<PAGE> 1
[GRAPHIC: PHOTO COLLAGE]
Nations
International
Value Fund
Nations
International
Equity Fund
Nations
International
Growth Fund
Nations
Emerging Markets
Fund
INTERNATIONAL
STOCK FUNDS
Semiannual report for the period
ended September 30, 1999
Nations Funds
<PAGE> 2
This Report is submitted for the general information of shareholders of Nations
Funds. This material must be preceded or accompanied by a current Nations Funds
prospectus.
Nations Funds distributor: Stephens Inc., which is not affiliated with Bank of
America N.A., is not a bank, and securities offered by it are not guaranteed by
any bank or insured by the FDIC. Stephens Inc., member NYSE, SIPC.
Nations Funds investment adviser: Banc of America Advisors, Inc.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
<PAGE> 3
PRESIDENTS'
MESSAGE
DEAR SHAREHOLDER:
We're rapidly approaching the end of the year, and
the end of the twentieth century. While we all look
forward to the beginning of the next century, let's
first take a look back at the last six months and
then we'll discuss how Nations Funds is positioned as
we head into the year 2000.
RIDING THE WAVES IN THE U.S.
The last six months offered a snapshot of what we
often refer to as market volatility. And when we say
market volatility, we mean the ups and downs of the
U.S. stock market. Basically, what went up in the
second quarter of the year fell right back down in
the third quarter. During the spring, we witnessed
another Dow Jones Industrial Average*
milestone -- crossing the 11,000 mark -- and we saw a
broadening in the stock market, as value stocks and
small-company stocks came back into favor. This was a
change from the past few years where rallies have
been led by a narrow group of large-company stocks.
However, strong economic growth -- combined with
continued low inflation and low
unemployment -- caused the Federal Reserve Board to
raise interest rates twice by a total of 0.50%. These
rate hikes (on June 30 and August 24) caused the
markets to resemble the rough surf of the Atlantic
during one of our many hurricanes this past summer.
(In fact, Hurricane Floyd actually shut down Wall
Street in mid-September with torrential rains and
high winds.) At any rate, the stock market, as
represented by the Standard & Poor's 500 Composite
Stock Price Index (S&P 500)**, finished the third
quarter at 5.36% (year-to-date through September 30,
1999), 10% off its August high, with the average
stock in the S&P 500 off 20% from its high.
A BRIGHTER PICTURE OVERSEAS
International stock markets performed well in the
second quarter and actually outperformed the U.S. for
the first time in a number of years. The Morgan
Stanley Capital International (MSCI) Europe,
Australasia and Far East (EAFE) Index gained 4.4% in
the third quarter. A resurgent Japanese economy
helped to push international equity markets higher.
This is yet another example of the importance of
diversification. Investors investing exclusively in
the U.S. could miss out on opportunities overseas.
One way to ensure that your portfolio is properly
diversified is to seek the professional advice of an
investment professional. An investment professional
can help explain the additional risks involved in
international investing, as well as educate you on
the potential rewards that have historically come
from a diversified portfolio including international
investments.
* The Dow Jones Industrial Average is a
price-weighted index of 30 of the largest, most
widely held stocks traded on the New York Stock
Exchange. It is unmanaged and unavailable for
investment.
** The Standard & Poor's 500 Composite Stock Price
Index is an unmanaged index of 500 widely held
common stocks. It is unavailable for investment.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
<PAGE> 4
PRESIDENTS'
MESSAGE continued...
STAY THE COURSE
While the ride has been bumpy over the last six
months, we believe the best course of action for an
investor is to stay focused on your long-term goals
and remain invested. We understand that Y2K has been
on investors' minds for quite some time now. As most
Americans have come to realize, substantial efforts
have been made by companies in the U.S. and abroad to
try to ensure that the Y2K problem will be avoided.
Regardless, Y2K will come and go and those investors
that stick to their long-term goals, as history has
shown, stand a better chance of attaining them.
WHAT'S NEW AT NATIONS FUNDS
We've made some great strides during the past six
months and are poised to make Nations Funds a
stronger presence in the mutual fund industry in the
new year. We completed the largest merger in mutual
fund history on May 21 when we combined Pacific
Horizon Funds with Nations Funds. Combining these two
entities provides you with more investment choices
and a broader range of investment expertise. This is
part of our ongoing commitment to providing you with
the best products and services, and helping you
pursue a lifetime of financial goals.
In fact, our selection of mutual funds continued to
grow as we introduced Nations Strategic Equity Fund,
a large-company stock fund managed for tax
efficiency, on August 1. This fund is managed by Bank
of America Investment Management -- a Nations Funds
Manager of Distinction(SM).
We look forward to the opportunities ahead of us in
the new year and to making your investment experience
with Nations Funds a successful one. Should you have
any questions or comments on your semiannual report,
please contact your investment professional or call
us at 1.800.321.7854. You can also visit us online at
www.nations-funds.com.
Once again, thank you for being a part of the Nations
Funds family.
Sincerely,
/s/ A. Max Walker
A. Max Walker
President and Chairman of the Board
/s/ Robert H. Gordon
Robert H. Gordon
President, Banc of America Advisors, Inc.
September 30, 1999
<PAGE> 5
Table
of
contents
<TABLE>
<S> <C>
Nations Funds Spectrum 2
FINANCIAL STATEMENTS
Statements of net assets
- Nations International Value Fund 3
- Nations International Equity Fund 6
- Nations International Growth Fund 11
- Nations Emerging Markets Fund 14
Statements of operations 18
Statements of changes in net assets 20
Schedules of capital stock activity 22
Financial highlights 26
Notes to financial statements 34
</TABLE>
<TABLE>
<S> <C>
---------------------------------------------------------------------------------
NATIONS FUNDS [Dalbar Logo]
RECOGNIZED FOR
OUTSTANDING DALBAR, Inc., is a well-respected research firm
CUSTOMER SERVICE that measures customer service levels and
establishes benchmarks in the financial services
In recognition of our industry.
commitment to retail
shareholders through
consistently providing
superior customer service,
Nations Funds was awarded
DALBAR Key Honors in 1997
and 1998.
---------------------------------------------------------------------------------
</TABLE>
<PAGE> 6
THE NATIONS FUNDS FAMILY OF FUNDS
LOWER
RISK/
REWARD
POTENTIAL
MONEY
MARKET
FUNDS
Nations Prime Fund
Nations Government
Money Market Fund
Nations Treasury Fund
Nations Tax Exempt
Fund
FIXED
INCOME
FUNDS
INCOME FUNDS
Nations Diversified
Income Fund
Nations U.S. Government
Bond Fund
Nations Strategic
Fixed Income Fund
Nations Intermediate
Bond Fund
Nations Government
Securities Fund
Nations Short-
Intermediate
Government Fund
Nations Short-Term
Income Fund
TAX-EXEMPT
INCOME FUNDS
Nations Municipal
Income Fund
Nations State-Specific
Long-Term Municipal
Bond Funds (CA, FL, GA,
MD, NC, SC, TN, TX, VA)
Nations Intermediate
Municipal Bond Fund
Nations State-Specific
Intermediate Municipal
Bond Funds (FL, GA, MD,
NC, SC, TN, TX, VA)
Nations Short-Term
Municipal Income Fund
DOMESTIC
EQUITY
FUNDS
GROWTH FUNDS
Nations Small Company
Growth Fund
Nations Emerging
Growth Fund
Nations Marsico
Focused Equities Fund
Nations Disciplined
Equity Fund
Nations Capital
Growth Fund
Nations Strategic
Equity Fund
Nations Blue Chip Fund
GROWTH AND
INCOME FUNDS
Nations Marsico Growth
& Income Fund
Nations Equity
Income Fund
Nations Value Fund
Nations Asset
Allocation Fund
Nations Balanced
Assets Fund
Nations Capital
Income Fund
INTERNATIONAL
FUNDS
Nations Emerging
Markets Fund
Nations International
Growth Fund
Nations International
Equity Fund
Nations International
Value Fund
HIGHER
RISK/
REWARD
POTENTIAL
INDEX FUNDS
Nations Equity Index Fund
Nations Managed Index Fund
Nations Managed SmallCap Index Fund
Nations Managed SmallCap Value Index Fund
Nations Managed Value Index Fund
ASSET ALLOCATION PORTFOLIOS
Nations LifeGoal Balanced Growth Portfolio
Nations LifeGoal Growth Portfolio
Nations LifeGoal Income and Growth Portfolio
<PAGE> 7
NATIONS FUNDS
Nations International Value Fund
STATEMENT OF NET ASSETS SEPTEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 94.9%
AUSTRIA -- 0.2%
24,860 EVN AG, ADR......................... $ 635
---------
BRAZIL -- 7.0%
676,000 Banco Bradesco SA, ADR.............. 3,204
827,450 Centrais Eletricas Brasileiras SA,
ADR (Electrobas).................. 6,896
20,575 Centrais Geradoras do Sul do Brasil
SA++.............................. 64
469,000 Compania Cervejaria Brahma, ADR..... 5,628
8,800 Embratel Participacoes, ADR++....... 101
495,600 Petroleo Brasileiros, ADR........... 7,641
880 Tele Celular Sul Participacoes SA,
ADR............................... 17
2,933 Tele Centro Oeste Celular
Participacoes SA, ADR............. 10
1,760 Tele Centro Sul Participacoes,
ADR++............................. 98
176 Tele Leste Celular Participacoes SA,
ADR............................... 6
440 Tele Nordeste Celular Participacoes
SA, ADR........................... 10
176 Tele Norte Celular Participacoes SA,
ADR............................... 5
8,800 Tele Norte Leste Participacoes,
ADR............................... 136
35,500 Telebras, ADR Pfd. Block............ 2,660
440 Telemig Celular Participacoes SA,
ADR++............................. 13
3,520 Telesp Celular Participacoes SA,
ADR............................... 92
8,800 Telesp Participacoes SA, ADR........ 139
---------
26,720
---------
DENMARK -- 1.9%
64,310 Den Danske Bank, ADR................ 7,325
---------
FRANCE -- 8.4%
426,100 Alcatel SA, ADR..................... 11,824
140,100 Compagnie Generale des
Establessements Michelin.......... 6,613
148,600 Elf Aquitaine, ADR.................. 13,615
270 Eridania Beghin-Say SA.............. 33
---------
32,085
---------
GERMANY -- 7.7%
150,300 BASF AG, ADR........................ 6,435
220,000 Bayersche Motoren Werke AG.......... 6,209
319,600 Deutsche Telekom AG................. 13,103
16,800 Munchener Ruckvers++................ 3,394
---------
29,141
---------
HONG KONG -- 5.2%
1,574,000 Citic Pacific, Ltd. ................ 4,357
164,400 Hutchison Whampoa, Ltd., ADR........ 7,646
1,616,500 Swire Pacific, Ltd. 'A', ADR........ 7,658
---------
19,661
---------
ITALY -- 4.8%
144,100 ENI Spa............................. 9,078
104,500 Telecom Italia Spa.................. 9,007
---------
18,085
---------
JAPAN -- 18.0%
63,100 Canon, Inc. ........................ 1,869
132,000 Daiichi Pharmaceutical Company,
Ltd. ............................. 2,006
145,100 Hitachi Ltd., ADR................... 15,834
906,000 Komatsu............................. 6,008
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ------------------------------------------------------------
<C> <S> <C>
JAPAN -- (CONTINUED)
169,500 Kyocera Corporation, ADR............ $ 12,501
35,900 Matsushita Electric Industrial
Company Ltd., ADR................. 7,503
2,393,000 Mitsubishi Heavy Industries,
Ltd. ............................. 9,215
742,000 Nippon Oil Company, Ltd. ........... 3,045
183,200 Tokio Marine & Fire Insurance
Company, Ltd., ADR................ 10,534
---------
68,515
---------
MEXICO -- 2.8%
152,125 Telefonos de Mexico, ADR............ 10,839
---------
NETHERLANDS -- 3.8%
159,265 ING Groep NV, ADR................... 8,720
132,190 Royal KPN NV, ADR................... 5,882
---------
14,602
---------
NEW ZEALAND -- 0.5%
60,000 Telecom Corporation of New Zealand
Ltd., ADR......................... 1,920
---------
PORTUGAL -- 1.1%
97,360 Portugal Telecommunications, ADR.... 4,022
---------
SINGAPORE -- 4.0%
263,453 DBS Group Holdings, ADR............. 11,775
797,900 Jardine Matheson Holdings, Ltd.,
ADR............................... 3,271
---------
15,046
---------
SOUTH AFRICA -- 2.9%
311,600 De Beers Consolidated Mines, Ltd.,
ADR............................... 8,413
131,700 Iscor, Ltd., ADR.................... 509
263,600 South African Breweries plc++....... 2,260
---------
11,182
---------
SOUTH KOREA -- 0.3%
31,000 Korea Telecom, ADR++................ 1,147
---------
SPAIN -- 1.4%
97,800 Argentaria Caja Postal y Banco
Hipotecario de Espana, SA,
ADR++............................. 4,315
58,200 Union Electrica Fenosa SA........... 873
---------
5,188
---------
SWITZERLAND -- 2.5%
234,400 Allied Zurich plc, ADR++............ 5,443
12,800 Swisscom AG++....................... 3,992
---------
9,435
---------
UNITED KINGDOM -- 20.7%
365,000 Allied Domecq plc................... 2,077
137,000 BOC Group plc....................... 2,856
313,200 British American Tobacco plc, ADR... 5,442
149,500 British Steel plc, ADR++............ 3,850
166,140 Coats Viyella plc, ADR.............. 454
256,351 Diageo plc, ADR..................... 10,622
228,500 HSBC Holdings plc................... 13,267
884,060 Invensys plc........................ 8,561
277,400 Marks & Spencer plc, ADR............ 8,662
224,800 National Power plc.................. 7,166
600,300 Reckitt & Colman.................... 7,454
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE> 8
NATIONS FUNDS
Nations International Value Fund
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ------------------------------------------------------------
<C> <S> <C>
UNITED KINGDOM -- (CONTINUED)
653,700 Royal & Sun Alliance Insurance Group
plc............................... $ 5,108
851,000 Safeway plc......................... 3,132
20,000 Tate & Lyle plc, ADR................ 493
---------
79,144
---------
VENEZUELA -- 1.7%
240,900 Cia Anonima Nacional Telefonos de
Venezuela, ADR (CANTV)............ 6,459
---------
TOTAL COMMON STOCKS
(Cost $348,072)................... 361,151
---------
</TABLE>
<TABLE>
<CAPTION>
SHARES
(000)
- ---------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 34.8%
(Cost $132,277)
132,277 Nations Cash Reserves#.............. 132,277
--------
TOTAL INVESTMENTS
(Cost $480,349*)........... 129.7% 493,428
--------
OTHER ASSETS AND
LIABILITIES (NET).......... (29.7)%
Receivable for Fund shares sold..... $ 3,076
Dividends receivable................ 2,520
Interest receivable................. 96
Prepaid expenses.................... 47
Collateral on securities loaned..... (114,680)
Payable for Fund shares redeemed.... (2,985)
Investment advisory fee payable..... (244)
Administration fee payable.......... (67)
Shareholder servicing and
distribution fees payable......... (75)
Due to custodian.................... (1)
Distributions payable............... (98)
Payable for investment securities
purchased......................... (360)
Accrued Trustees'/Directors' fees
and expenses...................... (10)
Accrued expenses and other
liabilities....................... (67)
--------
TOTAL OTHER ASSETS AND LIABILITIES
(NET)............................. (112,848)
--------
NET ASSETS................... 100.0% $380,580
========
NET ASSETS CONSIST OF:
Undistributed net investment
income............................ $ 2,744
Accumulated net realized gain on
investments sold, foreign
currencies and net other assets... 10,520
Net unrealized appreciation of
investments, foreign currencies
and net other assets.............. 13,083
Paid-in capital..................... 354,233
--------
NET ASSETS.......................... $380,580
========
</TABLE>
<TABLE>
<CAPTION>
VALUE
- -----------------------------------------------------------
- ---------
<C> <S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and
redemption price per share
($283,053,569 / 17,353,074 shares
outstanding)...................... $16.31
------
------
INVESTOR A SHARES:
Net asset value and redemption price
per share ($77,936,145 / 4,780,009
shares outstanding)............... $16.30
------
------
Maximum sales charge................ 5.75%
Maximum offering price per share.... $17.29
INVESTOR B SHARES:
Net asset value and offering price
per share+
($16,351,570 / 1,009,945 shares
outstanding)...................... $16.19
------
------
INVESTOR C SHARES:
Net asset value and offering price
per share+ ($3,238,556 / 199,821
shares outstanding)............... $16.21
------
------
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $28,270 and gross
depreciation of $15,191 for Federal income tax purposes. At September 30,
1999, the aggregate cost of securities for Federal income tax purposes was
$480,349.
++ Non-income producing security.
+ The redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
# Money market mutual fund registered under the Investment Company Act of 1940,
as amended, and sub-advised by TradeStreet Investment Associates, Inc. A
portion of this amount represents cash collateral received from securities
lending activity (Note 8). The portion that represents cash collateral is
$114,680.
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE> 9
NATIONS FUNDS
Nations International Value Fund
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1999 (UNAUDITED)
At September 30, 1999, sector diversification was as follows:
<TABLE>
% OF NET VALUE
SECTOR DIVERSIFICATION ASSETS (000)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks:
Telecommunications.......................................... 15.7% $ 59,658
Banking..................................................... 10.5 39,886
Electronics................................................. 10.2 38,724
Oil and Gas................................................. 8.0 30,334
Insurance................................................... 6.4 24,479
Beverages................................................... 4.9 18,510
Electrical Equipment........................................ 4.2 15,834
Diversified................................................. 3.2 12,015
Machinery and Engineering................................... 2.4 9,215
Financial Services.......................................... 2.3 8,720
Retail -- Department Stores................................. 2.3 8,662
Manufacturing............................................... 2.2 8,561
Metals and Mining........................................... 2.2 8,413
Household Products.......................................... 2.1 7,908
Investment Companies/Trusts................................. 2.0 7,646
Electric Power.............................................. 1.9 7,166
Automobile Parts Manufacturers.............................. 1.7 6,613
Chemicals -- Diversified.................................... 1.7 6,435
Automobiles and Trucks...................................... 1.6 6,209
Machinery and Equipment..................................... 1.6 6,008
Other....................................................... 7.8 30,155
---------- -------------
TOTAL COMMON STOCKS......................................... 94.9 361,151
INVESTMENT COMPANIES........................................ 34.8 132,277
---------- -------------
TOTAL INVESTMENTS........................................... 129.7 493,428
OTHER ASSETS AND LIABILITIES (NET).......................... (29.7) (112,848)
---------- -------------
NET ASSETS.................................................. 100.0% $ 380,580
---------- -------------
---------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE> 10
NATIONS FUNDS
Nations International Equity Fund
STATEMENT OF NET ASSETS SEPTEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 98.1%
ARGENTINA -- 0.1%
89,600 Perez Companc, ADR.................... $ 1,075
--------
AUSTRALIA -- 2.3%
149,843 Broken Hill Proprietary Company,
Ltd.++.............................. 1,726
243,071 Cable and Wireless Optus++............ 523
308,417 Coles Myer Ltd. ...................... 1,612
33,000 Computershare Limited................. 396
429,601 National Australia Bank............... 6,288
486,962 News Corporation...................... 3,416
150,000 Rio Tinto Ltd. ....................... 2,544
38,700 Telstra Corporation................... 201
14,000 Telstra Corporation ADS Rep 5 Ord.
NPV................................. 369
--------
17,075
--------
BELGIUM -- 0.3%
20,000 G.I.B. ............................... 867
70,000 Global Telesystems Com++.............. 1,380
--------
2,247
--------
BRAZIL -- 1.2%
96,080 Cemig CIA Energ, ADR.................. 1,476
86,600 Companhia Vale do Rio Doce, ADR....... 1,830
34,630 Embratel Participacoes, ADR++......... 396
31,721 Tele Centro Sul Participacoes,
ADR++............................... 1,761
37,500 Tele Norte Leste Participacoes, ADR... 581
55,596 Telesp Celular Participacoes SA,
ADR................................. 1,452
23,048 Telesp Participacoes SA, ADR.......... 363
81,600 Telesp Participacoes SA, ADR.......... 1,285
--------
9,144
--------
CANADA -- 1.5%
51,691 Abitibi-Consolidated Inc. ............ 621
45,662 Bank of Nova Scotia................... 979
51,158 BCE, Inc. ............................ 2,541
11,000 Magna International Inc., Class A, Sub
Voting Com NPV...................... 543
63,495 Nortel Networks Corporation........... 3,241
36,000 Nortel Networks Corporation........... 1,837
59,802 Toronto-Dominion Bank................. 1,158
--------
10,920
--------
CHILE -- 0.0%+
8,189 Enersis, ADR.......................... 171
10,100 Telecom De Chile, ADR................. 182
--------
353
--------
DENMARK -- 1.3%
57,700 Den Danske Bank Group................. 6,572
49,600 Novo Nordisk A/S...................... 2,963
--------
9,535
--------
FINLAND -- 1.5%
2,160 Huhtamaki Oyj......................... 68
108,462 Nokia AB Oy........................... 9,715
35,000 Sonera YHTYMA Oyj..................... 1,014
--------
10,797
--------
FRANCE -- 10.0%
29,635 Axa++................................. 3,749
15,989 Banque Nationale de Paris (BNP)....... 1,276
13,631 Bouygues.............................. 4,323
11,300 Cap Gemini............................ 1,781
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ------------------------------------------------------------
<C> <S> <C>
FRANCE -- (CONTINUED)
3,630 Castorama Dubois...................... $ 1,021
11,700 Compagnie De Saint-Gobain............. 2,181
60,000 Compagnie Generale des Establessements
Michelin............................ 2,833
40,000 Credit Commercial de France........... 5,044
19,760 Danone................................ 4,808
69,584 Elf Aquitaine......................... 12,153
58,446 France Telecom SA..................... 5,129
1,061 Havas Advertising SA.................. 254
22,751 Lafarge-Coppee........................ 2,514
2,785 Publicis SA........................... 647
55,627 Sanofi-Synthelabo++................... 2,370
12,620 Schneider Electric SA................. 923
51,043 Societe Generale...................... 10,518
9,618 Societe Television Francaise I........ 2,691
11,829 St Microelectronics................... 922
7,000 Suez Lyonnaise des Eaux............... 1,133
23,516 Total Fina............................ 2,955
90,000 Usinor................................ 1,270
46,328 Vivendi............................... 3,254
--------
73,749
--------
GERMANY -- 7.0%
83,800 BASF AG............................... 3,588
97,070 Bayer AG.............................. 3,871
65,957 Bayersche Motoren Werke AG............ 1,861
57,636 DaimlerChrysler AG.................... 3,971
67,550 Deutsche Bank AG...................... 4,521
30,000 Deutsche Telekom AG................... 1,230
25,000 Dresdner Bank AG...................... 1,181
138,854 Hoechst AG............................ 5,863
30,000 Kamps AG.............................. 1,827
74,806 Mannesman AG++........................ 11,951
25,000 PrimaCom.............................. 1,371
60,000 RWE AG................................ 2,489
79,600 SAP AG++.............................. 3,006
15,000 Siemens AG............................ 1,239
30,000 Veba AG............................... 1,644
33,706 Volkswagen AG......................... 1,881
4,812 Volkswagen AG Pfd. ................... 152
--------
51,646
--------
HOLLAND -- 0.8%
82,500 Unilever NV........................... 5,621
--------
HONG KONG -- 2.8%
587,600 Cable and Wire (HK Telecom)........... 1,290
115,000 Cheung Kong Holdings.................. 959
1,814,000 China Telecom (HK)++.................. 5,593
132,500 CLP Holdings.......................... 623
1,068,000 First Pacific Company Ltd. ........... 653
69,200 Hang Seng Bank........................ 733
141,000 Henderson Land Development Company,
Ltd. ............................... 652
652,600 HSBC Holdings......................... 7,477
177,000 Hutchison Whampoa..................... 1,646
130,000 New World Development Company......... 285
86,000 Sun Hung Kai Properties............... 656
--------
20,567
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE> 11
NATIONS FUNDS
Nations International Equity Fund
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ------------------------------------------------------------
<C> <S> <C>
IRELAND -- 1.6%
247,242 Bank of Ireland....................... $ 2,020
234,621 CRH plc Ord. ......................... 4,492
71,200 Elan Corporation ADR++................ 2,390
44,400 Elan Corporation plc++................ 1,505
165,484 Jefferson Smurfit Group plc........... 316
363,148 Smurfit (Jefferson) Ord............... 1,075
--------
11,798
--------
ITALY -- 4.3%
30,000 Bipop-Carire SpA...................... 1,284
1,670,717 ENI Spa (REGD)........................ 10,480
152,759 Mediaset SpA.......................... 1,560
75,330 Monte dei Paschi di Siena SpA++**..... 322
160,329 San Paolo-IMI SpA..................... 4,169
641,000 Tecnost SpA++......................... 1,345
908,831 Telecom Italia Mobile................. 5,652
809,021 Telecom Italia Spa.................... 7,030
--------
31,842
--------
JAPAN -- 21.7%
13,800 Advantest Corporation................. 1,996
245,000 Asahi Bank............................ 1,760
352,000 Asahi Chemical Industry Co., Ltd. .... 1,961
8,700 Benesse Corporation................... 1,731
58,000 Bridgestone Corporation............... 1,623
150,000 Canon, Inc. .......................... 4,367
39,100 Chubu Electric Power Co., Inc. ....... 711
147,000 Dai Nippon Printing Company, Ltd. .... 2,733
3,000 Dai-Ichi Kangyo Bank, Ltd. ........... 37
229,000 Daiichi Pharmaceutical Company,
Ltd. ............................... 3,480
238,000 Daiwa Securities...................... 2,168
691 DDI Corporation....................... 5,192
63 East Japan Railway Company............ 401
41,000 Eisai Company, Ltd. .................. 1,040
89,000 Fuji Bank Ltd. ....................... 1,082
95,000 Fuji Photo Film....................... 3,257
140,000 Fujitsu............................... 4,366
102,000 Honda Motor Company................... 4,273
31,000 Ito-Yokado Company.................... 2,562
10,232 KDD Corporation....................... 1,058
13,100 Kojima Company Limited................ 709
247,000 Komatsu............................... 1,638
60,200 Kyocera Corporation................... 4,580
11,100 Mabuchi Motor Co., Ltd. .............. 1,445
536,000 Mitsubishi Heavy Industries, Ltd. .... 2,064
704,000 Mitsubishi Materials Corporation++.... 2,083
20,000 Mitsubishi Trust & Banking
Corporation......................... 244
243,000 Mitsui O.S.K. Lines, Ltd. ............ 454
76,000 Murata Manufacturing Company, Ltd. ... 7,638
43,700 Namco, Ltd. .......................... 1,724
10,300 Nichiei Company, Ltd. ................ 788
8,000 Nidec Corporation..................... 1,514
750,000 Nikko Securities Company, Ltd. ....... 6,340
35,100 Nintendo Company, Ltd. ............... 5,598
389,000 Nippon Steel Corporation.............. 1,056
1,007 Nippon Telegraph & Telephone.......... 12,391
3,230 Nippon Television Network
Corporation......................... 2,306
104,000 Nomura Securities..................... 1,612
32 NTT Mobile Communication.............. 631
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ------------------------------------------------------------
<C> <S> <C>
JAPAN -- (CONTINUED)
50,100 Promise Company, Ltd. ................ $ 4,033
14,000 Rohm Company.......................... 2,926
55,000 Sankyo Company........................ 1,653
58,000 Sanwa Bank............................ 776
19,000 Secom Company......................... 1,695
19,000 Secom Company, Ltd. .................. 1,731
108,000 Sharp Corporation..................... 1,731
24,300 Shinko Electric Industries............ 1,121
161,000 Shiseido Company, Limited............. 2,404
2,600 Softbank Corporation**................ 989
85,500 Sony Corporation...................... 12,776
22,200 Sony Music Entertainment.............. 2,763
85,000 Taiyo Yuden Company................... 2,810
20,100 Takefuji Corporation.................. 3,347
10,000 TDK Corporation....................... 1,158
70,000 Teijin Limited........................ 337
126,000 The Bank of Tokyo - Mitsubishi........ 1,935
121,000 Tokyo Broadcasting.................... 2,438
95,100 Tokyo Electric Power.................. 2,197
381,000 Toshiba Corporation................... 2,838
83,000 Toyota Motor Corporation.............. 2,643
14,000 Trend Micro, Inc.++................... 1,696
7,900 World Company......................... 852
83,000 Yamanouchi Pharmaceutical............. 3,890
--------
161,352
--------
MEXICO -- 1.6%
119,877 Carso Global Telecom++................ 667
134,400 Carso Global Telecom, ADR++........... 1,478
34,099 Cifra SA, ADR++....................... 536
24,664 Coca-Cola Femsa SA.................... 341
237,247 Fomento Economico Mexicano, SA de
C.V. ............................... 746
83,100 Grupo Carso SA de CV, ADR++........... 692
50,700 Grupo Televisa, GDR++................. 2,025
71,553 Telefonos de Mexico, ADR.............. 5,098
--------
11,583
--------
NETHERLANDS -- 6.6%
205,374 ABN AMRO Holding NV................... 4,615
30,000 Aegon NV.............................. 2,581
184,689 Akzo Nobel NV......................... 7,828
6,050 Asm Lithography Holding N.V.++........ 410
24,300 Benckiser NV.......................... 1,510
15,309 Fortis (NL) NV........................ 495
30,000 Gucci Group NV........................ 2,468
32,743 Gucci Group, ADR...................... 2,734
20,000 Heineken NV........................... 995
211,445 Internationale Nederlanden Groep NV... 11,485
20,000 Koninklijke Kpn NV.................... 876
421 Laurus NV............................. 10
32,436 Libertel NV++......................... 586
30,000 Nutreco Holding NV.................... 1,038
86,573 Philips Electronics NV................ 8,712
500 Randstad Holding NV................... 26
20,000 United Pan-Europe NV.................. 1,235
32,000 Wolters Kluwer NV..................... 1,097
--------
48,701
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 12
NATIONS FUNDS
Nations International Equity Fund
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ------------------------------------------------------------
<C> <S> <C>
PHILIPPINES -- 0.0%+
48,000 Bank of the Philippines Islands....... $ 130
5,700 Philippine Long Distance Telephone
Company............................. 123
--------
253
--------
PORTUGAL -- 1.0%
50,000 Banco Commercial Portugues++.......... 1,347
38,547 Portugal Telecom++.................... 1,604
100,000 Portugal Telecommunications, ADR...... 4,131
--------
7,082
--------
SINGAPORE -- 0.8%
171,895 DBS Group Holding Ltd. ............... 1,921
148,000 Oversea-Chinese Banking Corporation,
Ltd. ............................... 1,149
129,160 Overseas Union Bank................... 573
97,000 Sembcorp Logistics Limited++.......... 297
34,000 Singapore Press Holdings, Ltd. ....... 536
350,000 Singapore Technologies Engineering,
Ltd. ............................... 447
190,000 Singapore Telecommunications.......... 346
87,000 United Overseas Bank Ltd. ............ 660
--------
5,929
--------
SOUTH AFRICA -- 0.1%
15,000 Anglo American Platinum Corporation... 398
--------
SOUTH KOREA -- 1.3%
24,400 Housing and Commercial Bank Korea++... 471
56,700 Korea Electric Power Corporation...... 1,864
19,400 Korea Telecom Corporation++........... 1,198
27,413 Korea Telecom, ADR++.................. 1,014
21,400 L.G. Chemical Limited++**............. 731
26,173 Pohang Iron & Steel Company Ltd.,
ADR................................. 820
19,776 Samsung Electronics................... 3,203
48,570 SK Telecom Company, ADR............... 501
--------
9,802
--------
SPAIN -- 3.3%
7,104 Acciona SA............................ 327
70,000 Banco Popular Espanol SA.............. 4,834
120,000 Banco Santander Central Hispano....... 1,241
290,245 Endessa............................... 5,514
100,000 Indra Sistemas SA..................... 1,043
150,000 Repsol SA............................. 2,938
250,000 Repsol-YPF, SA........................ 4,984
6,962 Sogecable, SA++**..................... 190
208,226 Telefonica SA......................... 3,333
--------
24,404
--------
SWEDEN -- 1.3%
142,364 Ericsson (L.M.) Telephone Company,
Series B............................ 4,411
139,284 Investor AB........................... 1,648
200,000 Nordbanken Holding AB................. 1,122
18,361 Sandvik AB............................ 498
21,934 Sandvik Ab............................ 599
104,301 Svenska Handelsbanken AB.............. 1,457
--------
9,735
--------
SWITZERLAND -- 5.3%
4,494 Clariant AG........................... 2,036
2,271 Compagnie Financiere Richemont AG..... 4,598
10,000 Credit Suisse Group................... 1,833
817 Julius Baer Holdings, Ltd. ........... 2,423
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ------------------------------------------------------------
<C> <S> <C>
SWITZERLAND -- (CONTINUED)
2,913 Nestle SA (REGD)...................... $ 5,475
5,275 Novartis AG (REGD).................... 7,824
2,948 PubliGroupe SA........................ 2,049
300 Roche Holding AG...................... 3,472
600 Schweizerische Rueckversicherungs-
Gesellschaft (REGD)................. 1,198
5,549 Swisscom AG++......................... 1,731
8,461 UBS AG................................ 2,385
8,000 Zurich Allied AG...................... 4,463
--------
39,487
--------
TAIWAN -- 0.3%
67,527 Advanced Semiconductor++.............. 192
24,022 Advanced Semiconductor, GDR++......... 464
33,024 Asustek Computer, GDR++............... 439
23,700 Synnex Technology International,
GDR................................. 459
100,000 Taiwan Semiconductor++................ 420
--------
1,974
--------
THAILAND -- 0.1%
48,700 Advanced Info Services (FGN)++........ 557
--------
UNITED KINGDOM -- 18.9%
174,115 3i Group.............................. 2,185
300,000 Aegis Group........................... 620
460,235 Associated British Foods plc.......... 2,998
89,215 AstraZeneca Group plc................. 3,742
58,000 AstraZeneca Group plc................. 2,416
80,000 BAA................................... 806
217,421 Barclays.............................. 6,381
26,196 Bass plc.............................. 314
80,000 Bowthorpe............................. 746
310,000 BP Amoco Ord. ........................ 5,662
223,600 British Aerospace..................... 1,474
40,000 British Airways plc................... 2,285
165,800 British Steel plc, ADR++.............. 4,269
709,906 British Telecommunications Ord. ...... 10,751
362,985 Carlton Communications plc............ 2,756
60,200 Colt Telecom Group++.................. 1,428
171,600 Compass Group......................... 1,683
278,370 Diageo plc............................ 2,853
296,313 EMI Group plc......................... 2,169
220,552 Glaxo Wellcome Ord. .................. 5,754
581,334 Granada Group......................... 4,978
70,000 Hays.................................. 755
155,400 HSBC Holdings......................... 1,779
514,678 Invensys plc.......................... 2,492
160,000 Lloyds TSB Group...................... 1,989
59,969 Logica................................ 785
680,211 Marks & Spencer plc................... 3,540
48,400 Misys plc............................. 471
5,399 National Westminster Bank plc......... 126
170,997 Orange Ord.++......................... 3,374
76,494 Peninsular and Oriental Steam
Navigation Company.................. 1,164
524,246 PowerGen plc.......................... 5,323
126,902 Reckitt & Colman...................... 1,576
70,000 Royal Bank of Scotland................ 1,503
834,488 ScottishPower plc..................... 7,668
180,106 Securicor Ord. ....................... 1,778
1,883,540 Shell Transport and Trading Company
Ord. ............................... 14,083
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 13
NATIONS FUNDS
Nations International Equity Fund
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ------------------------------------------------------------
<C> <S> <C>
UNITED KINGDOM -- (CONTINUED)
581,407 Smithkline Beecham Ord. .............. $ 6,688
166,935 Smiths Industries plc................. 2,367
1,285,084 Tesco plc............................. 4,016
200,000 Unilever.............................. 1,892
315,544 Vodafone AIRTOUCH Ord. ............... 7,473
270,475 WPP Group Ord. ....................... 2,517
--------
139,629
--------
UNITED STATES -- 1.1%
50,716 Pharmacia & Upjohn, Inc. ............. 2,518
31,730 STMicroelectronics NV................. 2,348
113,587 The News Corporation Ltd. ............ 3,230
--------
8,096
--------
TOTAL COMMON STOCKS
(Cost $665,651)..................... 725,351
--------
</TABLE>
<TABLE>
<CAPTION>
SHARES
(000)
- ---------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 11.7%
(Cost 86,462)
86,462 Nations Cash Reserves#............... 86,462
--------
TOTAL INVESTMENTS
(Cost $752,113*)............ 109.8% 811,813
--------
OTHER ASSETS AND
LIABILITIES (NET)........... (9.8)%
Receivable for investment securities
sold............................... $ 27,136
Receivable for Fund shares sold...... 2
Dividends receivable................. 2,099
Interest receivable.................. 202
Miscellaneous receivables............ 905
Prepaid expenses..................... 42
Collateral on securities loaned...... (73,890)
Payable for Fund shares redeemed..... (6)
Investment advisory fee payable...... (2,680)
Administration fee payable........... (721)
Shareholder servicing and
distribution fees payable.......... (116)
Due to custodian..................... (4,851)
Payable for investment securities
purchased.......................... (19,854)
Accrued Trustees'/Directors' fees and
expenses........................... (62)
Accrued expenses and other
liabilities........................ (598)
--------
TOTAL OTHER ASSETS AND
LIABILITIES (NET).................. (72,392)
--------
NET ASSETS.................... 100.0% $739,421
========
NET ASSETS CONSIST OF:
Undistributed net investment
income............................. $ 1,744
Accumulated net realized gain on
investments sold, foreign
currencies and net other assets.... 110,696
Net unrealized appreciation of
investments, foreign currencies and
net other assets................... 59,620
Paid-in capital...................... 567,361
--------
NET ASSETS........................... $739,421
========
</TABLE>
<TABLE>
<CAPTION>
VALUE
- ------------------------------------------------------------
- ---------
<C> <S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and
redemption price per share
($689,376,132 / 47,963,351
shares outstanding)................
$14.37
-----
-----
INVESTOR A SHARES:
Net asset value and redemption price
per share ($21,577,711 / 1,518,680
shares
outstanding).......................
$14.21
-----
-----
Maximum sales charge................. 5.75%
Maximum offering price per share..... $15.08
INVESTOR B SHARES:
Net asset value and offering price
per share## ($27,620,858 / 1,982,830
shares
outstanding).......................
$13.93
------
------
INVESTOR C SHARES:
Net asset value and offering price
per share## ($846,479 / 61,943
shares outstanding)................ $13.67
------
------
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $89,925 and gross
depreciation of $30,225 for Federal income tax purposes. At September 30,
1999, the aggregate cost of securities for Federal income tax purposes was
$752,113.
** Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
++ Non-income producing security.
## The redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
+ Amount represents less than 0.1%.
# Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates, Inc.
A portion of this amount represents cash collateral received from securities
lending activity (Note 8). The portion that represents cash collateral is
$73,890.
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 14
NATIONS FUNDS
Nations International Equity Fund
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1999 (UNAUDITED)
At September 30, 1999, sector diversification was as follows:
<TABLE>
% OF NET VALUE
SECTOR DIVERSIFICATION ASSETS (000)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks:
Telecommunications.......................................... 16.5% $ 122,328
Banking..................................................... 14.7 108,800
Oil and Gas................................................. 7.3 54,330
Drugs....................................................... 6.1 45,184
Food Producers.............................................. 3.7 27,675
Utilities -- Electric....................................... 3.6 26,480
Electronics................................................. 3.2 23,755
Media....................................................... 3.1 22,603
Financial Services.......................................... 2.8 20,473
Machinery and Equipment..................................... 2.3 17,286
Electrical Components....................................... 2.3 16,940
Chemicals -- Diversified.................................... 2.2 16,014
Electrical Equipment........................................ 2.1 15,265
Automobiles and Trucks...................................... 2.0 14,781
Diversified................................................. 2.0 14,549
Insurance................................................... 1.6 11,991
Construction................................................ 1.2 9,142
Metals and Mining........................................... 1.2 8,581
Chemicals -- Basic.......................................... 1.1 7,828
Steel....................................................... 1.0 7,415
Other....................................................... 18.1 133,931
---------- -------------
TOTAL COMMON STOCKS......................................... 98.1 725,351
INVESTMENT COMPANIES........................................ 11.7 86,462
---------- -------------
TOTAL INVESTMENTS........................................... 109.8 811,813
OTHER ASSETS AND LIABILITIES (NET).......................... (9.8) (72,392)
---------- -------------
NET ASSETS.................................................. 100.0% $ 739,421
---------- -------------
---------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 15
NATIONS FUNDS
Nations International Growth Fund
STATEMENT OF NET ASSETS SEPTEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -----------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 95.8%
AUSTRALIA -- 6.6%
250,000 Australia and New Zealand Banking
Group.............................. $ 1,672
500,000 Cable and Wireless Optus++........... 1,077
600,000 Colonial, Ltd. ...................... 2,177
400,492 News Corporation..................... 2,810
411,768 Southern Pacific Petroleum++......... 914
100,000 Telstra Corporation ADS.............. 2,638
--------
11,288
--------
BRAZIL -- 1.5%
161,000 Tele Norte Leste Participacoes,
ADR................................ 2,496
--------
FRANCE -- 10.1%
15,000 Accor++.............................. 3,497
20,000 Equant NV++.......................... 1,627
5,000 L'Oreal.............................. 3,192
5,000 Promodes............................. 4,422
104,000 Sanofi-Synthelabo++.................. 4,429
--------
17,167
--------
GERMANY -- 8.8%
130,000 Bayersche Motoren Werke AG........... 3,669
40,000 Deutsch Pfandbrief-Und Hypothekenbank
AG (DePfa-Bank).................... 3,301
50,000 Henkel Kgaa.......................... 3,142
30,000 Mannesman AG++....................... 4,791
--------
14,903
--------
IRELAND -- 6.6%
400,000 Bank of Ireland...................... 3,267
300,000 CRH plc Ord. ........................ 5,744
67,000 Elan Corporation ADR++............... 2,249
--------
11,260
--------
ITALY -- 0.4%
300,000 Tecnost SpA++........................ 629
--------
JAPAN -- 15.7%
240,000 Daiwa Securities..................... 2,187
181 East Japan Railway Company........... 1,153
50,000 Ito-Yokado Company................... 4,133
200,000 Kao Corporation...................... 5,654
300,000 Matsushita Electric Industrial
Company............................ 6,382
250,000 Sharp Corporation.................... 4,006
250,000 Toppan Printing Company.............. 3,147
--------
26,662
--------
MEXICO -- 1.4%
100,000 Cifra SA, ADR++...................... 1,573
45,920 Panamerican Beverages, Inc. ......... 761
--------
2,334
--------
NETHERLANDS -- 6.8%
60,000 Getronics NV......................... 3,236
65,000 Internationale Nederlanden Groep
NV................................. 3,530
50,000 Numico (Koninklijke) NV.............. 2,072
80,000 Wolters Kluwer NV.................... 2,743
--------
11,581
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -----------------------------------------------------------
<C> <S> <C>
NEW ZEALAND -- 0.2%
178,380 Contact Energy++..................... $ 289
--------
PORTUGAL -- 1.7%
70,000 Portugal Telecom++................... 2,913
--------
SINGAPORE -- 1.9%
290,750 DBS Group Holding Ltd. .............. 3,249
--------
SOUTH AFRICA -- 1.1%
1,784,000 Sanlam++............................. 1,948
--------
SPAIN -- 4.1%
90,000 Gas Natural.......................... 1,925
255,000 Repsol SA............................ 4,994
--------
6,919
--------
SWEDEN -- 5.1%
160,000 Atlas Copco AB, Series "A"........... 4,489
42,000 Atlas Copco AB, Series "B"........... 1,163
100,000 Ericsson (L.M.) Telephone Company,
Series B........................... 3,098
--------
8,750
--------
SWITZERLAND -- 3.3%
1,000 Nestle SA (REGD)..................... 1,879
2,500 Novartis AG (REGD)................... 3,709
--------
5,588
--------
UNITED KINGDOM -- 20.5%
300,000 Amvescap Ord. ....................... 2,448
1,500,000 Azlan Group Ord.++................... 1,989
350,000 Bank of Scotland Ord. ............... 4,176
50,000 EIDOS Ord.++......................... 3,149
350,000 Granada Group........................ 2,997
500,000 Securicor Ord. ...................... 4,937
700,000 Shell Transport and Trading Company
Ord. .............................. 5,233
300,000 Smithkline Beecham Ord. ............. 3,451
200,000 Standard Chartered Bank Ord. ........ 2,892
400,000 WPP Group Ord. ...................... 3,722
--------
34,994
--------
TOTAL COMMON STOCKS
(Cost $108,542)...................... 162,970
--------
RIGHTS -- 0.1%
SWEDEN -- 0.1%
160,000 Atlas Copco AB, Series "A"
Rights++........................... 194
42,000 Atlas Copco AB, Series "B"
Rights++........................... 47
--------
241
--------
TOTAL RIGHTS
(Cost $0)............................ 241
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 16
NATIONS FUNDS
Nations International Growth Fund
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
(000) (000)
- ----------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 7.4%
(Cost $12,681)
12,681 Nations Cash Reserves#............. $ 12,681
--------
TOTAL INVESTMENTS
(Cost $121,223*)............ 103.3% 175,892
--------
OTHER ASSETS AND
LIABILITIES (NET)........... (3.3)%
Cash............................... $ 7,903
Receivable for investment
securities sold.................... 2,572
Receivable for Fund shares sold.... 4
Dividends receivable............... 777
Interest receivable................ 17
Prepaid expenses................... 43
Collateral on securities loaned.... (12,681)
Payable for Fund shares redeemed... (4,005)
Investment advisory fee payable.... (116)
Administration fee payable......... (32)
Shareholder servicing and
distribution fees payable..........
(12)
Accrued Trustees'/Directors' fees
and
expenses...........................
(11)
Accrued expenses and other
liabilities........................ (110)
--------
TOTAL OTHER ASSETS AND
LIABILITIES (NET).................. (5,651)
--------
NET ASSETS.................. 100.0% $170,241
========
NET ASSETS CONSIST OF:
Distributions in excess of net
investment income.................. $ (1,389)
Accumulated net realized gain on
investments sold, foreign
currencies and net other assets.... 47,741
Net unrealized appreciation of
investments, foreign currencies and
net other assets................... 54,661
Paid-in capital.................... 69,228
--------
NET ASSETS......................... $170,241
========
</TABLE>
<TABLE>
<CAPTION>
VALUE
- ----------------------------------------------------------
<C> <S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and
redemption price per share
($146,653,030 / 9,004,917 shares
outstanding)..................... $16.29
======
INVESTOR A SHARES:
Net asset value and redemption
price per share
($21,936,692 / 1,371,597 shares
outstanding)..................... $15.99
======
Maximum sales charge............... 5.75%
Maximum offering price per share... $16.97
INVESTOR B SHARES:
Net asset value and offering price
per share+ ($1,233,001 / 78,549
shares outstanding).............. $15.70
======
INVESTOR C SHARES:
Net asset value and offering price
per share+ ($417,839 / 25,905
shares outstanding).............. $16.13
======
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $59,401 and gross
depreciation of $4,732 for Federal income tax purposes. At September 30,
1999, the aggregate cost of securities for Federal income tax purposes
was $121,223.
++ Non-income producing security.
+ The redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
# Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates,
Inc. Represents cash collateral received from securities lending activity
(Note 8).
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 17
NATIONS FUNDS
Nations International Growth Fund
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1999 (UNAUDITED)
At September 30, 1999, sector diversification was as follows:
<TABLE>
% OF NET VALUE
SECTOR DIVERSIFICATION ASSETS (000)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks:
Banking..................................................... 13.0% $ 22,087
Telecommunications.......................................... 9.5 16,171
Drugs....................................................... 8.1 13,838
Oil and Gas................................................. 7.7 13,066
Cosmetics and Toiletries.................................... 5.2 8,846
Electrical Equipment........................................ 3.7 6,382
Machinery and Engineering................................... 3.5 5,893
Printing and Publishing..................................... 3.5 5,890
Construction................................................ 3.4 5,744
Distribution and Wholesale.................................. 2.9 4,937
Financial Services.......................................... 2.7 4,635
Retail -- Specialty......................................... 2.6 4,422
Retail -- Food.............................................. 2.4 4,133
Insurance................................................... 2.4 4,125
Electronics................................................. 2.4 4,006
Food Producers.............................................. 2.3 3,951
Advertising and Marketing Services.......................... 2.2 3,722
Automobiles and Trucks...................................... 2.2 3,669
Restaurants and Lodging..................................... 2.1 3,497
Computer Services........................................... 1.9 3,236
Other....................................................... 12.1 20,720
---------- -------------
TOTAL COMMON STOCKS......................................... 95.8 162,970
RIGHTS...................................................... 0.1 241
INVESTMENT COMPANIES........................................ 7.4 12,681
---------- -------------
TOTAL INVESTMENTS........................................... 103.3 175,892
OTHER ASSETS AND LIABILITIES (NET).......................... (3.3) (5,651)
---------- -------------
NET ASSETS.................................................. 100.0% $ 170,241
---------- -------------
---------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE> 18
NATIONS FUNDS
Nations Emerging Markets Fund
STATEMENT OF NET ASSETS SEPTEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 88.6%
ARGENTINA -- 3.6%
13,390 Banco de Galicia, ADR................. $ 279
53,000 Perez Companc, ADR.................... 637
3,000 Telefonica de Argentina, ADR.......... 79
-------
995
-------
BRAZIL -- 11.4%
35,000,000 Banco Bradesco Preferred.............. 166
640,000 Brahma Cia Cervejaria Pref NPV........ 385
17,800 Cemig CIA Energ, ADR.................. 273
13,000 Companhia Vale do Rio Doce, ADR....... 275
23,500 Embratel Participacoes, ADR++......... 269
13,100 Pao de Acucar, ADR.................... 260
1,150,000 Petrol Brasileiros Preferred NPV...... 177
16,300 Petroleo Brasileiros, ADR............. 251
8,300 Tele Centro Sul Participacoes,
ADR++............................... 461
24,400 Tele Norte Leste Participacoes, ADR... 378
12,600 Telesp Participacoes SA, ADR.......... 198
3,000 Telesp Participacoes SA, ADR.......... 47
-------
3,140
-------
CHILE -- 0.9%
7,371 Enersis, ADR.......................... 154
5,400 Telecom De Chile, ADR................. 98
-------
252
-------
EGYPT -- 0.5%
10,100 Suez Cement Company, GDR.............. 145
-------
GREECE -- 6.7%
7,000 Alpha Credit Bank..................... 561
732 EFG Eurobank.......................... 35
5,000 Hellenic Bottling Company............. 120
23,250 National Bank of Greece, GDR++........ 368
17,523 OTE (Helenic Telecom)................. 409
18,400 Stet Hellas Telecommunication,
ADR++............................... 347
-------
1,840
-------
HONG KONG -- 6.3%
100,800 Cable and Wire (HK Telecom)........... 221
150,000 China Telecom (HK)++.................. 462
36,600 HSBC Holdings......................... 419
69,000 Hutchison Whampoa..................... 642
-------
1,744
-------
HUNGARY -- 1.7%
6,500 Matav, ADR............................ 177
13,500 Mol Magyar Olaj-Es Gz, GDS............ 284
-------
461
-------
INDIA -- 3.2%
1,000 Hindalco Industries Ltd., GDR......... 20
50,000 Reliance Industries Ltd., GDR++....... 543
22,000 Videsh Sanchar Nigam Ltd., GDR........ 310
-------
873
-------
ISRAEL -- 2.9%
187,000 Bank Hapoalim Ltd. ................... 460
7,000 Teva Pharmaceutical Industries Ltd.,
ADR................................. 352
-------
812
-------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ------------------------------------------------------------
<C> <S> <C>
MALAYSIA -- 4.4%
211,600 Ammb Holdings Berhad.................. $ 326
490,000 IOI Corporated Berhad................. 236
200,000 Malaysian International Shipping
(FGN) Berhad........................ 274
150,000 Telekom Malaysia Berhad............... 389
-------
1,225
-------
MEXICO -- 11.5%
86,300 Carso Global Telecom, ADR++........... 950
24,400 Cifra SA, ADR++....................... 384
23,500 Consorcio Ara, ADR++(+)............... 258
58,300 Grupo Carso SA de CV, ADR++........... 485
14,500 Grupo Imsa SA de CV, ADR.............. 230
109,168 Grupo Industrial Bimbo................ 229
100,000 Grupo Modelo.......................... 253
6,800 Grupo Televisa, GDR++................. 272
7,300 Panamerican Beverages, Inc. .......... 121
-------
3,182
-------
PHILIPPINES -- 0.7%
204,000 Ayala Corporation..................... 49
58,000 Bank of the Philippines Islands....... 157
-------
206
-------
POLAND -- 2.7%
13,400 Bank Handlowy W. Warszawie............ 157
22,883 Elektrim.............................. 212
8,800 Powszechny Bank Kredy, GDR++.......... 144
7,000 Telekomunikacja, GDR.................. 34
40,000 Telekomunikacja, GDR.................. 196
-------
743
-------
SOUTH AFRICA -- 5.1%
65,000 Amalgamated Bank of South Africa,
Group Ltd. ......................... 255
37,900 Amalgamated Beverage Industries....... 270
12,400 Anglo American Platinum Corporation... 329
14,600 Liberty Life Association of Africa
Ltd. ............................... 114
37,500 Rembrandt Group....................... 286
150,000 Sanlam++.............................. 164
-------
1,418
-------
SOUTH KOREA -- 13.5%
12,181 Korea Telecom, ADR++.................. 451
34,200 LG Electronics Company................ 1,147
7,000 Samsung Electronics................... 1,134
23,600 Shinhan Bank, GDR++................... 432
52,099 SK Telecom Company, ADR............... 537
-------
3,701
-------
TAIWAN -- 7.8%
42,000 Acer Inc., GDR........................ 380
35,036 Asustek Computer, GDR++............... 466
45,953 Siliconware Precision Company,
GDR++............................... 479
28,244 Taiwan Semiconductor SP, ADR++........ 833
-------
2,158
-------
THAILAND -- 2.1%
25,300 Advanced Info Services (FGN)++........ 289
1,017,000 National Finance Public Company
(FGN)++............................. 298
-------
587
-------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE> 19
NATIONS FUNDS
Nations Emerging Markets Fund
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ------------------------------------------------------------
<C> <S> <C>
TURKEY -- 3.6%
25,000,000 Haci Omer Sabanci..................... $ 650
25,000,000 Yapi Kredi Bankasi.................... 341
-------
991
-------
TOTAL COMMON STOCKS
(Cost $22,418)...................... 24,473
-------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000)
- ----------
<C> <S> <C> <C>
CONVERTIBLE BONDS AND NOTES -- 0.2%
(Cost $357)
SOUTH AFRICA -- 0.2%
$ 17,122 Standard Bank Investment
Corporation Ltd. ................ 55
--------
</TABLE>
<TABLE>
<CAPTION>
SHARES
- ----------
<C> <S> <C> <C>
PREFERRED STOCKS -- 0.4%
(Cost $0)
THAILAND -- 0.4%
109,000 Siam Comm Bk Pfd.++................ 98
--------
RIGHTS -- 0.3%
(Cost $0)
GREECE -- 0.3%
3,500 Commercial Bank of Greece++........ 75
--------
WARRANTS -- 0.0%+
BRAZIL -- 0.0%
59,969 Brahma Cia Cervejaria Expire
04/30/03++....................... 7
4,990 Brahma Cia Cervejaria Expire
04/30/03++(++)................... 0
--------
7
--------
TOTAL WARRANTS
(Cost $3)........................ 7
--------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
(000) (000)
- ------------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 17.3%
UNITED STATES -- 15.3%
4,237 Nations Cash Reserves#.............. $ 4,237
-------
TAIWAN -- 2.0%
49 Taiwan Index Fund++(+).............. 551
-------
TOTAL INVESTMENT COMPANIES
(Cost $4,687)..................... 4,788
-------
TOTAL INVESTMENTS
(Cost $27,465*)............ 106.8% 29,496
-------
OTHER ASSETS AND
LIABILITIES (NET).......... (6.8)%
Cash................................ $ 2,094
Receivable for investment securities
sold.............................. 395
Receivable for Fund shares sold..... 209
Dividends receivable................ 69
Unamortized organization costs...... 22
Prepaid expenses.................... 66
Collateral on securities loaned..... (4,237)
Payable for Fund shares redeemed.... (193)
Investment advisory fee payable..... (13)
Administration fee payable.......... (5)
Shareholder servicing and
distribution fees payable......... (3)
Payable for investment securities
purchased......................... (162)
Accrued Trustees'/Directors' fees
and expenses...................... (8)
Accrued expenses and other
liabilities....................... (100)
-------
TOTAL OTHER ASSETS AND
LIABILITIES (NET)................. (1,866)
-------
NET ASSETS................... 100.0% $27,630
=======
NET ASSETS CONSIST OF:
Distributions in excess of net
investment income................. $ (57)
Accumulated net realized loss on
investments sold, foreign
currencies and net other assets... (20,476)
Net unrealized appreciation of
investments, foreign currencies
and net other assets.............. 2,040
Paid-in capital..................... 46,123
-------
NET ASSETS.......................... $27,630
=======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE> 20
NATIONS FUNDS
Nations Emerging Markets Fund
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
- ------------------------------------------------------------
<C> <S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and
redemption price per share
($24,486,666 / 2,476,598 shares
outstanding)....................... $9.89
=====
INVESTOR A SHARES:
Net asset value and redemption price
per share ($1,174,883 / 119,585
shares outstanding)................ $9.82
=====
Maximum sales charge................. 5.75%
Maximum offering price per share..... $10.42
INVESTOR B SHARES:
Net asset value and offering price
per share## ($1,878,065 / 194,448
shares outstanding)................ $9.66
=====
INVESTOR C SHARES:
Net asset value and offering price
per share## ($90,157 / 9,342 shares
outstanding)....................... $9.65
=====
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $4,118 and gross
depreciation of $2,087 for Federal income tax purposes. At September 30,
1999, the aggregate cost of securities for Federal income tax purposes was
$27,465.
(+) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
++ Non-income producing security.
## The redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
+ Amount represents less than 0.1%.
(++) Amount represents less than $500.
# Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates,
Inc. Represents cash collateral received from securities lending activity
(Note 8).
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE> 21
NATIONS FUNDS
Nations Emerging Markets Fund
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1999 (UNAUDITED)
At September 30, 1999, sector diversification was as follows:
<TABLE>
% OF NET VALUE
SECTOR DIVERSIFICATION ASSETS (000)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks:
Telecommunications.......................................... 22.2% $ 6,125
Banking..................................................... 15.4 4,253
Electrical Components....................................... 6.4 1,778
Electrical Equipment........................................ 4.9 1,359
Oil and Gas................................................. 4.9 1,349
Financial Services.......................................... 4.5 1,234
Beverages................................................... 4.2 1,149
Electronics................................................. 4.1 1,134
Basic Materials............................................. 2.5 688
Holdings Companies -- Diversified........................... 2.3 642
Metals and Mining........................................... 2.3 624
Computer Related............................................ 2.0 557
Diversified................................................. 1.9 534
Utilities -- Electric....................................... 1.5 427
Retail -- General........................................... 1.4 384
Drugs....................................................... 1.3 352
Insurance................................................... 1.0 278
Transportation: Marine...................................... 1.0 274
Media....................................................... 1.0 272
Retail...................................................... 0.9 260
Other....................................................... 2.9 800
---------- -------------
TOTAL COMMON STOCKS......................................... 88.6 24,473
INVESTMENT COMPANIES........................................ 17.3 4,788
PREFERRED STOCKS............................................ 0.4 98
RIGHTS...................................................... 0.3 75
CONVERTIBLE BONDS AND NOTES................................. 0.2 55
WARRANTS.................................................... 0.0 7
---------- -------------
TOTAL INVESTMENTS........................................... 106.8 29,496
OTHER ASSETS AND LIABILITIES (NET).......................... (6.8) (1,866)
---------- -------------
NET ASSETS.................................................. 100.0% $ 27,630
---------- -------------
---------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE> 22
NATIONS FUNDS
STATEMENTS OF OPERATIONS (UNAUDITED)
For the six months ended September 30, 1999
<TABLE>
INTERNATIONAL INTERNATIONAL INTERNATIONAL EMERGING
VALUE EQUITY GROWTH MARKETS
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
INVESTMENT INCOME:
Dividends (Net of foreign withholding taxes of $82,
$1,315, $152 and $14, respectively)............... $ 4,128 $ 9,688 $ 1,622 $ 62
Interest............................................ 510 511 244 171
Securities lending income........................... 146 266 39 31
-------------- -------------- -------------- --------------
Total investment income......................... 4,784 10,465 1,905 264
-------------- -------------- -------------- --------------
EXPENSES:
Investment advisory fee............................. 1,125 3,486 804 131
Administration fee.................................. 249 781 188 25
Transfer agent fees................................. 39 146 44 6
Custodian fees...................................... 16 198 9 16
Legal and audit fees................................ 57 63 58 47
Registration and filing fees........................ 23 29 31 38
Directors' fees and expenses........................ 8 8 8 8
Amortization of organization costs.................. -- -- -- 15
Interest expense.................................... -- 69 -- 3
Other............................................... 33 6 299 29
-------------- -------------- -------------- --------------
Subtotal........................................ 1,550 4,786 1,441 318
Shareholder servicing and distribution fees:
Investor A Shares................................. 41 30 31 1
Investor B Shares................................. 46 142 6 9
Investor C Shares................................. 7 5 2 1
-------------- -------------- -------------- --------------
Total expenses.................................. 1,644 4,963 1,480 329
Fees waived by investment advisor, administrator
and/or distributor................................ (123) (239) (30) (76)
Fees reduced by credits allowed by the custodian.... (4) (1) -- --
-------------- -------------- -------------- --------------
Net expenses.................................... 1,517 4,723 1,450 253
-------------- -------------- -------------- --------------
NET INVESTMENT INCOME............................... 3,267 5,742 455 11
-------------- -------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON
INVESTMENTS:
Net realized gain/(loss) from:
Security transactions............................. 9,694 107,002 23,307 1,170
Foreign currencies and net other assets........... (6) (24) 9 (14)
-------------- -------------- -------------- --------------
Net realized gain/(loss) on investments............. 9,688 106,978 23,316 1,156
-------------- -------------- -------------- --------------
Change in unrealized appreciation/(depreciation) of:
Securities........................................ 8,326 (36,885) (12,853) 3,463
Foreign currencies and net other assets........... 3 14 5 13
-------------- -------------- -------------- --------------
Net change in unrealized appreciation/(depreciation)
of investments.................................... 8,329 (36,871) (12,848) 3,476
-------------- -------------- -------------- --------------
Net realized and unrealized gain/(loss) on
investments....................................... 18,017 70,107 10,468 4,632
-------------- -------------- -------------- --------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS........................................ $ 21,284 $ 75,849 $ 10,923 $ 4,643
============== ============== ============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE> 23
[This page intentionally left blank]
19
<PAGE> 24
NATIONS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERNATIONAL VALUE
------------------------------------------------------------
SIX MONTHS
ENDED
9/30/99 PERIOD ENDED PERIOD ENDED
(UNAUDITED) 3/31/99 5/15/98(a)
------------------------------------------------------------
<S> <C> <C> <C>
(IN THOUSANDS)
Net investment income..................................... $ 3,267 $ 1,550 $ 664
Net realized gain/(loss) on investments................... 9,688 8,446 5,449
Net change in unrealized appreciation/(depreciation) of
investments............................................. 8,329 (4,375) 5,638
-------------- -------------- --------------
Net increase/(decrease) in net assets resulting from
operations.............................................. 21,284 5,621 11,751
Distributions to shareholders from net investment income:
Primary A Shares........................................ (726) (1,714) --
Primary B Shares........................................ -- --* --
Investor A Shares....................................... (62) (78) --
Investor B Shares....................................... (19) (30) --
Investor C Shares....................................... (2) (1) --
Distributions to shareholders from net realized gain on
investments:
Primary A Shares........................................ (1,378) (11,258) (1,210)
Primary B Shares........................................ -- --* --
Investor A Shares....................................... (59) (526) (96)
Investor B Shares....................................... (51) (127) --
Investor C Shares....................................... (6) (8) --
Net increase/(decrease) in net assets from Fund share
transactions............................................ 208,615 36,565 55,558
-------------- -------------- --------------
Net increase/(decrease) in net assets..................... 227,596 28,444 66,003
NET ASSETS:
Beginning of period....................................... 152,984 124,540 58,537
-------------- -------------- --------------
End of period............................................. $ 380,580 $ 152,984 $ 124,540
============== ============== ==============
Undistributed net investment income/(distributions in
excess of net investment income) at end of period....... $ 2,744 $ 286 $ 565
============== ============== ==============
</TABLE>
- ---------------
* Amount represents less than $500.
(a) Represents financial information for the period December 1, 1997 to May 15,
1998 for the Emerald International Equity Fund, which was reorganized into
International Value on May 17, 1998.
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE> 25
NATIONS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY INTERNATIONAL GROWTH EMERGING MARKETS
------------------------------- ------------------------------- -------------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED
9/30/99 YEAR ENDED 9/30/99 YEAR ENDED 9/30/99 YEAR ENDED
(UNAUDITED) 3/31/99 (UNAUDITED) 3/31/99 (UNAUDITED) 3/31/99
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 5,742 $ 6,229 $ 455 $ 596 $ 11 $ 552
106,978 122,340 23,316 81,289 1,156 (13,222)
(36,871) (103,624) (12,848) (65,405) 3,476 (7,110)
-------------- -------------- -------------- -------------- -------------- --------------
75,849 24,945 10,923 16,480 4,643 (19,780)
(3,009) (6,815) (305) -- (10) (438)
-- --* -- -- -- --*
(85) (97) (25) -- -- (3)
(53) (196) -- -- -- (5)
(5) (6) -- -- -- (1)
(39,379) (57,696) -- (65,781) -- --
-- --* -- --* -- --
(672) (968) -- (6,209) -- --
(1,545) (2,238) -- (181) -- --
(45) (69) -- (118) -- --
(77,371) (105,006) (46,958) (164,008) (1,307) (31,495)
-------------- -------------- -------------- -------------- -------------- --------------
(46,315) (148,146) (36,365) (219,817) 3,326 (51,722)
785,736 933,882 206,606 426,423 24,304 76,026
-------------- -------------- -------------- -------------- -------------- --------------
$ 739,421 $ 785,736 $ 170,241 $ 206,606 $ 27,630 $ 24,304
============== ============== ============== ============== ============== ==============
$ 1,744 $ (847) $ (1,389) $ (1,515) $ (57) $ (57)
============== ============== ============== ============== ============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE> 26
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY
<TABLE>
<CAPTION>
INTERNATIONAL VALUE
SIX MONTHS ENDED
SEPTEMBER 30, 1999 PERIOD ENDED PERIOD ENDED
(UNAUDITED) MARCH 31, 1999(b) MAY 15, 1999(a)
------------------- ------------------ -----------------
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold........................................... 9,377 $152,895 4,332 $ 80,384 4,183 $64,837
Issued as reinvestment of dividends............ 74 1,202 292 4,000 34 451
Redeemed....................................... (1,963) (31,671) (2,449) (52,728) (650) (9,773)
------- -------- ------ -------- ----- -------
Net increase/(decrease)........................ 7,488 $122,426 2,175 $ 31,656 3,567 $55,515
======= ======== ====== ======== ===== =======
INVESTOR A SHARES:
Sold........................................... 7,636 $125,065 260 $ 5,477 110 $ 1,552
Issued as reinvestment of dividends............ 3 53 23 313 7 98
Redeemed....................................... (3,272) (53,472) (202) (5,154) (110) (1,607)
------- -------- ------ -------- ----- -------
Net increase/(decrease)........................ 4,367 $ 71,646 81 $ 636 7 $ 43
======= ======== ====== ======== ===== =======
INVESTOR B SHARES:
Sold........................................... 742 $ 11,970 306 $ 4,222 -- $ --
Issued as reinvestment of dividends............ 3 48 11 147 -- --
Redeemed....................................... (33) (523) (19) (263) -- --
------- -------- ------ -------- ----- -------
Net increase/(decrease)........................ 712 $ 11,495 298 $ 4,106 -- $ --
======= ======== ====== ======== ===== =======
INVESTOR C SHARES:
Sold........................................... 190 $ 3,089 16 $ 200 -- $ --
Issued as reinvestment of dividends............ --* 4 --* 9 -- --
Redeemed....................................... (3) (45) (3) (42) -- --
------- -------- ------ -------- ----- -------
Net increase/(decrease)........................ 187 $ 3,048 13 $ 167 -- $ --
======= ======== ====== ======== ===== =======
Total net increase/(decrease).................. 12,754 $208,615 2,567 $ 36,565 3,574 $55,558
======= ======== ====== ======== ===== =======
</TABLE>
- ---------------
* Amount represents less than 500 shares.
(a) Represents financial information for the period December 1, 1997 to May 15,
1998 for the Emerald International Equity Fund, which reorganized into
International Value on May 22, 1998.
(b) International Value's Investor B and Investor C Shares commenced operations
on May 28, 1998 and June 15, 1998, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE> 27
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY
SIX MONTHS ENDED
SEPTEMBER 30, 1999 YEAR ENDED
(UNAUDITED) MARCH 31, 1999
-------------------- --------------------
SHARES DOLLARS SHARES DOLLARS
----------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold...................................................... 3,683 $ 43,762 9,397 $ 138,073
Issued as reinvestment of dividends....................... 1,394 19,312 2,060 28,238
Redeemed.................................................. (9,802) (140,072) (18,544) (266,676)
------- --------- ------- ---------
Net increase/(decrease)................................... (4,725) $ (76,998) (7,087) $(100,365)
======= ========= ======= =========
PRIMARY B SHARES:+
Sold...................................................... -- $ -- --* $ --*
Issued as reinvestment of dividends....................... -- -- -- --
Redeemed.................................................. -- -- (2) (25)
------- --------- ------- ---------
Net increase/(decrease)................................... -- $ -- (2) $ (25)
======= ========= ======= =========
INVESTOR A SHARES:
Sold...................................................... 15,282 $ 208,597 7,314 $ 99,691
Issued in exchange for A Shares of Pacific Horizon
International Equity Fund (Note 10)..................... 3,095 41,876 -- --
Issued as reinvestment of dividends....................... 44 596 70 948
Redeemed.................................................. (17,818) (250,201) (7,387) (101,232)
------- --------- ------- ---------
Net increase/(decrease)................................... 603 $ 868 (3) $ (593)
======= ========= ======= =========
INVESTOR B SHARES:
Sold...................................................... 42 $ 508 93 $ 1,339
Issued in exchange for B Shares of Pacific Horizon
International Equity Fund (Note 10)..................... 29 389 -- --
Issued as reinvestment of dividends....................... 112 1,503 176 2,358
Redeemed.................................................. (256) (3,532) (556) (7,666)
------- --------- ------- ---------
Net increase/(decrease)................................... (73) $ (1,132) (287) $ (3,969)
======= ========= ======= =========
INVESTOR C SHARES:
Sold...................................................... 10 $ 31 33 $ 460
Issued in exchange for K Shares of Pacific Horizon
International Equity Fund (Note 10)..................... 62 808 -- --
Issued as reinvestment of dividends....................... 3 45 6 75
Redeemed.................................................. (74) (993) (43) (589)
------- --------- ------- ---------
Net increase/(decrease)................................... 1 $ (109) (4) $ (54)
======= ========= ======= =========
Total net increase/(decrease)............................. (4,194) $ (77,371) (7,383) $(105,006)
======= ========= ======= =========
</TABLE>
- ---------------
* Amount represents less than 500 shares and $500.
+ There were no longer any public shareholders of the Primary B Share class as
of April 22, 1998.
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE> 28
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH
SIX MONTHS ENDED
SEPTEMBER 30, 1999 YEAR ENDED
(UNAUDITED) MARCH 31, 1999
------------------- --------------------
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold...................................................... 278 $ 4,523 1,721 $ 29,566
Issued as reinvestment of dividends....................... -- -- 2,297 35,769
Redeemed.................................................. (3,010) (48,886) (12,933) (233,351)
------ --------- ------- ---------
Net increase/(decrease)................................... (2,732) $ (44,363) (8,915) $(168,016)
====== ========= ======= =========
INVESTOR A SHARES:
Sold...................................................... 8,625 $ 136,729 2,106 $ 34,591
Issued as reinvestment of dividends....................... -- -- 276 4,107
Redeemed.................................................. (8,752) (139,494) (2,150) (35,380)
------ --------- ------- ---------
Net increase/(decrease)................................... (127) $ (2,765) 232 $ 3,318
====== ========= ======= =========
INVESTOR B SHARES:
Sold...................................................... 22 $ 350 38 $ 635
Issued as reinvestment of dividends....................... -- -- 12 178
Redeemed.................................................. (8) (119) (13) (207)
------ --------- ------- ---------
Net increase/(decrease)................................... 14 $ 231 37 $ 606
====== ========= ======= =========
INVESTOR C SHARES:
Sold...................................................... 1 $ 11 3 $ 36
Issued as reinvestment of dividends....................... -- -- 7 109
Redeemed.................................................. (5) (72) (4) (61)
------ --------- ------- ---------
Net increase/(decrease)................................... (4) $ (61) 6 $ 84
====== ========= ======= =========
Total net increase/(decrease)............................. (2,849) $ (46,958) (8,640) $(164,008)
====== ========= ======= =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE> 29
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
EMERGING MARKETS
SIX MONTHS ENDED
SEPTEMBER 30, 1999 YEAR ENDED
(UNAUDITED) MARCH 31, 1999
------------------- ------------------
SHARES DOLLARS SHARES DOLLARS
-------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold...................................................... 564 $ 5,914 363 $ 3,133
Issued in exchange for assets of Primary A Shares of
Nations Pacific Growth Fund (Note 10)................... -- -- 1,016 8,277
Issued as reinvestment of dividends....................... -- -- 18 155
Redeemed.................................................. (752) (7,194) (5,693) (44,018)
---- ------- ------ --------
Net increase/(decrease)................................... (188) $(1,280) (4,296) $(32,453)
==== ======= ====== ========
PRIMARY B SHARES:+
Sold...................................................... -- $ -- --* $ --*
Issued as reinvestment of dividends....................... -- -- --* --*
Redeemed.................................................. -- -- (4) (23)
---- ------- ------ --------
Net increase/(decrease)................................... -- $ -- (4) $ (23)
==== ======= ====== ========
INVESTOR A SHARES:
Sold...................................................... 215 $ 2,109 20 $ 165
Issued in exchange for assets of Investor A Shares of
Nations Pacific Growth Fund (Note 10)................... -- -- 78 632
Issued as reinvestment of dividends....................... -- -- --* 3
Redeemed.................................................. (213) (2,093) (42) (346)
---- ------- ------ --------
Net increase/(decrease)................................... 2 $ 16 56 $ 454
==== ======= ====== ========
INVESTOR B SHARES:
Sold...................................................... 17 $ 160 15 $ 142
Issued in exchange for assets of Investor B Shares of
Nations Pacific Growth Fund (Note 10)................... -- -- 113 906
Issued as reinvestment of dividends....................... -- -- --* 5
Redeemed.................................................. (20) (188) (49) (411)
---- ------- ------ --------
Net increase/(decrease)................................... (3) $ (28) 79 $ 642
==== ======= ====== ========
INVESTOR C SHARES:
Sold...................................................... --* $ 4 8 $ 72
Issued in exchange for assets of Investor C Shares of
Nations Pacific Growth Fund (Note 10)................... -- -- 2 14
Issued as reinvestment of dividends....................... -- -- --* 1
Redeemed.................................................. (1) (19) (27) (202)
---- ------- ------ --------
Net increase/(decrease)................................... (1) $ (15) (17) $ (115)
==== ======= ====== ========
Total net increase/(decrease)............................. (190) $(1,307) (4,182) $(31,495)
==== ======= ====== ========
</TABLE>
- ---------------
* Amount represents less than 500 shares and $500.
+ There were no longer any public shareholders of the Primary B Share class as
of January 24, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE> 30
NATIONS FUNDS
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT NET INVESTMENT
OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME INCOME
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTERNATIONAL VALUE
PRIMARY A SHARES*
Six months ended 9/30/1999#
(unaudited)................. $14.45 $0.22 $1.85 $2.07 $(0.07) --
Period ended 3/31/1999#....... 15.53 0.16 0.28 0.44 (0.18) --
Period ended 5/15/1998........ 13.17 0.09 2.56 2.65 -- --
Year ended 11/30/1997......... 11.29 0.09 1.91 2.00 (0.09) $(0.01)
Period ended 11/30/1996**..... 10.00 0.06 1.29 1.35 (0.06) --
INVESTOR A SHARES*
Six months ended 9/30/1999#
(unaudited)................. $14.43 $0.22 $1.85 $2.07 $(0.06) --
Period ended 3/31/1999#....... 15.44 0.14 0.36 0.50 (0.17) --
Period ended 5/15/1998........ 13.13 0.08 2.52 2.60 -- --
Year ended 11/30/1997......... 11.29 0.01 1.91 1.92 (0.01) $(0.05)
Period ended 11/30/1996**..... 10.00 0.04 1.31 1.35 (0.04) --
INVESTOR B SHARES
Six months ended 9/30/1999#
(unaudited)................. $14.40 $0.15 $1.82 $1.97 $(0.04) --
Period ended 3/31/1999***#.... 14.33 0.06 0.76 0.82 (0.13) --
INVESTOR C SHARES
Six months ended 9/30/1999#
(unaudited)................. $14.41 $0.18 $1.80 $1.98 $(0.04) --
Period ended 3/31/1999***#.... 13.33 0.06 1.77 1.83 (0.13) --
</TABLE>
- ---------------
* The financial information for the fiscal periods through May 22, 1998
reflect the financial information for the Emerald International Equity
Fund's Institutional Shares and Retail Shares, which were reorganized into
the Primary A Shares and Investor A Shares, respectively, as of May 22,
1998.
** International Value Primary A and Investor A Shares commenced operations on
December 27, 1995.
*** International Value Investor B and Investor C Shares commenced operations
on May 28, 1998 and June 15, 1998, respectively.
+ Annualized
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly
average shares method.
(a) The effect of the custodial expense offset (Note 2) on the operating
expense ratio, with and without waivers and/or expense reimbursements, was
less than 0.01%.
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE> 31
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF NET
DISTRIBUTIONS TOTAL NET ASSETS OPERATING INVESTMENT
FROM NET DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO
REALIZED AND VALUE TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER
CAPITAL GAINS DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS NET ASSETS RATE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.14) $(0.21) $16.31 14.30% $283,054 1.16%+(a) 2.64%+ 14%
(1.34) (1.52) 14.45 1.48 142,546 1.30+ 1.36+ 44
(0.29) (0.29) 15.53 20.54 119,412 1.25+ 2.06+ 88
(0.02) (0.12) 13.17 17.75 54,277 1.21 0.89 29
-- (0.06) 11.29 13.47 17,528 0.00+ 0.00+ 50
$(0.14) $(0.20) $16.30 14.35% $ 77,936 1.41%+(a) 2.39%+ 14%
(1.34) (1.51) 14.43 1.75 5,960 1.55+ 1.11+ 44
(0.29) (0.29) 15.44 20.22 5,128 1.81+ 1.21+ 88
(0.02) (0.08) 13.13 17.11 4,259 1.73 0.26 29
(0.02) (0.06) 11.29 13.54 115 0.00+ 1.83+ 50
$(0.14) $(0.18) $16.19 13.66% $ 16,351 2.16%+(a) 1.64%+ 14%
(0.62) (0.75) 14.40 1.25 4,296 2.30+ 0.36+ 44
$(0.14) $(0.18) $16.21 13.76% $ 3,239 2.16%+(a) 1.64%+ 14%
(0.62) (0.75) 14.41 3.98 182 2.30+ 0.36+ 44
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF
OPERATING
EXPENSES TO
AVERAGE
NET ASSETS
---------------
<S> <C>
1.26%+(a)
1.39+
1.26+
1.21
3.46+
1.51%+(a)
1.64+
1.82+
1.93
57.40+
2.26%+(a)
2.39+
2.26%+(a)
2.39+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE> 32
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share outstanding throughout each period.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT NET INVESTMENT
OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME INCOME
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTERNATIONAL EQUITY
PRIMARY A SHARES
Six months ended 9/30/1999#
(unaudited)...................... $14.12 $ 0.11 $ 0.97 $ 1.08 $(0.06) --
Year ended 3/31/1999#.............. 14.81 0.11 0.39 0.50 (0.12) --
Year ended 3/31/1998#.............. 13.13 0.11 1.95 2.06 (0.17) $(0.05)
Year ended 3/31/1997#.............. 13.50 0.08 0.11 0.19 (0.11) (0.00)**
Period ended 3/31/1996(a)#......... 11.75 0.07 1.80 1.87 (0.06) (0.04)
Year ended 5/31/1995#.............. 12.06 0.14 (0.20) (0.06) (0.03) --
Year ended 5/31/1994#.............. 10.60 0.09 1.44 1.53 (0.05) --
INVESTOR A SHARES
Six months ended 9/30/1999#
(unaudited)...................... $13.97 $ 0.11 $ 0.95 $ 1.06 $(0.05) --
Year ended 3/31/1999#.............. 14.67 0.08 0.40 0.48 (0.11) --
Year ended 3/31/1998#.............. 13.01 0.07 1.94 2.01 (0.15) $(0.04)
Year ended 3/31/1997#.............. 13.39 0.05 0.11 0.16 (0.09) (0.00)**
Period ended 3/31/1996(a)#......... 11.67 0.04 1.78 1.82 (0.04) (0.04)
Year ended 5/31/1995#.............. 12.00 0.11 (0.20) (0.09) (0.02) --
Year ended 5/31/1994#.............. 10.56 0.06 1.44 1.50 (0.04) --
INVESTOR B SHARES
Six months ended 9/30/1999#
(unaudited)...................... $13.75 $ 0.03 $ 0.95 $ 0.98 $(0.03) --
Year ended 3/31/1999#.............. 14.56 (0.03) 0.38 0.35 (0.09) --
Year ended 3/31/1998#.............. 12.83 (0.03) 1.92 1.89 -- --
Year ended 3/31/1997#.............. 13.27 (0.05) 0.10 0.05 (0.04) $(0.00)**
Period ended 3/31/1996(a)#......... 11.56 (0.02) 1.78 1.76 -- (0.03)
Year ended 5/31/1995#.............. 11.96 0.05 (0.22) (0.17) (0.01) --
Period ended 5/31/1994*#........... 10.51 (0.00)** 1.51 1.51 (0.04) --
INVESTOR C SHARES
Six months ended 9/30/1999#
(unaudited)...................... $13.52 $ 0.04 $ 0.92 $ 0.96 $(0.04) --
Year ended 3/31/1999#.............. 14.34 (0.03) 0.37 0.34 (0.09) --
Year ended 3/31/1998#.............. 12.74 (0.01) 1.89 1.88 (0.10) $(0.02)
Year ended 3/31/1997#.............. 13.13 0.02 0.10 0.12 (0.06) (0.00)**
Period ended 3/31/1996(a)#......... 11.45 (0.03) 1.75 1.72 -- (0.02)
Year ended 5/31/1995#.............. 11.86 0.02 (0.21) (0.19) -- --
Year ended 5/31/1994#.............. 10.49 (0.03) 1.43 1.40 (0.01) --
</TABLE>
- ---------------
* International Equity Investor B Shares commenced operations on June 7, 1993.
** Amount represents less than $0.01 per share.
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# Per share net investment income/(loss) has been calculated using the monthly
average shares method.
## Amount represents less than 0.01%.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
May 31.
(b) The effect of interest expense on the operating expense ratio was less than
0.01%.
(c) The effect of the custodial expense offset (Note 2) on the operating
expense ratio, with and without waivers and/or expense reimbursements, was
less than 0.01%.
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE> 33
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF NET
DISTRIBUTIONS DISTRIBUTIONS TOTAL NET ASSETS OPERATING INVESTMENT
FROM NET IN EXCESS OF DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO
REALIZED NET REALIZED AND VALUE TOTAL PERIOD AVERAGE TO AVERAGE TURNOVER
CAPITAL GAINS CAPITAL GAINS DISTRIBUTIONS END OF PERIOD RETURN++ (000) NET ASSETS NET ASSETS RATE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$(0.77) -- $(0.83) $14.37 7.86% $689,376 1.15%+(b)(c) 1.50%+ 124%
(1.07) -- (1.19) 14.12 3.68 743,861 1.13 0.79 146
(0.16) -- (0.38) 14.81 16.06 885,329 1.14 0.76 64
(0.42) $(0.03) (0.56) 13.13 1.32 976,855 1.16 0.62 36
(0.02) -- (0.12) 13.50 16.01 849,731 1.17+ 0.65+ 26
(0.12) (0.10) (0.25) 11.75 (0.46) 572,940 1.03 1.17 92
(0.02) -- (0.07) 12.06 14.37 401,559 1.17 0.75 39
$(0.77) -- $(0.82) $14.21 7.82% $ 21,578 1.40%+(b)(c) 1.25%+ 124%
(1.07) -- (1.18) 13.97 3.59 12,785 1.38 0.54 146
(0.16) -- (0.35) 14.67 15.77 13,477 1.39 0.51 64
(0.42) $(0.03) (0.54) 13.01 1.08 9,443 1.41 0.37 36
(0.02) -- (0.10) 13.39 15.66 7,643 1.42+ 0.40+ 26
(0.12) (0.10) (0.24) 11.67 (0.69) 4,877 1.28 0.92 92
(0.02) -- (0.06) 12.00 14.00 3,219 1.42 0.50 39
$(0.77) -- $(0.80) $13.93 7.30% $ 27,621 2.15%+(b)(c) 0.50%+ 124%
(1.07) -- (1.16) 13.75 2.65 28,266 2.13 (0.21) 146
(0.16) -- (0.16) 14.56 14.93 34,119 2.14 (0.24) 64
(0.42) $(0.03) (0.49) 12.83 0.28 36,698 2.16 (0.38) 36
(0.02) -- (0.05) 13.27 15.25 40,426 1.99+ (0.17)+ 26
(0.12) (0.10) (0.23) 11.56 (1.30) 31,372 1.78 0.42 92
(0.02) -- (0.06) 11.96 14.32 17,349 1.92+ (0.00)+## 39
$(0.77) -- $(0.81) $13.67 7.32% $ 846 2.15%+(b)(c) 0.50%+ 124%
(1.07) -- (1.16) 13.52 2.63 824 2.13 (0.21) 146
(0.16) -- (0.28) 14.34 15.05 933 1.97 (0.07) 64
(0.42) $(0.03) (0.51) 12.74 0.77 988 1.66 0.12 36
(0.02) -- (0.04) 13.13 15.09 652 2.09+ (0.27)+ 26
(0.12) (0.10) (0.22) 11.45 (1.56) 495 2.03 0.17 92
(0.02) -- (0.03) 11.86 13.21 339 2.17 (0.25) 39
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF
OPERATING
EXPENSES TO
AVERAGE
NET ASSETS
---------------
<S> <C>
1.21%+(c)
1.13
1.14
1.16
1.18+
1.04
1.18
1.46%+(c)
1.38
1.39
1.41
1.43+
1.29
1.43
2.21%+(c)
2.13
2.14
2.16
2.00+
1.79
1.93+
2.21%+(c)
2.13
1.97
1.66
2.10+
2.04
2.18
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
29
<PAGE> 34
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share outstanding throughout each period.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT REALIZED
OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTERNATIONAL GROWTH
PRIMARY A SHARES*
Six months ended 9/30/1999#
(unaudited).................. $15.53 $ 0.04 $ 0.75 $ 0.79 $(0.03) --
Year ended 3/31/1999#.......... 19.42 0.05 0.87 0.92 -- $(4.81)
Period ended 3/31/1998#........ 18.43 0.03 1.30 1.33 -- (0.34)
Period ended 5/16/1997......... 17.05 0.05 1.84 1.89 (0.17) (0.34)
Year ended 8/31/1996........... 16.24 0.18 1.48 1.66 (0.46) (0.39)
Year ended 8/31/1995#.......... 16.34 0.13 0.17 0.30 (0.11) (0.29)
Year ended 8/31/1994#.......... 14.14 0.11 2.24 2.35 -- (0.15)
INVESTOR A SHARES*
Six months ended 9/30/1999#
(unaudited).................. $15.26 $ 0.02 $ 0.73 $ 0.75 $(0.02) --
Year ended 3/31/1999#.......... 19.21 0.01 0.85 0.86 -- $(4.81)
Period ended 3/31/1998#........ 18.27 (0.01) 1.29 1.28 -- (0.34)
Period ended 5/16/1997......... 16.90 (0.05) 1.90 1.85 (0.14) (0.34)
Year ended 8/31/1996........... 16.14 0.04 1.57 1.61 (0.46) (0.39)
Year ended 8/31/1995#.......... 16.29 0.08 0.17 0.25 (0.11) (0.29)
Year ended 8/31/1994#.......... 14.13 0.07 2.24 2.31 -- (0.15)
INVESTOR B SHARES*
Six months ended 9/30/1999#
(unaudited).................. $15.01 $(0.04) $ 0.73 $ 0.69 -- --
Year ended 3/31/1999#.......... 19.11 (0.12) 0.83 0.71 -- $(4.81)
Period ended 3/31/1998#........ 18.32 (0.11) 1.24 1.13 -- (0.34)
Period ended 5/16/1997......... 17.04 (0.05) 1.79 1.74 $(0.12) (0.34)
Period ended 8/31/1996(a)...... 17.54 -- (0.50) (0.50) -- --
INVESTOR C SHARES
Six months ended 9/30/1999#
(unaudited).................. $15.43 $(0.04) $ 0.74 $ 0.70 -- --
Year ended 3/31/1999#.......... 19.42 (0.12) 0.94 0.82 -- $(4.81)
Period ended 3/31/1998**#...... 18.49 (0.09) 1.36 1.27 -- (0.34)
</TABLE>
- ---------------
* The financial information for the fiscal periods through May 23, 1997 reflect
the financial information for the Pilot International Equity Fund's Pilot
Shares, Class A Shares and Class B Shares, which were reorganized into the
Primary A Shares, Investor A Shares and Investor B Shares, respectively, as
of May 23, 1997.
** International Growth Investor C Shares commenced operations on September 19,
1997.
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# Per share net investment income/(loss) has been calculated using the monthly
average shares method.
(a) Shares were initially issued on July 1, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
30
<PAGE> 35
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
RATIO OF NET AND/OR EXPENSE
OPERATING REIMBURSEMENTS
EXPENSES TO ---------------
RATIO OF AVERAGE RATIO OF NET RATIO OF
TOTAL NET ASSETS OPERATING NET ASSETS INVESTMENT OPERATING
DIVIDENDS NET ASSET END OF EXPENSES TO INCLUDING INCOME/(LOSS) PORTFOLIO EXPENSES TO
AND VALUE TOTAL PERIOD AVERAGE NET INTEREST TO AVERAGE TURNOVER AVERAGE
DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS EXPENSE NET ASSETS RATE NET ASSETS
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$(0.03) $16.29 5.08% $146,653 1.45%+ -- 0.50%+ 7% 1.48%+
(4.81) 15.53 6.16 182,316 1.12 1.14% 0.24 21 1.21
(0.34) 19.42 7.39 401,105 1.15+ -- 0.21+ 11 1.17+
(0.51) 18.43 11.28 701,033 1.18+ -- 0.47+ 34 1.18+
(0.85) 17.05 10.64 579,019 1.08 -- 0.69 22 1.08
(0.40) 16.24 2.08 363,212 1.18 -- 0.82 36 1.18
(0.15) 16.34 16.75 307,561 1.12 -- 0.75 35 1.12
$(0.02) $15.99 4.90% $ 21,937 1.70%+ -- 0.25%+ 7% 1.73%+
(4.81) 15.26 5.89 22,874 1.37 1.39% (0.01) 21 1.46
(0.34) 19.21 7.18 24,353 1.40+ -- (0.04)+ 11 1.42+
(0.48) 18.27 11.14 26,730 1.42+ -- 0.29+ 34 1.42+
(0.85) 16.90 10.40 26,730 1.32 -- 0.48 22 1.32
(0.40) 16.14 1.77 27,625 1.42 -- 0.50 36 1.42
(0.15) 16.29 16.48 44,990 1.37 -- 0.48 35 1.37
-- $15.70 4.60% $ 1,233 2.45%+ -- (0.50)%+ 7% 2.48%+
$(4.81) 15.01 5.11 957 2.12 2.14% (0.76) 21 2.21
(0.34) 19.11 6.34 500 2.15+ -- (0.79)+ 11 2.17+
(0.46) 18.32 10.37 560 2.18+ -- (0.61)+ 34 2.18+
-- 17.04 (2.85) 184 2.06+ -- (0.32)+ 22 2.06+
-- $16.13 4.54% $ 418 2.45%+ -- (0.50)%+ 7% 2.48%+
$(4.81) 15.43 5.56 459 2.12 2.14% (0.76) 21 2.21
(0.34) 19.42 7.04 465 2.15+ -- (0.79)+ 11 2.17+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
31
<PAGE> 36
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share outstanding throughout each period.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT NET INVESTMENT
OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME INCOME
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EMERGING MARKETS
PRIMARY A SHARES
Six months ended 9/30/1999
(unaudited)............... $ 8.14 $ 0.01 $ 1.75 $ 1.76 $(0.01) --
Year ended 3/31/1999#....... 10.60 0.14 (2.53) (2.39) (0.07) --
Year ended 3/31/1998#....... 11.41 0.04 (0.76) (0.72) (0.09) --
Year ended 3/31/1997#....... 10.34 0.01 1.21 1.22 (0.02) $(0.07)
Period ended 3/31/1996*#.... 10.00 (0.03) 0.37 0.34 -- 0.00**
INVESTOR A SHARES
Six months ended 9/30/1999
(unaudited)............... $ 8.09 $(0.01) $ 1.74 $ 1.73 -- --
Year ended 3/31/1999#....... 10.57 0.10 (2.52) (2.42) $(0.06) --
Year ended 3/31/1998#....... 11.39 0.01 (0.75) (0.74) (0.08) --
Year ended 3/31/1997#....... 10.32 (0.01) 1.21 1.20 (0.02) $(0.05)
Period ended 3/31/1996*#.... 10.00 (0.05) 0.37 0.32 -- --
INVESTOR B SHARES
Six months ended 9/30/1999
(unaudited)............... $ 7.99 $(0.05) $ 1.72 $ 1.67 -- --
Year ended 3/31/1999#....... 10.49 0.05 (2.50) (2.45) $(0.05) --
Year ended 3/31/1998#....... 11.31 (0.07) (0.75) (0.82) -- --
Year ended 3/31/1997#....... 10.26 (0.09) 1.20 1.11 -- --
Period ended 3/31/1996*#.... 10.00 (0.11) 0.37 0.26 -- --
INVESTOR C SHARES
Six months ended 9/30/1999
(unaudited)............... $ 7.98 $(0.05) $ 1.72 $ 1.67 -- --
Year ended 3/31/1999#....... 10.47 0.05 (2.49) (2.44) $(0.05) --
Year ended 3/31/1998#....... 11.34 (0.05) (0.75) (0.80) (0.07) --
Year ended 3/31/1997#....... 10.27 (0.04) 1.20 1.16 (0.01) $(0.02)
Period ended 3/31/1996*#.... 10.00 (0.10) 0.37 0.27 -- --
</TABLE>
- ---------------
* Emerging Markets Primary A, Investor A, Investor B and Investor C Shares
commenced operations on June 30, 1995.
** Amount represents less than $0.01 per share.
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# Per share net investment income/(loss) has been calculated using the monthly
average shares method.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) The effect of the custodial expense offset (Note 2) on the operating
expense ratio, with and without waivers and/or expense reimbursements, was
less than 0.01%.
SEE NOTES TO FINANCIAL STATEMENTS.
32
<PAGE> 37
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF RATIO OF RATIO OF
DISTRIBUTIONS TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING
FROM NET DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO
REALIZED AND VALUE TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE
CAPITAL GAINS DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-- $(0.01) $ 9.89 21.56% $24,487 1.90%+(a) 0.20%+ 35% 2.49%+
-- (0.07) 8.14 (22.60) 21,689 1.78(a)(b) 1.66 71 1.98(b)
-- (0.09) 10.60 (6.39) 73,797 1.57 0.36 63 1.57
$(0.06) (0.15) 11.41 11.97 76,483 1.74 0.13 31 1.74
-- 0.00** 10.34 3.42 47,560 2.13+ (0.38)+ 17 2.13+
-- -- $ 9.82 21.38% $ 1,175 2.15%+(a) (0.05)%+ 35% 2.74%+
-- $(0.06) 8.09 (22.90) 951 2.03(a)(b) 1.41 71 2.23(b)
-- (0.08) 10.57 (6.60) 652 1.82 0.11 63 1.82
$(0.06) (0.13) 11.39 11.74 894 1.99 (0.12) 31 1.99
-- -- 10.32 3.20 477 2.38+ (0.63)+ 17 2.38+
-- -- $ 9.66 20.90% $ 1,878 2.90%+(a) (0.80)%+ 35% 3.49%+
-- $(0.05) 7.99 (23.42) 1,579 2.78(a)(b) 0.66 71 2.98(b)
-- -- 10.49 (7.25) 1,247 2.57 (0.64) 63 2.57
$(0.06) (0.06) 11.31 10.88 1,499 2.74 (0.87) 31 2.74
-- -- 10.26 2.60 1,209 3.13+ (1.38)+ 17 3.13+
-- -- $ 9.65 20.93% $ 90 2.90%+(a) (0.80)%+ 35% 3.49%+
-- $(0.05) 7.98 (23.37) 86 2.78(a)(b) 0.66 71 2.98(b)
-- (0.07) 10.47 (7.17) 293 2.40 (0.47) 63 2.40
$(0.06) (0.09) 11.34 11.34 226 2.24 (0.37) 31 2.24
-- -- 10.27 2.70 23 3.02+ (1.27)+ 17 3.02+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
33
<PAGE> 38
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Nations Fund, Inc. (the "Company") and Nations Reserves ("Reserves") are each
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end investment company. At September 30, 1999, the Company
offered seven separate portfolios and Reserves offered sixteen portfolios. These
financial statements pertain only to the international stock portfolios of the
Company and Nations Reserves (each a "Fund" and collectively, the "Funds").
Financial statements for the other portfolios of the Company and Reserves are
presented under separate cover. The Funds currently offer four classes of
shares: Primary A Shares, Investor A Shares, Investor B Shares and Investor C
Shares. Shareholders of a Fund have equal voting rights on matters affecting all
shareholders of the Fund. In addition, each class of shares of a Fund has
exclusive voting rights on matters that relate solely to that class and separate
voting rights on matters in which the interests of one class differ from the
interests of any other class.
Effective August 20, 1999, the International Equity Fund converted to a
master-feeder structure. The Fund seeks to achieve its investment objective by
investing substantially all of its assets in a corresponding Master Portfolio of
Nations Master Investment Trust, another open-end investment company in the
Nations Funds family. The Master Portfolio has the same investment objective as
the International Equity Fund. Because the value of each Fund's investment in
the Master Portfolio at September 30, 1999 represented substantially all of the
beneficial interests in the Master Portfolio, financial statements of the Master
Portfolios have not been prepared and references in this report to International
Equity Fund should be read to include reference to the corresponding Master
Portfolio.
1. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies followed by the Funds in the preparation of
their financial statements.
Securities valuation: Equity securities traded on a recognized exchange or on
NASDAQ are valued at the last sales price on the exchange or market on which
such securities are primarily traded. Securities traded over-the-counter are
valued at the closing bid prices or, if no sale occurred on such day, at the
mean of the current bid and asked prices. Debt obligations are valued by an
independent pricing service approved by the Trustees/ Directors. Prices provided
by the pricing service may be determined without exclusive reliance on quoted
prices, and may reflect appropriate factors such as yield, type of issue, coupon
rate, maturity and general market conditions. Restricted securities, securities
for which market quotations are not readily available, and certain other assets
are valued by the investment advisor under the supervision of the respective
Board of Trustees/ Directors. Short-term investments that mature in 60 days or
less are valued at amortized cost.
Foreign currency translation: The books and records of the Funds are maintained
in U.S. dollars. Foreign currencies, investments and other assets and
liabilities are translated into U.S. dollars at the current exchange rates.
Purchases and sales of investment securities and income and expenses are
translated on the respective dates of such transactions. Net realized foreign
currency gains and losses resulting from changes in exchange rates include
foreign currency gains and losses between trade date and settlement date of
securities transactions, foreign currency transactions and the difference
between the amounts of interest and dividends recorded on the books of a Fund
and the amounts actually received. The effects of changes in foreign currency
exchange rates on securities are not separately stated in the Statements of
operations from the effects of changes in market prices of those securities, but
are included with the net realized and unrealized gain or loss on securities.
Forward foreign currency transactions: Generally, a Fund may enter into forward
currency exchange contracts only under two circumstances: (i) when the Fund
enters into a contract for the purchase or sale of a security denominated in a
foreign currency, to "lock" in the U.S. exchange rate of the transaction, with
such period being a short-dated contract covering the period between transaction
date and settlement date; and (ii) when the investment advisor or sub-advisor
believes that the currency of a particular foreign country may experience a
substantial movement against the U.S. dollar. Forward foreign currency contracts
are valued at the forward rate and are marked-to-market daily. The change in
market value is recorded by the Fund as an unrealized gain or loss. When the
contract is closed or offset with the same counterparty, 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 or offset.
34
<PAGE> 39
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
Forward foreign currency contracts will be used primarily to protect the Funds
from adverse currency movements and will generally not be entered into for terms
greater than one year. The use of forward foreign currency contracts does not
eliminate fluctuations in the underlying prices of the Fund's investment
securities; however, it does establish a rate of exchange that can be achieved
in the future. The use of forward contracts involves the risk that anticipated
currency movements will not be accurately predicted. A forward contract would
limit the risk of loss due to a decline in the value of a particular currency;
however, it also would limit any potential gain that might result should the
value of the currency increase instead of decrease. These contracts may involve
market risk in excess of the unrealized gain or loss reflected in the Statements
of net assets. In addition, the Funds could be exposed to risks if
counterparties to the contracts are unable to meet the terms of their contracts.
The counterparty risk exposure is, therefore, closely monitored and contracts
are only executed with high credit quality financial institutions.
Securities transactions and investment income: Securities transactions are
accounted for on trade date. Realized gains and losses are computed based on the
specific identification of securities sold. Interest income, adjusted for
accretion of discounts and amortization of premiums, is earned from settlement
date and recorded on an accrual basis. Dividend income is recorded on ex-
dividend date, except that if the ex-dividend date has passed, certain dividends
from foreign securities are recorded as soon as the Funds are informed of the
ex-dividend date. Each Fund's investment income and realized and unrealized
gains and losses are allocated among its classes based upon the relative net
assets of each class of shares.
Dividends and distributions to shareholders: Distributions from net investment
income are declared and paid each calendar quarter. Each Fund will distribute
net realized capital gains (including net short-term capital gains) at least
annually after the fiscal year in which the capital gains were earned, unless
offset by any available capital loss carryforward. Income distributions and
capital gain distributions on a Fund level are determined in accordance with
federal income tax regulations which may differ from generally accepted
accounting principles.
Federal income tax: Each Fund intends to continue to qualify as a regulated
investment company by complying with the applicable requirements of the Internal
Revenue Code of 1986, as amended, and by distributing substantially all of its
earnings to its shareholders. Therefore, no provision is made for Federal income
or excise taxes.
The Funds may be subject to foreign taxes on income, gains on investments or
currency repatriation, a portion of which may be recoverable. The Funds will
accrue such taxes and recoveries as applicable, based upon their current
interpretation of tax rules and regulations that exist in the markets in which
they invest.
Expenses: General expenses of the Company and Reserves are allocated to the
Funds based upon relative net assets or other expense allocation methodologies
determined by the nature of the expense in accordance with generally accepted
accounting principles. Expenses directly attributable to a Fund or class of
shares are charged to such Fund or class. The Funds bear all costs in connection
with their organization, including the fees and expenses of registering and
qualifying their shares for distribution under Federal and state securities
regulations. All such costs are being amortized on a straight line basis over a
period of five years from commencement of operations.
2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED
PARTY TRANSACTIONS
Each of the Company and Reserves has entered into an investment advisory
agreement (the "Investment Advisory Agreements") with Banc of America Advisors,
Inc. ("BAAI") (formerly known as NationsBanc Advisors, Inc.), a wholly-owned
subsidiary of Bank of America, N.A. ("Bank of America") (formerly known as
NationsBank, N.A.), which in turn is a wholly-owned banking subsidiary of Bank
of America Corporation, a bank holding company organized as a Delaware
corporation, pursuant to which BAAI provides investment advisory services to the
Funds. Under these Investment Advisory Agreements, BAAI is entitled to receive
an advisory fee, calculated daily on the Fund's average daily net assets and
payable monthly. Effective May 14, 1999, the maximum advisory fee payable by the
Funds decreased by 0.10% of the Funds' average daily net assets. The table below
shows the change in the maximum annual rate:
<TABLE>
<CAPTION>
CURRENT RATE RATE IN EFFECT
EFFECTIVE THROUGH
MAY 14, 1999 MAY 13, 1999
-----------------------------
<S> <C> <C>
International Equity,
International Growth....... 0.80% 0.90%
International Value.......... 0.90% 1.00%
Emerging Markets............. 1.00% 1.10%
</TABLE>
35
<PAGE> 40
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
Each of the Company and Reserves has entered into a sub-advisory agreement (the
"Sub-Advisory Agreements") with BAAI and Gartmore Global Partners ("Gartmore").
Gartmore is a joint venture structured as a general partnership between NB
Partner Corp., a wholly-owned subsidiary of Bank of America, and Gartmore U.S.
Ltd., an indirect wholly-owned subsidiary of Gartmore Investment Management PLC
("Gartmore PLC"), which is a United Kingdom ("U.K.") holding company for a
leading U.K. based international fund management group of companies. National
Westminster Bank PLC and its affiliated entities own 100% of the equity of
Gartmore PLC. Under the Sub-Advisory Agreements, Gartmore is entitled to receive
a sub-advisory fee from BAAI at the following annual rates of each Fund's
average daily net assets:
<TABLE>
<CAPTION>
ANNUAL
RATE
------
<S> <C>
International Equity*......................... 0.70%
International Growth.......................... 0.70
Emerging Markets.............................. 0.85
</TABLE>
- ---------------
* Gartmore receives a sub-advisory fee based upon their portion of the Fund's
average daily net assets.
The International Equity Fund is a "multi-manager" fund, which means that it is
managed by more than one sub-advisor. In addition to Gartmore, the Fund has
entered into sub-advisory agreements with INVESCO Global Asset Management
(N.A.), Inc. ("INVESCO") and Putnam Investment Management, Inc. ("Putnam"). Each
sub-advisor manages approximately one-third of the assets of the Fund. Pursuant
to the sub-advisory agreements INVESCO and Putnam are entitled to receive a fee
from BAAI at the annual rate of 0.65% of the first $60 million, 0.55% of the
next $130 million, 0.45% of the next $200 million and 0.40% over $390 million of
their portion of the Fund's average daily net assets.
Reserves has, on behalf of International Value Fund, entered into a sub-advisory
agreement with BAAI and Brandes Investment Partners, L.P. ("Brandes"), pursuant
to which Brandes is entitled to receive a fee from BAAI at the annual rate of
0.50% of the Fund's average daily net assets.
Stephens Inc. ("Stephens") and BAAI serve as co-administrators of the Company
and Reserves. Under the co-administration agreements, Stephens and BAAI are
currently entitled to receive a combined fee, computed daily and paid monthly,
at the maximum annual rate of 0.22% of the Fund's average daily net assets.
Effective May 14, 1999, the combined co-administration fee payable by the Funds
to Stephens and BAAI increased by 0.10% of the Fund's average daily net assets.
Prior to that date, the combined co-administration fee payable by the Funds was
0.12% of the average daily net assets. The Bank of New York ("BNY") serves as
sub-administrator of the Company and Reserves pursuant to an agreement with
BAAI. For the six months ended September 30, 1999, Stephens and BAAI earned
$193,051 and $520,790, respectively, from the Funds for its co-administration
services.
BAAI and/or the sub-advisors and Stephens may, from time to time, reduce their
fees payable by each Fund. Effective August 1, 1999, BAAI and/or the
sub-advisors and Stephens agreed to reimburse expenses and/or waive fees to the
extent that total expenses (excluding shareholder servicing and distribution
fees) exceed an annual rate of 1.15% of the International Equity Fund's average
daily net assets. Prior to that date, BAAI and/or the sub-advisors and Stephens
had voluntarily agreed to reimburse expenses and/or waive their fees to maintain
these total expense limits. In addition, BAAI and/or the sub-advisors and
Stephens voluntarily agreed to reimburse expenses and/or waive fees until May
2000 to the extent that total expenses (excluding shareholder servicing and
distribution fees) exceed an annual rate of 1.90% of the Emerging Markets Fund's
average daily net assets.
BNY serves as the custodian of the Funds' assets. For the six months ended
September 30, 1999, expenses of the Funds were reduced by $4,651 under expense
offset arrangements with BNY. The Funds could have invested a portion of the
assets utilized in connection with the expense offset arrangements in an income
producing asset if they had not entered into such arrangements.
First Data Investor Services Group, Inc., a wholly-owned subsidiary of First
Data Corporation, serves as the transfer agent for the Funds' shares. Bank of
America serves as the sub-transfer agent for the Primary Shares of the Funds.
For the six months ended September 30, 1999, Bank of America earned
approximately $8,230 for providing such services.
Stephens also serves as distributor of the Funds' shares. For the six months
ended September 30, 1999, the Funds were informed that the distributor received
$7,057,274 in front end sales charges for sales of Investor A Shares and $98,565
in contingent deferred sales charges from redemption of shares which were
subject to such charges. A substantial portion of these fees is paid to
affiliates of Bank of America.
36
<PAGE> 41
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
Effective July 1, 1999, the Board of Trustees/Directors of the Company and
Reserves, along with the Boards of Trustees/Directors of the other open-end
registered investment companies in the Nations Funds family, approved a new
compensation structure for the unaffiliated Trustees/Directors. The new
structure compensates the unaffiliated Trustees/Directors for their services to
the open-end registered investment companies in the Nations Funds family as a
whole, rather than to particular registered investment companies, or series or
portfolios thereof. As of September 30, 1999, the open-end registered investment
companies in the Nations Funds family were Nations Fund Trust, the Company,
Reserves, Nations Annuity Trust, Nations LifeGoal Funds, Inc. and Nations Master
Investment Trust. Under the new structure, each unaffiliated Trustee/Director
receives a base retainer fee from the open-end investment companies in the
amount of $65,000 per year, in addition to $5,000 for each in-person meeting
attended and $1,000 for each telephonic meeting attended. Each unaffiliated
Trustee/Director will be compensated only for a maximum of six in-person
meetings per calendar year. The Chairman of the Board receives an additional fee
of 20% of the base retainer fee and the Chairman of the Audit Committee receives
an additional fee of 10% of the base retainer fee. The members of the Nominating
Committee receive additional compensation at the rate of $1,000 per meeting
attended. Each unaffiliated Trustee/Director is also reimbursed for expenses
incurred in attending such meetings.
Prior to July 1, 1999, the Company and Reserves paid each unaffiliated Trustee
or Director an annual fee of $1,000 ($3,000 for the Chairman of the Board), plus
$500 per Fund and an additional $1,000 for each in-person board meeting, and
$500 for each telephonic board meeting attended. The Company and Nations
Reserves also reimbursed expenses incurred by each unaffiliated Trustee or
Director in attending such meetings.
The Company's and Reserves' eligible Trustees/Directors may participate in
non-qualified deferred compensation and retirement plans which may be terminated
at any time. All benefits provided under these plans are unfunded and any
payments to plan participants are paid solely out of the Funds' assets. Income
earned on each plan participant's deferral account is tied to the rate of return
of the eligible mutual funds selected by the participants or, if no funds are
selected, to the rate of return of Nations Treasury Fund, a portfolio of the
Company. The expense for the deferred compensation and retirement plans is
included in "Trustees/Directors' fees and expenses" in the Statements of
operations.
The Funds placed a portion of their portfolio transactions with firms that could
be deemed to be affiliates of Gartmore PLC.
International Value and International Equity Funds have made daily investments
of cash balances in Nations Cash Reserves, a portfolio of Reserves, pursuant to
an exemptive order received from the Securities and Exchange Commission. For the
six months ended September 30, 1999, International Value and International
Equity Funds earned $637,932 from such investments, which is included in
interest income.
A significant portion of each Fund's Primary A Shares represents investments by
fiduciary accounts over which Bank of America has either sole or joint
investment discretion.
3. SHAREHOLDER SERVICING AND DISTRIBUTION PLANS
The Company and Reserves each have adopted shareholder servicing plans and
distribution plans for the Investor A, Investor B and Investor C Shares of each
Fund. The shareholder servicing plans permit the Funds to compensate or
reimburse servicing agents for shareholder services provided by the servicing
agents. The distribution plans, adopted pursuant to Rule 12b-1 under the 1940
Act, permit the Funds to compensate or reimburse the distributor (and for
Investor A Shares, the distributor and/or selling agents) for activities or
expenses primarily intended to result in the sale of the classes' shares.
Payments are made at an annual rate, as a percentage of average daily net assets
set from time to time by the Board of Trustees/Directors, and are charged as
expenses of each Fund directly to the applicable class. A substantial portion of
the expenses incurred pursuant to these plans is paid to affiliates of Bank of
America and BAAI.
37
<PAGE> 42
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
At September 30, 1999, the rates in effect and plan limits, as a percentage of
average daily net assets, were as follows:
<TABLE>
<CAPTION>
CURRENT PLAN
RATE LIMIT
----------------
<S> <C> <C>
Investor A Combined Shareholder
Servicing and Distribution Plan.... 0.25% 0.25%
Investor B and Investor C Shareholder
Servicing Plans.................... 0.25% 0.25%
Investor B and Investor C
Distribution Plans................. 0.75% 0.75%
</TABLE>
4. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, excluding
long-term U.S. government securities and short-term investments, for the six
months ended September 30, 1999 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
(000) (000)
-----------------------
<S> <C> <C>
International Value........... $224,293 $ 32,379
International Equity.......... 945,431 1,059,633
International Growth.......... 12,809 55,475
Emerging Markets.............. 8,457 10,880
</TABLE>
There were no purchases or sales of long-term U.S. government securities for the
six month ended September 30, 1999.
5. CAPITAL STOCK
As of September 30, 1999, 480,000,000,000 shares of $.001 par value capital
stock were authorized for the Company and an unlimited number of shares of
beneficial interest without par value were authorized for Reserves. The
Company's Articles of Incorporation and Reserves' Declaration of Trust authorize
the Boards of Trustees/ Directors to classify or reclassify any authorized, but
unissued shares into one or more additional classes or series of shares. See
Schedules of capital stock activity.
6. FOREIGN SECURITIES
Each Fund may invest in foreign securities. Investing in securities of foreign
companies and foreign governments involves special risks and considerations not
typically associated with investing in U.S. companies and the U.S. government.
These risks include revaluation of currencies, less reliable information about
issuers, different securities transaction clearance and settlement practices,
and future adverse political and economic developments. These risks are
heightened for investments in emerging markets countries. Moreover, securities
of many foreign companies and foreign governments and their markets may be less
liquid and their prices more volatile than those of securities of comparable
U.S. companies and the U.S. government.
7. LINE OF CREDIT
The Company and Reserves each participate in an uncommitted line of credit
provided by BNY under a line of credit agreement (the "Agreement"). Advances
under the Agreement are taken primarily for temporary or emergency purposes,
including the meeting of redemption requests that otherwise might require the
untimely disposition of securities. Interest on borrowings is payable at a
specified Federal Funds rate plus 0.50% on an annualized basis. Each
participating Fund maintains a ratio of no less than 4 to 1 net assets (not
including amounts borrowed pursuant to the Agreement) to the aggregate amount of
indebtedness pursuant to the Agreement.
At September 30, 1999, there were no loans outstanding under this Agreement. For
the six months ended September 30, 1999, borrowings by the Funds under the
Agreement were as follows:
<TABLE>
<CAPTION>
AVERAGE
AMOUNT AVERAGE
OUTSTANDING INTEREST
FUND (000) RATE
- ---------------------------------------------------------
<S> <C> <C>
International Equity............ $2,394 5.67%
Emerging Markets................ 109 5.37
</TABLE>
The average amount outstanding was calculated based on daily balances in the
period.
8. SECURITIES LENDING
Under an agreement with BNY, the Funds can lend their portfolio securities to
approved brokers, dealers and other financial institutions. Loans are
collateralized by cash in an amount at least equal to the market value of the
securities loaned. The cash collateral received is invested in Nations Cash
Reserves, a portfolio of Reserves. A portion of the income generated by the
investment of the collateral, net of any rebates paid by BNY to borrowers, is
remitted to BNY as lending agent, and the remainder is paid to the Fund.
Generally, in the event of counterparty default, the Fund has the right to use
the collateral to offset losses incurred. There would be a potential loss to the
Fund in the event the Fund is delayed or prevented from exercising its right to
dispose of the collateral. The Fund bears the risk of loss with respect to the
investment of collateral.
38
<PAGE> 43
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
At September 30, 1999, the following Funds had securities on loan:
<TABLE>
<CAPTION>
MARKET VALUE OF MARKET VALUE
LOANED SECURITIES OF COLLATERAL
FUND (000) (000)
- ------------------------------------------------------------
<S> <C> <C>
International Value...... $110,004 $114,680
International Equity..... 69,176 73,890
International Growth..... 11,878 12,681
Emerging Markets......... 3,921 4,237
</TABLE>
9. CAPITAL LOSS CARRYFORWARD
At March 31, 1999, the Emerging Markets Fund had available for Federal income
tax purposes unused capital losses of $3,825,000 expiring in 2006 and
$15,069,000 expiring in 2007.
Under current tax law, capital and currency losses realized after October 31 may
be deferred and treated as occurring on the first day of the following fiscal
year. For the fiscal year ended March 31, 1999, the Emerging Markets Fund
elected to defer losses of $2,207,758 occurring between November 1, 1998 and
March 31, 1999 under these rules.
10. REORGANIZATIONS
On May 22, 1998, the International Value Fund, a newly established portfolio,
acquired the assets and certain liabilities of the Emerald International Equity
Fund pursuant to a plan of reorganization approved by its shareholders. The
acquisition was accomplished by a tax-free exchange of shares of International
Value Fund in an amount equal to the value of the outstanding shares of the
Emerald International Equity Fund. The financial statements of the International
Value Fund reflect the historical financial results of the Emerald International
Equity Fund prior to the reorganization. Additionally, the fiscal year end of
the Emerald International Equity Fund for financial reporting purposes was
changed to coincide with that of the Company.
On March 30, 1999, the Emerging Markets Fund (the "Acquiring Fund"), acquired
the assets and certain liabilities of the Nations Pacific Growth Fund (the
"Acquired Fund"), in a taxable reorganization in exchange for shares of the
Acquiring Fund, pursuant to a plan of reorganization approved by the Acquired
Fund's shareholders. The number and value of shares issued by the Acquiring Fund
are presented in the Schedules of capital stock activity. Net assets as of the
reorganization date were as follows:
<TABLE>
<CAPTION>
TOTAL NET ASSETS
TOTAL NET ASSETS TOTAL NET ASSETS OF ACQUIRING FUND
OF ACQUIRED FUND OF ACQUIRING FUND AFTER ACQUISITION
(000) (000) (000)
- --------------------------------------------------------
<S> <C> <C>
$9,829 $14,553 $24,382
</TABLE>
ACQUISITION OF THE PACIFIC HORIZON FUNDS
On May 14, 1999, the International Equity Fund (the "Acquiring Fund"), acquired
the assets and liabilities of the Pacific Horizon International Equity Fund (the
"Acquired Fund"), in a tax-free reorganization in exchange for shares of the
Acquiring Fund, pursuant to a plan of reorganization approved by the Acquired
Fund's shareholders. The number and value of shares issued by the Acquiring Fund
are presented in the Schedules of capital stock activity. Net assets and
unrealized appreciation as of the reorganization date were as follows:
<TABLE>
<CAPTION>
TOTAL NET ACQUIRED
TOTAL NET TOTAL NET ASSETS OF FUND
ASSETS OF ASSETS OF ACQUIRING FUND UNREALIZED
ACQUIRED FUND ACQUIRING FUND AFTER ACQUISITION APPRECIATION
(000) (000) (000) (000)
- -----------------------------------------------------------------
<S> <C> <C> <C>
$43,073 $766,603 $809,676 $5,349
</TABLE>
CHANGE OF REGISTERED INVESTMENT COMPANY
On August 20, 1999, the Emerging Markets, International Equity and International
Value Funds, newly established shell portfolios of Reserves (the "Successor
Funds"), acquired the assets and liabilities of their predecessor funds, which
were series of Nations Fund, Inc., Nations Fund, Inc. and Nations Fund
Portfolios, Inc., respectively, pursuant to a plans of reorganization approved
by each predecessor fund's shareholders. The predecessor funds had the same
name, investment objective and principal investment strategies as the Successor
Funds. The acquisition was accomplished by a tax-free exchange of shares of the
Successor Funds in an amount equal to the value of the outstanding shares of the
predecessor funds. The financial statements of the Successor Funds reflect the
historical financial results of the predecessor funds prior to the
reorganizations.
39
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P.O. Box 34602
Charlotte, NC 28234-4602
Toll free 1.800.982.2271
Nations Funds
SAR3 991428 (9/99)
