18%
Avaya, Inc.* 7 94
Cisco Systems, Inc.* 228,800 12,326,600
Corning, Inc. 20,600 1,575,900
JDS Uniphase Corp.* 21,400 1,741,425
Lucent Technologies, Inc. 105,500 2,459,469
Motorola, Inc. 99,600 2,483,775
------------
20,587,263
Computers & Business Equipment - 1.96%
International Business Machines Corp. 66,400 6,540,400
------------
Computers & Peripherals - 3.01%
Dell Computer Corp.* 90,400 2,666,800
EMC Corp. Mass.* 49,000 4,364,063
Hewlett-Packard Company 64,800 3,009,150
------------
10,040,013
Electric Utilities - 1.89%
Exelon Corp. 33,075 1,988,634
FPL Group, Inc. 65,500 4,323,000
------------
6,311,634
Electrical Equipment - 0.49%
Emerson Electric Co. 22,900 1,646,581
------------
Electronic Components - 5.07%
Analog Devices, Inc.* 46,800 3,042,000
Intel Corp. 189,700 8,536,500
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Electronic Components - continued
Micron Technology, Inc.* 76,900 $2,672,275
Texas Instruments, Inc. 54,200 2,659,188
------------
16,909,963
Electronic Equipment - 1.04%
Solectron Corp.* 78,200 3,440,800
Teradyne, Inc.* 1,300 40,625
------------
3,481,425
Financial Services - 6.14%
Associates First Capital Corp. 52,900 1,963,912
Citigroup, Inc. 171,266 9,012,873
Federal National Mortgage Association 3,100 238,700
Goldman Sachs Group, Inc. 26,100 2,605,106
Merrill Lynch & Co., Inc. 90,700 6,349,000
Morgan Stanley Dean Witter & Co. 3,800 305,188
------------
20,474,779
Forest Products - 0.06%
Weyerhaeuser Co. 4,000 187,750
------------
Health Care Equipment - 1.46%
Baxter International, Inc. 59,100 4,857,281
------------
Health Care Providers & Services - 1.74%
Cardinal Health, Inc. 34,800 3,297,300
HCA Healthcare Corp. 62,600 2,500,087
------------
5,797,387
Hotels & Restaurants - 0.77%
McDonald's Corp. 82,600 2,560,600
------------
Household Products - 3.38%
Gillette Company 57,700 2,012,288
Kimberly Clark Corp. 60,050 3,963,300
Procter & Gamble Co. 73,900 5,279,231
------------
11,254,819
Industrial Components - 0.58%
Caterpillar, Inc. 32,300 1,132,519
Illinois Tool Works, Inc. 14,400 800,100
------------
1,932,619
Insurance - 4.71%
American International Group, Inc. 74,625 7,313,250
Marsh & McLennan Companies, Inc. 64,000 8,368,000
------------
15,681,250
Internet Services - 2.27%
America Online, Inc.* 92,000 4,639,560
Exodus Communications, Inc.* 17,100 573,919
VeriSign, Inc.* 17,955 2,370,060
------------
7,583,539
I T Consulting Services - 1.04%
Computer Sciences Corp.* 37,900 2,387,700
Electronic Data Systems Corp. 23,100 1,084,256
------------
3,471,956
</TABLE>
The accompanying notes are an integral part of the financial statements.
50
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Media - 3.97%
AT & T - Liberty Media Corp.* 107,956 $2,503,230
General Motors Hughes Corp* 96,800 3,136,320
The Walt Disney Co. 53,100 1,901,644
Gannett, Inc. 57,500 3,335,000
Viacom, Inc.* 41,529 2,361,962
------------
129,800 13,238,156
Multi Industry - 5.99%
General Electric Co. 233,300 12,787,756
Minnesota Mining & Manufacturing Co. 30,600 2,956,725
Tyco International Ltd. 74,300 4,211,881
------------
19,956,362
Non-Ferrous Metals - 0.90%
Aluminum Company of America 104,400 2,994,975
------------
Oil & Gas - 6.35%
Amerada Hess Corp. 1,200 74,400
Chevron Corp. 41,500 3,408,187
Conoco, Inc. 65,000 1,767,187
El Paso Energy Corp. 2,900 181,794
ExxonMobil Corp. 123,784 11,039,986
Royal Dutch Petroleum Co. 65,300 3,877,187
UNOCAL Corp. 23,700 808,763
------------
21,157,504
Petroleum Services - 1.40%
Schlumberger, Ltd. 61,300 4,666,462
------------
Pharmaceuticals - 12.50%
Abbott Laboratories 87,800 4,636,937
American Home Products Corp. 119,400 7,581,900
Bristol-Myers Squibb Co. 66,800 4,070,625
Johnson & Johnson 49,900 4,597,038
Merck & Company, Inc. 66,600 5,989,838
Pfizer, Inc. 139,650 6,031,134
Pharmacia Corp. 110,489 6,076,895
Schering Plough Corp. 52,000 2,687,750
------------
41,672,117
Pollution Control - 0.48%
Waste Management, Inc. 79,900 1,598,000
------------
Retail Trade - 4.25%
CVS Corporation 19,200 1,016,400
Home Depot, Inc. 41,400 1,780,200
Target Corp. 160,000 4,420,000
Wal-Mart Stores, Inc. 153,100 6,946,912
------------
14,163,512
Software - 3.36%
Microsoft Corp.* 162,600 11,199,075
------------
Telecommunications - 7.78%
AT & T Corp. 162,600 2,926,800
Nortel Networks Corp. 65,000 2,957,500
SBC Communications, Inc. 139,744 8,061,482
Sprint Corp.* 57,000 2,173,125
Verizon Communications 109,954 6,356,716
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Telecommunications - continued
Worldcom, Inc.* 145,800 $3,462,750
------------
25,938,373
------------
TOTAL COMMON STOCKS
(Cost $245,021,974) $330,590,824
------------
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
REPURCHASE AGREEMENT - 0.81%
Repurchase Agreement with Paribas dated 10/31/00 at
6.55%, to be repurchased at $2,765,065 on 11/01/00,
collateralized by $2,231,000 U.S. Treasury Bond,
7.875% due 02/15/21 (valued at $2,727,487, including
interest) (Cost $2,710,000) $2,710,000 $2,710,000
------------
TOTAL INVESTMENTS (Growth & Income Fund) (Cost $247,731,974) $333,300,824
------------
-----------------------------------------------------------------------------
Large Cap Growth Fund
-----------------------------------------------------------------------------
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 96.27%
Automotive - .22%
Harley Davidson, Inc. 4,031 $194,244
------------
Banking - 1.78%
Bank of New York 9,050 520,941
Fifth Third Bancorp 10,706 550,021
Wells Fargo 9,925 459,651
------------
1,530,613
Biotechnology - 2.15%
Amgen, Inc.* 16,636 963,848
Genzyme Corp.* 5,750 408,250
Human Genome Sciences, Inc.* 2,475 218,767
MedImmune, Inc.* 3,950 258,231
------------
1,849,096
Commercial Services & Supplies - .80%
Devry, Inc.* 18,757 692,837
------------
Communications Equipment - 12.91%
Ciena Corp.* 21,800 2,291,725
Cisco Systems, Inc.* 80,943 4,360,804
Comverse Technology, Inc.* 6,725 751,519
General Motors Corporation* 16,500 534,600
JDS Uniphase Corporation* 21,545 1,753,224
Sycamore Networks, Inc.* 2,350 148,638
TyCom. Ltd.* 38,300 1,283,050
------------
11,123,560
Computers & Peripherals - 9.87%
EMC Corporation* 36,465 3,247,664
Juniper Networks, Inc.* 7,225 1,408,875
Network Appliance, Inc.* 8,325 990,675
Sun Microsystems, Inc.* 25,761 2,856,251
------------
8,503,465
</TABLE>
The accompanying notes are an integral part of the financial statements.
51
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Diversified - 2.67%
Corning, Inc. 30,100 $2,302,650
------------
Diversified Financial - 1.55%
Citigroup, Inc. 25,332 1,333,097
------------
Electrical Equipment - 2.87%
Nortel Networks Corporation 54,350 2,472,925
------------
Electronic Equipment - 5.48%
Applied Micro Circuits Corporation* 12,600 962,325
Broadcom Corp.* 5,050 1,122,994
Jabil Circuit, Inc.* 14,075 803,155
Palm, Inc.* 4,150 222,284
PE Corp. 2,814 329,238
Sanmina Corp.* 2,975 340,080
SDL, Inc.* 2,150 557,387
Solectron Corporation* 8,725 383,900
------------
4,721,363
Financial Servies - 2.42%
Federal National Mortgage Assoc. 16,600 1,278,200
Merrill Lynch & Co., Inc. 7,325 512,750
Schwab, Charles Corp. 8,516 299,125
------------
2,090,075
Food & Drug Retailing - 0.26%
Walgreen Co. 4,900 223,563
------------
Health Care Equipment & Supplies - 1.91%
Baxter International, Inc. 14,675 1,206,102
Medtronic Inc. 8,075 438,573
------------
1,644,675
Insurance - 0.61%
American International Group, Inc. 5,375 526,750
------------
Industrial Conglomerates - 5.38%
General Electric Company 45,014 2,467,330
Tyco International, Ltd. 38,293 2,170,734
------------
4,638,064
Media - 6.34%
A T & T Corp* 37,550 675,900
Comcast Corporation* 30,800 1,255,100
Echostar Communications Corp.* 4,821 218,150
Omnicom Group 4,850 447,413
Time Warner, Inc. 22,640 1,718,602
Viacom, Inc.* 20,250 1,151,719
------------
5,466,884
Motor Vehicle Parts - 0.16%
Danaher Corporation 2,249 141,968
------------
Oil & Gas - 3.78%
Anadarko Petroleum Corp. 3,750 240,188
Coastal Corp. 6,875 518,633
Enron Corp. 8,575 703,686
Halliburton 11,325 419,733
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Oil & Gas - continued
Schlumberger Ltd. 15,250 $1,160,905
Smith International, Inc.* 3,000 211,500
------------
3,254,645
Pharmaceuticals - 8.33%
Abbott Laboratories 11,500 607,344
Genentech, Inc.* 2,900 239,250
IDEC Pharmaceuticals Corp.* 1,450 284,381
Merck & Company, Inc. 26,750 2,405,828
Millennium Pharmaceuticals, Inc.* 3,025 219,502
Pfizer, Inc. 56,240 2,428,865
Pharmacia Corp. 18,050 992,750
------------
7,177,920
Retail Trade - 2.54%
Amazon.com Inc.* 11,950 437,669
Home Depot, Inc. 22,219 955,417
Kohl's Corporation* 3,831 207,592
Wal-Mart Stores, Inc. 13,075 593,278
------------
2,193,956
Semiconductor Equipment & Products - 6.17%
Analog Devices, Inc.* 19,875 1,291,875
GlobeSpan Semiconductor, Inc.* 2,125 163,492
Intel Corporation 39,629 1,783,305
LSI Logic Corp.* 21,025 691,197
Maxim Integrated Products, Inc.* 3,350 222,147
PMC-Sierra, Inc.* 2,500 423,750
Vitesse Semiconductor Corporation* 10,550 737,841
------------
5,313,607
Software - 13.51%
BEA Systems Inc.* 2,825 202,694
Brocade Communications Systems* 2,175 494,541
Business Objects SA* 2,550 200,932
Check Point Software 6,750 1,069,031
I2 Technologies, Inc.* 1,300 221,000
Inktomi Corporation* 3,600 228,375
Mercury Interactive Corp.* 9,850 1,093,350
Microsoft Corp.* 25,300 1,742,538
Momentum Business Applications* 22 228
Oracle Corp.* 73,975 2,441,175
Redback Networks, Inc.* 6,375 678,539
Siebel Systems, Inc.* 13,025 1,366,811
Verisign, Inc.* 1,625 214,500
Veritas Software Corporation* 11,968 1,687,674
------------
11,641,388
Telecommunications - 3.87%
AT&T Corp. 1,045 24,231
Corvis Corp.* 2,325 152,578
Level 3 Communications, Inc.* 3,775 180,020
Nextel Communications, Inc.* 8,875 341,133
Nokia Corporation 41,216 1,761,984
</TABLE>
The accompanying notes are an integral part of the financial statements.
52
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Telecommunications - continued
QUALCOMM* 9,900 $644,583
VoiceStream Wireless Corporation* 1,765 232,098
------------
3,336,627
Utilities - 0.69%
Calpine Corporation* 2,450 193,397
Dynegy Inc. 4,350 201,459
The AES Corp.* 3,575 201,985
------------
596,841
------------
TOTAL COMMON STOCKS (Cost $81,814,690) $82,970,813
------------
SHORT TERM INVESTMENTS - 0.00%
SSGA Money Market Fund 1,000 1,000
------------
Principal Value
--------- -----
REPURCHASE AGREEMENT - 3.73%
Repurchase Agreement with State Street Bank & Trust
Co. dated 10/31/00 at 6.42%, to be repurchased at
$3,218,574 on 11/01/00, collateralized by $3,150,000
U.S. Treasury Bonds, 6.125% due 08/15/29 (valued at
$3,291,752 including interest) (Cost $3,218,000) $3,218,000 $3,218,000
------------
TOTAL INVESTMENTS (Large Cap Growth Fund)
(Cost $85,032,690) $86,189,813
------------
-----------------------------------------------------------------------------
Mid Cap Growth Fund
-----------------------------------------------------------------------------
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 97.48%
Advertising - 0.75%
Lamar Advertising Co.* 4,150 $199,200
WPP Group, Plc 6,800 381,030
------------
580,230
Banks - 1.17%
Banknorth Group, Inc. 10,200 184,875
National Comm Bancorp 3,700 78,625
Northern Trust Corp. 7,500 640,313
------------
903,813
Biotechnology - 8.66%
Celgene Corp.* 12,375 796,641
Cor Therapeutics, Inc.* 17,700 1,000,050
Genzyme Corp.* 6,100 433,100
Gilead Sciences, Inc.* 6,000 516,000
Human Genome Sciences, Inc.* 9,700 857,389
Medarex, Inc.* 5,100 311,738
Medimmune, Inc.* 9,100 594,913
Millennium Pharmaceuticals* 13,480 978,142
Protein Design Labs, Inc.* 8,800 1,188,688
------------
6,676,661
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Business Services - 4.04%
Bisys Group, Inc.* 8,500 $400,562
CSG Systems International, Inc.* 6,450 299,522
Diamond Technology Partners, Inc.* 5,000 223,125
Paychex, Inc. 25,125 1,424,273
Robert Half International, Inc.* 25,200 768,600
------------
3,116,082
Communications Equipment - 7.44%
Brocade Communications Systems, Inc.* 6,150 1,398,356
Cacheflow, Inc.* 3,100 334,800
Ciena Corp.* 9,500 998,688
Comverse Technology, Inc.* 7,100 793,425
Crown Castle International Corp.* 9,400 284,937
Extreme Networks, Inc.* 9,500 787,906
Oni Sys Corp.* 3,900 316,144
Redback Networks, Inc.* 6,400 681,200
Turnstone Systems, Inc.* 6,800 144,500
------------
5,739,956
Computers & Peripherals - 0.83%
Handspring, Inc.* 3,600 260,325
Network Appliance, Inc.* 3,200 380,800
------------
641,125
Electronic Equipment & Instruments - 5.95%
Analog Devices, Inc.* 5,700 370,500
Applied Micro Circuits Corp.* 11,600 885,950
Flextronics International, Ltd.* 11,600 440,800
Jabil Circuit, Inc.* 11,900 679,044
Molex, Inc.* 9,800 529,200
Sanmina Corp.* 4,700 537,269
SDL, Inc.* 4,400 1,140,700
------------
4,583,463
Energy Equipment & Services - 4.88%
BJ Services Company* 7,200 377,550
Cooper Cameron Corp.* 9,450 515,025
Grant Pride, Inc.* 5,450 101,166
Nabors Industries, Inc.* 13,650 694,785
Noble Drilling Corp.* 15,650 650,453
Santa Fe International 18,000 657,000
Smith International, Inc.* 10,850 764,925
------------
3,760,904
Financial Services - 8.09%
Bear Stearns Companies, Inc. 5,700 345,562
Capital One Financial Corp. 9,200 580,750
Countrywide Cr Inds, Inc. 7,700 288,269
A.G. Edwards, Inc. 9,400 477,050
Federated Invs, Inc. 2,500 72,812
Legg Mason, Inc. 10,100 524,569
Lehman Brothers Holdings, Inc. 6,820 439,890
Providian Financial Corp. 4,900 509,600
Sei Investments Co. 3,900 353,925
T. Rowe Price & Associates, Inc. 20,400 954,975
TCF Financial Corp. 3,000 121,313
</TABLE>
The accompanying notes are an integral part of the financial statements.
53
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Financial Services - continued
USA Ed, Inc. 11,400 $636,975
Waddell & Reed Financial, Inc.
Cl. A 21,442 683,464
Waddell & Reed Financial, Inc.
Cl. B 8,029 250,906
------------
6,240,060
Healthcare Equipment & Supplies - 3.13%
Allergan, Inc. 9,750 819,609
Inhale Therapeutic Systems* 12,700 631,825
PE Corp. 8,200 959,400
------------
2,410,834
Hotels, Restaurants & Leisure - 3.33%
Gemstar TV Guide International, Inc.* 6,750 462,797
Harley Davidson, Inc. 10,800 520,425
Harrah's Entertainment, Inc.* 31,450 900,256
MGM Mirage, Inc. 19,850 686,066
------------
2,569,544
Insurance - 3.97%
Ambac Financial Group, Inc. 8,300 662,444
John Hancock Financial Services* 19,400 613,525
MGIC Invt Corp. 8,300 565,437
PMI Group, Inc. 5,800 428,475
Radian Group, Inc. 5,800 411,075
Sun Life Financial Services, Inc. (CAD)* 8,700 179,411
Sun Life Financial Services, Inc.* 9,800 200,900
------------
3,061,267
Internet Software & Services - 2.49%
Exodus Communications, Inc.* 16,800 563,850
Infospace, Inc.* 16,974 341,602
Real Networks, Inc.* 3,900 80,376
Verisign, Inc.* 5,000 660,000
Vignette Corp.* 9,150 272,784
------------
1,918,612
IT Consulting & Services - 0.47%
Proxicom, Inc.* 14,740 198,990
Sapient Corp.* 4,500 160,031
------------
359,021
Media - 4.04%
Cablevision Systems Corp.* 7,500 558,750
Hispanic Broadcasting Corp.* 8,200 256,250
Interpublic Group Cos., Inc. 5,400 231,862
Omnicom Group 7,200 664,200
TMP Worldwide, Inc.* 9,960 693,309
USA Networks, Inc.* 21,050 426,263
WPP Group 17,000 228,162
WPP Group (ADR) 900 60,187
------------
3,118,983
Oil & Gas - 1.36%
Anadarko Pete Co. 7,400 473,970
Apache Corp. 10,450 578,016
------------
1,051,986
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Personal Products - 0.23%
Estee Lauder Companies, Inc. 3,800 $176,462
------------
Pharmaceuticals - 6.76%
Abgenix, Inc.* 10,400 820,300
Alza Corp.* 9,150 740,578
Andrx Corp.* 6,400 460,800
Forest Laboratories, Inc.* 13,750 1,821,875
ICN Pharmaceuticals, Inc. 1,600 60,900
Imclone Systems, Inc.* 7,300 399,219
King Pharmaceuticals, Inc.* 12,375 554,555
Teva Pharmaceutical Industries 6,000 354,750
------------
5,212,977
Retail Trade - 2.10%
Best Buy Company, Inc.* 3,500 175,656
CDW Computer Centers, Inc.* 4,000 257,750
Kohls Corp.* 10,500 568,969
Radioshack Corp. 10,280 612,945
------------
1,615,320
Road & Rail - 0.01%
Kansas City Southern Industries, Inc. 650 5,647
------------
Semiconductor Equipment & Products - 8.11%
Altera Corp.* 20,800 851,500
Conexant Systems, Inc.* 4,600 121,037
Globespan Semiconductor, Inc.* 5,750 442,391
Linear Technology Corp. 11,400 736,012
Maxim Integrated Products, Inc.* 11,500 762,594
Microchip Technology, Inc.* 10,575 334,434
PMC Sierra, Inc.* 3,150 533,925
Transwitch Corp. 16,800 970,200
Vitesse Semiconductor Corp.* 9,300 650,419
Xilinx, Inc. 11,750 851,141
------------
6,253,653
Software - 14.05%
Aether Systems, Inc.* 4,200 338,625
Amdocs Limited* 12,350 800,434
Art Technology Group, Inc.* 8,900 558,475
BEA Systems, Inc.* 12,200 875,350
Commerce One, Inc.* 7,800 500,662
I2 Technologies, Inc.* 5,280 897,600
Inktomi Corp.* 6,000 380,625
Internap Network Services Corp.* 10,400 166,400
Intuit* 13,200 810,975
Liberate Technologies* 5,800 110,563
Macromedia, Inc.* 7,600 585,675
Mercury Interactive Corp.* 8,750 971,250
Metasolv Software, Inc.* 3,200 39,800
Micromuse, Inc.* 1,000 169,688
Nvidia Corp.* 3,400 211,278
Peregrine Systems, Inc.* 10,850 260,400
Quest Software, Inc.* 4,000 174,750
Portal Software, Inc.* 7,250 255,109
Rational Software Corp.* 13,600 811,750
</TABLE>
The accompanying notes are an integral part of the financial statements.
54
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Software - continued
Siebel Systems, Inc.* 8,800 $923,450
Software.com, Inc.* 3,720 554,280
Tibco Software, Inc.* 5,700 359,100
Vitria Technology, Inc.* 3,000 80,625
------------
10,836,864
Telecommunications - 5.63%
ADC Telecommunications, Inc.* 14,000 299,250
Allegiance Telecom, Inc.* 7,050 221,634
Colt Telecommunications Group PLC* 3,150 411,469
Echostar Communications Corp.* 17,950 812,237
Entercom Communications Corp.* 10,350 405,591
McLeodUSA, Inc.* 34,550 665,088
Nextel Partners, Inc.* 19,300 472,850
Time Warner Telecommunications, Inc.* 10,450 623,081
Western Wireless Corp.* 6,100 289,750
XO Communications, Inc.* 4,100 137,267
------------
4,338,217
------------
TOTAL COMMON STOCKS
(Cost $67,714,407) $75,171,681
------------
Principal Value
--------- -----
SHORT TERM INVESTMENTS - 2.52%
Repurchase Agreement with State Street Bank & Trust
Co. dated 10/31/00 at 6.42%, to be repurchased at
$1,940,341 on 11/01/00, collateralized by $1,680,000
U.S. Treasury Bonds, 7.50% due 11/15/16 (valued at
$1,992,158 Inc. Including interest) (Cost
$1,940,000) $1,940,000 $1,940,000
------------
TOTAL INVESTMENTS (Mid Cap Growth Fund) (Cost $69,654,407) $77,111,681
------------
-----------------------------------------------------------------------------
Mid Cap Value Fund
-----------------------------------------------------------------------------
Shares Value
------ -----
COMMON STOCKS - 94.38%
Aerospace & Defense - 3.08%
General Dynamics Corp. 5,800 $415,063
Raytheon Co. 9,100 291,200
------------
706,263
Airlines - 2.54%
Continental Airlines, Inc.* 4,900 257,250
Southwest Airlines Co. 11,400 324,900
------------
582,150
Auto Components - 3.30%
Lear Corp.* 18,000 490,500
Visteon Corp. 15,000 265,312
------------
755,812
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Banking - 4.34%
Dime Bancorp. Inc. 16,500 $403,219
Golden State Bancorp. Inc. 1,000 26,125
Golden West Financial Corp. 4,000 224,250
M & T Bank Corp. 6,800 341,360
------------
994,954
Biotechnology - 1.24%
Edwards Lifesciences Corp.* 6,900 92,719
Genzyme Corp.* 2,700 191,700
------------
284,419
Building Products - 1.15%
Crane Company 10,100 264,494
------------
Chemicals - 1.86%
FMC Corp. 5,600 425,600
------------
Commercial Services & Supplies - 5.88%
Choice Point, Inc.* 8,900 455,569
Dun & Bradstreet Corp.* 8,200 177,325
Fiserv, Inc.* 2,500 131,094
Iron Mountain, Inc. 10,700 361,794
Waste Management, Inc. 11,100 222,000
------------
1,347,782
Communications Equipment - 1.55%
3Com Corporation* 15,700 278,675
American Tower Corp.* 1,900 77,781
------------
356,456
Computers & Peripherals - 0.45%
Western Digital Corp.* 17,100 102,600
------------
Electrical Equipment - 3.14%
Energizer Holdings, Inc.* 11,100 219,225
SPX Corp.* 1,300 160,712
Thermo Electron Corp.* 11,700 339,300
------------
719,237
Electronic Equipment & Instruments - 0.44%
Harman International Industries, Inc. 2,100 100,800
------------
Energy Equipment & Services - 1.08%
Santa Fe International Corp. 4,000 146,000
Weatherford International, Inc. 2,800 102,200
------------
248,200
Financial Services - 6.97%
Countrywide Credit Industries, Inc. 4,000 149,750
AG Edwards, Inc. 2,200 111,650
Federated Investments, Inc.* 6,400 186,400
Franklin Resources, Inc. 2,800 119,952
Household International, Inc. 4,500 226,406
Lehman Brothers Holdings, Inc. 2,500 161,250
Moody's Corp. 10,000 263,125
Nationwide Financial Services, Inc. 7,800 379,275
------------
1,597,808
Food & Drug Retailing - 1.25%
Kroger Company* 12,700 286,544
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
55
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Food Products - 2.05%
Hershey Foods Corp. 5,000 $271,562
Wm Wrigley, Jr. Co. 2,500 197,969
------------
469,531
Health Care Equipment & Supplies - 2.37%
Beckman Coulter, Inc. 2,100 147,131
Charles River Laboratories* 9,900 259,875
Sybron International Corp.* 5,500 136,125
------------
543,131
Health Care Providers & Services - 2.95%
Health Management Assoc.* 8,400 166,425
Tenet Healthcare Corp. 9,400 369,538
Wellpoint Health Networks, Inc.* 1,200 140,325
------------
676,288
Hotels, Restaurants & Leisure - 0.99%
Brinker International, Inc.* 5,800 227,650
------------
Household Durables - 1.58%
Lennar Corp. 11,300 363,012
------------
Insurance - 10.45%
Ace Limited 8,400 329,700
AmbacFinancial Group, Inc. 3,700 295,306
Aon Corp. 7,000 290,062
John Hancock Financial Services* 11,900 376,338
MBIA, Inc. 2,500 181,719
Metlife, Inc.* 18,900 522,112
XL Capital, Ltd. 5,200 399,750
------------
2,394,987
IT Consulting & Services - 2.76%
Ceridian Corp.* 7,500 187,500
SunGuard Data Systems, Inc.* 8,700 444,788
------------
632,288
Machinery - 0.94%
Danaher Corp. 3,400 214,625
------------
Media - 5.31%
AH Belo Corp. 24,400 468,175
Cablevision Systems Corp.* 3,100 230,950
Entercom Communications Corp.* 5,600 219,450
E. W. Scripps Co. 5,100 298,031
------------
1,216,606
Multiline Retail - 1.71%
Consolidated Stores Corp.* 5,300 62,938
Costco Wholesale Corp.* 5,800 212,425
Federated Department Stores 3,600 117,225
------------
392,588
Oil & Gas- 4.32%
Anadarko Petroleum Corp. 2,000 128,100
Apache Corp. 2,100 116,156
Coastal Corp. 2,000 150,875
EOG Resources, Inc. 4,200 165,375
Gulf CDA Resources Ltd.* 51,400 218,450
USX Marathon Group 7,800 212,062
------------
991,018
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Personal Products - 0.49%
Carter Wallace, Inc. 4,100 $112,494
------------
Pharmaceuticals - 2.13%
ICN Pharmaceuticals, Inc. 4,800 182,700
Ivax Corp.* 4,300 187,050
Mylan Labs, Inc. 4,200 117,600
------------
487,350
Real Estate - 2.38%
Boston Properties, Inc. 4,300 174,150
Indymac Bancorp, Inc. 8,300 173,262
Spieker Properties, Inc. 3,600 199,350
------------
546,762
Software - 3.42%
Citrix Systems, Inc.* 17,900 396,038
DST Systems, Inc.* 3,700 228,012
Intuit* 2,600 159,737
------------
783,787
Specialty Retail - 2.27%
Staples, Inc.* 8,400 119,700
Tiffany & Company 3,700 157,944
TJX Companies, Inc. 8,900 242,525
------------
520,169
Telecommunications - 2.42%
Broadwing, Inc.* 10,300 290,975
Telephone & Data Systems, Inc. 2,500 263,750
------------
554,725
Transportation - Road & Rail - 0.94%
GATX 5,100 214,519
------------
Utilities - Electrical & Gas - 6.63%
AES Corp.* 3,400 192,100
Dominion Res, Inc. 500 29,781
Dominion Res, Inc. 2,400 142,950
DPL, Inc. 7,200 204,300
Edison International 9,700 231,588
Exelon corp. 7,525 452,441
Kinder Morgan, Inc. 4,300 165,819
Northeast Utilities 5,000 101,875
------------
1,520,854
------------
TOTAL COMMON STOCKS
(Cost $18,676,386) $21,635,503
------------
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
REPURCHASE AGREEMENT - 5.62%
Repurchase Agreement with State Street Bank & Trust
Co. dated 10/31/00 at 6.42%, to be repurchased at
$1,289,227 on 11/01/00, collateralized by, $1,200,000
U.S. Treasury Notes 7.875% due 11/15/04 (valued at
$1,328,843 including interest) (Cost $1,289,000) $1,289,000 $1,289,000
------------
TOTAL INVESTMENTS (Mid Cap Value Fund) (Cost $19,965,386) $22,924,503
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
56
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Science & Technology Fund
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 93.09%
Communications Equipment - 14.54%
Ciena Corp.* 2,900 $304,863
Cisco Systems, Inc.* 16,000 862,000
Corning, Inc. 4,000 306,000
JDS Uniphase Corp.* 4,000 325,500
Nokia Corp. 19,200 820,800
Qualcomm, Inc.* 5,600 364,612
Sycamore Networks, Inc.* 3,600 227,700
------------
3,211,475
Computers & Peripherals - 7.53%
Dell Computer Corp.* 16,000 472,000
EMC Corp.* 6,400 570,000
Sun Microsystems, Inc.* 5,600 620,900
------------
1,662,900
Electrical Equipment - 3.03%
Flextronics International, Ltd.* 13,600 516,800
Furukawa Electric 5,800 152,555
------------
669,355
Electronic Equipment & Instruments - 9.73%
Applied Micro Circuits Corp.* 6,400 488,800
Sanmina Corp.* 2,700 308,644
Sci Systems, Inc.* 3,700 159,100
SDL, Inc.* 2,700 699,975
Solectron Corp.* 11,200 492,800
------------
2,149,319
Internet Software & Services - 8.76%
America Online, Inc.* 4,800 242,064
Ariba, Inc.* 6,400 808,800
Exodus Communications, Inc.* 12,000 402,750
Real Networks, Inc.* 4,800 98,925
Verisign, Inc.* 2,900 382,800
------------
1,935,339
Machinery - 0.67%
Cognex Corp.* 4,400 147,400
------------
Media - 1.18%
General Motors Hughes* 8,000 259,200
------------
Semiconductor Equipment & Products - 22.01%
Altera Corp.* 12,800 524,000
Analog Devices, Inc.* 9,600 624,000
Applied Materials, Inc.* 6,600 350,625
ASM Lithography Holding NV* 8,000 222,500
Intel Corp. 5,300 238,500
KLA Tencor Corp.* 9,800 331,362
LSI Logic Corp.* 17,600 578,600
Maxim Integrated Products, Inc.* 8,400 557,025
Novellus Systems, Inc.* 5,400 221,063
Texas Instruments, Inc. 12,900 632,906
Xilinx, Inc.* 8,000 579,500
------------
4,860,081
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Software - 13.73%
Electronic Arts, Inc.* 12,800 $640,000
Intuit* 5,300 325,619
Microsoft Corp.* 12,800 881,600
Netiq* 2,400 206,700
Oracle Corp.* 17,600 580,800
Siebel Systems, Inc.* 1,900 199,381
Veritas Software Corp.* 1,400 197,422
------------
3,031,522
Telecommunications - 11.91%
China Mobile HK Ltd.* 3,400 104,125
Colt Telecom Group* 12,800 408,587
Nortel Networks Corp. 10,500 477,750
Sprint Corp.* 6,500 247,813
Vodafone Group 24,000 99,854
Vodafone Group Plc 14,400 612,900
Worldcom, Inc.* 8,000 190,000
XO Communications, Inc.* 14,500 489,148
------------
2,630,177
TOTAL COMMON STOCKS
(Cost $21,336,431) $20,556,768
------------
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
REPURCHASE AGREEMENT - 6.91%
Repurchase Agreement with State Street Bank & Trust
dated 10/31/00 at 6.42%, to be repurchased at
$1,527,269 on 11/01/00, collateralized by $1,570,000
U.S. Treasury Note, 5.875% due 09/30/02 (valued at
$1,566,325, including interest) (Cost $1,527,000) $1,527,000 $1,527,000
------------
TOTAL INVESTMENTS
(Science & Technology Fund)
(Cost $22,863,431) $22,083,768
------------
-----------------------------------------------------------------------------
Small Cap Growth Fund
-----------------------------------------------------------------------------
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 89.56%
Aerospace & Defense - 1.02%
Aeroflex, Inc.* 6,700 $398,650
------------
Banks - 1.24%
Bank UTD Corp.* 6,500 368,469
National Commerce Bancorp* 3,550 75,438
Pacific Century Financial Corp.* 3,150 39,966
------------
483,873
Biotechnology - 4.50%
Aclara Biosciences, Inc.* 9,975 178,303
Affymetrix, Inc.* 3,400 188,275
Ciphergen Biosystems, Inc.* 8,900 275,900
Illumina, Inc.* 9,900 321,750
</TABLE>
The accompanying notes are an integral part of the financial statements.
57
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Biotechnology - continued
Lynx Therapeutics, Inc.* 5,600 $98,000
Maxim Pharmaceuticals, Inc.* 3,600 159,750
Maxygen, Inc.* 4,075 164,019
Medarex, Inc.* 6,000 366,750
------------
1,752,747
Commercial Services & Supplies - 2.16%
Advantage Learning Systems, Inc.* 10,800 320,625
Compucredit Corp.* 5,900 182,162
Getty Images, Inc.* 10,600 336,550
------------
839,337
Communications Equipment - 9.73%
Adaptive Broadband Corp.* 1,900 30,519
Advanced Fibre Communications* 13,700 446,106
Antec Corp.* 8,400 102,375
Audio Codes, Ltd.* 9,300 367,931
Integrated Telecom Express* 17,300 244,362
MRV Communications, Inc.* 8,600 339,700
Polycom, Inc.* 12,450 809,250
Powerwave Technologies, Inc.* 10,500 505,312
Proxim, Inc.* 7,200 436,500
Tekelec, Inc.* 13,800 508,012
------------
3,790,067
Computers & Peripherals - 1.14%
DSP Group, Inc.* 13,800 391,575
Interlink Electronics* 2,300 51,463
------------
443,038
Diversified Financial - 0.99%
Americredit Corp.* 14,400 387,000
------------
Diversified Telecommunication - 0.05%
CTC Communications Group, Inc.* 1,950 18,830
------------
Electrical Equipment - 1.72%
Anaren Microwave, Inc.* 4,250 442,000
Asyst Technologies, Inc.* 10,200 153,000
Plexus Corp.* 1,204 75,927
------------
670,927
Electronic Equipment & Instruments - 4.65%
Anadigics, Inc.* 10,200 228,225
Caliper Technologies Corp.* 2,900 163,488
Exar Corp.* 9,050 404,422
Mips Technologies, Inc.* 9,000 361,125
Sipex Corp.* 10,400 409,500
Veeco Instruments, Inc.* 2,400 158,888
Zygo Corp.* 1,751 86,674
------------
1,812,322
Energy Equipment & Services - 5.43%
BJ Services Company* 5,900 309,381
Cooper Cameron Corp.* 5,400 294,300
Core Laboratories Ltd.* 2,400 51,750
Global Industries, Inc.* 3,500 36,750
Global Marine, Inc.* 4,450 117,925
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Energy Equipment & Services - continued
National Oil Well, Inc.* 11,075 $323,944
Petroleum Geo Services, Inc.* 21,000 287,438
Rowan Companies, Inc.* 13,300 334,994
Smith International, Inc.* 5,100 359,550
------------
2,116,032
Food Products - 0.85%
Hain Celestial Group, Inc.* 8,300 329,406
------------
Health Care Equipment & Supplies - 2.87%
Charles River Laboratories, Inc.* 15,100 396,375
Coherent, Inc.* 7,700 268,056
Inhale Therapeutic Systems* 5,900 293,525
Minimed, Inc.* 1,000 72,938
Molecular Devices Corp.* 1,275 87,178
------------
1,118,072
Health Providers & Services - 15.78%
Advance Paradiam, Inc.* 16,800 821,100
Amerisource Health Corp.* 14,200 616,812
Bindley Western Industries, Inc.* 12,925 464,492
Caremark RX, Inc.* 37,600 470,000
Community Health Services, Inc.* 23,775 670,158
Foundation Health Systems* 33,500 676,281
Lifepoint Hospitals, Inc.* 9,600 372,000
Mid Atlantic Medical Services, Inc.* 23,500 399,500
Oxford Health Plans, Inc.* 23,300 786,375
Renal Care Group, Inc.* 13,300 312,550
Universal Health Services, Inc.* 6,600 553,575
------------
6,142,843
Hotels, Restaurants & Leisure - 1.19%
American Classic Voyages Co.* 13,000 179,563
Mandalay Resort Group* 13,700 285,131
------------
464,694
Insurance - 1.61%
Fidelity National Financial, Inc. 18,300 449,494
Mutual Risk Management Ltd. 9,700 175,812
------------
625,306
Internet & Catalog Retail - 0.69%
Valuevision International, Inc.* 13,300 269,325
------------
Internet Software & Services - 0.32%
About.com, Inc.* 2,800 67,200
Marimba, Inc.* 1,500 8,906
Radvision Ltd.* 2,200 48,675
------------
124,781
I T Consulting & Services - 1.53%
Acxiom Corp.* 12,640 508,760
Titan Corp.* 6,500 86,937
------------
595,697
Leisure Equipment & Products - 0.74%
Championship Auto Racing Team* 11,500 286,063
------------
Machinery - 1.69%
APW Ltd.* 14,200 655,862
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
58
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Media - 0.74%
Catalina Marketing Corp.* 7,350 $288,488
------------
Oil & Gas - 1.85%
Devon Energy Corp. 1,750 88,200
Precision Drilling Corp.* 2,200 62,975
Spinnaker Exploration Co.* 4,775 144,444
Stone Energy Corp.* 8,300 424,960
------------
720,579
Pharmaceuticals - 5.52%
Alkermes, Inc.* 10,900 403,981
Cell Therapeutics, Inc.* 5,400 361,209
Intermune Pharmaceuticals, Inc.* 2,200 110,000
KV Pharmaceutical Co.* 6,300 245,306
Medicis Pharmaceutical Corp.* 7,800 574,275
Praecis Pharmaceuticals, Inc.* 9,100 230,912
Titan Pharmaceuticals, Inc.* 2,100 88,368
United Therapeutics Corp.* 2,500 133,750
------------
2,147,801
Semiconductor Equipment & Products - 7.90%
Alpha Industries, Inc.* 15,300 610,088
C-Cube Microsystems, Inc.* 19,200 374,400
Cymer, Inc.* 7,500 187,500
Emcore Corp.* 11,700 479,700
Fairchild Semiconductor Int'l., Inc.* 4,655 98,046
Photronics, Inc.* 14,400 324,900
PRI Automation, Inc.* 4,825 109,166
Telcom Semiconductor, Inc.* 4,200 59,063
Transwitch Corp.* 6,800 392,700
Varian Semiconductor Equipment, Inc.* 5,800 133,400
Zoran Corp.* 6,100 305,763
------------
3,074,726
Software - 13.65%
Avant Corp.* 500 8,406
Backweb Technologies, Ltd.* 17,800 159,088
Certicom Corp.* 10,000 330,000
Clarent Corp.* 6,375 198,023
Documentum, Inc.* 7,400 629,000
Great Plains Software, Inc.* 3,800 147,962
Informatica Corp.* 3,600 340,200
Iona Technologies PLC* 5,200 341,900
Manugistics Group, Inc.* 5,500 626,656
National Instruments Corp.* 1,150 53,691
Natural Microsystems Corp.* 5,600 253,050
Netiq* 4,400 378,950
Peregrine Systems, Inc.* 21,700 520,800
QRS Corp.* 800 6,750
Radiant Systems, Inc.* 19,100 352,156
Remedy Corp.* 6,400 109,600
RSA Sec, Inc.* 6,200 359,600
Seachange International. Inc.* 10,100 222,200
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Software - continued
T HQ, Inc.* 13,500 $276,750
Unify Corp.* 500 250
------------
5,315,032
------------
TOTAL COMMON STOCKS
(Cost $33,581,258) $34,871,498
------------
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
SHORT TERM INVESTMENTS - 10.44%
SSGA Money Market Fund $4,065,796 $4,065,796
---------- ------------
TOTAL INVESTMENTS (Small Cap Growth Fund)
(Cost $37,647,054) $38,937,294
------------
----------------------------------------------------------
Small Cap Index Fund
----------------------------------------------------------
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 89.05%
Aerospace & Defense - 0.98%
Aar Corp. 200 $2,388
Aeroflex, Inc.* 195 11,603
Alliant Techsystems, Inc.* 100 8,994
Gencorp, Inc. 300 2,513
Heico Corp. 3 36
Hexcel Corp.* 330 3,609
Kaman Corp. 146 2,117
Newport News Shipbuilding, Inc. 300 14,756
Orbital Sciences Corp.* 300 2,381
Precision Castparts Corp. 400 15,100
Primex Technologies, Inc. 100 2,931
Remec, Inc.* 261 7,781
Sequa Corp.* 100 3,687
------------
77,896
Air Freight & Couriers - 0.36%
Airborne Freight Company 400 4,050
Atlas Air, Inc.* 191 6,924
CNF Transportation, Inc. 203 5,418
EGL, Inc.* 200 5,700
Forward Air Corp.* 100 4,113
Fritz Companies, Inc.* 329 2,672
------------
28,877
Airlines - 0.49%
Airtran Holdings, Inc.* 600 2,663
Alaska Air Group, Inc.* 200 5,188
America West Holdings Corp.* 313 3,110
Atlantic Coast Airlines Holdings* 200 7,150
Frontier Airlines, Inc.* 400 9,400
Mesa Air Group, Inc.* 300 1,763
Mesaba Holdings, Inc.* 100 1,081
Midwest Express Holdings, Inc.* 100 1,900
Skywest, Inc. 134 6,766
------------
39,021
</TABLE>
The accompanying notes are an integral part of the financial statements.
59
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Auto Components - 1.07%
American Axle & Mfg. Holdings, Inc.* 100 $1,244
Arvinmeritor, Inc. 506 8,476
Bandag, Inc. 100 3,569
Borg Warner Automotive, Inc. 124 4,681
Collins & Aikman Corp.* 500 2,375
Cooper Tire & Rubber Co. 391 4,277
Delco Remy Int'l.,l Inc.* 100 669
Dura Automotive Systems, Inc.* 240 2,025
Exide Corp. 100 1,006
Federal Mogul Corp. 454 1,476
Federal Signal Corp. 400 9,350
Hayes Lemmerz Int'l., Inc.* 225 2,461
IMPCO Technologies, Inc.* 13 256
Lear Corp.* 461 12,562
Mascotech, Inc. 338 5,640
Midas, Inc. 100 1,388
Modine Manufacturing Co. 144 3,798
Sauer Danfoss, Inc. 100 756
Snap-On, Inc. 337 8,615
Stoneridge, Inc.* 100 975
Superior Industries Int'l., Inc. 127 4,326
Tenneco Automotive, Inc. 98 420
Tower Automotive, Inc.* 400 4,400
----------
84,745
Automobiles - 0.05%
Coachmen Industries, Inc. 100 837
Monaco Coach Corp.* 75 1,280
Thor Industries, Inc. 45 900
Winnebago Industries, Inc. 100 1,150
----------
4,167
Banks - 6.95%
1st Source Corp. 105 1,647
Alabama National Bancorp. 100 1,944
Amcore Financial, Inc. 200 3,925
American Financial Holdings, Inc. 165 2,949
Anchor Bancorp of Wisconsin, Inc. 200 3,088
Andover Bancorp, Inc. 42 1,260
Area Bancshares Corp. 100 2,088
Astoria Financial Corp. 518 19,425
Bancorpsouth, Inc. 725 9,470
Bank Granite Corp. 100 2,325
Bank United Corp. 300 17,006
Bay View Capital Corp. 208 1,690
BOK Financial Corp.* 100 1,900
Brenton Banks, Inc. 120 1,485
Brookline Bancorp, Inc. 100 1,081
BSB Bancorp, Inc. 100 1,450
BT Financial Corp. 105 2,054
Capitol Federal Financial 800 11,600
Cathay Bancorp, Inc. 100 4,931
Century South Bank, Inc. 100 1,838
Chemical Financial Corp. 131 2,800
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Banks - continued
Chittenden Corp. 207 $5,498
Citizens Banking Corp. 361 8,596
Colonial Bancgroup, Inc. 308 2,714
Commerce Bancorp, Inc. 310 18,774
Commercial Federal Corp. 166 2,905
Community First Bankshares, Inc. 403 6,247
Corus Bankshares, Inc. 100 3,969
CPB, Inc. 100 2,525
Cullen Frost Bankers, Inc. 111 3,698
CVB Financial Corp. 100 1,669
Dime Community Bancorp, Inc. 100 2,219
Doral Financial Corp. 500 8,938
Downey Financial Corp. 131 6,255
East West Bancorp, Inc. 390 7,386
F & M Bancorp 105 2,139
F & M National Corp. 103 2,665
F N B Corp. 110 2,365
First Bancorp 200 4,588
First Busey Corp. 100 1,831
First Charter Corp. 156 2,408
First Commonwealth Financial Corp. 500 4,969
First Citizens Bancshares, Inc. 35 2,590
First Federal Capital Corp. 100 1,175
First Financial Bancorp 341 5,286
First Financial Bankshares, Inc. 100 3,075
First Financial Holdings, Inc. 100 1,688
First Indiana Corp. 100 2,300
First Merchants Corp. 100 2,300
First Midwest Bancorp, Inc. 350 8,772
First Niagara Financial Group, Inc. 100 906
First Sentinel Bancorp, Inc. 400 3,713
Firstfed Financial Corp.* 118 3,009
Frontier Financial Corp. 100 1,875
Fulton Financial Corp. 226 4,944
GBC Bancorp 85 2,709
Gold Banc Corp., Inc. 731 3,381
Greater Bay Bancorp 420 13,676
Hancock Holding Co. 100 3,113
Harbor Florida Bancshares, Inc. 100 1,225
Harleysville National Corp. 105 3,229
Hudson United Bancorp 565 12,642
Imperial Bancorp 324 7,877
Independence Community Bank 500 7,344
Integra Bank Corp 110 2,839
International Bancshares Corp. 156 5,587
Investors Financial Services Corp. 300 21,506
Irwin Financial Corp. 100 1,544
MAF Bancorp Inc. 200 4,800
Merchants NY Bancorp, Inc. 124 2,573
Mid American Bancorp 100 2,488
Mid State Bancshares 100 2,950
National Penn Bancshares, Inc. 115 2,444
Netbank, Inc.* 340 2,954
</TABLE>
The accompanying notes are an integral part of the financial statements.
60
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Banks - continued
Northwest Bancorp, Inc. 100 $744
Oceanfirst Financial Corp. 100 2,094
Ocwen Financial Corp.* 300 1,763
Omega Financial Corp. 100 2,888
Oriental Financial Group, Inc. 100 1,225
Pacific Capital Bancorp 200 5,350
Pacific Northwest Bancorp* 100 1,338
Park National Corp. 100 9,563
Premier National Bancorp, Inc. 100 2,050
Provident Bankshares Corp. 220 4,166
Provident Financial Group, Inc. 7 212
Queens County Bancorp 108 3,024
R & G Financial Corp. 100 981
Republic Bancorp, Inc. 420 3,990
Republic Security Financial Corp. 400 2,713
Richmond County Financial Corp. 460 10,810
Riggs National Corp. 123 1,384
Roslyn Bancorp, Inc. 618 13,403
S & T Bancorp, Inc. 200 3,775
Sandy Spring Bancorp, Inc. 100 2,213
Santander Bancorp 20 305
Seacoast Financial Services Corp. 200 2,125
Silicon Valley Bancshares* 412 19,055
Sky Financial Group Inc. 1,071 17,812
South Financial Group, Inc. 417 4,248
Southwest Bancorporation* 300 10,950
Staten Island Bancorp, Inc. 400 7,725
Sterling Bancshares, Inc. 200 3,438
Susquehanna Bancshares, Inc. 300 4,238
Texas Regional Bancshares, Inc. 100 2,988
The Trust Company Of N J 105 1,509
Trustco Bank Corp N Y 460 5,520
Trustmark Corp. 142 2,698
U S B Holding, Inc. 105 1,306
UMB Financial Corp. 110 3,726
United Bankshares, Inc. 400 7,800
United National Bancorp 100 1,775
United Community Financial 300 2,100
W Holding Co., Inc. 400 3,700
Washington Federal, Inc. 500 11,156
Webster Financial Corp. 300 7,313
Wesbanco, Inc. 129 2,991
Westamerica Bancorporation 90 3,234
Westcorp, Inc. 100 1,550
Whitney Holding Corp. 145 5,348
-----------
553,124
Beverages - 0.15%
Constellation Brands, Inc.* 100 4,875
Mondavi, Robert Corp.* 100 4,525
Pepsiamericas, Inc.* 97 352
Triarc Cos., Inc.* 100 2,493
-----------
12,245
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Biotechnology - 3.05%
Aclara Biosciences, Inc.* 51 $912
Advanced Tissue Sciences, Inc.* 572 4,076
Albany Molecular Research, Inc.* 100 5,813
Alexion Pharmaceuticals, Inc.* 89 9,200
Alliance Pharmaceutical Corp* 335 4,732
Avant Immunotherapeutics, Inc.* 313 2,641
Avigen, Inc.* 90 3,488
Aviron* 115 7,518
Bio-Technology General Corp.* 400 4,200
Biocryst Pharmaceuticals, Inc.* 73 666
Biomarin Pharmaceutical, Inc.* 96 1,248
Biomatrix, Inc.* 100 1,913
Biopure Corp.* 70 1,439
Cell Genesys, Inc.* 229 5,281
Cerus Corp* 53 2,961
Collateral Therapeutics* 49 1,239
Connetics Corp.* 584 3,057
Corixa Corp.* 131 5,830
Curagen Corp.* 184 11,891
CV Therapeutics, Inc.* 102 8,033
Digene Corp.* 172 5,582
Edwards Lifesciences Corp.* 375 5,039
Entremed, Inc.* 100 3,113
Enzo Biochem, Inc.* 161 6,199
Exelixis, Inc.* 50 1,103
Geltex Pharmaceuticals, Inc.* 150 7,444
Gene Logic, Inc.* 191 4,166
Genome Therapeutics Corp.* 148 2,211
Genta, Inc.* 27 218
Genzyme Transgenics Corp.* 118 2,530
Geron Corp.* 146 3,431
Hyseq, Inc.* 65 1,889
Idexx Labs, Inc.* 300 7,200
Ilex Oncology, Inc.* 252 9,135
Immune Response Corp.* 136 825
Immunomedics, Inc.* 323 7,469
Invitrogen Corp.* 148 11,238
Lexicon Genetics, Inc.* 55 1,114
Luminex Corp.* 29 787
Lynx Therapeutics, Inc. 68 1,190
Maxim Pharmaceuticals, Inc. 136 6,035
Maxygen, Inc. 45 1,811
Myriad Genetics, Inc. 130 15,600
Neorx Corp.* 131 2,129
Neose Technologies, Inc.* 67 2,425
Neurocrine Biosciences, Inc.* 141 5,464
Neurogen Corp.* 100 3,144
Orchid Biosciences, Inc.* 27 552
Organogenesis, Inc.* 300 3,762
Paradigm Enetics, Inc.* 126 2,000
Peregrine Pharmaceuticals, Inc.* 519 1,249
Pharmacopeia, Inc.* 128 2,336
Photogen Technologies, Inc.* 64 288
</TABLE>
The accompanying notes are an integral part of the financial statements.
61
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(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Biotechnology - continued
Regeneron Pharmaceuticals, Inc.* 121 $3,237
Ribozyme Pharmaceuticals, Inc.* 57 1,208
Sangstat Medical Corp.* 600 6,000
Targeted Genetics Corp.* 229 2,290
Texas Biotechnology Corp.* 302 4,455
Transkaryotic Therapies, Inc.* 140 5,215
Valentis, Inc.* 184 1,587
Vaxgen, Inc.* 38 1,043
Vical, Inc.* 116 2,458
-----------
242,309
Building Products - 0.54%
Armstrong Holdings, Inc. 201 578
Comfort Systems USA, Inc.* 300 881
Coorstek, Inc.* 25 731
Dal-Tile International, Inc.* 500 6,188
Elcor Chemical Corp. 150 2,334
Insituform Technologies, Inc.* 129 4,604
Lennox International, Inc. 169 1,341
NCI Building Systems, Inc.* 119 1,852
Nortek, Inc.* 240 4,515
Owens Corning 269 370
Simpson Manufacturing, Inc.* 100 4,263
Trex Company, Inc.* 127 4,747
Universal Forest Products, Inc. 100 1,350
Watsco, Inc. 351 3,306
York International Corp. 218 5,927
-----------
42,987
Chemicals - 1.88%
Airgas, Inc.* 500 3,375
Albemarle Corp. 200 4,638
Arch Chemicals, Inc. 131 2,546
Calgon Carbon Corp. 320 1,880
Cambrex Corp. 150 5,991
Chemfirst, Inc. 117 2,691
Crompton Corp. 969 7,752
Cytec Industries, Inc.* 400 13,850
Ethyl Corp. 536 1,072
Ferro Corp. 300 6,150
Fuller, H B Co. 100 3,381
Georgia Gulf Corp. 300 4,013
Grace, W R & Co. 500 1,906
Great Lakes Chemical Corp. 265 8,844
International Specialty Products* 100 625
Lilly Industries, Inc. 147 4,410
Lubrizol Corp. 290 6,289
MacDermid, Inc. 100 2,150
Millennium Chemicals, Inc. 420 6,773
Minerals Technologies, Inc. 100 3,131
NL Industries, Inc. 100 2,363
Olin Corp. 400 7,100
OM Group, Inc. 200 9,250
Omnova Solutions, Inc. 300 1,688
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Chemicals - continued
R.P.M. ,Inc. 562 $5,023
Schulman, A, Inc. 300 3,281
Scotts Co.* 290 10,368
Solutia, Inc. 711 9,065
Spartech Corp. 100 1,544
Stepan Chemical Co. 37 717
Valspar Corp. 204 5,571
Wd-40 Co. 100 2,186
-----------
149,623
Commercial Services & Supplies - 3.68%
4 Kids Entertainment, Inc.* 17 245
ABM Industries, Inc. 105 2,933
Administaff, Inc.* 200 7,100
Advanced Marketing Services, Inc. 39 702
Advantage Learning Systems, Inc.* 100 2,969
Advent Software, Inc.* 190 11,364
Armor Holdings, Inc.* 222 3,455
Banta Corp. 200 4,613
Billing Concepts Corp.* 300 900
Bowne & Co., Inc. 338 2,831
Braun Consulting, Inc.* 43 324
Bright Horizons Family Solutions, Inc.* 100 2,500
C D I Corp.* 100 1,588
Career Education Corp.* 104 4,024
Casella Waste Systems, Inc.* 280 2,433
Catalytica, Inc.* 500 6,719
CCC Information Services Group, Inc.* 151 1,038
Central Parking Corp. 100 1,919
Centurybusiness Services, Inc.* 600 675
Cheap Tickets, Inc.* 169 1,796
Chemed Corp. 100 3,288
Coinstar, Inc.* 260 3,429
Compucredit Corp.* 100 3,088
Corporate Executive Board Co.* 200 9,225
Costar Group, Inc.* 87 2,719
Cypress Communications, Inc.* 53 142
Diamond Technology Partner, Inc.* 144 6,426
Digitalthink, Inc.* 24 846
e.MedSoft.com* 282 423
Edison Schools, Inc.* 62 1,701
Education Management Corp.* 123 3,813
Encompass Servics Corp.* 501 2,286
F Y I, Inc.* 100 4,013
Factset Research Systems, Inc. 125 4,734
First Consulting Group* 101 675
Futurelink Corp.* 266 482
G & K Services 100 2,763
Hall Kinion & Assoc., Inc.* 42 1,110
Harland, John H Co. 200 2,775
Heidrick & Struggles International, Inc.* 136 8,407
HON Industries, Inc. 337 8,109
Hypercom Corp.* 100 688
</TABLE>
The accompanying notes are an integral part of the financial statements.
62
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(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Commercial Services & Supplies - continued
Insurance Auto Auctions, Inc.* 13 $156
Ionics, Inc.* 104 2,178
ITT Educational Services, Inc.* 100 1,575
Kelly Services, Inc. 115 2,552
kforce.com, Inc.* 400 1,625
Kimball International, Inc.* 300 4,669
Korn / Ferry International* 243 8,505
Labor Ready, Inc.* 330 990
Learning Tree International, Inc.* 100 4,525
Mail Well Holdings, Inc.* 420 2,074
Management Network Group, Inc.* 29 382
Medquist, Inc.* 332 3,735
Memberworks, Inc.* 100 3,438
Meta Group, Inc.* 7 67
Modis Professional Services, Inc.* 630 2,599
Multex Systems, Inc.* 108 1,397
National Data Corp. 194 7,396
Navigant Consulting Co.* 300 1,144
NCO Group, Inc.* 247 5,403
Netcentives, Inc.* 254 1,810
New England Business Svc, Inc. 100 1,738
Nextcard, Inc.* 140 1,068
Ogden Corp.* 400 5,500
On Assignment, Inc.* 200 5,038
Pegasus Systems, Inc.* 150 2,559
Per Se Technologies Inc* 206 908
Pittston Brinks Group 396 6,287
Pre Paid Legal Svcs, Inc.* 124 5,441
Probusiness Services, Inc.* 250 8,172
Professional Detailing, Inc.* 14 1,241
Profit Recovery Group Intl., Inc.* 350 1,881
Prosofttraining.com* 85 595
Rollins, Inc. 110 1,987
Sitel Corp.* 400 1,125
Sodexho Marriott Services, Inc. 143 2,628
Sothebys Holdings, Inc. 257 6,987
Source Information Mgmt. Co.* 210 1,155
Spherion Corp.* 480 5,700
Standard Register Co. 100 1,200
Strayer Education, Inc. 28 674
Surmodics, Inc.* 31 1,628
Sylvan Learning Systems, Inc.* 185 2,856
Tanning Technology Corp.* 63 340
Tetra Tech, Inc.* 322 11,190
United Stationers, Inc.* 300 9,019
Volt Information Sciences, Inc.* 100 2,175
Wackenhut Corp.* 100 1,263
Wallace Computer Service, Inc. 400 5,800
Waste Connections, Inc.* 291 7,439
Xceed, Inc.* 100 78
Zomax Optical Media, Inc.* 200 1,213
-----------
292,363
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Communications Equipment - 1.87%
Adaptive Broadband Corp.* 300 $4,819
Airnet Commumication Corp.* 19 289
Allen Telecom, Inc.* 200 3,738
Anixter International, Inc.* 137 3,322
Arguss Holdings, Inc.* 100 1,250
Audiovox Corp.* 70 958
Aware, Inc.* 117 3,620
Brooktrout, Inc.* 100 1,444
C-Cor.net Corporation* 200 3,125
Cable Design Technologies Corp.* 450 10,378
Carrier Access Corp.* 100 1,250
Celeritek, Inc.* 61 2,017
Cobalt Networks, Inc.* 200 11,025
Computer Network Technology* 200 6,078
Cylink Corp.* 156 658
Davox Corp.* 9 88
Glenayre Technologies, Inc.* 500 4,125
Impsat Corp.* 74 888
Intelect Communications, Inc.* 481 541
Inter-Tel, Inc. 105 1,214
Interdigital Communications Corp.* 413 4,517
International Fibercom, Inc.* 200 2,575
LCC International, Inc.* 60 900
MCK Communications, Inc.* 52 813
Metawave Communications Corp.* 161 2,133
MRV Communications, Inc.* 400 15,800
Neon Communications, Inc.* 34 410
Netro Corp.* 354 7,722
Network Equipment Technologies, Inc.* 138 1,311
Network Peripherals, Inc.* 100 1,088
NX Networks, Inc.* 219 623
Osicom Technologies, Inc.* 77 2,464
P-Com, Inc.* 500 2,813
Plantronics, Inc.* 300 13,688
Proxim, Inc.* 200 12,125
Sonicwall, Inc.* 170 2,539
Spectralink Corp.* 57 424
Superior Telecom, Inc. 100 494
Symmetricom, Inc.* 87 1,109
Telaxis Communications Corp.* 16 72
Tut Systems, Inc.* 113 3,757
US Wireleless Corp.* 94 1,445
Viasat, Inc.* 94 2,068
Vyyo, Inc.* 37 819
Westell Technologies* 180 990
World Access, Inc.* 538 2,623
Xircom, Inc.* 200 2,825
-----------
148,971
Computers & Peripherals - 1.29%
3dfx Interactive, Inc.* 190 808
Advanced Digital Information* 375 4,875
Avid Technology, Inc.* 144 1,998
</TABLE>
The accompanying notes are an integral part of the financial statements.
63
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(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Computers & Peripherals - continued
Concurrent Computer Corp.* 435 $7,667
Crossroads Systems, Inc.* 125 867
Dot Hill Systems Corp.* 70 241
DSP Group, Inc.* 200 5,675
e.Machines, Inc.* 92 95
Extended Systems, Inc. 53 2,067
Gadzoox Networks, Inc.* 205 756
Hutchinson Technology, Inc.* 200 4,388
Immersion Corp.* 91 899
Infocus Corp.* 156 6,893
Intergraph Corp.* 400 2,500
Interlink Electronics, Inc.* 79 1,768
Iomega Corp.* 2,200 10,802
JNI Corp.* 15 1,336
Maxtor Corp.* 500 3,906
Media 100, Inc.* 36 356
Micron Electronics, Inc.* 326 2,577
MTI Technology Corp.* 300 1,556
Paradyne Networks, Inc.* 103 412
Procom Technology, Inc.* 33 749
Quantum Corp.* 611 6,988
Rainbow Technologies, Inc.* 110 2,736
SCM Microsystems, Inc.* 100 3,800
Silicon Graphics, Inc.* 1,286 5,787
Storage Technology Corp.* 666 6,494
Universal Display Corp.* 77 1,328
Wave Systems Corp.* 400 4,625
Western Digital Corp.* 1,064 6,384
Xybernaut Corp.* 217 1,022
------------
102,355
Construction & Engineering - 0.40%
Emcor Group, Inc.* 100 2,594
Foster Wheeler Corp. 400 2,950
Granite Construction, Inc. 121 2,760
Intergrated Electrical Svcs.* 300 2,063
Jacobs Engineering Group, Inc.* 142 5,875
SBA Communcations Corp.* 217 10,877
URS Corp.* 100 1,281
Washington Group Intl., Inc.* 306 3,213
------------
31,613
Construction Materials - 0.14%
Amcol Intl. Corp. 200 1,475
Centex Construction Products, Inc. 100 2,594
Florida Rock Industries, Inc. 100 3,888
Texas Industries, Inc. 136 3,170
U S Aggregates, Inc. 5 70
------------
11,197
Containers & Packaging - 0.46%
Ball Corp. 154 5,409
Caraustar Industries, Inc. 200 2,013
Chesapeake Corp. 100 1,963
Earthshell Corp.* 263 822
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Containers & Packaging - continued
Gaylord Container Corp.* 400 $875
Greif Bros. Corp. 100 3,200
Ivex Packaging Corp.* 135 1,325
Longview Fibre Co. 433 5,900
Myers Industries, Inc. 132 1,749
Packaging Corp. of America* 150 2,203
Pactiv Corp.* 1,081 11,349
------------
36,808
Distributors - 0.03%
Brightpoint, Inc.* 400 2,663
------------
Diversified Financials - 2.79%
Acacia Research Corp.* 83 2,640
Advanta Corp. 100 1,025
Affiliated Managers Group, Inc.* 286 17,196
Allied Capital Corp. 500 10,313
American Capital Strategies, Ltd. 315 6,950
Americredit Corp.* 800 21,500
Arch Capital Group, Ltd.* 100 1,550
Blackrock, Inc.* 93 3,964
Cash America Intl., Inc. 200 1,038
Charter Municipal Mortgage Accpt. Co. 133 1,794
Credit Acceptance Corp.* 100 613
Dain Rauscher Corp. 100 9,381
Donaldson Lufkin & Jenrette* 54 273
E-Loan, Inc.* 660 1,898
Eaton Vance Corp. 380 18,929
Espeed, Inc.* 62 1,302
Financial Federal Corp.* 220 4,661
Finova Group, Inc. 350 897
Friedman, Billings, Ramsey Group, Inc.* 149 1,192
Frontline Capital Group* 166 2,366
Gabelli Asset Mgmt., Inc.* 130 4,680
Globalnet Financial.com, Inc.* 166 747
Investment Technology Group* 166 5,976
Jeffries Group, Inc. 137 3,733
Labranche & Co., Inc.* 203 8,044
Leucadia National Corp. 400 9,950
Liberty Financial Cos., Inc. 100 2,700
Medallion Financial Corp. 100 1,538
Metris Companies, Inc. 611 19,781
Morgan Keegan, Inc. 200 3,988
National Discount Brokers Group* 100 4,869
On2.COM, Inc.* 99 226
Pennaco Energy, Inc.* 351 4,366
PFF Bancorp, Inc. 100 1,850
Phoenix Investment Partners, Ltd.* 500 7,813
Raymond James Financial, Inc. 400 13,525
Southwest Securities Group 121 3,418
The Intercept Group, Inc.* 31 839
Triad Guaranty, Inc.* 100 2,906
</TABLE>
The accompanying notes are an integral part of the financial statements.
64
<PAGE>
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PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Diversified Financials - continued
Tucker Anthony Sutro Corp. 100 $2,313
Walter Industries, Inc. 400 2,975
WFS Financial, Inc.* 27 425
Wit Soundview Group, Inc.* 794 5,653
------------
221,797
Diversified Telecommunication - 1.22%
Adelphia Business Solutions* 203 1,269
Alamosa PCS Holdings, Inc.* 34 516
Alaska Communications Sys., Inc.* 54 368
Allied Riser Communications Corp.* 587 1,871
Arch Wireless, Inc.* 330 990
Caprock Communications Corp.* 300 2,138
CFW Communications Co. 100 1,988
Choice One Communications, Inc.* 48 519
Commonwealth Telephone Entrps, Inc.* 100 3,463
CT Communications, Inc. 200 4,013
CTC Communications Group, Inc.* 150 1,448
Deltathree.com, Inc.* 55 165
E-Spire Communications, Inc.* 430 1,183
Eglobe, Inc.* 373 152
Electric Lightware, Inc.* 100 575
Fibernet Telecom. Group, Inc.* 53 566
Firstworld Communications* 56 84
General Communication, Inc.* 300 2,344
Goamerica, Inc.* 69 720
Golden Telecommunications, Inc.* 48 744
Hickory Tech Corp. 60 1,365
Ibasis, Inc.* 79 612
ICG Communications, Inc.* 600 263
IDT Corp.* 154 5,506
Illuminet Holdings, Inc.* 151 3,636
Intermedia Communications, Inc.* 400 8,850
ITC Deltacom, Inc.* 400 3,238
ITCX Corp.* 131 1,384
Leap Wireless Intl., Inc.* 181 9,005
Metricom, Inc.* 136 2,414
Metrocall, Inc.* 526 674
Motient Corp.* 222 2,692
Mpower Communications Corp.* 364 2,366
Net2000 Communication, Inc.* 60 360
Net2phone, Inc.* 142 2,636
Network Access Solutions Corp.* 105 285
Network Plus Corp.* 54 425
North Pittsburgh Systems, Inc. 107 1,271
Pac-West Telecomm, Inc.* 114 990
Price Communications Corp.* 465 10,056
Primus Telecomm Group, Inc.* 273 1,382
Rhythms Netconnections, Inc.* 557 1,218
Talk.com, Inc.* 400 1,238
Teligent, Inc.* 216 1,640
Telocity, Inc.* 55 158
Us LEC Corp.* 100 600
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Diversified Telecommunication - continued
Viatel, Inc.* 376 $3,619
Weblink Wireless, Inc.* 337 2,675
Worldpages.com, Inc.* 269 689
Z Tel Technologies, Inc.* 22 187
------------
96,550
Electric Utilities - 1.92%
Allete* 283 6,102
Black Hills Corp. 138 4,313
CH Energy Group, Inc. 109 4,292
Cleco Corp. 445 21,165
Conectiv, Inc. 824 14,781
El Paso Electric Co.* 500 5,995
Empire District Electric Co. 112 3,101
Energy East Corp. 118 2,382
Hawaiian Electric Industries, Inc. 308 10,145
Idacorp, Inc. 300 14,794
Kansas City Power & Light Co. 263 6,328
Madison Gas & Electric Co. 100 2,175
MDU Resources Group, Inc. 500 14,625
OGE Energy Corp. 211 4,339
Otter Tail Power Co. 200 4,438
Public Service Co. New Mexico 300 8,269
RGS Energy Group, Inc. 334 9,853
UIL Holding Corp. 100 4,681
Unisource Energy Corp. 300 4,481
WPS Resources Corp. 200 6,436
------------
152,695
Electrical Equipment - 2.22%
Advanced Lighting Technologies, Inc.* 89 1,062
American Technical Ceramics* 3 46
Ametek Aerospace Products, Inc. 307 6,677
Anaren Microwave, Inc.* 76 7,904
Artesyn Technologies, Inc.* 315 12,797
Asyst Technologies, Inc.* 283 4,245
Baldor Electric Co. 308 6,122
Bel Fuse, Inc. 33 1,324
Belden, Inc. 200 5,188
Benchmark Electronics, Inc.* 100 4,025
Brady Corp. 134 4,154
C&D Technologies 271 16,023
CTS Corp. 200 8,588
Electro Scientific Industries, Inc.* 200 6,988
Excel Technology, Inc.* 39 975
Franklin Electric, Inc. 5 341
General Cable Corp. 300 1,800
Genlyte Group, Inc.* 100 2,588
Littelfuse, Inc.* 126 3,654
Magnetek, Inc.* 200 2,175
MKS Instruments Inc.* 3 55
National Service Industries, Inc. 115 2,350
Paxar Corp.* 400 3,275
Penn Engineering & Mfg Corp. 3 113
</TABLE>
The accompanying notes are an integral part of the financial statements.
65
<PAGE>
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PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Electrical Equipment - continued
Plexus Corp.* 238 $15,009
Power Integrations* 167 2,244
Rayovac Corp.* 310 4,573
Satcon Technology Corp.* 128 3,264
Sensormatic Electronics Corp.* 600 10,800
SLI Inc. 100 825
Smith A O Corp. 136 1,921
Technitrol, Inc. 100 11,088
Tecumseh Products, Co. 26 1,037
Telxon Corp.* 89 1,997
Three Five Systems, Inc.* 140 4,830
Triumph Group, Inc.* 100 3,400
Vicor Corp.* 120 6,480
Wesco Intl., Inc.* 300 2,513
Woodhead Industries 39 858
Zixit Corp.* 120 2,929
------------
176,237
Electronic Equipment & Instruments - 3.06%
ACT Manufacturing, Inc.* 61 2,005
Anadigics, Inc.* 207 4,632
Analogic Corp. 20 706
Applied Micro Circuits Corp.* 332 25,340
Aurora Bioscience Corp.* 193 11,761
California Amplifier, Inc.* 72 1,800
Caliper Technologies Corp.* 20 1,128
Checkpoint Systems, Inc.* 300 2,381
Cohu, Inc. 100 1,581
Cyberoptics Corp.* 14 329
DDI Corporation* 58 2,316
Emagin Corp.* 100 865
Exar Corp.* 300 13,406
Fisher Scientific Intl., Inc.* 400 15,375
Fuelcell Energy, Inc.* 22 1,684
Harman Intl. Industries, Inc. 208 9,984
HI / FN, Inc.* 22 1,359
Identix, Inc.* 162 2,333
Ii-Vi, Inc.* 32 662
Interlogix, Inc.* 46 566
Ixys Corp.* 4 101
Keithley Instruments, Inc. 49 2,622
Kent Electronics Corp.* 200 3,725
Lightpath Technologies, Inc.* 78 2,126
Mattson Technology, Inc.* 94 1,105
Meade Instruments Corp.* 13 238
Mechanical Technology, Inc.* 157 1,178
MEMC Electronics Materials, Inc.* 300 2,981
Methode Electronics, Inc. 300 11,288
Mettler Toledo Intl., Inc.* 349 16,294
MIPS Technologies, Inc.* 300 12,038
Nanometrics, Inc.* 19 437
Park Electrochemical Corp. 100 6,606
Photon Dynamics, Inc.* 76 2,736
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Electronic Equipment & Instruments - continued
Pioneer Standard Electronics, Inc. 150 $2,081
Pixelworks, Inc.* 100 3,331
PLX Technology, Inc.* 101 2,424
Quicklogic Corp.* 183 1,624
Research Frontiers, Inc.* 57 1,097
Robotic Vision Systems, Inc.* 238 1,302
Rudolph Technologies, Inc.* 24 936
SBS Technologies, Inc.* 40 1,030
Sipex Corp.* 144 5,670
Somera Communications, Inc.* 174 1,958
Spectra Physics Lasers, Inc.* 11 388
Stanford Microdevices, Inc.* 100 2,506
Superconductor Technologies* 118 1,195
Supertex, Inc.* 26 738
Symyx Technologies, Inc.* 146 6,889
Teledyne Technologies, Inc.* 173 4,336
Therma Wave, Inc.* 63 1,292
Tollgrade Communications, Inc.* 79 7,564
Trimble Navigation Ltd.* 150 3,563
Varian, Inc.* 300 9,244
Veeco Instruments, Inc.* 159 10,526
Viasystems Group, Inc.* 282 4,001
Wink Communications, Inc.* 138 1,415
X Rite, Inc. 44 297
Zygo Corp.* 90 4,453
------------
243,548
Energy Equipment & Services - 0.95%
Atwood Oceanics, Inc.* 100 3,356
CAL Dive Intl., Inc.* 7 348
Carbo Ceramics, Inc. 19 569
Dril-Quip, Inc.* 100 3,300
Friede Goldman Halter, Inc.* 300 1,725
Horizon Offshore, Inc.* 192 2,640
Input/Output, Inc.* 400 3,375
Key Energy Services, Inc.* 990 8,910
Lone Star Technologies, Inc.* 146 5,862
Newpark Resources, Inc.* 545 4,905
Oceaneering Intl., Inc.* 100 1,406
Offshore Logistics, Inc.* 100 1,725
Parker Drilling Co.* 500 3,000
Patterson Energy, Inc.* 371 10,434
RPC, Inc. 100 1,244
Seacor Smit, Inc.* 150 6,281
Seitel, Inc.* 200 3,000
Superior Energy Svcs., Inc.* 400 3,600
UTI Energy Corp.* 200 4,013
Veritas DGC, Inc.* 200 6,000
------------
75,693
Food & Drug Retailing - 0.59%
Brio Technology, Inc.* 250 2,047
Caseys General Stores, Inc. 400 5,000
Duane Reade, Inc.* 100 2,919
</TABLE>
The accompanying notes are an integral part of the financial statements.
66
<PAGE>
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PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Food & Drug Retailing - continued
Fleming Cos., Inc. 350 $4,966
Great Atlantic & Pacific Tea, Inc. 100 1,000
Ingles Markets, Inc. 100 988
Longs Drug Stores Corp. 192 4,200
Performance Food Group Co.* 220 8,910
Ruddick Corp. 300 3,938
United Natural Foods, Inc.* 100 1,256
Whole Foods Market, Inc.* 200 9,250
Wild Oats Markets, Inc.* 410 2,587
------------
47,061
Food Products - 1.61%
Agribrands Intl., Inc.* 100 4,350
American Italian Pasta Co.* 350 7,022
Aurora Foods, Inc.* 680 1,913
Cadiz, Inc.* 580 6,163
Chiquita Brands Intl., Inc. 400 775
Corn Products Intl., Inc. 300 7,538
Dean Foods Co. 198 6,336
Del Monte Foods Co.* 500 3,031
Delta & Pine Land Co. 300 7,331
Dole Food, Inc. 252 3,040
Dreyers Grand Ice Cream, Inc. 330 8,126
Earthgrains Co. 400 8,100
Farmer Bros. Co. 1 195
Hain Celestial Group, Inc.* 353 14,010
International Multifoods Corp. 106 1,795
Interstate Bakeries Corp. 168 2,352
Lance, Inc. 200 2,013
Michael Foods, Inc. 100 2,694
Pilgrims Pride Corp. 100 675
Ralcorp Holdings, Inc.* 285 4,008
Rica Foods, Inc.* 48 732
Riviana Foods, Inc. 47 799
Sensient Technologies Corp.* 403 7,959
Smithfield Foods, Inc.* 300 8,606
Smucker, J M Co.* 200 4,450
Suiza Foods Corp.* 300 13,894
Tejon Ranch Co. 2 43
------------
127,950
Gas Utilities - 1.59%
AGL Resources, Inc. 500 10,188
Atmos Energy Corp. 400 9,250
Cascade Natural Gas Corp. 100 1,844
Energen Corp. 280 8,015
Laclede Gas Co. 122 2,669
Midcoast Energy Resources, Inc. 400 8,100
New Jersey Resources Corp. 100 3,994
Northwest Natural Gas Co. 200 4,688
NUI Corp. 100 3,119
Oneok, Inc. 400 15,850
Piedmont Natural Gas, Inc. 300 9,150
Semco Energy, Inc. 115 1,783
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Gas Utilities - continued
South Jersey Industries, Inc. 100 $2,913
Southern Union Co. 325 6,114
Southwest Gas Corp. 300 6,263
Southwestern Energy Co. 200 1,600
Transmontaigne, Inc.* 200 775
UGI Corp. 305 7,072
Vectren Corp. 566 13,085
WGL Holdings, Inc.* 400 10,200
------------
126,672
Health Care Equipment & Supplies - 2.96%
Abiomed, Inc.* 72 2,088
Acuson Corp.* 100 2,281
Adac Laboratories* 96 1,248
Aradigm Corp.* 107 2,367
Arrow International, Inc. 100 4,031
Arthrocare Corp.* 300 6,806
Aspect Medical Systems, Inc.* 115 1,021
ATS Medical, Inc.* 86 1,575
Bio-Rad Laboratories, Inc.* 100 2,990
Biosite Diagnostics, Inc.* 95 2,090
Cardiodynamics Intl., Corp.* 654 3,434
Celsion Corp.* 302 604
Chromavision Medical Systems, Inc.* 260 1,235
Closure Medical Corp.* 177 4,292
Coherent, Inc.* 200 6,963
Conmed Corp.* 100 1,469
Cooper Cos., Inc. 100 3,575
Cyberonics, Inc.* 315 7,324
Cygnus, Inc.* 154 1,376
Datascope Corp. 100 3,463
Diagnostic Products Corp. 100 4,563
Diametrics Medical, Inc.* 613 5,057
Endocare, Inc.* 170 3,007
Enzon, Inc.* 400 28,500
Gliatech, Inc.* 150 966
Haemonetics Corp.* 200 4,700
Henry Schein, Inc.* 200 4,875
I-Stat Corp.* 76 1,492
Igen Intl., Inc.* 100 2,488
Imatron, Inc.* 495 1,067
Inamed Corp.* 73 2,044
Inhale Therapeutic Systems* 222 11,045
Invacare Corp. 200 5,700
Mentor Corp. 134 2,362
Molecular Devices Corp.* 100 6,838
Nabi* 175 1,069
Nanogen, Inc.* 100 1,550
Nexell Therapeutics, Inc.* 207 1,478
Noven Pharmaceuticals, Inc.* 224 9,982
Novoste Corp.* 100 2,525
Ocular Sciences, Inc.* 100 1,238
Oratec Interventions, Inc.* 28 280
</TABLE>
The accompanying notes are an integral part of the financial statements.
67
<PAGE>
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PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Health Care Equipment & Supplies - continued
Packard Bioscience Co.* 46 $742
Polymedica Corp.* 169 9,718
Resmed, Inc.* 300 7,650
Respironics, Inc.* 313 6,143
Scott Technologies, Inc.* 100 2,300
Sonic Innovations, Inc.* 70 337
Sonosite, Inc.* 51 650
Staar Surgical Co.* 2 32
Steris Corp.* 500 7,500
Sunrise Technologies Intl.* 400 2,888
Theragenics Corp.* 200 938
Thermo Cardiosystems, Inc.* 101 827
Thoratec Labs Corp.* 84 1,024
Varian Medical Systems, Inc.* 300 14,663
Vasomedical, Inc.* 298 1,136
Ventana Medical Systems, Inc.* 100 2,625
Visx, Inc.* 397 8,511
Vital Signs, Inc. 42 1,307
West Pharmaceutical Svcs., Inc. 100 2,200
Zoll Medical Corp.* 29 1,430
------------
235,679
Health Care Providers & Services - 3.91%
Accredo Health, Inc.* 34 1,471
Advance Paradiam, Inc.* 522 25,513
Ameripath, Inc.* 100 1,794
Amerisource Health Corp.* 400 17,375
Apria Healthcare Group, Inc.* 400 8,000
Bergen Brunswig Corp. 912 8,265
Beverly Enterprises, Inc.* 800 4,000
Bindley Westn Industries, Inc. 135 4,852
Caremark Rx, Inc.* 1,600 20,000
Covance, Inc.* 500 4,313
Coventry Health Care, Inc.* 500 9,125
Cryolife, Inc.* 9 358
Cyber Care, Inc.* 434 2,129
Davita, Inc.* 600 6,750
DVI, Inc.* 230 3,853
Eclipsys Corp.* 300 7,406
Health Net, Inc.* 651 13,142
Hooper Holmes, Inc. 500 4,745
Humana, Inc.* 1,000 12,125
Impath, Inc.* 200 15,125
Laboratory Corp. of America Holdings* 40 5,395
Lifepoint Hospitals, Inc.* 300 11,625
Lincare Holdings, Inc.* 197 8,286
Manor Care, Inc.* 503 8,394
Maximus, Inc.* 100 2,456
Microvision, Inc. 74 2,521
Mid Atlantic Medical Services, Inc.* 400 6,800
Omnicare, Inc. 628 10,990
Orthodontic Centers of America, Inc.* 400 13,350
Owens & Minor, Inc. 300 4,538
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Health Care Providers & Services - continued
Parexel Intl. Corp.* 200 $1,750
Pharmaceutical Prod. Dvlpmnt, Inc.* 119 3,726
Province Healthcare Co.* 193 8,130
PSS World Medical, Inc.* 600 1,800
Quorum Health Group, Inc.* 600 8,025
Renal Care Group, Inc.* 400 9,400
Res-Care, Inc.* 100 550
Service Corp Intl.* 1,914 4,426
Stericycle, Inc.* 280 9,065
Stewart Enterprises, Inc. 471 1,001
Sunrise Assisted Living, Inc.* 100 2,338
Syncor Intl. Corp.* 200 5,138
Triad Hospitals, Inc.* 300 8,325
US Oncology, Inc.* 488 2,620
------------
310,990
Hotels, Restaurants & Leisure - 2.39%
American Classic Voyages Co.* 100 1,381
Anchor Gaming* 7 595
Applebees Intl., Inc. 200 6,041
Argosy Gaming Corp.* 380 6,175
Aztar Corp.* 400 6,050
Bally Total Fitness Hldg. Corp.* 200 4,988
Bob Evans Farms, Inc. 300 5,644
Boca Resorts, Inc.* 380 5,154
Boyd Gaming Corp.* 300 1,181
Buca, Inc.* 583 9,109
CBRL Group, Inc. 500 8,938
CEC Entertainment, Inc.* 155 4,941
Cheesecake Factory* 340 15,066
Choice Hotels, Inc.* 500 5,875
Churchill Downs, Inc.* 100 2,800
Consolidated Products, Inc. 175 1,323
Dover Downs Entertainment, Inc. 100 1,175
Extended Stay America, Inc.* 720 8,865
Gtech Holdings Corp.* 343 5,938
Ihop Corp.* 100 2,113
Isle of Capri Casinos, Inc.* 324 3,564
Jack In The Box, Inc.* 400 9,800
Krispy Kreme Doughnuts, Inc.* 19 1,873
Landrys Seafood Restaurants, Inc. 200 1,613
Lone Star Steakhouse & Saloon 214 1,806
Lubys Cafeterias, Inc. 233 1,369
Marcus Corp. 100 1,419
Morrison Mgmt. Specialists, Inc. 110 3,685
NPC Intl., Inc.* 100 1,113
O'Charleys, Inc.* 100 1,463
Papa Johns Intl., Inc.* 350 8,794
Penn National Gaming, Inc.* 225 3,938
Pinnacle Entertainment, Inc.* 350 7,984
Prime Hospitality Corp.* 415 3,943
Rare Hospitality Intl., Inc.* 150 3,488
Ruby Tuesday, Inc. 600 8,138
</TABLE>
The accompanying notes are an integral part of the financial statements.
68
<PAGE>
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PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Hotels, Restaurants & Leisure - continued
Ryans Family Steak Houses, Inc.* 300 $2,513
Sonic Corp.* 100 3,650
Speedway Motorsports, Inc.* 201 3,505
Station Casinos, Inc.* 300 4,838
Vail Resorts, Inc.* 144 3,051
WMS Industries, Inc.* 148 3,293
Wyndham Intl., Inc.* 1,100 1,781
------------
189,973
Household Durables - 2.22%
American Greetings Corp. 410 7,457
Applica, Inc.* 646 3,270
Blyth Industries, Inc. 190 4,940
Centex Corp. 340 12,580
Champion Enterprises, Inc.* 400 1,550
Clayton Homes, Inc. 482 4,428
Crossmann Communities, Inc.* 12 215
D.R.Horton, Inc. 436 8,066
Ethan Allen Interiors, Inc. 400 11,700
Fedders USA, Inc. 300 1,275
Fleetwood Enterprises, Inc. 300 3,956
Furniture Brands Intl., Inc.* 400 6,750
Interface, Inc. 400 3,650
Kaufman & Broad Home Corp. 400 11,900
La-Z-Boy, Inc. 400 6,300
Lancaster Colony Corp. 102 2,410
Lennar Corp. 402 12,914
Libbey, Inc. 100 2,725
M.D.C. Holdings, Inc. 100 2,738
Metromedia Inter. Grp., Inc.* 504 1,875
Mohawk Industries, Inc.* 210 4,581
National Presto Industries, Inc. 47 1,428
NVR, Inc.* 100 10,340
Oneida Ltd. 100 1,063
Palm Harbor Homes, Inc.* 100 1,463
Pulte Corp. 300 9,994
Russ Berrie & Co., Inc. 100 2,269
Ryland Group, Inc. 100 3,225
Salton, Inc.* 100 2,288
Springs Industries, Inc. 100 2,356
Standard-Pacific Corp. 200 3,750
Sunbeam Corp.* 756 709
Toll Bros., Inc.* 134 4,355
Topps, Inc.* 400 3,613
Toro Co. 100 3,500
Tupperware Corp. 500 8,563
Universal Electronics, Inc.* 77 1,415
Westpoint Stevens, Inc. 176 1,262
------------
176,873
Household Products - 0.42%
Block Drug, Inc. 106 5,545
Boyds Collection Ltd.* 446 3,540
Church & Dwight ,Inc. 400 7,900
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Household Products - continued
Dial Corp. 484 $5,415
Herbalife Intl., Inc. 100 844
Mathews Intl. Corp. 100 2,700
Oakley, Inc.* 200 4,200
Playtex Products, Inc.* 300 3,037
------------
33,181
Industrial Conglomerates - 0.51%
Brokat Aktiengesellschaft* 1 21
Carlisle Cos., Inc. 166 6,910
Gentek, Inc. 100 1,669
Harbor Global Company Ltd.* 40 161
Hotel Reservations Network, Inc.* 38 1,330
Mobile Mini, Inc.* 174 3,469
Polyone Corp.* 670 5,276
Standex Intl., Corp. 100 1,831
Teleflex, Inc. 208 7,189
Tredegar Industries, Inc. 130 2,478
U S Industries, Inc. 487 4,322
Uniroyal Technology* 74 754
Valmont Industries, Inc. 112 2,282
Waypoint Financial Corp.* 76 732
Yankee Candle, Inc.* 153 2,247
------------
40,671
Insurance - 2.06%
Alfa Corp 400 7,700
Argonaut Group, Inc. 108 1,856
Baldwin & Lyons, Inc. 100 1,894
Berkley, W R Corp. 100 3,406
Blanch, E W Holdings, Inc. 100 1,888
Brown & Brown, Inc. 200 6,500
CNA Surety Corp. 107 1,244
Commerce Group, Inc. 200 5,113
Crawford & Co. 300 3,750
Delphi Financial One Group, Inc. 106 3,922
Enhance Financial Svcs. Group, Inc. 200 2,325
FBL Financial Group, Inc. 100 1,606
Fidelity Natl. Financial, Inc. 285 7,000
First American Financial Corp. 500 10,469
Fremont General Corp. 346 1,254
Gallagher, Arthur J & Co. 300 18,938
Harleysville Group, Inc. 100 2,306
HCC Insurance Holdings, Inc. 400 7,625
Hilb Rogal & Hamilton Co. 100 3,963
Horace Mann Educators Corp. 400 6,725
HSB Group, Inc. 300 11,869
Landamerica Financial Group, Inc. 100 2,950
Liberty Corp. 100 3,463
Markel Corp.* 16 2,318
Medical Assurance, Inc.* 152 2,109
Mercury General Corp. 83 3,040
Ohio Casualty Corp. 500 4,203
Philadelphia Consol. Holding Co.* 100 2,231
</TABLE>
The accompanying notes are an integral part of the financial statements.
69
<PAGE>
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PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Insurance - continued
Pico Holdings, Inc.* 100 $1,288
PMA Capital Corp. 100 1,638
Presidential Life Corp. 200 2,913
Reliance Group Hldggs., Inc. 500 31
Rightchoice Managed Care, Inc.* 160 4,420
RLI Corp. 100 3,913
Scpie Holdings, Inc. 100 1,900
Selective Insurance Group, Inc. 200 3,450
Stancorp Financial Group, Inc. 119 4,849
State Auto Financial Corp. 100 1,350
Stewart Information Svcs. Corp. 100 1,575
UICI* 300 2,231
Zenith National Insurance Corp. 100 2,272
------------
163,497
Internet & Catalog Retail - 0.37%
Barnesandnoble.com, Inc.* 300 1,172
Buy.com, Inc.* 38 82
Drugstore.com, Inc.* 298 782
Envision Dev. Corp.* 15 54
Etoys, Inc.* 841 3,154
Flowers.com, Inc.* 20 78
Insight Enterprises, Inc.* 360 11,700
Lands End, Inc.* 100 2,565
Network Commerce, Inc.* 303 900
Stamps.com, Inc.* 354 1,394
Valuevision Intl., Inc.* 360 7,290
------------
29,171
Internet Software & Services - 1.21%
About.com, Inc.* 99 2,376
Accrue Software, Inc.* 250 1,156
Allscripts, Inc.* 211 2,532
Avenue A, Inc.* 23 98
Avocent Corp.* 442 31,354
Bell & Howell Co.* 100 1,900
Bluestone Software, Inc.* 74 1,591
CAIS Internet, Inc.* 46 194
Cnet Networks, Inc.* 67 2,111
Digital Island, Inc.* 505 6,376
Egain Communications Corp.* 232 1,508
Excelon Corporation* 158 1,284
Expedia, Inc.* 26 333
Globix Corp.* 268 2,714
Hollywood.com, Inc.* 112 847
Ibeam Broadcasting Corp.* 29 163
Infousa, Inc.* 170 553
Ivillage, Inc.* 236 561
Juno Online Svcs., Inc.* 119 316
Lante Corp. 17 63
Latitude Communications, Inc.* 164 943
Marimba, Inc.* 246 1,461
Marketwatch.com, Inc.* 9 42
NBC Internet, Inc.* 393 2,432
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Internet Software & Services - continued
Net Perceptions, Inc. 400 $1,325
Netopia. Inc.* 100 1,088
Onvia.com, Inc.* 35 92
Open Market, Inc.* 300 994
Organic, Inc.* 27 88
Packeteer, Inc.* 120 2,985
Prodigy Communications Corp.* 133 582
Rare Medium Group, Inc.* 274 1,267
Savvis Communications Corp.* 45 174
Seebeyond Technology Corp.* 11 187
Sequoia Software Corp.* 105 525
Softnet Systems, Inc.* 197 911
Sportsline USA, Inc.* 426 3,648
Starmedia Network, Inc.* 667 4,085
Switchboard, Inc.* 25 163
Travelocity.com, Inc.* 100 1,413
Universal Access, Inc.* 66 965
VelocityHSI, Inc.* 80 85
Ventro Corp.* 159 765
Via Net.Works, Inc.* 102 755
Watchguard Technologies, Inc.* 79 3,950
Women.com Networks, Inc.* 97 142
Worldgate Communications, Inc.* 400 7,472
------------
96,569
IT Consulting Services - 0.76%
Analysts Intl. Corp. 138 863
Cambridge Technology Ptnrs., Inc.* 400 1,550
Ciber, Inc.* 400 3,125
Com21, Inc.* 303 3,276
Complete Busines Solutions, Inc.* 200 2,075
Computer Horizons Corp.* 301 1,505
Cybersource Corp.* 424 2,332
Direct Focus, Inc.* 150 6,675
Eloyalty Corp.* 400 3,850
Epicedge, Inc.* 56 67
IDX Systems Corp.* 100 3,200
Inforte Corp.* 9 276
Lightbridge, Inc.* 117 1,250
Mynd Corp.* 300 3,825
Netegrity, Inc. 189 14,742
Netobjects, Inc.* 180 529
Netsolve, Inc.* 31 233
Perot Systems Corp.* 313 3,110
Priority Healthcare Corp.* 71 3,816
Startek, Inc.* 32 814
Sykes Enterprises, Inc.* 143 769
Technology Solutions Co. 400 950
Unova, Inc.* 400 1,924
------------
60,756
Leisure Equipment & Products - 0.62%
3DO Company (The)* 138 423
Arctic Cat, Inc. 100 1,281
</TABLE>
The accompanying notes are an integral part of the financial statements.
70
<PAGE>
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PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Leisure Equipment & Products - continued
Callaway Golf Co. 600 $9,600
Championship Auto Racing Team* 100 2,488
Concord Camera Corp.* 117 3,620
Jakks Pac, Inc.* 107 943
Midway Games, Inc.* 300 2,325
Musicland Stores, Inc.* 200 1,625
Parkervision, Inc.* 41 2,286
Pinnacle Systems, Inc.* 370 4,671
Polaris Industries, Inc. 200 6,950
Polaroid Corp. 400 4,025
SCP Pool Corp.* 210 5,434
Sturm Ruger & Co., Inc. 100 844
Take Two Interactive Software* 254 3,158
------------
49,673
Machinery - 3.13%
Actuant Corp.* 400 1,450
Advanced Energy Industries, Inc.* 100 1,725
Agco Corp. 500 5,688
Albany Intl. Corp.* 121 1,301
American Superconductor Corp.* 126 6,017
Applied Industrial Tech., Inc. 135 2,287
Aptargroup, Inc. 300 6,206
Astec Industries, Inc.* 260 2,681
Barnes Group, Inc. 100 1,925
Briggs & Stratton Corp. 87 3,105
Clarcor, Inc. 200 3,825
Columbus McKinnon Corp. 100 1,338
Cummins Engine, Inc. 245 8,330
Cuno, Inc.* 100 2,538
Dionex Corp.* 142 4,606
Donaldson, Inc. 400 9,050
Energy Conversion Devices, Inc.* 51 1,651
Esco Technologies, Inc.* 26 473
Esterline Technologies Corp.* 112 2,499
Flowserve Corp. 341 6,863
Gardner Denver, Inc.* 100 1,838
Graco, Inc. 100 3,594
Harsco Corp. 400 8,075
Idex Corp. 300 9,675
JLG Industries, Inc. 400 5,575
Kaydon Corp. 300 6,581
Kennametal, Inc. 200 5,875
Lincoln Electric Holdings, Inc. 341 5,861
Lindsay Manufacturing Co. 100 2,100
Manitowoc, Inc. 290 7,884
Maverick Tube Corp. 115 1,790
Milacron, Inc. 300 4,781
Mueller Industries, Inc. 425 9,908
Nacco Industries, Inc. 4 152
Nordson Corp. 200 5,738
NS Group, Inc.* 95 812
Oshkosh Truck Corp. 180 7,403
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Machinery - continued
Presstek, Inc.* 200 $3,150
Regal Beloit Corp. 135 2,261
Reliance Steel & Aluminum Co. 560 13,300
Robbins & Myers, Inc. 100 2,419
Rogers Corp.* 98 3,504
Roper Industries 300 10,500
Semitool, Inc. 94 1,228
Specialty Equipment Cos., Inc.* 100 3,031
SPS Technologies, Inc.* 100 5,163
Stewart & Stevenson Svcs., Inc. 200 4,800
Tennant Co. 100 4,350
Terex Corp.* 200 2,463
Thomas Industries, Inc. 100 2,100
Timken Co. 400 5,625
Trinity Industries, Inc. 400 9,625
USEC, Inc. 800 4,100
Valence Technology, Inc.* 200 2,788
Wabash National Corp. 248 1,984
Watts Industriew, Inc. 108 1,208
Woodward Governor Co. 100 4,478
------------
249,272
Marine - 0.23%
Alexander & Baldwin, Inc. 400 9,975
Kirby Corp.* 200 3,688
Overseas Shipholding Group, Inc. 200 4,800
------------
18,463
Media - 1.96%
24/7 Media, Inc.* 321 1,665
Ackerley Communications, Inc. 100 1,038
Acme Communications, Inc.* 57 349
ACNielson Corp.* 333 7,971
ACTV, Inc.* 331 3,258
Advo, Inc.* 100 3,681
APAC Teleservices, Inc.* 147 790
Citadel Communications Corp.* 246 2,983
Crown Media Holdings, Inc.* 37 513
Cumulus Media, Inc.* 300 1,875
Data Broadcasting* 460 2,027
Digital Impact, Inc.* 49 266
Gaylord Entertainment Co. 100 2,375
Grey Global Group, Inc. 2 1,120
Ha-Lo Industries, Inc.* 367 1,422
Hollinger International, Inc. 162 2,501
Houghton Mifflin Co. 152 5,596
Information Holdings, Inc.* 59 1,538
Insight Communications, Inc.* 234 3,247
Journal Register Co.* 400 7,125
Jupiter Media Metrix, Inc.* 219 2,984
Key3media Group, Inc.* 100 950
Lee Enterprises, Inc. 400 11,050
Lifeminders, Inc.* 80 930
Lodgenet Entertainment Corp.* 102 1,791
</TABLE>
The accompanying notes are an integral part of the financial statements.
71
<PAGE>
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PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Media - continued
Martha Stewart Living, Inc.* 53 $1,328
McClatchy Co. 117 4,446
Media General, Inc. 73 2,774
Mediacom Communications Corp.* 126 2,142
Mediaplex, Inc.* 83 179
Meredith Corp. 197 6,255
Modem Media, Inc.* 200 1,175
Mypoints.com, Inc.* 126 284
Netcreations, Inc.* 16 120
Netratings, Inc.* 20 360
Nucentrix Broadband Networks* 43 973
On Command Corp.* 100 1,050
Paxson Communications Corp.* 300 3,413
Penton Media, Inc. 137 4,187
Playboy Enterprises, Inc.* 128 1,656
Private Media Group, Inc.* 70 606
Pulitzer, Inc. 48 1,966
Regent Communications, Inc.* 68 408
RH Donnelley Corp.* 300 6,788
Saga Communications* 100 1,650
Salem Communications Corp.* 133 1,596
Scholastic Corp.* 100 8,000
Sinclair Broadcast Group, Inc.* 375 3,457
Sirius Satellite Radio, Inc.* 223 11,206
Spanish Broadcasting Sys., Inc.* 409 3,681
Tivo, Inc.* 89 1,163
Ventiv Health, Inc.* 67 720
Wiley, John & Son 521 10,648
World Wrestling Fedn. Enmt., Inc.* 17 257
Xm Satellite Radio Hldgs., Inc.* 62 1,798
Young Broadcasting, Inc.* 100 2,481
------------
155,810
Metals & Mining - 1.09%
Ak Steel Corp. 456 4,218
Aperian, Inc.* 64 224
Arch Coal, Inc. 208 2,262
Battle Mountain Gold Co.* 1,045 1,437
Bethlehem Steel Corp* 1,000 2,875
Brush Engineered Materials, Inc. 105 2,146
Carpenter Technology Corp. 100 3,100
Century Aluminum Co. 68 595
Cleveland Cliffs, Inc. 100 2,063
Commercial Metals Co. 100 2,725
Consol Energy, Inc. 100 1,694
Freeport McMoran Copper & Gold* 975 7,739
Gibraltor Steel Corp. 200 2,513
Kaiser Aluminum Corp.* 300 1,519
LTV Corp. 800 950
Metals USA, Inc. 900 2,531
National Steel Corp. 130 382
Quanex Corp. 100 1,981
RTI Intl. Metals, Inc.* 100 1,450
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Metals & Mining - continued
Ryerson Tull, Inc. 146 $1,095
Shaw Group, Inc.* 73 5,950
Southern Peru Copper Corp. 200 2,788
Steel Dynamics, Inc.* 730 8,760
Stillwater Mining Co.* 520 15,080
UCAR International, Inc.* 400 3,300
Weirton Steel Corp.* 123 292
Wolverine Tube, Inc.* 100 1,363
Worthington Inds., Inc. 600 5,738
------------
86,767
Multi-Utilities - 0.31%
Avista Corp. 337 7,561
Northwestern Corp. 100 2,213
Sierra Pacific Resources 588 10,106
Western Resources, Inc. 240 5,130
------------
25,010
Multiline Retail - 0.67%
99 Cents Only Stores* 100 2,244
Ames Dept. Stores, Inc.* 300 1,181
Buckle, Inc.* 100 1,681
Burlington Coat Factory Whse. 117 1,843
Central Garden & Pet Co.* 131 1,040
Chico's FAS, Inc.* 160 5,180
Childrens Place Retail Stores, Inc.* 170 4,409
Coldwater Creek, Inc.* 9 267
Dillards, Inc. 666 6,993
Electronics Boutique Corp.* 17 266
Factory 2 U, Inc.* 100 3,194
Freds, Inc. 45 951
Genesco, Inc.* 146 2,592
Hanover Direct, Inc.* 1,136 639
Intertan, Inc.* 200 2,213
PC Connection, Inc.* 71 1,936
Procurenet, Inc.* 300 0
Shopko Stores, Inc.* 300 1,913
Spiegel, Inc. 105 728
Stein Mart, Inc.* 200 3,100
Too, Inc.* 199 4,565
Tuesday Morning Corp.* 100 438
Tweeter Home Entmt. Group, Inc.* 110 2,647
United Auto Group, Inc.* 198 1,584
Value City Dept Stores, Inc.* 100 813
Whitehall Jewellers, Inc.* 100 800
------------
53,214
Office Electronics - 0.16%
Ikon Office Solutions, Inc. 1,094 3,556
Zebra Technologies Corp.* 200 8,763
------------
12,318
Oil & Gas - 2.20%
Barrett Resources Corp.* 300 10,913
Basin Exploration, Inc.* 350 6,934
Belco Oil & Gas Corp.* 100 913
</TABLE>
The accompanying notes are an integral part of the financial statements.
72
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Oil & Gas - continued
Berry Pete Co. 100 $1,719
Brown, Tom Inc.* 300 6,863
Cabot Oil & Gas Corp. 148 2,905
Chesapeake Energy Corp.* 1,120 6,300
Cross Timbers Oil Co. 622 11,701
EEX Corp.* 333 1,561
Evergreen Resources* 100 2,750
Forcenergy, Inc.* 74 1,610
Forest Oil Corp.* 310 4,282
Grey Wolf, Inc.* 1,400 6,475
H S Resources, Inc.* 108 3,362
Houston Exploration Co.* 100 2,250
Key Production, Inc.* 220 4,840
Louis Dreyfus Nat. Gas Corp.* 126 4,040
McMoran Exploration Co.* 440 5,258
Meridian Resource Corp.* 840 5,828
Mitchell Energy & Dev. Corp. 100 4,600
Nuevo Energy Co.* 100 1,813
Patina Oil & Gas Corp. 5 88
Pennzoil Quaker State Co. 600 7,050
Pioneer Nat. Res. Co.* 800 10,450
Plains Resources, Inc.* 103 1,970
Pogo Producing Co. 400 10,000
Prize Energy Corp.* 190 3,183
St Mary Land & Expl. Co. 200 4,688
Stone Energy Corp.* 100 5,120
Swift Energy Co.* 100 3,250
Syntroleum Corp.* 200 3,900
Tesoro Pete Corp.* 309 3,206
Trico Marine Svcs., Inc.* 97 1,613
Unit Corp.* 8 107
Universal Compression Hldgs.* 519 14,986
Vintage Pete, Inc. 400 8,450
------------
174,972
Paper & Forest Products - 0.41%
Buckeye Technologies, Inc.* 200 3,425
Deltic Timber Corp. 100 1,944
Glatfelter, P H Co. 200 2,088
Louisiana-Pacific Corp. 690 5,865
Pope & Talbot, Inc. 70 1,089
Potlatch Corp. 200 6,700
Rayonier, Inc. 200 7,038
Rock-Tenn Company 100 894
Wausau Mosinee Paper Corp. 432 3,780
------------
32,822
Personal Products - 0.20%
Alberto Culver Co. 147 4,934
Carter Wallace, Inc. 100 2,744
NBTY, Inc. 500 3,250
Nu Skin Enterprises, Inc.* 272 1,479
Perrigo Co.* 500 3,313
------------
15,719
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Pharmaceuticals - 2.63%
Alpharma, Inc. 174 $6,753
Amylin Pharmaceuticals, Inc.* 397 4,020
Aphton Corp.* 91 2,730
Ariad Pharmaceuticals, Inc.* 154 1,405
Barr Labs, Inc.* 150 9,469
Bone Care Intl., Inc.* 23 566
Cell Pathways, Inc.* 137 1,045
Cell Therapeutics, Inc.* 178 11,907
Columbia Labs, Inc.* 298 1,825
Coulter Pharmaceutical, Inc.* 117 4,483
Cubist Pharmaceuticals, Inc.* 193 8,293
Cytogen Corp.* 524 3,013
Diversa Corp.* 41 1,043
Dura Pharmaceuticals, Inc.* 400 13,775
Dusa Pharmaceuticals, Inc.* 86 2,247
Emisphere Technologies, Inc.* 99 2,506
Guilford Pharmaceuticals, Inc.* 148 3,654
Immunogen, Inc.* 219 7,528
Intermune Pharmaceuticals, Inc.* 36 1,800
Intrabiotics Pharmaceuticals* 42 625
Isis Pharmaceuticals* 300 3,094
K V Pharmaceutical Co.* 150 5,850
KOS Pharmaceuticals, Inc.* 34 674
Ligand Pharmaceuticals, Inc.* 400 5,950
Martek Biosciences Corp.* 165 3,548
Matrix Pharmaceuticals* 141 2,027
Medicis Pharmaceutical Corp.* 265 19,511
MGI Pharma, Inc.* 112 3,136
Miravant Med. Technologies* 91 1,376
NPS Pharmaceuticals, Inc.* 132 5,660
OSI Pharmaceuticals, Inc.* 170 12,240
Pharmacyclics, Inc.* 209 11,247
Praecis Pharmaceuticals, Inc.* 42 1,066
Sciclone Pharmaceuticals, Inc.* 702 5,660
Sequenom, Inc.* 33 1,068
Sicor, Inc.* 586 7,508
Supergen, Inc.* 380 4,893
Titan Pharmaceuticals, Inc.* 164 6,901
Triangle Pharmaceuticals, Inc.* 300 2,522
Trimeris, Inc.* 114 8,066
Tularik, Inc.* 64 2,032
Twinlab Corps* 100 525
United Therapeutics Corp.* 90 4,815
Vivus* 174 566
Watson Pharmaceuticals, Inc.* 3 188
------------
208,805
Real Estate - 5.93%
Alexandria Real Estate 100 3,388
Amerco* 100 2,025
American Industrial Prop. 158 1,955
Amli Residential Properties 100 2,313
Arden Realty, Inc. 206 4,944
</TABLE>
The accompanying notes are an integral part of the financial statements.
73
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Real Estate - continued
Avis Group Holdings, Inc.* 142 $4,242
Bedford Property Investors 114 2,244
Boykin Lodging Co. 127 1,151
Brandywine Realty 327 6,254
BRE Properties, Inc. 400 12,650
Burnham Pacific Ppty, Inc. 300 1,631
Cabot Industrial Trust 400 7,550
Camden Property Trust 400 11,450
Capital Automotive Reit 125 1,611
Catellus Dev. Corp.* 973 17,696
CB Richard Ellis, Inc.* 100 1,250
CBL & Assoc Properties, Inc. 146 3,376
Centerpoint Properties Trust 133 5,910
Chateau Communities, Inc. 100 2,813
Chelsea GCA Realty, Inc. 102 3,290
Colonial Properties Trust 200 4,913
Commercial Net Lease Rlty, Inc. 339 3,432
Corrections Corp. of America* 879 714
Cornerstone Realty Income Tr., Inc. 405 4,253
Cousins Properties, Inc. 300 7,800
Crestline Cap. Corp.* 100 2,088
Developers Diversified Realty 500 5,969
Dollar Thrifty Automotive Grp.* 200 3,075
Eastgroup Properties, Inc. 103 2,099
Electro Rent Corp.* 100 1,369
Entertainment Pptys. Trust 122 1,350
Equity Inns, Inc. 315 1,949
Essex Property Trust 100 5,200
Fairfield Communities, Inc. 400 5,075
Federal Realty Invt. Tr. 400 7,700
Felcor Lodging Tr., Inc. 127 2,786
First Industrial Realty Trust 300 9,263
First Washington Realty Trust 100 2,525
Forest City Enterprises, Inc. 102 3,774
Franchise Finance Corp. of Amer. 230 4,672
Gables Residential Trust 200 5,100
Glenborough Realty Trust 300 4,819
Glimcher Realty Trust 200 2,600
Great Lakes Reit, Inc. 113 1,914
Health Care Property Invs., Inc. 456 13,395
Health Care Reit, Inc. 300 5,306
Healthcare Realty Trust 400 7,975
Highwoods Properties, Inc. 205 4,433
Home Properties N Y, Inc. 100 2,719
Hospitality Properties Trust 400 8,625
HRPT Properties Trust 719 4,629
Indymac Bancorp, Inc.* 600 12,525
Innkeepers USA Trust 300 3,056
Insignia Financial Group, Inc.* 100 969
Interpool, Inc. 100 1,288
IRT Property Co. 313 2,563
JDN Realty Corp. 319 3,489
Jones Lang Lasalle, Inc.* 300 3,825
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Real Estate - continued
JP Realty, Inc. 100 $1,600
Kilroy Realty Corp 200 5,213
Koger Equity, Inc. 200 3,188
Lasalle Hotel Peroperties 100 1,438
Lexington Corp. Property Trust 134 1,499
LNR Property Corp 200 4,325
Macerich Co. 300 5,888
Manufactured Home Cmntys., Inc. 130 3,234
McGrath Rentcorp 100 1,725
Meditrust* 967 2,659
Meristar Hospitality Corp. 408 7,803
Mid Amer Apt Cmntys., Inc. 119 2,618
Mills Corp. 100 1,706
National Golf Properties, Inc. 100 1,988
National Health Invs., Inc. 200 1,250
Nationsrent, Inc.* 400 900
Nationwide Health Properties, Inc. 400 5,975
New Plan Excel Realty Trust 364 4,482
Pacific Gulf Properties, Inc. 100 2,656
Pan Pac Retail Properties, Inc. 100 2,044
Parkway Properties, Inc. 100 2,863
Pennsylvania Real Estate Invt. 100 1,719
Prentiss Properties Trust 300 7,613
Prime Group Realty Trust 100 1,488
PS Business Pks., Inc. 200 5,250
Realty Income Corp. 200 4,600
Reckson Assocs. Realty Corp. 400 9,050
Regency Realty Corp. 300 6,750
Rent A Center, Inc.* 113 3,298
Rent Way, Inc.* 159 805
RFS Hotel Investments, Inc. 200 2,575
Saul Centers, Inc. 100 1,531
Security Cap. Group, Inc.* 400 7,625
Senior Housing Property Trust 68 633
Shurgard Storage Ctrs., Inc. 300 6,806
SL Green Realty Corp. 140 3,754
Smith, Charles E Residential 127 5,588
Sovran Self Storage, Inc. 118 2,227
Storage USA, Inc. 200 5,588
Summit Properties, Inc. 147 3,528
Sun Communities, Inc. 100 3,038
Taubman Centers, Inc. 300 3,281
Town & Country Trust 100 1,850
Trammell Crow Co.* 200 2,675
United Dominion Rlty. Trust, Inc. 900 9,450
United Rentals, Inc.* 197 4,236
Urban Shopping Centers, Inc. 100 4,794
Ventas, Inc. 500 2,500
Washington Real Estate Invt. Tr. 300 6,000
Webb, Del Corp.* 100 2,688
Weingarten Realty Invs. 200 8,388
Western Properties Trust 132 1,675
</TABLE>
The accompanying notes are an integral part of the financial statements.
74
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Real Estate - continued
Westfield America, Inc. 300 $4,200
Xtra Corp.* 100 4,550
------------
471,776
Road & Rail - 0.66%
American Freightways Corp.* 140 2,258
Arkansas Best Corp.* 26 416
Arnold Industries, Inc. 122 2,143
Heartland Express, Inc.* 112 1,946
Hunt, J B Trans Svcs., Inc. 138 1,803
Knight Transportation, Inc.* 43 683
Landstar Systems, Inc.* 100 4,725
M S Carriers, Inc.* 100 1,563
Roadway Express, Inc. 100 2,056
Rollins Truck Leasing Corp. 401 2,105
Ryder Systems, Inc. 294 5,807
Swift Transportation, Inc.* 350 4,988
US Freightways Corp. 200 5,150
Wabtec 399 4,040
Werner Enterprises, Inc. 300 4,200
Wisconsin Cent. Transn. Corp.* 400 5,125
Yellow Corp.* 200 3,600
------------
52,605
Semiconductor Equipment & Products - 2.22%
Actel Corp.* 127 4,651
ADE Corp.* 45 804
Alliance Semiconductor Corp.* 200 4,000
Applied Science & Tech., Inc.* 47 676
Atmi, Inc.* 281 5,304
Axt, Inc.* 110 4,235
Brooks Automation, Inc.* 121 3,207
C Cube Microsystems, Inc.* 400 7,800
Cirrus Logic, Inc.* 523 22,554
Cymer, Inc.* 271 6,775
Dupont Photomasks, Inc.* 4 225
Elantec Semiconductor, Inc.* 131 14,574
Electroglas, Inc.* 129 1,814
Emcore Corp.* 200 8,200
ESS Technology, Inc.* 200 3,100
FEI Co.* 97 2,298
FSI Intl., Inc.* 200 1,863
Gasonics Intl. Corp.* 84 1,717
General Semiconductor, Inc.* 300 3,431
Genrad, Inc.* 200 1,825
Helix Technology Corp. 150 4,181
Ibis Technology Corp.* 48 1,818
Integrated Circuit Systems, Inc.* 30 409
Integrated Silicon Solution* 240 3,210
Kulicke & Soffa Inds., Inc.* 400 5,875
LTX Corp.* 400 5,600
Microsemi Corp.* 42 1,680
Netsilicon, Inc.* 32 454
Oak Technology* 239 6,707
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Semiconductor Equipment & Products - continued
Pericom Semiconductor Corp.* 114 $3,021
Photronics, Inc.* 139 3,136
PRI Automation, Inc.* 136 3,077
S3, Inc. 700 6,322
Silicon Image, Inc.* 314 3,690
Silicon Valley Group, Inc.* 315 10,375
Smartdisk Corp.* 37 190
SpeedFam-Ipec, Inc.* 200 1,900
Telcom Semiconductor, Inc.* 107 1,505
Ultratech Stepper, Inc.* 138 3,243
Varian Semiconductor Equip., Inc.* 276 6,348
White Electr. Designs Corp.* 13 124
Zoran Corp.* 92 4,612
------------
176,527
Software - 6.56%
Actuate Corp.* 626 17,645
Adept Technology, Inc.* 52 1,450
Agency.com Ltd.* 12 126
Allaire Corp.* 165 1,207
AnswerThink Consulting Group* 216 3,537
AppliedTheory Corp.* 40 190
Aremissoft Corp.* 57 2,437
Ask Jeeves, Inc.* 144 1,872
Aspen Technology, Inc.* 200 8,263
Avant Corp.* 349 5,868
AVT Corp.* 200 1,256
Axent Technologies, Inc.* 300 5,756
Barra, Inc.* 100 6,113
Be Free, Inc.* 156 614
Bindview Dev. Corp.* 300 2,344
Black Box Corp.* 128 8,432
Bottomline Technologies, Inc.* 52 1,823
Breakaway Solutions, Inc.* 54 311
Broadbase Software, Inc.* 232 2,494
Bsquare Corp.* 53 828
CACI, Inc.* 100 2,063
Caldera Systems, Inc.* 28 98
Calico Commerce, Inc.* 185 567
Caminus Corp.* 14 441
Carreker Corp.* 24 444
Cerner Corp.* 200 12,388
Chordiant Software, Inc.* 20 122
Clarent Corp.* 145 4,504
Clarus Corp.* 96 960
Click2learn.com, Inc.* 92 1,334
Cognizant Technology Solutions* 31 1,271
Concord Communications, Inc.* 109 845
Convergent Communications, Inc.* 168 714
Corillian Corp.* 11 157
Corsair Communications, Inc.* 120 728
Cysive, Inc.* 2 16
Daleen Technologies, Inc.* 155 1,545
</TABLE>
The accompanying notes are an integral part of the financial statements.
75
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Software - continued
Data Return Corp.* 77 $886
Datastream Systems, Inc.* 106 1,299
Dendrite Intl., Inc.* 300 6,525
Digimarc Corp.* 53 792
Digital Courier Technologies* 244 709
Digital Insight Corp.* 170 3,283
Digital River, Inc.* 316 2,064
Digitas, Inc.* 50 597
Documentum, Inc.* 113 9,605
Dset Corp.* 57 324
DSL Net, Inc.* 481 1,263
Ebenx, Inc.* 22 263
Edwards, J D & Co.* 356 9,212
Embarcadero Tech., Inc.* 14 846
Emerge Interactive, Inc.* 33 369
Epresence, Inc.* 200 1,413
Eprise Corp.* 19 57
Excalibur Technologies Corp.* 100 5,888
Exchange Applications, Inc.* 200 641
Extensity, Inc.* 19 242
F5 Networks, Inc.* 125 3,875
Fair, Issac & Co., Inc. 100 4,100
Filenet Corp.* 309 8,189
Firepond, Inc.* 26 208
Forrester Research, Inc.* 69 2,833
Gartner Group, Inc.* 537 5,102
Geoworks* 68 334
Gerber Scientific, Inc. 135 1,080
Goto.com, Inc.* 181 2,568
Great Plains Software, Inc.* 100 3,894
GRIC Communications, Inc.* 22 110
High Speed Access Corp.* 385 1,131
HNC Software, Inc. 200 4,063
Hotjobs.com Ltd.* 91 1,422
Hyperion Solutions Corp.* 300 4,200
Igate Cap. Corp.* 378 1,914
Imation Corp.* 335 6,637
IMR Global Corp. 126 1,040
Indus Intl., Inc.* 71 288
Informatica Corp. 178 16,821
Information Architects Corp.* 424 1,590
Inprise Corp.* 359 2,289
Intelidata Technologies Corp.* 268 1,432
Interact Comm. Corp.* 189 1,736
Interactive Intelligence, Inc.* 29 1,059
Interliant, Inc.* 441 2,646
Internet.com Corp.* 72 1,499
Internet Pictures Corp.* 355 760
Intertrust Technologies Corp.* 468 4,680
Intervoice, Inc.* 307 3,003
Interworld Corp.* 133 291
Interwoven, Inc.* 256 25,792
Intranet Solutions, Inc.* 115 5,348
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Software - continued
Intraware, Inc.* 104 $761
Intrusion.com, Inc.* 97 994
IXL Enterprises, Inc.* 506 1,297
JDA Software Group, Inc.* 142 2,139
Keynote Systems, Inc.* 116 2,784
Kronos, Inc.* 100 3,644
Legato Systems, Inc.* 657 5,851
Level 8 Systems, Inc.* 182 1,752
Liveperson, Inc.* 50 116
Looksmart, Ltd.* 301 2,126
Loudeye Technologies, Inc.* 24 92
Mail.com, Inc.* 668 2,171
Manhattan Assocs., Inc.* 18 1,152
Manugistics Group, Inc.* 163 18,572
MapInfo Corp.* 85 2,778
MatrixOne, Inc.* 35 1,039
Mcafee.com Corp.* 30 206
MCSI, Inc.* 100 2,875
Medicalogic, Inc.* 51 207
Mentor Graphics Corp.* 500 11,719
Mercator Software, Inc.* 181 826
Mercury Computer Systems, Inc.* 125 3,875
Metacreations Corp.* 142 1,420
Metasolv Software, Inc.* 59 734
Micros Systems, Inc.* 100 1,975
Microstrategy, Inc.* 237 5,673
Mp3.com, Inc.* 233 823
National Information Consortm.* 74 250
Natural Microsystems Corp.* 232 10,484
Neoforma.com, Inc.* 27 46
Neon Systems, Inc.* 21 148
Net Genesis Corp.* 26 91
Netguru.com, Inc.* 20 100
Netiq* 173 14,900
Netscout Systems, Inc.* 76 1,420
Netsol Intl., Inc.* 21 186
Netzero, Inc.* 339 498
New Era Of Networks, Inc.* 335 5,213
Nhancement Technologies, Inc.* 45 1,136
Niku Corporation* 54 851
Novadigm, Inc.* 68 680
Nuance Communications* 31 2,674
Numerical Technologies, Inc.* 27 554
Nyfix, Inc.* 158 6,241
Objective Sys. Integrators, Inc.* 141 1,269
Onyx Software Corp.* 240 3,810
Opus360 Corp.* 240 390
OTG Software, Inc.* 33 1,040
PC-Tel, Inc.* 74 1,277
Persistence Software, Inc.* 73 858
Phoenix Technology Ltd.* 200 3,213
Predictive Systems, Inc.* 16 222
Primus Knowledge Solutions, Inc.* 89 723
</TABLE>
The accompanying notes are an integral part of the financial statements.
76
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Software - continued
Progress Software Corp.* 300 $4,744
Project Software & Dev., Inc.* 100 1,300
Puma Technology, Inc.* 232 3,147
Purchasepro.com, Inc.* 130 3,510
QRS Corp.* 100 844
Quintus Corp.* 117 874
Quokka Sports, Inc.* 123 377
Radiant Systems, Inc.* 150 2,766
Radisys Corp.* 100 2,650
Ramp Networks, Inc.* 95 178
Razorfish, Inc* 100 450
Register.com, Inc.* 28 196
Remedy Corp.* 200 3,425
Retek, Inc.* 277 10,924
Saba Software, Inc.* 421 9,867
Saga Systems, Inc.* 300 1,613
Sagent Technology, Inc.* 300 769
Sanchez Computer Assoc., Inc.* 100 1,606
Scientific Learning Corp.* 80 448
Sciquest.com, Inc.* 121 541
Seachange Intl., Inc.* 117 2,574
Secure Computing Corp.* 172 3,956
Selectica, Inc.* 28 739
Serena Software, Inc.* 150 7,631
Silverstream Software, Inc.* 77 1,733
Simione Cent. Hldgs., Inc.* 3 10
Smartserv Online, Inc.* 28 543
Sonic Foundry, Inc.* 266 1,696
SPSS, Inc.* 100 2,250
Starbase Corp.* 718 3,657
Structural Dynamics Res. Corp.* 331 3,413
SVI Holdings, Inc.* 200 908
Syntel, Inc.* 33 311
Systems & Computer Technology* 308 4,447
THQ, Inc.* 150 3,075
Tenfold Corp.* 87 375
Transaction Sys. Architects, Inc.* 311 4,199
Tricord Systems, Inc.* 121 1,997
Trizetto Group, Inc.* 77 1,540
Tumbleweed Communications Corp.* 62 1,062
Unify Corp.* 59 30
US Interactive, Inc.* 192 192
Verity, Inc.* 259 6,087
Versat, Inc.* 24 396
Vertel Corp.* 195 1,036
Vertex Industries, Inc.* 49 735
Viador, Inc.* 277 1,281
Vialink Co.* 103 740
Viant Corp.* 482 2,862
Vicinity Corp.* 45 473
Visual Networks, Inc.* 200 738
Websense, Inc.* 168 3,024
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Software - continued
Webtrends Corp.* 100 $3,214
Xpedior, Inc.* 45 84
------------
522,066
Specialty Retail - 2.36%
Aaron Rents, Inc. 100 1,675
Abercrombie & Fitch Co.* 673 15,858
American Eagle Outfitters, Inc.* 132 4,546
Anntaylor Stores Corp.* 169 5,070
Barnes & Noble, Inc.* 328 6,191
Borders Group, Inc.* 600 8,325
Cato Corp. 100 1,200
Charming Shoppes, Inc.* 800 4,900
Claire S Stores, Inc. 249 5,011
Copart, Inc.* 300 4,519
Cost Plus, Inc.* 150 4,200
CSK Auto Corp.* 182 637
Dress Barn, Inc.* 101 2,531
Footstar, Inc. 126 4,520
Group 1 Automotive, Inc.* 230 2,286
Guitar Center, Inc.* 142 1,882
Handleman Co.* 200 1,975
Hollywood Entmt. Corp.* 390 1,194
Hot Topic, Inc.* 146 5,001
Hughes Supply, Inc. 200 3,750
Linens 'N Things, Inc.* 348 10,701
Mens Wearhouse, Inc.* 291 8,512
Michaels Stores, Inc.* 200 4,863
O Reilly Automotive, Inc.* 300 5,400
Office Max, Inc.* 900 2,588
Pacific Sunwear of Calif.* 305 6,253
Payless Shoesource, Inc.* 128 7,416
Pep Boys-Manny Moe & Jack 400 1,800
Petsmart, Inc.* 900 3,994
Pier 1 Imports, Inc. 800 10,600
Regis Corp. 250 3,781
School Specialty, Inc.* 106 1,630
Sonic Automotive, Inc.* 523 4,674
Sunglass Hut Intl., Inc.* 400 3,100
Trans World Entmt. Corp.* 309 2,627
Ultimate Electronics, Inc.* 49 1,770
Venator Group. Inc.* 1,019 14,393
Wilsons Leather Experts, Inc.* 53 812
Zale Corp.* 229 7,757
------------
187,939
Textiles & Apparel - 0.97%
Brown Shoe, Inc. 118 1,158
Bush Industries, Inc. 100 1,163
Cole, Kenneth Prodtns., Inc.* 80 3,635
Columbia Sportswear Co.* 100 4,275
Fossil, Inc.* 100 1,306
Guess, Inc.* 47 350
Haverty Furniture Cos., Inc. 116 1,305
</TABLE>
The accompanying notes are an integral part of the financial statements.
77
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Textiles & Apparel - continued
Kellwood Co. 200 $3,888
Madden, Steven Ltd.* 200 1,906
Nautica Enterprises, Inc.* 301 3,800
Oshkosh B Gosh, Inc. 100 1,600
Phillips Van Heusen Corp. 115 1,366
Polo Ralph Lauren Corp.* 327 6,417
Polymer Group, Inc. 100 613
Quiksilver, Inc.* 230 4,399
Reebok Intl., Ltd.* 400 8,625
Russell Corp. 200 3,200
Skechers USA, Inc.* 54 820
Stride Rite Corp. 400 2,150
Timberland Co.* 200 10,325
Unifi, Inc.* 500 4,344
Vans, Inc.* 34 440
Warnaco Group, Inc. 290 761
Wellman, Inc. 319 4,785
Wolverine World Wide, Inc. 400 4,325
------------
76,954
Tobacco - 0.16%
Schweitzer Mauduit Intl., Inc. 100 1,619
Star Scientific, Inc.* 200 794
Universal Corp. 300 8,400
Vector Group Ltd. 119 1,659
------------
12,471
Water Utilities - 0.31%
American States Water Co. 100 3,119
California Water Service Grp. 100 2,694
Etown Corp. 100 6,738
Philadelphia Suburban Corp.* 500 11,720
------------
24,270
Wireless Telecommunication Service - 0.11%
Advanced Radio Telecom. Corp.* 200 788
AirGate PCS, Inc.* 64 2,488
Rural Celluar Corp.* 54 2,903
Terremark Worldwide, Inc.* 875 2,302
------------
8,480
TOTAL COMMON STOCKS
(Cost $7,570,102) $7,082,460
------------
PREFERRED STOCKS - 0.01%
Corrections Corporation of America Series B, 12%
(Cost $774) 43 $699
------------
WARRANTS - 0.00%
Endo Pharmaceutical Holdings, Exp. 12/31/02
(Cost $635) 100 $62
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
U.S. TREASURY OBLIGATIONS - SHORT TERM - 1.19%
U.S. Treasury Bills - 00%
6.07% due 12/21/00 $25,000 $24,789
5.90% due 12/07/00 20,000 19,951
5.99% due 12/07/00 50,000 49,700
------------
TOTAL U.S. TREASURY OBLIGATIONS - SHORT TERM
(Cost $94,440) $94,440
------------
REPURCHASE AGREEMENTS - 9.75%
Repurchase Agreement with State Street Bank & Trust
Co. dated 10/31/00 at 6.42%, to be repurchased at
$776,136 on 11/01/00, collateralized by $745,000 U.S.
Treasury Notes, 7.00% due 07/15/06 (valued at
$816,352, including interest)
(Cost $776,000) 776,000 $776,000
------------
TOTAL INVESTMENTS (Small Cap Index Fund)
(Cost $8,441,951) $7,953,661
------------
------------------------------------------------------------------------------
Socially Responsible Fund
------------------------------------------------------------------------------
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 79.74%
Airlines - 0.37%
AMR Corp. 760 $24,890
Delta Air Lines, Inc. 380 17,955
------------
42,845
Auto Components - 0.01%
Superior Industries Intl., Inc. 50 1,703
------------
Automobiles - 0.04%
Harley-Davidson, Inc. 100 4,819
------------
Banks - 5.00%
Bank America Corp. 1,600 76,900
Bank of New York, Inc. 1,000 57,563
Chase Manhattan Corp. 2,295 104,423
Firstar Corp. 450 8,859
Fleetboston Financial Corp. 1,420 53,960
Greenpoint Financial Corp. 400 11,900
Mellon Financial Corp. 750 36,188
Morgan J P & Co Inc 440 72,820
Northern Trust Corp 150 12,806
PNC Finl Services Group, Inc. 650 43,469
Suntrust Banks, Inc. 450 21,966
Washington Mutual, Inc. 450 19,800
Wells Fargo & Co. 1,300 60,206
------------
580,859
Beverages - 1.44%
Coca Cola Co. 2,000 120,750
Pepsico, Inc. 960 46,500
------------
167,250
</TABLE>
The accompanying notes are an integral part of the financial statements.
78
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Biotechnology - 0.42%
Amgen, Inc.* 850 $49,247
------------
Chemicals - 0.24%
Albemarle Corp. 200 4,638
Grace, W R & Co.* 800 3,050
Lubrizol Corp. 250 5,422
Praxair, Inc. 150 5,588
Sigma Aldrich 250 8,938
------------
27,634
Commercial Services & Supplies - 1.84%
Automatic Data Processing, Inc. 800 52,250
Avery Dennison Corp. 250 12,625
Deluxe Corp. 1,400 31,588
Dun And Bradstreet Corp.* 400 8,650
Ecolab, Inc. 300 11,756
First Data Corp. 770 38,596
IMS Health, Inc. 800 18,900
Paychex, Inc. 375 21,258
Pitney Bowes, Inc. 500 14,844
Viad Corp 150 3,206
------------
213,673
Communications Equipment - 4.63%
Avaya, Inc.* 200 2,688
Cisco Systems, Inc.* 4,600 247,825
Corning, Inc. 900 68,850
JDS Uniphase Corp.* 700 56,963
Juniper Networks, Inc.* 50 9,750
Lucent Technologies, Inc. 2,410 56,183
Motorola, Inc. 1,800 44,888
Qualcomm, Inc.* 550 35,810
Tellabs, Inc.* 200 9,988
Turnstone Systems, Inc.* 200 4,250
------------
537,193
Computers & Peripherals - 5.82%
Apple Computer* 540 10,564
Compaq Computer Corp. 1,300 39,533
Dell Computer Corp.* 1,450 42,775
E M C Corp.* 1,450 129,141
Gateway, Inc.* 200 10,322
Hewlett Packard Co. 1,700 78,944
International Business Machines 1,670 164,495
Lexmark International, Inc.* 150 6,150
Network Appliance, Inc.* 150 17,850
Palm, Inc.* 274 14,676
Seagate Technology* 410 28,649
Sun Microsystems, Inc.* 1,200 133,050
------------
676,148
Electric Utilities - 1.27%
Allegheny Energy, Inc. 850 34,797
DPL, Inc. 1,171 33,227
Idacorp, Inc. 510 25,149
OGE Energy Corp. 650 13,366
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Electric Utilities - continued
Potomac Electric Power Co. 550 $12,581
Puget Sound Energy, Inc. 1,150 28,247
------------
147,367
Electrical Equipment - 1.05%
Cooper Industries, Inc. 660 25,245
Emerson Electric Co. 550 40,391
Molex, Inc. 312 16,848
Rockwell International Corp. 630 24,767
Sensormatic Electronics Corp.* 340 6,120
Vishay Intertechnology, Inc.* 275 8,250
------------
121,620
Electronic Equipment & Instruments - 0.46%
Agilent Technologies, Inc.* 324 15,005
ABVX Corp. 1,000 28,625
Kemet Corp.* 200 5,575
Solectron Corp.* 100 4,400
------------
53,605
Energy Equipment & Services - 1.79%
Baker Hughes, Inc. 900 30,938
Cooper Cameron Corp.* 200 10,900
Halliburton Co. 600 22,238
Helmerich & Payne, Inc. 1,100 34,581
Noble Drilling Corp.* 300 12,469
Rowan Companies, Inc.* 450 11,334
Schlumberger Ltd. 690 52,526
Tidewater, Inc. 530 24,479
Transocean Sedco Forex, Inc. 167 8,851
------------
208,316
Financial Services - 7.34%
American Express Co. 1,410 84,600
Associates First Capital Corp. 750 27,844
Citigroup, Inc. 3,866 203,448
Edwards, A G, Inc. 150 7,613
Federal Home Loan Mortgage Corp 750 45,000
Federal National Mortgage Assn. 1,350 103,950
Household International, Inc. 1,150 57,859
Lehman Brothers Holdings, Inc. 920 59,340
MBNA Corp. 800 30,050
Merrill Lynch & Co., Inc. 1,280 89,600
Moody's Corp. 800 21,050
Morgan Stanley Dean Witter & Co. 1,000 80,313
Paine Webber Group, Inc. 360 25,650
Providian Financial Corp. 150 15,600
------------
851,916
Food & Drug Retailing - 0.39%
Sysco Corp. 300 15,656
Walgreen Co. 650 29,656
------------
45,312
Food Products - 1.33%
Campbell Soup Co. 570 16,673
Conagra, Inc. 1,600 34,200
</TABLE>
The accompanying notes are an integral part of the financial statements.
79
<PAGE>
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PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Food Products - continued
Kellogg Co. 450 $11,419
Quaker Oats Co. 450 36,703
Ralston Purina Co. 1,190 28,858
Sara Lee Corp. 1,230 26,522
------------
154,374
Gas Utilities - 2.04%
AGL Resources, Inc. 3,520 71,720
El Paso Energy Corp. 300 18,806
Equitable Resources, Inc 400 23,200
National Fuel Gas Co. 800 42,900
Oneok, Inc. 1,150 45,569
Peoples Energy Corp.* 1,000 34,375
------------
236,570
Health Care Equipment & Supplies - 0.79%
Allergan, Inc. 400 33,625
Bausch & Lomb, Inc. 50 1,928
Medtronic, Inc. 600 32,588
PE Corp. 200 23,400
------------
91,541
Health Care Providers & Services - 2.32%
Apria Healthcare Group, Inc.* 100 2,000
Cigna Corp. 1,100 134,145
HCA Healthcare Co. 1,310 52,318
Oxford Health Plans, Inc.* 250 8,438
Tenet Healthcare Corp. 1,010 39,706
UnitedHealth Group, Inc. 300 32,813
------------
269,419
Hotels, Restaurants & Leisure - 0.34%
Carnival Corp. 450 11,166
Darden Restaurants, Inc. 800 18,000
Marriott International Inc. 250 10,125
------------
39,291
Household Durables - 0.27%
Black & Decker Corp. 400 15,050
Stanley Works 630 16,774
------------
31,824
Household Products - 1.70%
Colgate Palmolive Co. 550 32,318
Fort James Corp 100 3,294
Kimberly Clark Corp. 1,100 72,600
Procter & Gamble Co. 1,250 89,297
------------
197,509
Industrial Conglomerates - 0.66%
Tyco International, Ltd. 1,346 76,301
------------
Insurance - 3.30%
Aflac, Inc. 250 18,266
Allstate Corp. 400 16,100
American Financial Group, Inc. 110 2,358
American International Group, Inc. 1,950 191,100
Chubb Corp. 150 12,666
Hartford Financial Services Group 320 23,820
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Insurance - continued
Jefferson Pilot Corp. 240 $16,500
Lincoln National Corp. 1,000 48,375
Marsh & Mclennan Cos., Inc. 200 26,150
Torchmark, Inc. 850 28,316
------------
383,650
Internet Software & Services - 1.00%
America Online, Inc.* 1,850 93,296
Yahoo, Inc.* 400 23,450
------------
116,746
I T Consulting Services - 0.65%
Ceridian Corp.* 550 13,750
Computer Sciences Corp.* 100 6,300
Electronic Data Systems Corp. 1,180 55,386
------------
75,436
Leisure Equipment & Products - 0.01%
Hasbro, Inc. 100 1,075
------------
Machinery - 0.86%
Caterpillar, Inc. 730 25,596
Deere & Co. 380 13,989
Dover Corp. 750 31,828
Harsco Corp. 590 11,911
Illinois Tool Works, Inc. 300 16,669
------------
99,992
Media - 4.12%
Belo, A H Corp. 1,250 23,983
Clear Channel Communications* 700 42,044
Disney, Walt Co. 2,420 86,665
Dow Jones & Co., Inc. 960 56,520
Gannett, Inc. 710 41,180
Harte Hanks, Inc. 100 2,213
Interpublic Group Cos., Inc. 250 10,734
Knight Ridder, Inc. 450 22,613
McGraw-Hill Cos., Inc. 200 12,837
New York Times Co. 200 7,350
Omnicom Group 250 23,063
Time Warner, Inc. 1,000 75,910
Viacom, Inc.* 1,196 68,023
Young & Rubicam, Inc. 100 4,806
------------
477,941
Metals & Mining - 0.36%
Alcan Aluminum Ltd. 1,320 41,663
------------
Multiline Retail - 1.86%
Sears Roebuck & Co. 1,260 37,460
Target Corp. 880 24,310
Wal Mart Stores, Inc. 3,400 154,275
------------
216,045
Oil & Gas - 0.42%
Ashland, Inc. 1,490 48,798
------------
Paper & Forest Products - 0.19%
Rayonier, Inc. 640 22,520
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
80
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Personal Products - 0.40%
Avon Products, Inc. 350 $16,975
Gillette Co. 850 29,644
------------
46,619
Pharmaceuticals - 7.65%
Abbott Laboratories 2,210 116,716
Bristol Myers Squibb Co. 2,560 156,000
Ivax Corp.* 250 10,875
Johnson & Johnson 1,510 139,109
Lilly Eli & Co. 900 80,438
Merck & Co., Inc. 3,370 303,089
Schering Plough Corp. 1,590 82,183
------------
888,409
Real Estate - 0.05%
Host Marriott Corp. 500 5,313
------------
Road & Rail - 0.45%
Burlington Northern 850 22,578
GATX 200 8,413
Union Pacific Corp. 450 21,094
------------
52,084
Semiconductor Equipment & Products - 4.15%
Advanced Micro Devices, Inc.* 1,100 24,888
Altera Corp.* 150 6,141
Analog Devices, Inc.* 300 19,500
Applied Materials, Inc.* 550 29,219
Broadcom Corp.* 50 11,119
Conexant Systems, Inc.* 100 2,631
Integrated Device Technology* 150 8,447
Intel Corp. 4,500 202,500
KLA Tencor Corp.* 200 6,763
LSI Logic Corp.* 200 6,575
Micron Technology, Inc.* 1,100 38,225
National Semiconductor, Corp.* 700 18,200
Teradyne, Inc.* 500 15,625
Texas Instruments, Inc. 1,500 73,594
Xilinx, Inc.* 250 18,109
------------
481,534
Software - 4.80%
Adobe Systems, Inc. 200 15,213
Art Technology Group, Inc.* 100 6,275
Commerce One, Inc.* 50 3,209
Computer Assoc. Intl., Inc. 500 15,938
Inktomi Corp.* 100 6,344
Liberate Technologies* 150 2,859
Microsoft Corp.* 3,880 267,235
Oracle Corp.* 4,200 138,600
Portal Software, Inc.* 50 1,759
Siebel Systems, Inc.* 100 10,494
Software.com, Inc.* 350 52,150
Sybase, Inc.* 400 8,375
Synavant, Inc.* 40 183
Veritas Software Corp.* 200 28,203
------------
556,836
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Specialty Retail - 1.10%
Best Buy Co., Inc.* 150 $7,528
Home Depot, Inc. 1,800 77,400
Lowes Cos., Inc. 300 13,706
Radioshack Corp. 490 29,215
------------
127,850
Telecommunications - 6.35%
Alltel Corp. 200 12,888
A T & T Corp. 3,367 78,072
Bellsouth Corp. 2,090 100,973
Global Crossing, Ltd.* 550 12,994
Nortel Networks Corp. 2,340 106,470
Qwest Communications Intl., Inc.* 841 40,894
SBC Communications, Inc. 2,650 152,872
Sprint Corp.* 1,500 38,250
Verizon Communications 2,422 140,022
Worldcom, Inc.* 2,250 53,438
------------
736,872
Wireless Telecommunications - 0.46%
Nextel Communications, Inc.* 400 15,375
Sprint Corp.* 1,000 38,125
------------
53,500
TOTAL COMMON STOCKS
(Cost $8,280,182) $9,259,219
------------
COMMON STOCK UNIT - 0.74%
Financial Services - 0.74%
SPDR Trust (Cost $88,724) 600 $85,772
------------
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
U.S. TREASURY OBLIGATIONS-SHORT TERM - 1.42%
U.S. Treasury Bills - 1.42%
5.90% due 11/16/00 $20,000 $19,951
5.94% due 11/02/00 65,000 64,989
5.97% due 11/02/00 10,000 9,998
5.99% due 12/01/00 10,000 9,940
6.02% due 12/07/00 50,000 49,699
6.07% due 12/14/00 10,000 9,928
------------
TOTAL U.S. TREASURY OBLIGATIONS-SHORT TERM
(Cost $164,505) $164,505
------------
REPURCHASE AGREEMENT - 18.10%
Repurchase Agreement with State Street Bank &
Trust Company dated 10/31/00 at 6.42%, to be
repurchased at $2,102,370 on 11/01/00,
collateralized by $2,160,000 U.S. Treasury
Notes, 5.875% due 09/30/02 (valued at
$2,154,944, including interest) (Cost
$2,102,000) $2,102,000 $2,102,000
------------
TOTAL INVESTMENTS
(Socially Responsible Fund)
(Cost $10,635,411) $11,611,496
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
81
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Stock Index Fund
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 87.80%
Aerospace & Defense - 1.31%
Boeing Co. 2,100 $142,406
General Dynamics Corp. 500 35,781
Goodrich B F Co. 200 8,188
Honeywell Intl Inc. 1,900 102,244
Lockheed Martin Corp. 1,050 37,643
Northrop Grumman Corp. 200 16,800
Raytheon Co. 800 27,350
United Technologies Corp. 1,100 76,794
------------
447,205
Air Freight & Couriers - 0.10%
Fedex Corp.* 700 32,802
------------
Airlines - 0.20%
AMR Corp. 400 13,100
Delta Air Lines Inc. 300 14,175
Southwest Airls Co. 1,200 34,200
US Airways Group Inc.* 200 7,550
------------
69,025
Auto Components - 0.21%
Cooper Tire and Rubber Co. 200 2,188
Dana Corp. 400 8,875
Delphi Automotive Sys Corp. 1,300 20,394
Goodyear Tire And Rubber 400 7,400
Johnson Controls Inc. 200 11,925
Snap On Inc. 100 2,556
TRW Inc. 300 12,600
Visteon Corp. 264 4,670
------------
70,607
Automobiles - 0.68%
Ford Motor Co. 4,531 118,372
General Motors Corp. 1,300 80,763
Harley Davidson Inc. 700 33,731
------------
232,866
Banks - 4.63%
Amsouth BanCorp.oration 900 12,544
Bank of America Corp. 3,900 187,444
Bank New York Inc. 1,800 103,613
Bank One Corp. 2,800 102,200
BB+T Corp. 1,000 31,875
Charter One Finl Inc. 520 11,928
Chase Manhattan Corp. 3,100 141,050
Comerica Inc. 400 24,125
Fifth Third BanCorp. 1,100 56,513
First Union Corp. 2,300 69,719
Firstar Corp. 2,300 45,281
Fleet Boston Finl Corp. 2,100 79,800
Golden West Finl Corp. 400 22,425
Huntington Bancshares Inc. 640 9,200
KeyCorp. 1,000 24,688
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Banks - continued
Mellon Finl Corp. 1,200 $57,900
Morgan J P + Co Inc. 400 66,200
National City Corp. 1,400 29,925
Northern Trust Corp. 500 42,688
Old Kent Financial Corp. 315 8,722
PNC Finl Svcs Group Inc. 700 46,813
Regions Financial Corp. 500 11,781
South Trust Corp. 400 12,950
Summit BanCorp. 400 15,000
Suntrust Banks Inc. 700 34,169
Synovus Finl Corp. 700 15,094
Union Planters Corp. 300 10,144
US BanCorp. 1,800 43,538
Wachovia Corp. 500 27,000
Washington Mutual Inc. 1,300 57,200
Wells Fargo + Co. 3,900 180,619
------------
1,582,143
Beverages - 1.93%
Anheuser Busch Cos Inc. 2,200 100,650
Brown Forman Corp. 200 12,175
Coca Cola Co. 5,900 356,213
Coca Cola Enterprises Inc. 1,000 18,375
Coors Adolph Co. 100 6,369
Pepsico Inc. 3,400 164,688
------------
658,469
Biotechnology - 0.57%
Amgen Inc.* 2,400 139,050
Biogen Inc.* 400 24,075
Medimmune Inc.* 500 32,688
------------
195,813
Building Products - 0.07%
Armstrong Hldgs Inc. 100 288
Crane Co. 100 2,619
Masco Corp. 1,100 20,556
------------
23,463
Chemicals - 0.83%
Air Prods + Chems Inc. 500 18,656
Dow Chem Co. 1,600 49,000
Du Pont E I De Nemours + Co. 2,500 113,438
Eastman Chem Co. 200 8,575
Engelhard Corp. 300 6,263
FMC Corp.* 100 7,600
Grace, W R + Co.* 200 763
Great Lakes Chemical Corp. 100 3,338
Hercules Inc. 300 5,494
International Flavours* 200 3,350
PPG Inds Inc. 400 17,850
Praxair Inc. 400 14,900
Rohm + Haas Co. 500 15,031
Sigma Aldrich 200 7,150
Union Carbide Corp. 300 12,900
------------
284,306
</TABLE>
The accompanying notes are an integral part of the financial statements.
82
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Commercial Services & Supplies - 1.09%
Allied Waste Industries Inc.* 500 $4,625
Automatic Data Processing Inc. 1,500 97,969
Avery Dennison Corp. 300 15,150
Block, H + R Inc. 200 7,138
Cendant Corp.* 1,700 20,400
Convergys Corp.* 400 17,425
Deluxe Corp. 200 4,513
Donnelley, R R + Sons Co. 300 6,450
Ecolab Inc. 300 11,756
Equifax Inc. 300 10,350
First Data Corp. 1,000 50,125
IMS Health Inc. 700 16,538
Paychex Inc. 900 51,019
Pitney Bowes Inc. 600 17,813
Sabre Hldgs Corp. 299 9,998
Waste Mgmt Inc. 1,500 30,000
------------
371,267
Communications Equipment - 5.47%
ADC Telecommunications Inc.* 1,900 40,613
Andrew Corp.* 200 5,263
Avaya Inc.* 658 8,842
Cabletron Systems Inc.* 400 10,850
Cisco Sys Inc.* 16,900 910,488
Comverse Technology Inc.* 400 44,700
Corning Inc. 2,100 160,650
JDS Uniphase Corp.* 2,200 179,025
Lucent Technologies Inc. 7,900 184,169
Motorola Inc. 5,200 129,675
Qualcomm Inc.* 1,800 117,197
Scientific Atlanta Inc. 400 27,375
Tellabs Inc.* 1,000 49,938
------------
1,868,782
Computers & Peripherals - 6.13%
Apple Computer* 800 15,650
Compaq Computer Corp. 4,000 121,640
Dell Computer Corp.* 6,200 182,900
E M C Corp.* 5,200 463,125
Gateway Inc.* 800 41,288
Hewlett Packard Co. 4,800 222,900
IBM 4,200 413,700
Lexmark Intl Inc.* 300 12,300
NCR Corp.* 200 8,625
Network Appliance Inc.* 700 83,300
Palm Inc.* 1,339 71,720
Seagate Technology* 500 34,938
Sun Microsystems Inc.* 3,800 421,325
------------
2,093,411
Construction & Engineering - 0.02%
Fluor Corp. 200 7,000
Mcdermott Intl Inc. 100 969
------------
7,969
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Construction Materials - 0.02%
Vulcan Materials Co. 200 $8,400
------------
Containers & Packaging - 0.08%
Ball Corp. 100 3,513
Bemis Inc. 100 2,588
Crown Cork + Seal Inc. 300 2,738
Owens Illinois Inc.* 300 1,781
Pactiv Corp.* 400 4,200
Sealed Air Corp.* 200 9,625
Temple Inland Inc. 100 4,475
------------
28,919
Diversified Financials - 5.91%
American Express Co. 3,200 192,000
Associates First Cap Corp. 1,700 63,113
Bear Stearns Cos Inc. 300 18,188
Capital One Finl Corp. 500 31,563
CIT Group Inc. 650 11,334
Citigroup Inc. 10,666 561,298
Countrywide Cr Inds Inc. 300 11,231
Federal Home Ln Mtg Corp. 1,700 102,000
Federal Natl Mtg Assn. 2,400 184,800
Franklin Res Inc. 600 25,704
Household Intl Inc. 1,100 55,344
Lehman Brothers Hldgs Inc. 600 38,700
MBNA Corp. 2,000 75,125
Merrill Lynch + Co Inc. 1,900 133,000
Moodys Corp. 400 10,525
Morgan Stanley Dean Witter + Co. 2,700 216,844
Paine Webber Group Inc. 400 28,500
Price, T Rowe + Assoc Inc. 300 14,044
Providian Finl Corp. 300 31,200
Schwab Charles Corp. 3,300 115,913
State Street Corp.oration 400 49,896
Stilwell Financial Inc. 550 24,647
USA Education Inc. 400 22,350
------------
2,017,317
Diversified Telecommunication - 6.18%
Alltel Corp 800 51,550
AT + T Corp. 8,900 206,369
Bellsouth Corp. 4,500 217,406
CenturyTel Inc. 300 11,550
Global Crossing Ltd* 2,100 49,613
Nortel Networks Corp. 7,100 323,050
Qwest Communications Intl Inc.* 3,929 191,048
SBC Communications Inc. 8,100 467,269
Sprint Corp.* 2,100 53,550
Verizon Communications 6,518 376,822
Worldcom Inc.* 6,800 161,500
------------
2,109,726
Electric Utilities - 1.94%
AES Corp.* 1,050 59,325
Ameren Corp. 300 11,925
American Elec Pwr Inc. 740 30,710
</TABLE>
The accompanying notes are an integral part of the financial statements.
83
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Electric Utilities - continued
Cinergy Corp. 400 $12,250
CMS Energy Corp. 300 8,100
Consolidated Edison Inc. 500 17,594
Constellation Energy Group Inc. 400 16,675
CP + L Energy Inc. 400 16,125
Dominion Res Inc. 600 35,738
DTE Energy Co. 300 10,838
Duke Energy Co. 900 77,794
Dynegy Inc. 700 32,419
Edison Intl 800 19,100
Entergy Corp. 500 19,156
Exelon Corp. 750 45,094
FirstEnergy Corp. 500 12,938
Florida Progress Corp. 200 10,638
FPL Group Inc. 400 26,400
GPU Inc. 300 9,919
Niagara Mohawk Hldgs Inc.* 400 6,400
PG+E Corp. 900 24,244
Pinnacle West Cap Corp. 200 8,688
PPL Corp. 300 12,356
Public Svc Enterprise Group 500 20,750
Reliant Energy Inc. 700 28,919
Southern Co. 1,500 44,063
TXU Corp. 600 22,238
XCEL Energy Inc. 810 20,706
------------
661,097
Electrical Equipment - 0.47%
American Pwr Conversion Corp.* 500 6,469
Cooper Inds Inc. 200 7,650
Emerson Elec Co. 1,000 73,438
Molex Inc. 500 27,000
National Svc Inds Inc. 100 2,044
Power One Inc.* 200 14,188
Rockwell Intl Corp. 400 15,725
Thermo Electron Corp.* 450 13,050
Thomas + Betts Corp. 100 1,513
------------
161,075
Electronic Equipment & Instruments - 0.54%
Agilent Technologies Inc.* 1,099 50,897
Millipore Corp. 100 5,250
Perkinelmer Inc. 100 11,950
Sanmina Corp.* 400 45,725
Solectron Corp.* 1,400 61,600
Tektronix Inc. 100 7,125
------------
182,547
Energy Equipment & Services - 0.65%
Baker Hughes Inc. 800 27,500
Halliburton Co. 1,100 40,769
Nabors Industries Inc.* 300 15,270
Rowan Cos Inc.* 200 5,038
Schlumberger Ltd 1,400 106,575
Transocean Sedco Forex Inc. 500 26,500
------------
221,651
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Food & Drug Retailing - 1.01%
Albertsons Inc. 1,000 $23,688
CVS Corp. 900 47,644
Kroger Co.* 2,000 45,125
Longs Drug Stores Corp. 100 2,188
Safeway Inc.* 1,200 65,625
Supervalu Inc. 300 4,613
Sysco Corp. 800 41,750
Walgreen Co. 2,400 109,500
Winn Dixie Stores Inc. 300 5,775
------------
345,906
Food Products - 1.12%
Archer Daniels Midland Co. 1,460 16,060
Campbell Soup Co. 1,000 29,250
Conagra Inc. 1,300 27,788
General Mls Inc. 700 29,225
Heinz, H J Co. 800 33,550
Hershey Foods Corp. 300 16,294
Kellogg Co. 1,000 25,375
Nabisco Group Hldg Corp. 800 23,100
Quaker Oats Co. 300 24,469
Ralston Purina Co. 700 16,975
Sara Lee Corp. 2,100 45,281
Unilever N V 1,400 71,138
Wrigley (WM) Jr Co. 300 23,756
------------
382,260
Gas Utilities - 0.27%
Columbia Energy Group 200 14,388
Eastern Enterprises 100 6,438
El Paso Energy Corp. 600 37,613
Keyspan Corp. 350 12,316
Nicor Inc. 100 3,531
Oneok Inc. 100 3,963
Peoples Energy Corp. 100 3,438
Sempra Energy 500 10,344
------------
92,028
Health Care Equipment & Supplies - 1.19%
Allergan Inc. 300 25,219
Bard, C R Inc. 100 4,188
Bausch + Lomb Inc. 100 3,856
Baxter Intl Inc. 700 57,531
Becton Dickinson + Co. 600 20,100
Biomet Inc. 400 14,475
Boston Scientific Corp.* 1,000 15,938
Guidant Corp.* 700 37,056
Medtronic Inc. 2,900 157,506
PE Corp. 500 58,500
St Jude Med Inc.* 200 11,000
------------
405,369
Health Care Providers & Services - 0.91%
Aetna Inc. 300 17,344
Cardinal Health Inc. 700 66,325
Cigna Corp. 400 48,780
</TABLE>
The accompanying notes are an integral part of the financial statements.
84
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Health Care Providers & Services - continued
HCA Healthcare Co. 1,300 $51,919
Healthsouth Corp.* 900 10,800
Humana Inc.* 400 4,850
Manor Care Inc.* 200 3,338
McKesson HBOC Inc. 700 19,644
Quintiles Transnational Corp.* 300 4,181
Tenet Healthcare Corp. 700 27,519
Unitedhealth Group Inc. 400 43,750
Wellpoint Health Networks Inc.* 100 11,694
------------
310,143
Hotels, Restaurants & Leisure - 0.62%
Carnival Corp. 1,400 34,738
Darden Restaurants Inc. 300 6,750
Harrahs Entmt Inc.* 300 8,588
Hilton Hotels Corp. 900 8,550
Marriott Intl Inc. 600 24,300
McDonalds Corp. 3,100 96,100
Starbucks Corp.* 400 17,875
Tricon Global Restaurants Inc.* 300 9,000
Wendys Intl Inc. 300 6,525
------------
212,425
Household Durables - 0.22%
American Greetings Corp. 200 3,638
Black + Decker Corporation 200 7,525
Centex Corp. 100 3,700
Fortune Brands Inc. 400 11,775
Kaufman + Broad Home Corp. 100 2,975
Leggett + Platt Inc. 500 8,188
Maytag Corp. 200 5,725
Newell Rubbermaid Inc. 600 11,513
Pulte Corp. 100 3,331
Stanley Works 200 5,325
Tupperware Corp. 100 1,713
Whirlpool Corp. 200 8,700
------------
74,106
Household Products - 1.27%
Clorox Co. 600 26,775
Colgate Palmolive Co. 1,400 82,264
Fort James Corp. 500 16,469
Kimberly Clark Corp. 1,300 85,800
Procter + Gamble Co. 3,100 221,456
------------
432,764
Industrial Conglomerates - 4.77%
General Elec Co. 23,600 1,293,575
ITT Inds Inc. 200 6,513
Minnesota Mng + Mfg Co. 900 86,963
Textron Inc. 300 15,131
Tyco Intl Ltd 3,999 226,711
------------
1,628,893
Insurance - 3.13%
Aflac Inc. 600 43,838
Allstate Corp. 1,700 68,425
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Insurance - continued
American Gen Corp. 600 $48,300
American Intl Group Inc. 5,550 543,900
AON Corp. 600 24,863
Chubb Corp. 400 33,775
Cincinnati Finl Corp. 400 14,700
Conseco Inc. 800 5,550
Hartford Financial Svcs Grp 500 37,219
Jefferson Pilot Corp. 200 13,750
Lincoln Natl Corp. 500 24,188
Loews Corp. 200 18,188
Marsh + Mclennan Cos Inc. 600 78,450
MBIA Inc. 200 14,538
MGIC Invest. Corp. 300 20,438
Progressive Corp. 200 19,650
Safeco Corp. 300 7,256
St Paul Cos Inc. 500 25,625
Torchmark Inc. 300 9,994
UnumProvident Corp. 600 16,950
------------
1,069,594
Internet Software & Services - 1.04%
America Online Inc.* 5,500 277,365
Yahoo Inc.* 1,300 76,213
------------
353,578
IT Consulting Services - 0.30%
Ceridian Corp.* 300 7,500
Computer Sciences Corp.* 400 25,200
Electronic Data Sys Corp. 1,100 51,631
Sapient Corp.* 300 10,669
Unisys Corp.* 700 8,925
------------
103,925
Leisure Equipment & Products - 0.16%
Brunswick Corp. 200 3,888
Eastman Kodak Co. 700 31,413
Hasbro Inc. 400 4,300
Mattel Inc. 1,000 12,938
Polaroid Corp. 100 1,006
------------
53,544
Machinery - 0.58%
Briggs + Stratton Corp. 100 3,569
Caterpillar Inc. 800 28,050
Cummins Engine Inc. 100 3,400
Danaher Corp. 300 18,938
Deere + Co. 600 22,088
Dover Corp. 500 21,219
Eaton Corp. 200 13,613
Illinois Tool Wks Inc. 700 38,894
Ingersoll Rand Co. 400 15,100
Navistar Intl Corp. Inc.* 100 3,306
Paccar Inc. 200 8,413
Pall Corp. 300 6,469
Parker Hannifin Corp. 300 12,413
Timken Co. 100 1,406
------------
196,875
</TABLE>
The accompanying notes are an integral part of the financial statements.
85
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Media - 3.13%
Clear Channel Communications* 1,400 $84,088
Comcast Corp.* 2,200 89,650
Disney Walt Co. 5,000 179,063
Dow Jones + Co Inc. 200 11,775
Gannett Inc. 600 34,800
Harcourt Gen Inc. 200 11,210
Interpublic Group Cos Inc. 700 30,056
Knight Ridder Inc. 200 10,050
Mcgraw Hill Cos Inc. 500 32,094
Meredith Corp. 100 3,175
New York Times Co. 400 14,700
Omnicom Group 400 36,900
Seagram Ltd 1,000 57,125
Time Warner Inc. 3,200 242,912
Tribune Co. 700 25,944
Viacom Inc.* 3,600 204,750
------------
1,068,291
Metals & Mining - 0.43%
Alcan Alum Ltd 800 25,250
Alcoa Inc. 2,100 60,244
Allegheny Technologies Inc. 200 4,050
Barrick Gold Corp. 900 12,038
Bethlehem Steel Corp.* 300 863
Freeport Mcmoran Copper + Gold* 400 3,175
Homestake Mng Co.* 600 2,475
INCO Ltd* 400 6,175
Newmont Mng Corp. 400 5,425
Nucor Corp. 200 6,938
Phelps Dodge Corp. 200 9,350
Placer Dome Inc. 800 6,500
U. S. Steel Group 200 3,188
Worthington Industries Inc. 200 1,913
------------
147,581
Multiline Retail - 2.11%
Consolidated Stores Corp.* 300 3,563
Costco Wholesale Corp.* 1,100 40,288
Dillards Inc. 200 2,100
Dollar Gen Corp. 800 12,400
Federated Dept Stores Inc.* 500 16,281
K Mart Corp.* 1,100 6,531
Kohls Corp.* 800 43,350
May Dept Stores Co. 750 19,688
Nordstrom Inc. 300 4,931
J C Penney, Inc. 600 7,013
Sears Roebuck + Co. 800 23,784
Target Corp. 2,200 60,775
Wal Mart Stores Inc. 10,600 480,975
------------
721,678
Multi Utilities - 0.57%
Enron Corp. 1,800 147,713
Williams Cos Inc. 1,100 45,994
------------
193,706
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Office Electronics - 0.04%
Xerox Corp. 1,600 $13,500
------------
Oil & Gas - 4.57%
Amerada Hess Corp. 200 12,400
Anadarko Pete Corp. 627 40,159
Apache Corp. 300 16,594
Ashland Inc. 200 6,550
Burlington Res Inc. 500 18,000
Chevron Corp. 1,600 131,400
Coastal Corp. 500 37,719
Conoco Inc. 1,500 40,781
Devon Energy Corporation 300 15,120
Exxon Mobil Corp. 8,300 740,256
Kerr Mcgee Corp. 200 13,063
Occidental Petroleum Corp. 900 17,888
Phillips Petroluem Co. 600 37,050
Royal Dutch Petroleum Co. 5,100 302,813
Sunoco Inc. 200 5,988
Texaco Inc. 1,300 76,781
Tosco Corp. 300 8,588
Unocal Corp. 600 20,475
Usx Marathon Group 700 19,031
------------
1,560,654
Paper & Forest Products - 0.32%
Boise Cascade Corp. 100 2,869
Georgia Pac Corp. 400 10,750
International Paper Co. 1,200 43,950
Louisiana Pac Corp. 200 1,700
Mead Corp. 200 5,788
Potlatch Corp. 100 3,350
Westvaco Corp. 200 5,700
Weyerhaeuser Co. 500 23,469
Willamette Inds Inc. 300 10,894
------------
108,469
Personal Products - 0.35%
Alberto Culver Co. 100 3,356
Avon Prods Inc. 600 29,100
Gillette Co. 2,500 87,188
------------
119,644
Pharmaceuticals - 8.13%
Abbott Labs 3,700 195,406
Alza Corp.* 300 24,281
American Home Products Corp. 3,100 196,850
Bristol Myers Squibb Co. 4,700 286,406
Johnson + Johnson 3,300 304,013
King Pharmaceuticals Inc.* 400 17,925
Lilly Eli + Co. 2,700 241,313
Merck + Co Inc. 5,500 494,656
Pfizer Inc. 15,050 649,972
Pharmacia Corp. 3,100 170,500
Schering Plough Corp. 3,500 180,906
Watson Pharmaceuticals Inc.* 200 12,513
------------
2,774,741
</TABLE>
The accompanying notes are an integral part of the financial statements.
86
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Road & Rail - 0.24%
Burlington Northern Santa Fe 1,000 $26,563
CSX Corp. 500 12,656
Norfolk Southern Corp. 900 12,713
Ryder Sys Inc. 100 1,975
Union Pac Corp. 600 28,125
------------
82,031
Semiconductor Equipment & Products - 4.50%
Adaptec Inc.* 200 3,163
Advanced Micro Devices Inc.* 700 15,838
Altera Corp.* 1,000 40,938
Analog Devices Inc.* 800 52,000
Applied Materials Inc.* 1,900 100,938
Broadcom Corp.* 550 122,306
Conexant Sys Inc.* 500 13,156
Intel Corp. 16,000 720,000
KLA Tencor Corp.* 400 13,525
Linear Technology Corp. 700 45,194
LSI Logic Corp.* 700 23,013
Maxim Integrated Prods Inc.* 700 46,419
Micron Technology Inc.* 1,300 45,175
National Semiconductor Corp.* 400 10,400
Novellus Sys Inc.* 300 12,281
Teradyne Inc.* 400 12,500
Texas Instrs Inc. 4,100 201,156
Xilinx Inc.* 800 57,950
------------
1,535,950
Software - 5.09%
Adobe Sys Inc. 600 45,638
Autodesk Incorporated 100 2,206
BMC Software Inc.* 600 12,188
Citrix Sys Inc.* 400 8,850
Computer Assoc Intl Inc. 1,400 44,625
Compuware Corp.* 900 7,088
Mercury Interactive Corp.* 200 22,200
Microsoft Corp.* 12,500 860,938
Novell Inc.* 800 7,200
Oracle Corp.* 13,400 442,200
Parametric Technology Corp.* 600 7,388
Peoplesoft Inc.* 700 30,548
Siebel Sys Inc.* 1,000 104,938
Synavant Inc.* 30 137
Veritas Software Corp.* 1,000 141,016
------------
1,737,157
Specialty Retail - 1.48%
Autozone Inc.* 300 8,044
Bed Bath + Beyond Inc.* 700 18,069
Best Buy Co Inc.* 500 25,094
Circuit City Stores Inc. 500 6,625
Gap Inc. 2,000 51,625
Home Depot Inc. 5,500 236,500
Limited Inc. 1,000 25,250
Lowes Cos Inc. 900 41,119
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Specialty Retail - continued
Office Depot Inc.* 700 $5,819
Radioshack Corp. 400 23,850
Sherwin Williams Co. 400 8,675
Staples Inc.* 1,100 15,675
Tiffany + Co. 300 12,806
TJX Cos Inc. 700 19,075
Toys R Us Inc.* 500 8,594
------------
506,819
Textiles & Apparel - 0.12%
Liz Claiborne Inc. 100 4,250
Nike Inc. 600 23,963
Reebok Intl Ltd* 100 2,156
Russell Corp. 100 1,600
V F Corp. 300 8,194
------------
40,163
Tobacco - 0.61%
Philip Morris Cos Inc. 5,400 197,775
UST Inc. 400 10,100
------------
207,875
Trading Companies & Distributors - 0.04%
Genuine Parts Co. 400 8,525
Grainger W W Inc. 200 6,388
------------
14,913
Wireless Telecommunication Service - 0.45%
Nextel Communications Inc.* 1,800 69,188
Sprint Corp. 2,200 83,875
------------
153,063
------------
TOTAL COMMON STOCKS
(Cost $27,927,611) $29,976,500
------------
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
U.S. TREASURY OBLIGATIONS- SHORT TERM - 1.05%
U.S. Treasury Bills - 0.90%
6.31% due 12/21/00 $125,000 $123,861
5.90% due 11/02/00 75,000 74,988
6.07% due 12/21/00 10,000 9,916
6.12% due 12/21/00 100,000 99,150
------------
307,914
U.S. Treasury Bonds - 0.15%
5.99% due 12/07/00 50,000 49,701
------------
TOTAL U.S. TREASURY OBLIGATIONS-SHORT TERM
(Cost $357,615) $357,615
------------
REPURCHASE AGREEMENTS - 11.15%
Repurchase Agreement with State Street Bank &
Trust Co. dated 10/31/00 at 6.42%, to be
repurchased at $3,808,670 on 11/01/00,
collateralized by $3,915,000 U.S.Treasury
Notes, 5.875% due 09/30/02 (valued at
$3,994,985, including interest) (Cost
$3,808,000) $3,808,000 $3,808,000
------------
TOTAL INVESTMENTS (Stock Index Fund )
(Cost $32,093,226) $34,142,115
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
87
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Global Equity Fund
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 99.90%
Aerospace - 1.64%
Embraer-Empresa Brasileira de Aero 20,925 $605,517
------------
Air Freight & Couriers - 1.05%
TNT Post Group NV 18,325 388,143
------------
Banking - 6.65%
Banco Santander Central Hispano SA 37,825 366,563
Bank Of New York 2,234 128,595
Citigroup, Inc. 15,261 803,110
Fifth Third Bancorp 4,646 238,688
ForeningsSparbanken AB (SW) 28,475 408,931
San Paolo-IMI SPA 18,650 302,284
Wells Fargo 4,425 204,933
------------
2,453,104
Biotechnology - 0.98%
Amgen, Inc.* 3,174 183,894
Genentech, Inc.* 2,164 178,530
------------
362,424
Building Materials - 0.97%
Cemex 17,000 359,125
------------
Commercial Services & Supplies - 3.33%
Havas Advertising SA 18,875 304,169
Omnicom Group 1,170 107,933
WPP Group 21,500 288,558
ISS A/S* 4,100 252,466
Securitas AB 13,000 277,113
------------
1,230,238
Computer Equipment - 4.87%
EMC Corp.* 9,066 807,441
Network Appliance Inc.* 1,429 170,051
Sun Microsystems, Inc.* 7,374 817,592
------------
1,795,084
Computer Networking - 3.31%
Cisco Systems, Inc.* 22,698 1,222,855
------------
Consumer Products - 2.90%
Altadis SA 25,150 376,692
Reckitt Benckiser plc 22,000 289,203
The Swatch Group AG 305 403,816
------------
1,069,711
Diversified - 1.24%
Corning, Inc 5,978 457,317
------------
Electronics - 10.41%
Epcos AG* 4,200 318,347
Flextronics International* 9,250 351,500
General Electric Co. 18,432 1,010,304
Jabil Circuit, Inc.* 2,125 121,258
Murata Manufacturing Co., Ltd. 2,305 275,886
NEC Corporation 21,000 400,312
Philips Electronics 20,363 813,247
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Electronics - continued
Pioneer Corporation 8,000 $247,812
Samsung Elect.-GDR 4,100 301,350
------------
3,840,016
Financial Services - 0.72%
Federal National Mortgage Assoc. 3,425 263,725
------------
Food & Beverages - 1.82%
Ajinomoto Co., Inc. 34,000 380,149
Heineken NV 5,375 291,919
------------
672,068
Health Care Services & Supplies - 2.41%
Fresenius Medical Care AG-ADR 20,100 293,963
Baxter International, Inc. 2,782 228,646
Synthes-Stratec Inc.* 144A 575 366,252
------------
888,860
Hotels, Restaurants & Leisure Time - 1.94%
Accor 9,100 368,352
Viacom, Inc.* 6,098 346,824
------------
715,176
Insurance - 1.39%
Alleanza Assicurazioni 38,725 513,634
------------
Manufacturing - 4.09%
Assa Abloy AB 17,500 322,248
Perlos OYJ SA (FI) 26,400 562,317
Tyco International Ltd. 11,006 623,903
------------
1,508,467
Media - 4.44%
AT&T Corp. - Liberty Media Group* 5,375 96,750
Comcast Corporation Class A Special* 6,342 258,437
General Motors Corp.-Hughes* 4,781 154,904
Societe Europeenne des Satellites 2,675 356,391
Time Warner, Inc. 5,621 426,690
VNU NV 144A 7,300 343,810
------------
1,636,982
Natural Gas - 0.94%
Tokyo Gas Co., Ltd. 133,000 347,386
------------
Oil & Gas - 4.11%
Petroleo Brasileiro* 4,200 122,063
BP Amoco PLC ADR 7,600 387,125
Total Fina Elf SA 3,520 503,621
Halliburton 3,600 133,425
Saipem 71,000 369,939
------------
1,516,172
Pharmaceuticals - 7.06%
Glaxo Wellcome 15,500 446,196
Merck & Company, Inc. 4,896 440,334
Novo Nordisk 2,300 487,827
Pfizer, Inc. 20,846 900,287
Takeda Chemical Industries, Ltd. 5,000 329,469
------------
2,604,113
</TABLE>
The accompanying notes are an integral part of the financial statements.
88
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Retail - 4.34%
Fast Retailing Co., Ltd. 2,600 $639,784
Home Depot, Inc. 8,026 345,118
Kohl's Corp.* 3,996 216,533
Walgreen Company 3,349 152,798
Wal-Mart Stores, Inc. 5,480 248,655
------------
1,602,888
Road & Rail - 0.34%
MTR Corp.* 144A 84,000 124,401
------------
Semiconductor Equipment & Products - 5.07%
Analog Devices, Inc.* 2,100 136,500
Applied Micro Circuits Corp.* 1,850 141,294
Broadcom Corporation* 779 173,230
Intel Corp. 8,143 366,435
JDS Uniphase Corp.* 5,058 411,595
STMicroelectronics N.V. 3,600 181,617
Taiwan Semiconductor Man. Co.* 7,500 170,156
The Furukawa Electric Co., Ltd. 11,000 289,328
------------
1,870,155
Software - 7.81%
Business Objects S.A.* 3,475 268,349
Check Point Software Tech. Ltd.* 3,050 483,044
Dassault Systemes SA (FR) 4,675 356,454
Logica plc 10,600 313,599
Microsoft Corp.* 2,725 187,684
Oracle Systems Corp.* 12,442 410,586
Redback Networks, Inc.* 1,141 121,445
The Sage Group plc 45,900 334,991
Veritas Software* 2,883 406,548
------------
2,882,700
Telephone - 0.92%
Tele Norte Leste Participacoes 15,400 340,725
------------
Telecommunication Services - 6.16%
China Mobile (HK) Ltd.* 77,000 493,653
Energis PLC* 40,875 349,618
Juniper Networks, Inc.* 1,158 225,810
Nippon Telegraph and Telephone 50 455,025
Partner Comm. Co. Ltd.* 4,200 25,200
Vodafone Airtouch Public Ltd. 145,625 605,887
VoiceStream Wireless Corp.* 908 119,402
------------
2,274,594
Telecommunications Equipment - 8.99%
Alcatel SA (FR) 14,200 866,404
Ciena Corp.* 4,175 438,897
Comverse Technology, Inc.* 1,602 179,024
Marconi Plc 25,025 315,897
Nokia Oyj Sponsored ADR 19,795 846,236
Nortel Networks Corporation 9,000 409,500
TyCom, Ltd.* 7,775 260,463
------------
3,316,420
TOTAL COMMON STOCKS
(Cost $36,769,171) $36,862,000
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
PREFERRED STOCK - 0.03%
Fresenius Medical
(Cost $11,334) 250 $10,607
------------
RIGHTS & WARRANTS - 0.07%
Logica Plc
(Cost $14,168) 850 $24,419
------------
SHORT TERM INVESTMENTS - 0.00%
SSGA Money Market Fund
(Cost $1,000) 1,000 $1,000
------------
TOTAL INVESTMENTS (Global Equity Fund)
(Cost $36,795,673) $36,898,026
------------
-----------------------------------------------------------
International Equity Fund
-----------------------------------------------------------
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 93.64%
Aerospace & Defense - 0.47%
BAE Systems 18,372 $104,362
Singapore Technologies Engineering 11,000 70,899
Thomson CSF 1,073 48,168
------------
223,429
Appliances & Household Durables - 2.63%
Daiwa House Industry Co. Ltd. 4,000 25,111
Electrolux AB 3,300 41,612
JM Bygg & Fastigh 900 20,536
Matsushita Electric Industrial 13,000 377,675
Philips Electronics 3,944 154,944
Sanyo Electric Company Ltd. 17,000 129,313
Sekisui House Ltd 7,000 74,032
Sharp Corporatio 7,000 89,172
Sony Corporatio 4,400 351,629
------------
1,264,024
Automobiles - 2.40%
Daimlerchrysler AG 4,850 223,483
Fiat SpA 1,107 25,740
Honda Motor Company 2,000 69,101
Nissan Motors Company 13,000 89,236
Peugeot SA 291 53,587
Toyota Motor Corp. 15,200 607,359
Volkswagen AG 1,650 82,429
------------
1,150,935
Auto Components - 0.73%
Bridgestone Corporation 6,000 59,497
Continental AG 800 12,220
Denso Corporation 4,000 91,280
GKN Plc 8,995 103,105
Michelin 960 27,780
Pirelli SpA 10,365 30,081
Valeo SA 616 26,816
------------
350,779
</TABLE>
The accompanying notes are an integral part of the financial statements.
89
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Banking - 11.09%
77 Bank Ltd. 2,000 $14,810
Abbey National Plc. 6,246 86,186
Abn Amro Holdings NV 5,294 122,645
Asahi Bank Ltd. 13,000 51,230
Banca Intesa SpA 11,914 49,439
Banca Popolare di Milano 725 4,553
Banco Bilbao Vizcaya SA 24,660 328,546
Banco Bradesco SA 2,767,000 13,045
Banco Comercial Portugues SA 3,884 19,413
Banco di Roma 12,196 12,854
Banco Espirito Santo 593 9,008
Banco Santander Central Hispano 22,829 221,236
Bank of East Asia Ltd. 12,105 27,317
Bank of Tokyo-Mitsubishi Ltd. 21,000 251,927
Bank of Yokohama 2,000 9,806
Banque Nationale de Paris 1,206 103,979
Barclays Plc 8,178 233,995
Bayerische Hypo-Und Vereinsbank 2,000 109,894
Commonwealth Bank of Austria AG 1,507 22,426
Credit Suisse Holding 1,160 217,468
Daiwa Bank Ltd. 15,000 30,518
DBS Group Holdings Ltd. 16,815 198,184
Deutsche Bank AG 2,800 229,244
Dresdner Bank AG 2,000 83,333
Foereningssparbanken AB 3,100 44,519
Bank of Fukuoka Ltd. 2,000 9,824
Halifax Group Plc 10,224 80,403
Hang Seng Bank Ltd. 4,100 48,365
HSBC Holdings Plc 40,895 582,685
Joyo Bank Ltd. 6,400 21,878
Lloyds TSB Group Plc 23,107 235,360
Mediobanca SpA 1,439 16,009
Mizuho Holdings 30 230,674
National Australia Bank Ltd. 7,122 98,937
Oversea-Chinese Banking Corp. Ltd. 18,400 117,338
Royal Bank of Scotland 10,751 241,319
Sakura Bank Ltd. 19,000 138,432
San Paolo IMI SpA 3,357 54,411
Shizuoka Bank Ltd. 7,000 63,575
Skandinaviska Enskilda Banken 3,500 41,332
Societe Generale 1,547 87,825
Sumitomo Bank 14,000 170,004
Suncorp Metway Ltd. 1,664 8,453
Svenska Handelsbanken 3,900 61,277
Tokai Bank Ltd. 10,000 53,613
UBS AG 1,710 236,866
Unicredito Italiano 11,728 59,714
United Overseas Bank Ltd. 13,336 98,712
Westpac Banking Corp. 9,720 66,375
------------
5,318,956
Beverages & Tobacco - 2.15%
Altadis SA 3,322 49,756
Asahi Breweries Ltd. 4,000 39,518
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Beverages & Tobacco - continued
Austria Tabak AG 93 $4,262
British American Tobacco 20,704 145,095
Carlsberg A 100 4,333
Carlsberg B 100 4,185
Coca-Cola Amatil Ltd. 3,364 6,848
Diageo Plc 31,661 298,830
Fosters Brewing Group Ltd. 9,289 21,041
Fraser & Neave Ltd. 4,000 13,893
Heineken Holdings NV 3,945 214,255
Japan Tobacco Inc. 4 27,494
Kirin Brewery Company Ltd. 15,000 156,440
OYJ Hartwall 467 8,084
Pernod Ricard 681 31,206
Swedish Match AB 1,800 6,179
------------
1,031,419
Building Materials & Components - 0.56%
Asahi Glass Company Ltd. 11,000 112,908
Buderus AG 300 5,685
Cie de Saint Gobain 600 79,378
Hanson Plc 158 838
Heidelberger Zement AG 300 14,256
Holderbank Financiere Glarus AG 20 5,886
Holderbank Financiere Glarus AG 10 10,508
Imerys 47 4,652
Italcementi Fabbriche Riunite 201 1,592
Lafarge SA 450 33,223
------------
268,926
Business & Public Services - 1.96%
Adecco SA 140 96,807
Benesse Corporation Ltd. 700 38,492
Ste. BIC 482 16,709
Capita Group 5,904 44,974
Dai Nippon Printing Co. Ltd. 6,000 94,029
Hays 11,253 61,432
PT Multimedia* 300 1,527
Rentokil Initial Plc 12,399 28,605
Securitas AB 4,000 85,266
Soc. Gen. de Aguas de Barcelona 1,807 22,235
Suez Lyonnaise des Eaux 973 148,459
United Utilities Plc 4,613 46,384
Vedior NV 445 6,627
Vivendi SA 3,440 247,255
------------
938,801
Chemicals - 1.69%
Akzo Nobel NV 856 38,971
Asahi Chemical Industry Co. Ltd. 9,000 55,758
BASF AG 4,500 176,424
Bayer AG 5,200 225,711
BOC Group Plc 4,065 56,622
Cin Corporacao Industrial Norte 170 570
Givaudan AG* 58 13,906
Imperial Chemical Industries Plc 8,735 53,484
</TABLE>
The accompanying notes are an integral part of the financial statements.
90
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Chemicals - continued
L'Air Liquide 467 $55,204
Mitsubishi Chemical Corp. 9,000 28,456
Orica Ltd. 610 1,834
SNIA SpA 2,631 5,448
Sumitomo Chemical Co. Ltd. 13,000 64,098
Teijin 2,000 9,055
Toray Industries, Inc. 7,000 27,265
------------
812,806
Communications Equipment - 0.79%
Alcatel 709 43,259
L M Ericsson Telefon AB 10,850 144,416
Marconi Plc 3,548 44,787
Nokia AB 3,405 140,111
Sagem SA 31 5,682
------------
378,255
Computers & Peripherals - 1.33%
Asustek Computer, Inc. 9,574 51,700
Asustek Computer, Inc. 144A 8 43
Creative Technology Ltd. 300 4,868
Fujitsu Ltd. 8,000 142,529
Legend Holdings 23,000 19,464
NEC Corporation 17,000 324,062
Psion 489 2,959
Toshiba Corporation 13,000 92,929
------------
638,554
Construction & Engineering - 0.58%
Acs Actividades de Construccion 674 14,751
Bilfinger & Berger Bauaktienge 400 4,324
Bouygues 2,178 110,895
Fomento de Construcciones Y Contra 1,026 18,850
Grupo Dragados SA 1,931 18,763
Impregilo SpA 1,043 559
Kajima Corporation 17,000 44,247
Leighton Holdings Ltd. 1,436 4,980
Obayashi Corp 2,000 8,285
Penta-Ocean Construction Co. Ltd. 1,800 2,095
Sirti SpA 448 642
Skanska/Frueher AB 1,300 51,520
------------
279,911
Containers & Packaging - 0.14%
Amcor Ltd. 3,419 9,481
Assidoman 153 2,605
Corticeira Amorim Socdad Gestora 158 1,082
Oji Paper Co. Ltd. 9,000 52,376
Reno de Medici SpA 295 611
------------
66,155
Electrical Equipment - 1.10%
ABB AG 1,760 156,409
Mitsubishi Electric Corp. 19,000 136,517
Schneider SA 1,067 69,494
Sumitomo Electric Industries 9,000 166,201
------------
528,621
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Electronic Components & Instruments - 0.88%
Alps Electric Co. Ltd. 1,000 $19,796
Canon, Inc. 3,000 119,049
Hitachi Ltd. 11,000 117,949
Kyocera Corporation 800 104,110
Nidec Corporation 400 24,525
OCE NV 129 1,921
Omron Corp. 1,000 24,653
Venture Manufacturing, Singapore 1,000 9,679
------------
421,682
Energy Sources - 9.00%
BP Amoco Plc 178,879 1,517,152
Broken Hill Proprietary Co. Ltd. 5,179 50,201
Ente Nazionale Idrocarburi SpA 60,283 326,376
Japan Energy Corp. 2,000 2,658
Nippon Mitsubishi Oil Corp. 22,000 118,352
Petrol Brasilieros 3,590 103,995
Repsol SA 9,908 157,396
Royal Dutch Petroleum Co. NV 17,328 1,027,701
Santos Ltd. 4,985 15,866
Showa Shell Sekiyu 2,000 10,063
Total Fina Elf SA 6,914 989,214
------------
4,318,974
Financial Services - 4.33%
Acom Co. Ltd. 1,700 137,570
Amvescap 4,450 99,434
BPI-SGPS SA* 4,425 14,382
Chuo Mitsui Trust 4,000 12,207
Credit Saison Co. 1,100 23,287
Daiwa Securities Group, Inc. 17,000 188,361
ING Groep NV 5,822 399,789
Hutchison Whampoa Ltd. 4,100 50,994
Keppel Corporation Ltd. 11,000 21,921
Lend Lease Corp. Ltd. 2,908 34,044
Mitsubishi Trust & Banking Corp. 15,000 121,661
Nichiei Company Ltd. 300 1,320
Nomura Securities Co. Ltd. 21,000 445,539
Nordic Baltic Holding* 7,104 53,653
OM Gruppen AB 800 28,582
Orix Corporation 200 20,987
Promise Company Ltd. 1,700 127,599
Schroder Plc 1,680 30,397
Swire Pacific Ltd. 1,500 9,251
Takefuji Corporation 1,500 148,467
T.I. Group Plc 4,683 106,339
------------
2,075,784
Food & Household Products - 4.48%
Ajinomoto Co., Inc. 6,000 67,085
Azucarera Ebro Agricolas 359 4,372
Cadbury Schweppes Plc 17,928 110,814
Danisco 200 7,914
Eridania Beghin-Say SA 328 25,232
Goodman Fielder Wattie Ltd. 6,827 4,423
</TABLE>
The accompanying notes are an integral part of the financial statements.
91
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Food & Household Products - continued
Groupe Danone 1,901 $265,854
Jeronimo Martins Sgps. SA 565 5,447
Kamps AG 300 4,773
KAO Corporation 6,000 179,810
Kerry Group 154 1,921
Nestle SA 540 1,118,992
Nissin Food Products 100 2,626
Orkla SA 800 14,441
Parmalat Finanziaria SpA 14,195 20,478
Raisio Group Plc 1,459 2,204
Tate & Lyle 1,970 6,303
Unilever NV 7,298 366,011
Unilever Plc 26,664 180,383
------------
2,389,083
Forest Products & Paper - 0.27%
Investimentos Participacoes 119 616
Paperlinx 1,139 1,948
Portucel Industrial SA 660 3,719
Svenska Cellulosa AB 2,659 54,551
UPM-Kymmene 2,423 68,573
------------
129,407
Gold Mines - 0.00%
Normandy Mining Ltd. 6,667 3,214
------------
Health Care - 0.27%
Nycomed Amersham 4,233 37,895
Smith & Nephew 2,652 10,890
Terumo Corporation 1,900 53,806
Fresenius Medical 200 15,915
Parkway Holdings Ltd. 7,000 14,348
------------
132,854
IT Consulting & Services - 0.48%
Cap Gemini SA 518 82,640
Getronics NV 2,261 25,423
Logica 2,225 65,826
Sema Group 2,532 31,962
Tietoenator Corporation 646 12,417
Wm-Data Nordik AB 3,800 13,234
------------
231,502
Insurance - 6.71%
Aegon NV 6,840 271,647
Allianz AG 2,050 695,069
AMP Limited* 5,121 46,161
Assicurazione Generali SpA 5,742 188,816
Axa 2,091 276,810
CGNU Plc 13,707 183,369
Corporacion Mapfre Cia International 809 14,245
Legal & General Group Plc 34,085 84,816
Muenchener Rueckversicherungs 1,450 455,889
Prudential Corporation Plc 11,144 149,890
QBE Insurance Group Ltd. 2,110 9,734
Riunione Adriatica de Sicurta 2,703 35,485
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Insurance - continued
Sai Sta Assicuratrice Industrial 368 $6,105
Sampo Insurance Company Ltd. 953 38,818
Skandia Forsakring AB 10,500 178,112
Swiss Ruckversicherungs 105 207,068
Tokio Marine & Fire Insurance Co. 11,000 121,578
Zurich Financial Services Group* 526 254,371
------------
3,217,983
Leisure & Tourism - 0.87%
Accor SA 1,621 65,615
Autogrill Spa 962 10,621
Bass Plc 7,239 70,846
Compass Group Plc 14,672 126,453
Hilton Group Plc 13,719 38,119
Hongkong & Shanghai Hotels Ltd. 500 298
Hotel Properties Ltd. 13,000 11,103
Oriental Land Company Plc 400 24,195
Sodexho Alliance SA 204 31,940
Sol Melia SA 1,076 9,843
Tabcorp Holdings Ltd. 1,711 9,302
Telepizza SA* 2,488 9,522
United Overseas Land Ltd. 9,000 7,943
------------
415,800
Leisure Equipment & Products - 0.69%
Fuji Photo Film Company Ltd. 4,000 148,467
Nintendo Company Ltd. 1,100 181,964
------------
330,431
Machinery & Engineering - 1.60%
Atlas Copco AB Ser A 1,300 27,581
Atlas Copco AB Ser B 800 16,533
Coflexip 150 17,375
Fag Kugelfischer Georg Schaefer 950 6,965
Fanuc Ltd. 2,100 188,608
Invensys Plc 27,067 64,604
Kawasaki Heavy Industries 2,000 2,071
Komatsu Ltd. 7,000 31,050
Kubota Corp 2,000 6,727
Linde AG 950 41,276
Man AG 800 21,093
Metso 1,401 10,700
Mitsubishi Heavy Industries Ltd. 28,000 108,803
Mitsui Engineering & Shipbuilding Co. 1,800 1,831
Sandvik AB,Ser A* 2,800 61,788
SKF AB 1,000 14,861
SMC Corporation 600 84,901
Stork NV 293 3,282
Sulzer AG* 10 6,459
Volvo AB, Series A 500 7,506
Volvo AB, Series B 1,800 27,741
Wartsila 606 9,771
Zardoya Otis SA 539 4,094
------------
765,620
</TABLE>
The accompanying notes are an integral part of the financial statements.
92
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Media - 2.91%
British Sky Broadcasting Group* 18,501 $151,602
Canal Plus SA 1,553 224,698
Carlton Communications 4,412 35,529
Elsevier NV 3,595 45,913
EM TV Merchandising 300 9,038
EMI Group Plc 4,796 35,907
Lagardere Groupe SCA 996 56,544
Mediaset SpA 5,508 79,693
News Corp Ltd. 9,864 103,180
Pearson Plc 3,342 89,659
Reed International Plc 6,185 57,165
Reuters Group* 8,677 168,956
Singapore Press Holdings 4,000 57,166
Thomson Corp 1,000 40,262
Tokyo Broadcasting System, Inc. 2,000 78,266
Toppan Printing Co. Ltd. 6,000 53,008
Wolters Kluwer NV 1,776 39,969
WPP Group 5,182 69,549
------------
1,396,104
Merchandising 3.20%
Ahold NV 3,701 107,505
Boots Company Plc 4,949 39,494
Carrefour 3,493 234,465
Casino Guichard Perrachon 549 47,939
Coles Myer Ltd. 5,958 21,587
Cycle & Carriage Ltd. 4,000 7,288
Daiei Inc. 2,000 3,409
Dixons Group 11,032 32,814
Douglas Holding AG 600 17,872
Esprit Holdings 998 857
Great Universal Stores Plc 7,108 49,092
Hennes & Mauritz AB 8,000 149,715
Ito-Yokado Company Ltd. 2,000 90,363
Jusco Company Ltd. 4,000 75,150
Karstadt Quelle AG 500 16,319
Kesko Corporation 1,571 13,132
Kingfisher Plc 8,493 50,770
Marks & Spencer Plc 18,271 50,890
Marui Company Ltd. 2,000 29,510
Metro AG 2,150 86,663
Pinault-Printemps Redoute 796 142,055
Rinascente Per L'Esercizio 1,004 5,129
J. Sainsbury Plc 11,579 65,060
Sonae SGPS SA* 1,660 2,014
Tesco Plc 42,448 161,827
Valora Holding AG 40 8,133
Woolworths Ltd. 6,114 24,358
------------
1,533,410
Metals - Non-Ferrous - 0.42%
Outakumpa 1,131 7,870
Pechiney SA 776 28,975
Rio Tinto Plc 7,244 117,194
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Metals - Non-Ferrous - continued
Rio Tinto Ltd. 599 $8,222
SGL Carbon* 100 6,153
Siderar Nacional CIA 452,000 12,547
WMC Ltd. 5,758 22,012
------------
202,973
Metals - Steel - 0.42%
Acerinox SA 483 13,440
Kawasaki Steel Corporation 9,000 8,826
Nippon Steel Corporation 51,000 82,729
Onesteel* 1,295 617
Pohang Iron & Steel 130 7,554
SSAB Swedish Steel 800 6,485
Sumitomo Metal Industries Ltd. 9,000 4,949
Thyssen Krupp AG 4,000 57,026
Usinor 2,039 22,234
------------
203,860
Multi-Industry - 2.20%
Bradespar SA* 2,767,000 1,507
Brambles Industries Ltd. 1,149 29,791
Hopewell Holdings 1,000 362
Johnson Electric Holdings Ltd. 5,000 10,065
Lattice Group 23,981 51,149
Li & Fung 56,000 104,116
Pacific Dunlop Ltd. 5,638 4,501
Preussag AG 1,350 43,980
Sembcorp Industries Ltd. 26,000 25,019
Siemens AG 5,910 752,535
Sonae SGPS SA* 4,980 5,832
Southcorp Ltd. 3,321 8,580
Trelleborg AB 1,500 8,406
Wesfarmers Ltd. 978 7,467
------------
1,053,310
Personal Products - 0.99%
Beiersdorf AG 1,450 139,043
L'Oreal 4,089 312,293
Shiseido Co. Ltd. 2,000 25,844
------------
477,180
Pharmaceuticals - 8.79%
Astrazeneca Plc 9,620 450,568
Aventis SA 4,758 343,199
CSL Ltd. 558 9,926
Faulding & Co. Ltd. 660 3,490
Glaxo Wellcome Plc 19,740 568,252
Merck KGAA 500 19,009
Novartis AG 510 773,682
Roche Holding Chf100 Ords 12 129,673
Roche Holding Chf Genusschein NPV 53 484,123
Sankyo Co. Ltd. 4,000 88,164
Sanofi Synthelabo SA 4,825 253,859
Schering AG 600 33,605
Smithkline Beecham Plc 30,581 394,906
Taisho Pharmaceutical Co. Ltd. 4,000 115,108
</TABLE>
The accompanying notes are an integral part of the financial statements.
93
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Pharmaceuticals - continued
Takeda Chemical Industries Ltd. 7,000 $461,256
Yamanouchi Pharmaceutical Co. 2,000 90,547
------------
4,219,367
Real Estate - 1.81%
British Land Company Plc 8,840 52,845
Burford Holdings 5,910 8,575
Canary Wharf Group* 1,977 15,433
Castellum AB 2,590 27,605
Chelsfield 2,311 12,239
Corporacion Financiera Alba SA 966 24,592
Cie Fonciere Klepierre 260 20,960
City Developments Ltd. 9,000 41,508
DBS Land Ltd. 17,000 25,844
Drott AB 2,530 29,750
First Capital Corporation Ltd. 4,000 3,234
Gecina 120 10,285
Grantchester Holdings Plc 9,850 26,154
Great Portland Estates Plc 3,642 13,713
Hammerson Plc 2,910 17,396
Hang Lung Development Co. Ltd. 1,000 898
Henderson Land Development 4,000 17,233
Hysan Development Co. Ltd. 1,000 1,269
Inmobilia Colonial 1,141 13,575
Interbail (Societe Financiere) 380 9,339
IVG Holding AG 1,363 15,094
Land Securities Plc 6,488 66,838
Metrovacesa SA 1,628 22,021
Mitsubishi Estate Company Ltd. 7,000 74,417
Mitsui Fudosan Company Ltd. 4,000 48,463
New World Development Co. Ltd. 13,097 15,534
Prima Inmobiloaroa SA 1,140 10,777
Rodamco Continental 330 11,846
SILIC 50 6,695
SIMCO* 320 19,823
Sino Land Company Ltd. 9,195 4,097
Slough Estates 4,470 23,932
Ste Fonciere Lyonnaise SA 120 11,711
Sun Hung Kai Properties Ltd. 6,000 49,237
Uni Invest SA 1,169 11,210
Unibail SA 295 39,303
United Industrial Corp. Ltd. 22,000 10,146
Vallehermoso SA 6,399 36,219
WCM Beteil & Grundbe 400 7,824
Wharf Holdings Ltd. 5,000 10,194
Wihlborgs Fastighets 1,300 1,860
------------
869,688
Semiconductors - 1.32%
Advantest Corporation 500 65,206
ARM Holdings* 5,450 53,772
ASM Lithography* 5,286 144,484
Murata Manufacturing Co. Ltd. 1,900 227,411
Nikon Corporation 1,000 14,535
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Semiconductors - continued
ST Microelectronics 1,101 $55,545
Tokyo Electron Ltd. 900 70,439
------------
631,392
Software - 1.13%
Dassault Systemes 156 11,894
Misys Plc 4,061 42,307
Sage Group 7,462 54,460
SAP AG 1,550 253,727
Softbank Corporation 3,000 180,085
------------
542,473
Telecommunications - 5.04%
British Telecommunications Plc 36,480 427,679
Deutsche Telekom AG 5,988 224,853
France Telecom SA 1,671 174,699
Koninklijke KPN NV 9 182
Netcom AB* 300 14,081
Nippon Telegraph & Telephone 31 282,115
Olivetti & Co. SpA 5,508 16,686
Pacific Century* 18,815 14,475
Portugal Telecom SA 1,598 14,239
Singapore Telecommunications Ltd. 23,900 39,600
Sonera Corporation 1,760 38,772
Swisscom AG 200 50,790
Telecom Italia Mobile SpA Eur 659 3,585
Telecom Italia Mobile SpA Eur 5,936 68,759
Telefonica SA USD* 475 27,520
Telefonica SA Euro* 8,755 166,941
Telstra Corporation Ltd. 14,170 46,244
TIM Spa 16,659 141,651
Vodafone Group 159,377 663,103
------------
2,415,974
Textiles & Apparel - 0.64%
Adidas Salomon AG 300 13,773
Benetton Group SpA 7,898 14,343
Moet Hennessy Louis Vuitton 2,900 211,641
The Swatch Group AG 50 66,199
Toyobo Company Ltd. 1,800 3,002
------------
308,958
Transportation - Airlines - 0.55%
British Airways Plc 9,634 43,054
Cathay Pacific Airways Ltd. 10,000 18,143
Deutsche Lufthansa AG 800 15,614
Japan Airlines Company Ltd. 4,000 16,020
Singapore Airlines Ltd. 17,000 170,358
------------
263,189
Transportation - Air Freight & Couriers - 0.14%
Mayne Nickless Ltd. 1,965 5,215
TNT Post Groep NV 2,976 63,035
------------
68,250
</TABLE>
The accompanying notes are an integral part of the financial statements.
94
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Transportation - Marine - 0.11%
Nedlloyd NV 158 $2,936
Neptune Orient Lines Ltd.* 9,000 7,635
Nippon Yusen KK 2,000 9,385
P & O (Princess Cruises)* 3,826 15,030
P & O (Princess Cruises) GBP* 3,826 15,766
------------
50,752
Transportation - Road & Rail - 0.75%
Central Japan Railway Company 9 54,850
East Japan Railway Company 18 103,432
Kinki Nippon Railway Company Ltd. 21,000 91,032
Nippon Express Company Ltd. 11,000 66,031
Railtrack Group Plc 2,932 45,350
------------
360,695
Transportation Infrastructure - 0.20%
Autopistas Concesionaria Espanol 2,910 22,126
BAA Plc 7,043 58,555
Brisa Auto-Estradas de Portugal 2,155 16,660
------------
97,341
Utilities - Electrical & Gas - 5.15%
Australian Gas Light Company 2,595 15,638
BG Group Plc 23,981 96,035
Centrica Plc 22,808 78,431
CLP Holdings Ltd. 6,000 28,004
E.On AG 8,120 412,611
Electricidade de Portugal 23,405 63,557
Eletrobras 1,880,000 33,385
Endesa SA 12,237 199,379
Enel SpA 44,988 166,833
Gas Natural Sdg SA 5,676 97,296
Hongkong & China Gas Company Ltd. 22,700 28,670
Iberdrola SA 11,410 139,525
International Power 4,829 19,478
Italgas Sta Italiana Per Il Gas 4,043 16,708
Kansai Electric Power Co., Inc. 11,400 186,700
National Grid Group Plc 9,027 78,259
Osaka Gas Company Ltd. 21,000 51,771
RWE AG 4,550 182,438
Scottish Power 11,249 84,465
Tohoku Electric Power Co., Inc. 5,600 75,443
Tokyo Electric Power Co., Inc. 13,700 332,722
Tokyo Gas Company 6,000 15,672
Union Electrica Fenosa 3,790 70,081
------------
2,473,101
Wholesale & International Trade - 0.16%
Buhrmann NV 558 15,247
Hagemeyer NV 509 12,029
Mitsubishi Corporation 2,000 16,496
Mitsui & Company 2,000 13,289
Sumitomo Corporation 2,000 17,596
------------
74,657
TOTAL COMMON STOCKS
(Cost $46,310,085) $44,926,579
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
PREFERRED STOCKS - 1.36%
Automobiles - 0.13%
Fiat SpA 3,453 $51,513
Volkswagen AG 300 8,605
------------
60,118
Banks - 0.13%
Banco Bradesco SA 2,767,000 17,104
Banco Itau SA 609,000 47,374
------------
64,478
Construction Materials - 0.00%
Dyckerhoff AG 100 1,601
------------
Electric Utilities - 0.05%
Cemig (Cia Energetica de Minas) 1,307,000 19,841
RWE AG 100 3,140
------------
22,981
Food & Drug Retailing - 0.05%
Pao de Acucar Cia* 609,000 21,696
------------
Media - 0.16%
News Corporation 8,738 78,358
------------
Multi-industry - 0.00%
Bradespar SA* 2,767,000 1,623
------------
Oil & Gas - 0.13%
Petrol Brasilieros 2,420 64,157
------------
Other - 0.06%
Ambev Cia de Bebid 130,000 29,011
------------
Paper & Forest Products - 0.02%
Aracruz Celulos SA 5,000 7,386
------------
Software - 0.40%
SAP AG 950 191,474
------------
Telecommunications - 0.23%
Braxil Telecomunicoes Participacoes SA 1,481,000 16,036
Embratel Participacoes SA 1,465,000 23,506
Tele Norte Leste Participacoes SA 1,607,083 35,088
Telesp Celular Participacoes SA 1,271,000 15,034
TIM Spa 3,970 21,056
------------
110,720
TOTAL PREFERRED STOCKS
(Cost $658,460) $653,603
------------
RIGHTS & WARRANTS - 0.00%
BPI SGPS 4,425 $0
Simco 80 401
------------
TOTAL RIGHTS AND WARRANTS
(Cost $0) $401
------------
COMMON STOCK UNIT - 0.06%
Real Estate - 0.06%
AMP Diversified Property Trust* 2,061 $2,521
General Property Trust Units 7,688 10,042
Stockland Trust Group 1,725 3,353
</TABLE>
The accompanying notes are an integral part of the financial statements.
95
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Real Estate - continued
Westfield Trust AUD 245 $404
Westfield Trust* 7,147 11,518
------------
TOTAL COMMON STOCK UNIT
(Cost $35,150) $27,838
------------
SHORT TERM INVESTMENTS - 0.00%
SSGA Money Market Fund 1,000 $1,000
------------
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
REPURCHASE AGREEMENT - 4.94%
Repurchase Agreement with State Street Bank & Trust
Company, dated 10/31/00 at 6.42%, to be repurchased at
$2,371,417 on 11/01/00, collateralized by $1,875,000
U.S.Treasury Bonds, 8.50% due 02/15/20 (valued at
$2,434,464 including interest) $2,371,000 $2,371,000
------------
TOTAL INVESTMENTS (International Equity Fund) (Cost $50,146,393) $47,980,421
------------
-------------------------------------------------------------------------------
International Small Cap Fund
-------------------------------------------------------------------------------
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 98.11%
Aerospace - 0.83%
Cobham PLC 7,525 $121,413
Heroux Devtek* 8,775 40,213
Societe Industrielle D'Aviations 650 59,517
------------
221,142
Agriculture - 0.97%
Nutreco Holding NV 6,000 258,653
------------
Airlines - 1.10%
China Eastern Airlines Corp.* 344,000 49,842
Copenhagen Airport* 1,850 141,342
Flughafen Wien AG 2,825 103,060
------------
294,244
Apparel - 1.01%
Carli Gry International AS 5,100 76,766
Giordano International* 202,000 118,496
Marzotto SPA 7,750 75,237
------------
270,499
Automobiles & Related - 0.64%
Torotrak PLC* 13,575 86,665
Westport Innovations, Inc.* 7,600 84,583
------------
171,248
Basic Industry - 0.42%
Tsubaki Nakashima Co Ltd. 9,000 112,753
------------
Biotechnology - 4.16%
Cambridge Antibody Tech. Group* 5,750 358,747
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Biotechnology - continued
Evotec Biosystems AG* 2,827 $99,308
Genmab A/S* 6,150 161,999
GPC Biotech AG* 144A 2,950 132,679
Lion Bioscience AG* 1,650 127,417
Oxford GlycoSciences Plc* 3,400 124,317
Pharmagene PLC* 17,225 65,731
PyroSequencing AB* 3,700 45,915
------------
1,116,113
Building Materials - 0.39%
Sarna Kunststoff 100 105,696
------------
Business Services - 8.80%
AIT Group PLC 8,850 218,295
Amey PLC 3,625 87,048
Articon-Integralis AG* 2,694 179,461
BTG PLC* 6,575 162,180
Cosco Pacific Ltd. 92,000 69,169
Datalex PLC ADR* 14,000 161,875
Eyretel PLC* 116,925 324,884
Heyde AG* 4,425 105,142
HiQ International AB 3,150 25,535
Net2S* 1,675 40,936
NetStore plc* 26,650 53,748
Observer AB 3,320 43,526
Poolia AB* 875 36,778
Proffice AB 3,500 115,589
Scipher plc* 7,575 69,243
Siticom Group* 2,175 65,061
The Innovation Group PLC* 8,150 122,982
Trafficmaster PLC* 12,025 101,196
Valtech* 4,525 57,983
Vedior N.V. BDR 144A 21,300 317,220
------------
2,357,851
Computer Equipment - 2.02%
I-data International A/S* 1,900 203,660
IPC Archtec AG* 625 39,036
Kontron Embedded Computers AG* 400 43,177
Logitech International* 775 237,122
Torex plc 2,175 17,775
------------
540,770
Computer Networking - 0.91%
NorCom InfoTech AG* 1,375 42,589
Orchestream Ltd.* 25,300 201,900
------------
244,489
Computer Software & Services - 7.08%
Actinic PLC* 144A 35,725 82,936
CAA AG* 2,175 75,859
COR AG Insurance Tech.* 9,100 193,057
InfoVista SA* 2,225 81,769
Meitec Corporation 3,900 163,699
Micronic Laser Systems AB* 1,300 38,770
Ncipher PLC* 23,400 134,111
</TABLE>
The accompanying notes are an integral part of the financial statements.
96
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Computer Software & Services - continued
PinkRoccade NV 1,700 $94,492
Pivotal Corporation* 5,900 360,638
Teleplan Int'l N.V* 2,775 98,904
Telework Group* 75,325 271,046
Thiel Logistik AG* 144A 975 150,584
Think Tools AG* 400 153,538
------------
1,899,402
Construction - 3.84%
Abengoa SA 2,825 80,909
Alliance et Gestion Commerciale* 200 18,584
AMEC PLC 26,150 110,598
George Wimpey PLC 65,825 143,263
Grupo Dragados, S.A. 33,975 330,117
Hunet, Inc. 15,000 126,472
JGC Corp. 14,000 87,376
JM Byggnads och Fastighets 5,325 121,504
Taylor Woodrow PLC 4,000 10,453
------------
1,029,276
Consumer Products & Services - 1.29%
Zapf Creation AG 3,195 135,428
Arriva PLC 50,650 170,498
Diagonal PLC 10,725 41,238
------------
347,164
Distribution - 1.68%
A/S Det Ostasiatiske Kompagni* 9,325 195,655
Internatio-Muller NV 13,125 256,171
------------
451,827
Diversified - 1.43%
CAE, Inc. 16,450 208,923
Ideal Group SA* 8,580 51,888
Royal Canin SA 575 51,966
Shanghai Industrial Hldgs 37,000 70,214
------------
382,992
Electronics - 3.39%
Densei-Lambda K.K. 4,600 96,119
Egide S.A.* 100 54,310
Imagination Technologies Group* 18,375 88,515
Leica Geosystems AG* 144A 475 134,763
Nanjing Panda Electronics Co., Ltd* 98,000 19,728
Schaffner Holding AG 475 141,369
Volex 11,950 375,386
------------
910,191
Environmental Services - 4.73%
Boralex, Inc.* 5,900 21,823
Energiekontor AG* 2,400 215,884
Eurofins Scientific* 3,550 115,982
Global Thermoelectric, Inc.* 7,700 161,309
IFX Power PLC 8,625 118,887
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Environmental Services - continued
NEG Micon A/S* 9,300 $482,525
Pennon Group PLC 6,950 68,169
Stuart Energy Systems* 5,500 83,175
------------
1,267,754
Financial Services - 5.99%
Bank Sarasin & Cie 75 241,989
Credito Emiliano SpA 80,000 307,533
First Capital Corp. 18,000 14,553
Industrial Alliance Life Insurance Co.* 3,200 70,704
Intermediate Capital Group PLC 8,700 104,104
Kempen & Co NV 3,975 244,556
Societe Eurafrance SA 175 105,216
Tecis Holding AG 900 65,071
Van der Moolen Holding N.V. 5,600 452,643
------------
1,606,369
Food & Beverages - 1.79%
CSM NV 9,025 206,017
Katokichi Co., Ltd. 5,600 161,664
Koninklijke Wessanen NV 5,900 68,843
Oyj Hartwall Abp 2,525 43,711
------------
480,235
Healthcare Services - 2.38%
Capio AB* 14,000 88,268
MediSolution Ltd.* 21,550 31,179
Oridion Systems Ltd* 6,300 276,168
Rhoen-Klinikum AG 550 29,987
SSL International PLC* 18,300 211,755
------------
637,357
Insurance - 0.80%
Bayerische Vita Spa 6,350 72,746
Codan A/S 675 48,107
Corporacion Mapfre 5,325 93,765
------------
214,618
Leisure & Entertainment - 2.11%
Bang & Olufsen Holding 2,575 125,674
Ferretti S.p.A.* 46,000 171,366
NH Hotels, SA 8,800 99,320
Rodriguez Groupe 144A 600 150,202
Wembley PLC 2,075 18,365
------------
564,928
Machinery - 3.90%
Eneserve Corp. 4,000 157,632
Hoeft & Wessel AG* 5,750 107,348
Neopost SA* 1,775 34,057
Palfinger AG 3,275 97,410
Pinguely-Haulotte SA 8,775 189,885
Swisslog Holding AG 500 275,367
Technotrans AG 1,425 185,016
------------
1,046,714
</TABLE>
The accompanying notes are an integral part of the financial statements.
97
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Manufacturing - 5.32%
Aalberts Industries 900 $21,003
Babcock Borsig AG* 3,175 119,897
Buderus AG 1,300 24,354
Chloride Group PLC 98,455 292,849
Doncaster PLC* 9,475 170,550
Elexis AG 2,000 15,190
FAG Kugelfischer AG 4,900 36,266
Miyachi Technos Corp. 2,760 163,149
Pilkington PLC 35,900 51,237
SIG Schweizerische Industrie 225 132,677
ToshibaTungaloy Co., LTD. 15,000 74,096
Turbo Genset, Inc.* 9,975 324,200
------------
1,425,468
Medical Supplies & Equipment - 5.31%
AorTech International PLC* 4,975 68,539
Card-Guard Scientific Survival* 5,900 355,293
CyBio AG* 825 99,063
Disetronic Holding AG 400 347,352
Jomed NV* 3,925 240,181
Moritex Corp. 500 24,286
Nobel Biocare 11,700 263,453
Tecan AG 25 26,557
------------
1,424,726
Metals & Mining - 0.11%
Yanzhou Coal Mining Co. 108,000 29,487
------------
Oil & Gas - 0.40%
ERG Spa 34,200 107,672
------------
Oil Services - 4.97%
Bouygues Offshore SA 4,325 212,871
Technip 1,750 223,946
Comp. Generale de Geophysique SA 2,150 132,276
Expro International Group plc 13,900 101,849
Frontline Ltd.* 144A 12,550 206,935
IHC Caland 925 40,818
Precision Drilling Corp.* 2,825 80,766
Smedvig ASA* 25,525 209,063
Stolt Comex Seaway* 10,300 122,956
------------
1,331,480
Paper & Forest Products - 0.42%
Holmen AB 1,900 49,432
Metsa Serla 9,000 57,912
Rottneros AB 4,925 4,281
Soporcel-Soc. Portuguesa de Papel* 125 1,812
------------
113,438
Pharmaceuticals - 2.65%
Actelion Ltd.* 144A 325 143,733
Alliance Unichem PLC 5,275 44,698
Boiron SA 200 12,424
Cerep SA* 1,525 124,882
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Pharmaceuticals - continued
Lavipharm SA 9,760 $47,317
Maxim Pharmaceuticals, Inc* 2,700 118,892
Phytopharm PLC* 4,800 46,697
Powderject Pharmaceuticals PLC* 14,675 134,570
Recordati S.p.A. 2,875 37,572
------------
710,784
Photography & Imaging - 0.60%
Gretag Imaging Group 900 161,716
------------
Property - 1.74%
Berkeley Group 5,750 53,770
Castellum AB 9,900 105,516
Chelsfield PLC 7,250 38,396
Keppel Land Ltd 69,000 102,932
Minerva PLC 8,750 36,500
Shaftesbury PLC 17,375 62,017
Wihlborgs Fastigheter AB 46,425 66,439
------------
465,570
Publishing & Broadcasting - 2.63%
Bloomsbury Publishing PLC 3,200 43,761
Elanders AB 3,050 45,480
HIT Entertainment 144A 48,825 329,418
Incepta Group PLC 104,100 212,217
Primacom AG* 3,750 73,192
------------
704,067
Retail Trade - 2.97%
Charles Voegele Holding AG 850 159,824
Electronics Boutique PLC 39,075 35,151
Gruppo Coin Spa* 12,825 175,221
Iceland Group PLC 80,175 380,980
Ted Baker PLC 7,900 43,901
------------
795,078
Semiconductors & Equipment - 2.49%
ARC International PLC* 39,350 190,126
Ferrotec Corp. 3,000 57,737
Parthus Technologies PLC* 35,825 122,673
Robotic Technology Systems PLC* 4,400 34,347
Shindengen Electric Manufacturing Co. 14,000 81,474
Silicon-On-Insulator Technologies 7,975 180,695
------------
667,052
Telecommunication Services - 1.66%
Intec Telecom Systems PLC* 33,075 334,491
Telemetrix PLC 16,250 109,637
------------
444,129
Telecommunications Equipment - 3.01%
EMTS Technologie AG* 1,000 73,988
Exfo Electro-Optical Engineering, Inc.* 2,575 98,172
Huber & Suhner AG 300 262,850
ITG Group PLC* 144A 12,294 93,373
Linos AG* 725 45,527
Nitsuko Corporation 16,000 70,824
</TABLE>
The accompanying notes are an integral part of the financial statements.
98
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Telecommunications Equipment - continued
Tandberg ASA* 3,200 $84,837
Tandberg Television ASA* 7,600 76,991
------------
806,562
Transportation - 1.16%
Autopistas del Mare Nostrum 8,475 128,735
D. Logistics AG* 2,600 183,128
------------
311,863
Utilities - 1.01%
Grupo Auxiliar Metalurgico*144A 6,850 126,315
Keppel Fels Energy* 19,000 11,900
Sechilienne SA 600 50,916
Viridian Group PLC* 7,475 81,344
------------
270,474
------------
TOTAL COMMON STOCKS
(Cost $26,204,625) $26,301,854
------------
COMMON STOCK UNIT - 0.28%
Household Durables - 0.28%
Waterford Wedgewood PLC*
(Cost $74,163) 61,100 $74,663
------------
WARRANTS - 0.01%
Biotechnology - 0.01%
Xenova Group*, Special Warrants
(Cost $0) 6,640 3,372
------------
PREFERRED STOCKS - 0.48%
Apparel - 0.48%
Hugo Boss AG* (Cost $81,814) 500 127,460
------------
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
SHORT TERM INVESTMENTS - 1.12%
SSGA Money Market Fund
(Cost $301,274) $301,274 $301,274
------------
TOTAL INVESTMENTS
(International Small Cap Fund)
(Cost $26,661,876) $26,808,623
------------
--------------------------------------------------------
Balanced Fund
--------------------------------------------------------
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 65.78%
Automobiles - 0.85%
General Motors Corp. 9,100 $565,338
------------
Banks - 5.26%
Bank of New York, Inc. 17,600 1,013,100
Chase Manhattan Corp. 13,400 609,700
Morgan, J.P. & Co., Inc. 5,900 976,450
Wells Fargo & Company 19,700 912,356
------------
3,511,606
Biotechnology - 1.28%
Genentech, Inc.* 10,400 858,000
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Communications Equipment - 3.57%
Cisco Systems, Inc.* 16,400 $883,550
Corning, Inc. 11,200 856,800
Crown Castle International Corp.* 21,200 642,625
------------
2,382,975
Computers & Peripherals - 3.76%
Compaq Computer Corp. 25,600 778,496
EMC Corp.* 10,700 952,969
Intuit* 12,700 780,256
------------
2,511,721
Diversified Financial - 4.34%
Citigroup, Inc. 17,933 943,724
Morgan Stanley Dean Witter 11,900 955,719
Stilwell Financial, Inc. 22,300 999,319
------------
2,898,762
Electronic Equipment & Supplies - 1.88%
Palm, Inc.* 14,700 787,369
SDL, Inc.* 1,800 466,650
------------
1,254,019
Energy Equipment & Services - 1.05%
Schlumberger, Ltd. 9,200 700,350
------------
Health Care Equipment & Supplies - 0.84%
Guidant Corp.* 10,600 561,138
------------
Hotels, Restaurants & Leisure - 1.45%
Harrah's Entertainment, Inc.* 33,800 967,525
------------
Industrial Conglomerates - 2.87%
General Electric Co. 15,000 822,187
Minnesota Mining & Manufacturing Co. 8,200 792,325
Monsanto Co.* 12,000 306,000
------------
1,920,512
Insurance - 1.41%
Allmerica Financial Corp. 15,000 945,937
------------
Internet Software & Services - 1.56%
America Online, Inc.* 20,700 1,043,901
------------
Media - 2.52%
AT & T Corp. - Liberty Media* 33,000 594,000
General Motors Hughes 33,700 1,091,880
------------
1,685,880
Multiline Retail - 2.16%
Target Corp. 27,000 745,875
Wal-Mart Stores, Inc. 15,300 694,238
------------
1,440,113
Non-ferrous Metals - 0.74%
Alcoa, Inc. 17,200 493,425
------------
Oil & Gas - 5.97%
Apache Corp. 11,800 652,687
Canadian Natural Resources Ltd.* 14,000 411,249
Coastal Corp. 11,100 837,356
Duke Energy Co. 4,600 397,612
</TABLE>
The accompanying notes are an integral part of the financial statements.
99
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Oil & Gas - continued
ExxonMobil Corp. 10,296 $918,274
Unocal Corp. 22,900 781,462
------------
3,998,640
Personal Products - 1.34%
Gillette Company 25,600 892,800
------------
Pharmaceuticals - 6.85%
American Home Products 15,800 1,003,300
Merck & Co., Inc. 9,600 863,400
Pfizer, Inc. 22,800 984,675
Pharmacia Corp. 16,800 924,000
Teva Pharmaceutical Industries 13,500 798,188
------------
4,573,563
Road & Rail - 0.37%
Norfolk Southern Corp. 17,600 248,600
------------
Semiconductor Equipment & Products - 2.30%
Intel Corp. 15,300 688,500
Maxim Integrated Products, Inc.* 12,800 848,800
------------
1,537,300
Software - 2.54%
Amdocs Ltd.* 12,100 784,231
Sun Microsystems, Inc.* 8,200 909,175
------------
1,693,406
Specialty Retail - 1.68%
Radio Shack Corp. 18,800 1,120,950
------------
Telecommunications - 9.19%
Echostar Communications Corp.* 14,400 651,600
Nextel Communications, Inc.* 20,200 776,438
Omnicom Group 9,900 913,275
Qwest Communications Int'l., Inc.* 18,718 910,163
Redback Networks, Inc.* 6,000 638,625
SBC Communications., Inc. 19,400 1,119,138
Verizon Communications 19,500 1,127,344
------------
6,136,583
------------
TOTAL COMMON STOCKS (Cost $40,439,260) $43,943,045
------------
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
CORPORATE BONDS - 17.74%
Beverages - 0.73%
Jos. E. Seagram & Sons,
7.60% due 12/15/28 $450,000 $492,017
------------
Consumer Services - 1.42%
Hertz Corporation,
6.50% due 05/15/06 1,000,000 946,870
------------
Electric & Gas Utilities - 9.92%
Commonwealth Edison Co.,
8.375% due 09/15/22 1,250,000 1,257,933
Consumers Energy Co.,
7.375% due 09/15/23 500,000 444,872
</TABLE>
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Electric & Gas Utilities - continued
El Paso Electric Co.,
9.40% due 05/01/11 $600,000 $630,060
Indiana & Michigan Power Co.,
8.50% due 12/15/22 1,000,000 1,014,130
Niagara Mohawk Power Corp.,
8.75% due 04/01/22 225,000 236,425
Niagara Mohawk Power Corp.,
8.50% due 07/01/23 250,000 253,333
NRG Northeast Generating LLC
9.292% due 12/15/24 500,000 512,745
Pennsylvania Power Co.,
8.50% due 07/15/22 1,000,000 1,002,880
Texas Electric Utilities Co.,
8.50% due 08/01/24 1,000,000 1,029,150
Texas Electric Utilities Co.,
7.875% due 04/01/24 250,000 242,430
------------
6,623,958
Telecommunications - 5.67%
Esat Holdings,
Zero Coupon due 02/01/07 750,000 723,750
Esat Telecommunications Group Plc,
11.875% due 12/01/08 500,000 584,370
Metronet Communications Corp.,
Zero Coupon due 06/15/08 1,500,000 1,200,255
Rogers Cantel Mobile, Inc.,
9.75% due 06/01/16 250,000 266,250
Worldcom, Inc.
7.75% due 04/01/07 1,000,000 1,011,880
------------
3,786,505
------------
TOTAL CORPORATE BONDS (Cost $13,119,927) $11,849,350
------------
U.S. TREASURY OBLIGATIONS - 3.12%
U.S. Treasury Notes - 3.12%
7.25% due 05/15/04 $2,000,000 $2,085,620
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $2,079,573) $2,085,620
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 8.47%
Federal Home Loan Banks - 0.29%
5.125% due 09/15/03 200,000 $193,032
------------
Federal Home Loan Mortgage Corporation - 2.27%
6.45% due 03/10/04 500,000 502,219
6.875% due 01/15/05 1,000,000 1,012,810
------------
1,515,029
Federal National Mortgage Association - 2.48%
6.00% due 05/15/08 400,000 384,188
6.25% due 05/15/29 250,000 233,750
7.25% due 01/15/10 1,000,000 1,036,560
------------
1,654,498
</TABLE>
The accompanying notes are an integral part of the financial statements.
100
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Government National Mortgage Corporation - 1.64%
6.50% due 06/15/29 $250,000 $231,001
7.00% due 11/15/28 533,474 452,986
7.00% due 12/15/22 375,000 177,699
8.00% due 04/15/30 250,000 236,569
------------
1,098,255
Resolution Funding FBE Strips - 1.79%
Zero Coupon due 04/15/09 2,000,000 1,193,640
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $4,385,925) $5,654,454
------------
SHORT TERM INVESTMENTS - 0.00%
SSGA Money Market Fund 1,000 $1,000
------------
REPURCHASE AGREEMENT - 4.89%
Repurchase Agreement with
State Street Bank & Trust Co.
dated 10/31/00 at 6.42%, to
be repurchased at $3,267,575
on 11/01/00, collateralized by
$3,350,000 U.S. Treasury
Notes, 5.50% due 05/15/09
(valued at $3,345,040, including
interest) (Cost $3,267,000) $3,267,000 $3,267,000
------------
TOTAL INVESTMENTS (Balanced Fund)
(Cost $63,292,685) $66,800,468
------------
-----------------------------------------------------------------
Core Bond Fund
-----------------------------------------------------------------
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
CORPORATE BONDS - 34.59%
Aerospace & Defense - 0.01%
Raytheon Company,
6.75% due 08/15/07 $40,000 $38,399
------------
Automobiles - 0.63%
Daimler Chrysler,
7.125% due 04/10/03 2,725,000 2,733,284
------------
Banking - 6.13%
Asian Development Bank,
6.375% due 10/01/28 2,730,000 2,717,633
Asian Development Bank,
6.50% due 10/21/02 4,300,000 4,297,162
Bank of America,
7.80% due 02/15/10 2,820,000 2,863,879
Bank One Corp,
7.875% due 08/01/10 2,820,000 2,831,647
Corporacion Andina de Fomento,
8.875% due 06/01/05 3,280,000 3,443,065
First Financial Caribbean Corp.,
7.84% due 10/10/06 135,000 130,309
First Union Corp.,
6.95% due 11/01/04 3,300,000 3,252,678
</TABLE>
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Banking - continued
First Union National Bank,
7.80% due 08/18/10 $3,385,000 $3,373,017
Inter-american Development Bank,
7.00% due 06/16/03 2,730,000 2,765,463
NBD Bancorp,
8.25% due 11/01/24 300,000 318,390
Royal Bank of Scotland Group Plc,
6.40% due 04/01/09 150,000 138,416
U.S. Bancorp,
7.50% due 06/01/26 300,000 302,532
Western Financial Savings,
8.875% due 08/01/07 25,000 22,594
------------
26,456,785
Chemical Products - 0.02%
Arco Chemical Co.,
9.80% due 02/01/20 5,000 4,850
ICI North America, Inc.,
8.875% due 11/15/06 65,000 67,398
------------
72,248
Diversified Manufacturing - 1.37%
Tyco International Group SA,
6.875% due 09/05/02 5,945,000 5,927,890
------------
Drugs & Health Care - 0.14%
Allegiance Corp.,
7.00% due 10/15/26 325,000 318,718
Mediq/PRN Life Support Services,
11.0% due 06/01/08 10,000 300
McKesson Corp.,
6.3% due 03/01/05 315,000 274,050
------------
593,068
Financial Services - 14.91%
AAG Holding, Inc.,
6.875% due 06/01/08 100,000 89,681
Amvescap Plc,
6.60% due 05/15/05 150,000 143,367
Associates Corp. of North America,
5.75% due 11/01/03 270,000 260,604
Associates Corp. of North America,
5.80% due 04/20/04 250,000 240,150
BanPonce Financial Corp.,
6.75% due 08/09/01 250,000 249,312
Beneficial Corp.,
8.40% due 05/15/08 75,000 77,262
Countrywide Funding Corp.,
6.25% due 04/15/09 4,715,000 4,252,128
EOP Operating LP,
6.50% due 01/15/04 95,000 92,101
Fairfax Financial Holdings Ltd.,
8.25% due 10/01/15 2,935,000 2,487,823
Fairfax Financial Holdings Ltd.,
7.375% due 03/15/06 3,780,000 3,258,889
</TABLE>
The accompanying notes are an integral part of the financial statements.
101
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Financial Services - continued
Ford Motor Credit Corp.,
5.80% due 01/12/09 $150,000 $131,792
Ford Motor Credit Corp.,
7.50% due 03/15/05 4,665,000 4,679,835
Heller Financial, Inc.,
7.375% due 11/01/09 3,270,000 3,139,004
Heller Financial, Inc.,
7.875% due 05/15/03 2,720,000 2,759,739
Household Finance Corp.,
6.40% due 06/17/08 150,000 139,575
Household Finance Corp.,
8.00% due 05/09/05 4,090,000 4,182,557
International Finance Corp.,
7.125% due 04/06/05 2,840,000 2,847,554
KFW International Finance, Inc.,
7.125% due 02/15/05/\ 13,900,000 14,181,614
Lehman Brothers Holdings,
7.75% due 01/15/05 5,775,000 5,825,242
Merrill Lynch & Company,
7.20% due 10/15/12 1,000,000 971,680
Potomac Capital Investment Corp., 144A
7.55% due 11/19/01 4,950,000 4,985,655
Qwest Capital Funding, Inc., 144A
7.90% due 08/15/10 2,820,000 2,860,636
Speer Leeds & Kellogg LP,
8.25% due 08/15/05 2,820,000 2,895,266
Sun Canada Financial Co.,
7.25% due 12/15/15, 144A 200,000 191,716
U.S. West Capital Funding, Inc.,
6.875% due 07/15/28 3,950,000 3,469,996
------------
64,413,178
Food & Beverages - 0.02%
Joseph E. Seagram & Sons, Inc.,
7.50% due 12/15/18 65,000 69,709
------------
Food-Meat Products - 0.63%
IBP, Inc.,
7.95% due 02/01/10 3,460,000 2,727,321
------------
Industrials - 0.06%
K & F Industries, Inc.,
9.25% due 10/15/07 10,000 9,588
SCL Aereo Santiago,
6.95% due 07/01/12, 144A 100,000 92,071
WMX Technologies, Inc.,
7.10% due 08/01/26 150,000 145,461
------------
247,120
Insurance - 0.07%
Florida Windstorm Underwriting,
7.125% due 02/25/19, 144A 180,000 171,331
Ohio National Life Insurance Co.,
8.50% due 05/15/26, 144A 150,000 145,662
------------
316,993
</TABLE>
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Oil & Gas - 2.02%
Enron Corp.,
6.75% due 09/01/04 $3,775,000 $3,739,062
Pennzoil Company,
10.25% due 11/01/05 205,000 227,462
Pennzoil Company,
10.125% due 11/15/09 625,000 724,050
Williams Companies, Inc.,
7.625% due 07/15/19 4,160,000 4,034,285
------------
8,724,859
Paper & Forest Products - 0.00%
Domtar, Inc.,
9.50% due 08/01/16 10,000 10,529
------------
Real Estate - 0.00%
Grove Worldwide LLC,
9.25% due 05/01/08 15,000 2,100
------------
Telecommunication Services - 4.86%
American Telephone & Telegraph Corp.,
6.50% due 03/15/29 5,595,000 4,394,089
Deutsche Telekom International,
8.00% due 06/15/10 2,730,000 2,782,634
Deutsche Telekom International,
8.25% due 06/15/30 2,730,000 2,786,020
GST Telecommunications, Inc.,
12.75% 11/15/07 20,000 50
Hyperion Telecommunications, Inc.,
13.00 % due 04/15/03 10,000 7,800
Iridium Operations LLC,
11.25% due 07/15/05 25,000 625
KMC Telecom. Holdings, Inc.,
Step-up due 02/15/08* 50,000 5,000
Metronet Communications Corp.,
Step-up due 06/15/08 3,910,000 3,128,665
Northwestern Bell Telephone Co.,
7.75% due 05/01/30 1,835,000 1,841,881
Royal KPN NV, 144A
8.00% due 10/01/10 1,410,000 1,384,325
Tele-Communications, Inc.,
9.25% due 04/15/02 200,000 204,738
Telefonica Europe BV,
7.75% due 09/15/10 2,820,000 2,831,054
Vodafone Airtouch Plc, 144A
7.875% due 02/15/30 1,615,000 1,606,909
------------
20,973,790
Transportation - 0.01%
Southern Railway Company,
8.75% due 10/15/03 30,000 31,175
------------
Utilities - 3.71%
Appalachian Power Company,
8.00% due 06/01/25 2,885,000 2,953,086
Cinergy Corp.,
6.125% due 04/15/04 2,940,000 2,768,051
</TABLE>
The accompanying notes are an integral part of the financial statements.
102
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Utilities - continued
Edison International,
6.875% due 09/15/04 $2,890,000 $2,811,016
GCI, Inc.,
9.75% due 08/01/07 25,000 23,000
Osprey, 144A
7.797% due 01/15/03 4,230,000 4,231,687
Pennsylvania Electric Company,
6.625% due 04/01/19 3,675,000 3,250,317
------------
16,037,157
------------
TOTAL CORPORATE BONDS (Cost $150,005,968) $149,375,605
------------
U.S. TREASURY OBLIGATIONS - 6.77%
U.S. Treasury Bonds - 2.46%
6.125% due 08/15/29 8,710,000 $9,020,250
7.50% due 11/15/16 1,210,000 1,393,956
12.00% due 08/15/13 150,000 205,008
------------
10,619,214
U.S. Treasury Notes - 4.31%
5.75% due 08/15/10 8,595,000 8,586,921
6.75% due 05/15/05 5,640,000 5,847,101
6.875% due 05/15/06 4,000,000 4,191,240
------------
18,625,262
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $29,142,983) $29,244,476
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 33.47%
Federal Farm Credit Banks - 1.28%
6.75% due 07/07/09 $5,540,000 $5,514,904
------------
Federal Home Loan Banks - 2.79%
5.125% due 09/15/03 400,000 386,064
5.315% due 12/23/08 4,000,000 3,628,120
5.805% due 03/23/09 3,780,000 3,537,853
6.01% due 12/03/08 900,000 839,529
6.70% due 05/07/03 2,300,000 2,288,500
7.00% due 08/01/29 1,302,519 1,276,872
7.00% due 02/01/12 109,706 109,260
------------
12,066,198
Federal Home Loan Mortgage Corp. - 5.92%
6.00% due 05/18/08 1,500,000 1,440,705
6.25% due 05/15/29 1,000,000 935,000
6.50% due 06/15/23 100,000 95,593
6.50% TBA 150,000 146,907
6.625% due 09/15/09 15,035,000 14,941,031
8.00% TBA 7,900,000 8,006,176
------------
25,565,412
Federal National Mortgage Association - 18.56%
6.18% due 07/01/08 19,504 18,768
6.27% due 11/01/07 53,505 51,872
6.28% due 02/12/08 3,780,000 3,658,927
</TABLE>
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Federal National Mortgage Association - continued
6.295% due 06/01/08 $19,507 18,897
6.30% due 01/01/08 19,416 18,840
6.305% due 02/01/08 194,179 182,004
6.34% due 01/01/08 19,122 18,609
6.37% due 01/30/08 2,050,000 1,991,390
6.39% due 01/01/06 18,981 18,640
6.43% due 01/01/08 19,414 18,968
6.50% TBA 34,325,000 33,233,206
6.50% due 04/01/29 458,094 440,197
6.650% due 11/07/07 4,000,000 3,925,640
6.981% due 06/01/07 18,580 18,719
7.00% TBA 21,950,000 21,504,195
7.00% due 09/01/10 - 10/01/28 655,563 644,709
7.04% due 03/01/07 19,334 19,478
7.125% due 06/15/10 11,095,000 11,429,625
7.28% due 10/01/06 19,291 19,641
7.50% TBA 2,925,000 2,945,124
------------
80,177,449
Government National Mortgage Association - 4.92%
6.50% due 06/15/29 957,212 924,006
7.00% due 12/15/22 - 08/15/29 1,503,825 1,484,054
7.50% TBA 16,900,000 16,958,136
8.00% due 04/15/30 1,861,723 1,892,553
------------
21,258,749
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $146,428,961) $144,582,712
------------
FIXED INCOME - OTHER - 5.71%
Auto Loans Receivable - 2.81%
Aesop Funding II LLC,
6.40% due 10/20/03, 144A $100,000 $99,299
Americredit Automobile Rec,
7.05% due 02/12/05 2,820,000 2,833,048
Associates Automobile Rec,
6.99% due 07/15/08 3,950,000 3,983,328
Daimler Chrysler,
6.70% due 03/08/06 1,000,000 999,890
Ford Motor Credit Corp.,
6.58% due 11/15/04 4,230,000 4,225,373
------------
12,140,938
Credit Cards Receivable - 0.65%
Discover Card,
5.60% due 05/16/06 150,000 145,171
Fleet Credit Card,
6.90% due 04/16/07 2,640,000 2,656,500
------------
2,801,671
Other Asset Backed Securities - 2.25%
Continental Airlines,
6.90% due 01/02/18 100,000 90,057
Continental Airlines pass-through,
6.648% due 09/15/17 70,000 61,166
</TABLE>
The accompanying notes are an integral part of the financial statements.
103
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Other Asset Backed Securities - continued
Continental Airlines pass-through,
7.08% due 11/01/04 $133,276 $131,620
P P & L Transition,
7.05% due 06/25/09 2,820,000 2,831,449
Peco Energy Trans,
6.13% due 03/01/09 3,780,000 3,555,544
United Airlines pass-through,
7.73% due 07/01/10 2,820,000 2,832,887
First Union Lehman Bros., Series 1997,
Class A2, 6.60% due 05/18/07 200,000 197,317
------------
9,700,040
------------
TOTAL FIXED INCOME - OTHER (Cost $24,737,390) $24,642,649
------------
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 0.00%
Telecommunication Services - 0.00%
Decisionone Corp. 23 $5
SF Holdings Group, Inc., 144A 7 0
------------
TOTAL COMMON STOCKS
(Cost $10,089) $5
------------
PREFERRED STOCKS - 0.01%
Concentric Network, PIK 13.5% 5 $0
Fairfield Mfg. Co., Inc., PIK 11.25% 25 20,313
Primedia, Inc., 8.625% 145 12,216
SF Holdings Group, Inc.*, 13.75% 2 8,050
XO Communications, Inc. 5 3,750
------------
TOTAL PREFERRED STOCKS
(Cost $61,097) $44,329
------------
WARRANTS - 0.00%
Concentric Network Corp.*,
Exp. 12/15/07, 144A 5 $2,151
KMC Telecom. Holdings, Inc.*,
Exp. 04/15/08, 144A 50 103
Motient Corp.*,
Exp. 04/01/2008 5 176
------------
TOTAL WARRANTS
(Cost $0) $2,430
------------
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
CORPORATE SHORT-TERM COMMERCIAL PAPER - 19.45%
Albertson's, Inc.,
6.52% due 11/01/00 $4,532,000 $4,532,000
Aon Corporation,
6.54% due 11/17/00 5,000,000 4,985,467
Connectiv, Inc.,
6.73% due 11/13/00 7,474,000 7,457,233
Connectiv, Inc.,
6.74% due 11/21/00 6,500,000 6,475,661
</TABLE>
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
CORPORATE SHORT-TERM COMMERCIAL PAPER - continued
Dow Corning Corp.,
6.64% due 11/01/00 $3,680,000 $3,680,000
Govco, Inc.,
6.50% due 11/17/00 10,000,000 9,971,111
Harley Davidson Dealer Funding,
6.50% due 11/16/00 9,250,000 9,224,948
Harley Davidson Dealer Funding,
6.49% due 11/17/00 4,192,000 4,179,908
Merrill Lynch & Co., Inc.,
6.47% due 11/03/00 7,165,000 7,162,425
Omnicom Finance, Inc.,
6.57% due 11/17/00 14,000,000 13,959,120
Safeway, Inc.,
6.65% due 11/16/00 5,415,000 5,399,996
Snap-on Tools Corp.,
6.47% due 11/16/00 7,000,000 6,981,129
------------
TOTAL CORPORATE SHORT-TERM COMMERCIAL PAPER
(Cost $84,008,998) $84,008,998
------------
TOTAL INVESTMENTS (Core Bond Fund)
(Cost $434,395,486) $431,901,204
------------
---------------------------------------------------------------
High Yield Bond Fund
---------------------------------------------------------------
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
CORPORATE BONDS - 88.07%
Aerospace & Defense - 0.38%
K & F Industries,
9.25% due 10/15/07 $250,000 $239,688
------------
Airlines - 1.40%
Aircraft Service International Group,
11.00% due 08/15/05 800,000 632,000
Atlas Air, Inc.,
9.702% due 07/02/11 250,000 253,875
------------
885,875
Auto Related - 2.70%
Pep Boys-Manny Moe & Jack,
6.52% due 07/16/07 750,000 627,787
Prestolite Electric, Inc.,
9.625% due 02/01/08 800,000 480,000
Stanadyne Automotive Corp.,
10.25% due 12/15/07 750,000 600,000
------------
1,707,787
Banks - 1.09%
Western Financial Bank:
8.50% due 07/01/03 500,000 466,310
8.875% due 08/01/07 250,000 225,938
------------
692,248
</TABLE>
The accompanying notes are an integral part of the financial statements.
104
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Building Products - 0.12%
Oglebay Norton Co.,
10.00% due 02/01/09 $85,000 $75,650
------------
Business & Commercial Services - 2.13%
Americredit Corp.,
9.25% due 02/01/04 375,000 361,875
Anthony Crane Rental,
10.375% due 08/01/08 1,500,000 630,000
Integrated Electrical Services,
9.375% due 02/01/09 300,000 267,000
Pierce Leahy Corp.,
8.125% due 05/15/08 100,000 92,875
------------
1,351,750
Chemicals - 2.45%
Borden Chemical & Plastics,
9.50% due 05/01/05 1,000,000 580,000
Geo Specialty Chemicals, Inc.,
10.125% due 08/01/08 350,000 269,500
Koppers Industries, Inc.,
9.875% due 12/01/07 350,000 323,750
Royster-Clark, Inc.,
10.25% due 04/01/09 500,000 380,000
------------
1,553,250
Containers-Paper - 1.02%
Packaged Ice, Inc., Series B,
9.75% due 02/01/05 750,000 645,000
------------
Financial Services - 3.36%
Charter Communications Holding,
10.25% due 01/15/10 1,000,000 972,500
Ono Finance Company Plc.,
13.00% due 05/01/09 1,500,000 1,155,000
------------
2,127,500
Electronic Equipment & Services - 1.65%
Flextronics International, Inc.,
9.875% due 07/01/10 375,000 378,750
Metromedia Fiber Network, Inc.,
10.00% due 12/15/09 750,000 667,500
------------
1,046,250
Food & Drug Distribution - 2.02%
Agrilink Foods, Inc.,
11.875% due 11/01/08 1,000,000 715,000
Pharmerica, Inc.,
8.375 due 04/01/08 750,000 562,500
------------
1,277,500
Health Care Providers & Services - 4.53%
Iasis Healthcare Corp.,
13.00% due 10/15/09 1,170,000 1,076,400
Lifepoint Hospitals Holdings, Inc.,
10.75% due 05/15/09 230,000 244,950
</TABLE>
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Health Care Providers & Services - continued
Manor Care, Inc.,
7.50% due 06/15/06 $250,000 $206,482
Medpartners, Inc.,
7.375% due 10/01/06 200,000 176,500
Omega Healthcare Investments, Inc.,
6.95% due 06/15/02 500,000 444,085
Universal Hospital Services, Inc.,
10.25% due 03/01/08 1,000,000 720,000
------------
2,868,417
Home Builders - 1.20%
Beazer Homes USA, Inc.:
8.875% due 04/01/08 450,000 423,000
9.00% due 03/01/04 350,000 337,313
------------
760,313
Household Products - 1.17%
Sealy Mattress Company,
10.88% due 12/15/07 750,000 570,000
Sleepmaster LLC,
11.00% due 05/15/09 200,000 170,000
------------
740,000
Hotels, Restaurants & Leisure - 8.62%
Apple South, Inc.,
9.75% due 06/01/06 180,000 135,000
Cinemark USA, Inc. Series B
9.625% due 08/01/08 100,000 45,000
Cinemark USA, Inc. Series D
9.625% due 08/01/08 200,000 84,000
Crown Castle International:
10.38% due 05/15/11 350,000 224,000
10.63% due 11/15/07 350,000 273,000
Harveys Casino Resorts,
10.625% due 06/01/06 550,000 565,125
Hollywood Casino Shreveport,
13.00% due 08/01/06, 144A 1,000,000 1,070,000
Hollywood Park, Inc. Series B:
9.25% due 02/15/07 500,000 537,500
9.50% due 08/01/07 350,000 360,500
Isle of Capri Casinos, Inc.,
8.75% due 04/15/09 650,000 589,875
Prime Hospitality Corp.,
9.75% due 04/01/07 800,000 805,000
Riviera Black Hawk, Inc.,
13.00% due 05/01/05 750,000 766,875
------------
5,455,875
Internet Services - 0.78%
Globix Corp.,
12.50% due 02/01/10 775,000 496,000
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
105
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Machinery - 1.37%
Calpine Corp.,
7.75% due 04/15/09 $200,000 $188,062
Lennar Corp.,
9.95% due 05/01/10 400,000 408,000
Penhall International Corp.,
12.00% due 08/01/06 300,000 273,000
------------
869,062
Media - 3.84%
Coaxial Communications Center, Inc.,
10.00% due 08/15/06 600,000 579,000
Cumulus Media, Inc.,
10.375% due 07/01/08 1,094,000 908,020
Echostar DBS Corp.,
9.375% due 02/01/09 75,000 73,781
Golden Sky DBS, Inc.,
13.50% due 03/01/07 400,000 272,000
Regional Independent Media Group,
10.50% due 07/01/08 150,000 156,000
Spanish Broadcasting System, Inc.,
9.625% due 11/01/09 200,000 193,500
Transwestern Publishing Company,
9.625% due 11/15/07 250,000 248,125
------------
2,430,426
Merchandising - 2.27%
Big 5 Corporation Series B,
10.875% due 11/15/07 250,000 223,750
Shop At Home, Inc.,
11.00% due 04/01/05 500,000 480,000
True Temper Sports, Inc.,
10.875% due 12/01/08 750,000 735,000
------------
1,438,750
Metals - 2.41%
Metals USA, Inc.,
8.625% due 02/15/08 300,000 192,000
Renco Steel Holdings, Inc.,
10.875% due 02/01/05 300,000 252,000
Russel Metals, Inc.
10.00% due 06/01/09 300,000 276,000
WCI Steel, Inc.,
10.00% due 12/01/04 1,000,000 805,000
------------
1,525,000
Natural Gas - 0.88%
Leviathan Gas Pipeline Ptnr. Co. Series B,
10.375% due 06/01/09 530,000 556,500
------------
Oil-Integrated Domestic - 0.61%
Tesoro Petroleum Corp.,
9.00% due 07/01/08 400,000 385,000
------------
Oil-Service/Products - 0.50%
Triton Energy, Ltd.,
9.25% due 04/15/05 315,000 319,725
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Oil & Gas Producers - 4.47%
Frontier Oil Corp.,
11.75% due 11/15/09 $850,000 $862,750
Grey Wolf, Inc., 144A
8.875% due 07/01/07 500,000 485,000
8.875% due 07/01/07 225,000 218,250
HS Resources, Inc.,
9.25% due 11/15/06 625,000 618,750
HS Resources, Inc. Series B,
9.25% due 11/15/06 650,000 648,375
------------
2,833,125
Other - 1.95%
Ekabel Hessen,
14.50% due 09/01/10 144A 500,000 470,000
RB Falcon Corp.,
9.50% due 12/15/08 25,000 26,250
United Pan Europe:
11.25% due 02/01/10 200,000 151,000
13.75% due 02/01/10 144A 1,500,000 585,000
------------
1,232,250
Paper & Forest Products - 1.65%
Bear Island Paper Company LLC
10.00% due 12/01/07 1,200,000 1,044,000
------------
Pharmaceuticals - 2.73%
ICN Pharmaceuticals, Inc.,
8.75% due 11/15/08 144A 1,425,000 1,414,312
King Pharmaceuticals, Inc.,
10.75% due 02/15/09 300,000 316,500
------------
1,730,812
Pollution Control - 0.67%
Allied Waste of North America, Inc.,
10.00% due 08/01/09 500,000 422,500
------------
Real Estate - 1.14%
Grove Worldwide LLC,
9.25% due 05/01/08 900,000 126,000
Meditrust Companies:
7.00% due 08/15/07 200,000 140,000
7.51% due 09/26/03 650,000 454,249
------------
720,249
Schools - 1.44%
KinderCare Learning Centers, Inc.,
9.50% due 02/15/09 1,000,000 912,500
------------
Telecommunications - 24.28%
Benedek Communications Corp.,
13.25% due 05/15/06 1,350,000 1,147,500
Concentric Network Corp.,
12.75% due 12/15/07 1,170,000 1,105,650
Condor Systems, Inc.,
11.875% due 05/01/09 500,000 330,000
Covad Communications Group,
12.00% due 02/15/10 1,000,000 480,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
106
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Telecommunications - continued
Energis Plc.,
9.75% due 06/15/09 $630,000 $601,650
ESAT Holdings Series B,
12.50% due 02/01/07 600,000 579,000
Exodus Communications, Inc.,
11.625% due 07/15/10 1,000,000 935,000
Frontiervision Holding,
11.875% due 09/15/07 1,000,000 855,000
Global Crossings Holdings, Ltd.,
9.625% due 05/15/08 1,000,000 955,000
GT Group Telecommunications, Inc.,
13.25% due 02/01/10, 144A 1,200,000 438,000
Level 3 Communications, Inc.,
12.88% due 03/15/10 144A 750,000 371,250
Level 3 Communications, Inc.,
11.00% due 03/15/08 500,000 452,500
Microcell Telecommunications,
12.00% due 06/01/09 1,500,000 1,057,500
National Communications Corp.,
11.50% due 10/01/08 700,000 644,000
Netia Holdings B.V.:
10.25% due 11/01/07 250,000 187,500
11.25% due 11/01/07 500,000 320,000
Netia Holdings II B.V.,
13.125% due 06/15/09 150,000 129,000
Nextlink Communications, Inc.,
13.13% due 12/01/09 144A 500,000 240,000
Nextel Communications,
9.375% due 11/15/09 250,000 242,500
North Point Communications,
12.875% due 02/15/10 1,000,000 930,000
Orbvcom Global Series B,
14.00% due 08/15/04 500,000 75,000
Pegasus Communications Corp. Series B,
9.625% due 10/15/05 100,000 97,500
Pegasus Communications Corp.,
9.75% Step up, due 12/01/06 75,000 73,125
PSI Net, Inc.,
11.00% due 08/01/09 1,000,000 485,000
Spectrasite Holdings, Inc.,
12.88% due 03/15/10 144A 1,000,000 485,000
Telewest Communications Plc.,
9.25% due 04/15/09 1,000,000 490,000
11.00% Step up, due 10/01/07 400,000 352,000
Versatel Telecommunications B.V.,
13.25% due 05/15/08 650,000 484,250
Versatel Telecommunications Int'l.,
13.25% due 05/15/08 150,000 114,000
Williams Communications Group,
10.875% due 10/01/09 50,000 42,125
Williams Communications Group,
11.70% due 08/01/08 144A 450,000 401,625
</TABLE>
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Telecommunications - continued
WinStar Communications, Inc:
12.75% due 04/15/10 144A $50,000 $35,750
14.75% due 04/15/10 144A 750,000 236,250
------------
15,372,675
Textiles & Apparel - 1.07%
Anvil Knitwear, Inc. Series B,
10.875% due 03/15/07 300,000 256,500
Galey & Lord, Inc.,
9.125% due 03/01/08 675,000 418,500
------------
675,000
Utilities-Electric - 2.17%
Caithness Cosco Funding Corp.,
9.05% due 12/15/09 1,375,000 1,375,000
------------
TOTAL CORPORATE BONDS
(Cost $62,390,193) 0 $55,765,677
------------
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
PREFERRED STOCK - 0.91%
Adelphia Communications Corp.,
Exchangeable Series B, 13.00%
(Cost $603,500) 6,000 $574,500
------------
WARRANTS - 0.15%
GT Group Telecommunications, Inc.,
Exp. 02/01/10, 144A 1,200 $60,600
Ono Finance Company 500 36,125
------------
TOTAL WARRANTS (Cost $58,479) $96,725
------------
PUT OPTIONS - 0.15%
Meditrust Exercisable Put Option,
7.114%, Exp. 08/15/04
(Cost $71,919) 150,000 $94,500
------------
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
REPURCHASE AGREEMENT - 10.72%
Repurchase Agreement with State
Street Bank & Trust, dated
10/31/00 at 6.42%, to be
repurchased at $6,788,210 on
11/01/00, collateralized by $6,315,000 U.S. Treasury
Note, 7.875% due 11/15/04 (valued at $6,993,034,
including interest)
(Cost $6,787,000) $6,787,000 $6,787,000
------------
TOTAL INVESTMENTS (High Yield Bond Fund)
(Cost $69,911,091) $63,318,402
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
107
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Municipal Bond Fund
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
LONG-TERM INVESTMENTS - 99.39%
Alabama - 0.80%
Alabama Housing Finance Authority Single Family
Mortgage Revenue Collateralized Home Mortgage Program,
Series B-2, 6.40%, 04/01/25 $130,000 $131,551
------------
Alaska - 1.37%
Anchorage, Alaska, Lease Revenue Bonds,
5.88%, 02/01/13 215,000 226,984
------------
Arkansas - 1.54%
Camden, Arkansas, Pollution Control, (International
Paper Company Project), 5.70%, 09/01/12 250,000 254,025
------------
California - 6.14%
California Housing Finance Agency Revenue, Series H
6.15%, 08/01/16 1,000,000 1,014,020
------------
Colorado - 8.73%
Colorado Health Facilities Authority, 5.25%, 09/01/18 250,000 211,105
Denver, Colorado, City & County Airport,
6.00%, 11/15/15 750,000 783,322
El Paso County, Colorado, Single Family Prerefunded,
Zero Coupon, 09/01/15 1,000,000 448,460
------------
1,442,887
District of Columbia - 1.58%
District of Columbia Refunding, 5.50%, 06/01/09 250,000 261,465
------------
Hawaii - 1.35%
Honolulu, Hawaii, City & County, 5.25%, 07/01/15 225,000 223,393
------------
Illinois - 7.55%
Illinois Health Facilities Authority
Revenue (Hospital Association Project), 7.00%,
02/15/22 200,000 209,888
Illinois State Highway Authority Toll, Series A,
5.50%, 01/01/15 225,000 231,689
Sauget, Illinois, Pollution Control, 4.45%, FRB,
09/01/22 100,000 100,000
Chicago, Illinois, Water Revenue,
6.50%, 11/01/15 450,000 506,893
Chicago, Illinois, Skyway Toll Bridge, Revenue,
5.375%, 01/01/16 200,000 199,470
------------
1,247,940
</TABLE>
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Indiana - 1.26%
Elkhart County Hospital Authority, 5.25%, 08/15/28 $250,000 $208,190
------------
Iowa - 0.95%
Iowa Finance Authority Hospital Facility Revenue
Refunding (Trinity Regional Hospital Project), 7.00%,
07/01/12 150,000 157,851
------------
Kansas - 2.04%
Wyandotte County, Kansas City, Kansas, Unified
Government, 4.50%, 09/01/28 225,000 185,360
Wyandotte County, Kansas City, Kansas, Unified
Government Utility System Revenue, 5.75%, 09/01/24 150,000 152,165
------------
337,525
Louisiana - 1.33%
Louisiana Public Facilities Authority Hospital Revenue
Refunding (Touro Infirmary Project), Series A,
5.50%, 08/15/19 250,000 219,145
------------
Maine - 0.15%
Maine State Housing Authority Mortgage Purchase,
Revenue Series A-4,
6.375%, 11/15/12 25,000 25,314
------------
Maryland - 1.74%
Maryland State Transit Authority, Facility projects
revenue Bond, 6.80%, 07/01/16 6.25%, 02/15/11 250,000 287,245
------------
Massachusetts - 1.07%
Massachusetts State Health & Educational Facilities,
Partners Healthcare System, 5.13%, 07/01/20 200,000 177,004
------------
Michigan - 4.93%
Michigan State Hospital Finance Authority, Ascension
Health Credit Service,
5.25%, 11/15/09 250,000 253,768
Michigan State Strategic Fund, West Riverbank LP
Project, 4.45%, 11/01/06 560,000 560,000
------------
813,768
Nevada - 3.15%
Nevada Housing Division, Single-Family Revenue
Program, B-2, 6.95%, 10/01/26 225,000 231,608
</TABLE>
The accompanying notes are an integral part of the financial statements.
108
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Nevada - continued
Nevada Housing Division, Single-Family Revenue
Program, Issue C, 6.35%, 10/01/12 $285,000 $289,777
------------
521,385
New York - 14.79%
New York, New York, Series B, Gen. Oblig.,
5.75%, 08/01/14 750,000 774,217
New York State Dorm. Authority, Mental Health
Services Facility, 6.00%, 02/15/08 250,000 266,518
New York State Environmental Facilities Corporation
Pollution Control Revenue Refunding (IBM Corporation
Project),
7.125%, 07/01/12 480,000 491,261
New York State Local Government Assistance
Corporation, Series A, 6.00%, 04/01/16 310,000 322,853
New York State Mortgage Agency Revenue, Series 40-A,
6.35%, 04/01/21 365,000 372,643
New York State Mortgage Agency Revenue, Series 77A,
7.70%, 04/01/11 225,000 216,135
------------
2,443,627
North Dakota - 4.17%
North Dakota State Water Commission Facilities
Authority Revenue, Series A,
6.00%, 08/01/12 640,000 689,370
------------
Ohio - 1.04%
Washington County, Ohio, Hospital Revenue,
5.375%, 09/01/18 175,000 171,159
------------
Oklahoma - 1.49%
Oklahoma Development Finance Auth., Public Service of
Oklahoma Project,
4.88%, 6/01/14 250,000 246,162
------------
Oregon - 1.40%
Portland, Oregon, Airport Revenue,
5.25%, 07/01/11 225,000 230,578
------------
Pennsylvania - 8.05%
Delaware Valley, Pennsylvania, Regional Finance
Authority Series A,
5.50%, 08/01/28 500,000 494,620
Philadelphia, Pennsylvania, Gas Works,
5.375%, 07/01/12 250,000 254,602
</TABLE>
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Pennsylvania - continued
Philadelphia, Pennsylvania, Water & Wastewater
Revenue, 6.25%, 08/01/12 $450,000 $499,486
Pine Richland School District, Series A,
Zero Coupon, 09/01/23 300,000 81,492
------------
1,330,200
South Carolina - 1.57%
South Carolina State Public Revenue,
5.625%, 01/01/13 250,000 259,890
------------
Tennessee - 2.90%
Humphreys County, Tennessee, Industrial Development
Board Solid Waste Disposal Revenue (Inland Container
Corp. Project), 6.70%, 05/01/24 450,000 479,911
------------
Texas - 12.66%
Argyle, Texas, Independent School District,
Zero Coupon, 08/15/14 270,000 128,636
Austin, Texas, Water & Wastewater,
6.50%, 05/15/05 400,000 430,972
Garland, Texas,
4.50%, 02/15/19 250,000 216,050
Kerrville, Texas, Independent School District,
6.00%, 08/15/13 200,000 214,036
Lower Colorado River Authority, Texas Revenue,
6.00%, 05/15/10 250,000 271,743
Lower Colorado River Authority, Texas Prerefunded,
5.25%, 01/01/15 200,000 201,778
Port Arthur, Texas, Navigation District,
Zero Coupon, 03/01/10 900,000 560,952
Texas State Veterans Housing Assistance,
6.80%, 12/01/23 65,000 67,533
------------
2,091,700
Washington - 1.38%
Central Puget Sound, Washington, Regional,
5.25%, 02/01/13 225,000 228,029
------------
Wisconsin - 3.41%
Wisconsin Housing & Economic Development Authority
Home Ownership Revenue, Series D,
6.10%, 07/01/24 70,000 71,065
</TABLE>
The accompanying notes are an integral part of the financial statements.
109
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Wisconsin - continued
Wisconsin State Health & Educational Facilities
Authority Revenue, Mercy Hospital of Janesville,
Incorporated,
6.60%, 08/15/22 $500,000 $492,785
------------
563,850
Wyoming - 0.85%
Green River-Sweetwater County, Wyoming,
4.50%, 03/01/14 140,000 139,575
------------
TOTAL LONG TERM INVESTMENTS
(Cost $16,477,811) $16,423,743
------------
SHORT TERM INVESTMENTS-STUDENT LOAN - 0.61%
Missouri Higher Education Loan Authority,
4.40% due 06/01/17 $100,000
------------
TOTAL INVESTMENTS (Municipal Bond Fund)
(Cost $16,577,811) $16,523,743
------------
--------------------------------------------------------------------------
Strategic Income Fund
--------------------------------------------------------------------------
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
CORPORATE BONDS - 39.99%
Aerospace & Defense - 0.43%
Raytheon Company,
6.15% due 11/01/08 $ 175,000 $ 160,188
------------
Auto Related - 1.13%
Pep Boys-Manny Moe & Jack,
6.52% due 07/16/07 200,000 167,410
Prestolite Electric, Inc.,
9.625% due 02/01/08 50,000 30,000
Stanadyne Automotive Corp., 10.25% due 12/15/07 275,000 220,000
------------
417,410
Banks - 0.07%
Western Financial Savings, 8.875% due 08/01/07 30,000 27,113
------------
Business & Commercial Services - 1.24%
Americredit Corp.,
9.25% due 02/01/04 25,000 24,125
Cendant Corp.,
7.75% due 12/01/03 100,000 97,866
Condor Systems, Inc.,
11.875% due 05/01/09 25,000 16,500
Iron Mountain, Inc.,
10.125% due 10/01/06 250,000 257,500
National Equipment Services, Inc. Series B,
10.00% due 11/30/04 50,000 30,000
National Equipment Services, Inc. Series C,
10.00% due 11/30/04 50,000 30,000
------------
455,991
</TABLE>
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Chemicals - 0.44%
Borden Chemicals & Plactics, 9.50% due 05/01/05 $250,000 $145,000
Geo Specialty Chemicals, Inc. 10.125% due 08/01/08 20,000 15,400
------------
160,400
Crude Petroleum & Natural Gas - 1.50%
Pennzoil Company,
10.25% due 11/01/05 500,000 554,785
------------
Electronic Equipment & Services - 0.51%
Breed Technologies, Inc.,
9.25% due 04/15/08/2/ 500,000 3,750
Flextronics International, Ltd.: 8.75% due 10/15/07 60,000 57,900
9.875% due 07/01/10 125,000 126,250
------------
187,900
Finance Companies - 1.25%
Ono Finance Company Plc, 144A
13.00% due 05/01/09 600,000 462,000
------------
Food & Drug Distribution - 1.38%
Agrilink Foods, Inc.
11.875% due 11/01/08 300,000 214,500
Express Scripts, Inc.,
9.625% due 06/15/09 50,000 49,937
Pharmerica, Inc.,
8.375% due 04/01/08 325,000 243,750
------------
508,187
Healthcare Providers & Services - 2.28%
Iasis Healthcare Corp.,
13.00% due 10/15/09 235,000 216,200
Lifepoint Hospitals, Inc.,
10.75% due 05/15/09 50,000 53,250
Manor Care, Inc.,
7.50% due 06/15/06 250,000 206,483
Omega Healthcare Investments, Inc.
6.95% due 06/15/02 135,000 119,903
Universal Hospital Services, Inc.,
10.25% due 03/01/08 350,000 245,000
------------
840,836
Home Builders - 0.13%
Beazer Homes, Inc.:
8.875% due 04/01/08 25,000 23,500
9.00% due 03/01/04 25,000 24,094
------------
47,594
Hotels, Restaurants & Leisure - 4.45%
Crown Castle International Corp.,
Zero Coupon due 05/15/11 350,000 224,000
Hollywood Casino, Shreveport,
13.0% due 08/01/06 400,000 428,000
Isle of Capri Casinos, Inc.,
8.75% due 04/15/09 25,000 22,688
</TABLE>
The accompanying notes are an integral part of the financial statements.
110
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Hotels, Restaurants & Leisure - continued
Perkins Family Restaurant,
10.125% due 12/15/07 $25,000 $23,375
Prime Hospitality Corp.,
9.75% due 04/01/07 300,000 301,875
Riviera Black Hawk, Inc.,
13.00% due 05/01/05 300,000 306,750
Speedway Motorsports, Inc.,
8.50% due 08/15/07 350,000 330,750
------------
1,637,438
Internet Services - 0.35%
Globix Corp.,
12.50% due 01/01/10 200,000 128,000
------------
Machinery - 0.96%
Lennar Corp.,
9.95% due 05/01/10 125,000 127,500
Pennhall International, Inc.,
12.0% due 08/01/06 250,000 227,500
------------
355,000
Media - 1.01%
Cumulus Media, Inc.,
10.375% due 07/01/08 350,000 290,500
Echostar DBS Corp.,
9.375% due 02/01/09 10,000 9,837
Susquehanna Media Co.,
8.50% due 05/15/09 50,000 49,000
Transwestern Publishing Co.,
9.625% due 11/15/07 25,000 24,813
------------
374,150
Merchandising - 1.17%
Big 5 Corp.,
10.875% due 11/15/07 125,000 111,875
True Temper Sports, Inc.,
10.875% due 12/01/08 325,000 318,500
------------
430,375
Natural Gas - 0.14%
Leviathan Gas Pipeline Partners,
10.375% due 06/01/09 50,000 52,625
------------
Oil & Gas Producers - 2.41%
Baker Hughes, Inc.
6.25% due 01/15/09 150,000 141,615
Countrywide Funding Corp.,
6.25% due 04/15/09 148,000 133,471
Grey Wolf, Inc.,
8.875% due 07/01/07 25,000 24,250
Grey Wolf, Inc.,
8.875% due 07/01/07 300,000 291,000
HS Resources, Inc.,
9.25% due 11/15/06 50,000 49,500
HS Resources, Inc. Series B,
9.25% due 11/15/06 250,000 249,375
------------
889,211
</TABLE>
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Oil Exploration & Production 0.61%
Costilla Energy, Inc.,
10.25% due 10/01/06 $500,000 $225,000
------------
Other - 0.51%
Ekabel Hessen, 144A
14.50% ue 09/01/10 100,000 94,000
United Pan Europe,
11.25% due 02/01/10 125,000 94,375
------------
188,375
Paper & Forest Products - 1.01%
Bear Island Paper Co. LLC,
10.00% due 12/01/07 285,000 247,950
Pacifica Papers, Inc.
10.00% due 03/15/09 125,000 123,438
------------
371,388
------------
Pharmaceuticals - 0.40%
ICN Pharmaceuticals, Inc.,
8.75% due 11/15/08 150,000 148,875
------------
Pollution Control - 0.34%
Allied Waste Industries, Inc.,
10.00% due 08/01/09 150,000 126,750
------------
Real Estate - 0.84%
Grove Worldwide, Inc.,
9.25% due 05/01/08 175,000 24,500
HMH Properties, Inc.,
7.875% due 08/01/08 100,000 91,875
Meditrust Corp.
7.00% due 08/15/07 276,000 193,200
------------
309,575
------------
Steel - 0.83%
Renco Steel Holdings, Inc.,
10.875% due 02/01/05 100,000 84,000
WCI Steel, Inc.,
10.00% due 12/01/04 275,000 221,375
------------
305,375
------------
Telecommunication Services - 14.17%
Adelphia Communications Corp.,
9.50% due 02/15/04 46,998 44,061
Benedek Communications Corp.,
13.25% due 05/15/06 250,000 212,500
Century Communications Corp.,
8.875% due 01/15/07 175,000 150,500
Charter Communications,
10.25% due 01/15/10 200,000 194,500
Coaxial Communications, Inc.,
10.00% due 08/15/06 25,000 24,125
Concentric Network Corp.,
12.75% due 12/15/07 150,000 141,750
Covad Communications Group, Inc.,
12.00% due 02/15/10 350,000 168,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
111
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Telecommunication Services - continued
Energis Plc.,
9.75% due 06/15/09 $25,000 $23,875
Frontiervision Holdings,
11.875% due 09/15/07 400,000 342,000
GTE Corp.,
6.94% due 04/15/28 18,000 16,359
GT Group Telecommunications, Inc.,
13.25% due 02/01/10 150,000 54,750
International Cabletel, Inc.,
11.50% due 02/01/06 1,000,000 900,000
Level 3 Communications, Inc.,
12.875% due 03/15/10 550,000 272,250
Microcell Telecommunications,
12.00% due 06/01/09 325,000 227,500
Netia Holdings II B.V.,
13.125% due 06/15/09 300,000 258,000
Nextel Communications,
9.95% due 02/15/08 750,000 560,625
Northpoint Communications,
12.875% due 02/15/10 300,000 279,000
NTL Communications Corp.,
11.50% due 10/01/08 100,000 92,000
PSI Net, Inc.,
11.0% due 08/01/09 100,000 48,500
Pegasus Communications Corp.,
9.75% due 12/01/06 25,000 24,375
Spectrasite Holdings, Inc.,
12.875% due 03/15/10 600,000 291,000
Sprint Capital Corp.,
6.125% due 11/15/08 150,000 133,226
Telewest Communication Plc,
Step up to 11.00% due 10/01/07 500,000 440,000
Versatel Telecommunications B.V.
13.25% due 05/15/08 150,000 111,750
Versatel Telecommunications Int'l., Inc.,
13.25% due 05/15/08 50,000 38,000
Williams Communications Group,
11.70% due 08/01/08 200,000 177,500
------------
5,226,146
------------
Textiles - 0.29%
Galey & Lord, Inc., 9.125% due 03/01/08 175,000 108,500
------------
Utilities-Electric - 0.14%
CaithnessCoso Funding Corp.
9.05% due 12/15/09 50,000 50,000
------------
TOTAL CORPORATE BONDS
(Cost $16,438,799) 14,749,187
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
U.S. TREASURY OBLIGATIONS - 0.80%
U.S. Treasury Notes - 0.80%
4.75% due 11/15/08 $315,000 $293,145
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $316,401) $293,145
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 14.14%
Federal Home Loan Banks - 0.89%
6.50% due 05/01/29 $140,847 $135,433
7.00% due 06/01/29 197,424 193,536
------------
328,969
------------
Federal Home Loan Mortgage Corporation - 1.34%
8.50% due 05/01/08 241,473 246,303
10.00% due 05/15/20 201,007 209,737
11.565% due 06/15/21 133,461 38,477
------------
494,517
------------
Government National Mortgage Association - 1.50%
7.50% due 07/15/27 239,528 240,426
7.50% due 10/15/27 246,234 247,157
7.50% due 10/15/27 65,253 65,498
------------
553,081
------------
Federal National Mortgage Association - 5.24%
7.50% TBA 1,000,000 998,750
5.50% due 01/01/29 46,358 42,258
5.50% due 06/01/29 441,060 402,053
8.00% due 11/01/28 439,739 445,923
13.00% due 11/01/15 37,512 42,857
------------
1,931,841
Federal National Mortgage Association -
Interest Only - 2.71%
Interest Only due 03/17/20, REMIC 5,225,005 86,456
Interest Only due 02/25/35, REMIC 5,778,047 304,799
Interest Only due 10/17/36, REMIC 12,543,561 278,483
Interest Only due 06/25/38, REMIC 6,093,147 329,419
------------
999,157
------------
Federal National Mortgage Association - CMO - 1.24%
7.394% due 08/17/03, REMIC 103,382 103,106
8.80% due 01/25/19, REMIC 295,072 302,541
10.40% due 04/25/19, REMIC 48,278 51,114
------------
456,761
------------
Student Loan Marketing Association - 1.22%
7.20% due 11/09/00 450,000 450,000
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $5,580,524) $5,214,326
------------
FIXED INCOME - OTHER - 21.85%
Collateralized Mortgage Obligations - 9.13%
First Union Residential Securities,
7.00% due 08/25/28 $240,598 $216,712
</TABLE>
The accompanying notes are an integral part of the financial statements.
112
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Collateralized Mortgage Obligations - 9.13%
Green Tree Financial Corp.,
7.07% due 09/15/07/\ $2,009,666 $1,929,279
Mid State Trust VI, Class A,
7.34% due 07/01/35/\ 1,269,830 1,219,824
------------
3,365,815
------------
Commercial Mortgage Backed Securities - 5.14%
Commercial Mortgage Asset Trust,
7.35% due 08/17/13 1,200,000 1,174,778
DLJ Commercial Mortgage Corp.,
Interest Only Strips: due 05/10/23 9,520,632 363,715
due 11/12/31 7,517,515 355,804
------------
1,894,297
Residential Subordinate Securities - 7.58%
GE Capital Management Services, Inc.
6.75% due 11/25/28 977,859 886,801
PNC Mortgage Securities Corp.,
6.734% due 07/25/28 411,013 361,703
6.750% due 05/25/28 341,137 299,280
6.770% due 03/25/29 491,695 446,267
6.838% due 05/25/28 462,537 412,509
6.910% due 04/25/29 439,576 390,189
------------
2,796,749
TOTAL FIXED INCOME - OTHER
(Cost $8,568,069) $8,056,861
------------
FOREIGN GOVERNMENT OBLIGATIONS - 21.32%
Algeria - 1.25%
6.375% due 03/04/10 $570,000 $460,988
------------
Republic of Argentina - 0.34%
6.812% due 03/31/05 144,000 125,172
------------
Federal Republic of Brazil - 4.21%
7.00% due 04/15/12 600,000 441,000
8.00% due 04/15/14 1,493,700 1,111,911
------------
1,552,911
National Republic of Bulgaria - 0.77%
2.75% due 07/28/12 400,000 282,000
------------
Government of France - 0.28%
5.50% due 04/25/29 125,000 103,731
------------
Federal Republic of Germany - 0.95%
4.000% due 07/04/09 110,000 85,384
4.250% due 11/26/04 200,000 164,459
5.625% due 01/04/28 120,000 101,455
------------
351,298
Republic of Greece - 0.39%
8.80% due 06/19/07 50,000,000 144,264
------------
Republic of Italy - 0.23%
5.25% due 11/01/29 110,000 84,273
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Government of Mexico - 4.38%
6.25% due 12/31/19 $1,650,000 $1,455,570
10.375% due 02/17/09 150,000 159,015
------------
1,614,585
Government of Morocco - 0.81%
6.843% due 01/01/09 344,048 299,321
------------
Kingdom of Norway - 1.13%
5.75% due 11/30/04 4,000,000 417,157
------------
Government of Peru - 2.00%
3.75% FRB due 03/07/17 1,400,000 738,500
------------
Republic of South Africa - 2.42%
12.0% due 02/28/05 3,500,000 447,917
13.00% due 08/31/10 3,500,000 444,422
------------
892,339
------------
Kingdom of Spain - 0.19%
6.15% due 01/31/13 80,000 71,001
------------
Kingdom of Sweden - 0.25%
10.25% due 05/05/03 800,000 90,235
------------
Republic of Venezuela - 1.72%
7.437% due 03/31/07 773,805 634,520
------------
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $7,800,103) $7,862,295
------------
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCK UNIT - 0.02%
Ono Finance Company 144A
(Cost $0) 100 $7,225
------------
PREFERRED STOCK - 0.65%
TCR Holdings-Class B 570 $6
TCR Holdings-Class C 314 3
TCR Holdings-Class D 827 8
TCR Holdings-Class E 1,711 17
------------
34
------------
Telecommunications - 0.65%
Adelphia Communications Corp., PIK
Series B, 13.00% (Cost $247,578) 2,500 $239,375
------------
RIGHTS & WARRANTS - 0.09%
Crude Petroleum & Natural Gas - 0.07%
Terex Corporation,
rights expire 12/31/00 2,000 $25,126
------------
Other - 0.00%
BCP Holdings Corp.
exp. 04/15/04 500 0
------------
Telephone - 0.00%
In-flight Phone Corp.,
warrants, expire 5/15/02 1,000 0
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
113
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Telecommunications - 0.02%
GT Group Telecommunications, Inc.,
warrants expire 02/01/10 144A 150 $7,575
------------
TOTAL RIGHTS & WARRANTS
(Cost $7,176) $32,701
------------
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
REPURCHASE AGREEMENT - 1.07%
Repurchase Agreement with State Street Bank & Trust
Co. dated 10/31/00 at 6.42%, to be repurchased at
$394,069 on 11/01/00, collateralized by $350,000
U.S. Treasury Bonds, 10.75% due 05/15/03 (valued at
$403,017, including interest)
(Cost $394,000) $394,000 $394,000
------------
<CAPTION>
Contracts Value
---------- -----
<S> <C> <C>
PUT OPTIONS - 0.08%
Real Estate Investment Trust - 0.08%
Meditrust Exercisable Put Option,
7.114%, Exp. 08/15/04 (Cost $23,989) 50,000 $31,500
------------
TOTAL INVESTMENTS (Strategic Income Fund)
(Cost $39,376,639) $36,880,649
------------
----------------------------------------------------------------------------
U.S. Government Securities Fund
----------------------------------------------------------------------------
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
U.S. TREASURY OBLIGATIONS - 4.17%
U.S. Treasury Bonds - 4.17%
5.25% due 08/15/03
(Cost $2,565,903) $2,600,000 $2,556,944
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 68.19%
Federal Agriculture Mortgage Corporation - 0.85%
7.02% due 03/26/04 $520,000 $518,133
------------
Federal Home Loan Banks - 3.57%
5.80% due 09/02/08/\ 1,500,000 1,419,615
6.70% due 05/07/03 275,000 273,625
7.00% due 03/10/05/\ 500,000 496,560
------------
2,189,800
Federal Home Loan Mortgage Corporation - 32.71%
6.50% Gold Balloon, TBA** 2,800,000 2,742,264
7.50% Gold Single, TBA** 3,000,000 3,021,570
8.00% Gold Single, TBA** 700,000 709,408
8.50% Gold Single, TBA** 6,000,000 6,144,360
6.875% due 01/15/05/\ 7,000,000 7,089,670
8.00% due 06/01/08 109,423 110,619
8.25% due 07/01/06 81,685 82,801
</TABLE>
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
Federal Home Loan Mortgage Corporation - continued
8.50% due 05/01/08 $98,930 $100,427
11.75% due 08/01/13 30,472 33,494
------------
20,034,613
Federal National Mortgage Association - 28.58%
6.527% due 05/25/30 REMIC 2,750,000 2,612,737
6.58% due 12/28/28 1,830,407 1,792,599
6.783% due 01/17/03 REMIC 641,086 631,482
7.00% due TBA** 2,400,000 2,351,256
7.125% due 02/15/05/\ 8,500,000 8,685,895
7.50% due TBA** 1,250,000 1,258,600
8.00% due 08/01/04 10,998 10,991
8.50% due 08/01/02 15,343 15,366
11.00% due 02/01/15 354 389
11.50% due 04/01/19 130,484 144,469
------------
17,503,784
Government National Mortgage Association - 2.48%
7.50% due 04/15/02 55,887 55,903
7.75% due 04/15/04 32,441 32,758
8.00% due 11/15/06 - 02/15/08 22,897 23,374
9.00% due 12/15/16 544,142 565,429
10.25% due 03/15/01 1,705 1,719
11.00% due 11/20/14 - 09/20/15 7,934 8,506
11.25% due 10/20/15 3,724 4,013
11.50% due 03/15/13 - 10/20/15 275,503 302,309
12.50% due 09/15/14 16,039 17,983
13.00% due 01/15/11 - 06/15/15 205,565 230,722
13.25% due 07/15/14 38,339 43,276
13.50% due 11/15/12 - 02/15/13 33,092 37,767
15.00% due 07/15/11 - 09/15/12 46,268 54,404
15.50% due 08/15/11 - 09/15/11 115,874 132,899
16.00% due 11/15/11 9,104 10,566
------------
1,521,628
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $42,288,977) $41,767,958
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - SHORT TERM -
16.31%
Federal Home Loan Mortgage Corporation - 16.31%
6.36% due 11/07/00
(Cost $9,989,367) $9,989,367 $9,989,367
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
114
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
REPURCHASE AGREEMENTS - 11.33%
Repurchase Agreement with State Street Bank & Trust
Co. dated 10/31/00 at 6.42%, to be repurchased at
$6,939,237 on 11/01/00, collateralized by $5,375,000
U.S. Treasury Bonds, 8.75% due 05/15/17 (valued at
$7,108,311, including interest) (Cost $6,938,000) $6,938,000 $6,938,000
------------
TOTAL INVESTMENTS
(U.S. Government Securities Fund)
(Cost $61,782,247) $61,252,269
------------
</TABLE>
--------------------------------------------------------------------------------
Money Market Fund
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
COMMERCIAL PAPER - 96.73%
Ace INA Holdings, Inc.,
6.60% due 11/10/00 $1,000,000 $998,350
Ace INA Holdings, Inc.,
6.57% due 11/14/00 409,000 408,030
Albertson's, Inc.,
6.52% due 11/13/00 700,000 698,479
Albertson's, Inc.,
6.55% due 11/06/00 1,000,000 999,090
AON Corp.,
6.53% due 11/13/00 303,000 302,340
AON Corp.,
6.53% due 11/17/00 1,493,000 1,488,667
BancOne Corp.,
6.56% due 01/10/01 1,909,000 1,884,650
Baxter International, Inc.,
6.52% due 11/07/00 700,000 699,239
Baxter International, Inc.,
6.52% due 12/01/00 1,100,000 1,094,023
Bellsouth Telecommunications, Inc.,
6.47% due 11/28/00 1,000,000 995,147
Cardinal Health, Inc.,
6.49% due 12/05/00 1,000,000 993,871
Cardinal Health, Inc.,
6.50% due 12/05/00 800,000 792,922
Ciesco L.P.,
6.45% due 12/14/00 800,000 793,837
Coca Cola Co.,
6.45% due 12/06/00 1,000,000 993,729
Cooper Industries, Inc.,
6.55% due 11/08/00 915,000 913,835
Countrywide Home Loans, Inc.,
6.55% due 11/16/00 971,000 968,350
Delaware Funding Corp.,
6.53% due 01/17/01 1,520,000 1,498,770
Dover Corporation,
6.49% due 11/13/00 598,000 596,706
</TABLE>
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
COMMERCIAL PAPER - continued
Dover Corporation,
6.70% due 02/28/01 $1,000,000 1,000,000
Duke Capital Corp.,
6.55% due 11/22/00 1,406,000 1,400,628
Eastman Kodak Company,
6.49% due 12/04/00 711,000 706,770
Ford Motor Credit Corp.,
6.91% due 10/01/01 1,800,000 1,802,504
General Electric Capital Corp.,
6.52% due 01/18/01 1,000,000 985,873
General Motors Acceptance Corp.,
7.11% due 07/11/01 2,000,000 2,004,791
Goldman Sachs Group LP,
6.52% due 01/19/01 1,000,000 985,692
Govco, Inc.,
6.51% due 11/21/00 800,000 797,107
Govco, Inc.,
6.55% due 01/31/01 1,000,000 983,443
Harley Davidson Dealer Funding,
6.49% due 11/09/00 1,000,000 998,558
Household International, Inc.,
6.53% due 11/10/00 1,800,000 1,797,062
Jefferson Pilot Corp.,
6.53% due 02/28/01 1,000,000 978,415
Morgan Stanley Dean Witter,
6.47% due 12/13/00 1,000,000 992,452
Omnicom Finance, Inc.,
6.57% due 11/21/00 1,631,000 1,625,047
PPG Industries, Inc.,
6.50% due 11/03/00 683,000 682,753
Pacific Gas & Electric Co.,
6.52% due 01/31/01 1,020,000 1,003,189
Receivables Capital Corp.,
6.51% due 11/01/00 1,200,000 1,200,000
Receivables Capital Corp.,
6.53% due 01/25/01 672,000 661,639
Safeway, Inc.,
6.70% due 12/18/00 1,000,000 991,253
Salomon Smith Barney Holdings, Inc.,
6.48% due 11/20/00 1,000,000 996,580
Southern California Edison Co.,
6.48% due 11/08/00 983,000 981,761
Southern California Edison Co.,
6.53% due 11/02/00 860,000 859,844
Textron Financial Corp.,
6.57% due 01/05/01 1,000,000 988,138
United Healthcare Corp., 6.53% due 12/11/00 900,000 893,470
United Healthcare Corp., 6.53% due 12/12/00 1,000,000 992,563
</TABLE>
The accompanying notes are an integral part of the financial statements.
115
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
COMMERCIAL PAPER - continued
Wal Mart Stores, Inc., 6.47% due 11/27/00 $675,000 $671,846
------------
TOTAL COMMERCIAL PAPER
(Cost $45,101,413) $45,101,413
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 3.22%
Student Loan Marketing Association - 3.22%
6.805% due 02/21/01
(Cost $1,500,000) $1,500,000 $1,500,000
------------
REPURCHASE AGREEMENT - 0.05%
Repurchase Agreement with State Street Bank & Trust
dated 10/31/00 at 6.42%, to be repurchased at $27,005
on 11/01/00, collateralized by $20,000 U.S. Treasury
Bonds, 11.25% due 02/15/15 (valued at $30,341,
including interest)
(Cost $27,000) $27,000 $27,000
------------
TOTAL INVESTMENTS (Money Market Fund)
(Cost $46,628,413) $46,628,413
------------
-------------------------------------------------------------------------------
Municipal Money Market Fund
-------------------------------------------------------------------------------
<CAPTION>
Par Value Value
--------- -----
<S> <C> <C>
SHORT-TERM INVESTMENTS - 100.00%
Colorado - 4.12%
Colorado Health Facilities Authority,
4.40% due 05/15/20 $100,000 $100,000
Colorado Springs Utilities,
5.00% due 11/15/00 200,000 200,036
------------
300,036
------------
Florida - 6.17%
Broward County Industrial Development,
4.20% due 04/01/08 200,000 200,000
Orlando Special Assessment, 4.25% due 10/01/21 250,000 250,000
------------
450,000
------------
Georgia - 3.43%
Municipal Electric Authority Georgia,
4.30% due 01/01/20 250,000 250,000
------------
Illinois - 8.23%
Chicago, Illinois,
4.30% due 01/01/12 300,000 300,000
llinois Health Facilities Authority, 4.35% due
11/15/29 100,000 100,000
</TABLE>
<TABLE>
<CAPTION>
Par Value Value
--------- -----
<S> <C> <C>
Illinois - continued
Illinois State Toll Highway Authority,
4.40% due 01/01/16 $200,000 $200,000
------------
600,000
------------
Indiana - 6.86%
Indiana Secondary Market Educational Loans,
4.40% due 12/01/14 300,000 300,000
Marion Indiana Economic Development,
4.35% due 06/30/01 200,000 200,000
------------
500,000
------------
Kentucky - 6.17%
Ashland Kentucky Pollution Control,
4.35% due 04/01/09 200,000 200,000
Kentucky Higher Education Student Loan,
4.35% due 06/01/26 250,000 250,000
------------
450,000
------------
Maine - 4.12%
Maine State Housing Authority, 4.40% due 10/28/32 300,000 300,000
------------
Maryland - 1.37%
Community Development Administration Maryland
Multifamily,
4.25% due 06/15/26 100,000 100,000
------------
Massachusetts - 3.43%
Massachusetts State Housing Finance Agency,
4.20% due 12/01/25 250,000 250,000
------------
Michigan - 8.23%
Bruce Township Hospital Finance, 4.25%, due 05.01.18 200,000 200,000
Detroit Michigan Sewage Disposal,
4.30% due 07/01/23 200,000 200,000
Grand Rapids Michigan Water Supply System,
4.20% due 01/01/20 200,000 200,000
------------
600,000
------------
Minnesota - 6.18%
Duluth Minnesota Tax Increment Revenue,
4.35% due 09/01/10 250,000 250,000
Minneapolis Minnesota Special School District,
5.00% due 02/01/01 200,000 200,338
------------
450,338
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
116
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value Value
--------- -----
<S> <C> <C>
Missouri - 5.49%
Missouri Higher Education Student Loans,
4.40% due 12/01/05 $200,000 $200,000
Missouri State Health and Educational Facilities
Authority,
4.30% due 09/01/30 200,000 200,000
------------
400,000
------------
North Carolina - 2.74%
North Carolina Medical Care Commission:
4.40% due 09/01/02 100,000 100,000
4.65% due 10/01/20 100,000 100,000
------------
200,000
------------
Ohio - 4.80%
Cuyahoga County Ohio Industrial Development,
4.25% due 12/01/15 100,000 100,000
Franklin County Ohio Industrial Development,
4.40% due 11/01/14 250,000 250,000
------------
350,000
------------
Pennsylvania - 9.69%
Berks County Pennsylvania,
7.25% due 11/15/00 305,000 305,855
Pennsylvania State Higher Education Student Loan,
4.40% due 12/01/25 100,000 100,000
Philadelphia Pennsylvania Authority Industrial
Development,
4.40% due 12/01/08 200,000 200,000
Quakertown Pennsylvania Hospital Authority,
4.35% due 07/01/05 100,000 100,000
------------
705,855
------------
South Carolina - 7.55%
Piedmont Municipal Power Agency,
4.30% due 01/01/19 250,000 250,000
South Carolina Educational Facilities Authority,
4.40% due 10/01/26 300,000 300,000
------------
550,000
------------
Texas - 7.99%
La Joya Texas Independent School District,
5.00% due 02/15/01 200,000 201,047
North Texas Higher Education Authority,
4.40% due 04/01/20 200,000 200,000
</TABLE>
<TABLE>
<CAPTION>
Par Value Value
--------- -----
<S> <C> <C>
Texas - continued
Weslaco Texas Independent School District,
5.25% due 02/15/01 $180,000 $181,100
------------
582,147
------------
Utah - 3.43%
Utah State Board of Regents Student Loan,
4.40% due 11/01/25 250,000 250,000
------------
TOTAL INVESTMENTS
(Municipal Money Market Fund)
(Cost $7,288,376) $ 7,288,376
------------
--------------------------------------------------------------------------
Aggressive Growth LifeStyle Fund
--------------------------------------------------------------------------
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
AFFILIATED INVESTMENT COMPANIES - 100.0%
INTERNATIONAL EQUITY SECURITIES - 24.6%
North American International Equity Fund - Class
I
(Cost - $6,344,019) 543,537 $5,690,833
------------
DOMESTIC EQUITY SECURITIES - 65.6%
North American Growth & Income Fund - Class I 84,703 $2,296,286
North American Large Cap Growth Fund - Class I 257,857 4,749,722
North American Mid Cap Growth Fund - Class I 66,242 1,189,045
North American Mid Cap Value Fund - Class I 252,702 3,431,691
North American Small Cap Growth Fund - Class I 203,110 3,519,898
------------
TOTAL DOMESTIC EQUITY SECURITIES -
(Cost - $16,212,458) 15,186,642
------------
BONDS - 9.8%
North American Core Bond Fund - Class I
(Cost - $2,264,375) 235,651 2,269,324
------------
TOTAL INVESTMENTS
(Aggressive Growth LifeStyle Fund)
(Cost - $24,820,852) 23,146,799
------------
--------------------------------------------------------------------------
Moderate Growth LifeStyle Fund
--------------------------------------------------------------------------
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
AFFILIATED INVESTMENT COMPANIES - 100.0%
INTERNATIONAL EQUITY SECURITIES - 14.8%
North American International Equity Fund - Class
I
(Cost - $3,365,870) 295,924 $3,098,323
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
117
<PAGE>
NORTH AMERICAN FUNDS
PORTFOLIO OF INVESTMENTS - October 31, 2000 - continued
(showing percentage of total value of investments)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
DOMESTIC EQUITY SECURITIES - 55.6%
North American Growth & Income Fund - Class I 115,291 $3,125,544
North American Large Cap Growth Fund - Class I 175,472 3,232,199
North American Mid Cap Growth Fund - Class I 36,063 647,330
North American Mid Cap Value Fund - Class I 183,449 2,491,237
North American Small Cap Growth Fund - Class I 122,864 2,129,230
------------
TOTAL DOMESTIC EQUITY SECURITIES -
(Cost - $12,228,852) $11,625,540
------------
BONDS - 29.6%
North American Core Bond Fund - Class I
(Cost - $6,161,586) 641,486 $6,177,512
------------
TOTAL INVESTMENTS
(Moderate Growth LifeStyle Fund)
(Cost - $21,756,308) $20,901,375
------------
</TABLE>
-------------------------------------------------------------------------------
Conservative Growth LifeStyle Fund
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
AFFILIATED INVESTMENT COMPANIES - 100.0%
INTERNATIONAL EQUITY SECURITIES - 7.9%
North American International Equity Fund - Class I
(Cost - $1,593,188) 138,640 $1,451,557
-----------
DOMESTIC EQUITY SECURITIES - 42.6%
North American Growth & Income Fund - Class I 87,771 $2,379,481
North American Large Cap Growth Fund - Class I 133,590 2,460,729
North American Mid Cap Growth Fund - Class I 21,119 379,093
North American Mid Cap Value Fund - Class I 107,430 1,458,899
North American Small Cap Growth Fund - Class I 64,757 1,122,236
-----------
TOTAL DOMESTIC EQUITY SECURITIES -
(Cost - $8,209,599) $7,800,438
-----------
BONDS - 49.5%
North American Core Bond Fund - Class I
(Cost - $9,020,682) 939,197 $9,044,463
-----------
TOTAL INVESTMENTS
(Conservative Growth LifeStyle Fund)
(Cost - $18,823,469) $18,296,458
-----------
</TABLE>
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Key to Currency Abbreviations
AUD- Australian Dollar
CAD- Canadian Dollar
EUR- European Currency Unit
GBP- British Pound
GRD- Greek Drachma
HKD- Hong Kong Dollar
JPY- Japanese Yen
NOK- Norwegian Krone
PLN- Polish Zloty
SEK- Swedish Krona
Key to Security Abbreviations and Legend
FRB Floating Rate Bond. The interest rates shown on FRBs are the current
interest rates at October 31, 2000, which are subject to change based on
the terms of the security.
REMIC Real Estate Mortgage Investment Conduit
TBA Forward Commitment
1 Non-Income producing, issuer is in default of interest payments
2 Non-Income producing, issuer is in bankruptcy and is in default of
interest payments
/\ Collateral for forward commitments
* Non-Income producing
** Purchased on a forward commitment (Note 2)
PIK Payment in Kind
The accompanying notes are an integral part of the financial statements.
118
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
1. ORGANIZATION OF THE FUND. North American Funds (the "Fund") is organized as
a Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended, as an open-end management investment company. 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 October 31, 2000, the Fund offered twenty four portfolios, and the
following twenty three portfolios are included in this report:
U.S. Equity Funds:
Growth & Income Fund ("Growth & Income")
Large Cap Growth Fund (formerly the Growth Equity Fund) ("Large Cap
Growth")
Mid Cap Growth Fund (formerly the Small/Mid Cap Fund) ("Mid Cap Growth")
Mid Cap Value Fund ("Mid Cap Value")
Science & Technology Fund ("Science & Technology")
Small Cap Growth Fund (formerly the Emerging Growth Fund) ("Small Cap
Growth")
Small Cap Index Fund ("Small Cap Index")
Socially Responsible Fund ("Socially Responsible")
Stock Index Fund ("Stock Index")
International/Global Equity Funds:
Global Equity Fund ("Global Equity")
International Equity Fund, ("International Equity")
International Small Cap Fund ("International Small Cap")
Balanced Funds:
Balanced Fund ("Balanced")
Income Funds:
Core Bond Fund (formerly the Investment Quality Bond Fund) ("Core Bond")
High Yield Bond Fund ("High Yield Bond")
Municipal Bond Fund, (formerly the National Municipal Bond Fund)
("Municipal Bond")
Strategic Income Fund ("Strategic Income")
U.S. Government Securities Fund ("U.S. Government Securities")
Money Market Funds:
Money Market Fund ("Money Market")
Municipal Money Market Fund ("Municipal Money Market")
LifeStyle Funds:
Aggressive Growth LifeStyle Fund ("Aggressive Growth LifeStyle")
Moderate Growth LifeStyle Fund ("Moderate Growth LifeStyle")
Conservative Growth LifeStyle Fund ("Conservative Growth LifeStyle")
All of the portfolios are diversified management investment companies except
for Small Cap Growth, Aggressive Growth LifeStyle, Moderate Growth LifeStyle
and Conservative Growth Lifestyle, which are non-diversified management
investment companies.
The Fund offers Class A, Class B, Class C, Class I and, in Core Bond and High
Yield, Class II shares. Class A shares are sold with a front-end sales charge
up to 5.75%. Class B and Class C shares are sold without an initial sales
charge. 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 C shares are sold with a contingent deferred sales charge of 1% in the
first year after purchase. The redemption price per share may differ from the
net asset value per share. Class B shares will automatically convert to Class
A shares of the same portfolio eight years after purchase. Class I and Class
II shares are sold only through institutional investment plans and other
eligible programs as described in the prospectus and have no front-end or
contingent deferred sales charges. All five 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).
Investment income, realized and unrealized capital gains and losses and common
expenses of each portfolio are allocated on a pro-rata basis to each class
based on their relative net assets.
Effective March 10, 2000 CypressTree Investments, Inc. ("CypressTree") sold
substantially all of its assets including all of the stock of CypressTree
Asset Management Corporation, Inc. ("CAM"), the Trust's investment adviser,
and all of the stock of CypressTree Funds Distributors, Inc. ("CFD"), the
Trust's distributor, to American General Corporation ("American General"). The
acquisition by American General of CypressTree's assets (herein "the
Acquisition") took place pursuant to a Purchase Agreement dated February 25,
2000.
119
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
Note 1 - continued
The closing of the Acquisition on March 10, 2000 (the "Closing") constituted
an assignment of the investment advisory agreement between CAM and the Trust
with respect to the Funds, and of the distribution agreement between CFD and
the Trust. Under the Investment Company Act of 1940, as amended (the
"Investment Company Act"), these assignments operated to terminate
automatically each of the investment advisory and distribution agreements.
American General Asset Management Corp., Inc. ("AGAM") , a subsidiary of
American General Corporation, serves as investment adviser and American
General Fund Distributors, Inc,. ("AGFD") serves as principal underwriter for
the Fund, effective March 10, 2000. Previously, those services were provided
by CypressTree Asset Management Corporation, Inc. ("CAM"), a wholly-owned
subsidiary of CypressTree Investments, Inc. ("CypressTree"). AGFD serves as
distributor for the Fund. Previously, this service was provided by CypressTree
Funds Distributors, Inc. ("CFD"), also a wholly-owned subsidiary of
CypressTree.
Effective March 10, 2000, Founders Asset Management LLC became sub-adviser to
Global Equity, INVESCO Funds Group, Inc. became sub-adviser to Mid Cap Growth
and Balanced, and American General Investment Management, L.P. ("AGIM") became
sub-adviser to Strategic Income, Core Bond, Municipal Bond, U.S. Government
Securities and Money Market.
2. SIGNIFICANT ACCOUNTING POLICIES. The following is a summary of significant
accounting policies consistently followed by the Fund in the preparation of
its financial statements. The preparation of financial statements is in
conformity with generally accepted accounting principles and requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities at the date of the financial statements and the
reported amounts of increases and decreases in net assets from operations
during the reporting period. Actual results could differ from those estimates.
Security Valuation. Securities which are traded on a recognized exchange 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. Portfolio debt securities
purchased with an original maturity greater than sixty days are valued by
pricing agents, approved by the Board of Trustees, whose quotations reflect
broker/dealer supplied valuations and electronic data processing techniques.
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. Investments of Money Market and Municipal Money
Market are valued using the amortized cost method, permitted in accordance
with Rule 2a-7 under the Investment Company Act. The LifeStyle Funds'
securities are valued at the net asset value of the underlying fund. This
method involves valuing a portfolio security at its cost and thereafter
assuming a constant amortization to maturity of any discount or premium.
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 U.S.
Government Securities, Municipal Bond, Money Market and Municipal Money
Market, 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 daily using forward currency exchange
120
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
Note 2 - continued
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.
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.
Options Contracts. The Fund may use option contracts to hedge against changes
in the value of securities the Fund owns or expects to purchase. The Fund may
also write options on securities it owns or in which it may invest in an
attempt to increase its current returns. The potential risk to the Fund is
that the change in value of options contracts may not correspond to the change
in value of the hedged instruments, but is generally limited to the premium
originally paid. Also, losses may arise from changes in the value of the
underlying instruments, if there is an illiquid secondary market for the
contracts, or if the counterparty to the contract is unable to perform. When
the contract is closed, the Fund records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed. Realized gains and losses on purchased
options are included in realized gains and losses on investment securities.
Exchange traded options are valued at the quoted daily settlement prices
established by the exchange on which they trade.
Forward Commitments. The Fund may purchase debt securities on a "when-issued"
or "forward delivery" basis. 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 Fund
will establish a segregated account consisting of cash or liquid high-quality
debt securities equal to the amount of the commitment to purchase when-issued
or forward delivery securities. 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
October 31, 2000, the forward commitments were $82,793,744 in Core Bond,
$998,750 in Strategic Income and $16,254,425 in U.S. Government Securities.
Mortgage Dollar Rolls. Each of the Funds except the Money Market Fund and the
Municipal Money Market Fund 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.
Futures Contracts. The Fund may enter into futures contracts to hedge against
market risk. Upon entering into a futures contract, the portfolio is required
to deposit with the custodian on behalf of the broker an amount of cash or
cash equivalents equal to a certain percentage of the contract amount, which
is known as the "initial margin". The potential risk to the Fund is that the
change in value of futures contracts may not correspond to the change in value
of the hedged instruments. Also, losses may arise from changes in the value of
the underlying instruments, if there is an illiquid secondary market for the
contracts, or if the counterparty to the contract is unable to perform.
Subsequent payments, called "variation margin", are made or received by the
portfolio, depending upon the fluctuation of the value of the futures
contract. When futures contracts are closed, the difference between the
opening value at the date of purchase and the value at closing is recorded as
realized gain/(loss) in the Statement of Operations. Futures contracts are
valued at the most recent settlement price.
Securities Lending. Certain portfolios of 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,
short term investments 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. Cash collateral provided is invested in the State
Street Bank and Trust Company Navigator Securities Lending Trust. The related
income is included as interest income in the Statements of Operations. All
collateral received will be
121
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
Note 2 - continued
in an amount equal to at least 100% of the market value of the loaned
securities and should 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
October 31, 2000, the value of the securities loaned amounted to $2,173,125,
$8,071,068, $11,011,640, $10,136,990, $1,370,224, $3,303,575, $16,999,487, and
$2,434,396 in Growth & Income, Large Cap Growth, Mid Cap Growth, Small Cap
Growth, Global Equity, International Equity, Core Bond and Strategic Income,
respectively. At October 31, 2000, the value of cash collateral amounted to
$2,052,000, $7,577,734, $10,716,980, $9,908,134, $1,416,057, $3,410,912,
$17,427,484, and $3,385,257 in Growth & Income, Large Cap Growth, Mid Cap
Growth, Small Cap Growth, Global Equity, International Equity, Core Bond and
Strategic Income, respectively.
Organization Costs. Costs incurred by the Small Cap Growth portfolio in
connection with its organization are being amortized on a straight line basis
over a five year period.
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. Distributions of net investment income are
declared as a dividend to shareholders of record as of the close of business
each day and are paid monthly for Core Bond, High Yield Bond, Municipal Bond,
Strategic Income, U.S. Government Securities, Money Market and Municipal Money
Market, quarterly for Small Cap Index, Socially Responsible, Stock Index and
the LifeStyle Funds, semi-annually to shareholders of International Equity and
Growth & Income, and annually to shareholders of Large Cap Growth, Mid Cap
Growth, Mid Cap Value, Science & Technology, Small Cap Growth, Global Equity,
International Equity and Balanced. 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 federal excise tax.
Capital Loss Carryforwards. At October 31, 2000, capital loss carryforwards
available to offset future recognized gains were approximately:
<TABLE>
<CAPTION>
Capital Loss Carryforwards: Expiration Year
----------------------------------------------------
Portfolio 2003 2004 2005 2006 2007 2008
--------- --------- ---- ------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Science & Technology..... - - - - - 1,069,495
Growth & Income.......... - - 974,573 232,312 5,251,432 -
Socially Responsible..... - - - - - 159,082
Stock Index.............. - - - - - 16,953
Global Equity............ - - - - - 2,339,194
Balanced................. - - - - - 2,378,112
Core Bond................ 329,026 - - 7,250,820 7,004,605 7,052,964
High Yield............... - - - - 710,603 3,014,754
Municipal Bond........... 24,157 - - 20,931 262,544 3,360
Strategic Income......... - - 110,152 - 3,866,240 3,438,003
U. S. Government
Securities............... 1,062,756 - - - 594,779 1,075,945
Money Market............. - - 1,130 1,156 - 461
</TABLE>
As a result of the reorganization of some of these funds during the year,
certain capital loss carryforwards may be subject to limitations on use
pursuant to applicable U.S. Federal Income Tax law. Therefore, it is possible
not all of these capital losses will be available for use.
Repurchase and Reverse Repurchase Agreements. Each portfolio may enter into
repurchase agreements and, additionally, U.S. Government Securities may enter
into reverse repurchase agreements. When a portfolio enters into a repurchase
agreement through its custodian, it receives delivery of 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 repurchase 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, U.S. Government
Securities may sell a debt security and agree to repurchase it at an agreed
upon time and at an agreed upon price.
122
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
Note 2 - continued
Other. Investment security transactions are accounted for on 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. Non-cash dividends, if
any, are recorded at the fair market value of the securities received.
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 year ended October 31, 2000, is as
follows:
<TABLE>
<CAPTION>
Shares Capital Shares Capital
---------- ----------- ---------- -----------
Class A Class B
----------------------- -----------------------
<S> <C> <C> <C> <C>
Growth & Income
Sold...................... 520,232 $14,345,704 650,532 $17,609,391
Shares issued in
connection with the
merger of North American
Equity-Income............ 304,952 8,608,176 610,686 16,835,378
Shares issued in
connection with the
merger of North American
Tax-Sensitive Equity..... 9,543 269,386 82,798 2,282,585
Shares issued in
connection with the merger
of AGSPC2 Large Cap
Value..................... 92,804 2,619,669 274,941 7,579,579
Reinvestment of
distributions............. 105,709 2,884,282 315,780 8,444,061
Redeemed.................. (605,069) (16,899,847) (1,601,437) (43,338,250)
---------- ----------- ---------- -----------
Net increase/(decrease).. 428,171 $11,827,370 333,300 $9,412,744
---------- ----------- ---------- -----------
<CAPTION>
Class C Class I
----------------------- -----------------------
<S> <C> <C> <C> <C>
Growth & Income
Sold...................... 1,062,513 $29,009,747 276,505 $7,842,218
Shares issued in
connection with the
merger of North American
Equity-Income............ 1,410,041 39,042,706 - -
Shares issued in
connection with the
merger of North American
Tax-Sensitive Equity..... 81,780 2,264,394 - -
Shares issued in
connection with the merger
of AGSPC2 Large Cap
Value..................... - - 162,787 4,598,570
Reinvestment of
distributions............. 449,765 12,080,942
Redeemed.................. (2,073,452) (56,268,644) (60,597) (1,642,017)
---------- ----------- ---------- -----------
Net increase/(decrease).. 930,647 $26,129,145 378,695 $10,798,771
---------- ----------- ---------- -----------
<CAPTION>
Class A Class B
----------------------- -----------------------
<S> <C> <C> <C> <C>
Large Cap Growth
Sold...................... 180,298 $3,963,213 510,101 $11,202,280
Shares issued in
connection with the merger
of AGSPC2 Large Cap
Growth.................... 240,358 5,302,772 922,147 19,731,175
Reinvestment of
distributions............. 74,768 1,502,311 265,589 5,130,551
Redeemed.................. (237,334) (5,349,958) (551,390) (12,079,257)
---------- ----------- ---------- -----------
Net increase/(decrease).. 258,090 $5,418,338 1,146,447 $23,984,749
---------- ----------- ---------- -----------
<CAPTION>
Class C Class I
----------------------- -----------------------
<S> <C> <C> <C> <C>
Large Cap Growth
Sold...................... 542,311 $12,012,298 817,135 $17,838,190
Shares issued in
connection with the merger
of AGSPC2 Large Cap
Growth.................... - - 297,894 6,578,574
Reinvestment of
distributions............. 214,569 4,238,969 82,237 1,547,705
Redeemed.................. (395,536) (8,550,664) (159,511) (3,393,150)
---------- ----------- ---------- -----------
Net increase/(decrease).. 361,344 $7,700,603 1,037,755 $22,570,919
---------- ----------- ---------- -----------
</TABLE>
123
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note 3 - continued
<TABLE>
<CAPTION>
Shares Capital Shares Capital Shares Capital
--------- --------- --------- ----------- --------- -----------
Class A Class B
----------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Mid Cap Growth
Sold.................... 236,428 $4,958,839 398,588 $8,068,295
Shares issued in
connection with the
merger of AGSPC2 Mid
Cap Growth............. 112,209 2,428,094 326,329 6,785,306
Reinvestment of
distributions........... 152,684 2,771,897 446,218 7,770,631
Redeemed................ (168,892) (3,635,675) (366,298) (7,489,811)
--------- ----------- --------- -----------
Net
increase/(decrease).... 332,429 $6,523,155 804,837 $15,134,421
--------- ----------- --------- -----------
<CAPTION>
Class C Class I
----------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Mid Cap Growth
Sold.................... 478,136 $9,593,264 139,968 $3,018,075
Shares issued in
connection with the
merger of AGSPC2 Mid
Cap Growth............. - - 471,490 10,228,987
Reinvestment of
distributions........... 372,559 6,549,451 106,192 1,883,847
Redeemed................ (559,008) (11,298,090) (69,387) (1,465,582)
--------- ----------- --------- -----------
Net
increase/(decrease).... 291,687 $4,844,625 648,263 $13,665,327
--------- ----------- --------- -----------
<CAPTION>
Class A Class B
----------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Mid Cap Value
Sold.................... 144,253 $1,841,667 472,924 $5,823,819
Reinvestment of
distributions........... 31,579 373,702 88,412 1,029,601
Redeemed................ (118,255) (1,550,678) (384,551) (4,956,358)
--------- ----------- --------- -----------
Net
increase/(decrease).... 57,577 $664,691 176,785 $1,897,062
--------- ----------- --------- -----------
<CAPTION>
Class C Class I Class II
-------------------- ----------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Mid Cap Value
Sold.................... 43,900 $601,390 1,252,181 $16,290,616 11,121 $137,028
Reinvestment of
distributions........... 2,397 29,983 68,110 845,335 16,112 181,253
Redeemed................ (599,402) (7,827,596) (149,144) (1,862,031)
--------- --------- --------- ----------- --------- -----------
Net
increase/(decrease).... 46,297 $631,373 720,889 $9,308,355 (121,911) ($1,543,750)
--------- --------- --------- ----------- --------- -----------
<CAPTION>
Class A Class B
----------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Science & Technology
Sold.................... 604,655 $5,510,690 2,111,172 $18,832,737
Reinvestment of
distributions...........
Redeemed................ (32,401) (283,380) (138,114) (1,184,568)
--------- ----------- --------- -----------
Net
increase/(decrease).... 572,254 $5,227,310 1,973,058 $17,648,169
--------- ----------- --------- -----------
<CAPTION>
Class C Class I
----------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Science & Technology
Sold.................... 136,418 $1,133,849 66,676 $666,741
Reinvestment of
distributions...........
Redeemed................ (234) (1,808)
--------- ----------- --------- -----------
Net
increase/(decrease).... 136,184 $1,132,041 66,676 $666,741
--------- ----------- --------- -----------
<CAPTION>
Class A Class B
----------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Small Cap Growth
Sold.................... 179,013 $3,493,309 256,423 $4,499,113
Shares issued in
connection with the
merger of AGSPC2 Small
Cap Growth............. 257,697 5,093,883 754,012 14,548,655
Reinvestment of
distributions........... 21,216 354,265 50,039 812,730
Redeemed................ (81,989) (1,648,781) (246,538) (4,858,401)
--------- ----------- --------- -----------
Net
increase/(decrease).... 375,937 $7,292,693 813,936 $15,002,097
--------- ----------- --------- -----------
</TABLE>
124
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note 3 - continued
<TABLE>
<CAPTION>
Shares Capital Shares Capital Shares Capital
--------- ---------- --------- ----------- ---------- ------------
Class C Class I
----------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Small Cap Growth
Sold.................... 185,962 $3,432,164 434,971 $8,306,602
Shares issued in
connection with the
merger of AGSPC2 Small
Cap Growth............. - - 469,456 9,303,218
Reinvestment of
distributions........... 11,278 182,974 45,510 762,287
Redeemed................ (33,565) (598,912) (133,113) (2,503,418)
--------- ----------- ---------- ------------
Net
increase/(decrease).... 163,675 $3,016,226 816,824 $15,868,689
--------- ----------- ---------- ------------
<CAPTION>
Class A Class B Class C
---------------------- ----------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Small Cap Index
Sold.................... 23,750 $275,800 96,627 $1,116,799 3,483 $39,259
Reinvestment of
distributions........... 70,177 702,455 88,320 874,356 337 3,142
Redeemed................ (13,488) (156,325) (21,268) (240,302)
--------- ---------- --------- ----------- ---------- ------------
Net
increase/(decrease).... 80,439 $821,930 163,679 $1,750,853 3,820 $42,401
--------- ---------- --------- ----------- ---------- ------------
<CAPTION>
Class A Class B
----------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Socially Responsible
Sold.................... 28,809 $352,586 89,213 $1,088,674
Reinvestment of
distributions........... 6,476 78,486 11,019 133,425
Redeemed................ (12,932) (157,649) (35,336) (424,336)
--------- ----------- ---------- ------------
Net
increase/(decrease).... 22,353 $273,423 64,896 $797,763
--------- ----------- ---------- ------------
<CAPTION>
Class C Class I Class II
---------------------- ----------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Socially Responsible
Sold.................... 4,696 $59,576 852,292 $10,531,657 8 $100
Reinvestment of
distributions........... - 8,931 108,358 5,774 70,009
Redeemed................ (533,794) (6,608,539) (132,317) (1,631,480)
--------- ---------- --------- ----------- ---------- ------------
Net
increase/(decrease).... 4,696 $59,576 327,429 $4,031,476 (126,535) ($1,561,371)
--------- ---------- --------- ----------- ---------- ------------
<CAPTION>
Class A Class B Class C
---------------------- ----------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Stock Index
Sold.................... 257,610 $3,300,025 1,030,761 $13,150,515 39,852 $506,404
Reinvestment of
distributions........... 7,328 94,341 11,656 148,815 1 19
Redeemed................ (52,165) (667,516) (296,871) (3,762,586)
--------- ---------- --------- ----------- ---------- ------------
Net
increase/(decrease).... 212,773 $2,726,850 745,546 $9,536,744 39,853 $506,423
--------- ---------- --------- ----------- ---------- ------------
<CAPTION>
Class A Class B Class C
---------------------- ----------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Global Equity
Sold.................... 561,515 $6,564,695 61,443 $779,179 2,354,014 $29,022,558
Reinvestment of
distributions........... 102,952 1,452,654 223,719 3,087,303 391,138 5,421,137
Redeemed................ (676,962) (8,745,579) (952,125) (12,058,568) (3,783,257) (47,863,041)
--------- ---------- --------- ----------- ---------- ------------
Net
increase/(decrease).... (12,495) ($728,230) (666,963) ($8,192,086) (1,038,105) ($13,419,346)
--------- ---------- --------- ----------- ---------- ------------
<CAPTION>
Class A Class B
----------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
International Equity
Sold.................... 752,978 $8,539,000 223,968 $2,565,738
Shares issued in
connection with the
merger of AGSPC2
International Growth... 241,933 2,836,359 540,423 6,262,957
Shares issued in
connection with the
merger of AGSPC2
International Value.... 275,839 3,233,635 577,643 6,694,306
Reinvestment of
distributions........... 27,241 318,993 85,506 992,722
Redeemed................ (921,853) (10,575,559) (883,545) (10,072,806)
--------- ----------- ---------- ------------
Net
increase/(decrease).... 376,138 $4,352,428 543,995 $6,442,917
--------- ----------- ---------- ------------
</TABLE>
125
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note 3 - continued
<TABLE>
<CAPTION>
Shares Capital Shares Capital Shares Capital
--------- ----------- ---------- ------------ ---------- -----------
Class C Class I
------------------------ -----------------------
<S> <C> <C> <C> <C> <C> <C>
International Equity
Sold.................... 162,734 $1,895,481 998,106 $11,225,802
Shares issued in
connection with the
merger of AGSPC2
International Growth... - - 362,776 4,259,720
Shares issued in
connection with the
merger of AGSPC2
International Value.... - - 505,421 5,934,659
Reinvestment of
distributions........... 40,660 472,060 - -
Redeemed................ (310,335) (3,546,141) (276,032) (2,977,809)
---------- ------------ ---------- -----------
Net
increase/(decrease).... (106,941) ($1,178,600) 1,590,271 $18,442,372
---------- ------------ ---------- -----------
<CAPTION>
Class A Class B Class C
----------------------- ------------------------ -----------------------
<S> <C> <C> <C> <C> <C> <C>
International Small Cap
Sold.................... 617,132 $15,273,632 302,823 $7,405,887 354,827 $9,376,657
Reinvestment of
distributions........... 28,290 633,967 75,949 1,644,481 61,882 1,343,520
Redeemed................ (455,514) (11,482,589) (149,996) (3,534,129) (207,100) (4,854,566)
--------- ----------- ---------- ------------ ---------- -----------
Net
increase/(decrease).... 189,908 $4,425,010 228,776 $5,516,239 209,609 $5,865,611
--------- ----------- ---------- ------------ ---------- -----------
<CAPTION>
Class A Class B
------------------------ -----------------------
<S> <C> <C> <C> <C> <C> <C>
Balanced
Sold.................... 239,789 $2,221,399 169,192 $1,578,042
Shares issued in
connection with the
merger of AGSPC2
Balanced............... 260,076 2,429,626 850,413 7,900,334
Reinvestment of
distributions........... 97,337 845,859 207,921 1,802,749
Redeemed................ (320,654) (2,974,969) (898,843) (8,259,026)
---------- ------------ ---------- -----------
Net
increase/(decrease).... 276,548 $2,521,915 328,683 $3,022,099
---------- ------------ ---------- -----------
<CAPTION>
Class C Class I
------------------------ -----------------------
<S> <C> <C> <C> <C> <C> <C>
Balanced
Sold.................... 147,231 $1,400,824 206,780 $1,973,415
Shares issued in
connection with the
merger of AGSPC2
Balanced............... 448,772 4,196,897
Reinvestment of
distributions.......... 787,946 6,942,381
Redeemed................ (2,057,592) (19,112,110) (28,756) (271,671)
---------- ------------ ---------- -----------
Net
increase/(decrease)... (1,122,415) ($10,768,905) 626,796 $5,898,641
---------- ------------ ---------- -----------
<CAPTION>
Class A Class B
------------------------ -----------------------
<S> <C> <C> <C> <C> <C> <C>
Core Bond
Sold.................... 86,061 $836,397 61,183 $592,169
Shares issued in
connection with the
merger of AGSPC2 Core
Bond................... 18,563 178,964 49,200 474,337
Shares issued in
connection with the
merger of AGSPC2
Domestic Bond.......... 340,668 3,284,382 1,140,806 10,998,835
Reinvestment of
distributions.......... 18,168 175,504 24,870 240,124
Redeemed................ (417,481) (4,015,632) (1,197,400) (11,469,196)
---------- ------------ ---------- -----------
Net
increase/(decrease)... 45,979 $459,615 78,659 $836,269
---------- ------------ ---------- -----------
</TABLE>
126
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note 3 - continued
<TABLE>
<CAPTION>
Shares Capital Shares Capital Shares Capital
--------- ----------- ---------- ----------- ---------- ------------
Class C Class I Class II
----------------------- ----------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Core Bond
Sold.................... 46,061 $448,966 1,808,854 $17,383,782 8 $75
Shares issued in
connection with the
merger of AGSPC2 Core
Bond................... - - 23,609 235,590 33,038,051 318,569,797
Shares issued in
connection with the
merger of AGSPC2
Domestic Bond.......... - - 693,472 6,688,535 - -
Reinvestment of
distributions.......... 19,488 188,367 40,452 391,593 700,635 6,764,917
Redeemed................ (242,315) (2,350,556) (491,180) (4,754,531) (622,731) (6,000,000)
--------- ----------- ---------- ----------- ---------- ------------
Net
increase/(decrease)... (176,766) ($1,713,223) 2,075,207 $19,937,089 33,115,963 $319,334,789
--------- ----------- ---------- ----------- ---------- ------------
<CAPTION>
Class A Class B
----------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
High Yield Bond
Sold.................... 32,163 $300,163 122,781 $1,123,161
Reinvestment of
distributions.......... 1,170 10,572 8,193 73,989
Redeemed................ (3,512) (33,029) (13,772) (123,026)
---------- ----------- ---------- ------------
Net
increase/(decrease)... 29,821 $277,706 117,202 $1,074,124
---------- ----------- ---------- ------------
<CAPTION>
Class C Class I Class II
----------------------- ----------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
High Yield Bond
Sold.................... 63,079 $567,367 1,605 $14,414 7,091,254 $63,681,758
Reinvestment of
distributions.......... 601 5,208 150 1,368 704,361 6,390,330
Redeemed................ - - (1,596) (14,336) (7,088,114) (63,648,633)
--------- ----------- ---------- ----------- ---------- ------------
Net
increase/(decrease)... 63,680 $572,575 159 $1,446 707,501 $6,423,455
--------- ----------- ---------- ----------- ---------- ------------
<CAPTION>
Class A Class B Class C
----------------------- ----------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Municipal Bond
Sold.................... 138,950 $1,317,668 9,870 $94,254 1,628 $15,403
Shares issued in
connection with the
merger of AGSPC2
Municipal Bond......... 344,682 3,290,627 414,403 3,955,889 - -
Reinvestment of
distributions.......... 16,903 160,992 13,996 133,257 7,966 75,353
Redeemed................ (162,218) (1,539,938) (215,733) (2,051,175) (185,975) (1,760,691)
--------- ----------- ---------- ----------- ---------- ------------
Net
increase/(decrease)... 338,317 $3,229,349 222,536 $2,132,225 (176,381) ($1,669,935)
--------- ----------- ---------- ----------- ---------- ------------
<CAPTION>
Class A Class B
----------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Strategic Income
----------------
Sold.................... 235,425 $1,934,596 188,191 $1,554,585
Shares issued in
connection with the
merger of AGSPC2
Strategic Bond......... 210,906 1,732,804 266,623 2,190,838
Reinvestment of
distributions........... 53,247 440,576 118,611 981,318
Redeemed................ (765,027) (6,343,100) (1,218,211) (10,106,970)
---------- ----------- ---------- ------------
Net
increase/(decrease)... (265,449) ($2,235,124) (644,786) ($5,380,229)
---------- ----------- ---------- ------------
<CAPTION>
Class C Class I
----------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Strategic Income
----------------
Sold.................... 194,141 $1,597,500 $9 $75
Shares issued in
connection with the
merger of AGSPC2
Strategic Bond......... - - 328,991 2,705,249
Reinvestment of
distributions........... 110,714 916,823 8,751 69,194
Redeemed................ (1,138,865) (9,482,491) (8,294) (67,939)
---------- ----------- ---------- ------------
Net
increase/(decrease)... (834,010) ($6,968,168) 329,457 ($2,706,579)
---------- ----------- ---------- ------------
</TABLE>
127
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note 3 - continued
<TABLE>
<CAPTION>
Shares Capital Shares Capital Shares Capital
---------- ----------- ----------- ----------- ----------- -----------
Class A Class B Class C
----------------------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
U.S. Government
Securities
---------------
Sold.................... 260,706 $2,454,069 251,432 $2,371,338 2,953,663 $27,736,875
Reinvestment of
distributions........... 132,162 1,124,755 41,149 348,322 44,282 374,449
Redeemed................ (994,682) (9,334,232) (675,339) (6,148,543) (3,404,934) (31,970,103)
---------- ----------- ----------- ----------- ----------- -----------
Net
increase/(decrease)... (601,814) ($5,755,408) (382,758) ($3,428,883) (406,989) ($3,858,779)
---------- ----------- ----------- ----------- ----------- -----------
<CAPTION>
Class A Class B
------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Money Market
------------
Sold.................... 35,256,844 $35,256,844 10,939,422 $10,939,422
Shares issued in
connection with the
merger of AGSPC2 Money
Market................. 16,037,970 16,037,970 4,757,994 4,757,994
Reinvestment of
distributions........... 732,440 732,440 268,711 268,711
Redeemed................ (32,448,147) (32,448,147) (12,420,665) (12,420,665)
----------- ----------- ----------- -----------
Net
increase/(decrease)... 19,579,107 $19,579,107 3,545,462 $3,545,462
----------- ----------- ----------- -----------
<CAPTION>
Class C Class I
------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Money Market
------------
Sold.................... 30,703,970 $30,703,970 2,867,349 $2,867,349
Shares issued in
connection with the
merger of AGSPC2 Money
Market................. 5,610,626 5,610,626
Reinvestment of
distributions........... 371,257 371,257 108,376 108,376
Redeemed................ (32,524,278) (32,524,278) (2,475,554) (2,461,485)
----------- ----------- ----------- -----------
Net
increase/(decrease)... (1,449,051) ($1,449,051) 6,110,797 $6,124,866
----------- ----------- ----------- -----------
<CAPTION>
Class A Class B Class C
----------------------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Municipal Money Market
----------------------
Sold.................... 2,115,643 $2,115,642 416,013 $416,013 112,080 $112,080
Reinvestment of
distributions........... 86,176 86,176 43,881 43,882 235 235
Redeemed................ (1,401,118) (1,401,118) (524,290) (524,290) (4,000) (4,000)
---------- ----------- ----------- ----------- ----------- -----------
Net
increase/(decrease)... 800,701 $800,700 (64,396) ($64,395) 108,314 $108,314
---------- ----------- ----------- ----------- ----------- -----------
<CAPTION>
Class A Class B
------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Aggressive Growth
LifeStyle
-----------------
Sold.................... 154,794 $2,051,325 657,584 $8,804,810
Reinvestment of
distributions........... 19,409 250,862 58,467 692,034
Redeemed................ (16,440) (218,429) (72,094) (957,709)
----------- ----------- ----------- -----------
Net
increase/(decrease)... 157,763 $2,083,758 643,957 $8,539,135
----------- ----------- ----------- -----------
<CAPTION>
Class C Class I Class II
----------------------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Aggressive Growth
LifeStyle
-----------------
Sold.................... 14,397 $188,274 629,278 $8,586,698 8 $100
Reinvestment of
distributions........... 21,903 282,055 5,380 71,165
Redeemed................ (387,895) (5,353,647) (131,036) (1,765,000)
---------- ----------- ----------- ----------- ----------- -----------
Net
increase/(decrease)... 14,397 $188,274 263,286 $3,515,106 (125,648) ($1,693,735)
---------- ----------- ----------- ----------- ----------- -----------
<CAPTION>
Class A Class B
------------------------- -------------------------
Moderate Growth LifeStyle
<S> <C> <C> <C> <C> <C> <C>
Sold.................... 118,463 $1,454,170 538,571 $6,583,591
Reinvestment of
distributions........... 15,307 185,162 46,680 565,594
Redeemed................ (20,669) (251,696) (91,454) (1,118,453)
----------- ----------- ----------- -----------
Net
increase/(decrease)... 113,101 $1,387,636 493,797 $6,030,732
----------- ----------- ----------- -----------
</TABLE>
128
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note 3 - continued
<TABLE>
<CAPTION>
Shares Capital Shares Capital Shares Capital
---------- ------------ --------- ----------- ---------- -----------
Class C Class I Class II
------------------------ ----------------------- -----------------------
Moderate Growth LifeStyle
<S> <C> <C> <C> <C> <C> <C>
Sold..................... 15,078 $188,489 740,368 $9,290,421 8 $100
Reinvestment of
distributions............ 16 187 18,336 221,379 4,909 59,749
Redeemed................. (442,764) (5,612,543) (131,311) (1,628,183)
---------- ------------ --------- ----------- ---------- -----------
Net
increase/(decrease)..... 15,094 $188,676 315,940 $3,899,257 (126,394) ($1,568,344)
---------- ------------ --------- ----------- ---------- -----------
<CAPTION>
Class A Class B
----------------------- -----------------------
Conservative Growth
LifeStyle
<S> <C> <C> <C> <C> <C> <C>
Sold..................... 132,543 $1,548,028 363,073 $4,240,024
Reinvestment of
distributions............ 12,294 141,683 40,395 466,977
Redeemed................. (11,888) (138,955) (44,929) (528,305)
--------- ----------- ---------- -----------
Net
increase/(decrease)..... 132,949 $1,550,756 358,539 $4,178,696
--------- ----------- ---------- -----------
<CAPTION>
Class C Class I Class II
------------------------ ----------------------- -----------------------
Conservative Growth
LifeStyle
<S> <C> <C> <C> <C> <C> <C>
Sold..................... 12,844 $152,493 662,195 $7,849,117 9 $100
Reinvestment of
distributions............ 14,757 170,114 4,837 55,734
Redeemed................. (426,915) (5,103,384) (132,197) (1,547,920)
---------- ------------ --------- ----------- ---------- -----------
Net
increase/(decrease)..... 12,844 $152,493 250,037 $2,915,847 (127,351) ($1,492,086)
---------- ------------ --------- ----------- ---------- -----------
Share activity for the year ended October 31, 1999, was as follows:
<CAPTION>
Shares Capital Shares Capital Shares Capital
---------- ------------ --------- ----------- ---------- -----------
Class A Class B Class C
------------------------ ----------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Growth and Income
Sold..................... 593,218 $16,112,290 1,020,665 $27,330,906 1,567,435 $42,427,008
Reinvestment of
distributions............ 64,085 1,621,392 114,011 2,851,439 176,921 4,442,490
Redeemed................. (1,133,085) (31,765,735) (579,899) (15,547,216) (1,325,973) (35,951,361)
---------- ------------ --------- ----------- ---------- -----------
Net
increase/(decrease)..... (475,782) ($14,032,053) 554,777 $14,635,129 418,383 $10,918,137
---------- ------------ --------- ----------- ---------- -----------
<CAPTION>
Class A Class B Class C
------------------------ ----------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Large Cap Growth (formerly
Growth Equity)
Sold..................... 121,585 $2,413,151 281,502 $5,559,694 393,750 $7,688,421
Reinvestment of
distributions............ 14,236 259,959 39,479 708,254 45,768 820,167
Redeemed................. (92,961) (1,834,145) (169,645) (3,324,990) (252,763) (4,961,227)
---------- ------------ --------- ----------- ---------- -----------
Net
increase/(decrease)..... 42,860 $838,965 151,336 $2,942,958 186,755 $3,547,361
---------- ------------ --------- ----------- ---------- -----------
<CAPTION>
Class A Class B Class C
------------------------ ----------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Mid Cap Growth (formerly
Small/ Mid Cap)
Sold..................... 126,496 $2,275,849 291,328 $5,096,560 542,798 $9,521,511
Reinvestment of
distributions............ 25,158 411,088 78,912 1,259,456 86,436 1,382,112
Redeemed................. (128,546) (2,337,709) (301,084) (5,259,240) (605,710) (10,637,501)
---------- ------------ --------- ----------- ---------- -----------
Net
increase/(decrease)..... 23,108 $349,228 69,156 $1,096,776 23,524 $266,122
---------- ------------ --------- ----------- ---------- -----------
<CAPTION>
Class A Class B
------------------------ -----------------------
<S> <C> <C> <C> <C> <C> <C>
Mid Cap Value
Sold..................... 148,430 $1,533,854 392,956 $4,546,587
Reinvestment of
distributions............ 576 6,387 222 2,384
Redeemed................. (4,845) (63,601) (8,871) (112,567)
---------- ------------ --------- -----------
Net
increase/(decrease)..... 144,161 $1,476,640 384,307 $4,436,404
---------- ------------ --------- -----------
</TABLE>
129
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note 3 - continued
<TABLE>
<CAPTION>
Shares Capital Shares Capital Shares Capital
---------- ------------ --------- ----------- ---------- ------------
Class I Class II
------------------------ -----------------------
Mid Cap
Value
<S> <C> <C> <C> <C> <C> <C>
Sold.................... 129,332 $1,304,099 125,228 $1,253,837
Reinvestment of
distributions........... 707 7,954 1,065 12,263
Redeemed................ (4,055) (53,401) (4,480) (59,463)
---------- ------------ --------- -----------
Net
increase/(decrease).... 125,984 $1,258,652 121,813 $1,206,637
---------- ------------ --------- -----------
<CAPTION>
Class A Class B Class C
------------------------ ----------------------- ------------------------
Small Cap Growth
(formerly Emerging
Growth)
<S> <C> <C> <C> <C> <C> <C>
Sold.................... 15,516 $160,205 49,363 $491,033 23,740 $251,163
Redeemed................ (14,536) (152,525) (26,577) (268,051) (15,638) (158,481)
---------- ------------ --------- ----------- ---------- ------------
Net
increase/(decrease).... 980 $7,680 22,786 $222,982 8,102 $92,682
---------- ------------ --------- ----------- ---------- ------------
<CAPTION>
Class A Class B
------------------------ -----------------------
Small Cap Index
<S> <C> <C> <C> <C> <C> <C>
Sold.................... 260,137 $2,618,550 304,191 $3,102,682
Reinvestment of
distributions........... 2,928 26,235 598 6,607
Redeemed................ (471) (5,219) (290) (3,313)
---------- ------------ --------- -----------
Net
increase/(decrease).... 262,594 $2,639,566 304,499 $3,105,976
---------- ------------ --------- -----------
<CAPTION>
Class A Class B
------------------------ -----------------------
Socially Responsible
<S> <C> <C> <C> <C> <C> <C>
Sold.................... 135,640 $1,376,465 242,494 $2,630,795
Reinvestment of
distributions........... 1,097 12,708 206 2,271
Redeemed................ -- -- (309) (3,518)
---------- ------------ --------- -----------
Net
increase/(decrease).... 136,737 $1,389,173 242,391 $2,629,548
---------- ------------ --------- -----------
<CAPTION>
Class I Class II
------------------------ -----------------------
Socially Responsible
<S> <C> <C> <C> <C> <C> <C>
Sold.................... 179,786 $1,923,909 124,875 $1,248,750
Reinvestment of
distributions........... 1,401 16,322 1,535 17,856
Redeemed................ (8,751) (100,865) - -
---------- ------------ --------- -----------
Net
increase/(decrease).... 172,436 $1,839,366 126,410 $1,266,606
---------- ------------ --------- -----------
<CAPTION>
Class A Class B
------------------------ -----------------------
Stock Index
<S> <C> <C> <C> <C> <C> <C>
Sold.................... 463,951 $5,084,388 1,247,810 $14,353,724
Reinvestment of
distributions........... 3,454 41,504 2,069 24,958
Redeemed................ (10,183) (120,851) (20,813) (243,829)
---------- ------------ --------- -----------
Net
increase/(decrease).... 457,222 $5,005,041 1,229,066 $14,134,853
---------- ------------ --------- -----------
<CAPTION>
Class A Class B Class C
------------------------ ----------------------- ------------------------
Global Equity
<S> <C> <C> <C> <C> <C> <C>
Sold.................... 1,423,394 $22,816,700 129,757 $2,083,840 1,897,782 $30,883,719
Reinvestment of
distributions........... 142,681 2,268,622 131,730 2,068,160 255,619 4,026,003
Redeemed................ (2,665,234) (42,997,272) (522,562) (8,405,115) (2,853,048) (46,324,542)
---------- ------------ --------- ----------- ---------- ------------
Net
increase/(decrease).... (1,099,159) ($17,911,950) (261,075) ($4,253,115) (699,647) ($11,414,820)
---------- ------------ --------- ----------- ---------- ------------
<CAPTION>
Class A Class B Class C
------------------------ ----------------------- ------------------------
International Equity
<S> <C> <C> <C> <C> <C> <C>
Sold.................... 88,662 $974,431 180,051 $1,967,284 96,884 $1,067,562
Reinvestment of
distributions........... 1,100 11,388 3,861 39,697 2,310 23,747
Redeemed................ (137,110) (1,500,053) (404,482) (4,414,104) (344,573) (3,768,194)
---------- ------------ --------- ----------- ---------- ------------
Net
increase/(decrease).... (47,348) ($514,234) (220,570) ($2,407,123) (245,379) ($2,676,885)
---------- ------------ --------- ----------- ---------- ------------
</TABLE>
130
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note 3 - continued
<TABLE>
<CAPTION>
Shares Capital Shares Capital Shares Capital
---------- ------------ ---------- ----------- ---------- ------------
Class A Class B Class C
------------------------ ----------------------- ------------------------
International Small Cap
<S> <C> <C> <C> <C> <C> <C>
Sold.................... 20,122 $317,282 55,279 $858,748 45,908 $706,902
Redeemed................ (53,744) (845,699) (169,869) (2,632,560) (174,307) (2,683,477)
---------- ------------ ---------- ----------- ---------- ------------
Net
increase/(decrease).... (33,622) ($528,417) (114,590) ($1,773,812) (128,399) ($1,976,575)
---------- ------------ ---------- ----------- ---------- ------------
<CAPTION>
Class A Class B Class C
------------------------ ----------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Balanced
Sold.................... 156,485 $1,680,266 113,675 $1,223,061 323,739 $3,527,724
Reinvestment of
distributions........... 124,734 1,332,156 143,215 1,528,102 483,841 5,230,466
Redeemed................ (975,179) (10,544,849) (587,122) (6,295,079) (1,398,327) (15,170,133)
---------- ------------ ---------- ----------- ---------- ------------
Net
increase/(decrease).... (693,960) ($7,532,427) (330,232) ($3,543,916) (590,747) ($6,411,943)
---------- ------------ ---------- ----------- ---------- ------------
<CAPTION>
Class A Class B Class C
------------------------ ----------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Core Bond (formerly
Investment Quality Bond)
Sold.................... 69,728 $725,581 157,085 $1,652,116 128,622 $1,337,848
Reinvestment of
distributions........... 28,223 291,270 23,317 239,071 27,756 284,636
Redeemed................ (374,751) (3,799,199) (200,439) (2,081,049) (210,799) (2,141,915)
---------- ------------ ---------- ----------- ---------- ------------
Net
increase/(decrease).... (276,800) ($2,782,348) (20,037) ($189,862) (54,421) ($519,431)
---------- ------------ ---------- ----------- ---------- ------------
<CAPTION>
Class A Class B
------------------------ -----------------------
<S> <C> <C> <C> <C> <C> <C>
High Yield Bond
Sold.................... 127,950 $1,278,928 191,330 $1,913,973
Reinvestment of
distributions........... 538 5,377 2,309 22,587
Redeemed................ (124,988) (1,251,086) (124,580) (1,246,996)
---------- ------------ ---------- -----------
Net
increase/(decrease).... 3,500 $33,219 69,059 $689,564
---------- ------------ ---------- -----------
<CAPTION>
Class I Class II
------------------------ -----------------------
<S> <C> <C> <C> <C> <C> <C>
Sold.................... 124,875 $1,248,449 6,217,232 $62,127,399
Reinvestment of
distributions........... 486 4,873 537,322 5,345,983
Redeemed................ (124,000) (1,241,240) (125,000) (1,251,250)
---------- ------------ ---------- -----------
Net
increase/(decrease).... 1,361 $12,082 6,629,554 $66,222,132
---------- ------------ ---------- -----------
<CAPTION>
Class A Class B Class C
------------------------ ----------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Municipal Bond (formerly
National Municipal Bond)
Sold.................... 12,373 $121,276 38,617 $389,927 58,284 $590,526
Reinvestment of
distributions........... 13,971 138,776 11,804 117,251 12,945 128,980
Redeemed................ (128,078) (1,256,715) (123,709) (1,221,515) (160,321) (1,597,610)
---------- ------------ ---------- ----------- ---------- ------------
Net
increase/(decrease).... (101,734) ($996,663) (73,288) ($714,337) (89,092) ($878,104)
---------- ------------ ---------- ----------- ---------- ------------
<CAPTION>
Class A Class B Class C
------------------------ ----------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Strategic Income
Sold.................... 355,037 $3,163,049 470,944 $4,269,053 212,534 $1,899,105
Reinvestment of
distributions........... 80,202 708,185 151,925 1,339,782 195,047 1,722,274
Redeemed................ (1,065,074) (9,458,644) (1,333,186) (11,782,693) (1,669,529) (14,600,123)
---------- ------------ ---------- ----------- ---------- ------------
Net
increase/(decrease).... (629,835) ($5,587,410) (710,317) ($6,173,858) (1,261,948) ($10,978,744)
---------- ------------ ---------- ----------- ---------- ------------
<CAPTION>
Class A Class B Class C
------------------------ ----------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
U.S. Government
Securities
Sold.................... 418,180 $4,109,724 316,176 $3,095,258 3,441,704 $33,633,113
Reinvestment of
distributions........... 160,487 1,575,298 43,417 425,351 49,911 488,789
Redeemed................ (1,798,945) (17,585,651) (872,536) (8,630,181) (3,625,489) (35,381,313)
---------- ------------ ---------- ----------- ---------- ------------
Net
increase/(decrease).... (1,220,278) ($11,900,629) (512,943) ($5,109,572) (133,874) ($1,259,411)
---------- ------------ ---------- ----------- ---------- ------------
</TABLE>
131
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
Note 3 - continued
<TABLE>
<CAPTION>
Shares Capital Shares Capital Shares Capital
----------- ----------- ----------- ----------- ----------- -----------
Class A Class B Class C
------------------------ ------------------------ ------------------------
<S> <C> <C> <C> <C> <C> <C>
Money Market
Sold.................... 35,775,604 $35,777,032 11,223,162 $11,223,619 29,891,743 $29,892,797
Reinvestment of
distributions........... 335,040 335,040 197,442 197,442 334,268 334,268
Redeemed................ (40,376,812) (40,376,812) (12,789,186) (12,789,186) (29,820,314) (29,820,314)
----------- ----------- ----------- ----------- ----------- -----------
Net
increase/(decrease).... (4,266,168) ($4,264,740) (1,368,582) ($1,368,125) 405,697 $406,751
----------- ----------- ----------- ----------- ----------- -----------
<CAPTION>
Class A Class B
------------------------ ------------------------
<S> <C> <C> <C> <C> <C> <C>
Municipal Money Market
Sold.................... 3,984,748 $3,984,748 2,853,653 $2,853,653
Reinvestment of
distributions........... 61,818 61,818 37,545 37,545
Redeemed................ (397,687) (397,687) (52,777) (52,777)
----------- ----------- ----------- -----------
Net
increase/(decrease).... 3,648,879 $3,648,879 2,838,421 $2,838,421
----------- ----------- ----------- -----------
</TABLE>
4. PURCHASES AND SALES OF SECURITIES. The following table summarizes the
securities transactions (excluding short-term investments) for all portfolios,
excluding Money Market and Municipal Money Market, for the year ended October
31, 2000:
<TABLE>
<CAPTION>
Purchases Sales
----------------------------- -----------------------------
Portfolio U. S. Government Other Issues U. S. Government Other Issues
------------ ---------------- ------------ ---------------- ------------
<S> <C> <C> <C> <C>
Growth & Income......... 96,856,401 147,789,341
Large Cap Growth........ 132,306,760 119,052,705
Mid Cap Growth.......... 123,564,828 122,782,509
Mid Cap Value........... 35,304,304 27,022,661
Science & Technology.... 35,634,930 12,582,894
Small Cap Growth........ 37,345,942 29,341,776
Small Cap Index......... 5,381,573 4,333,794
Socially Responsible.... 5,820,835 4,688,870
Stock Index............. 12,342,382 534,703
Global Equity........... 115,123,896 145,722,036
International Equity.... 40,024,143 42,661,466
International Small
Cap..................... 159,704,967 149,108,657
Balanced................ 12,160,455 126,721,037 36,384,795 122,959,723
Core Bond............... 412,533,912 131,888,498 377,949,865 165,177,209
High Yield Bond......... 59,539,068 54,597,751
Municipal Bond.......... 5,958,797 9,165,993
Strategic Income........ 5,260,240 26,451,647 6,149,304 44,385,302
U.S. Government
Securities.............. 190,950,568 195,276,034
Aggressive Growth
LifeStyle............... 30,908,194 16,896,907
Moderate Growth
LifeStyle............... 25,457,036 14,907,463
Conservative Growth
LifeStyle............... 20,809,977 13,169,011
</TABLE>
132
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
Note 4 - continued
At October 31, 2000, 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>
Growth & Income.......... 247,932,307 85,368,517 104,439,571 (19,071,054)
Large Cap Growth......... 86,034,499 155,314 7,660,592 (7,505,278)
Mid Cap Growth........... 70,018,306 7,093,375 14,892,412 (7,799,037)
Mid Cap Value............ 20,055,109 2,869,394 3,204,459 (335,065)
Science & Technology..... 23,509,569 (1,425,801) 1,189,449 (2,615,250)
Small Cap Growth......... 37,676,128 1,261,166 5,657,982 (4,396,816)
Small Cap Index.......... 8,448,238 (494,577) 1,248,190 (1,742,767)
Socially Responsible..... 10,635,411 976,085 1,855,499 (879,414)
Stock Index.............. 32,114,542 2,027,573 4,792,834 (2,765,261)
Global Equity............ 37,198,232 (300,206) 3,131,657 (3,431,863)
International Equity..... 50,818,941 (2,838,520) 2,553,346 (5,391,866)
International Small Cap.. 26,786,141 22,482 1,632,838 (1,610,356)
Balanced................. 63,304,758 3,495,827 5,358,679 (1,862,852)
Core Bond................ 434,296,792 (2,395,530) 2,928,847 (5,324,377)
High Yield Bond.......... 63,189,171 (6,658,028) 891,189 (7,549,217)
Municipal Bond........... 16,577,811 (54,068) 268,291 (322,359)
Strategic Income......... 39,433,399 (2,552,647) 769,404 (3,322,051)
U.S. Government
Securities............... 61,795,977 (543,713) 30,606 (574,319)
Aggressive Growth
LifeStyle................ 25,212,681 (2,065,882) 171,981 (2,237,863)
Moderate Growth
LifeStyle................ 22,014,065 (1,112,691) 169,513 (1,282,204)
Conservative Growth
LifeStyle................ 19,125,531 (829,073) 112,827 (941,900)
</TABLE>
5. INVESTMENT ADVISORY AGREEMENTS. The Fund maintains an Investment Advisory
Agreement with AGAM, pursuant to approval by the Fund's Board of Trustees and
Fund shareholders. AGAM 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,
AGAM 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 million $200 million
First and $200 and $500 Excess over
Portfolio $50 million million million $500 million
--------- ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
Growth & Income............ .725% .675% .625% .550%
Large Cap Growth........... .900% .850% .825% .800%
Mid Cap Growth............. .925% .900% .875% .850%
Mid Cap Value.............. See below/1/
Science & Technology....... .900% .900% .900% .900%
Small Cap Growth........... .950% .950% .950% .950%
Small Cap Index............ .280% .280% .280% .270%
Socially Responsible/4/.... .650% .650% .650% .650%
Stock Index................ .270% .270% .270% .260%
Global Equity.............. .900% .900% .700% .700%
International Equity....... .900% .850% .800% .750%
International Small Cap.... 1.050% 1.000% .900% .800%
Balanced................... .775% .725% .675% .625%
Aggressive Growth
LifeStyle.................. .100% .100% .100% .100%
Moderate Growth LifeStyle.. .100% .100% .100% .100%
Conservative Growth
LifeStyle.................. .100% .100% .100% .100%
</TABLE>
133
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
Note 5 - continued
<TABLE>
<CAPTION>
Between Between
$50 million $200 million
First and $200 and $500 Excess over
Portfolio $50 million million million $500 million
------------ ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Core Bond............... .600% .600% .525% .475%
High Yield Bond/2/...... .825% .825% .725% .675%
Municipal Bond.......... .600% .600% .600% .600%
Strategic Income........ .750% .700% .650% .600%
U. S. Government
Securities.............. .600% .600% .525% .475%
Money Market............ .200% .200% .200% .145%
Municipal Money
Market/3/............... .350% .350% .350% .350%
</TABLE>
/1/The Management fee schedule for the Mid Cap Value Fund from July 7, 2000 is
as follows: 0.900% on the first $100 million, 0.875% between $100 million
and $250 million, 0.850% between $250 million and $500 million, 0.825%
between $500 million and $750 million, and 0.800% on the excess over $750
million of the average net assets of the Fund. Prior to that date, the
Management fee was as follows: 0.750% on the first $100 million, 0.725%
between $100 million and $250 million, 0.700% between $250 million and $500
million, 0.675% between $500 million and $750 million, and 0.650% on the
excess over $750 million of the average net assets of the Fund.
/2/Prior to July 7, 2000, the Management fee schedule for High Yield Bond was
as follows: 0.700% on the first $200 million, 0.600% between $200 million
and $500 million and 0.450% on the excess over $500 million of the average
net assets of the Fund.
/3/Prior to July 7, 2000, the Management fee schedule for Municipal Money
Market was as follows: 0.500% on the first $200 million, 0.450% between $200
million and $500 million and 0.400% on the excess over $500 million of the
average net assets of the Fund.
/4/Prior to July 7, 2000, the management fee for Socially Responsible was
0.25% of average net assets.
Prior to March 10, 2000, The Variable Annuity Life Insurance Company ("VALIC")
served as investment adviser for Mid Cap Value, Science & Technology, Small
Cap Index, Socially Responsible, Stock Index, High Yield Bond and Municipal
Money Market. Advisory fee rates payable to CAM and VALIC prior to March 10,
2000, were the same as those payable under the current advisory agreement with
AGAM except as noted in the footnotes to the chart below. For the year ended
October 31, 2000, AGAM paid aggregate subadvisory fees of $3,481,904. In
addition, AGAM retained net investment advisory fees of $3,825,317 after
payment of subadvisory fees, which were allocated among the portfolios as
follows:
<TABLE>
<CAPTION>
% of Net % of Net
Fee Assets Fee Assets
Paid to Paid to Retained by Retained by
Portfolio Sub-adviser Sub-adviser AGAM AGAM
------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Growth & Income......... $831,412 0.27% $1,255,216 0.40%
Large Cap Growth........ 313,631 0.49% 258,254 0.40%
Mid Cap Growth.......... 316,341 0.53% 238,731 0.40%
Mid Cap Value........... 75,402 0.50% 47,071 0.31%
Science & Technology.... 55,886 0.60% 28,304 0.30%
Small Cap Growth........ 80,730 0.55% 58,712 0.40%
Small Cap Index......... 768* 0.01% 21,193 0.27%
Socially Responsible.... 9,029* 0.09% 30,144 0.30%
Stock Index............. 2,047* 0.01% 74,470 0.26%
Global Equity........... 285,818 0.49% 238,061 0.41%
International Equity.... 165,746 0.50% 133,355 0.40%
International Small
Cap..................... 173,739 0.57% 146,471 0.48%
Balanced................ 231,868 0.37% 254,433 0.40%
Core Bond............... 265,944* 0.23% 397,496 0.34%
High Yield Bond......... 290,743* 0.45% 189,422 0.29%
Municipal Bond.......... 31,952* 0.25% 44,923 0.35%
Strategic Income........ 150,251* 0.35% 171,750 0.40%
U. S. Government
Securities.............. 112,544* 0.23% 187,566 0.38%
Money Market............ 21,204* 0.08% 35,122 0.12%
Municipal Money Market.. 18,324* 0.25% 14,623 0.20%
Aggressive Growth
LifeStyle............... 17,053* 0.10% - -
Moderate Growth
LifeStyle............... 16,346* 0.10% - -
Conservative Growth
LifeStyle............... 15,126* 0.10% - -
</TABLE>
* Fund is sub-advised by AGIM, a wholly owned indirect subsidiary of American
General Corporation.
134
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
Note 5 - continued
Expense Reimbursement and Distribution Plan. Pursuant to the Investment
Advisory Agreement, effective July 7, 2000, AGAM will reduce the advisory fee,
or, if necessary, reimburse each portfolio of the Fund for expenses (excluding
taxes, portfolio brokerage commissions, interest, certain litigation and
indemnification expenses and extraordinary expenses) incurred through February
28, 2001 in excess of the following annual percentages of average net assets
as highlighted in the table below. (Expense limitation).
<TABLE>
<CAPTION>
Class A Class B Class C Class I Class II
------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Growth & Income....................... 1.46% 2.11% 2.11% 1.23%
Large Cap Growth...................... 1.17% 1.82% 1.82% 1.07%
Mid Cap Growth........................ 1.48% 2.13% 2.13% 1.38%
Mid Cap Value......................... 1.78% 2.43% 2.43% 1.68%
Science & Technology.................. 1.10% 1.75% 1.75% 1.00%
Small Cap Growth...................... 1.22% 1.87% 1.87% 1.12%
Small Cap Index....................... 1.00% 1.65% 1.65% 0.90%
Socially Responsible.................. 1.20% 1.85% 1.85% 1.10%
Stock Index........................... 0.70% 1.35% 1.35% 0.60%
Global Equity......................... 1.87% 2.52% 2.52% 1.65%
International Equity.................. 1.50% 2.15% 2.15% 1.40%
International Small Cap............... 1.85% 2.50% 2.50% 1.75%
Balanced.............................. 1.51% 2.16% 2.16% 1.41%
Core Bond............................. 1.30% 1.95% 1.95% 1.20% 0.95%
High Yield Bond....................... 1.55% 2.20% 2.20% 1.45% 1.13%
Municipal Bond........................ 1.00% 1.85% 1.85%
Strategic Income...................... 1.55% 2.20% 2.20% 1.45%
U. S. Government Securities........... 1.25% 1.90% 1.90% 1.15%
Money Market.......................... 0.70% 0.70% 0.70% 0.70%
Municipal Money Market................ 0.75% 0.75% 0.75%
Aggressive Growth LifeStyle........... 0.20% 0.85% 0.85% 0.10%
Moderate Growth LifeStyle............. 0.20% 0.85% 0.85% 0.10%
Conservative Growth LifeStyle......... 0.20% 0.85% 0.85% 0.10%
</TABLE>
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 Money Market and Municipal Money Market, of a monthly distribution fee to
AGAM as principal underwriter for the Fund as follows:
<TABLE>
<S> <C>
Class A 0.0035% of average daily net assets, except for Municipal Bond, which charges
0.0015% of average daily net assets
Class B 0.0100% of average daily net assets
Class C 0.0100% of average daily net assets
</TABLE>
The amounts payable by Aggressive Growth LifeStyle, Moderate Growth LifeStyle
and Conservative Growth LifeStyle ("LifeStyle Funds") under the Plan will be
reduced by any amounts payable with respect to the Institutional Class I
Shares of each Portfolio in which a LifeStyle Fund invests, pursuant to the
Administrative and Shareholder Services Agreement dated July 7, 2000, between
the LifeStyle Funds and AGAM. Under the Administrative and Shareholder
Services Agreement, Class I Shares are subject to a 0.25% Service fee.
In accordance with the Investment Advisory agreement, AGAM, in addition to
providing advisory services, provides accounting and administrative services
for which AGAM charged $1,404,639 to the Fund, before reimbursement based on
expense limitations, for the year ended October 31, 2000. American General
Distributors, Inc., and American General Financial Advisors, Inc, received
$57,275 and $491,411, respectively, in front-end sales charges, and American
General Distributors, Inc., and AGFD received $62,067 and $61,325,
respectively, in contingent deferred sales charges during the period.
At October 31, 2000, the American General Retirement Plan, a Defined Benefit
Pension Plan sponsored by American General Corporation, owned directly or
indirectly 92% of the outstanding shares of Core Bond and 98% of the
outstanding shares of High Yield Bond.
At October 31, 2000, VALIC, an indirect wholly-owned subsidiary of American
General Corporation, owned over 5% of the outstanding shares of, Mid Cap
Value, Small Cap Growth, Small Cap Index, Socially Responsible, Stock Index,
International Equity, Balanced, Municipal Bond, Strategic Income, Money Market
and Municipal Money Market. Strategic Income, Money Market, Municipal Money
Market, Aggressive Growth LifeStyle, Moderate Growth LifeStyle and
Conservative Growth LifeStyle. In addition, at October 31, 2000, one
135
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
Note 5 - continued
shareholder owned over 5% of the outstanding shares of Mid Cap Growth and
Small Cap Growth, Socially Responsible and Money Market. Aggressive Growth
LifeStyle owned over 5% of the outstanding shares of Large Cap Growth, Mid Cap
Value, Small Cap Growth and International Equity, Moderate Growth LifeStyle
owned over 5% of the outstanding shares of Mid Cap Value. Small Cap Growth and
International Equity, and Conservative Growth LifeStyle owned over 5% of the
outstanding shares of Mid Cap Value.
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 $900 plus travel expenses
for each Board of Trustees meeting attended and an annual retainer of $3,600.
Previously, each Trustee was paid a fee of $750 for each meeting attended, a
quarterly retainer of $750, and $200 for each telephone meeting. Prior to July
7, 2000, the Trustees of Mid Cap Value, Science & Technology, Small Cap Index,
Socially Responsible, Stock Index High Yield Bond, Municipal Money Market and
the three LifeStyle Funds received a fee of $1,000 plus travel expense for
each Board of Trustees meeting attended and an annual retainer of $6,200.
7. LINE OF CREDIT. The Fund has entered into an agreement that provides a
$20,000,000 Line of Credit to the Fund which may be used for temporary or
emergency purposes. The Fund pays a commitment fee of $20,000 annually, and
interest is charged on any borrowed amounts at the currently effective Federal
Funds Rate plus .55%. This Line of Credit was not used during the year ended
October 31, 2000.
8. COMMITMENTS. At October 31, 2000, International Equity, Global Equity and
Strategic Income entered into forward foreign currency contracts which
contractually obligate the portfolio to deliver currencies at future dates.
Open sale and purchase contracts at October 31, 2000, were as follows:
FORWARD CONTRACTS
<TABLE>
<CAPTION>
Net
Contracts In Unrealized
to Exchange Settlement Appreciation
Deliver For Date Value (Depreciation)
---------- ---------- ---------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Global Equity
Purchases $219,249 Japanese Yen 23,725,000 11/10/00 $217,431 ($1,818)
Sales
British Pounds......... 110,506 $160,399 11/06/00 $160,338 $61
British Pounds......... 108,505 157,277 11/07/00 157,277 --
Japanese Yen........... 43,621,935 399,395 11/06/00 399,395 --
<CAPTION>
---------- ---------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
$717,071 $717,010 $61
<CAPTION>
---------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
($1,757)
<CAPTION>
--------------
<S> <C> <C> <C> <C> <C> <C>
International Small Cap
Purchases
$15,785 Euro 18,757 11/3/00 $15,917 $132
154,015 Euro 181,285 11/6/00 153,839 (176)
161,007 British Pounds 111,077 11/7/00 161,168 161
<CAPTION>
---------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
$330,807 $330,924 117
<CAPTION>
--------------
<S> <C> <C> <C> <C> <C> <C>
Sales
British Pounds......... 40,069 $ 57,399 11/1/00 58,138 (739)
British Pounds......... 10,082 14,438 11/2/00 14,629 (191)
British Pounds......... 13,159 19,107 11/3/00 19,092 15
British Pounds......... 73,140 106,163 11/6/00 106,123 40
British Pounds......... 11,573 16,761 11/7/00 16,792 (31)
Japanese Yen........... 4,681,129 42,860 11/6/00 42,901 (41)
Swedish Krona.......... 22,495 2,254 11/6/00 2,251 3
<CAPTION>
---------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
$258,982 $259,926 ($944)
<CAPTION>
--------------
<S> <C> <C> <C> <C> <C> <C>
($827)
<CAPTION>
--------------
</TABLE>
136
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
Note 8 - continued
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
International Equity
<CAPTION>
Net
Contracts In Unrealized
to Exchange Settlement Appreciation
Deliver For Date Value (Depreciation)
---------- ---------- ---------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Purchases
$23,411 Euro 27,762 11/03/00 $23,559 $ 148
1,922 Euro 2,264 11/07/00 1,921 (1)
42,095 British Pounds 29,394 11/02/00 42,649 554
298,857 British Pounds 205,762 11/06/00 298,550 (307)
5,617 British Pounds 3,872 11/07/00 5,618 1
184,430 Japanese Yen 19,090,404 12/08/00 176,175 (8,255)
<CAPTION>
---------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
$556,332 $548,472 ($7,860)
<CAPTION>
---------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Sales
Euro................... 478,000 $403,881 12/08/00 $406,357 ($2,476)
Japanese Yen........... 19,090,404 180,746 12/08/00 176,175 4,571
<CAPTION>
---------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
$584,627 $582,532 $2,095
<CAPTION>
---------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
($5,765)
<CAPTION>
--------------
</TABLE>
9. ACQUISITIONS
On July 10, 2000, the certain funds, as listed below, (each an "Acquiring
Fund" acquired the assets and certain liabilities of other funds, also listed
below, (each an "Acquiring Fund") in tax-free exchanges approved by the
shareholders. The number and value of shares issued by the Acquiring Fund are
presented in the schedule of Capital Stock Activity (Note 3). Net asset and
unrealized appreciation (depreciation) as of the reorganization date were as
follows:
Acquisition of AGSPC2 Money Market Fund by the North American Money Market
Fund:
<TABLE>
<S> <C>
Net Assets of North American Money Market prior to merger....... $19,870,100
Net Assets of AGSPC2 Money market prior to Merger............... $26,406,587
Aggregate net assets of North American Money Market immediately
following the acquisition....................................... $46,276,687
Acquisition of AGSPC2 Core Bond Fund and the AGDPC3 Domestic Bond Fund by the
North American Core Bond Fund:
Net Assets of North American Core Bond prior to merger.......... $9,221,390
Net Assets of AGSPC2 Core Bond prior to Merger.................. $319,450,486
Net Assets of AGSPC2 Domestic Bond prior to Merger.............. $20,971,752
Aggregate net assets of North American Core Bond immediately
following the acquisition....................................... $349,643,628
Unrealized depreciation in AGSPC2 Core Bond..................... $7,569,361
Unrealized depreciation in AGSPC2 Domestic Bond................. $213,402
Acquisition of the North American Equity-Income Fund, the North American Tax-
Sensitive Equity Fund, and the AGSPC2 Large Cap Value Fund by the North
American Growth & Income Fund:
Net Assets of North American Growth & Income prior to merger.... $285,707,092
Net Assets of North American Equity-Income prior to Merger...... $64,486,260
Net Assets of North American Tax-Sensitive Equity prior to
Merger.......................................................... $4,816,365
Net Assets of AGSPC2 Large Cap Value prior to Merger............ $14,797,818
Aggregate net assets of North American Growth & Income
immediately following the acquisition........................... $369,807,535
Unrealized appreciation in North American Equity-Income......... $3,612,632
Unrealized appreciation in North American Tax-Sensitive Equity.. $1,361,977
Unrealized appreciation in AGSPC2 Large Cap Value............... $548,794
</TABLE>
137
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note 9 - continued
Acquisition of AGSPC2 Balanced Fund by the North American Balanced Fund:
<TABLE>
<S> <C>
Net Assets of North American Balanced prior to merger............ $53,829,259
Net Assets of AGSPC2 Balanced prior to Merger.................... $14,526,857
Aggregate net assets of North American Balanced immediately
following the acquisition........................................ $68,356,116
Unrealized appreciation in AGSPC2 Balanced....................... $1,064,064
Acquisition of AGSPC2 Municipal Bond Fund by the North American Municipal Bond
Fund:
Net Assets of North American Municipal Bond prior to merger...... $10,011,129
Net Assets of AGSPC2 Municipal Bond prior to Merger.............. $7,246,516
Aggregate net assets of North American Municipal Bond immediately
following the acquisition........................................ $17,257,645
Unrealized depreciation in AGSPC2 Municipal Bond................. $294,879
Acquisition of AGSPC2 International Growth Fund and the AGSPC2 International
Value Fund by the North American International Equity Fund:
Net Assets of North American International Equity prior to
merger........................................................... $24,631,389
Net Assets of AGSPC2 International Growth prior to Merger........ $13,359,036
Net Assets of AGSPC2 International Value prior to Merger......... $15,862,600
Aggregate net assets of North American International Equity
immediately following the acquisition............................ $53,853,025
Unrealized appreciation in AGSPC2 International Growth........... $2,221,695
Unrealized appreciation in AGSPC2 International Value............ $3,791,004
Acquisition of AGSPC2 Strategic Bond Fund by the North American Strategic
Income Fund:
Net Assets of North American Strategic Income prior to merger.... $37,517,037
Net Assets of AGSPC2 Strategic Bond prior to Merger.............. $6,626,303
Aggregate net assets of North American Strategic Income
immediately following the acquisition............................ $44,143,340
Unrealized depreciation in AGSPC2 Strategic Bond................. $134,632
Acquisition of AGSPC2 Mid Cap Growth Fund by the North American Mid Cap Growth
Fund:
Net Assets of North American Mid Cap Growth prior to merger...... $56,193,139
Net Assets of AGSPC2 Mid Cap Growth prior to Merger.............. $19,442,387
Aggregate net assets of North American Mid Cap Growth immediately
following the acquisition........................................ $75,635,526
Unrealized appreciation in AGSPC2 Mid Cap Growth................. $2,332,158
Acquisition of AGSPC2 Large Cap Growth Fund by the North American Large Cap
Growth Fund:
Net Assets of North American Large Cap Growth prior to merger.... $55,136,766
Net Assets of AGSPC2 Large Cap Growth prior to Merger............ $31,612,521
Aggregate net assets of North American Large Cap Growth
immediately following the acquisition............................ $86,749,287
Unrealized appreciation in AGSPC2 Large Cap Growth............... $4,904,896
Acquisition of AGSPC2 Small Cap Growth Fund by the North American Small Cap
Growth Fund:
Net Assets of North American Small Cap Growth prior to merger.... $6,647,129
Net Assets of AGSPC2 Small Cap Growth prior to Merger............ $28,945,756
Aggregate net assets of North American Small Cap Growth
immediately following the acquisition............................ $35,592,885
Unrealized appreciation in AGSPC2 Small Cap Growth............... $5,088,462
</TABLE>
138
<PAGE>
NORTH AMERICAN FUNDS
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
Note 9 - continued
On July 10, 2000, certain newly established portfolios, as listed below (each
an "Acquiring Fund"), acquired the assets and liabilities of certain funds,
also listed below (each an "Acquired Portfolio") pursuant to a plan of
reorganization approved by its shareholders. The reorganization was
accomplished by a tax-free exchange of shares of the Acquiring Fund in an
amount equal to the outstanding interests of the Acquired Portfolio.
<TABLE>
<CAPTION>
Acquiring Fund Acquired Portfolio
-------------- ------------------
<S> <C>
Mid Cap Value AGSPC2 Mid Cap Value
Science & Technology AGSPC2 Science & Technology
Small Cap Index AGSPC2 Small Cap Index
Socially Responsible AGSPC2 Socially Responsible
Stock Index AGSPC2 Stock Index
High Yield Bond AGSPC2 High Yield Bond
Municipal Money Market AGSPC2 Municipal Money Market
Aggressive Growth LifeStyle AGSPC2 Aggressive Growth Lifestyle
Moderate Growth LifeStyle AGSPC2 Moderate Growth Lifestyle
Conservative Growth LifeStyle AGSPC2 Conservative Growth Lifestyle
</TABLE>
10. FOREIGN SECURITIES. Investing in securities of foreign companies and
foreign governments involves special risks and considerations not typically
associated with investing in securities of domestic companies and the United
States Government. These risks include revaluation of currencies and future
adverse political and economic developments. Moreover, securities of foreign
companies and foreign governments may be less liquid and their prices more
volatile than those of securities of comparable domestic companies and the
United States Government.
11. FUTURES CONTRACTS. Futures contracts outstanding at October 31, 2000 weres
as follows:
<TABLE>
<CAPTION>
Net
Unrealized
Aggregate Expiration Total Appreciation
Cost Date Value (Depreciation)
--------- ---------- --------- --------------
<S> <C> <C> <C> <C>
Socially Responsible
S&P Mini 500 Index (Long)...... 886,017 12/15/2000 864,121 (21,896)
S&P 500 Index (Long)........... 1,502,163 12/15/2000 1,440,200 (61,963)
--------- --------- --------
2,388,180 2,304,321 (83,859)
--------- --------- --------
Stock Index
S&P Mini 500 Index (Long)...... 929,435 12/15/2000 936,163 6,726
S&P 500 Index (Long)........... 3,356,188 12/15/2000 3,240,417 (115,771)
--------- --------- --------
4,285,625 4,176,580 (109,045)
--------- --------- --------
Small Cap Index
Russell 2000 Index (Long)...... 770,525 12/31/2000 750,750 (19,775)
S&P Mini 500 Index (Long)...... 69,900 12/15/2000 72,013 2,113
S&P 500 Index (Long)........... 380,913 12/15/2000 360,048 (20,865)
--------- --------- --------
1,221,338 1,182,811 (38,528)
--------- --------- --------
International Equity
Dax Index (Short).............. 410,671 12/15/2000 453,411 (42,740)
--------- --------- --------
410,671 453,411 (42,740)
--------- --------- --------
</TABLE>
139
<PAGE>
NORTH AMERICAN FUNDS
OTHER INFORMATION (Unaudited)
-------------------------------------------------------------------------------
Capital Gain Distributions (Unaudited)
Pursuant to Section 852 of the Internal Revenue Code, the distributions set
forth below have been designated as capital gains distributions for the fiscal
year ended October 31, 2000:
<TABLE>
<CAPTION>
Capital Gain
Portfolio Distribution
-------------------------------- ------------
<S> <C>
Growth & Income................ $32,396,577
Large Cap Growth............... 7,589,304
Mid Cap Growth................. 3,912,751
Mid Cap Value.................. 299,142
Small Cap Growth............... 931,972
Small Cap Index................ 685,194
International Equity........... 4,677,750
International Small Cap........ 702,814
Aggressive Growth LifeStyle.... 2,752,224
Moderate Growth LifeStyle...... 1,729,036
Conservative Growth LifeStyle.. 1,333,892
</TABLE>
140
<PAGE>
TRUSTEES
ALICE T. KANE, CHAIRPERSON
JOSEPH T. GRAUSE, JR.
DR. JUDITH L. CRAVEN
WILLIAM F. DEVIN
DR. TIMOTHY J. EBNER
JUDGE GUSTAVO E. GONZALES, JR.
KENNETH J. LAVERY
DR. JOHN E. MAUPIN, JR.
BEN H. LOVE
OFFICERS
ALICE T. KANE, PRESIDENT
JOSEPH T. GRAUSE, JR., VICE PRESIDENT
THOMAS J. BROWN, VICE PRESIDENT AND TREASURER
JOHN I. FITZGERALD, VICE PRESIDENT AND SECRETARY
JOHN N. PACKS, VICE PRESIDENT AND ASSISTANT TREASURER
INDEPENDENT ACCOUNTANTS
PRICEWATERHOUSECOOPERS LLP
160 Federal Street
BOSTON, MA 02210
ADVISER
AMERICAN GENERAL ASSET MANAGEMENT CORP.
286 CONGRESS STREET
BOSTON, MA 02210
TRANSFER AND DIVIDEND AGENT
STATE STREET BANK AND TRUST COMPANY
P.O. BOX 8505
BOSTON, MA 02266-8505
DISTRIBUTOR
AMERICAN GENERAL FUNDS DISTRIBUTORS, INC.
286 CONGRESS STREET
BOSTON, MA 02210
NORTH AMERICAN FUNDS SHAREHOLDER SERVICES
286 CONGRESS STREET
BOSTON, MA 02210
800-872-8037
<PAGE>
NORTH AMERICAN FUNDS
286 Congress Street, Boston, MA 02210
www.northamericanfunds.com
[VARIOUS FUND COMPANY LOGOS ARE SCREENED IN BACKGROUND]
151 NAF 1000:90310