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[GALAXY FUND II LOGO]
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[PHOTO OF PEOPLE ON WALKWAY]
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GALAXY FUND II REPORT
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Large Company Index Fund - Small Company Index Fund -
Utility Index Fund - U.S. Treasury Index Fund - Municipal Bond Fund
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SEMI-ANNUAL
REPORT
FOR THE
PERIOD ENDED
SEPTEMBER 30, 1996
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CHAIRMAN'S
MESSAGE
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Dear Galaxy Fund II Shareholder:
The following report covers the performance of the Galaxy Fund II
portfolios for the six months ended September 30, 1996. The report includes both
an overview of financial market activity during this time and investment reviews
for each portfolio. At the back of the report, you'll find lists of securities
in the portfolios when the period ended, as well as financial statements for the
individual portfolios.
In the last six months the outlook for the economy became less clear and
investors grew more nervous about higher inflation and interest rates. This made
the financial markets more volatile. Although stock and bond prices improved
over the period, the gains were relatively smaller than they were six months
earlier.
The Galaxy Fund II portfolios held up well in this environment. Many stock
investors moved quickly among issues in search of new opportunities. The broad
diversification of holdings in the Galaxy Fund II stock index portfolios helped
buffer shareholders from the potentially negative impact of such rotation.
Diversification also helped to provide balance to returns when compared to the
effect sector volatility can have on the performance of mutual funds that
concentrate investments in selected market segments. Strong diversification also
benefited shareholders of the U.S. Treasury Index Fund.
Expenses for index funds are generally lower than those for other mutual
funds because index funds hold fixed baskets of securities and therefore make
fewer purchases and sales. As of September 30, 1996, the average U.S. stock fund
charged shareholders 1.4% of assets for management fees and other operational
expenses -- according to Morningstar Mutual Funds, Inc., a mutual fund tracking
service. That cost compared to 0.40% for the Galaxy Fund II stock portfolios
during the six months ended September 30, 1996.
Index funds can also help you trim taxes on capital gains distributions --
which keeps more of your money at work. When mutual funds have realized capital
gains due to trades they make in their portfolios, they must pass 95% of these
net gains on to you. Because they tend to make fewer trades, index funds
generally have less gains to distribute.
We hope this report will help you understand the many factors that
influence your returns. If you have questions after reading the report or want
more information about Galaxy funds and services, please call the Galaxy
Information Center at 1-800-628-0414.
Sincerely,
/s/ Dwight E. Vicks, Jr.
- ------------------------
Dwight E. Vicks, Jr.
Chairman of the Board of Trustees
MUTUAL FUNDS:
- - ARE NOT BANK DEPOSITS
- - ARE NOT FDIC INSURED
- - ARE NOT OBLIGATIONS OF FLEET BANK
- - ARE NOT GUARANTEED BY FLEET BANK
- - ARE SUBJECT TO INVESTMENT RISKS INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED
<PAGE> 3
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MARKET OVERVIEW
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MARKET OVERVIEW
By Fleet Investment Advisors Inc.
Stock and bond prices grew more volatile in the six months ended September 30,
1996, as investors became more confused about where the economy and interest
rates were headed. Prices weakened when investors thought the economy was
growing fast enough for the Federal Reserve to stem inflation with higher
interest rates. Prices then strengthened when investors saw that inflation was
moderate and the Federal Reserve had left interest rates unchanged. At the end
of the period stock and bond prices were modestly higher than when it began.
SECOND-GUESSING THE FED
Many times during the period there were reports that the economy was growing
much faster than analysts had expected. Indeed, the Gross Domestic Product
("GDP") measuring U.S. goods and services grew at an annual rate of 4.7% in the
second quarter of 1996, up from 2.0% in the first. As investors worried about
higher inflation, bond prices fell and bond yields rose -- pushing the yield for
long-term Treasury bonds above 7% for the first time since May 1995.
Although rising bond yields made stocks less attractive, stock prices
advanced in the second quarter partially due to ongoing growth in company
earnings and large flows of cash into stock mutual funds. The gains were more
modest and stock prices were more volatile than in previous quarters, however.
In the second quarter the S&P 500 Index had a total return of 3.8%, versus a
return of 5.4% in the first quarter.
Stock and bond prices dropped sharply at the start of the third quarter on
new reports of economic strength. This created a total correction for stocks of
10% since their last high in May and drove the yield for long-term Treasury
bonds to 7.2%. Because inflation remained moderate, however, the Federal Reserve
continued to leave interest rates alone. This, plus later reports of slower
growth helped stock and bond prices rebound. Although stock prices dipped again
at the end of August, they quickly recovered -- as investors again put money in
stock funds after a two-month ebb. By the end of the period most stock indices
were breaking new highs. After retreating early in August, bond prices were also
advancing as the period closed.
[CAPTION]
"Many times during the period there were reports that the economy was growing
much faster than analysts had expected."
1
<PAGE> 4
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MARKET OVERVIEW
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RESPONDING TO SLOWER GROWTH
Although the Federal Reserve may raise interest rates in coming months, Fleet
Investment Advisors believes any increase would be modest. We also feel stock
and bond prices have already adjusted for such an increase. With interest rates
at or slightly above current levels, the economy should begin to lose steam.
After slowing to an estimated rate of 2.3% in the third quarter, we expect GDP
growth to remain near 2% through the fourth quarter and into 1997. If this
happens, and investors see that inflation is still in check, interest rates
should edge back down and bond prices should rally.
Lower interest rates should also benefit stocks. Now that valuations are
high again, however, slower economic growth and weaker earnings could prompt
another correction. Once valuations become more reasonable, stocks should have
more room to improve.
[CAPTION]
"Lower interest rates should also benefit stocks. Now that valuations are high
again, however, slower economic growth and weaker earnings could prompt another
correction. "
PERFORMANCE AT-A-GLANCE
Average Annual Returns as of September 30, 1996
LARGE COMPANY INDEX FUND Inception Date 10/1/90
Six Months 7.48%
1 Year 20.00% [BAR CHART]
3 Years 16.97%
5 Years 14.75%
Life of Fund 16.94%
SMALL COMPANY INDEX FUND Inception Date 10/1/90
Six Months 6.77%
1 Year 16.23% [BAR CHART]
3 Years 13.37%
5 Years 14.91%
Life of Fund 19.04%
UTILITY INDEX FUND Inception Date 1/5/93
Six Months -2.92%
1 Year 2.02% [BAR CHART]
3 Years 3.80%
Life of Fund 8.23%
U.S. TREASURY INDEX FUND Inception Date 6/4/91
Six Months 1.93%
1 Year 3.93% [BAR CHART]
3 Years 3.98%
5 Years 7.19%
Life of Fund 7.82%
MUNICIPAL BOND FUND Inception Date 4/15/93
Six Months 1.84%
1 Year 3.93% [BAR CHART]
3 Years 3.58%
Life of Fund 5.08%
- 6 months returns are cummulative
The performance data quoted represents past performance and the invesment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
2
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PORTFOLIO REVIEWS
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[PHOTO OF Murphy van der Velde]
GALAXY FUND II
LARGE COMPANY INDEX FUND
By Murphy van der Velde
Portfolio Manager
The Galaxy Fund II Large Company Index Fund seeks to match, before the deduction
of operating expenses, the price and yield performance of the S&P 500 Composite
Stock Price Index(R) (the "S&P Index"). By investing in publicly traded U.S.
stocks according to their representation in the S&P Index, the Fund is also
structured to deliver the same volatility and risk as the S&P Index.
Rising stock prices, plus interest in the more reliable earnings of
large-company stocks, helped the S&P Index earn a total return of 7.72% for the
six months ended September 30, 1996. During the same period, the Fund had a
total return of 7.48% (after the deduction of operating expenses).
During the 12 months ended September 30, 1996, the Fund's performance
represented a correlation coefficient of .999%. Correlation coefficients measure
the degree to which fund performances after expenses move in line with their
target index during specific periods. A high correlation coefficient means that
the Galaxy Fund II Large Company Index Fund generated results that closely
tracked the S&P Index. As in the previous six months, the Fund's broad
diversification helped buffer shareholders from the added volatility caused by
significant rotation among industry sectors.
While we expect moderate growth and inflation to help stock prices advance
further in coming months, we think high valuations and the prospect of slower
earnings growth could prompt another market correction. Any such weakness,
however, could set the stage for another advance.
We expect stocks of large companies to perform especially well in this
environment, as investors continue to focus on firms with reliable earnings.
Since the recent rotation among industry sectors is likely to persist, index
funds representing a wide range of securities should give investors further
protection from volatility.
GALAXY FUND II
LARGE COMPANY
INDEX FUND
Distribution of Total Net Assets as of September 30, 1996
<TABLE>
[PIE CHART]
<S> <C>
Other Common and Preferred Stocks 8%
Technology 13%
Capital Goods 7%
Financial 13%
Consumer Cyclical 8%
Consumer Staples 21%
Utilities 7%
Energy 7%
U.S. Gov't and Agency Obligations and
Net Other Assets and Liabilities 16%
</TABLE>
GALAXY FUND II
LARGE COMPANY INDEX FUND
Growth of $10,000 investment*
<TABLE>
[MOUNTAIN CHART]
10/1/90 9/91 9/92 9/93 9/94 9/95 9/96
<S> <C>
INITIAL INVESTMENT $10,000
S&P 500 $26,398
GALAXY $25,566
</TABLE>
- - Galaxy Fund II Large Company Index Fund
- - S&P 500 Composite Stock Price Index(R)
*Since inception on 10/1/90. The S&P 500 Composite Stock Price Index(R) is an
unmanaged index which does not reflect expenses and management fees.
GALAXY FUND II
SMALL COMPANY INDEX FUND
By Murphy van der Velde
Portfolio Manager
The Galaxy Fund II Small Company Index Fund seeks to match, before the
deduction of operating expenses, the price and yield performance of smaller
capitalization stocks as represented by the Russell Special Small Company(TM)
Index (the "Russell Index"). The Russell Index is an unmanaged index of the
common stocks of 3000 companies with the largest market capitalizations,
excluding companies in the S&P 500 Index. The Small
GALAXY FUND II
SMALL COMPANY INDEX FUND
Distribution of Total Net Assets
as of September 30, 1996
<TABLE>
[PIE CHART]
<S> <C>
Finance 18%
Consumer Cyclical 10%
Other Common and Preferred Stocks 6%
Technology 17%
Capital Goods 4%
Consumer Staples 16%
Basic Materials 5%
Energy 4%
Utilities 9%
U.S. Gov't. and Agency Obligations and
Net Other Assets and Liabilities 11%
</TABLE>
3
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PORTFOLIO REVIEWS
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Company Index Fund does not own all of the issues in the Russell Index, but uses
a statistical technique known as "portfolio optimization" to select securities.
This technique is designed to provide the Fund with the same responsiveness to
economic developments as that of the Russell Index.
In the six months ended September 30, 1996, small-company stocks benefited
from strong advances in technology issues -- as well as continued economic
growth and strong interest in initial public offerings. After a sharp advance
early in the period, small company issues were hit especially hard when the
market corrected. With further gains in technology issues, however, stocks of
small companies easily recouped the ground that they'd lost.
During this time the Russell Index produced a total return of 6.41%, and
the Galaxy Fund II Small Company Index Fund achieved a total return of 6.77%
(after the deduction of operating expenses).
The Fund's performance during the 12 months ended September 30, 1996
represented a correlation coefficient of .991%. Correlation coefficients measure
the degree to which fund performances after expenses move in line with their
target index during specific periods. A high correlation coefficient means the
Fund generated results that tracked the Russell Index.
In the short-term, high valuations and slower economic growth may make
small company stocks especially vulnerable to another correction. Longer-term,
however, stocks of small companies should continue to benefit from investors'
preference for issues with strong potential in a growing economy.
GALAXY FUND II
SMALL COMPANY
INDEX FUND
Growth of $10,000 investment*
- - Galaxy Fund II Small Company Index Fund
- - Russell Special Small Company(TM) Index
<TABLE>
[MOUNTAIN CHART]
10/1/90 9/91 9/92 9/93 9/94 9/95 9/96
<S> <C>
Initial Investment $10,000
Galaxy Fund II Small Company Index Fund $28,436
Russell Special Small Company(TM) Index $31,650
</TABLE>
*Since inception on 10/1/90. The Russell Special Small Company (TM)Index is an
unmanaged index which does not reflect expenses and management fees.
GALAXY FUND II
UTILITY INDEX FUND
By Murphy van der Velde
Portfolio Manager
The Galaxy Fund II Utility Index Fund seeks to match, before the deduction of
operating expenses, the price and yield performance of stocks in the utility
industry. To this end, the Fund invests in publicly traded stocks according to
their representation in the Russell 1000(TM) Utility Index (the "Utility
Index"), an unmanaged index of the common stocks of the utility companies
included in the Russell 1000.
In the six months ended September 30, 1996, prices for utility stocks
suffered from rising oil prices and disappointing earnings -- as well as from
fears of higher interest rates. These effects were offset somewhat by investors'
desire for income-oriented stocks and the continued consolidation of natural gas
firms. During the period the Utility Index produced a total return of -3.82%,
and the Galaxy Fund II Utility Index Fund had a total return of -2.92% (after
the deduction of operating expenses). The Standard & Poor's Utili-
GALAXY FUND II
UTILITY INDEX FUND
Distribution of Total Net Assets
as of September 30, 1996
<TABLE>
[PIE CHART]
<S> <C>
Other Common Stocks 8%
Utilities 94%
U.S. Government
Agency Obligation 7%
</TABLE>
Net Other Assets and Liabilities -9%
GALAXY FUND II
UTILITY INDEX FUND
Growth of $10,000 investment*
<TABLE>
[MOUNTAIN CHART]
1/5/93 9/94 9/95 9/96 9/96
<S> <C>
Initial Investment $10,000
Standard & Poor's(R) Utility Index $14,372
Russell 1000(R) Utility Index $13,396
Galaxy Fund II Utility Index Fund $13,436
</TABLE>
- - Galaxy Fund II Utility Index Fund
- - Russell 1000(R) Utility Index
- - Standard & Poor's(R) Utility Index
*Since inception on 1/5/93. The Russell 1000(R) Utility Index and Standard &
Poor's(R) Utility Index are unmanaged indices which do not reflect expenses and
management fees.
4
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PORTFOLIO REVIEWS
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ty Index, which reflects the results of a more yield oriented selection of
utility stocks than the Russell 1000(TM) Utility Index, returned 1.50% during
the same period. The Fund's outperformance of the Utility Index can be
attributed primarily to the positive performance of its investment in AT&T stock
during the period.
For the 12 months ended September 30, 1996 the Fund's performance
represents a correlation coefficient of .995%. Correlation coefficients measure
the degree to which fund performances after expenses move in line with their
target index during specific periods. A high correlation coefficient means the
Fund generated results that closely tracked the utility indices.
Ongoing uncertainty about the magnitude of oil price and interest rate
increases may plague utility stocks further in coming months. If the Federal
Reserve raises short-term interest rates, however, utility stocks should
eventually benefit from a slower economy and any decline in interest rates that
would result. Investors could also be drawn by the attractive valuations that
utility stocks now offer, as well as by enhanced cost-efficiency from further
consolidation of natural gas firms.
Murphy van der Velde became manager of the Galaxy Fund II Large Company Index
Fund, the Galaxy Fund II Small Company Index Fund and the Galaxy Fund II Utility
Index Fund in March of 1996. The managing director of equity trading and
derivative products for Fleet Investment Advisors, Mr. van der Velde has managed
equity portfolios since 1993.
[PHOTO OF David Lindsay]
GALAXY FUND II
U.S. TREASURY INDEX FUND
By David Lindsay
Portfolio Manager
The Galaxy Fund II U.S. Treasury Index Fund seeks to match, before the deduction
of operating expenses, the price and yield performance of the U.S. Treasury
component of the Salomon Brothers Broad Investment Grade Bond Index (the "U.S.
Treasury Index"), an unmanaged index of government securities. The Fund attempts
to meet this objective by investing in U.S. Treasury notes and bonds according
to their representation in the U.S. Treasury Index.
Worries about higher interest rates and inflation made prices for Treasury
bonds quite volatile in the six months ended September 30, 1996. Also during
this period many investors favored corporate issues, which have moderately
higher yields. Treasury prices traded in a relatively narrow range, however,
keeping yields for 30-year bonds between 6.65% and 7.25%.
During this time the U.S. Treasury Index posted a total return of 2.10%,
while the Galaxy Fund II U.S. Treasury Index Fund had a total return of 1.93%
(after deduction of operating expenses).
The Fund's performance during the 12 months ended September 30, 1996
represents a correlation coefficient of .998%. Correlation coefficients measure
the degree to which fund performances after expenses move in line with their
target index during specific periods. A high correlation coefficient means
GALAXY FUND II
U.S. TREASURY
INDEX FUND
Distribution of Total Net Assets
as of September 30, 1996
<TABLE>
[PIE CHART]
<S> <C>
Other U.S. Government
and Agency Obligations
& Net Other Assets
and Liabilities 3%
U.S. Treasury Bonds 26%
U.S. Treasury Notes 71%
</TABLE>
GALAXY FUND II
U.S. TREASURY INDEX FUND
Growth of $10,000 investment*
<TABLE>
[MOUNTAIN CHART]
6/4/91 9/91 9/92 9/93 9/94 9/95 9/96
<S> <C>
Initial Investment $10,000
Galaxy Fund II U.S. Treasury Index Fund $14,932
Salomon Brothers U.S. Treasury Index $15,222
</TABLE>
- - Galaxy Fund II U.S. Treasury Index Fund
- - Salomon Brothers U.S. Treasury Index
* Since inception on 6/4/91. The Salomon Brothers U.S. Treasury Index is an
unmanaged index which does not reflect expenses and management fees.
5
<PAGE> 8
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PORTFOLIO REVIEWS
- -----------------
the Fund generated results that tracked the index closely and shows that the
securities owned by the Fund constituted a representative cross-section of the
U.S. Treasury Index.
Moderate inflation in the U.S. and low interest rates overseas should keep
Treasury bonds attractive to investors here and abroad. If the Federal Reserve
raises short-term interest rates and economic growth slows, prices for
Treasuries could strengthen enough to lower long-term yields early next year.
Having suffered more when bond prices fell, we believe Treasuries could outpace
corporate bonds and other higher-yielding issues in months to come.
David Lindsay has managed the Galaxy Fund II U.S. Treasury Index Fund since July
1994. He has managed fixed-income portfolios for Fleet Investment AdvisorsInc.
since 1986.
[PHOTO OF Mary McGoldrick]
GALAXY FUND II
MUNICIPAL BOND FUND
By Mary McGoldrick
Portfolio Manager
The Galaxy Fund II Municipal Bond Fund seeks to provide the highest level of
income exempt from regular federal tax that is consistent with preservation of
capital. Typically, the Fund invests substantially all of its assets in debt
securities issued by state, local and regional government agencies, and
maintains an average maturity for its investments of seven to 12 years.
In the last six months prices for municipal bonds held up relatively well
against rising interest rates. This was largely because municipal prices had
been hurt earlier by talk of legislation that would have removed the tax
advantages municipals enjoy. As Congress grew less interested in such changes,
municipal prices strengthened. Prices for municipals also benefited from a
reduced supply of new issues. Many issuers postponed taking issues to market
hoping that interest rates would soon fall.
During this time we tried to make the most of higher yields by emphasizing
longer-term issues in the Fund's portfolio. To further enhance yield, while
protecting the value of Fund shares, we concentrated on municipal bonds that
could not be called in early by their issuers. Prices for bonds with such
protection tend to fluctuate less in times of market instability than prices for
"callable" issues.
GALAXY FUND II
MUNICIPAL BOND FUND
Growth of $10,000 investment*
<TABLE>
- - Galaxy Fund II Municipal Bond Fund
- - Lehman Bros. Seven Year Municipal Bond Index
4/15/93 9/93 9/94 9/95 9/96
<S> <C>
Initial Investment $10,000
Lehman Bros. Seven Year Municipal Bond Index $11,488
Galaxy Fund II Municipal Bond Fund $11,871
</TABLE>
* Since inception on 4/15/93. The Lehman Brothers Seven Year Municipal Bond
Index is an unmanaged index which does not reflect expenses and management
fees.
6
<PAGE> 9
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PORTFOLIO REVIEWS
- -----------------
These strategies helped the Fund earn a total return of 1.84% (after
deduction of operating expenses) for the six months ended September 30, 1996.
That compares to a return of 2.24% for its benchmark, the Lehman Brothers Seven
Year Municipal Bond Index -- an unmanaged index of municipal issues that mature
in seven years.
Prices for municipal securities may fluctuate further in coming months, as
bond investors remain confused about the economy and interest rates. Should the
Federal Reserve raise interest rates modestly, however, the economy could slow,
interest rates could fall, and bond prices should start to improve. By focusing
on municipal bonds with longer maturities, which tend to be more sensitive to
interest rate changes, we hope to enhance the potential for capital gains that a
bond rally could bring.
[CAPTION]
Mary McGoldrick has managed the Galaxy Fund II Municipal Bond Fund since July
1994. She has managed portfolios at Fleet Investment Advisors Inc. and other
banks for nine years.
GALAXY FUND II MUNICIPAL BOND FUND
Geographical Distribution of Total Net Assets
as of September 30, 1996
<TABLE>
[PIE CHART]
<S> <C>
South 33%
East 31%
Mountain 10%
Pacific 7%
North Central 18%
Net Other Assets and Liabilities 1%
</TABLE>
7
<PAGE> 10
- ---------------------------
SHAREHOLDER INFORMATION
- ---------------------------
TRUSTEES
AND OFFICERS
Dwight E. Vicks, Jr.
Chairman and Trustee
John T. O'Neill
President, Treasurer
and Trustee
Louis DeThomasis,
F.S.C., Ph.D.
Trustee
Donald B. Miller
Trustee
James M. Seed
Trustee
Bradford S. Wellman
Trustee
W. Bruce
McConnel, III, Esq.
Secretary
Neil Forrest
Vice President &
Assistant Treasurer
INVESTMENT ADVISOR
Fleet Investment
Advisors Inc.
75 State Street
Boston, MA
02109
DISTRIBUTOR
440 Financial
Distributors, Inc.
4400 Computer Drive
Westborough,
Massachusetts 01581
ADMINISTRATOR
Fleet National Bank
50 Kennedy Plaza
Providence,
Rhode Island 02903-2305
For complete information, and before making an investment decision on any of the
Funds of Galaxy Fund II, you should request a prospectus from 440 Financial
Distributors, Inc., by calling (800) 628-0414. This report is submitted for the
general information of shareholders of Galaxy Fund II. It is not authorized for
distribution to prospective investors unless accompanied or preceded by an
effective prospectus for each Fund of Galaxy Fund II, which contains more
information concerning investment policies, expenses of the Funds as well as
other pertinent information. Read the prospectus carefully before you invest.
Shares of the Funds are not deposits or obligations of, or guaranteed or
endorsed by Fleet Financial Group, Inc. or any of its affiliates, Fleet
Investment Advisors Inc., or any Fleet bank. Shares of the Funds are not
federally insured by the U.S. Government, the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other agency. The performance data
quoted represents past performance and the investment return and principal value
will vary as a result of market conditions or other factors so that shares of
the Funds, when redeemed, may be worth more or less than their original cost. An
investment in the Funds involves investment risks, including the possible loss
of principal.
[RECYCLE SYMBOL]
This report was printed on recycled paper.
8
<PAGE> 11
<TABLE>
LARGE COMPANY INDEX FUND
GALAXY PORTFOLIO OF INVESTMENTS
FUND II SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
SHARES (NOTE 2)
------ --------
<S> <C> <C>
COMMON STOCKS - 84.28%
CONSUMER STAPLES - 20.78%
40,600 Abbott Laboratories $ 1,999,550
1,479 Alberto-Culver Co., Class B 64,152
3,187 Allergan, Inc. 121,504
4,191 ALZA Corp.* 112,633
9,434 American Brands, Inc. 398,587
31,970 American Home Products Corp. 2,038,088
13,548 Amgen, Inc.* 855,218
26,056 Anheuser-Busch Cos., Inc. 980,357
28,315 Archer-Daniels-Midland Co. 545,064
7,062 Avon Products, Inc. 350,452
2,900 Bard (C.R.), Inc. 90,263
2,922 Bausch & Lomb, Inc. 107,384
14,394 Baxter International, Inc. 672,920
6,542 Becton Dickinson & Co. 289,484
5,098 Beverly Enterprises, Inc.* 55,441
5,827 Biomet, Inc.* 95,417
26,074 Bristol-Myers Squibb Co. 2,512,882
3,411 Brown-Forman Corp., Class B 133,455
12,770 Campbell Soup Co. 996,060
2,703 Clorox Co. 259,150
128,904 Coca-Cola Co. 6,557,933
7,618 Colgate Palmolive Co. 661,814
22,928 Columbia/HCA Healthcare Corp. 1,304,030
2,373 Community Psychiatric Centers * 22,247
12,272 ConAgra, Inc. 604,396
2,039 Coors (Adolph) Co., Class B 44,731
7,665 CPC International, Inc. 573,917
8,118 Darden Restaurants, Inc. 70,018
10,600 Federated Department Stores, Inc.* 355,100
2,025 Fleming Cos., Inc. 35,184
4,103 Fruit of The Loom, Inc., Class A * 127,193
8,214 General Mills, Inc. 495,920
22,754 Gillette Co. 1,641,132
19,394 Heinz (H. J.) Co. 654,548
8,172 Hershey Foods Corp. 410,643
6,200 HFS, Inc.* 414,625
8,200 Humana, Inc.* 166,050
5,632 International Flavors & Fragances, Inc 245,696
66,402 Johnson & Johnson 3,403,103
11,185 Kellogg Co. 770,367
14,447 Kimberly-Clark Corp. 1,273,142
28,528 Lilly (Eli) & Co. 1,840,056
13,982 Limited, Inc. 267,406
3,913 Liz Claiborne, Inc. 145,759
1,195 Luby's Cafeterias, Inc. 28,680
3,124 Manor Care, Inc. 119,884
35,605 McDonald's Corp. 1,686,787
11,892 Medtronic, Inc. 762,575
63,405 Merck & Co., Inc. 4,462,127
7,358 NIKE, Inc., Class B 893,997
81,200 PepsiCo, Inc. 2,293,900
32,450 Pfizer, Inc. 2,567,606
25,845 Pharmacia & Upjohn, Inc. 1,066,106
43,217 Philip Morris Cos., Inc. 3,878,726
4,415 Pioneer Hi-Bred International, Inc. $ 267,108
35,229 Procter & Gamble Co. 3,434,828
6,851 Quaker Oats Co. 250,918
5,413 Ralston Purina Group 370,791
3,686 Reebok International, Ltd. 128,089
4,318 Rite Aid Corp. 156,528
8,076 Rubbermaid, Inc. 197,862
2,153 Russell Corp. 69,434
2,901 Ryan's Family Steak Houses, Inc.* 22,120
24,974 Sara Lee Corp. 892,821
19,105 Schering-Plough Corp. 1,174,958
19,125 Seagram Co., Ltd. 714,797
20,166 Sears Roebuck & Co. 902,429
1,079 Shared Medical Systems Corp. 61,503
2,249 Shoney's, Inc.* 20,522
1,052 Springs Industries, Inc., Class A 46,814
3,664 St. Jude Medical, Inc.* 147,934
3,478 SuperValu, Inc. 95,645
9,394 Sysco Corp. 315,873
10,359 Tenet Healthcare Corp.* 230,488
8,209 Unilever N.V., New York Shares 1,293,944
9,136 United Healthcare Corp. 380,286
2,878 United States Surgical Corp. 122,315
10,088 UST, Inc. 298,857
3,225 VF Corp. 193,903
14,014 Warner-Lambert Co. 924,924
6,170 Wendy's International, Inc. 132,655
7,888 Winn-Dixie Stores, Inc. 275,094
5,846 Wrigley (William) Jr. Co. 352,222
------------
65,999,121
------------
TECHNOLOGY - 13.26%
6,938 Advanced Micro Devices, Inc.* 102,336
25,247 Airtouch Communications, Inc.* 697,448
6,028 Amdahl Corp.* 56,889
82,085 American Telephone & Telegraph Corp. 4,288,941
11,118 AMP, Inc. 430,823
6,453 Apple Computer, Inc. 143,176
9,322 Applied Materials, Inc.* 257,520
2,384 Autodesk, Inc. 61,686
14,606 Automatic Data Processing, Inc. 637,187
9,700 Bay Networks, Inc. * 264,325
9,002 Boston Scientific Corp.* 517,615
3,495 Cabletron Systems, Inc.* 238,971
3,366 Ceridian Corp.* 168,300
32,110 CISCO Systems, Inc.* 1,992,827
13,626 Compaq Computer Corp.* 873,767
18,612 Computer Associates International, Inc. 1,112,067
2,790 Computer Sciences Corp.* 214,481
11,868 Corning, Inc. 462,852
2,021 Data General Corp.* 28,294
7,597 Digital Equipment Corp.* 271,593
13,431 Dow Chemical Co. 1,077,838
5,745 DSC Communications Corp.* 143,625
2,712 E G & G, Inc. 48,477
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 12
<TABLE>
LARGE COMPANY INDEX FUND
GALAXY PORTFOLIO OF INVESTMENTS (CONTINUED)
FUND II SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
SHARES (NOTE 2)
------ --------
<S> <C> <C>
TECHNOLOGY (CONTINUED)
11,400 EMC Corp.* $ 257,925
6,300 General Instrument Corp.* 155,925
2,459 General Signal Corp. 108,196
2,050 Harris Corp. 133,506
52,322 Hewlett-Packard Co. 2,550,698
6,646 Honeywell, Inc. 419,529
2,155 Imation Corp.* 52,798
42,416 Intel Corp. 4,048,077
2,384 Intergraph Corp.* 26,224
29,181 International Business Machines Corp. 3,633,035
6,100 Lucent Technologies, Inc. 279,838
6,600 LSI Logic Corp.* 153,450
34,660 MCI Communications Corp. 888,163
10,663 Micron Technology, Inc. 325,222
30,366 Microsoft Corp.* 4,004,516
30,271 Motorola, Inc. 1,562,740
7,122 National Semiconductor Corp.* 143,330
12,937 Northern Telecom, Ltd. 747,112
19,090 Novell, Inc. * 209,990
33,618 Oracle Corp.* 1,430,866
2,239 Perkin-Elmer Corp. 129,582
7,886 Pitney Bowes, Inc. 415,001
3,968 Scientific-Atlanta, Inc. 62,992
5,400 Seagate Technology, Inc.* 301,725
8,380 Silicon Graphics, Inc.* 185,408
22,389 Sprint Corp. 870,372
9,652 Sun Microsystems, Inc.* 599,631
5,916 Tandem Computers, Inc.* 63,597
1,715 Tektronix, Inc. 70,101
33,428 Tele-Communications, Inc.,
TCI Group, Series A* 499,331
4,517 Tellabs, Inc.* 319,013
9,746 Texas Instruments, Inc. 537,248
1,938 Thomas & Betts Corp. 79,458
8,300 3Com Corp.* 498,519
7,912 Tyco International, Ltd. 341,205
9,121 Unisys Corp.* 55,866
24,194 U.S. West, Inc., Media Group* 408,274
2,686 Western Atlas, Inc.* 167,204
21,195 Westinghouse Electric Corp. 394,757
16,607 Xerox Corp. 890,550
------------
42,112,012
------------
FINANCE - 12.60%
7,703 Aetna Life & Casualty Co. 542,099
5,897 Ahmanson (H.F.) & Co. 165,116
2,359 Alexander & Alexander Services, Inc. 39,218
23,078 Allstate Corp. 1,136,592
24,807 American Express Co. 1,147,324
10,460 American General Corp. 394,865
24,458 American International Group, Inc. 2,464,144
5,400 Aon Corp. 292,950
23,131 Banc One Corp. 948,371
5,830 Bank of Boston Corp. 337,411
20,730 Bank of New York Co., Inc. 608,944
18,979 BankAmerica Corp. $ 1,558,650
4,106 Bankers Trust New York Corp. 322,834
9,968 Barnett Banks, Inc. 336,420
2,681 Beneficial Corp. 154,158
5,299 Block (H & R), Inc. 157,645
7,922 Boatmen's Bancshares, Inc. 442,642
22,374 Chase Manhattan Corp. 1,792,717
9,040 Chubb Corp. 415,840
3,885 Cigna Corp. 465,714
24,848 Citicorp 2,251,850
5,800 Comerica, Inc. 298,700
11,499 CoreStates Financial Corp. 497,332
8,603 Dean Witter Discover & Co. 473,165
9,346 Federal Home Loan Mortgage Corp. 914,740
56,112 Federal National Mortgage Association 1,956,906
5,200 Fifth Third Bancorp 302,250
6,700 First Bank System, Inc. 448,063
16,302 First Chicago NBD Corp. 737,666
11,562 First Data Corp. 943,748
14,322 First Union Corp. 955,994
13,631 Fleet Financial Group, Inc. 606,580
4,225 General Re Corp. 598,894
2,932 Golden West Financial Corp. 171,156
7,100 Great Western Financial Corp. 188,150
7,100 Green Tree Financial Corp. 278,675
5,103 Household International, Inc. 419,722
5,936 ITT Corp.* 258,958
5,936 ITT Hartford Group, Inc. 350,224
5,936 ITT Industries, Inc. 143,206
3,594 Jefferson-Pilot Corp. 185,990
12,125 KeyCorp 533,500
5,433 Lincoln National Corp. 238,373
5,960 Loews Corp. 461,155
3,677 Marsh & McLennan Cos., Inc. 357,129
11,803 MBNA Corp. 410,154
7,259 Mellon Bank Corp. 430,096
8,942 Merrill Lynch & Co., Inc. 586,819
3,000 MGIC Investment Corp. 202,125
7,900 Morgan Stanley Group, Inc. 393,025
9,607 Morgan (J.P.) & Co., Inc. 853,822
11,500 National City Corp. 484,438
15,139 NationsBank Corp. 1,315,201
18,240 Norwest Corp. 745,560
17,170 PNC Bank Corp. 573,049
4,955 Providian Corp. 213,065
1,494 Pulte Corp. 38,284
2,870 Republic New York Corp. 198,389
6,578 SAFECO Corp. 230,230
5,529 Salomon, Inc. 252,261
4,420 St. Paul Cos., Inc. 245,310
11,720 SunTrust Banks, Inc. 480,520
3,586 Torchmark Corp. 164,508
3,381 Transamerica Corp. 236,247
24,917 Travelers Group, Inc. 1,224,048
3,600 UNUM Corp. 230,850
5,703 USF & G Corp. 105,506
</TABLE>
See Notes to Financial Statements.
10
<PAGE> 13
<TABLE>
LARGE COMPANY INDEX FUND
GALAXY PORTFOLIO OF INVESTMENTS (CONTINUED)
FUND II SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
SHARES (NOTE 2)
------ --------
<S> <C> <C>
FINANCE (CONTINUED)
1,896 USLife Corp. $ 56,880
7,743 U.S. Bancorp 305,849
8,637 Wachovia Corp. 427,532
5,063 Wells Fargo & Co. 1,316,380
------------
40,015,928
------------
CONSUMER CYCLICAL - 7.82%
13,000 Albertson's, Inc. 547,625
3,845 American Greetings Corp., Class A 110,063
1,941 Armstrong World Industries, Inc. 121,070
2,436 Bally Entertainment Corp.* 69,122
4,469 Black & Decker Corp. 185,464
1,510 Briggs & Stratton Corp. 67,006
839 Brown Group, Inc. 19,507
4,944 Brunswick Corp. 118,656
1,513 Centex Corp. 49,362
5,684 Charming Shoppes, Inc.* 34,104
4,954 Circuit City Stores, Inc. 178,963
12,527 Comcast Corp. Special Class A 192,603
4,313 Cooper Tire & Rubber Co. 93,269
1,719 Crane Co. 76,281
11,980 CUC International, Inc. * 477,703
5,238 Dana Corp. 158,450
10,713 Dayton-Hudson Corp. 353,529
4,319 Deluxe Corp. 163,042
5,809 Dillard Department Stores, Inc., Class A 187,340
35,297 Disney (Walt) Co. 2,236,947
7,987 Donnelley (R.R.) & Sons Co. 257,581
4,977 Dow Jones & Co., Inc. 184,149
8,476 Dun & Bradstreet Corp. 505,382
17,657 Eastman Kodak Co. 1,386,075
4,082 Eaton Corp. 246,451
3,018 Echlin, Inc. 94,690
7,276 Gannett Co., Inc. 512,049
14,684 Gap, Inc. 424,001
6,299 Genuine Parts Co. 275,581
3,027 Giant Food, Inc., Class A 102,918
2,596 Goodrich (B.F.) Co. 117,145
7,893 Goodyear Tire & Rubber Co. 364,065
2,045 Great Atlantic & Pacific Tea Co., Inc. 52,914
3,668 Harcourt General, Inc. 202,657
1,734 Harland (John H.) Co. 52,020
5,336 Harrah's Entertainment, Inc.* 99,383
4,580 Hasbro, Inc. 170,033
9,932 Hilton Hotels Corp. 281,821
24,585 Home Depot, Inc. 1,398,272
4,106 Interpublic Group of Companies, Inc. 194,009
1,958 Jostens, Inc. 40,873
1,709 Kaufman & Broad Home Corp. 22,217
1,942 King World Productions, Inc.* 71,611
23,704 Kmart Corp. 242,966
5,178 Knight-Ridder, Inc. 191,586
6,459 Kroger Co.* 289,040
1,058 Longs Drug Stores Corp. 46,023
8,276 Lowe's Cos., Inc. 338,282
6,594 Marriott International, Inc. 363,494
8,293 Masco Corp. $ 248,790
14,330 Mattel, Inc. 370,789
12,837 May Department Stores Co. 624,199
5,506 Maytag Corp. 107,367
5,174 McGraw-Hill Cos., Inc. 220,542
5,393 Melville Corp. 237,966
1,940 Mercantile Stores Co., Inc. 104,760
1,428 Meredith Corp. 70,508
5,267 Moore Corp., Ltd. 96,781
2,586 National Service Industries, Inc. 90,510
5,022 New York Times Co., Class A 169,493
8,204 Newell Co. 246,120
4,311 Nordstrom, Inc. 163,818
1,056 Outboard Marine Corp. 16,236
2,568 Owens-Corning Fiberglas Corp. 94,695
11,488 Penney (J.C.) Co., Inc. 621,788
3,120 Pep Boys-Manny, Moe & Jack 111,150
2,389 Polaroid Corp. 105,116
10,012 Price/Costco, Inc.* 205,246
2,950 Safety-Kleen Corp. 48,675
10,708 Service Corp. International 323,917
4,426 Sherwin-Williams Co. 205,256
3,232 Snap-On, Inc. 103,828
4,726 Stanley Works 132,919
2,496 Stride Rite Corp. 22,464
3,091 Tandy Corp. 124,799
19,802 Time Warner, Inc. 764,852
5,760 Times Mirror Co., Series A 256,320
3,668 TJX Cos., Inc. 131,590
14,190 Toys `R' Us, Inc.* 413,284
3,249 Tribune Co. 253,422
3,033 Tupperware Corp. 148,617
12,536 Walgreen Co. 463,832
118,195 Wal-Mart Stores, Inc. 3,117,393
3,871 Whirlpool Corp. 195,969
5,392 Whitman Corp. 124,690
6,798 Woolworth Corp.* 140,209
------------
24,845,304
------------
ENERGY - 7.39%
4,824 Amerada Hess Corp. 255,069
25,618 Amoco Corp. 1,806,069
3,226 Ashland, Inc. 128,234
8,213 Atlantic Richfield Co. 1,047,158
7,123 Baker Hughes, Inc. 216,361
6,572 Burlington Resources, Inc. 291,633
33,306 Chevron Corp. 2,085,788
9,385 Dresser Industries, Inc. 279,204
1,067 Eastern Enterprises 40,279
63,711 Exxon Corp. 5,303,941
5,814 Halliburton Co. 300,148
1,392 Helmerich & Payne, Inc. 60,726
2,693 Kerr-McGee Corp. 163,936
1,814 Louisiana Land & Exploration Co. 95,462
2,781 McDermott International, Inc. 60,487
20,317 Mobil Corp. 2,351,693
</TABLE>
See Notes to Financial Statements.
11
<PAGE> 14
<TABLE>
LARGE COMPANY INDEX FUND
GALAXY PORTFOLIO OF INVESTMENTS (CONTINUED)
FUND II SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
SHARES (NOTE 2)
------ --------
<S> <C> <C>
ENERGY (CONTINUED)
16,253 Occidental Petroleum Corp. $ 379,914
5,494 Oryx Energy Co.* 97,519
7,720 Panenergy Corp. 268,270
2,362 Pennzoil Co. 124,891
13,359 Phillips Petroleum Co. 571,097
4,388 Rowan Cos., Inc.* 81,727
27,633 Royal Dutch Petroleum Co., ADR 4,314,202
12,311 Schlumberger, Ltd. 1,040,280
3,961 Sun Co., Inc. 91,103
13,579 Texaco, Inc. 1,249,268
12,603 Unocal Corp. 453,708
14,819 USX-Marathon Group 320,461
------------
23,478,628
------------
UTILITIES - 7.12%
9,651 Alltel Corp. 269,022
9,704 American Electric Power Co., Inc. 394,225
28,536 Ameritech Corp. 1,501,707
7,603 Baltimore Gas & Electric Co. 198,628
22,359 Bell Atlantic Corp. 1,338,745
50,704 BellSouth Corp. 1,876,048
8,005 Carolina Power & Light Co. 276,173
9,820 Central & South West Corp. 255,320
7,988 Cinergy Corp. 246,630
5,485 Coastal Corp. 226,256
2,584 Columbia Gas System, Inc. 144,704
12,275 Consolidated Edison Co. of New York 340,631
4,937 Consolidated Natural Gas Co. 264,747
8,955 Dominion Resources, Inc. 338,051
7,555 DTE Energy Co. 211,540
10,626 Duke Power Co. 495,437
23,075 Edison International 412,466
13,139 Enron Corp. 535,414
3,449 ENSERCH Corp. 71,998
11,902 Entergy Corp. 321,354
9,583 FPL Group, Inc. 414,465
6,158 GPU, Inc. 189,359
49,725 GTE Corp. 1,914,413
13,674 Houston Industries, Inc. 302,537
7,429 Niagara Mohawk Power Corp. 59,432
2,612 NICOR, Inc. 88,155
6,380 Noram Energy Corp. 94,903
3,444 Northern States Power Co. 160,577
22,043 NYNEX Corp. 958,871
7,880 Ohio Edison Co. 152,675
1,501 Oneok, Inc. 41,278
4,381 Pacific Enterprises 132,525
22,013 Pacific Gas & Electric Co. 478,783
21,857 Pacific Telesis Group 734,942
14,591 PacifiCorp 300,939
11,521 PECO Energy Co. 273,624
1,828 Peoples Energy Corp. 62,152
8,200 P P & L Resources, Inc. 179,375
12,649 Public Service Enterprise Group, Inc. 338,361
4,710 Santa Fe Energy Resources, Inc.* 67,118
31,188 SBC Communications, Inc. $ 1,500,923
4,427 Sonat, Inc. 195,895
34,351 Southern Co. 777,191
9,254 Tenneco, Inc. 463,857
11,881 Texas Utilities Co. 470,785
11,009 Unicom Corp. 276,601
5,340 Union Electric Co. 196,913
24,194 U.S. West, Inc., Communications Group 719,772
18,705 Viacom, Inc., Class B * 664,028
5,239 Williams Cos., Inc. 267,189
19,000 WorldCom, Inc.* 406,125
------------
22,602,859
------------
CAPITAL GOODS - 6.47%
5,948 Alco Standard Corp. 296,657
7,537 American Stores Co. 301,480
2,840 Andrew Corp.* 141,645
17,610 Boeing Co. 1,664,145
10,959 Browning-Ferris Industries, Inc. 273,975
10,170 Caterpillar, Inc. 766,564
1,914 Cincinnati Milacron, Inc. 36,127
5,613 Cooper Industries, Inc. 242,762
2,105 Cummins Engine Co., Inc. 82,884
13,709 Deere & Co. 575,778
5,754 Dover Corp. 274,754
11,763 Emerson Electric Co. 1,060,140
2,371 Fleetwood Enterprises, Inc. 72,908
4,311 Fluor Corp. 265,127
1,934 FMC Corp.* 131,270
2,135 Foster Wheeler Corp. 93,406
3,189 General Dynamics Corp. 219,642
85,945 General Electric Co. 7,820,995
1,847 Giddings & Lewis, Inc. 21,933
2,603 Grainger (W.W.), Inc. 182,861
2,542 Harnischfeger Industries, Inc. 95,961
6,020 Illinois Tool Works, Inc. 434,193
5,597 Ingersoll-Rand Co. 265,858
2,152 Johnson Controls, Inc. 161,400
15,376 Laidlaw, Inc., Class B 169,136
2,949 Lucasvarity Plc, ADR* 116,117
11,662 McDonnell Douglas Corp. 612,255
465 NACCO Industries, Inc., Class A 22,204
3,997 Navistar International Corp.* 33,975
2,582 Northrop Grumman Corp. 207,206
2,074 PACCAR, Inc. 113,552
3,929 Parker-Hannifin Corp. 165,018
12,768 Raytheon Co. 710,220
11,180 Rockwell International Corp. 630,273
4,428 Textron, Inc. 376,380
1,715 Timken Co. 67,314
3,237 TRW, Inc. 301,041
6,163 United Technologies Corp. 740,330
24,731 WMX Technologies, Inc. 813,032
------------
20,560,518
------------
</TABLE>
See Notes to Financial Statements.
12
<PAGE> 15
<TABLE>
LARGE COMPANY INDEX FUND
GALAXY PORTFOLIO OF INVESTMENTS (CONTINUED)
FUND II SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
SHARES (NOTE 2)
------ --------
<S> <C> <C>
BASIC MATERIALS - 5.54%
5,728 Air Products & Chemicals, Inc. $ 333,656
11,649 Alcan Aluminum, Ltd. 349,470
14,462 AlliedSignal, Inc. 952,684
9,265 Aluminum Co. of America 546,635
5,261 Armco, Inc.* 23,675
2,158 ASARCO, Inc. 57,457
2,681 Avery-Dennison Corp. 148,796
1,694 Ball Corp. 41,503
18,084 Barrick Gold Corp. 454,361
2,692 Bemis Co., Inc. 91,192
5,837 Bethlehem Steel Corp.* 58,370
2,557 Boise Cascade Corp. 86,938
5,054 Champion International Corp. 231,852
5,934 Crown Cork & Seal Co., Inc. 273,706
4,882 Cyprus Amax Minerals Co. 104,963
28,700 duPont (E.I.) deNemours & Co. 2,532,775
4,135 Eastman Chemical Co. 241,381
6,696 Echo Bay Mines, Ltd. 59,009
7,298 Engelhard Corp. 167,854
10,384 Freeport-McMoran
Copper & Gold, Inc., Class B 324,500
4,634 Georgia-Pacific Corp. 366,665
5,035 Grace (W.R.) & Co. 380,143
3,191 Great Lakes Chemical Corp. 181,887
5,701 Hercules, Inc. 312,130
7,130 Homestake Mining Co. 104,276
6,114 Inco, Ltd., Class A 188,006
2,538 Inland Steel Industries, Inc. 45,367
15,664 International Paper Co. 665,720
4,313 James River Corp. of Virginia 119,147
5,634 Louisiana-Pacific Corp. 128,174
3,968 Mallinckrodt Group, Inc. 165,168
2,729 Mead Corp. 159,988
2,297 Millipore Corp. 90,732
21,554 Minnesota Mining & Manufacturing Co. 1,506,086
29,745 Monsanto Co. 1,085,693
7,752 Morton International, Inc. 308,142
3,362 Nalco Chemical Co. 121,873
4,969 Newmont Mining Corp. 234,785
4,528 Nucor Corp. 229,796
5,874 Pall Corp. 165,941
3,463 Phelps Dodge Corp. 222,065
12,398 Placer Dome, Inc. 292,903
1,510 Potlatch Corp. 58,513
10,111 PPG Industries, Inc. 549,786
7,340 Praxair, Inc. 315,620
2,347 Raychem Corp. 176,025
3,029 Reynolds Metals Co. 154,858
3,455 Rohm & Haas Co. 226,303
2,468 Sigma Aldrich Corp. 140,676
5,014 Stone Container Corp. 78,344
2,811 Temple-Inland, Inc. 148,280
1,514 Trinova Corp. $ 47,691
3,464 Union Camp Corp. 169,303
7,138 Union Carbide Corp. 325,671
4,375 USX-U.S. Steel Group, Inc. 124,688
5,228 Westvaco Corp. 154,880
10,382 Weyerhaeuser Co. 478,870
2,800 Williamette Industries, Inc. 183,400
4,717 Worthington Industries, Inc. 94,340
------------
17,582,712
------------
TRANSPORTATION - 3.19%
3,956 AMR Corp.* 314,997
7,360 Burlington Northern Santa Fe Corp. 621,000
2,049 Caliber System, Inc. 33,040
3,600 Case Corp. 175,500
39,240 Chrysler Corp. 1,123,245
4,108 Conrail, Inc. 297,317
2,244 Consolidated Freightways, Inc. 54,978
10,766 CSX Corp. 543,683
2,785 Delta Air Lines, Inc. 200,520
3,301 Ecolab, Inc. 111,409
2,705 Federal Express Corp.* 214,371
55,721 Ford Motor Co. 1,741,281
38,285 General Motors Corp. 1,837,680
10,300 Lockheed Martin Corp. 928,288
6,675 Norfolk Southern Corp. 609,928
3,989 Ryder System, Inc. 118,174
7,296 Southwest Airlines Co. 166,896
13,167 Union Pacific Corp. 964,483
3,195 U.S. Air Group, Inc.* 52,718
1,507 Yellow Corp.* 19,591
------------
10,129,099
------------
METALS AND MINING - 0.11%
8,882 Allegheny Teledyne, Inc.* 200,955
10,000 Battle Mountain Gold Co. 77,500
6,832 Santa Fe Pacific Gold Corp. 85,400
------------
363,855
------------
TOTAL COMMON STOCKS 267,690,036
------------
(Cost $181,681,776)
PREFERRED STOCK - 0.01%
592 Aetna Life & Casualty Co., Class C 43,142
------------
TOTAL PREFERRED STOCK 43,142
------------
(Cost $38,702)
</TABLE>
See Notes to Financial Statements.
13
<PAGE> 16
<TABLE>
LARGE COMPANY INDEX FUND
GALAXY PORTFOLIO OF INVESTMENTS (CONTINUED)
FUND II SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
(NOTE 2)
--------
PAR VALUE
- ---------
<S> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS (B) - 15.66%
FEDERAL HOME LOAN BANK - 15.03%
$47,740,000 5.11%, 10/01/96 $ 47,740,000
------------
U.S. TREASURY BILL - 0.63%
2,000,000 5.11%, 10/03/96 (A) 1,999,435
------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS 49,739,435
------------
(Cost $49,739,435)
TOTAL INVESTMENTS - 99.95% 317,472,613
------------
(Cost $231,459,913)
NET OTHER ASSETS AND LIABILITIES - 0.05% 174,490
------------
NET ASSETS - 100.00% $317,647,103
============
<FN>
- ---------------------------------------
* Non-income producing security.
ADR American Depositary Receipt.
(A) Security has been deposited as an initial margin on open futures
contracts.
(B) Annualized yield at time of purchase.
</TABLE>
At September 30, 1996, the Fund's open futures contracts were as follows:
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS CONTRACT EXPIRATION OPENING CURRENT
PURCHASED(SOLD) TYPE DATE POSITION MARKET VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
S&P 500
144 Stock Index 12/96 $49,573,625 $49,780,800
=========== ===========
</TABLE>
See Notes to Financial Statements.
14
<PAGE> 17
<TABLE>
SMALL COMPANY INDEX FUND
GALAXY PORTFOLIO OF INVESTMENTS
FUND II SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
SHARES (NOTE 2)
------ --------
<S> <C> <C>
COMMON STOCKS- 88.91%
FINANCE - 18.28%
6,600 Acordia, Inc. $ 200,475
52,762 AFLAC Inc. 1,873,051
4,400 Alex Brown, Inc. 254,650
432 Alleghany Corp. 88,560
9,800 AMBAC, Inc. 546,350
7,700 American Annuity Group, Inc. 102,988
1,300 American Bankers Insurance Group, Inc. 65,000
4,100 American Health Properties, Inc. 89,688
2,600 American National Insurance Co. 176,800
13,800 American Re Corp. 876,300
6,600 AmeriCredit Corp.* 121,275
11,750 AmSouth Bancorp. 522,875
2,400 Amvestors Financial Corp. 34,200
350 Arbatax International, Inc. 2,468
6,000 Argonaut Group, Inc. 177,000
9,450 Bancorp Hawaii, Inc. 368,550
5,980 BancorpSouth, Inc. 140,530
750 Bank Of Granite Corp. 20,625
16,800 BanPonce Corp. 453,600
38,789 Bear Stearns Cos., Inc. 901,844
4,400 Berkley (W.R.) Corp. 201,300
5,200 Berkshire Realty Co., Inc. 51,350
11,267 California Federal Bancorp, Inc.* 261,958
12,500 Capital One Financial Corp. 375,000
700 Capital Re Corp. 26,600
6,600 Capstead Mortgage Corp. 136,125
300 CCB Financial Corp. 16,425
4,500 Center Financial Corp. 113,063
13,050 Central Fidelity Banks, Inc. 316,463
10,217 Charter One Financial, Inc. 408,660
14,553 Cincinnati Financial Corp. 833,159
500 Citizens Bancorp 24,000
8,400 City National Corp. 152,250
18,200 CNA Financial Corp.* 1,744,925
4,400 Coast Savings Financial, Inc.* 140,800
4,100 Collective Bancorp, Inc. 116,850
6,945 Commerce Bancshares, Inc. 270,855
6,000 Commercial Federal Corp. 258,000
9,050 Compass Bancshares, Inc. 311,094
19,391 Conseco, Inc. 955,007
12,800 Continental Airlines, Inc., Class B* 286,400
19,577 Countrywide Credit Industries, Inc. 501,661
3,900 Crawford & Co., Class B 80,438
9,400 Crestar Financial Corp. 554,600
11,200 CRIIMI MAE, Inc. 121,800
4,000 Cullen/Frost Bankers, Inc. 120,500
4,600 CWM Mortgage Holdings, Inc. 91,425
5,600 Dauphin Deposit Corp. 173,600
1,600 Deposit Guaranty Corp. 77,200
32,818 Dime Bancorp, Inc.* 438,941
1,785 Downey Financial Corp. $ 45,071
1,000 Eaton Vance Corp. 38,875
14,083 Edwards (A.G.), Inc. 410,167
3,600 Enhance Financial Services Group, Inc. 118,800
44,900 Equifax, Inc. 1,184,263
19,000 Equitable Cos., Inc. 489,250
6,300 Equitable of Iowa Cos. 261,450
307 F & M National Corp. 5,641
6,700 Federal Realty Investment Trust 157,450
17,265 First America Bank Corp. 908,571
5,500 First American Corp. 264,000
400 First American Financial Corp. 14,050
2,500 First Citizens BancShares, Inc., Class A 165,000
4,700 First Colony Corp. 166,850
7,187 First Commerce Corp. 250,647
1,348 First Commercial Corp. 46,590
1,200 First Empire State Corp. 298,800
2,000 First Financial Bancorp 70,000
5,100 First Financial Corp. 122,400
4,500 First Hawaiian, Inc. 139,500
2,672 First Michigan Bank Corp. 66,132
16,700 First Security Corp. 459,250
17,100 First Tennessee National Corp. 567,506
9,400 First USA, Inc. 520,525
11,850 First Virginia Banks, Inc. 515,475
18,200 Firstar Corp. 878,150
4,500 FirstBank Puerto Rico 101,813
4,900 Foremost Corp. of America 269,500
14,800 Franklin Resources, Inc. 982,350
4,455 Fremont General Corp. 131,423
4,200 Fund American Enterprises
Holdings, Inc. 384,300
1,274 Gainsco, Inc. 13,059
3,700 Gallagher (Arthur J.) & Co. 127,188
8,468 Glendale Federal Savings Bank* 150,307
900 Hancock Holding Co. 34,200
5,000 Hartford Steam Boiler
Inspection & Insurance Co. 223,750
5,000 Health Care Property Investors, Inc. 163,125
7,600 Health & Retirement Properties Trust 134,900
26,400 Hibernia Corp., Class A 300,300
7,400 Horace Mann Educators Corp. 243,275
35,839 Huntington Bancshares, Inc. 824,297
5,570 Imperial Credit Industries, Inc. 204,001
332 Investors Financial Services Corp. 8,549
5,300 John Alden Financial Corp. 109,313
3,100 John Nuveen Co., Class A 83,700
9,800 Kansas City Southern Industries, Inc. 418,950
4,950 Keystone Financial, Inc. 123,750
4,500 Labone, Inc. 75,375
5,250 Legg Mason, Inc. 168,000
21,300 Lehman Brothers Holdings, Inc. 543,150
</TABLE>
See Notes to Financial Statements.
15
<PAGE> 18
<TABLE>
SMALL COMPANY INDEX FUND
GALAXY PORTFOLIO OF INVESTMENTS (CONTINUED)
FUND II SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
SHARES (NOTE 2)
------ --------
<S> <C> <C>
FINANCE (CONTINUED)
300 Liberty Bancorp, Inc. $ 11,400
3,600 Liberty Corp. 126,450
1,900 Life Re Corp. 68,400
600 Magna Bancorp, Inc. 11,850
5,200 Magna Group, Inc. 145,600
800 Mark Twain Bancshares, Inc. 34,000
20,060 Marshall & Ilsley Corp. 604,308
16,400 MBIA, Inc. 1,406,300
8,700 Mercantile Bancorp, Inc. 452,400
10,300 Mercantile Bankshares Corp. 305,138
700 Mercer International, Inc. 9,538
26,799 Mercury Finance Co. 321,588
2,200 Mercury General Corp. 103,400
1,800 Merry Land & Investment Co., Inc. 38,475
4,591 Mid-Am, Inc. 80,350
1,600 NAC Re Corp. 57,600
2,090 National Auto Credit, Inc.* 24,035
1,050 National Commerce Bancorp. 34,388
5,600 National Re Corp. 296,100
8,200 Nationwide Health Properties, Inc. 180,400
11,500 New Plan Realty Trust 247,250
2,000 North American Mortgage Co. 38,000
3,440 North Fork Bancorp., Inc. 108,360
25,450 Northern Trust Corp. 1,673,388
8,000 Ohio Casualty Corp. 272,000
12,953 Old Kent Financial Corp. 548,883
2,430 Old National Bancorp 88,999
21,300 Old Republic International Corp. 527,175
2,600 ONBANCorp, Inc. 90,025
5,156 Orion Capital Corp. 266,179
16,650 Paine Webber Group, Inc. 349,650
1,100 PEC Israel Economic Corp.* 18,838
1,500 PennCorp Financial Group, Inc. 48,375
1,200 Peoples Bank Bridgeport Connecticut 29,700
3,000 Peoples Heritage Financial Group, Inc. 70,125
1,200 Pioneer Group, Inc. 31,500
4,700 Price Enterprises, Inc. 75,788
6,600 Price (T. Rowe) Associates, Inc. 214,500
18,500 Progessive Corp. of Ohio 1,059,125
3,600 Protective Life Corp. 135,900
2,205 Provident Bankshares Corp. 78,002
8,600 Provident Cos., Inc. 322,500
9,600 Public Storage, Inc. 217,200
1,100 PXRE Corp. 25,163
9,424 Quick & Reilly Group, Inc. 247,380
2,500 RCSB Financial, Inc. 66,875
12,976 Regions Financial Corp. 624,470
20,468 Resource Bancshares
Mortgage Group, Inc. 266,084
3,900 Resource Mortgage Capital, Inc. 92,625
12,300 Riggs National Corp. 204,488
3,816 Roosevelt Financial Group, Inc. 65,349
13,800 Rouse Co. 358,800
7,600 S & T Bancorp, Inc. 239,400
25,700 Schwab (Charles) Corp. $ 594,313
6,996 Security Capital Pacific Trust 147,791
12,500 Signet Banking Corp. 334,375
19,220 Southern National Corp. 639,065
17,150 Southtrust Corp. 523,075
3,880 Sovereign Bancorp, Inc. 42,680
8,400 Standard Federal Bancorp., Inc. 384,300
6,500 Star Banc Corp. 553,313
27,200 State Street Boston Corp. 1,560,600
22,600 Student Loan Marketing Association 1,686,525
4,400 St. Paul Bancorp, Inc. 115,500
21,227 Summit Bancorp 843,773
20,700 SunAmerica, Inc. 714,150
625 Susquehanna Bancshares, Inc. 18,594
25,050 Synovus Financial Corp. 651,300
5,600 Taubman Centers, Inc. 62,300
1,200 TCF Financial Corp. 45,150
800 Trans Financial, Inc. 16,000
1,600 Transatlantic Holdings, Inc. 108,800
13,600 Travelers/Aetna Property & Casualty Co. 374,000
400 Trenwick Group, Inc. 20,700
6,000 Trust Co. of New Jersey 85,500
8,500 20th Century Industries* 149,813
7,200 United Insurance Cos., Inc.* 187,200
2,347 UMB Financial Corp. 89,186
7,387 Union Planters Corp. 262,239
8,600 United Asset Management Corp. 203,175
2,600 United Bankshares, Inc. 76,375
2,700 United Carolina Bancshares Corp. 62,775
3,300 United Cos. Financial Corp. 107,663
7,600 United Dominion Realty Trust, Inc. 106,400
12,000 Unitrin, Inc. 591,000
4,300 Universal Health Realty Income Trust 79,013
2,000 UST Corp. 33,750
9,883 Valley National Bancorp 250,781
2,900 Vornado Realty Trust 117,450
10,290 Washington Federal, Inc. 243,101
13,050 Washington Mutual, Inc. 486,113
6,200 Washington National Corp. 179,025
1,100 Washington Real Estate Investment Trust 17,600
3,400 Weingarten Realty Investors 131,750
3,400 Wellsford Residential Property Trust 74,800
1,100 Whitney Holding Corp. 36,025
11,300 Wilmington Trust Corp. 403,975
4,400 Zions Bancorp 389,400
------------
56,974,495
------------
TECHNOLOGY - 17.05%
14,800 Acxiom Corp.* 608,650
14,900 Adaptec, Inc.* 894,000
20,800 Adobe Systems, Inc. 774,800
1,800 Adtran, Inc.* 90,450
2,200 Advanced Technology Laboratories, Inc.* 70,400
</TABLE>
See Notes to Financial Statements.
16
<PAGE> 19
<TABLE>
SMALL COMPANY INDEX FUND
GALAXY PORTFOLIO OF INVESTMENTS (CONTINUED)
FUND II SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
SHARES (NOTE 2)
------ --------
<S> <C> <C>
TECHNOLOGY (CONTINUED)
17,300 America Online, Inc.* $ 603,338
17,600 American Power Conversion Corp.* 257,400
3,000 Amphenol Corp., Class A* 68,625
56,625 Analog Devices, Inc.* 1,535,953
5,500 Analysts International Corp. 253,000
5,600 Anixter International, Inc.* 81,900
11,500 ANTEC Corp.* 168,188
7,000 Applix, Inc. 183,750
11,304 Arrow Electronics, Inc.* 503,028
15,700 Ascend Communications, Inc.* 1,038,163
25 Associated Group, Inc., Class A* 794
8,686 AST Research, Inc.* 43,430
11,200 Atmel Corp.* 345,800
1,300 Augat, Inc. 27,625
3,100 Aura Systems, Inc.* 9,300
2,000 Avid Technology, Inc.* 27,250
10,600 Avnet, Inc. 514,100
8,300 BE Aerospace, Inc.* 171,188
2,200 BHC Communications, Inc., Class A* 215,050
4,100 BISYS Group, Inc.* 168,100
3,600 Black Box Corp.* 118,800
2,000 BMC Industries, Inc. 57,250
9,100 BMC Software, Inc.* 723,450
450 Boole & Babbage, Inc. 11,250
6,410 Borland International, Inc.* 44,069
3,000 Boston Technology, Inc.* 42,750
6,400 Broderbund Software, Inc.* 185,600
6,500 BW/IP, Inc. 100,750
22,775 Cadence Design Systems, Inc.* 814,206
7,100 Calgene, Inc.* 35,500
6,400 California Microwave, Inc.* 84,800
19,800 Cascade Communications Corp.* 1,613,700
800 Catalina Marketing Corp.* 42,600
8,300 Catellus Development Corp.* 81,963
11,800 C-Cube Microsystems, Inc.* 523,625
1,100 CDI Corp.* 27,775
7,700 Century Telephone Enterprises, Inc. 264,688
8,700 Cephalon, Inc.* 209,888
2,400 Cerner Corp.* 37,200
5,400 Cheyenne Software, Inc.* 116,100
7,700 Chips & Technologies, Inc.* 104,913
14,600 Cirrus Logic, Inc.* 304,775
1,300 Coherent, Inc.* 45,825
2,000 Computer Network Technology Corp.* 11,500
9,100 Compuware Corp.* 416,325
4,300 Comverse Technology, Inc.* 167,163
1,900 Control Data Systems, Inc.* 43,938
3,800 CopyTele, Inc.* 27,550
36,700 Cox Communications, Inc., Class A* 674,363
9,150 Credence Systems Corp.* 144,113
200 C-Tec Corp.* 5,200
26,500 Cypress Semiconductor Corp.* 331,250
2,400 Cyrix Corp.* 39,300
11,900 Dallas Semiconductor Corp. $ 217,175
4,000 Datascope Corp.* 69,000
31,300 Dell Computer Corp.* 2,433,550
700 Devon Group, Inc.* 16,450
300 Dialogic Corp.* 10,650
6,800 DSP Communications, Inc.* 379,950
4,400 Dynatech Corp.* 201,300
70,700 Electronic Data Systems Corp. 4,339,213
100 Ennis Business Forms, Inc. 1,075
2,800 ESS Technology, Inc.* 47,950
5,100 Exabyte Corp.* 76,500
3,000 Fair Issac & Co., Inc. 116,250
11,366 Federal Signal Corp. 274,205
1,700 FileNet Corp.* 43,350
5,500 FirstMerit Corp. 176,000
10,300 Fiserv, Inc.* 393,975
8,100 FORE Systems, Inc.* 335,138
300 Fusion Systems Corp.* 5,400
2,400 General DataComm Industries, Inc.* 27,000
1,700 Gerber Scientific, Inc. 24,225
30,000 Guidant Corp. 1,657,500
1,680 Harman International Industries, Inc. 81,900
2,100 Heartland Wireless
Communications, Inc.* 53,025
4,000 HPR, Inc.* 64,000
13,200 IDEXX Laboratories, Inc.* 597,300
5,100 Information Resources, Inc.* 66,938
32,400 Informix Corp.* 903,150
18,400 Input / Output, Inc.* 547,400
3,800 Insituform Technologies, Inc., Class A* 30,400
16,600 Integrated Device Technology, Inc.* 164,963
8,000 Interdigital Communications Corp.* 62,000
9,300 Interface, Inc., Class A 160,425
2,166 International Cabletel, Inc.* 55,504
7,600 International Rectifier Corp.* 105,450
3,800 InterVoice, Inc.* 56,050
36,100 Iomega Corp.* 875,425
4,400 Kimball International, Inc., Class B 161,150
4,600 KLA Instruments Corp.* 103,500
1,400 Lam Research Corp.* 37,275
1,300 Landmark Graphics Corp.* 38,188
2,900 Landstar System, Inc.* 77,575
9,600 Lattice Semiconductor Corp.* 277,200
25,300 Linear Technology Corp. 932,938
1,800 Macromedia, Inc.* 37,350
8,000 MagneTek, Inc.* 92,000
5,038 Mark IV Industries, Inc. 109,577
4,000 Marshall Industries, Inc.* 120,500
1,500 Material Sciences Corp.* 25,500
19,000 Maxim Integrated Products, Inc.* 672,125
2,900 McAfee Associates, Inc.* 200,100
500 McWhorter Technologies, Inc.* 9,750
6,100 Measurex Corp. 160,888
</TABLE>
See Notes to Financial Statements.
17
<PAGE> 20
<TABLE>
SMALL COMPANY INDEX FUND
GALAXY PORTFOLIO OF INVESTMENTS (CONTINUED)
FUND II SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
SHARES (NOTE 2)
------ --------
<S> <C> <C>
TECHNOLOGY (CONTINUED)
1,400 Metricom, Inc.* $ 24,675
1,200 MicroAge, Inc.* 22,650
5,250 Microchip Technology, Inc.* 196,219
2,500 Micron Electronics, Inc.* 51,563
6,100 MicroTouch Systems, Inc.* 114,375
9,500 Mobile Telecommunications
Technologies Corp.* 149,625
18,008 Molex, Inc. 670,798
100 MTS Systems Corp. 1,975
18,256 Nellcor Puritan Bennett, Inc.* 401,632
4,900 NETCOM On-Line
Communication Services, Inc.* 83,913
15,000 NetManage, Inc.* 131,719
11,600 Network General Corp.* 265,350
24,500 New World Communications
Group, Inc., Class A* 566,563
3,600 Oak Industries, Inc.* 119,700
11,200 Octel Communications Corp.* 324,800
1,300 OIS Optical Imaging Systems, Inc.* 3,900
800 Optical Data Systems, Inc.* 13,600
2,800 PairGain Technologies, Inc.* 218,750
22,800 Parametric Technology Corp.* 1,125,750
1,463 Paxar Corp.* 23,957
13,800 Paxson Communications Corp.* 155,250
14,775 Paychex, Inc. 856,950
5,400 PeopleSoft, Inc.* 449,550
15,350 Pioneer Standard Electronics, Inc. 172,688
7,400 PLATINUM Technology, Inc.* 93,425
3,100 Policy Management Systems Corp.* 105,400
5,900 Premisys Communications, Inc.* 216,825
100 Presstek, Inc.* 7,350
100 Progress Software Corp.* 1,600
2,200 Protein Design Laboratories, Inc.* 55,550
12,450 Quantum Corp.* 218,653
25,600 Reynolds & Reynolds Co., Class A 668,800
6,600 Robotic Vision Systems, Inc.* 87,450
10,000 Sanmina Corp.* 402,500
6,500 SCI Systems, Inc.* 365,625
13,000 Sensormatic Electronics Corp. 232,375
4,700 Shiva Corp.* 269,663
6,171 Softkey International, Inc.* 119,563
1,700 Standard Microsystems Corp.* 24,225
7,900 Standard Register Co. 218,238
7,746 Sterling Software, Inc.* 591,601
13,528 Storage Technology Corp.* 512,373
4,700 Stratus Computer, Inc.* 92,825
8,900 Structural Dynamics Research Corp.* 212,488
10,000 SunGard Data Systems, Inc.* 450,000
11,600 Sybase, Inc.* 172,550
6,300 Symantec Corp.* 68,513
2,400 Symmetricom, Inc.* 36,300
4,000 Synopsys, Inc.* 184,500
11,925 System Software Associates, Inc. 158,006
700 Systems & Computer Technology Corp.* 8,575
14,800 Systemsoft Corp. 506,900
7,800 Tech Data Corp.* $ 217,425
32,300 Tele-Communications, Inc.
Liberty Media Group, Series A* 924,588
20,000 Teradyne, Inc.* 332,500
4,600 3D Systems Corp.* 64,400
6,400 3DO Co.* 36,000
13,600 Total System Services, Inc. 353,600
200 Tseng Laboratories, Inc.* 1,575
200 Unitrode Corp.* 4,550
10,800 U.S. Robotics Corp. 697,950
6,650 Vanguard Cellular Systems, Inc., Class A* 128,844
5,000 VeriFone, Inc.* 223,750
3,200 Viewlogic Systems, Inc.* 37,200
15,000 Viking Office Products, Inc.* 450,000
6,543 Vishay Intertechnology, Inc. 151,307
6,500 VLSI Technology, Inc.* 105,625
19,200 Wallace Computer Services, Inc. 542,400
10,700 Western Digital Corp.* 429,338
23,600 Wheelabrator Technologies, Inc. 359,900
1,500 WMS Industries, Inc.* 40,500
6,500 Wyle Electronics 208,813
31,900 Xilinx, Inc.* 1,084,600
5,300 Young Broadcasting, Inc., Class A* 174,900
10,400 Zero Corp. 197,600
6,600 Zilog, Inc.* 126,225
11,600 Zoran Corp.* 197,200
------------
53,150,478
------------
CONSUMER STAPLES - 15.68%
7,300 AAR Corp. 168,813
1,900 ADAC Laboratories 38,238
11,600 Airgas, Inc.* 294,350
3,600 Alliance Pharmaceutical Corp.* 61,650
1,000 American Medical Response, Inc.* 36,000
5,700 Amylin Pharmaceuticals, Inc.* 64,838
4,300 AnnTaylor Stores Corp.* 72,563
2,400 Apogee Enterprises, Inc. 84,000
450 Apple South, Inc. 6,019
21,240 Apria Healthcare Group, Inc.* 398,250
1,500 Aztar Corp.* 13,125
6,666 Ballard Medical Products 129,987
5,700 Barr Laboratories, Inc.* 161,738
4,500 BBN Corp.* 77,063
157 BEC Group, Inc.* 805
9,193 Bergen Brunswig Corp., Class A 291,878
10,100 Best Buy Co., Inc.* 229,775
1,300 Bindley Western Industries, Inc. 22,750
7,500 Biogen, Inc.* 570,000
69 Block Drug Co., Inc., Class A 3,096
100 Books-A-Million, Inc.* 813
7,800 Borg-Warner Automotive, Inc.* 276,900
15,650 Brinker International, Inc.* 266,050
2,100 Brown (Tom), Inc.* 39,638
</TABLE>
See Notes to Financial Statements.
18
<PAGE> 21
<TABLE>
SMALL COMPANY INDEX FUND
GALAXY PORTFOLIO OF INVESTMENTS (CONTINUED)
FUND II SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
SHARES (NOTE 2)
------ --------
<S> <C> <C>
CONSUMER STAPLES (CONTINUED)
12,148 Buffets, Inc.* $ 127,554
9,800 Burlington Industries, Inc.* 96,775
13,300 Callaway Golf Co. 453,863
12,100 Caraustar Industries, Inc. 359,219
12,171 Cardinal Health, Inc. 1,005,629
6,900 Carter-Wallace, Inc. 85,388
500 Cato Corp., Class A 2,750
16,900 Centocor, Inc.* 599,950
4,800 Champion Enterprises, Inc.* 108,600
4,200 Chemed Corp. 159,600
9,400 Chiquita Brands International, Inc. 115,150
35,200 Chiron Corp.* 668,800
7,400 Chronimed, Inc.* 102,675
4,600 Church & Dwight Co., Inc. 93,725
10,350 Claire's Stores, Inc. 221,231
5,200 Coca-Cola Bottling Co. 197,600
20,200 Coca-Cola Enterprises, Inc. 914,050
4,800 Coleman, Inc.* 70,800
4,200 Coventry Corp.* 50,138
15,450 Cracker Barrel Old Country Store, Inc. 349,556
4,000 Cytogen Corp.* 24,000
11,400 Dean Foods Co. 322,050
3,600 Dekalb Genetics Corp., Class B 122,400
700 Diagnostic Products Corp. 26,338
10,200 Dole Food, Inc. 428,400
15,803 Dollar General Corp. 491,868
100 Dress Barn, Inc.* 1,088
5,300 Dreyer's Grand Ice Cream, Inc. 132,831
24,800 Duracell International, Inc. 1,590,300
5,000 Duty Free International, Inc. 68,750
12,180 Enzo Biochem, Inc.* 217,718
10,800 Family Dollar Stores, Inc. 187,650
10,428 FHP International Corp.* 389,747
8,800 First Brands Corp. 229,900
12,900 Foodmaker, Inc.* 129,000
23,600 Forest Laboratories, Inc.* 852,550
13,199 Foundation Health Corp.* 447,116
3,600 Fresenius USA, Inc.* 93,150
12,100 Furniture Brands International, Inc.* 176,963
800 Furon Co. 20,000
3,150 G & K Services, Inc., Class A 92,138
5,700 Geltex Pharmaceuticals, Inc.* 114,000
8,250 Genesis Health Ventures, Inc.* 232,031
5,100 Griffon Corp.* 50,363
1,700 Guilford Mills, Inc. 38,250
4,800 Gymboree Corp.* 145,800
3,800 Haemonetics Corp.* 78,375
1,000 Hancock Fabrics, Inc. 8,875
9,200 Hannaford Brothers Co. 299,000
26,550 Harte-Hanks Communications, Inc. 740,081
18,920 HBO & Co. 1,262,910
3,400 Health Care REIT, Inc. 79,050
7,050 Health Care & Retirement Corp.* $ 165,675
15,693 Health Management
Associates, Inc., Class A* 390,363
12,100 Health Systems
International, Inc., Class A* 343,338
22,200 Healthsource, Inc.* 327,450
32,542 HEALTHSOUTH Corp.* 1,248,785
5,800 Herbalife International, Inc. 89,900
8,100 Hillenbrand Industries, Inc. 295,650
13,056 Home Shopping Network, Inc.* 135,456
5,422 Horizon/CMS Healthcare Corp.* 65,064
8,900 Hormel Foods Corp. 208,038
25,300 Host Marriott Corp. 366,850
1,260 Host Marriott Services Corp.* 10,238
2,550 Hudson Foods, Inc., Class A 36,656
28,900 IBP, Inc. 671,925
9,240 ICN Pharmaceuticals, Inc. 189,420
11,000 ICOS Corp.* 96,250
7,300 ImmuLogic Pharmaceutical Corp.* 59,313
3,300 Immunex Corp.* 42,900
7,400 International Dairy Queen, Inc., Class A* 151,700
5,150 International Multifoods Corp. 83,688
9,800 Interneuron Pharmaceuticals, Inc.* 276,850
8,300 Interstate Bakeries Corp. 302,950
4,200 Invacare Corp. 117,600
14,890 IVAX Corp. 232,656
500 Jacobs Engineering Group, Inc.* 11,250
3,100 Jones Apparel Group, Inc.* 197,625
5,700 Kaydon Corp. 245,100
6,900 Kellwood Co. 114,713
19,800 Kinetic Concepts, Inc. 285,863
18,600 Kohl's Corp.* 669,600
12,600 Komag, Inc.* 264,600
16,200 La Quinta Inns, Inc. 315,900
8,121 Lancaster Colony Corp. 310,628
2,900 Lance, Inc. 50,025
22,600 Leggett & Platt, Inc. 663,875
7,200 Lennar Corp. 160,200
1,350 Life Technologies, Inc. 30,375
2,527 Ligand Pharmaceuticals, Class B* 34,430
2,600 Lincare Holdings, Inc.* 104,000
4,450 Lindsay Manufacturing Co. 184,675
6,600 LiposomeInc.* 124,575
4,400 Lone Star Steakhouse & Saloon, Inc.* 133,925
9,400 MacFrugal's Bargains-Close-Outs, Inc.* 222,075
4,000 Magellan Health Services, Inc.* 83,000
22,300 McCormick & Co., Inc. 521,263
6,400 Medimmune, Inc.* 91,200
7,200 Meditrust 249,300
5,200 Meyer (Fred), Inc.* 172,250
2,000 MGM Grand, Inc.* 84,500
1,700 Michael Foods, Inc. 17,638
</TABLE>
See Notes to Financial Statements.
19
<PAGE> 22
<TABLE>
SMALL COMPANY INDEX FUND
GALAXY PORTFOLIO OF INVESTMENTS (CONTINUED)
FUND II SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
SHARES (NOTE 2)
------ --------
<S> <C> <C>
CONSUMER STAPLES (CONTINUED)
3,800 Michaels Stores, Inc.* $ 55,813
5,400 Mid Atlantic Medical Services, Inc.* 68,850
32,300 Mirage Resorts, Inc.* 827,678
4,050 Mohawk Industries, Inc.* 103,781
9,750 Multicare Cos., Inc.* 212,063
31,000 Mylan Laboratories, Inc. 530,875
4,900 Myriad Genetics, Inc.* 124,950
1,800 National Presto Industries, Inc. 67,725
1,200 Nautica Enterprises, Inc.* 38,700
8,600 Neiman-Marcus Group, Inc.* 303,150
3,500 Noven Pharmaceuticals, Inc.* 44,188
1,400 Nu-Kote Holding, Inc., Class A* 15,225
4,000 Oakwood Homes Corp. 110,000
20,086 Office Depot, Inc.* 474,532
1,564 Omega Healthcare Investors, Inc. 46,920
5,350 Outback Steakhouse, Inc.* 129,069
3,450 Owens & Minor, Inc. 32,775
19,600 Oxford Health Plans, Inc.* 975,100
7,500 PacifiCare Health Systems, Inc., Class B* 648,750
100 Park-Ohio Industries, Inc.* 1,450
11,200 Perrigo Co.* 110,600
3,000 Phillips-Van Heusen Corp. 33,375
9,650 PhyCor, Inc.* 367,303
5,100 Physicians Corp. of America* 61,838
10,920 Pier 1 Imports, Inc. 176,085
300 Pope & Talbot, Inc. 4,613
5,300 Ralcorp Holdings, Inc.* 109,975
5,700 Regis Corp. 148,200
8,000 Renal Treatment Centers, Inc.* 266,000
15,500 Revco D. S., Inc.* 455,313
9,938 Richfood Holdings, Inc. 370,191
68,340 RJR Nabisco Holdings Corp. 1,776,840
1,200 Roberts Pharmaceutical Corp.* 22,650
600 Ryland Group, Inc. 8,925
8,000 Savannah Foods & Industries, Inc. 111,000
6,000 Scherer (R.P.) Corp.* 292,500
6,500 Scios Nova, Inc.* 40,219
2,700 SEQUUS Pharmaceuticals, Inc.* 42,525
30,050 Service Merchandise Co., Inc.* 138,981
6,100 Shopko Stores, Inc. 96,838
2,900 Showboat, Inc. 63,800
500 Sierra Health Services, Inc.* 17,188
2,300 Smithfield Foods, Inc.* 71,588
5,900 Smucker (J.M.) Co., Class A 100,300
1,800 Sofamor/Danek Group, Inc.* 55,575
10,000 Southland Corp.* 30,313
600 Spiegel, Inc., Class A 4,425
38 Standard Commercial Corp. 480
1,700 Standex International Corp. 51,000
4,600 Stanhome, Inc. 132,825
23,600 Starbucks Corp.* 778,800
12,896 STERIS Corp.* 436,852
4,695 Strawbridge & Clothier, Class A $ 94,634
21,000 Stryker Corp. 632,625
6,150 Summit Technology, Inc.* 37,669
18,700 Sunbeam Corp. 432,438
5,100 Sunrise Medical, Inc.* 80,963
18,800 Sybron International Corp.* 545,200
11,900 Tambrands, Inc. 501,288
7,150 Tecnol Medical Products, Inc.* 102,781
1,650 TheraTech, Inc.* 16,913
900 Thermo Cardiosystems, Inc.* 32,963
6,400 Tiffany & Co. 256,000
1,300 Timberland Co., Class A* 26,650
8,400 Toll Brothers, Inc.* 139,650
4,130 Tootsie Roll Industries, Inc. 146,099
21,400 Topps Co., Inc.* 90,950
3,100 Triarc Cos., Inc.* 37,200
200 Tyco Toys, Inc.* 1,150
27,166 Tyson Foods, Inc., Class A 724,993
17,375 Unifi, Inc. 477,813
10,700 Universal Corp. 272,850
7,900 Universal Foods Corp. 256,750
14,000 Universal Health Services, Inc., Class B* 381,500
3,200 Urban Outfitters, Inc.* 74,400
9,900 U. S. Filter Corp.* 337,838
900 Valmont Industries, Inc. 30,713
12,127 Value Health, Inc.* 227,381
4,426 Vencor, Inc.* 142,739
8,000 Ventritex, Inc.* 140,000
6,600 Vicor Corp.* 164,175
1,400 VISX, Inc.* 37,800
8,550 Vivra, Inc.* 278,944
6,900 Vons Cos., Inc. 295,838
7,300 Waban, Inc.* 166,988
8,600 Warnaco Group, Inc., Class A 204,250
9,422 Watson Pharmaceuticals, Inc.* 353,325
2,800 WD-40 Co. 131,600
1,400 Webb Corp. 24,325
2,601 Wellpoint Health Networks, Inc. 84,533
3,100 Whole Foods Market, Inc.* 82,150
4,050 Williams-Sonoma, Inc.* 114,919
1,700 Windmere-Durable Holdings 23,375
600 WLR Foods, Inc. 6,975
1,350 Wolverine World Wide, Inc. 37,463
------------
48,872,905
------------
CONSUMER CYCLICAL - 10.13%
7,750 Acclaim Entertainment, Inc.* 60,063
13,750 Advanta Corp., Class A 632,500
11,846 AES Corp.* 466,436
700 Alexander's, Inc.* 48,475
1,700 Allen Group, Inc. 31,450
</TABLE>
See Notes to Financial Statements.
20
<PAGE> 23
<TABLE>
SMALL COMPANY INDEX FUND
GALAXY PORTFOLIO OF INVESTMENTS (CONTINUED)
FUND II SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
SHARES (NOTE 2)
------ --------
<S> <C> <C>
CONSUMER CYCLICAL (CONTINUED)
650 American Business Information, Inc.* $ 11,700
600 Arbor Drugs, Inc. 13,050
4,500 Arctic Cat, Inc. 42,188
200 Argosy Gaming Corp.* 1,375
2,300 Arvin Industries, Inc. 56,638
28,000 AutoZone, Inc.* 812,000
5,300 Bandag, Inc. 261,688
6,825 Banta Corp. 155,269
7,700 Belo (A.H.) Corp., Class A 265,650
2,100 Billing Information Concepts* 46,725
12,466 Bob Evans Farms, Inc. 166,733
137 Bombay Co., Inc.* 771
9,700 Boston Chicken, Inc.* 341,925
17,700 Boyd Gaming Corp.* 165,938
6,200 Breed Technologies, Inc. 172,825
2,300 Burlington Coat Factory
Warehouse Corp.* 25,300
8,850 Butler Manufacturing Co. 243,375
10,200 Cablevision Systems Corp., Class A* 443,700
5,400 Carlisle Cos., Inc. 299,700
3,300 Carson Pirie Scott & Co.* 87,863
5,000 Casey's General Stores, Inc. 87,500
1,200 Casino America, Inc.* 8,100
3,100 Casino Magic Corp.* 11,238
7,800 CellStar Corp.* 62,400
2,800 Central Newspapers, Inc., Class A 106,750
15,093 Century Communications Corp.,
Class A* 113,198
4,681 Chris-Craft Industries, Inc. 195,432
2,700 Chromcraft Revington, Inc.* 67,838
13,250 Circus Circus Enterprises, Inc.* 468,719
16,035 Clayton Homes, Inc. 352,770
7,600 Clear Channel Communications, Inc.* 672,600
9,980 Comdisco, Inc. 288,173
12,100 CompUSA, Inc.* 653,400
11,000 Consolidated Stores Corp.* 440,000
100 CPI Corp. 1,875
10,300 Danaher Corp. 426,163
5,300 Discovery Zone, Inc.* 1,988
5,100 Donaldson Co., Inc. 140,888
2,300 Eagle Hardware & Garden, Inc.* 62,100
15,600 Eckerd Corp.* 436,800
1,000 Exide Corp. 25,875
900 Express Scripts, Inc., Class A* 32,625
2,400 Fibreboard Corp.* 84,000
1,900 Fisher Scientific International, Inc. 78,375
17,050 Flowers Industries, Inc. 347,394
105,400 Food Lion, Inc., Class B 935,425
1,100 Franklin Quest Co.* 20,625
9,200 Friedman's, Inc., Class A* 172,500
10,800 Gartner Group, Inc., Class A* 367,200
11,025 Gaylord Entertainment Co., Class A* 249,441
10,200 GenCorp, Inc. $ 144,075
37,000 General Motors Corp., Class H 2,136,750
300 Gibson Greetings, Inc.* 4,350
6,000 Golden Books Family
Entertainment, Inc.* 69,750
5,115 Grand Casinos, Inc.* 75,446
8,200 GTECH Holdings Corp.* 263,425
22,000 Harley-Davidson, Inc. 946,000
10,390 HealthCare COMPARE Corp.* 492,226
14,800 Hechinger Co., Class A 53,650
13,200 Heilig-Meyers Co. 206,250
1,800 Hollywood Park, Inc.* 13,950
4,000 Houghton Mifflin Co. 188,500
100 Huffy Corp. 1,350
1,800 In Focus Systems, Inc.* 25,875
19,350 Infinity Broadcasting Corp., Class A* 609,525
1,900 Integrated Health Services, Inc. 47,975
9,900 Intelligent Electronics, Inc. 82,294
4,400 Juno Lighting, Inc. 73,150
8,150 Kelly Services, Inc., Class A 231,256
3,000 Kinder-care Learning Centers, Inc.* 48,000
5,300 Lafarge Corp. 98,713
3,900 La-Z-Boy, Inc. 117,488
18,100 Lear Seating Corp.* 597,300
11,200 Lee Enterprises, Inc. 256,200
21,600 Manpower, Inc. 718,200
7,526 Marvel Entertainment Group, Inc.* 62,090
4,400 Medaphis Corp.* 66,000
33,094 MedPartners, Inc.* 752,889
1,800 Medusa Corp. 55,350
1,725 Men's Wearhouse, Inc. 43,125
7,500 Miller (Herman), Inc. 303,750
5,300 Modine Manufacturing Co. 139,125
133 Morrison Health Care, Inc. 1,596
9,593 Myers Industries, Inc. 143,895
6,500 National Computer Systems, Inc. 133,250
15,140 NovaCare, Inc.* 141,938
13,775 Olsten Corp., Class B 342,653
16,200 Omnicom Group, Inc. 757,350
10,720 OrNda Healthcorp* 293,460
14,100 PETsMART, Inc.* 364,838
7,800 PHH Corp. 232,050
1,500 Playboy Enterprises, Inc., Class B* 18,563
6,900 Players International, Inc.* 52,613
3,700 Primadonna Resorts, Inc.* 67,525
9,800 QUALCOMM, Inc.* 416,500
1,100 Renters Choice, Inc.* 20,625
6,300 Rio Hotel & Casino, Inc.* 99,225
3,200 Robert Half International, Inc.* 118,000
6,350 Rollins, Inc. 127,794
6,600 Ross Stores, Inc. 237,600
4,550 Ruby Tuesday, Inc. 86,450
</TABLE>
See Notes to Financial Statements.
21
<PAGE> 24
<TABLE>
SMALL COMPANY INDEX FUND
GALAXY PORTFOLIO OF INVESTMENTS (CONTINUED)
FUND II SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
SHARES (NOTE 2)
------ --------
<S> <C> <C>
CONSUMER CYCLICAL (CONTINUED)
14,600 Ruddick Corp. $ 200,750
75,000 Safeway, Inc.* 3,196,875
2,900 Scholastic Corp.* 210,250
8,962 Schulman (A.), Inc. 208,367
20,600 Shaw Industries, Inc. 275,525
1,000 Smith (A.O.) Corp. 24,875
8,600 Smith's Food & Drug
Centers, Inc., Class B 227,900
9,800 Sodak Gaming, Inc.* 225,400
3,800 Sotheby's Holdings, Inc., Class A 62,225
8,000 Southdown, Inc. 197,000
5,700 Spelling Entertainment Group, Inc.* 42,750
300 Standard Pacific Corp. 1,725
20,737 Staples, Inc.* 460,102
6,800 Station Casinos, Inc.* 81,600
8,775 Stewart Enterprises, Inc., Class A 296,156
11,756 Sun Healthcare Group, Inc.* 152,828
4,900 Superior Industries International, Inc 118,213
9,900 USG Corp.* 293,288
2,500 U.S. Home Corp.* 51,250
1,700 Washington Post Co., Class B 595,000
4,600 Weis Markets, Inc. 144,900
8,200 Westwood One, Inc. 150,675
------------
31,562,335
------------
UTILITIES - 9.11%
11,100 AGL Resources, Inc. 212,288
34,600 Allegheny Power System, Inc. 1,003,400
14,400 American Water Works Co., Inc. 311,400
600 Aspect Telecommunications Corp.* 37,350
2,500 Atlantic Energy, Inc. 43,750
15,200 Boston Edison Co. 336,300
10,250 Brooklyn Union Gas Co. 285,719
38,900 Centerior Energy Corp. 354,963
18,100 Cincinnati Bell, Inc. 959,300
9,900 CIPSCO, Inc. 352,688
234 Citizens Utilities Co., Class B 2,833
23,900 CMS Energy Corp. 719,988
13,624 Comsat Corp. 308,243
15,200 Delmarva Power & Light Co. 311,600
29,050 DPL, Inc. 679,044
22,950 DQE, Inc. 639,731
4,800 Embrace Systems Corp. (B) 0
28,900 Enova Corp. 639,413
7,200 Equitable Resources, Inc. 205,200
25,800 Florida Progress Corp. 877,200
28,900 Frontier Corp. 769,463
9,500 Geotek Communications, Inc.* 79,563
9,450 Glenayre Technologies, Inc.* $ 217,350
5,600 Hawaiian Electric Industries, Inc. 191,100
13,000 Idaho Power Co. 407,875
7,800 IES Industries, Inc. 236,925
24,700 Illinova Corp. 654,550
600 IPACLO Enterprises, Inc. 15,750
18,300 Kansas City Power & Light Co. 489,525
11,700 KU Energy Corp. 336,375
12,700 LCI International, Inc.* 400,050
19,000 LG & E Energy Corp. 422,750
28,800 Long Island Lighting Co. 493,200
8,500 MAPCO, Inc. 506,813
19,400 MCN Corp. 521,375
4,911 MFS Communications Co., Inc.* 214,242
23,814 MidAmerican Energy Co. 378,047
6,500 Minnesota Power & Light Co. 173,063
15,400 Montana Power Co. 329,175
7,200 National Fuel Gas Co. 264,600
11,200 Nevada Power Co. 228,200
16,100 New England Electric System 501,113
20,400 New York State Electric & Gas Corp. 448,800
21,005 NEXTEL Communications, Inc., Class A* 388,593
15,500 NIPSCO Industries, Inc. 554,125
35,900 Northeast Utilities 444,263
11,500 Oklahoma Gas & Electric Co. 460,000
2,500 Otter Tail Power Co. 83,750
10,900 Paging Network, Inc.* 218,000
2,300 PanAmSat Corp.* 63,969
900 People's Choice TV Corp.* 12,825
6,500 PictureTel Corp.* 229,125
22,100 Pinnacle West Capital Corp. 654,713
13,500 Portland General Corp. 518,063
31,400 Potomac Electric Power Co. 796,775
15,100 Public Service Co. Of Colorado 536,050
25,700 SCANA Corp. 674,625
12,200 Scripps (E.W.) Co., Class A 568,825
18,300 Southern New England
Telecommunication Corp. 674,813
12,900 Southwestern Public Service Co. 419,250
8,500 Symbol Technologies, Inc.* 391,000
5,600 TCA Cable TV, Inc. 144,200
32,600 TECO Energy, Inc. 774,250
8,600 Telephone & Data Systems, Inc. 346,150
22,100 Turner Broadcasting System, Inc., Class B 624,325
100 United Water Resources, Inc. 1,650
11,500 UtiliCorp United, Inc. 317,688
8,400 U.S. Cellular Corp.* 254,100
12,800 Valero Energy Corp. 280,000
400 Washington Gas Light Co. 8,800
</TABLE>
See Notes to Financial Statements.
22
<PAGE> 25
<TABLE>
SMALL COMPANY INDEX FUND
GALAXY PORTFOLIO OF INVESTMENTS (CONTINUED)
FUND II SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
SHARES (NOTE 2)
------ --------
<S> <C> <C>
UTILITIES (CONTINUED)
11,500 Washington Water Power Co. $ 217,063
17,024 Western Resources, Inc. 495,824
25,850 Wisconsin Energy Corp. 697,950
------------
28,411,078
------------
BASIC MATERIALS - 4.49%
3,600 Actel Corp.* 69,300
300 Alpharma, Inc., Class A 4,688
1,900 Amcol International Corp. 26,125
800 Armor All Products Corp. 12,800
300 Ashland Coal, Inc. 7,463
3,300 Birmingham Steel Corp. 52,388
10,600 Bowater, Inc. 402,800
4,400 Brush Wellman, Inc. 84,700
6,100 Calgon Carbon Corp. 63,288
4,600 CalMat Co. 85,100
8,812 Castle (A.M.) & Co. 177,342
1,200 Chesapeake Corp. 33,000
6,300 Consolidated Papers, Inc. 327,600
11,500 Crompton & Knowles Corp. 188,313
6,000 Dexter Corp. 179,250
23,591 Ethyl Corp. 212,319
2,500 Gaylord Container Corp., Class A 18,438
8,400 Georgia Gulf Corp. 250,950
6,600 Glatfelter (P.H.) Co. 111,375
5,500 Handy & Harman 98,313
11,025 Hanna (M.A.) Co. 252,197
7,600 Harsco Corp. 478,800
14,000 IMC Global, Inc. 547,750
12,500 Intermet Corp. 134,375
28,500 International Game Technology 584,250
8,700 Jefferson Smurfit Corp.* 103,313
7,800 Justin Industries, Inc. 84,825
4,000 Kennametal, Inc. 137,500
1,800 Lilly Industries, Inc., Class A 29,925
6,700 Loctite Corp. 303,175
11,400 Longview Fibre Co. 179,550
22,000 LTV Corp. 255,750
2,200 Lukens, Inc. 40,150
12,200 Lyondell Petrochemical Co. 283,650
2,900 MAXXAM, Inc.* 128,325
7,700 Minerals Technologies, Inc. 287,788
3,600 Mississippi Chemical Corp. 84,150
2,400 Mueller Industries, Inc.* 97,500
6,000 Mycogen Corp.* 85,500
4,500 Olin Corp. 378,000
9,500 OM Group, Inc. 361,000
5,900 Oregon Steel Mills, Inc. 90,713
100 O'Sullivan Corp. 1,063
34,100 Owens-Illinois, Inc.* 596,750
9,700 Pentair, Inc. 257,050
6,300 Quanex Corp. $ 169,313
3,300 Rayonier, Inc. 131,175
11,900 Rhone-Poulenc Rorer, Inc. 876,138
16,643 RPM, Inc. 274,610
6,000 Scotts Co., Class A* 115,500
9,600 Sealed Air Corp.* 357,600
1,000 Sequa Corp., Class A* 44,625
11,900 Shorewood Packaging Corp.* 201,556
9,300 Solectron Corp.* 455,700
27,470 Sonoco Products Co. 755,425
3,000 St. Joe Corp. 194,250
4,900 Telxon Corp. 68,600
1,300 Tencor Instruments* 23,481
23,400 Terra Industries, Inc. 348,075
500 Texas Industries, Inc. 29,938
8,300 Thiokol Corp. 389,063
500 TriMas Corp. 12,125
1,000 Valspar Corp. 49,250
5,676 Wausau Paper Mills Co. 109,263
6,600 Wellman, Inc. 115,500
6,500 WHX Corp.* 65,813
10,500 Witco Corp. 345,188
9,000 Wolverine Tube, Inc.* 387,000
17,300 Zeigler Coal Holding Co. 298,425
------------
14,006,214
------------
ENERGY - 4.36%
4,500 Albemarle Corp. 77,063
20,800 Anadarko Petroleum Corp. 1,162,200
20,352 Apache Corp. 605,472
17,300 ARCO Chemical Co. 865,000
300 Atmos Energy Corp. 7,013
2,800 Benton Oil & Gas Co.* 60,900
4,000 BJ Services Co.* 145,000
540 BJ Services Co. Warrants* 7,560
19,000 Cabot Corp. 529,625
3,400 Cabot Oil & Gas Corp., Class A 50,150
9,960 CalEnergy, Inc.* 317,475
4,200 Cooper Cameron Corp.* 240,975
10,300 Devon Energy Corp. 262,650
5,400 Diamond Offshore Drilling, Inc.* 297,000
7,100 Diamond Shamrock, Inc. 220,988
13,090 El Paso Natural Gas Co. 575,960
3,100 Energy Ventures, Inc.* 125,550
12,200 Enron Oil & Gas Co. 303,475
1,825 ENSCO International, Inc.* 59,313
200 FINA, Inc., Class A 10,500
9,000 FINOVA Group, Inc. 540,000
4,150 Fuller (H.B.) Co. 159,256
46,300 Global Marine, Inc.* 729,225
</TABLE>
See Notes to Financial Statements.
23
<PAGE> 26
<TABLE>
SMALL COMPANY INDEX FUND
GALAXY PORTFOLIO OF INVESTMENTS (CONTINUED)
FUND II SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
SHARES (NOTE 2)
------ --------
<S> <C> <C>
ENERGY (CONTINUED)
2,800 Global Natural Resources, Inc.* $ 48,650
1,800 KCS Energy, Inc. 64,125
6,150 KN Energy, Inc. 216,788
1,200 Lone Star Technologies, Inc.* 17,550
1,000 Mine Safety Appliances Co. 50,625
7,050 Mitchell Energy & Development
Corp., Class A 133,069
10,715 Murphy Oil Corp. 516,999
36,251 NGC Corp. 566,422
6,600 Noble Affiliates, Inc. 278,850
7,800 Noble Drilling Corp.* 117,975
900 Nuevo Energy Co.* 36,563
4,100 Oceaneering International, Inc.* 69,700
21,500 Parker Drilling Co.* 137,063
6,600 Parker & Parsley Petroleum Co. 172,425
5,300 Pogo Producing Co. 189,475
10,300 Quaker State Corp. 177,675
11,600 Questar Corp. 410,350
6,000 Reading & Bates Corp.* 162,750
100 RPC Energy Services, Inc.* 1,138
6,200 Seagull Energy Corp.* 121,675
8,500 Smith International, Inc.* 298,563
5,300 Snyder Oil Corp. 62,275
15,300 Tesoro Petroleum Corp.* 196,988
8,800 Tosco Corp. 482,900
1,700 Tuboscope Vetco International Corp.* 26,563
9,900 Ultramar Corp. 299,475
28,500 Union Pacific Resources Group, Inc. 798,000
10,200 Union Texas Petroleum Holdings, Inc. 220,575
6,000 Varco International, Inc.* 105,750
9,978 Weatherford Enterra, Inc.* 273,148
------------
13,606,454
------------
CAPITAL GOODS - 4.34%
17,500 ADC Telecommunications, Inc.* 1,120,000
6,900 AGCO Corp. 175,950
100 Air & Water Technologies Corp., Class A* 713
4,600 Alliant Techsystems, Inc.* 238,625
2,800 Allied Products Corp. 70,000
6,300 American Management Systems, Inc.* 176,400
29,600 American Standard Cos., Inc.* 1,013,800
13,200 AMETEK, Inc. 249,150
6,000 Applied Power, Inc., Class A 191,250
7,400 AptarGroup, Inc. 237,725
13,919 BancTec, Inc.* 290,559
8,550 Bearings, Inc. 241,538
4,600 Checkpoint Systems, Inc.* 121,900
4,100 Coltec Industries, Inc.* 65,600
8,550 Commercial Intertech Corp. 98,325
6,666 Commercial Metals Co. 218,312
7,400 Corrections Corp. Of America* 231,250
8,550 Cuno, Inc.* $ 132,525
4,000 Dentsply International, Inc. 178,000
10,912 Diebold, Inc. 636,988
1,900 Digital Microwave Corp.* 43,700
8,200 Dionex Corp.* 311,600
7,500 Duriron Co., Inc. 198,750
7,100 Federal-Mogul Corp. 149,988
4,200 GATX Corp. 196,350
17,000 Gentex Corp.* 386,750
6,200 Goulds Pumps, Inc. 137,950
198 Healthdyne Technologies, Inc.* 1,658
15,502 Hubbell, Inc., Class B 573,574
900 IDEX Corp. 29,925
3,200 IMCO Recycling, Inc. 52,000
2,800 KEMET Corp.* 56,350
6,500 Keystone International, Inc. 127,563
7,414 Litton Industries, Inc.* 365,140
10,800 Martech USA, Inc.* (B) 0
7,000 Mascotech, Inc. 99,750
3,500 Molten Metal Technology, Inc.* 112,000
2,700 Nordson Corp. 150,525
2,000 Orbital Sciences Corp.* 35,500
5,850 Pittway Corp., Class A 261,056
5,000 Rega Beloit Corp. 83,125
1,400 Roper Industries, Inc. 66,150
1,900 Silicon Valley Group, Inc.* 33,725
9,900 Simpson Industries, Inc. 100,238
8,100 Stewart & Stevenson Services, Inc. 175,163
21,800 Sundstrand Corp. 850,200
600 Teleflex, Inc. 29,775
20,775 Thermo Electron Corp. 841,388
8,100 Trinity Industries, Inc. 270,333
8,176 U.S.A. Waste Services, Inc.* 257,544
8,900 Varian Associates, Inc. 427,200
8,800 Vulcan Materials Co. 528,000
5,700 Watts Industries, Inc., Class A 111,863
6,600 Wyman-Gordon Co.* 150,975
13,200 York International Corp. 638,550
------------
13,542,968
------------
TRANSPORTATION - 2.22%
4,400 Airborne Freight Corp. 94,050
13,900 Alexander & Baldwin, Inc. 340,550
16,908 America West Airlines, Inc., Class B* 198,669
3,100 American Freightways Corp.* 27,513
6,800 APL, Ltd. 146,200
1,600 Arnold Industries, Inc. 25,200
9,300 Atlantic Southeast Airlines, Inc. 204,600
16,705 Comair Holdings, Inc. 392,568
7,738 Fritz Cos., Inc.* 112,201
2,100 Greyhound Lines, Inc.* 7,088
6,400 Hunt (J.B.) Transport Services, Inc. 101,600
</TABLE>
See Notes to Financial Statements.
24
<PAGE> 27
<TABLE>
SMALL COMPANY INDEX FUND
GALAXY PORTFOLIO OF INVESTMENTS (CONTINUED)
FUND II SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
SHARES (NOTE 2)
------ --------
<S> <C> <C>
TRANSPORTATION (CONTINUED)
16,200 Illinois Central Corp., Series A $ 512,325
5,200 Kirby Corp.* 91,650
800 Lo-Jack Corp.* 8,700
6,300 Mesa Air Group, Inc.* 57,488
900 M.S. Carriers, Inc.* 17,325
16,300 Northwest Airlines Corp., Class A* 576,613
9,600 Offshore Logistics, Inc.* 138,000
7,200 Overseas Shipholding Group, Inc. 118,800
23,100 Republic Industries, Inc.* 669,900
2,250 Rollins Truck Leasing Corp. 25,313
16,000 Rural/Metro Corp.* 584,000
2,600 Standard Products Co. 65,650
14,100 Tidewater, Inc. 526,988
3,300 Top Source Technologies, Inc.* 15,469
12,400 UAL Corp.* 582,800
6,828 Union Pacific Corp. 500,176
2,800 United Waste Systems, Inc.* 97,300
9,450 USFreightways Corp. 193,725
3,000 Wabash National Corp. 47,250
2,400 Werner Enterprises, Inc. 38,400
7,800 Wisconsin Central Transportation Corp.* 279,825
3,200 XTRA Corp. 135,600
------------
6,933,536
------------
DURABLE GOODS - 1.77%
5,200 Acuson Corp.* 89,050
1,700 Albany International Corp., Class A 36,763
8,700 Altera Corp.* 440,438
1,200 AMISYS Managed Care Systems, Inc.* 28,650
6,800 Beckman Instruments, Inc. 264,350
100 Borg-Warner Security Corp. 938
7,800 Cintas Corp. 436,800
2,200 Citrix Systems, Inc.* 109,725
30,300 Elcom International, Inc.* 238,613
12,400 Electronic Arts, Inc.* 463,450
13,200 Fastenal Co. 653,400
1,300 Figgie International, Inc., Class A* 17,469
13,000 Genzyme Corp.* 331,500
5,600 GT Interactive Software Corp.* 127,400
6,900 HON Industries, Inc. 274,275
1,400 Marquette Medical Systems, Inc., ClassA* 23,450
12,500 Mentor Graphics Corp.* 110,938
16,600 Nabors Industries, Inc.* 226,175
8,200 Netscape Communications Corp.* 380,275
4,600 OEA, Inc. 182,850
5,300 Precision Castparts Corp. 257,050
3,101 Premier Farnell Plc, ADR* 64,346
12,600 Read-Rite Corp.* 198,450
3,500 SanDisk Corp.* 55,563
6,800 Semitool, Inc.* $ 80,750
6,800 Sequent Computer Systems, Inc.* 88,400
11,200 SMART Modular Technologies, Inc.* 190,400
8,400 Smith Micro Software, Inc.* 52,500
5,200 Valassis Communications, Inc.* 81,250
------------
5,505,218
------------
METALS AND MINING - 0.50%
8,800 Allegheny Teledyne, Inc. 199,100
2,100 Alumax, Inc.* 70,350
13,300 Amax Gold, Inc.* 74,813
3,300 Carpenter Technology Corp. 115,500
8,071 Coeur d'Alene Mines Corp. 116,021
6,783 Freeport McMoRan, Inc. 211,969
13,300 Hecla Mining Co.* 88,113
14,400 Newmont Gold Co. 682,200
------------
1,558,066
------------
CHEMICALS AND DRUGS - 0.44%
8,400 Betzdearborn Inc 441,000
8,500 Ferro Corp. 229,500
8,000 Keravision, Inc.* 120,000
20,400 Lubrizol Corp. 586,500
------------
1,377,000
------------
CONSUMER PRODUCTS - 0.39%
4,000 Intimate Brands, Inc., Class A 73,000
28,200 Reader's Digest Association, Inc., Class A 1,152,675
------------
1,225,675
------------
MISCELLANEOUS - 0.08%
5,400 Flightsafety International, Inc. 240,975
------------
BUILDING AND CONSTRUCTION - 0.07%
1,875 Chittenden Corp. 47,344
6,600 Morrison Knudsen Corp.* 59,400
5,000 Schuller Corp. 48,125
2,700 TJ International, Inc. 49,275
------------
204,144
------------
TOTAL COMMON STOCKS 277,171,541
------------
(Cost $186,099,147)
</TABLE>
See Notes to Financial Statements.
25
<PAGE> 28
<TABLE>
SMALL COMPANY INDEX FUND
GALAXY PORTFOLIO OF INVESTMENTS (CONTINUED)
FUND II SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
SHARES (NOTE 2)
------ --------
<S> <C> <C>
PREFERRED STOCK - 0.02%
2,499 Premier Farnell Plc, ADR $ 63,412
------------
TOTAL PREFERRED STOCK 63,412
------------
(Cost $62,787)
PAR VALUE
U.S. GOVERNMENT AND AGENCY OBLIGATIONS (A) - 11.04%
FEDERAL HOME LOAN BANK - 10.56%
$32,905,000 5.70%, 10/01/96 32,905,000
------------
U.S. TREASURY BILL (C) - 0.48%
1,500,000 5.11%, 10/03/96 1,499,578
------------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS 34,404,578
------------
(Cost $34,404,578)
TOTAL INVESTMENTS - 99.97% 311,639,531
------------
(Cost $220,566,512)
NET OTHER ASSETS AND LIABILITIES - 0.03% 103,533
------------
NET ASSETS - 100.00% $311,743,064
============
<FN>
- ---------------------------------------
* Non-income producing security.
ADR American Depositary Receipt
REIT Real Estate Investment Trust
(A) Annualized yield at time of purchase.
(B) Filed for bankruptcy.
(C) Security has been deposited as an initial margin on open futures
contracts.
</TABLE>
<TABLE>
At September 30, 1996, the Fund's open futures contracts were as follows:
<CAPTION>
NUMBER OF
CONTRACTS CONTRACT EXPIRATION OPENING CURRENT
PURCHASED(SOLD) TYPE DATE POSITION MARKET VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
84 Russell 2000 12/96 $14,328,500 $14,574,000
159 Midcap 12/96 19,152,100 19,394,025
----------- -----------
$33,480,600 $33,968,025
=========== ===========
</TABLE>
See Notes to Financial Statements.
26
<PAGE> 29
<TABLE>
GALAXY UTILITY INDEX FUND
FUND II PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
SHARES (NOTE 2)
- --------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS - 102.51%
UTILITIES - 93.55%
6,100 AGL Resources, Inc. ............... $ 116,663
8,700 Allegheny Power System, Inc. ...... 252,300
13,800 ALLTEL Corp. ...................... 384,675
12,600 American Electric Power Co., Inc. . 511,875
1,200 American Water Works Co., Inc. .... 25,950
5,300 Atlantic Energy, Inc. ............. 92,750
13,300 Baltimore Gas & Electric Co. ...... 347,463
24,000 BellSouth Corp. ................... 888,000
6,900 Boston Edison Co. ................. 152,663
13,700 Brooklyn Union Gas Co. ............ 381,888
36,700 Carolina Power & Light Co. ........ 1,266,150
51,900 Central & South West Corp. ........ 1,349,400
12,047 Cinergy Corp. ..................... 371,951
2,300 CIPSCO, Inc. ...................... 81,938
800 Columbia Gas System, Inc. ......... 44,800
2,800 Comsat Corp., Series I ............ 63,350
58,000 Consolidated Edison Co. of New York 1,609,500
6,400 Consolidated Natural Gas Co. ...... 343,200
8,900 Delmarva Power & Light Co. ........ 182,450
43,900 Dominion Resources, Inc. .......... 1,657,225
7,100 DPL, Inc. ......................... 165,963
27,200 DTE Energy Co. .................... 761,600
50,100 Duke Power Co. .................... 2,335,913
108,300 Edison International .............. 1,935,863
61,200 Enron Corp.* ...................... 2,493,900
2,500 ENSERCH Corp. ..................... 52,188
56,300 Entergy Corp. ..................... 1,520,100
7,500 Florida Progress Corp. ............ 255,000
45,300 FPL Group, Inc. ................... 1,959,225
11,400 Frontier Corp. .................... 303,525
10,000 GPU, Inc. ......................... 307,500
77,700 GTE Corp. ......................... 2,991,450
15,700 Hawaiian Electric Industries, Inc. 535,763
17,800 Houston Industries, Inc. .......... 393,825
2,900 Idaho Power Co. ................... 90,988
3,850 IPALCO Enterprises, Inc. .......... 101,063
4,900 Kansas City Power & Light Co. ..... 131,075
3,400 KU Energy Corp. ................... 97,750
5,300 L G & E Energy Corp. .............. 117,925
4,500 LCI International, Inc.* .......... 141,750
3,600 MCN Corp. ......................... 96,750
7,500 Midamerican Energy Co. ............ 119,063
3,500 Minnesota Power & Light Co. ....... 93,188
6,800 Montana Power Co. ................. 145,350
2,900 National Fuel Gas Co. ............. 106,575
4,300 Nevada Power Co. .................. 87,613
10,600 New England Electric System ....... 329,925
5,400 New York State Electric & Gas Corp. 118,800
34,800 Niagara Mohawk Power Corp. ........ 278,400
3,100 NICOR, Inc. ....................... 104,625
4,700 Noram Energy Corp. ................ 69,913
30,700 Northeast Utilities ............... 379,913
4,400 Northern States Power Co. ......... 205,150
37,700 Ohio Edison Co. ................... 730,438
4,700 Oklahoma Gas & Electric Co. ....... 188,000
19,000 P P & L Resources, Inc. ........... 415,625
6,500 Pacific Enterprises ............... 196,625
99,600 Pacific Gas & Electric Co. ........ 2,166,300
72,600 PacifiCorp ........................ 1,497,375
4,300 Paging Network, Inc.* ............. 86,000
54,900 PECO Energy Co. ................... 1,303,875
4,000 Peoples Energy Corp. .............. 136,000
9,200 Potomac Electric Power Co. ........ 233,450
4,900 Public Service Co. of Colorado .... 173,950
35,700 Public Service Enterprise Group,
Inc. ............................ 954,975
7,400 Puget Sound Power & Light Co. ..... 166,500
5,100 Rochester Gas & Electric Corp. .... 93,075
14,900 Scana Corp. ....................... 391,125
6,800 Sonat, Inc. ....................... 300,900
166,300 Southern Co. ...................... 3,762,538
3,900 Southern New England
Telecommunication Corp. ........... 143,813
4,600 Southwestern Public Service Co. ... 149,500
1,300 Telephone & Data Systems, Inc. .... 52,325
55,500 Texas Utilities Co. ............... 2,199,188
16,600 Unicom Corp. ...................... 417,075
12,900 Union Electric Co. ................ 475,688
6,400 UtiliCorp United, Inc. ............ 176,800
4,200 Washington Gas Light Co. .......... 92,400
6,800 Washington Water Power Co. ........ 128,350
9,400 Western Resources, Inc. ........... 273,775
7,800 Williams Cos., Inc. ............... 397,800
8,800 Wisconsin Energy Corp. ............ 237,600
2,700 WPL Holdings, Inc. ................ 78,638
-----------
46,571,525
-----------
TECHNOLOGY - 7.43%
45,650 American Telephone & Telegraph Corp. 2,464,901
2,400 Cox Communications, Inc., Class A* 44,087
30,598 Sprint Corp. ...................... 1,189,497
32 360 Communications Co.* ........... 752
-----------
3,699,237
-----------
ENERGY - 1.01%
11,800 Panenergy Corp. ................... 410,050
2,600 Questar Corp. ..................... 91,975
-----------
502,025
-----------
CONSUMER CYCLICAL - 0.52%
16,900 Comcast Corp., Special, Class A ... 259,838
TOTAL COMMON STOCKS ............... 51,032,625
-----------
(Cost $52,158,247)
</TABLE>
See Notes to Financial Statements.
27
<PAGE> 30
<TABLE>
GALAXY UTILITY INDEX FUND
FUND II PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 1996 (UNAUDITED)
<S> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATION (A) - 6.65%
FEDERAL HOME LOAN BANK - 6.65%
$ 3,310,000 5.70%, 10/01/96 ................ $ 3,310,000
-----------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATION .................... 3,310,000
-----------
(Cost $3,310,000)
TOTAL INVESTMENTS - 109.16% .................. 54,342,625
-----------
(Cost $55,468,247)
NET OTHER ASSETS AND LIABILITIES - (9.16)% ... (4,559,345)
-----------
NET ASSETS - 100.00% ......................... $49,783,280
===========
<FN>
- ----------
* Non-income producing security.
(A) Annualized yield at time of purchase.
</TABLE>
See Notes to Financial Statements.
28
<PAGE> 31
<TABLE>
GALAXY U.S TREASURY INDEX FUND
FUND II PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<S> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 98.12%
U.S. TREASURY NOTES - 71.26%
$ 5,591,000 6.00%, 11/30/97 ................ $ 5,597,871
3,500,000 7.25%, 02/15/98 ................ 3,556,907
7,200,000 7.88%, 04/15/98 ................ 7,395,336
4,500,000 6.00%, 05/31/98 ................ 4,496,711
1,352,000 9.25%, 08/15/98 ................ 1,426,102
7,850,000 7.13%, 10/15/98 ................ 8,006,294
3,000,000 5.13%, 12/31/98 ................ 2,937,210
3,500,000 5.00%, 01/31/99 ................ 3,413,407
800,000 5.50%, 02/28/99 ................ 787,944
3,450,000 7.00%, 04/15/99 ................ 3,513,791
4,400,000 6.38%, 07/15/99 ................ 4,416,676
1,000,000 6.00%, 10/15/99 ................ 993,409
3,400,000 7.75%, 01/31/00 ................ 3,541,573
6,550,000 5.50%, 04/15/00 ................ 6,375,770
3,200,000 6.25%, 05/31/00 ................ 3,186,205
2,953,000 8.75%, 08/15/00 ................ 3,188,351
3,250,000 7.50%, 11/15/01 ................ 3,392,188
400,000 7.50%, 05/15/02 ................ 418,924
1,900,000 6.38%, 08/15/02 ................ 1,887,460
1,800,000 6.25%, 02/15/03 ................ 1,771,128
3,000,000 5.75%, 08/15/03 ................ 2,863,830
5,100,000 7.25%, 05/15/04 ................ 5,283,192
4,250,000 7.88%, 11/15/04 ................ 4,569,426
------------
83,019,705
------------
U.S. TREASURY BONDS - 25.47%
400,000 10.75%, 08/15/05 ................ 506,356
3,630,000 11.75%, 11/15/14 ................ 5,125,302
2,900,000 7.25%, 05/15/16 ................ 2,963,884
5,464,000 8.88%, 08/15/17 ................ 6,537,780
3,421,000 8.50%, 02/15/20 ................ 3,976,054
10,000,000 7.50%, 11/15/24 ................ 10,571,500
------------
29,680,876
------------
FEDERAL HOME LOAN BANK (A) - 1.39%
$ 1,620,000 5.70%, 10/01/96 ................ $ 1,620,000
------------
TOTAL INVESTMENTS - 98.12% ................... 114,320,581
------------
(Cost $114,555,736)
NET OTHER ASSETS AND LIABILITIES - 1.88% ..... 2,188,548
------------
NET ASSETS - 100.00% ......................... $116,509,129
============
<FN>
- -------------------
(A) Annualized yield at time of purchase.
</TABLE>
See Notes to Financial Statements.
29
<PAGE> 32
<TABLE>
GALAXY MUNICIPAL BOND FUND
FUND II PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<S> <C> <C>
MUNICIPAL BONDS - 99.12%
ALABAMA - 4.62%
$ 980,000 Auburn University Revenues,
Athletic
5.20%, 04/01/04
Insured: MBIA $ 977,550
----------
FLORIDA - 4.85%
1,000,000 Florida State Board of Education
Capital Outlay
Public Education, Series A, GO
5.70%, 06/01/08
Insured: AMBAC 1,024,998
----------
GEORGIA - 4.82%
1,000,000 Atlanta Airport Facilities Revenue,
Series A
5.20%, 01/01/02
Insured: AMBAC 1,018,750
----------
ILLINOIS - 12.78%
380,000 Chicago Metropolitan
Water Reclamation District
Greater Chicago,
Capital Improvement, GO
4.80%, 12/01/00 381,900
500,000 Chicago Metropolitan
Water Reclamation District
Greater Chicago, GO
5.10%, 12/01/03 508,750
750,000 Illinois Health Facilities
Authority Revenue
University of Chicago Hospitals,
Series A
5.25%, 08/15/03
Insured: MBIA 758,438
500,000 Illinois State Sales Tax Revenue,
Series V
6.00%, 06/15/08 519,375
500,000 Kane County Community School District
Number 304
Geneva, GO
6.00%, 06/01/04
Insured: FGIC 533,125
----------
2,701,588
----------
LOUISIANA - 2.35%
500,000 Jefferson Parish Hopital Revenue
Service District 1
4.80%, 01/01/02
Insured: FGIC 496,875
----------
MASSACHUSETTS - 8.66%
$1,000,000 Massachusetts State Consolidated
Loan, Series B, GO
5.70%, 08/01/07
Insured: FGIC $1,032,500
800,000 Springfield, Series B, GO
5.05%, 01/15/04
Insured: MBIA 798,000
----------
1,830,500
----------
MISSOURI - 8.65%
1,000,000 Sikeston Electric Revenue
6.00%, 06/01/04
Insured: MBIA 1,066,250
750,000 St. Louis Water Revenue
5.30%, 07/01/99
Insured: FGIC 763,125
----------
1,829,375
----------
NEVADA - 7.18%
1,000,000 Clark County School
District Revenue Series B, GO
5.00%, 05/01/02
Insured: FGIC 1,008,750
500,000 Las Vegas Valley
Water District Revenue, GO
5.40%, 09/01/04
Insured: AMBAC 508,125
----------
1,516,875
----------
NEW HAMPSHIRE - 5.96%
750,000 New Hampshire HEFA
Mary Hitchcock Memorial Hospital
5.00%, 08/15/03
Insured: FGIC 750,000
500,000 New Hampshire Municipal Bond Bank,
Series A
5.25%, 11/15/03 510,625
----------
1,260,625
----------
NEW JERSEY - 3.69%
750,000 New Jersey Health Care Facilities
Financing Authority
Dover General Hospital and
Medical Center
5.60%, 07/01/02
Insured: MBIA 780,000
----------
</TABLE>
See Notes to Financial Statements.
30
<PAGE> 33
<TABLE>
GALAXY UTILITY INDEX FUND
FUND II PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<S> <C> <C>
NEW YORK - 7.15%
$ 500,000 Battery Park City Authority Revenue
Junior Lien, Series B
4.70%, 11/01/00 $ 495,625
500,000 New York Municipal Water
Finance Authority Water and
Sewer System Revenue, Series B
4.75%, 06/15/01 499,375
500,000 New York State Environmental
Facilities Corp., PCR
5.75%, 06/15/09 517,500
-----------
1,512,500
-----------
PENNSYLVANIA - 3.60%
750,000 Pennsylvania State IDA,
Economic Development
5.00%, 01/01/00
Insured: AMBAC 760,313
-----------
TEXAS - 6.57%
500,000 Carrollton Farmers Branch
Independent School District, GO
5.10%, 02/15/04 499,375
375,000 Harlingen Waterworks and Sewer Sy
5.25%, 11/01/10
Insured: MBIA 366,094
500,000 Houston Water and Sewer System Re
Junior Lien, Series A
5.75%, 12/01/03
Insured: MBIA 523,125
-----------
1,388,594
-----------
UTAH - 2.51%
525,000 Utah Associated
Municipal Power System Revenue
Central - St. George Project
5.15%, 12/01/03
Insured: AMBAC 531,563
-----------
VIRGINIA - 3.64%
750,000 Virginia State Transportation Boa
Transportation Contract Revenue,
Route 28 Project
6.00%, 04/01/10 768,750
-----------
WASHINGTON - 7.21%
$1,000,000 Seattle Municipal Light &
Power Revenue, Series B
5.75%, 08/01/07 $ 1,026,250
500,000 Washington State Public Power
Supply System Nuclear Project
Number 1
Revenue, Series B
5.10%, 07/01/04
Insured: MBIA 496,875
-----------
1,523,125
-----------
WISCONSIN - 4.88%
1,000,000 Milwaukee Corporate Purpose,
Series A, GO
5.50%, 06/15/08 1,031,250
-----------
TOTAL INVESTMENTS - 99.12% 20,953,231
-----------
(Cost $20,523,538)
NET OTHER ASSETS AND LIABILITIES - 0.88% 186,712
-----------
NET ASSETS - 100.00% $21,139,943
===========
<FN>
- ----------------------
AMBAC American Municipal Bond Assurance Corp.
FGIC Financial Guaranty Insurance Corp.
GO General Obligation
HEFA Health and Educational Facilities Authority
IDA Industrial Development Authority
MBIA Municipal Bond Insurance Association
PCR Pollution Control Revenue
</TABLE>
See Notes to Financial Statements.
31
<PAGE> 34
<TABLE>
GALAXY STATEMENTS OF ASSETS AND LIABILITIES
FUND II SEPTEMBER 30, 1996 (UNAUDITED)
<CAPTION>
LARGE SMALL U.S.
COMPANY COMPANY UTILITY TREASURY
INDEX FUND INDEX FUND INDEX FUND INDEX FUND
------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost ...................... $231,459,913 $220,566,512 $55,468,247 $114,555,736
Net unrealized appreciation (depreciation) 86,012,700 91,073,019 (1,125,622) (235,155)
------------ ------------ ----------- ------------
Total investments at value ............... 317,472,613 311,639,531 54,342,625 114,320,581
Cash ....................................... 6,128 -- -- --
Receivable for investments sold ............ -- 54,874 2,826,307 --
Receivable for shares sold ................. 207,148 116,539 32,540 50,669
Interest and dividend receivables .......... 518,282 319,328 186,157 2,400,750
------------ ------------ ----------- ------------
Total Assets ........................... 318,204,171 312,130,272 57,387,629 116,772,000
------------ ------------ ----------- ------------
LIABILITIES:
Payable for investments purchased .......... 279,197 -- 7,512,665 --
Payable for shares repurchased ............. 175,358 191,378 70,517 96,392
Payable to custodian ....................... -- 2,886 4,702 10,940
Distributions payable ...................... -- -- -- 116,633
Payable for daily variation margin
on futures contracts ..................... -- 93,000 -- --
Advisory fee payable (Note 4) .............. 25,628 24,985 4,116 9,727
Administration fee payable (Note 4) ........ 76,885 74,959 12,349 29,179
------------ ------------ ----------- ------------
Total Liabilities ...................... 557,068 387,208 7,604,349 262,871
------------ ------------ ----------- ------------
NET ASSETS .................................... $317,647,103 $311,743,064 $49,783,280 $116,509,129
============ ============ =========== ============
NET ASSETS CONSIST OF:
Par value (Note 3) ......................... $ 14,732 $ 13,096 $ 4,359 $ 11,527
Paid-in capital in excess of par value ..... 222,473,499 197,439,833 49,502,126 121,908,141
Undistributed (overdistributed)
net investment income .................... 3,974,232 2,683,864 28,636 23,099
Accumulated net realized gain (loss) on
investments sold and futures contracts ... 4,964,765 20,045,827 1,373,781 (5,198,483)
Unrealized appreciation (depreciation)
of investments and futures contracts ..... 86,219,875 91,560,444 (1,125,622) (235,155)
------------ ------------ ----------- ------------
TOTAL NET ASSETS .............................. $317,647,103 $311,743,064 $49,783,280 $116,509,129
============ ============ =========== ============
SHARES OF BENEFICIAL INTEREST OUTSTANDING ..... 14,732,259 13,096,433 4,359,119 11,527,415
NET ASSET VALUE,
offering and redemption price per share
(Net Assets / Shares Outstanding) ........ $ 21.56 $ 23.80 $ 11.42 $ 10.11
============ ============ =========== ============
<CAPTION>
MUNICIPAL
BOND FUND
------------
<S> <C>
ASSETS:
Investments (Note 2):
Investments at cost ...................... $20,523,538
Net unrealized appreciation (depreciation) 429,693
-----------
Total investments at value ............... 20,953,231
Cash ....................................... --
Receivable for investments sold ............ --
Receivable for shares sold ................. 1,600
Interest and dividend receivables .......... 317,568
-----------
Total Assets ........................... 21,272,399
-----------
LIABILITIES:
Payable for investments purchased .......... --
Payable for shares repurchased ............. 25,000
Payable to custodian ....................... 87,628
Distributions payable ...................... 9,250
Payable for daily variation margin
on futures contracts ..................... --
Advisory fee payable (Note 4) .............. 4,409
Administration fee payable (Note 4) ........ 6,169
-----------
Total Liabilities ...................... 132,456
-----------
NET ASSETS .................................... $21,139,943
===========
NET ASSETS CONSIST OF:
Par value (Note 3) ......................... $ 2,082
Paid-in capital in excess of par value ..... 21,771,756
Undistributed (overdistributed)
net investment income .................... 21,593
Accumulated net realized gain (loss) on
investments sold and futures contracts ... (1,085,181)
Unrealized appreciation (depreciation)
of investments and futures contracts ..... 429,693
-----------
TOTAL NET ASSETS .............................. $21,139,943
===========
SHARES OF BENEFICIAL INTEREST OUTSTANDING ..... 2,081,931
NET ASSET VALUE,
offering and redemption price per share
(Net Assets / Shares Outstanding) ........ $ 10.15
===========
</TABLE>
See Notes to Financial Statements.
32
<PAGE> 35
<TABLE>
GALAXY STATEMENTS OF OPERATION
FUND II FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
<CAPTION>
LARGE SMALL
COMPANY COMPANY UTILITY
INDEX FUND INDEX FUND INDEX FUND
------------ ------------ ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest (Note 2) ......................................... $ 748,262 $ 739,439 $ 32,043
Dividend (Note 2) ......................................... 2,823,456 2,252,564 1,092,488
----------- ----------- -----------
Total Investment Income ................................. 3,571,718 2,992,003 1,124,531
----------- ----------- -----------
EXPENSES:
Investment advisory fee (Note 4) .......................... 136,891 149,964 26,689
Administration fee (Note 4) ............................... 410,672 449,894 80,070
Trustees' fees (Note 4) ................................... 8,552 9,369 1,667
----------- ----------- -----------
Total expenses before reimbursement ..................... 556,115 609,227 108,426
Less: reimbursement by sub-administrator (Note 4) (8,552) (9,369) (1,667)
----------- ----------- ----------
Total Expenses net of reimbursement ..................... 547,563 599,858 106,759
----------- ----------- -----------
NET INVESTMENT INCOME ........................................ 3,024,155 2,392,145 1,017,772
----------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Net realized gain (loss) on investment sold ............... 551,608 8,369,901 2,962,854
Net realized gain (loss) on futures contracts ............. 1,644,029 (151,100) --
Net change in unrealized appreciation
(depreciation) on investments sold
and futures contracts ................................... 15,988,675 8,851,907 (5,610,739)
----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS ........................................ 18,184,312 17,070,708 (2,647,885)
----------- ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS ............................. $21,208,467 $19,462,853 $(1,630,113)
=========== =========== ===========
<CAPTION>
U.S.
TREASURY MUNICIPAL
INDEX FUND BOND FUND
---------- ----------
<S> <C> <C>
INVESTMENT INCOME:
Interest (Note 2) ......................................... $ 4,046,539 $ 566,163
Dividend (Note 2) ......................................... -- --
----------- ---------
Total Investment Income ................................. 4,046,539 566,163
----------- ---------
EXPENSES:
Investment advisory fee (Note 4) .......................... 59,760 27,130
Administration fee (Note 4) ............................... 179,281 37,986
Trustees' fees (Note 4) ................................... 3,734 678
----------- ---------
Total expenses before reimbursement ..................... 242,775 65,794
Less: reimbursement by sub-administrator (Note 4) (3,734) (678)
----------- ---------
Total Expenses net of reimbursement ..................... 239,041 65,116
----------- ---------
NET INVESTMENT INCOME ........................................ 3,807,498 501,047
----------- ---------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Net realized gain (loss) on investment sold ............... 72,781 25,110
Net realized gain (loss) on futures contracts ............. --
Net change in unrealized appreciation
(depreciation) on investments sold
and futures contracts ................................... (1,651,422) (137,927)
----------- ---------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS ........................................ (1,578,641) (112,817)
----------- ---------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS ............................. $ 2,228,857 $ 388,230
=========== =========
</TABLE>
See Notes to Financial Statements.
33
<PAGE> 36
<TABLE>
GALAXY
FUND II STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
LARGE COMPANY INDEX FUND SMALL COMPANY INDEX FUND
------------------------ --------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED
1996 MARCH 31, 1996 MARCH 31,
(UNAUDITED) 1996 (UNAUDITED) 1996
------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD $240,689,326 $147,597,190 $291,724,251 $235,294,714
------------ ------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income 3,024,155 4,087,540 2,392,145 3,980,746
Net realized gain (loss) on investments sold
and futures contracts 2,195,637 4,766,394 8,218,801 15,267,683
Net change in unrealized appreciation
(depreciation) of investments and futures contracts 15,988,675 43,100,141 8,851,907 50,356,620
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting
from operations 21,208,467 51,954,075 19,462,853 69,605,049
------------ ------------ ------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income: -- (3,206,646) -- (4,757,318)
Dividends in excess of net investment income -- -- -- --
Net realized gain on investments -- (3,754,041) -- (4,274,380)
------------ ------------ ------------ ------------
Total Dividends -- (6,960,687) -- (9,031,698)
------------ ------------ ------------ ------------
SHARE TRANSACTIONS:
Net proceeds from sales of shares 80,200,091 78,100,033 20,636,332 40,205,781
Issued to shareholders in reinvestment
of dividends -- 6,344,797 -- 8,699,735
Costs of shares repurchased (24,450,781) (36,346,082) (20,080,372) (53,049,330)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from
share transactions 55,749,310 48,098,748 555,960 (4,143,814)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets 76,957,777 93,092,136 20,018,813 56,429,537
------------ ------------ ------------ ------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) $317,647,103 $240,689,326 $311,743,064 $291,724,251
============ ============ ============ ============
(A) Accumulated undistributed (overdistributed)
net investment income $ 3,974,232 $ 950,077 $ 2,683,864 $ 291,719
============ ============ ============ ============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold 3,914,547 4,288,969 900,170 1,958,689
Issued to shareholders in reinvestment
of dividends -- 341,875 -- 418,056
Repurchased (1,180,995) (1,995,829) (887,156) (2,647,174)
------------ ------------ ------------ ------------
Net increase (decrease) in shares outstanding 2,733,552 2,635,015 13,014 (270,429)
============ ============ ============ ============
</TABLE>
See Notes to Financial Statements.
34
<PAGE> 37
<TABLE>
<CAPTION>
UTILITY INDEX FUND U.S. TREASURY INDEX FUND
------------------------------- ------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
1996 MARCH 31, 1996
(UNAUDITED) 1996 (UNAUDITED)
----------- ------------ ------------
<S> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD $56,383,495 $ 52,831,112 $124,944,179
----------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income 1,017,772 2,084,926 3,807,498
Net realized gain (loss) on investments sold
and futures contracts 2,962,854 (494,211) 72,781
Net change in unrealized appreciation
(depreciation) of investments and futures contracts (5,610,739) 11,134,521 (1,651,422)
----------- ------------ ------------
Net increase (decrease) in net assets resulting
from operations (1,630,113) 12,725,236 2,228,857
----------- ------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income: (1,069,434) (2,114,529) (3,807,498)
Dividends in excess of net investment income -- -- --
Net realized gain on investments -- -- --
----------- ------------ ------------
Total Dividends (1,069,434) (2,114,529) (3,807,498)
----------- ------------ ------------
SHARE TRANSACTIONS:
Net proceeds from sales of shares 1,690,295 6,908,802 9,313,482
Issued to shareholders in reinvestment
of dividends 982,911 1,935,740 2,505,146
Costs of shares repurchased (6,573,874) (15,902,866) (18,675,037)
----------- ------------ ------------
Net increase (decrease) in net assets from
share transactions (3,900,668) (7,058,324) (6,856,409)
----------- ------------ ------------
Net increase (decrease) in net assets (6,600,215) 3,552,383 (8,435,050)
----------- ------------ ------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) $49,783,280 $ 56,383,495 $116,509,129
=========== ============ ============
(A) Accumulated undistributed (overdistributed)
net investment income $ 28,636 $ 80,298 $ 23,099
=========== ============ ============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold 143,435 596,420 929,757
Issued to shareholders in reinvestment
of dividends 83,885 171,694 248,845
Repurchased (554,593) (1,430,584) (1,849,805)
----------- ------------ ------------
Net increase (decrease) in shares outstanding (327,273) (662,470) (671,203)
=========== ============ ============
<CAPTION>
MUNICIPAL BOND FUND
U.S. TREASURY INDEX FUND --------------------------------
------------------------ SIX MONTHS ENDED
YEAR ENDED SEPTEMBER 30, YEAR ENDED
MARCH 31, 1996 MARCH 31,
1996 (UNAUDITED) 1996
---------- ------------- ----------
<S> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD $104,250,685 $22,478,238 $24,559,594
------------ ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income 7,453,794 501,047 1,061,460
Net realized gain (loss) on investments sold
and futures contracts 489,553 25,110 24,569
Net change in unrealized appreciation
(depreciation) of investments and futures contracts 2,627,125 (137,927) 609,928
------------ ----------- -----------
Net increase (decrease) in net assets resulting
from operations 10,570,472 388,230 1,695,957
------------ ----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income: (7,385,819) (501,047) (1,061,460)
Dividends in excess of net investment income (67,974) -- --
Net realized gain on investments -- -- --
------------ ----------- -----------
Total Dividends (7,453,793) (501,047) (1,061,460)
------------ ----------- -----------
SHARE TRANSACTIONS:
Net proceeds from sales of shares 38,639,829 1,719,344 2,239,987
Issued to shareholders in reinvestment
of dividends 6,197,486 443,404 953,563
Costs of shares repurchased (27,260,500) (3,388,226) (5,909,403)
------------ ----------- -----------
Net increase (decrease) in net assets from
share transactions 17,576,815 (1,225,478) (2,715,853
------------ ----------- -----------
Net increase (decrease) in net assets 20,693,494 (1,338,295) (2,081,356)
------------ ----------- -----------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) $124,944,179 $21,139,943 $22,478,238
============ =========== ===========
(A) Accumulated undistributed (overdistributed)
net investment income $ 23,099 $ 21,593 $ 21,593
============ =========== ===========
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold 3,712,495 169,538 218,792
Issued to shareholders in reinvestment
of dividends 596,650 43,781 93,310
Repurchased (2,628,230) (334,252) (579,680)
------------ ----------- -----------
Net increase (decrease) in shares outstanding 1,680,915 (120,933) (267,578)
============ =========== ===========
</TABLE>
See Notes to Financial Statements.
35
<PAGE> 38
<TABLE>
LARGE COMPANY INDEX FUND
GALAXY FINANCIAL HIGHLIGHTS
FUND II FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<CAPTION>
SIX MONTHS ENDED YEARS ENDED MARCH 31,
SEPTEMBER 30, 1996 ---------------------------------------------------------
(UNAUDITED) 1996 1995 1994(1) 1993(1) 1992(1)
----------- ---- ---- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period 20.06 $ 15.76 $ 14.36 $ 14.59 $ 13.04 $ 12.10
-------- -------- -------- -------- -------- -------
Income from Investment Operations:
Net investment income(2) 0.19 0.38 0.37 0.36 0.34 0.31
Net realized and unrealized gain (loss)
on investments and futures contracts 1.31 4.57 1.73 (0.20) 1.55 0.95
-------- -------- -------- -------- -------- -------
Total from Investment Operations 1.50 4.95 2.10 0.16 1.89 1.26
-------- -------- -------- -------- -------- -------
Less Dividends:
Dividends from net investment income -- (0.31) (0.37) (0.36) (0.34) (0.31)
Dividends from net realized capital gains -- (0.34) (0.33) (0.03) -- (0.01)
-------- -------- -------- -------- -------- -------
Total Dividends -- (0.65) (0.70) (0.39) (0.34) (0.32)
-------- -------- -------- -------- -------- -------
Net Increase (decrease) in net asset value 1.50 4.30 1.40 (0.23) 1.55 0.94
-------- -------- -------- -------- -------- -------
Net Asset Value, End of period $ 21.56 $ 20.06 $ 15.76 $ 14.36 $ 14.59 $ 13.04
======== ======== ======== ======== ======== =======
Total Return 7.48%** 31.80% 15.07% 1.02% 14.68% 10.43%
Ratios/Supplemental Data:
Net assets, End of period (in 000's) $317,647 $240,689 $147,597 $143,828 $133,426 $87,118
Ratios to average net assets:
Net investment income 2.21%* 2.11% 2.48% 2.41% 2.57% 2.79%
Net operating expenses(2) 0.40%* 0.40% 0.40% 0.40% 0.40% 0.40%
Portfolio turnover rate 1%** 5% 7% 4% 0% 0%
Average Commission Rate Paid(3) $ 0.0408 $ 0.0203 N/A N/A N/A N/A
<FN>
- ------------
* Annualized.
** Not Annualized.
(1) Audited by other auditors
(2) Net investment income per share and the operating expense ratios before
reimbursement by the sub-administrator for the period ended September 30,
1996 and the years ended March 31, 1996 and 1995 were $0.19 and 0.41%; $0.38
and 0.41% and $0.37 and 0.41%, respectively.
(3) For fiscal years beginning on or after September 1, 1995, a Fund is required
to disclose its average commission rate per share for trades for which
commissions are charged.
</TABLE>
See Notes to Financial Statements.
36
<PAGE> 39
<TABLE>
SMALL COMPANY INDEX FUND
GALAXY FINANCIAL HIGHLIGHTS
FUND II FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<CAPTION>
SIX MONTHS ENDED YEARS ENDED MARCH 31,
SEPTEMBER 30, 1996 ----------------------------------------------------------
(UNAUDITED) 1996 1995 1994(1) 1993(1) 1992(1)
------------------ ---- ---- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period $ 22.30 $ 17.62 $ 17.49 $ 17.42 $ 15.39 $ 13.08
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income(2) 0.18 0.32 0.32 0.26 0.25 0.20
Net realized and unrealized gain (loss)
on investments and futures contracts 1.32 5.07 0.91 0.39 2.07 2.40
-------- -------- -------- -------- -------- --------
Total from Investment Operations 1.50 5.39 1.23 0.65 2.32 2.60
-------- -------- -------- -------- -------- --------
Less Dividends:
Dividends from net investment income -- (0.38) (0.32) (0.25) (0.24) (0.22)
Dividends from net realized capital gains -- (0.33) (0.78) (0.33) (0.05) (0.07)
-------- -------- -------- -------- -------- --------
Total Dividends -- (0.71) (1.10) ( 0.58) (0.29) (0.29)
-------- -------- -------- -------- -------- --------
Net Increase (decrease) in net asset value 1.50 4.68 0.13 0.07 2.03 2.31
-------- -------- -------- -------- -------- --------
Net Asset Value, End of period $ 23.80 $ 22.30 $ 17.62 $ 17.49 $ 17.42 $ 15.39
======== ======== ======== ======== ======== ========
Total Return 6.77%** 30.85% 7.60% 3.64% 15.20% 20.04%
Ratios/Supplemental Data:
Net assets, End of period (in 000's) $311,743 $291,724 $235,295 $255,347 $213,669 $116,290
Ratios to average net assets:
Net investment income 1.60%* 1.52% 1.72% 1.55% 1.80% 2.26%
Net operating expenses(2) 0.40%* 0.40% 0.40% 0.40% 0.40% 0.40%
Portfolio turnover rate 7%** 14% 10% 17% 5% 6%
Average Commission Rate Paid(3) $ 0.0458 $ 0.0225 N/A N/A N/A N/A
<FN>
- ------------------------------
* Annualized.
** Not Annualized.
(1) Audited by other auditors
(2) Net investment income per share and the operating expense ratios before
reimbursement by the sub-administrator for the period ended September 30,
1996 and the years ended March 31, 1996 and 1995 were $0.18 and 0.41%; $0.31
and 0.41% and $0.31 and 0.40%, respectively.
(3) For fiscal years beginning on or after September 1, 1995, a Fund is required
to disclose its average commission rate per share for trades for which
commissions are charged.
</TABLE>
See Notes to Financial Statements.
37
<PAGE> 40
<TABLE>
UTILITY INDEX FUND
GALAXY FINANCIAL HIGHLIGHTS
FUND I FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<CAPTION>
SIX MONTHS ENDED YEARS ENDED MARCH 31,
SEPTEMBER 30, 1996 ------------------------------------------
(UNAUDITED) 1996 1995 1994(1) 1993(1)(2)
------------------ ---- ---- ------ ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period $ 12.03 $ 9.88 $ 9.99 $ 10.93 $ 10.00
------- ------- ------- ------- -------
Income from Investment Operations:
Net investment income(3) 0.23 0.44 0.47 0.43 0.06
Net realized and unrealized gain (loss)
on investments (0.60) 2.15 (0.03) (0.93) 0.93
------- ------- ------- ------- -------
Total from Investment Operations (0.37) 2.59 0.44 (0.50) 0.99
------- ------- ------- ------- -------
Less Dividends:
Dividends from net investment income (0.24) (0.44) (0.46) (0.43) (0.06)
Dividends from net realized capital gains -- -- (0.08) (0.01) --
Dividends in excess of net realized capital gains -- -- (0.01) -- --
------- ------- ------- ------- -------
Total Dividends (0.24) (0.44) (0.55) (0.44) (0.06)
------- ------- ------- ------- -------
Net Increase (decrease) in net asset value (0.61) 2.15 (0.11) (0.94) 0.93
------- ------- ------- ------- -------
Net Asset Value, End of period $ 11.42 $ 12.03 $ 9.88 $ 9.99 $ 10.93
======= ======= ======= ======= =======
Total Return (2.92)%** 26.61% 4.67% 4.83% 9.85%**
Ratios/Supplemental Data:
Net assets, End of period (in 000's) $49,783 $56,383 $52,831 $68,445 $38,151
Ratios to average net assets:
Net investment income 3.81%* 3.79% 4.62% 4.08% 4.66%*
Net operating expenses(3) 0.40%* 0.40% 0.40% 0.40% 0.40%*
Portfolio turnover rate 65%** 12% 5% 19% 0%**
Average Commissions Rate Paid(4) $0.0561 $0.0230 N/A N/A N/A
<FN>
- ----------------------------
* Annualized.
** Not Annualized.
(1) Audited by other auditors
(2) The Fund commenced operations on January 5, 1993.
(3) Net investment income per share and the operating expense ratios before
reimbursement by the sub-administrator for the period ended September 30,
1996 and the years ended March 31, 1996 and 1995 were $0.23 and 0.41%; $0.44
and 0.41% and $0.47 and 0.41%, respectively.
(4) For fiscal years beginning on or after September 1, 1995, a Fund is required
to disclose its average commission rate per share for trades for which
commissions are charged.
</TABLE>
See Notes to Financial Statements.
38
<PAGE> 41
<TABLE>
U.S. TREASURY INDEX FUND
GALAXY FINANCIAL HIGHLIGHTS
FUND II FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<CAPTION>
SIX MONTHS ENDED YEARS ENDED MARCH 31,
SEPTEMBER 30, 1996 -------------------------------------------------------
(UNAUDITED) 1996 1995 1994(1) 1993(1) 1992(1)(2)
------------------ -------- ------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period $ 10.24 $ 9.91 $ 10.38 $ 11.01 $ 10.39 $ 10.00
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income(3) 0.32 0.66 0.65 0.58 0.63 0.51
Net realized and unrealized gain (loss)
on investments (0.13) 0.33 (0.29) (0.29) 0.75 0.38
-------- -------- -------- -------- -------- --------
Total from Investment Operations 0.19 0.99 0.36 0.29 1.38 0.89
-------- -------- -------- -------- -------- --------
Less Dividends:
Dividends from net investment income (0.32) (0.65) (0.66) (0.58) (0.63) (0.50)
Dividends in excess of net investment income -- (0.01) (0.01) -- -- --
Dividends from net realized capital gains -- -- -- (0.34) (0.13) --
Dividends in excess of net realized capital gains -- -- (0.16) -- -- --
-------- -------- -------- -------- -------- --------
Total Dividends (0.32) (0.66) (0.83) (0.92) (0.76) (0.50)
-------- -------- -------- -------- -------- --------
Net increase (decrease) in net asset value (0.13) 0.33 (0.47) (0.63) 0.62 0.39
-------- -------- -------- -------- -------- --------
Net Asset Value, End of period $ 10.11 $ 10.24 $ 9.91 $ 10.38 $ 11.01 $ 10.39
======== ======== ======== ======== ======== ========
Total Return 1.93%** 10.09% 3.81% 2.40% 13.69% 8.99%**
Ratios/Supplemental Data:
Net assets, End of period (in 000's) $116,509 $124,944 $104,251 $138,225 $145,353 $102,830
Ratios to average net assets:
Net investment income 6.37%* 6.35% 6.43% 5.21% 5.87% 6.40%*
Net operating expenses(3) 0.40%* 0.40% 0.40% 0.40% 0.40% 0.40%*
Portfolio turnover rate 24%** 35% 50% 75% 35% 57%**
<FN>
- -----------------------------
* Annualized.
** Not Annualized.
(1) Audited by other auditors
(2) The Fund commenced operations on June 4, 1991.
(3) Net investment income per share and the operating expense ratios before
reimbursement by the sub-administrator for the period ended September 30,
1996 and the years ended March 31, 1996 and 1995 were $0.32 and 0.41%;
$0.66 and 0.41% and $0.65 and 0.41%, respectively.
</TABLE>
See Notes to Financial Statements.
39
<PAGE> 42
<TABLE>
MUNICIPAL BOND FUND
GALAXY FINANCIAL HIGHLIGHTS
FUND II FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<CAPTION>
SIX MONTHS ENDED YEARS ENDED MARCH 31,
SEPTEMBER 30, 1996 --------------------------------------------
(UNAUDITED) 1996 1995 1994(1)(2)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of period ....... $ 10.20 $ 9.94 $ 9.89 $ 10.00
------- ------- ------- -------
Income from Investment Operations:
Net investment income(3) ................ 0.23 0.46 0.46 0.43
Net realized and unrealized gain (loss)
on investments ....................... (0.05) 0.26 0.05 (0.11)
------- ------- ------- -------
Total from Investment Operations .. 0.18 0.72 0.51 0.32
------- ------- ------- -------
Less Dividends:
Dividends from net investment income .... (0.23) (0.46) (0.46) (0.43)
Dividends from net realized capital gains -- -- -- --
------- ------- ------- -------
Total Dividends ................... (0.23) (0.46) (0.46) (0.43)
------- ------- ------- -------
Net Increase (decrease) in net asset value . (0.05) 0.26 0.05 (0.11)
------- ------- ------- -------
Net Asset Value, End of period ............. $ 10.15 $ 10.20 $ 9.94 $ 9.89
======= ======= ======= =======
Total Return ............................... 1.84%** 7.36% 5.34% 3.10%**
Ratios/Supplemental Data:
Net assets, End of period (in 000's) ....... $21,140 $22,478 $24,560 $33,352
Ratios to average net assets:
Net investment income ................... 4.62%* 4.54% 4.72% 4.35%*
Net operating expenses(3) ............... 0.60%* 0.60% 0.60% 0.60%*
Portfolio turnover rate .................... 2%** 2% 47% 56%**
<FN>
- ---------------------------------------------------------
* Annualized.
** Not Annualized.
(1) Audited by other auditors
(2) The Fund commenced operations on April 15, 1993.
(3) Net investment income per share and the operating expense ratios before
reimbursement by the sub-administrator for the period ended September 30,
1996 and the years ended March 31, 1996 and 1995 were $0.23 and 0.61%:
$0.46 and 0.61% and $0.46 and 0.63%, respectively.
</TABLE>
See Notes to Financial Statements.
40
<PAGE> 43
GALAXY
FUND II NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION:
Galaxy Fund II ("Galaxy II" or the "Trust"), formerly the "IBM Mutual Funds", a
Massachusetts business trust, is registered under the Investment Company Act of
1940, as amended, as an open-end investment company. As of the date of this
report, the Trust offered five managed investment portfolios. The accompanying
financial statements and financial highlights are those of the Large Company
Index Fund, the Small Company Index Fund, the Utility Index Fund, the U.S.
Treasury Index Fund, and the Municipal Bond Fund (individually a "Fund",
collectively the "Funds").
2. SIGNIFICANT ACCOUNTING POLICIES:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Trust in the preparation of its
financial statements.
PORTFOLIO VALUATION: Listed investment securities are valued by an independent
pricing service approved by the Trust's Board of Trustees at the last quoted
sale price on the principal exchange where such securities are traded. Unlisted
securities or listed securities for which last sales prices are not available
are valued at the closing bid price in the principal market where such
securities trade. U.S. Government securities (other than short-term investments)
are valued at the mean of the quoted bid and asked prices in the
over-the-counter market. Debt securities of U.S. issuers (other than U.S.
Government securities and short-term securities), including municipal
securities, are valued at the mean between the quoted bid price and the asked
price. Short-term obligations that mature in 60 days or less are valued at
amortized cost, which approximates market value. Futures contracts are valued at
the settlement price established each day by the board of trade or exchange on
which they are traded.
Investments for which market quotations are not readily available are valued
based on fair value as determined in good faith under consistently applied
procedures established by and under the general supervision of the Board of
Trustees.
FUTURES CONTRACTS: All Funds, except the U.S. Treasury Index Fund, may enter
into futures contracts for the delayed delivery of securities at a fixed price
at some future date or the change in the value of a specified financial index
over a predetermined time period. Cash or securities are deposited with brokers
in order to establish and maintain a position. Subsequent payments made or
received by the Fund based on the daily change in the market value of the
position are recorded as unrealized gain or loss until the contract is closed
out, at which time the gain or loss is realized.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: Security transactions are accounted
for on a trade date basis. Net realized gains or losses on sales of securities
are determined on the identified cost method. Interest income and expenses are
recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment
income are declared daily and paid monthly for the U.S. Treasury Index Fund and
the Municipal Bond Fund, declared and paid quarterly for the Utility Index Fund
and are declared and paid annually for the Small Company Index Fund and the
Large Company Index Fund. Net realized capital gains, if any, are distributed at
least annually. Income dividends and capital gain dividends are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
FEDERAL INCOME TAXES: The Trust treats each Fund as a separate entity for
federal income tax purposes. Each Fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended. By so qualifying, each Fund will not be subject to federal
income taxes to the extent that it distributes substantially all of its taxable
or tax-exempt income, if any, for its tax year ending March 31. In addition, by
distributing in each calendar year substantially all of its net investment
income, capital gains, and certain other amounts, if any, each Fund will not be
subject to a Federal excise tax. Therefore, no federal income tax provision is
required.
3. SHARES OF BENEFICIAL INTEREST:
The Trust's Declaration of Trust authorizes the Trustees to issue an unlimited
number of shares of beneficial interest, with $0.001 par value.
41
<PAGE> 44
GALAXY NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FUND II (UNAUDITED)
4. INVESTMENT ADVISORY, ADMINISTRATION AND DISTRIBUTION AGREEMENTS:
Effective July 1, 1994, the Trust and Fleet Investment Advisors Inc. (the
"Investment Adviser"), an indirect wholly-owned subsidiary of Fleet Financial
Group, Inc., became parties to an investment advisory agreement under which the
Investment Adviser provides advisory services for a fee, computed daily and paid
monthly, at the annual rate of 0.10% of the average daily net assets of the
Large Company Index, Small Company Index, Utility Index, and U.S. Treasury Index
Funds, and 0.25% of the average daily net assets of the Municipal Bond Fund.
Prior to July 1, 1994, IBM Credit Investment Management Corporation, a
wholly-owned subsidiary of IBMCredit Corporation, served as the investment
adviser to the Trust for the same fees as those charged by Fleet Investment
Advisors Inc.
Effective October 25, 1994, the Trust and Fleet National Bank (the
"Administrator") became parties to an administration agreement. Under the
agreement, the Administrator pays all expenses of the Funds, except the fees and
expenses of the Trustees who are not interested persons of the Trust, brokerage
fees and commissions, interest on borrowings, taxes and such extraordinary,
non-recurring expenses as may arise, including litigation, to which the Trust
may be a party. For its services as administrator, the Administrator receives a
fee at an annual rate of 0.30% of the average daily net assets of each of the
Large Company Index, Small Company Index, Utility Index and U.S. Treasury Index
Funds, and 0.35% of the average daily net assets of the Municipal Bond Fund.
Effective March 31, 1995, the Administrator entered into a sub-administration
agreement with First Data Investor Services Group, Inc. ("FDISG") formerly known
as The Shareholder Services Group, Inc. doing business as 440 Financial, a
wholly-owned subsidiary of First Data Corporation ("First Data"), under which
FDISG (the "Sub-Administrator") provides administrative, accounting and transfer
agent services to the Trust. The Administrator bears the fees of the
Sub-Administrator for serving in this capacity.
Prior to March 31, 1995, the sub-administration services described above were
provided by 440 Financial Group of Worcester, Inc., a wholly-owned subsidiary of
State Mutual Life Assurance Company of America ("State Mutual"), for the same
annual fees. On that date, FDISG acquired substantially all of the assets of 440
Financial Group of Worcester, Inc. Prior to July 1, 1994, IBM Credit Investment
Management Corporation served as administrator to the IBMMutual Funds for the
same fees as those charged by Fleet National Bank and Flagship Financial, Inc.
served as the sub-administrator to the IBM Mutual Funds.
440 Financial Distributors, Inc., a wholly-owned subsidiary of FDISG and an
indirect wholly-owned subsidiary of First Data, acts as the exclusive
distributor of the Trust's shares. Prior to March 31, 1995, the Distributor was
a wholly-owned subsidiary of 440 Financial Group of Worcester, Inc. and an
indirect wholly-owned subsidiary of State Mutual. Prior to July 1, 1994, IBM
Credit Distributors Corporation, a wholly-owned subsidiary of IBM Credit
Corporation, served as the Trust's distributor.
Certain officers of the Trust may be officers of the Sub-Administrator and/or
Distributor. Such officers receive no compensation from the Trust for serving in
their respective roles. No officer, director or employee of the Investment
Adviser serves as an officer, Trustee or employee of the Trust. For the period
covered by this report, each Trustee was entitled to receive for services as a
Trustee of the Trust a fee of $5,000 per annum plus certain other fees for
attending or participating in meetings. Effective November 1, 1996, each Trustee
is entitled to receive for services as a trustee of the Trust, The Galaxy Fund
("Galaxy") and The Galaxy VIP Fund ("VIP") an aggregate fee of $29,000 per annum
plus certain other fees for attending or participating in meetings as well as
reimbursement for expenses received in attending meetings. These fees are
allocated among the funds of the Trust, Galaxy and VIP based on their relative
net assets. In addition, effective March 1, 1996, each Trustee became eligible
to participate in the Trust's Deferred Compensation Plan (the "Plan"), an
unfunded, nonqualified deferred compensation plan. The Plan allows each Trustee
to defer receipt of all or a percentage of fees that would otherwise be payable
for services performed. The sub-administrator voluntarily agreed to reimburse
the funds for Trustee fees so that total expenses would not exceed certain
expense limitations. The sub-administrator at its discretion may revise or
discontinue the voluntary expense reimbursement.
42
<PAGE> 45
GALAXY NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FUND II (UNAUDITED)
5. SECURITIES TRANSACTIONS:
<TABLE>
The cost of purchases and the proceeds from sales of securities (excluding
short-term investments and futures contracts) for the six months ended September
30, 1996 for each Fund were as follows:
<CAPTION>
U.S. Government Other Investment
Securities Securities
--------------------------- ---------------------------
Purchases Sales Purchases Sales
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Large Company Index $ -- $ -- $22,836,227 $ 1,452,957
Small Company Index -- -- 20,336,254 33,937,494
Utility Index ..... -- -- 34,137,137 36,340,840
U.S. Treasury Index 28,383,961 35,119,359 -- --
Municipal Bond .... -- -- 381,455 1,582,210
</TABLE>
<TABLE>
The aggregate cost, gross unrealized appreciation and depreciation and net
unrealized appreciation (depreciation) for all securities as computed on a
federal income tax basis at September 30, 1996 for each Fund were as follows:
<CAPTION>
Cost Appreciation (Depreciation) Net
----------------------------------------------------------------
<S> <C> <C> <C> <C>
Large Company Index $231,459,913 $ 90,431,405 $ (4,418,705) $86,012,700
Small Company Index 220,566,512 104,308,242 (13,235,223) 91,073,019
Utility Index ..... 55,468,247 2,235,504 (3,361,126) (1,125,622)
U.S. Treasury Index 114,555,736 1,516,198 (1,751,353) (235,155)
Municipal Bond .... 20,523,538 451,967 (22,274) 429,693
</TABLE>
During the fiscal year ended March 31, 1996, the Large Company Index Fund and
the Small Company Index Fund made distributions from long-term capital gains of
$3,388,748 and $4,053,139, respectively.
<TABLE>
At March 31, 1996, the following Funds had capital loss carryforwards:
<CAPTION>
Capital loss Expiration
Carryforward Date
------------ ---------
<S> <C> <C>
Utility Index............ $ 351,703 2003
1,057,646 2004
U.S. Treasury Index...... 4,700,515 2003
548,015 2004
Municipal Bond........... 18,541 2002
888,409 2003
203,341 2004
</TABLE>
6. FINANCIAL INSTRUMENTS:
The Large Company Index, Small Company Index and Utility Index Funds may enter
into stock index futures contracts that are traded on a national exchange. These
Funds will enter into stock index futures contracts only for bona-fide hedging
purposes or as otherwise permitted by The Commodities Futures Trading Commission
("CFTC"). If permitted, these Funds may use stock index futures to maintain cash
reserves while remaining fully invested, to facilitate trading, to reduce
transaction costs or to seek higher investment returns when a stock index
futures contract is priced more attractively than the underlying index. The
Municipal Bond Fund may enter into interest rate futures contracts and municipal
bond index futures contracts only for bona-fide hedging purposes or as otherwise
permitted by CFTC regulations. In addition, the Municipal Bond Fund may purchase
put or call options on interest rate and municipal bond index futures contracts,
which are traded on a United States exchange, as a hedge against changes in
interest rates, and may enter into closing transactions with respect to such
options to terminate existing positions. The Fund will segregate assets to cover
its commitments on purchased futures contracts.
Risks associated with using financial instruments such as futures as a hedge
include an imperfect correlation between the movements in the price of the
instruments and the price of the underlying securities and interest rates, an
illiquid secondary market for the instruments or the inability of counterparties
to perform under the terms of the contract.
7. CONCENTRATION OF CREDIT RISK:
The Utility Index Fund will concentrate its investments in the utility industry.
As a result, the Fund's investments may be subject to greater risk and market
fluctuation than a fund that has securities representing a broader range of
investment alternatives.
43
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GALAXY FUND II BULK RATE
4400 Computer Drive U. S. POSTAGE PAID
P.O. Box 5108 PERMIT NO. 54201
Westborough, MA 01581-5108 BOSTON, MA
