<PAGE> 1
GALAXY FUND II [Logo]
[Picture of a business man and business woman walking.]
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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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ANNUAL
REPORT
FOR THE
YEAR ENDED
MARCH 31, 1996
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<PAGE> 2
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CHAIRMAN'S
MESSAGE
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Dear Galaxy Fund II Shareholder:
In the last 12 months low levels of economic growth, inflation and interest
rates helped stocks and bonds earn returns that were exceptional by historical
standards. During this time the Galaxy Fund II Index portfolios performed
closely in line with their target indices, allowing shareholders to make the
most of these returns. The Municipal Bond Fund also provided solid returns for
shareholders over the year.
The recent market gains are particularly impressive given the high degree
of investor uncertainty about where the economy and interest rates might head.
This was especially true in the second half of the period, when the natural
fluctuations in stock and bond prices became more pronounced. Confusion among
investors, when added to the strong price gains that stocks had achieved, also
caused investors to move quickly from one stock to another in search of the best
market values. This meant that while stocks as a whole improved during the year,
some stocks performed much better than others at various times.
Because the Galaxy Fund II stock index portfolios own a broad range of
securities, shareholders were somewhat buffered from the added volatility of the
market rotation. This, along with the lower expenses that index funds typically
enjoy, helped the Galaxy Fund II stock index portfolios deliver returns that
were competitive with and often stronger than many funds within the same sectors
with active portfolio management.
For the 12 months ended March 31, 1996, as measured by Lipper Analytical
Services, Inc., the average growth equity fund earned a total return of 28.28%
while the Galaxy Fund II Large Company Equity Fund earned a total return of
31.80%. The Galaxy Fund II Small Company Equity Fund earned a total return of
30.85% compared to the Lipper average for small company growth funds of 31.38%.
The Galaxy Fund II Utility Index Fund's total return was 26.61% compared to
21.57% for the average utility fund as measured by Lipper.
With their fixed baskets of securities the Galaxy Fund II Index portfolios
also had fewer capital gains to distribute than many of their actively managed
counterparts. This helped reduce taxes for shareholders -- keeping more of their
assets at work in the markets to earn further gains.
The enclosed report covers the performance of the Galaxy Fund II portfolios
for the 12 months ended March 31, 1996. Inside, you'll find a summary of
previous market activity and an outlook for possible market conditions in months
to come. Also included are reviews of performances by individual portfolios,
lists of securities the portfolios held when the fiscal year ended, and
financial statements for each portfolio. If you have questions about this
report, or want additional 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 rose strongly for most of the past 12 months, as
lackluster economic growth kept inflation under control and drove interest rates
lower. Although interest rates and bond prices reversed course in the first
quarter of 1996, stocks continued to rally. For the 12 months ended March 31,
1996, gains in both markets delivered attractive returns for the Galaxy Fund II
portfolios.
THE "SOFT LANDING" CONTINUES
For 1995 as a whole, the gross domestic product, a measure of U.S. goods
and services, improved by just 2.1% -- compared to 3.5% in 1994. Although it was
not always clear if the economy was accelerating, inflation grew at a relatively
steady rate of 2.5% during 1995. This, plus several cuts in short-term interest
rates by the Federal Reserve, allowed yields on 30-year Treasury bonds to fall a
total of 158 basis points in the last three quarters of the year. At the end of
1995, Treasury yields were at 5.94%, their lowest levels in more than two years.
Lower yields, plus renewed strength in corporate earnings, pushed stock
prices to record highs. Between March 31, 1995, and December 31, 1995, the
Standard and Poor's 500 Composite Stock Price Index ("S&P Index"), an unmanaged
index of the common stocks of 500 leading U.S. businesses, enjoyed a total
return of 25.34%.
In the first quarter of 1996, bond investors became rattled by signs that
the economy might be growing fast enough to spur higher rates of inflation.
Having counted on low inflation to bring further reductions in interest rates,
the bond market quickly changed course. By the end of the quarter, long-term
Treasury yields had risen to 6.7%.
Although turmoil in the bond market caused greater volatility in stock
prices, and significant rotation among individual industry sectors, stocks
continued to rally. This was due partly to the fact that corporate earnings
continued to grow and that investors had put large amounts of retirement money
into equity mutual funds. During the quarter the S&P Index produced a total
return of 5.4%.
INFLATION SHOULD REMAIN MODERATE
Although recent economic data indicates that the economy may be picking up
steam, Fleet Investment Advisors believes that economic growth should remain
moderate in 1996. If growth in the gross domestic product stays near 2%, as we
expect, the annual rate of inflation should be about 3%.
As investors see that economic growth is moderate and likely to continue
without higher inflation, we believe bond prices will become more stable. This
should keep Treasury yields between 6.25% and 7.0% for the rest of the year.
"Although interest rates and bond prices reversed course in the first quarter of
1995, stocks continued to rally. For the 12 months ended March 31, 1996, gains
in both markets delivered attractive returns for the Galaxy Fund II portfolios."
1
<PAGE> 4
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MARKET OVERVIEW
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[Call out quote:
"Although interest rates and bond prices reversed course in the first
quarter of 1995, stocks continued to rally. For the 12 months ended March 31,
1996, gains in both markets delivered attractive returns for the Galaxy Fund II
portfolios."]
Stocks should continue to benefit from such an environment. With slow to
moderate growth, however, we believe that corporate profits may rise by only 4%
in 1996, compared to the 10% gain they enjoyed in 1995. Otherwise, earnings
disappointments in the months immediately ahead may combine with nervousness in
the bond market to cause a correction in stock prices.
If the flow of money into stock mutual funds continues to be strong, any
such correction would likely be short-lived. Stocks should also benefit from the
upcoming presidential election. In the past 40 years there has not been a
significant decline in stock prices during the final seven months of an election
year.
<TABLE>
PERFORMANCE AT-A-GLANCE
Average Annual Returns as of March 31, 1996
<CAPTION>
1 Year 3 Years 5 Years Life of Fund
<S> <C> <C> <C> <C>
LARGE COMPANY INDEX FUND
Inception Date 10/1/90 31.80% 15.28% 14.17% 17.06%
SMALL COMPANY INDEX FUND
Inception Date 10/1/90 30.85% 13.43% 15.09% 19.48%
UTILITY INDEX FUND
Inception Date 1/5/93 26.61% 8.04% - 10.60%
U.S. TREASURY INDEX FUND
Inception Date 6/4/91 10.09% 5.37% - 8.22%
MUNICIPAL BOND FUND
Inception Date 4/15/93 7.36% - - 5.31%
<FN>
The performance data quoted represents past performance and the investment
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.
</TABLE>
2
<PAGE> 5
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PORTFOLIO REVIEWS
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[Picture of Murphy van der Velde, Portfolio Manager]
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 Standard & Poor's
500 Composite Stock Price Index (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 similar volatility and risk as the S&P Index. For
the 12 months ended March 31, 1996, the S&P Index had a total return of 32.07%.
During the same period, the Fund achieved a total return of 31.80% (after the
deduction of operating expenses).
During the last year, the Fund's correlation with the S&P Index was 99.98%.
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. By carefully managing the
expenses of the Fund over the last 12 months, we assured that shareholders
enjoyed the full returns achieved by large company issues. The broad
diversification of the Fund also protected shareholders from the significant
rotation among industry sectors that occurred during this time.
As long as the flow of cash into stock mutual funds stays strong, and
investors remain uncertain about the economy, we believe that large company
stocks should continue to perform well. In times of uncertainty, many investors
prefer the relative earnings stability that large companies typically offer.
Large company issues should also benefit from low inflation, which has kept
short-term interest rates at levels that cannot compete with the potential
returns available from stocks.
<TABLE>
GALAXY FUND II LARGE COMPANY INDEX FUND
Distribution of Total Net Assets as of March 31, 1996
<S> <C>
Other Common and Preferred Stocks 11%
Cash Equivalents and Net Other Assets and Liabilities 4%
Consumer Staples 23%
Capital Goods 7%
Energy 8%
Utilities 9%
Financial 14%
Consumer Cyclical 9%
Technology 15%
</TABLE>
[Chart of growth of $10,000 investment in the Galaxy Fund II Large Company
Index Fund from 10/1/90 to 3/96 which shows: Galaxy Fund II Large Company Index
Fund valued at $23,787 and S&P Index at $24.840. Footnote to chart: "Since
inception on 10/1/90. The S&P Index 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[trademark] Index (the
"Russell Index"), an unmanaged index of the common stocks of 3000 companies with
the largest market capitalizations with the exception of companies included in
the S&P 500 Index. The Small Company Index Fund does not own all of the
<TABLE>
GALAXY FUND II SMALL COMPANY INDEX FUND
Distribution of Total Net Assets as of March 31, 1996
<S> <C>
Technology 16%
Utilities 11%
Financial 18%
Cash Equivalents and Net Other Assets and Liabilities 6%
Consumer Cyclical 12%
Energy 4%
Basic Materials 5%
Other Common Stocks 7%
Capital Goods 4%
Consumer Staples 17%
</TABLE>
3
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PORTFOLIO REVIEWS
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[Chart of growth of $10,000 investment in the Galaxy Fund II Small Company Index
Fund from 10/1/90 to 3/96 which shows: Galaxy Fund II Small Company Index Fund
valued at $26,622 and Russel Special Small Company Index at $29,450. Footnote to
chart: "Since inception on 10/1/90. The Russell Special Small Company Index is
an unmanaged index which does not reflect expenses and management fees."]
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 sensitivity to economic developments as the
Russell Index.
In recent quarters, signs of an improving economy helped smaller
capitalization companies perform well in relation to companies with larger
capitalizations. As a result, the Russell Index earned a return that was quite
competitive with returns for actively managed portfolios over the last six and
12 months.
For the 12 months ended March 31, 1996, the Russell Index produced a total
return of 30.73%. During the same time, the Galaxy Fund II Small Company Index
Fund achieved a total return of 30.85% (after the deduction of operating
expenses). This performance represents a correlation coefficient between the
Fund and the Russell Index of 97.93%.
The correlation coefficient measures the degree to which the Fund's
performance moved in line with its target index during the period. A high
correlation coefficient means the Fund generated results that tracked the
Russell Index. It speaks to the effectiveness of the statistical technique and
the successful control of cash flows and trading costs.
The future performance of small company stocks should remain closely tied
to investor confidence about the economy. If the economy continues to improve
slowly with low inflation, as we expect, the stocks of small companies should
attract growing numbers of investors looking for value after the sizable gains
in stock prices of past years.
<TABLE>
GALAXY FUND II UTILITY INDEX FUND
Distribution of Total Net Assets as of March 31, 1996
<S> <C>
Consumer Cyclical 1%
Utilities 74%
Cash Equivalents and Net Other Assets and Liabilities 1%
Technology 24%
</TABLE>
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 the stocks in the utility
industry by investing in publicly traded stocks according to their
representation in the Russell 1000[Registered Trademark] Utility Index (the
"Utility Index"), an unmanaged index of the common stocks of 100 utility
companies. For the 12 months ended March 31, 1996, the Utility Index produced a
total return of 27.63%, while the Galaxy Fund II Utility Index Fund had a total
return of 26.61% (after the deduction of operating expenses). The performance
represents a correlation of 99.90%.
The correlation coefficient measures the degree to which the Fund's
performance moved in line with its target index during the period. A high
correlation coefficient means the Fund generated results that closely tracked
the Utility Index. Trading and administrative costs were kept to a minimum over
the last year, which enabled shareholders in the Galaxy Fund II Utility Index
Fund to benefit from the returns that utility stocks achieved.
[Chart of growth of $10,000 investment in the Galaxy Fund II Utility Index Fund
from 1/5/93 to 3/96 which shows: Galaxy Fund II Utility Index Fund valued at
$13,852 and Russell 1000[registered trademark] Utility Index at $13,928.
Footnote to chart: "Since inception on 1/5/93. The Russell 1000[registered
trademark] Utility Index is an unmanaged index which does not reflect expenses
and management fees."]
4
<PAGE> 7
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PORTFOLIO REVIEWS
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The relative performance of utility stocks has historically been tied to
the outlook for short-term interest rates. While rates declined in 1995,
investors favored utility stocks because of their attractive yields. The reverse
was true as rates rose in the first quarter of 1996. If the economy continues to
grow slowly, as we expect, interest rates and bond yields should stabilize.
This, combined with greater cost efficiency due to industry consolidation,
should strengthen the dividends and prices of utility stocks.
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, he has managed equity
portfolios since 1993. Prior to March, Jay Evans managed the portfolios
[Picture of David Lindsay, Portfolio Manager]
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 corporate and government bonds. 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. For the 12 months
ended March 31, 1996, the Index posted a total return of 10.49%. During the same
period, the Galaxy Fund II U.S. Treasury Index Fund had a total return of 10.09%
(after deduction of operating expenses). The performance represents a
correlation of 99.89%.
The correlation coefficient measures the degree to which the Fund's
performance moved in line with its target index during the period. A high
correlation coefficient means the Fund generated results that tracked the index
closely and shows that the securities owned by the Fund represented a valid
cross-section of securities included in the U.S. Treasury Index.
For most of the past year bond prices rallied, and Treasury bonds
outperformed other sectors. In the first quarter of 1996, however, signs of
greater economic strength drove interest rates higher, causing bond prices to
retreat. As investors realize that the economy is not growing so fast as to
spark higher inflation, we expect interest rates and bond prices will stabilize.
Any progress on balancing the federal budget would likely accelerate this trend.
Because prices for Treasury bonds were hurt more in the recent selloff than
prices of other issues, Treasury prices may show greater strength in the 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
Advisors Inc. since 1986.
<TABLE>
GALAXY FUND II U.S. TREASURY INDEX FUND
Distribution of Total Net Assets as of March 31, 1996
<S> <C>
Cash Equivalents and Net Other Assets and Liabilities 3%
U.S. Treasury Notes 72%
U.S. Treasury Bonds 25%
</TABLE>
[Chart of growth of $10,000 investment in the Galaxy Fund II U.S. Treasury Index
Fund from 6/4/91 to 3/96 which shows: Galaxy Fund II U.S. Treasury Index Fund
valued at $14,643 and Saloman Brothers U.S. Treasury Index at $14,849. Footnote
to chart: "Since inception on 6/4/91. The Saloman 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
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[Picture of Mary McGoldrick, Portfolio Manager]
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 income 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 7 to 12
years.
For most of the past year, a combination of falling interest rates and
moderate inflation caused municipal prices to rally strongly. Although rising
interest rates caused municipal prices to fall in the first quarter of 1996, the
Fund enjoyed a total return of 7.36% (after deduction of operating expenses) for
the 12 months ended March 31, 1996. That compares to a return of 8.06% for its
benchmark, the Lehman Brothers Seven Year Municipal Bond Index -- an unmanaged
index of municipal issues maturing in seven years.
In the first half of the period, municipal prices lagged those for Treasury
bonds because investors were concerned about proposed legislation that would
reduce or eliminate the tax advantages that municipal bonds enjoy. Later, as
talk of tax reform abated, municipal prices strengthened. This and a reduced
supply of new issues combined to help municipals' prices hold up better when
compared to the prices of taxable debt securities when bond prices fell .
While bond prices were rising, the Galaxy Fund II Municipal Bond Fund
benefited from earlier purchases of longer-maturity issues. Later, as prices
became more volatile, we adopted a more conservative strategy for the portfolio
- -- keeping the average maturity of investments in the Fund's portfolio
relatively neutral to the average maturity of its benchmark. We were able to
maximize the Fund's yield in many instances while maintaining our conservative
approach in order to give shareholders an attractive level of income.
We will probably maintain this strategy over the next several months.
Although we do not think the economy will grow fast enough to boost inflation
significantly, most of the decline in interest rates is likely past. By
continuing to focus on income, we hope to help the Fund make the most of a
market where returns from bonds will depend mostly on their yields.
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.
<TABLE>
GALAXY FUND II MUNICIPAL BOND FUND
Distribution of Total Net Assets as of March 31, 1996
<S> <C>
Net Other Assets and Liabilities 1%
South 36%
North Central 16%
Pacific 7%
Mountain 10%
East 30%
</TABLE>
[Chart of growth of $10,000 investment in the Galaxy Fund II U.S. Municipal Bond
Fund from 4/15/93 to 3/96 which shows: Galaxy Fund II Municipal Bond Fund valued
at $11,657 and the Lehman Brothers Seven Year Municipal Bond Index at $11,236.
Footnote to chart: "Since inception on 4/15/93. The Lehman Brothers Seven Year
Municipal Index is an unmanaged index which does not reflect expenses and
management fees."]
6
<PAGE> 9
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SHAREHOLDER SERVICES
- ----------------------
AUTOMATIC INVESTMENT PROGRAM
The Golden Rule of investing is "pay yourself first." That is easy to do with
Galaxy's Automatic Investment Program. For as little as $50 per month deducted
directly from your checking, statement savings, NOW or bank money market
account, you can consistently and conveniently add to your Galaxy investment.
When you establish an Automatic Investment Program, the $2,500 initial
investment requirement for Galaxy is waived. Of course, such a program does not
assure a profit and does not protect against loss in declining markets.
[Callout left side: "A well-balanced asset allocation plan may help to control
your risk while pursuing your goals."]
DIVERSIFICATION
A fundamental investment practice is "diversification." A well-balanced asset
allocation plan may help to control your risk while pursuing your goals. Many
mutual funds offer a low-cost way to diversify your investments while you
benefit from professional management. Galaxy's comprehensive array of investment
choices can be used in combination to match the needs of nearly everyone.
EXCHANGE PRIVILEGES
As your investment needs change, you can conveniently exchange your shares in
one fund for shares in another fund.
INFORMATION
Service also means giving you the practical information you need, in language
you can understand, to make smart investment decisions. The quarterly magazine,
Galaxy Observer, brings news, strategies and simple, straight-forward
explanations of investment basics and terminology. Timely, comprehensive mutual
fund account statements offer status reports on your individual account. If you
have a Fleet One or a Fleet Private Banking Account, your Galaxy Fund
information can appear on your regular bank account statement.
INVESTMENT SPECIALISTS
In many Fleet branch offices you can visit one-on-one with an Investment
Specialist* whose main concern is that you select the investments that match
your individual needs. This service is at no cost to you.
24-HOUR ACCESS TO REGISTERED REPRESENTATIVES
24 hours a day, seven days a week, 365 days a year, we are ready and available
to help. Our toll-free telephone lines offer round-the-clock access to Fund
information and service. Call 1-800-628-0414 for information on initial
purchases and current performance.
CUSTOMER SERVICE
Quality customer service is only a phone call away. Call 1-800-628-0413 between
9 a.m. and 5 p.m. to arrange bank wires, or to make telephone exchanges and
redemptions.
- --------------------------------------------------------------------------------
Certain shareholder services may not be available for Trust Share Investors.
Please consult your Fund Prospectus.
* Investment Specialists are registered representatives of FIS Securities, Inc.,
member NASD, or 440 Financial Distributors, Inc., member NASD and SIPC.
7
<PAGE> 10
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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.
45 East Avenue
Rochester, New York 14604
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 Logo]
This report was printed on recycled paper.
8
<PAGE> 11
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GALAXY FUND II
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<TABLE>
LARGE COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
<S> <C> <C>
COMMON STOCKS - 95.53%
CONSUMER STAPLES - 22.87%
37,400 Abbott Laboratories .............................. $ 1,524,050
1,279 Alberto-Culver Co., Class B ...................... 49,242
2,987 Allergan, Inc. ................................... 110,146
3,791 ALZA Corp.* ...................................... 116,573
8,634 American Brands, Inc. ............................ 365,866
14,685 American Home Products Corp. ..................... 1,591,487
12,548 Amgen, Inc.* ..................................... 729,353
12,028 Anheuser-Busch Cos., Inc. ........................ 810,387
24,767 Archer-Daniels-Midland Co. ....................... 455,094
3,231 Avon Products, Inc. .............................. 277,058
2,700 Bard (C.R.), Inc. ................................ 96,188
2,722 Bausch & Lomb, Inc. .............................. 100,714
13,194 Baxter International, Inc. ....................... 597,029
3,071 Becton Dickinson & Co. ........................... 251,438
4,698 Beverly Enterprises, Inc.* ....................... 51,678
5,427 Biomet, Inc.* .................................... 75,978
24,074 Bristol-Myers Squibb Co. ......................... 2,061,336
3,211 Brown-Forman Corp., Class B ...................... 128,841
11,770 Campbell Soup Co. ................................ 716,499
2,503 Clorox Co. ....................................... 215,571
59,352 Coca-Cola Co. (C) ................................ 4,903,959
7,018 Colgate Palmolive Co. ............................ 546,527
21,128 Columbia/HCA Healthcare Corp. .................... 1,220,142
2,173 Community Psychiatric Centers* ................... 18,199
11,272 Conagra, Inc. .................................... 457,925
1,839 Coors (Adolph) Co., Class B ...................... 32,872
7,065 CPC International, Inc. .......................... 490,134
7,518 Darden Restaurants, Inc. ......................... 101,493
9,800 Federated Department Stores, Inc.* ............... 316,050
1,825 Fleming Cos., Inc. ............................... 26,006
3,703 Fruit of the Loom, Inc., Class A* ................ 95,815
7,614 General Mills, Inc. .............................. 444,467
20,954 Gillette Co. ..................................... 1,084,387
17,794 Heinz (H. J.) Co. ................................ 589,426
3,686 Hershey Foods Corp. .............................. 274,607
7,600 Humana, Inc.* .................................... 190,950
5,232 International Flavors & Fragrances, Inc. ......... 250,482
30,501 Johnson & Johnson ................................ 2,813,716
10,385 Kellogg Co. ...................................... 786,664
13,247 Kimberly-Clark Corp. ............................. 986,902
26,328 Lilly (Eli) & Co. ................................ 1,711,320
12,782 Limited, Inc. .................................... 242,858
3,513 Liz Claiborne, Inc. .............................. 120,320
1,099 Luby's Cafeterias, Inc. .......................... 25,414
2,924 Manor Care, Inc. ................................. 114,767
32,805 Mcdonald's Corp. ................................. 1,574,640
10,892 Medtronic, Inc. .................................. 649,436
58,405 Merck & Co., Inc. ................................ 3,635,711
6,758 Nike, Inc., Class B .............................. 549,088
37,400 PepsiCo, Inc. .................................... 2,365,550
29,850 Pfizer, Inc. ..................................... 1,999,950
23,845 Pharmacia & Upjohn, Inc. ......................... 950,819
39,817 Philip Morris Cos., Inc. ......................... 3,493,942
4,015 Pioneer Hi-Bred International, Inc. .............. 211,289
2,833 Premark International, Inc. ...................... 151,920
32,429 Procter & Gamble Co. ............................. 2,748,358
6,251 Quaker Oats Co. .................................. 208,627
5,013 Ralston Purina Group ............................. 335,244
3,486 Reebok International, Ltd. ....................... 96,301
VALUE
SHARES (NOTE 2)
- ------ --------
CONSUMER STAPLES (CONTINUED)
3,918 Rite Aid Corp. ................................... $ 120,968
7,476 Rubbermaid, Inc. ................................. 212,132
1,953 Russell Corp. .................................... 52,243
2,701 Ryan's Family Steak Houses, Inc.* ................ 24,309
22,974 Sara Lee Corp. ................................... 749,527
17,505 Schering-Plough Corp. ............................ 1,017,478
17,525 Seagram Co., Ltd. ................................ 567,372
18,566 Sears Roebuck & Co. .............................. 905,093
985 Shared Medical Systems Corp. ..................... 59,346
2,049 Shoney's, Inc.* .................................. 18,441
970 Springs Industries, Inc., Class A ................ 44,620
3,264 St. Jude Medical, Inc.* .......................... 121,788
3,278 SuperValu, Inc. .................................. 101,208
8,594 Sysco Corp. ...................................... 282,528
9,559 Tenet Healthcare Corp.* .......................... 200,739
2,678 U.S. Surgical Corp. .............................. 87,705
7,609 Unilever NV, New York Shares, ADR ................ 1,032,922
8,336 United Healthcare Corp. .......................... 512,664
9,288 UST, Inc. ........................................ 296,055
3,025 V.F. Corp. ....................................... 167,131
6,407 Warner-Lambert Co. ............................... 661,523
5,570 Wendy's International, Inc. ...................... 100,956
7,288 Winn-Dixie Stores, Inc. .......................... 245,059
5,446 Wrigley (William) Jr. Co. ........................ 319,272
-----------
55,041,884
-----------
TECHNOLOGY - 14.59%
6,338 Advanced Micro Devices, Inc. ..................... 109,331
23,247 AirTouch Communications, Inc.* ................... 723,563
5,628 Amdahl Corp.* .................................... 47,838
75,485 American Telephone & Telegraph Corp.(C) .......... 4,623,435
10,318 AMP, Inc. ........................................ 426,907
5,853 Apple Computer, Inc. ............................. 143,764
8,522 Applied Materials, Inc.* ......................... 297,205
2,184 Autodesk, Inc. ................................... 82,446
13,406 Automatic Data Processing, Inc. .................. 527,861
8,900 Bay Networks, Inc.* .............................. 273,675
8,202 Boston Scientific Corp.* ......................... 377,292
3,295 Cabletron Systems, Inc.* ......................... 218,294
3,166 Ceridian Corp.* .................................. 136,138
25,910 Cisco Systems, Inc.* ............................. 1,201,576
7,700 3 Com Corp.* ..................................... 307,038
1 360 Communications Co.* .......................... 16
12,626 Compaq Computer Corp.* ........................... 487,679
11,408 Computer Associates International, Inc ........... 817,098
2,590 Computer Sciences Corp.* ......................... 182,271
10,868 Corning, Inc. .................................... 380,380
1,201 Cray Research, Inc.* ............................. 34,979
1,821 Data General Corp.* .............................. 26,632
6,997 Digital Equipment Corp.* ......................... 385,710
12,431 Dow Chemical Co. ................................. 1,079,943
5,345 DSC Communications Corp.* ........................ 144,315
2,512 EG & G, Inc. ..................................... 56,206
10,400 EMC Corp.* ....................................... 227,500
5,700 General Instrument Corp.* ........................ 156,094
2,259 General Signal Corp. ............................. 81,889
1,850 Harris Corp. ..................................... 114,469
24,161 Hewlett-Packard Co. .............................. 2,271,134
6,046 Honeywell, Inc. .................................. 334,042
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 12
- --------------
GALAXY FUND II
- --------------
<TABLE>
LARGE COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
<S> <C> <C>
TECHNOLOGY (CONTINUED)
39,016 Intel Corp. ...................................... $ 2,219,035
2,184 Intergraph Corp.* ................................ 34,944
26,981 International Business Machines Corp. ............ 2,998,264
8,078 Loral Corp. ...................................... 395,822
6,000 LSI Logic Corp.* ................................. 160,500
31,860 MCI Communications Corp. ......................... 963,765
9,863 Micron Technology, Inc. .......................... 309,452
27,966 Microsoft Corp.* ................................. 2,883,994
27,871 Motorola, Inc. ................................... 1,477,163
6,522 National Semiconductor Corp.* .................... 90,493
11,937 Northern Telecom, Ltd. ........................... 569,992
17,690 Novell, Inc.* .................................... 236,604
20,679 Oracle Corp.* .................................... 974,498
2,039 Perkin-Elmer Corp. ............................... 110,361
7,286 Pitney-Bowes, Inc. ............................... 357,014
3,568 Scientific-Atlanta, Inc. ......................... 63,332
7,516 Silicon Graphics, Inc.* .......................... 187,900
16,589 Sprint Corp. ..................................... 630,382
8,852 Sun Microsystems, Inc.* .......................... 387,275
5,516 Tandem Computers, Inc.* .......................... 48,955
1,515 Tektronix, Inc. .................................. 49,238
30,828 Tele-Communications, Inc.,
TCI Group, Class A* .............................. 572,245
2,648 Teledyne, Inc. ................................... 74,144
4,117 Tellabs, Inc.* ................................... 199,160
8,946 Texas Instruments, Inc. .......................... 455,128
869 Thomas & Betts Corp. ............................. 65,175
7,312 Tyco International, Ltd. ......................... 261,404
22,194 U.S. West, Inc., Media Group* .................... 457,751
8,321 Unisys Corp.* .................................... 49,926
2,486 Western Atlas, Inc.* ............................. 149,160
19,395 Westinghouse Electric Corp. ...................... 373,354
8,700 Worldcom, Inc.* .................................. 400,287
5,069 Xerox Corp. ...................................... 636,160
-----------
35,119,597
-----------
FINANCIAL - 13.82%
5,526 Aetna Life & Casualty Co. ........................ 417,213
5,497 Ahmanson (H.F.) & Co. ............................ 133,302
2,159 Alexander & Alexander Services, Inc. ............. 40,751
21,278 Allstate Corp. ................................... 896,336
22,807 American Express Co. ............................. 1,126,096
9,660 American General Corp. ........................... 333,270
22,458 American International Group, Inc. ............... 2,102,630
21,331 Banc One Corp. ................................... 759,917
5,430 Bank of Boston Corp. ............................. 269,464
9,565 Bank of New York Co., Inc. ....................... 492,598
17,579 BankAmerica Corp. ................................ 1,362,373
3,706 Bankers Trust New York Corp. ..................... 262,663
4,584 Barnett Banks, Inc. .............................. 285,354
2,481 Beneficial Corp. ................................. 142,968
4,899 Block (H & R), Inc. .............................. 176,976
7,322 Boatmen's Bancshares, Inc. ....................... 287,389
8,354 Chase Manhattan Corp. ............................ 614,019
11,886 Chemical Banking Corp. ........................... 837,963
4,120 Chubb Corp. ...................................... 386,765
3,485 Cigna Corp. ...................................... 398,161
122,848 Citicorp ......................................... 1,827,840
VALUE
SHARES (NOTE 2)
- ------ --------
FINANCIAL (CONTINUED)
5,400 Comerica, Inc. ................................... $ 225,450
6,599 CoreStates Financial Corp. ....................... 279,633
8,003 Dean Witter, Discover & Co. ...................... 458,172
8,546 Federal Home Loan Mortgage Corp. ................. 728,547
51,712 Federal National Mortgage Association ............ 1,648,320
4,800 Fifth Third Bancorp .............................. 278,400
6,100 First Bank System, Inc. .......................... 363,713
15,102 First Chicago NBD Corp. .......................... 626,733
10,562 First Data Corp. ................................. 744,621
3,557 First Interstate Bancorp ......................... 617,140
13,122 First Union Corp. ................................ 793,881
12,631 Fleet Financial Group, Inc. ...................... 511,556
3,825 General Re Corp. ................................. 557,494
2,732 Golden West Financial Corp. ...................... 146,504
6,500 Great Western Financial Corp. .................... 156,813
6,500 Green Tree Financial Corp. ....................... 223,438
4,703 Household International, Inc. .................... 316,277
5,536 ITT Corp.* ....................................... 332,160
5,536 ITT Hartford Group, Inc. ......................... 271,264
5,536 ITT Industries, Inc. ............................. 141,168
3,394 Jefferson-Pilot Corp. ............................ 182,852
11,125 Keycorp .......................................... 429,703
5,033 Lincoln National Corp. ........................... 255,425
5,560 Loews Corp. ...................................... 420,475
3,477 Marsh & McLennan Cos ............................. 322,926
10,803 MBNA Corp. ....................................... 320,039
6,659 Mellon Bank Corp. ................................ 367,077
8,142 Merrill Lynch & Co., Inc. ........................ 494,627
8,807 Morgan (J.P.) & Co., Inc. ........................ 730,981
7,300 Morgan Stanley Group, Inc. ....................... 377,775
7,000 National City Corp. .............................. 245,875
13,939 Nationsbank Corp. ................................ 1,116,862
16,840 Norwest Corp. .................................... 618,870
15,770 PNC Bank Corp. ................................... 484,928
4,555 Providian Corp. .................................. 203,267
1,294 Pulte Corp. ...................................... 34,776
2,670 Republic New York Corp. .......................... 158,865
5,978 Safeco Corp. ..................................... 200,263
5,129 Salomon, Inc. .................................... 192,338
4,020 St. Paul Cos., Inc. .............................. 223,110
5,360 SunTrust Banks, Inc. ............................. 375,200
3,386 Torchmark Corp. .................................. 152,370
3,181 Transamerica Corp. ............................... 238,177
15,278 Travelers Group, Inc. ............................ 1,008,340
7,143 U.S. Bancorp ..................................... 242,862
1,696 USlife Corp. ..................................... 49,820
3,400 UNUM Corp. ....................................... 202,300
5,303 USF & G Corp. .................................... 82,197
8,037 Wachovia Corp. ................................... 359,656
2,292 Wells Fargo & Co. ................................ 598,212
----------
33,265,500
----------
CONSUMER CYCLICAL - 9.04%
12,000 Albertson's, Inc. ................................ 445,500
3,445 American Greetings Corp., Class A ................ 95,168
1,741 Armstrong World Industries, Inc. ................. 108,160
2,236 Bally Entertainment Corp.* ....................... 38,571
4,069 Black & Decker Corp. ............................. 154,113
</TABLE>
See Notes to Financial Statements.
10
<PAGE> 13
- --------------
GALAXY FUND II
- --------------
<TABLE>
LARGE COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
<S> <C> <C>
CONSUMER CYCLICAL (CONTINUED)
1,310 Briggs & Stratton Corp. .......................... $ 56,494
767 Brown Group, Inc. ................................ 10,355
4,544 Brunswick Corp. .................................. 104,512
1,313 Centex Corp. ..................................... 40,703
5,284 Charming Shoppes, Inc. ........................... 27,246
4,554 Circuit City Stores, Inc. ........................ 136,051
11,527 Comcast Corp., Special Class A ................... 203,884
3,913 Cooper Tire & Rubber Co. ......................... 100,760
1,519 Crane Co. ........................................ 61,330
8,380 CUC International, Inc.* ......................... 245,115
4,838 Dana Corp. ....................................... 161,468
3,371 Dayton-Hudson Corp. .............................. 286,114
3,919 Deluxe Corp. ..................................... 122,959
4,519 Dial Corp. ....................................... 126,532
5,409 Dillard Department Stores, Inc., class A ......... 187,287
32,497 Disney (Walt) Co. ................................ 2,075,746
7,387 Donnelley (R.R.) & Sons Co. ...................... 254,852
4,577 Dow Jones & Co., Inc. ............................ 176,215
7,876 Dun & Bradstreet Corp. ........................... 477,483
16,257 Eastman Kodak Co. ................................ 1,154,247
3,682 Eaton Corp. ...................................... 221,841
2,818 Echlin, Inc. ..................................... 102,153
6,676 Gannett Co., Inc. ................................ 448,961
6,742 Gap, Inc. ........................................ 373,338
5,899 Genuine Parts Co. ................................ 265,455
2,827 Giant Food, Inc., Class A ........................ 93,291
1,198 Goodrich (B.F.) Co. .............................. 95,241
7,293 Goodyear Tire & Rubber Co. ....................... 371,943
1,845 Great Atlantic & Pacific Tea Co. ................. 57,195
3,468 Harcourt General, Inc. ........................... 157,361
1,534 Harland (John H.) Co. ............................ 33,748
4,936 Harrah's Entertainment, Inc.* .................... 144,995
4,180 Hasbro, Inc. ..................................... 154,660
2,283 Hilton Hotels Corp. .............................. 214,602
22,585 Home Depot, Inc. ................................. 1,081,257
3,706 Interpublic Group Cos., Inc. ..................... 175,109
1,758 Jostens, Inc. .................................... 39,335
1,509 Kaufman & Broad Home Corp. ....................... 24,144
1,742 King World Productions, Inc.* .................... 72,075
21,704 Kmart Corp. ...................................... 203,475
2,389 Knight-Ridder, Inc. .............................. 162,751
5,859 Kroger Co.* ...................................... 237,290
978 Longs Drug Stores, Inc. .......................... 46,211
7,676 Lowe's Cos., Inc. ................................ 274,417
5,994 Marriott International, Inc. ..................... 284,715
7,693 Masco Corp. ...................................... 223,097
13,130 Mattel, Inc. ..................................... 356,151
11,837 May Department Stores Co. ........................ 571,135
5,106 Maytag Corp. ..................................... 103,397
2,387 McGraw-Hill Cos., Inc. ........................... 207,072
4,993 Melville Corp. ................................... 179,124
1,740 Mercantile Stores Co., Inc. ...................... 106,793
1,228 Meredith Corp. ................................... 50,655
4,867 Moore Corp., Ltd. ................................ 94,907
2,386 National Service Industries, Inc. ................ 86,493
4,622 New York Times Co., Class A ...................... 134,038
7,604 Newell Co. ....................................... 203,407
3,911 Nordstrom, Inc. .................................. 189,439
974 Outboard Marine Corp. ............................ 18,628
2,368 Owens-Corning Fiberglas Corp.* ................... 95,016
10,488 Penney (J.C.), Inc. .............................. 521,778
VALUE
SHARES (NOTE 2)
- ------ --------
CONSUMER CYCLICAL (CONTINUED)
2,920 Pep Boys-Manny, Moe & Jack ....................... $ 97,820
2,189 Polaroid Corp. ................................... 98,505
9,212 Price/Costco, Inc.* .............................. 172,725
2,750 Safety-Kleen Corp. ............................... 39,531
4,954 Service Corp., International ..................... 241,508
4,026 Sherwin-Williams Co. ............................. 178,654
1,955 Snap-On, Inc. .................................... 91,396
2,163 Stanley Works .................................... 118,965
2,296 Stride Rite Corp. ................................ 20,951
2,891 Tandy Corp. ...................................... 133,709
18,202 Time Warner, Inc.................................. 744,007
5,360 Times Mirror Co., Class A ........................ 211,050
3,468 TJX Cos., Inc. ................................... 87,134
12,990 Toys 'R' Us, Inc.* ............................... 350,730
3,049 Tribune Co. ...................................... 200,853
7,316 U.S. Healthcare, Inc. ............................ 335,622
108,795 Wal-Mart Stores, Inc. ............................ 2,515,873
11,536 Walgreen Co. ..................................... 376,362
3,471 Whirlpool Corp. .................................. 191,773
4,992 Whitman Corp. .................................... 121,056
6,198 Woolworth Corp.* ................................. 96,844
----------
21,752,626
----------
UTILITIES - 8.94%
8,851 Alltel Corp. ..................................... 274,381
8,904 American Electric Power, Inc. .................... 371,742
26,336 Ameritech Corp. .................................. 1,435,312
7,003 Baltimore Gas & Electric Co. ..................... 193,458
20,559 Bell Atlantic Corp. .............................. 1,269,518
46,704 BellSouth Corp. .................................. 1,728,048
7,405 Carolina Power & Light Co. ....................... 275,836
9,020 Central & South West Corp. ....................... 257,070
7,388 Cinergy Corp. .................................... 221,640
5,085 Coastal Corp. .................................... 200,858
2,384 Columbia Gas System, Inc. ........................ 109,366
11,275 Consolidated Edison Co. of New York, Inc. ........ 359,391
4,537 Consolidated Natural Gas Co. ..................... 197,360
8,155 Dominion Resources, Inc. ......................... 323,142
6,955 DTE Energy Co. ................................... 233,862
9,826 Duke Power Co. ................................... 496,213
21,275 Edison International ............................. 364,334
12,139 Enron Corp. ...................................... 447,626
3,249 ENSERCH Corp. .................................... 52,796
10,902 Entergy Corp. .................................... 305,256
8,783 FPL Group, Inc. .................................. 397,431
5,758 General Public Utilities Corp. ................... 190,014
45,725 GTE Corp. ........................................ 2,006,182
12,674 Houston Industries, Inc. ......................... 274,075
6,829 Niagara Mohawk Power Corp. ....................... 45,242
2,412 NICOR, Inc. ...................................... 64,521
5,780 Noram Energy Corp. ............................... 53,465
3,244 Northern States Power Co. ........................ 158,145
20,243 NYNEX Corp. ...................................... 1,009,620
7,280 Ohio Edison Co. .................................. 164,710
1,301 Oneok, Inc. ...................................... 31,061
3,981 Pacific Enterprises .............................. 103,008
20,213 Pacific Gas & Electric Co. ....................... 457,319
20,057 Pacific Telesis Group ............................ 554,075
13,391 PacifiCorp ....................................... 279,537
7,120 Panhandle Eastern Corp. .......................... 221,610
</TABLE>
See Notes to Financial Statements.
11
<PAGE> 14
- --------------
GALAXY FUND II
- --------------
<TABLE>
LARGE COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
<S> <C> <C>
UTILITIES (CONTINUED)
10,521 PECO Energy Co. .................................. $ 280,122
1,628 People's Energy Corp. ............................ 52,707
7,600 P P & L Resources, Inc. .......................... 185,250
11,649 Public Service Enterprise Group, Inc. ............ 320,348
4,310 Santa Fe Energy Resources, Inc.* ................. 45,255
28,788 SBC Communications, Inc. ......................... 1,514,969
4,027 Sonat, Inc. ...................................... 144,972
31,551 Southern Co. ..................................... 753,280
8,454 Tenneco, Inc. .................................... 472,367
10,881 Texas Utilities Co. .............................. 450,201
22,194 U.S. West, Inc., Communications Group ............ 718,531
10,209 Unicom Corp. ..................................... 275,643
4,940 Union Electric Co. ............................... 202,540
17,105 Viacom, Inc., Class B* ........................... 720,548
4,839 Williams Cos., Inc. .............................. 243,765
-----------
21,507,722
-----------
ENERGY - 8.48%
4,424 Amerada Hess Corp. ............................... 243,320
23,618 Amoco Corp. ...................................... 1,706,401
3,026 Ashland, Inc. .................................... 116,123
7,613 Atlantic Richfield Co. ........................... 905,947
6,523 Baker Hughes, Inc. ............................... 190,798
5,972 Burlington Resources, Inc. ....................... 221,711
30,706 Chevron Corp. .................................... 1,723,374
8,585 Dresser Industries, Inc. ......................... 261,843
985 Eastern Enterprises .............................. 34,968
58,711 Exxon Corp. (C) .................................. 4,792,282
5,414 Halliburton Co. .................................. 307,921
1,192 Helmerich & Payne, Inc. .......................... 40,230
2,493 Kerr-Mcgee Corp. ................................. 158,306
1,614 Louisiana Land & Exploration Co. ................. 75,253
2,581 McDermott International, Inc. .................... 49,684
18,717 Mobil Corp. ...................................... 2,168,832
14,853 Occidental Petroleum Corp. ....................... 397,318
5,094 Oryx Energy Co.* ................................. 70,679
2,162 Pennzoil Co. ..................................... 85,940
12,359 Phillips Petroleum Co. ........................... 488,181
3,988 Rowan Cos., Inc.* ................................ 50,847
25,433 Royal Dutch Petroleum Co., ADR ................... 3,592,411
11,311 Schlumberger, Ltd. ............................... 894,983
3,561 Sun Co., Inc. .................................... 102,824
12,579 Texaco, Inc. ..................................... 1,081,794
11,603 Unocal Corp. ..................................... 387,250
13,619 USX-Marathon Group ............................... 262,166
-----------
20,411,386
-----------
CAPITAL GOODS - 7.17%
5,348 Alco Standard Corp. .............................. 278,765
6,937 American Stores Co. .............................. 228,921
2,640 Andrew Corp.* .................................... 100,980
16,210 Boeing Co. ....................................... 1,404,191
10,159 Browning-Ferris Industries, Inc. ................. 320,009
9,370 Caterpillar, Inc. ................................ 637,160
1,714 Cincinnati Milacron, Inc. ........................ 44,993
5,213 Cooper Industries, Inc. .......................... 203,307
1,905 Cummins Engine Co., Inc. ......................... 76,914
12,709 Deere & Co. ...................................... 530,601
5,354 Dover Corp. ...................................... 244,946
10,763 Emerson Electric Co. ............................. 869,112
VALUE
SHARES (NOTE 2)
- ------ --------
CAPITAL GOODS (CONTINUED)
2,171 Fleetwood Enterprises, Inc. ...................... $ 53,732
3,911 Fluor Corp. ...................................... 266,926
1,734 FMC Corp.* ....................................... 130,267
1,935 Foster Wheeler Corp. ............................. 85,866
2,989 General Dynamics Corp. ........................... 174,857
79,145 General Electric Co. (C) ......................... 6,163,412
1,647 Giddings & Lewis, Inc. ........................... 31,293
2,403 Grainger (W.W.), Inc. ............................ 161,301
2,342 Harnischfeger Industries, Inc. ................... 90,753
5,620 Illinois Tool Works, Inc. ........................ 363,193
5,197 Ingersoll-Rand Co. ............................... 211,778
1,952 Johnson Controls, Inc. ........................... 145,668
14,176 Laidlaw, Inc., Class B ........................... 150,620
5,331 McDonnell Douglas Corp. .......................... 488,453
429 Nacco Industries, Inc., Class A .................. 24,399
3,597 Navistar International Corp.* .................... 37,319
2,382 Northrop Grumman Corp. ........................... 151,555
2,370 Ogden Corp. ...................................... 46,215
1,874 PACCAR, Inc. ..................................... 91,358
3,529 Parker-Hannifin Corp. ............................ 132,338
11,768 Raytheon Co. ..................................... 603,110
10,380 Rockwell International Corp. ..................... 611,123
4,028 Textron, Inc. .................................... 322,240
1,515 Timken Co. ....................................... 69,879
3,037 TRW, Inc. ........................................ 270,673
5,763 United Technologies Corp. ........................ 646,897
1,937 Varity Corp.* .................................... 83,775
22,731 WMX Technologies, Inc. ........................... 721,709
-----------
17,270,608
-----------
BASIC MATERIALS - 5.93%
5,328 Air Products & Chemicals, Inc. ................... 291,042
10,649 Alcan Aluminum, Ltd. ............................. 343,430
13,262 Allied Signal, Inc. .............................. 784,116
8,465 Aluminum Co. of America .......................... 530,121
4,861 Armco, Inc.* ..................................... 26,128
1,958 ASARCO, Inc. ..................................... 68,530
2,481 Avery-Dennison Corp. ............................. 133,974
1,494 Ball Corp. ....................................... 46,314
16,684 Barrick Gold Corp. ............................... 506,777
2,492 Bemis, Inc. ...................................... 78,187
5,437 Bethlehem Steel Corp.* ........................... 71,361
2,357 Boise Cascade Corp. .............................. 98,994
4,654 Champion International Corp. ..................... 210,594
5,334 Crown Cork & Seal Co., Inc. ...................... 260,033
4,482 Cyprus Amax Minerals Co. ......................... 126,617
26,500 duPont (E.I.) deNemours & Co. .................... 2,199,492
3,735 Eastman Chemical Co. ............................. 258,182
6,698 Engelhard Corp. .................................. 156,566
4,234 Georgia-Pacific Corp. ............................ 293,734
4,635 Grace (W.R.) & Co. ............................... 362,689
2,991 Great Lakes Chemical Corp. ....................... 201,519
5,301 Hercules, Inc. ................................... 328,662
5,714 Inco, Ltd., Class A .............................. 180,705
2,338 Inland Steel Industries, Inc. .................... 57,866
14,464 International Paper Co. .......................... 569,533
3,913 James River Corp. of Virginia .................... 100,760
5,234 Louisiana-Pacific Corp. .......................... 127,579
3,568 Mallinckrodt Group, Inc. ......................... 134,246
2,529 Mead Corp. ....................................... 136,566
</TABLE>
See Notes to Financial Statements.
12
<PAGE> 15
- --------------
GALAXY FUND II
- --------------
<TABLE>
LARGE COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
<S> <C> <C>
BASIC MATERIALS (CONTINUED)
2,097 Millipore Corp. .................................. $ 80,210
5,469 Monsanto Co. ..................................... 839,492
7,152 Morton International, Inc. ....................... 274,458
3,162 Nalco Chemical Co. ............................... 97,232
4,569 Newmont Mining Corp. ............................. 258,720
4,128 Nucor Corp. ...................................... 244,068
5,474 Pall Corp. ....................................... 140,271
3,263 Phelps Dodge Corp. ............................... 223,923
11,398 Placer Dome, Inc. ................................ 329,117
1,310 Potlatch Corp. ................................... 56,003
9,311 PPG Industries, Inc. ............................. 455,075
6,740 Praxair, Inc. .................................... 268,758
2,147 Raychem Corp. .................................... 138,482
2,829 Reynolds Metals Co. .............................. 167,265
3,255 Rohm & Haas Co. .................................. 216,458
2,268 SIGMA-Aldrich Corp. .............................. 129,843
4,614 Stone Container Corp. ............................ 64,596
2,611 Temple-Inland, Inc. .............................. 122,391
1,314 Trinova Corp. .................................... 41,884
3,264 Union Camp Corp. ................................. 161,976
6,538 Union Carbide Corp. .............................. 324,448
3,975 USX-U.S. Steel Group, Inc. ....................... 137,634
4,828 Westvaco Corp. ................................... 141,823
9,582 Weyerhaeuser Co. ................................. 441,970
2,600 Willamette Industries, Inc. ...................... 156,650
4,317 Worthington Industries, Inc. ..................... 85,800
-----------
14,282,864
-----------
TRANSPORTATION - 3.90%
3,556 AMR Corp.* ....................................... 318,262
6,760 Burlington Northern Santa Fe Corp. ............... 555,165
1,849 Caliber System, Inc. ............................. 79,276
3,400 Case Corp. ....................................... 172,975
18,020 Chrysler Corp. ................................... 1,121,745
3,708 Conrail, Inc. .................................... 265,586
2,044 Consolidated Freightways, Inc. ................... 52,378
9,966 CSX Corp. ........................................ 454,699
2,385 Delta Air Lines, Inc. ............................ 183,347
3,101 Ecolab, Inc. ..................................... 93,030
2,505 Federal Express Corp.* ........................... 175,037
50,921 Ford Motor Co. ................................... 1,750,407
35,285 General Motors Corp. ............................. 1,878,926
9,500 Lockheed Martin Corp. ............................ 720,813
6,075 Norfolk Southern Corp. ........................... 516,375
3,589 Ryder System, Inc. ............................... 97,800
6,696 Southwest Airlines Co. ........................... 198,369
9,867 Union Pacific Corp. .............................. 677,123
2,995 U.S. Air Group, Inc.* ............................ 54,659
1,307 Yellow Corp. ..................................... 16,338
-----------
9,382,310
-----------
METALS AND MINING - 0.79%
6,096 Echo Bay Mines, Ltd. ............................. 82,296
9,584 Freeport-McMoran Copper, Class B ................. 303,094
6,530 Homestake Mining Co. ............................. 126,519
19,754 Minnesota Mining & Manufacturing Co. ............. 1,281,541
6,232 Santa Fe Pacific Gold Corp. ...................... 99,712
-----------
1,893,162
-----------
TOTAL COMMON STOCKS............................... 229,927,659
-----------
(Cost $159,777,729)
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
<S> <C> <C>
PREFERRED STOCK - 0.00%
- -----------------------
122 Teledyne, Inc., Class E .......................... $ 1,769
------------
TOTAL PREFERRED STOCK 1,769
------------
(Cost $1,830)
PAR VALUE
- ---------
U.S. GOVERNMENT OBLIGATION (A) - 0.21%
U.S. TREASURY BILL - 0.21%
$ 500,000 4.99%, 06/27/96 (B) .............................. 494,452
------------
TOTAL U.S. GOVERNMENT OBLIGATION ................. 494,452
------------
(Cost $494,452)
REPURCHASE AGREEMENT - 4.25%
10,238,192 Chase Securities, Inc. ..........................
5.20%, 04/01/96, Dated 03/29/96
Repurchase Price $10,242,629
(Collateralized by U.S. Treasury Bond
11.25%, Due 2015, Total Par Value $6,865,000,
Market Value $10,091,550) ........................ 10,238,192
------------
TOTAL REPURCHASE AGREEMENT 10,238,192
------------
(Cost $10,238,192)
TOTAL INVESTMENTS - 99.99% ....................... 240,662,072
------------
(Cost $170,512,203)
NET OTHER ASSETS AND LIABILITIES - 0.01% .................... 27,254
------------
NET ASSETS - 100.00% ........................................ $240,689,326
============
- ----------
<FN>
* Non-income producing security.
ADR American Depository Receipt.
(A) Annualized yield at time of purchase.
(B) Security has been deposited as an initial margin on open futures contracts.
</TABLE>
<TABLE>
At March 31, 1996, the Fund's open futures contracts were as follows:
<CAPTION>
NUMBER OF
CONTRACTS CURRENT
PURCHASED EXPIRATION OPENING MARKET
(SOLD) CONTRACT TYPE DATE POSITION VALUE
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
32 S&P 500 Stock Index 6/96 $10,338,670 $10,420,000
<FN>
(C) All or a portion of these shares are used as collateral on open futures
contracts.
</TABLE>
See Notes to Financial Statements.
13
<PAGE> 16
- ----------------
Galaxy Fund II
- ----------------
<TABLE>
SMALL COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCKS - 93.92%
FINANCIAL - 17.89%
<S> <C> <C>
6,600 Acordia, Inc. .................................... $ 209,550
40,762 AFLAC, Inc. ...................................... 1,273,813
4,700 Alex Brown, Inc. ................................. 243,813
432 Alleghany Corp.* ................................. 85,415
10,600 AMBAC, Inc. ...................................... 510,125
7,700 American Annuity Group, Inc. ..................... 91,438
1,300 American Bankers Insurance Group, Inc. 45,825
4,100 American Health Properties, Inc. ................. 92,250
2,600 American National Insurance Co. .................. 175,500
10,200 American Re Corp. ................................ 408,000
6,600 Americredit Corp.* ............................... 91,575
5,500 Ampal American Israel Corp., Class A 31,625
11,750 Amsouth Bancorp .................................. 456,781
2,400 Amvestors Financial Corp. ........................ 30,600
26,050 AON Corp. ........................................ 1,348,088
6,000 Argonaut Group, Inc. ............................. 186,000
9,450 Bancorp Hawaii, Inc. ............................. 331,938
5,980 BancorpSouth, Inc. ............................... 149,500
500 Bank of Granite Corp. ............................ 15,125
8,400 BanPonce Corp. ................................... 388,500
5,100 Baybanks, Inc. ................................... 548,250
38,561 Bear Stearns Cos., Inc. .......................... 954,385
4,400 Berkley (W.R.) Corp. ............................. 203,500
5,200 Berkshire Realty Co. ............................. 51,350
800 BHC Financial, Inc. .............................. 10,900
6,700 Boatmen's Bancshares, Inc. ....................... 262,975
11,967 California Federal Bancorp, Inc.* ................ 213,910
12,500 Capital One Financial Corp. ...................... 343,750
700 Capital Re Corp. ................................. 25,200
4,800 Capstead Mortgage Corp............................ 120,000
1,800 Cash America International, Inc. ................. 9,675
300 CCB Financial Corp. .............................. 15,075
4,500 Center Financial Corp. ........................... 81,563
8,700 Central Fidelity Banks, Inc. ..................... 295,800
11,230 Charter One Financial, Inc. ...................... 379,013
14,553 Cincinnati Financial Corp. ....................... 922,296
500 Citizens Bancorp ................................. 15,125
1,321 Citizens, Inc., Class A* ......................... 11,722
8,400 City National Corp. .............................. 114,450
1,000 CNA Financial Corp.* ............................. 111,250
5,000 Coast Savings Financial, Inc.* ................... 156,250
4,100 Collective Bancorp, Inc. ......................... 103,525
6,945 Commerce Bancshares, Inc. ........................ 241,339
6,900 Commercial Federal Corp. ......................... 268,238
9,050 Compass Bancshares, Inc. ......................... 291,863
7,100 Conseco, Inc. .................................... 513,863
22,477 Countrywide Credit Industries, Inc. .............. 497,304
2,400 Cousins Properties, Inc. ......................... 46,800
3,900 Crawford & Co., Class B .......................... 61,425
10,000 Crestar Financial Corp. .......................... 575,000
3,800 CRI Liquidating Reit, Inc. ....................... 14,250
11,200 Criimi Mae, Inc. ................................. 113,400
2,000 Cullen/Frost Bankers, Inc. ....................... 98,500
4,600 CWM Mortgage Holdings, Inc. ...................... 74,175
5,600 Dauphin Deposit Corp. ............................ 168,000
1,600 Deposit Guaranty Corp. ........................... 75,600
32,818 Dime Bancorp, Inc.* .............................. 406,123
1,785 Downey Financial Corp. ........................... 41,948
1,000 Eaton Vance Corp. ................................ 32,500
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
FINANCIAL (CONTINUED)
<S> <C> <C>
14,083 Edwards (A.G.), Inc. ............................. $ 350,315
3,600 Enhance Financial Services Group, Inc. ........... 99,450
45,400 Equifax, Inc. .................................... 913,675
19,000 Equitable Cos., Inc. ............................. 460,750
6,300 Equitable of Iowa Cos. ........................... 225,225
307 F & M National Corp. ............................. 5,334
6,700 Federal Realty Investment Trust .................. 149,075
5,500 First American Corp. ............................. 244,750
400 First American Financial Corp. ................... 11,500
2,500 First Citizens Bancshares, Inc., Class A ......... 150,000
4,700 First Colony Corp. ............................... 112,213
7,187 First Commerce Corp. ............................. 237,172
1,348 First Commercial Corp. ........................... 42,125
1,200 First Empire State Corp. ......................... 295,200
2,000 First Financial Bancorp .......................... 70,000
5,100 First Financial Corp. ............................ 109,013
4,500 First Hawaiian, Inc. ............................. 124,313
1,909 First Michigan Bank Corp. ........................ 57,747
17,265 First of America Bank Corp. ...................... 800,664
17,100 First Security Corp. ............................. 474,525
17,100 First Tennessee National Corp. ................... 564,300
9,500 First Usa, Inc. .................................. 537,938
11,850 First Virginia Banks, Inc. ....................... 478,444
11,200 Firstar Corp. .................................... 501,200
4,500 Firstbank Puerto Rico ............................ 108,000
4,900 Foremost Corp. of America ........................ 269,500
11,200 Franklin Resources, Inc. ......................... 638,400
4,455 Fremont General Corp. ............................ 105,249
4,200 Fund American Enterprises Holdings, Inc. ......... 323,400
1,274 Gainsco, Inc. .................................... 14,173
3,700 Gallagher (Arthur J.) & Co. ...................... 134,588
8,468 Glendale Federal Savings Bank* ................... 153,483
800 Greater New York Savings Bank* ................... 9,500
900 Hancock Holding Co. .............................. 32,175
5,000 Hartford Steam Boiler Inspection & Insurance Co. . 253,125
7,600 Health & Retirement Properties Trust ............. 131,100
5,000 Health Care Property Investors, Inc. ............. 157,500
26,400 Hibernia Corp., Class A .......................... 280,500
7,400 Horace Mann Educators Corp. ...................... 225,700
32,581 Huntington Bancshares, Inc. ...................... 777,871
6,270 Imperial Credit Industries, Inc.* ................ 153,615
8,700 Integra Financial Corp. .......................... 610,088
332 Investors Financial Services Corp.* .............. 7,262
5,300 John Alden Financial Corp. ....................... 93,413
3,600 John Nuveen Co., Class A ......................... 87,750
9,800 Kansas City Southern Industries, Inc. ............ 455,700
3,300 Keystone Financial, Inc. ......................... 108,075
5,500 Labone, Inc. ..................................... 90,750
5,250 Legg Mason, Inc. ................................. 152,906
21,300 Lehman Brothers Holdings, Inc. ................... 569,775
300 Liberty Bancorp, Inc. ............................ 11,100
3,600 Liberty Corp. .................................... 118,800
8,900 Life Partners Group, Inc. ........................ 184,675
1,900 Life Re Corp. .................................... 51,300
300 Magna Bancorp, Inc. .............................. 9,300
5,200 Magna Group, Inc. ................................ 120,250
800 Mark Twain Bancshares, Inc. ...................... 30,000
20,060 Marshall & Ilsley Corp. .......................... 524,068
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE> 17
- --------------
Galaxy Fund II
- --------------
<TABLE>
SMALL COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
FINANCIAL (CONTINUED)
<S> <C> <C>
8,600 MBIA, Inc. ....................................... $645,000
2,700 Mdc Holdings, Inc. ............................... 19,575
8,700 Mercantile Bancorp, Inc. ......................... 398,025
10,300 Mercantile Bankshares Corp. ...................... 270,375
700 Mercer International, Inc.* ...................... 14,875
27,999 Mercury Finance Co. .............................. 395,486
2,200 Mercury General Corp. ............................ 91,575
13,200 Meridian Bancorp, Inc. ........................... 689,700
1,800 Merry Land & Investment, Inc. .................... 39,150
16,400 MGIC Investment Corp. ............................ 893,800
4,174 Mid-Am, Inc. ..................................... 76,697
1,600 NAC Re Corp. ..................................... 52,200
1,900 National Auto Credit, Inc.* ...................... 28,738
1,050 National Commerce Bancorp. ....................... 32,550
5,600 National Re Corp. ................................ 189,000
8,200 Nationwide Health Properties, Inc. ............... 172,200
2,871 Nbt Bancorp, Inc. ................................ 48,807
11,500 New Plan Realty Trust ............................ 237,188
2,300 North American Mortgage Co. ...................... 47,150
3,440 North Fork Bancorp., Inc. ........................ 82,130
15,350 Northern Trust Corp. ............................. 828,900
8,000 Ohio Casualty Corp. .............................. 288,000
12,337 Old Kent Financial Corp. ......................... 491,938
2,430 Old National Bancorp ............................. 80,798
14,200 Old Republic International Corp. ................. 461,500
2,600 ONBANCorp, Inc. .................................. 91,000
5,156 Orion Capital Corp. .............................. 233,309
16,650 Paine Webber Group, Inc. ......................... 366,300
1,100 PEC Israel Economic Corp.* ....................... 23,650
1,500 PennCorp Financial Group, Inc. ................... 47,250
1,200 People's Bank .................................... 25,800
3,000 Peoples Heritage Financial Group, Inc. ........... 65,250
9,200 Phoenix Resource Cos., Inc. ...................... 219,650
1,200 Pioneer Group, Inc. .............................. 34,800
4,700 Price Enterprises, Inc. .......................... 74,025
3,300 Price (T. Rowe) & Associates, Inc. ............... 174,900
14,500 Progessive Corp. of Ohio ......................... 647,063
3,600 Protective Life Corp. ............................ 121,500
2,100 Provident Bankshares Corp. ....................... 69,825
8,600 Provident Cos., Inc. ............................. 261,225
9,600 Public Storage, Inc. ............................. 195,600
1,100 PXRE Corp. ....................................... 28,050
9,424 Quick & Reilly Group, Inc. ....................... 278,008
2,500 Rcsb Financial, Inc. ............................. 59,063
12,976 Regions Financial Corp. .......................... 569,322
4,729 Resource Bancshares Mortgage Group, Inc.* ........ 73,891
3,900 Resource Mortgage Capital, Inc. .................. 79,463
12,300 Riggs National Corp.* ............................ 152,213
14,100 Rockefeller Center Properties, Inc. .............. 111,038
3,816 Roosevelt Financial Group, Inc. .................. 70,596
13,800 Rouse Co. ........................................ 301,875
7,600 S & T Bancorp, Inc. .............................. 233,700
29,500 Schwab (Charles) Corp. ........................... 755,938
700 Seafield Capital Corp. ........................... 25,900
6,996 Security Capital Pacific Trust ................... 153,912
12,500 Signet Banking Corp. ............................. 310,938
19,220 Southern National Corp. .......................... 533,355
17,150 Southtrust Corp. ................................. 473,769
3,880 Sovereign Bancorp, Inc............................ 43,165
4,400 St. Paul Bancorp, Inc. ........................... 108,350
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
FINANCIAL (CONTINUED)
<S> <C> <C>
8,900 Standard Federal Bancorp., Inc. ................... $ 378,250
6,500 Star Banc Corp. ................................... 419,250
17,500 State Street Boston Corp. ......................... 875,000
1,800 Stewart Information Services Corp. ................ 35,550
22,600 Student Loan Marketing Association (D) ............ 1,728,900
22,127 Summit Bancorp .................................... 818,699
9,350 SunAmerica, Inc. .................................. 471,006
625 Susquehanna Bancshares, Inc. ...................... 17,656
16,700 Synovus Financial Corp. ........................... 563,625
5,600 Taubman Centers, Inc. ............................. 55,300
1,200 TCF Financial Corp. ............................... 43,500
800 Trans Financial, Inc. ............................. 13,300
1,600 Transatlantic Holdings, Inc. ...................... 109,200
400 Trenwick Group, Inc. .............................. 20,400
6,000 Trust Co. of New Jersey ........................... 81,000
8,500 20th Century Industries* .......................... 142,375
12,348 U.S. Bancorp ...................................... 419,832
2,347 UMB Financial Corp. ............................... 90,360
7,387 Union Planters Corp. .............................. 223,457
4,300 United Asset Management Corp. ..................... 199,413
2,600 United Bankshares, Inc. ........................... 76,050
2,700 United Carolina Bankshares Corp. .................. 66,150
3,300 United Cos. Financial Corp. ....................... 105,188
7,600 United Dominion Realty Trust ...................... 111,150
7,200 United Insurance Cos., Inc.* ...................... 159,300
12,000 Unitrin, Inc. ..................................... 552,000
4,300 Universal Health Realty Income Trust .............. 84,388
2,000 UST Corp. ......................................... 261,211
2,900 Vornado Realty Trust .............................. 110,200
10,290 Washington Federal, Inc. .......................... 223,808
13,050 Washington Mutual, Inc. ........................... 388,238
6,200 Washington National Corp. ......................... 165,850
1,100 Washington, Reit .................................. 17,600
3,400 Weingarten Realty Investment ...................... 121,975
3,400 Wellsford Residential Property Trust .............. 74,375
1,100 Whitney Holding Corp. ............................. 34,375
11,300 Wilmington Trust Corp. ............................ 364,425
4,400 Zions Bancorp ..................................... 311,300
-----------
52,193,228
-----------
</TABLE>
<TABLE>
CONSUMER STAPLES - 17.39%
<S> <C> <C>
7,300 AAR Corp .......................................... 148,738
1,900 ADAC Laboratories ................................. 33,488
5,800 Airgas, Inc.* ..................................... 230,550
3,600 Alliance Pharmaceutical Corp.* .................... 62,550
1,000 American Medical Response, Inc.* .................. 35,500
5,700 Amylin Pharmaceuticals, Inc.* ..................... 56,288
4,300 AnnTaylor Stores Corp.* ........................... 77,400
2,400 Apogee Enterprises, Inc. .......................... 52,200
450 Apple South, Inc. ................................. 11,025
19,300 Applied Bioscience International, Inc.* ........... 176,113
6,340 Apria Healthcare Group, Inc.* ..................... 201,295
3,500 Athena Neurosciences, Inc.* ....................... 65,188
1,500 Aztar Corp.* ...................................... 12,750
7,666 Ballard Medical Products .......................... 137,988
5,700 Barr Laboratories, Inc.* .......................... 140,363
4,500 BBN Corp.* ........................................ 114,188
314 Benson Eyecare Corp.* ............................. 2,865
9,193 Bergen Brunswig Corp., Class A .................... 240,167
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE> 18
- --------------
Galaxy Fund II
- --------------
<TABLE>
SMALL COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
CONSUMER STAPLES (CONTINUED)
<S> <C> <C>
9,900 Best Buy Co., Inc.* ............................... $ 172,013
1,300 Bindley Western Industries, Inc. .................. 20,638
7,500 Biogen, Inc.* ..................................... 446,250
1,400 Blair Corp. ....................................... 35,350
69 Block Drug, Inc., Class A ......................... 2,855
3,400 Books-A-Million, Inc.* ............................ 37,400
7,800 Borg-Warner Automotive, Inc. ...................... 259,350
15,650 Brinker International, Inc.* ...................... 262,138
2,100 Brown (Tom), Inc.* ................................ 29,663
7,000 Buffets, Inc.* .................................... 99,750
9,800 Burlington Industries, Inc.* ...................... 123,725
13,300 Callaway Golf Co. ................................. 355,775
12,100 Caraustar Industries, Inc. ........................ 302,500
8,756 Cardinal Health, Inc. ............................. 562,573
24,300 Caremark International, Inc. ...................... 610,538
6,900 Carter-Wallace, Inc. .............................. 112,988
5,600 Cato Corp., Class A ............................... 56,700
16,900 Centocor, Inc.* ................................... 610,513
2,400 Champion Enterprises, Inc.* ....................... 68,700
4,200 Chemed Corp. ...................................... 155,925
9,400 Chiquita Brands International, Inc. ............... 145,700
8,800 Chiron Corp.* ..................................... 864,600
7,400 Chronimed, Inc.* .................................. 148,925
4,600 Church & Dwight Co., Inc. ......................... 96,025
6,900 Claire's Stores, Inc. ............................. 125,063
900 Clarcor, Inc. ..................................... 19,575
5,200 Coca-Cola Bottling Co. ............................ 175,500
20,200 Coca-Cola Enterprises, Inc. ....................... 623,675
2,400 Coleman, Inc.* .................................... 105,900
2,561 Community Health Systems, Inc.* ................... 105,001
4,200 Coventry Corp.* ................................... 71,925
15,750 Cracker Barrel Old Country Store, Inc. ............ 366,188
5,100 Cross (A.T.) Co., Class A ......................... 80,325
4,000 Cytogen Corp.* .................................... 26,000
11,400 Dean Foods Co. .................................... 285,000
1,200 Dekalb Genetics Corp., Class B .................... 89,100
1,300 Delchamps, Inc. ................................... 27,625
700 Diagnostic Products Corp. ......................... 28,263
10,200 Dole Food, Inc. ................................... 392,700
13,843 Dollar General Corp. .............................. 401,447
8,600 Dress Barn, Inc.* ................................. 101,050
5,300 Dreyer's Grand Ice Cream, Inc. .................... 178,875
24,800 Duracell International, Inc. (D) .................. 1,230,700
5,000 Duty Free International, Inc. ..................... 66,250
12,180 Enzo Biochem, Inc.* ............................... 207,060
10,800 Family Dollar Stores, Inc. ........................ 159,300
10,428 FHP International Corp.* .......................... 329,786
900 Fieldcrest Cannon, Inc.* .......................... 18,675
8,800 First Brands Corp. ................................ 246,400
2,500 Flagstar Cos., Inc.* .............................. 7,813
12,900 Foodmaker, Inc.* .................................. 90,300
23,600 Forest Laboratories, Inc.* ........................ 1,150,500
13,199 Foundation Health Corp.* .......................... 503,212
5,200 Fred Meyer, Inc.* ................................. 145,600
3,600 Fresenius USA, Inc.* .............................. 73,350
12,100 Furniture Brands International, Inc.* ............. 111,925
7,600 Furon Co. ......................................... 167,200
3,150 G & K Services, Inc., Class A ..................... 84,263
5,500 Genesis Health Ventures, Inc.* .................... 222,063
7,700 Good Guys, Inc. ................................... 67,375
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
CONSUMER STAPLES (CONTINUED)
<S> <C> <C>
15,100 Griffon Corp.* .................................... $ 141,563
1,700 Guilford Mills, Inc. .............................. 41,650
4,800 Gymboree Corp.* ................................... 125,400
3,800 Haemonetics Corp.* ................................ 62,700
11,400 Hancock Fabrics, Inc. ............................. 112,575
9,200 Hannaford Brothers Co. ............................ 266,800
26,550 Harte-Hanks Communications, Inc. .................. 564,188
9,550 Haverty Furniture Cos., Inc. ...................... 130,119
8,560 HBO & Co. ......................................... 806,780
3,400 Health Care Reit, Inc. ............................ 75,225
4,700 Health Care & Retirement Corp.* ................... 177,425
10,462 Health Management Associates, Inc., Class A* ...... 366,170
12,100 Health Systems International, Inc.* ............... 441,650
22,200 Healthsource, Inc.* ............................... 860,250
32,542 HEALTHSOUTH Corp.* ................................ 1,106,320
9,580 Healthwise of America, Inc.* ...................... 380,805
5,800 Herbalife International, Inc. ..................... 63,800
20,400 HFS, Inc.* ........................................ 991,950
8,100 Hillenbrand Industries, Inc. ...................... 280,463
13,056 Home Shopping Network, Inc.* ...................... 132,192
4,400 Hometown Buffet, Inc. ............................. 53,350
5,422 Horizon/Cms Healthcare Corp.* ..................... 75,908
8,900 Hormel Foods Corp. ................................ 233,625
25,300 Host Marriott Corp.* .............................. 341,550
5,060 Host Marriott Services Corp.* ..................... 35,420
2,550 Hudson Foods, Inc., Class A ....................... 36,338
28,900 IBP, Inc. ......................................... 740,563
9,240 ICN Pharmaceuticals, Inc. ......................... 204,435
11,000 ICOS Corp.* ....................................... 103,125
7,300 Immulogic Pharmaceutical Corp.* ................... 96,725
3,300 Immunex Corp.* .................................... 53,213
7,400 International Dairy Queen, Inc., Class A* ......... 162,916
5,150 International Multifoods Corp. .................... 98,494
9,800 Interneuron Pharmaceuticals, Inc.* ................ 363,825
8,300 Interstate Bakeries Corp. ......................... 203,350
4,200 Invacare Corp. .................................... 118,650
5,500 Isomedix, Inc.* ................................... 77,000
14,890 IVAX Corp. ........................................ 385,279
9,100 J & J Snack Foods Corp.* .......................... 108,063
500 Jacobs Engineering Group, Inc.* ................... 14,125
3,100 Jones Apparel Group, Inc.* ........................ 150,350
11,900 Kaman Corp., Class A .............................. 129,413
5,700 Kaydon Corp. ...................................... 199,500
6,900 Kellwood Co. ...................................... 106,950
19,800 Kinetic Concepts, Inc. ............................ 264,825
9,300 Kohl's Corp.* ..................................... 589,388
12,600 Komag, Inc.* ...................................... 305,550
10,800 La Quinta Inns, Inc. .............................. 317,250
8,121 Lancaster Colony Corp. ............................ 302,507
2,900 Lance, Inc. ....................................... 45,131
22,600 Leggett & Platt, Inc. ............................. 516,975
7,200 Lennar Corp. ...................................... 179,100
900 Life Technologies, Inc. ........................... 25,200
2,527 Ligand Pharmaceuticals, Class B* .................. 29,376
2,600 Lincare Holdings, Inc.* ........................... 84,500
4,950 Lindsay Manufacturing Co. ......................... 170,775
6,600 Liposome, Inc.* ................................... 137,775
4,400 Lone Star Steakhouse & Saloon* .................... 168,300
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE> 19
- --------------
Galaxy Fund II
- --------------
<TABLE>
SMALL COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
CONSUMER STAPLES (CONTINUED)
<S> <C> <C>
9,400 MacFrugals Bargains Close-Outs, Inc.* ............. $ 131,600
4,000 Magellan Health Services, Inc.* ................... 90,000
22,300 Mccormick & Co., Inc. ............................. 490,600
6,400 Medimmune, Inc.* .................................. 100,800
7,200 Meditrust ......................................... 243,900
2,000 MGM Grand, Inc.* .................................. 76,750
12,400 Michael Foods, Inc. ............................... 130,200
3,800 Michaels Stores, Inc.* ............................ 53,200
5,400 Mid Atlantic Medical Services, Inc.* .............. 124,875
13,350 Mirage Resorts, Inc.* ............................. 585,731
4,050 Mohawk Industries, Inc.* .......................... 60,750
6,500 Multicare Cos., Inc.* ............................. 184,438
31,000 Mylan Laboratories, Inc. .......................... 651,000
1,800 National Presto Industries, Inc. .................. 72,000
600 Nautica Enterprises, Inc.* ........................ 28,650
8,600 Neiman-Marcus Group, Inc.* ........................ 191,350
6,000 Noven Pharmaceuticals, Inc.* ...................... 86,250
1,400 Nu-Kote Holding, Inc., Class A* ................... 24,675
2,000 Oakwood Homes Corp. ............................... 99,250
20,086 Office Depot, Inc.* ............................... 394,188
1,564 Omega Healthcare Investors, Inc. .................. 44,770
5,350 Outback Steakhouse, Inc.* ......................... 201,628
3,450 Owens & Minor, Inc. ............................... 41,400
9,800 Oxford Health Plans, Inc.* ........................ 859,950
5,900 Oxford Industries, Inc. ........................... 103,988
7,500 Pacificare Health Systems, Inc., Class B* ......... 639,375
3,900 Park-Ohio Industries, Inc.* ....................... 64,350
800 Penn Traffic Co. .................................. 11,900
4,600 Penwest, Ltd. ..................................... 87,400
11,200 Perrigo Co.* ...................................... 151,200
1,300 Pharmaceutical Marketing Services, Inc.* .......... 17,550
3,000 Phillips-Van Heusen Corp. ......................... 35,250
900 Phycor, Inc.* ..................................... 39,600
5,100 Physician Corp. of America* ....................... 81,600
10,920 Pier 1 Imports, Inc. .............................. 137,865
7,100 Pope & Talbot, Inc. ............................... 98,513
8,400 Pyxis Corp.* ...................................... 215,775
4,000 Quantum Health Resources, Inc.* ................... 42,000
5,300 Ralcorp Holdings, Inc.* ........................... 135,813
3,800 Regis Corp. ....................................... 116,850
8,000 Renal Treatment Centers, Inc.* .................... 190,000
15,500 Revco D. S., Inc.* ................................ 426,250
9,938 Richfood Holdings, Inc. ........................... 280,127
68,340 RJR Nabisco Holdings Corp. (D) .................... 2,067,285
1,200 Roberts Pharmaceutical Corp.* ..................... 22,650
7,500 Rock Bottom Restaurants, Inc.* .................... 71,250
600 Ryland Group, Inc. ................................ 9,675
11,200 Savannah Foods & Industries, Inc. ................. 121,800
6,000 Scherer (R.P.) Corp.* ............................. 263,250
6,500 Scios Inc.* ....................................... 29,656
2,700 Sequus Pharmaceuticals, Inc.* ..................... 37,294
30,050 Service Merchandise, Inc.* ........................ 157,763
6,100 Shopko Stores, Inc. ............................... 85,400
2,900 Showboat, Inc. .................................... 71,050
500 Sierra Health Services, Inc.* ..................... 16,313
2,300 Smithfield Foods, Inc.* ........................... 66,700
5,900 Smucker (J.M.) Co., Class A ....................... 131,275
1,800 Sofamor/Danek Group, Inc.* ........................ 60,975
10,000 Southland Corp.* .................................. 33,125
600 Spiegel, Inc., Class A ............................ 6,150
3,819 Standard Commercial Corp.* ........................ 34,371
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
CONSUMER STAPLES (CONTINUED)
<S> <C> <C>
1,700 Standex International Corp. ....................... $ 51,213
4,600 Stanhome, Inc. .................................... 146,625
23,600 Starbucks Corp.* .................................. 550,175
9,800 Steris Corp.* ..................................... 294,000
10,100 Stop & Shop Cos., Inc.* ........................... 333,300
4,695 Strawbridge & Clothier, Class A ................... 89,792
11,100 Stryker Corp. ..................................... 545,981
700 Summit Care Corp.* ................................ 14,875
6,150 Summit Technology, Inc.* .......................... 145,294
18,700 Sunbeam Corp. ..................................... 317,900
5,100 Sunrise Medical, Inc.* ............................ 71,400
18,800 Sybron International Corp.* ....................... 460,600
11,900 Tambrands, Inc. ................................... 556,325
7,150 Tecnol Medical Products, Inc.* .................... 125,237
5,600 Tejon Ranch Co. ................................... 91,000
1,100 Theratech, Inc.* .................................. 23,375
600 Thermo Cardiosystems, Inc.* ....................... 40,650
3,200 Tiffany & Co. ..................................... 181,600
1,300 Timberland Co., Class A* .......................... 27,788
9,000 Toll Brothers, Inc.* .............................. 155,250
4,130 Tootsie Roll Industries, Inc. ..................... 150,756
21,400 Topps, Inc.* ...................................... 117,700
3,100 Triarc Cos., Inc.* ................................ 38,750
5,600 Tyco Toys, Inc.* .................................. 33,600
27,166 Tyson Foods, Inc., Class A ........................ 631,610
17,375 Unifi, Inc. ....................................... 427,859
10,700 Universal Corp. ................................... 268,838
7,900 Universal Foods Corp. ............................. 301,188
7,000 Universal Health Services, Inc., Class B* ......... 371,875
1,600 Urban Outfitters, Inc.* ........................... 48,400
68,700 U.S. Bioscience, Inc.* ............................ 450,844
6,600 U.S. Filter Corp.* ................................ 184,800
900 Valmont Industries, Inc. .......................... 27,000
12,127 Value Health, Inc.* ............................... 333,493
4,426 Vencor, Inc.* ..................................... 152,697
8,000 Ventritex, Inc.* .................................. 123,000
6,600 Vicor Corp.* ...................................... 100,650
1,400 Visx, Inc.* ....................................... 51,100
8,550 Vivra, Inc.* ...................................... 254,363
6,900 Vons Cos., Inc.* .................................. 214,763
7,300 Waban, Inc.* ...................................... 191,625
8,600 Warnaco Group, Inc., Class A ...................... 207,475
9,422 Watson Pharmaceuticals, Inc.* ..................... 376,880
2,800 WD-40 Co. ......................................... 135,100
1,400 Webb Corp. ........................................ 25,725
3,900 Wellpoint Health Networks, Inc., Class A* ......... 136,500
3,100 Whole Foods Market, Inc.* ......................... 56,575
4,050 Williams-Sonoma, Inc.* ............................ 92,138
1,700 Windmere Corp. .................................... 16,575
600 WLR Foods, Inc. ................................... 8,100
900 Wolverine World Wide, Inc. ........................ 25,200
-----------
50,727,980
-----------
TECHNOLOGY - 15.86%
14,800 Acxiom Corp.* ..................................... 353,350
16,400 Adaptec, Inc.* .................................... 791,300
20,800 Adobe Systems, Inc. (D) ........................... 670,800
2,200 Advanced Technology Laboratories, Inc.* ........... 59,400
19,400 America Online, Inc.* ............................. 1,086,400
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE> 20
- --------------
Galaxy Fund II
- --------------
<TABLE>
SMALL COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
TECHNOLOGY (CONTINUED)
<S> <C> <C>
17,600 American Power Conversion Corp.* .................. $ 176,000
3,000 Amphenol Corp., Class A* .......................... 70,125
57,425 Analog Devices, Inc.* ............................. 1,607,900
6,600 Analysts International Corp. ...................... 224,400
5,600 Anixter International, Inc.* ...................... 94,500
1,700 Antec Corp.* ...................................... 26,350
10,900 Applix, Inc.* ..................................... 381,500
1,500 Aquarion Co. ...................................... 38,250
11,304 Arrow Electronics, Inc.* .......................... 531,288
22,900 Ascend Communications, Inc.* ...................... 1,233,738
25 Associated Group, Inc., Class A* .................. 481
8,686 AST Research, Inc.* ............................... 41,394
11,200 Atmel Corp.* ...................................... 285,600
1,300 Augat, Inc. ....................................... 22,750
3,100 Aura Systems, Inc.* ............................... 15,306
2,000 Avid Technology, Inc.* ............................ 42,000
10,600 Avnet, Inc. ....................................... 511,450
2,500 Banyan Systems, Inc.* ............................. 19,063
8,300 BE Aerospace, Inc.* ............................... 91,300
2,200 BHC Communications, Inc., Class A* ................ 205,700
4,100 BISYS Group, Inc.* ................................ 135,813
3,600 Black Box Corp.* .................................. 61,200
2,000 BMC Industries, Inc. .............................. 43,000
9,100 BMC Software, Inc.* ............................... 498,225
450 Boole & Babbage, Inc.* ............................ 11,531
6,410 Borland International, Inc.* ...................... 115,380
3,000 Boston Technology, Inc.* .......................... 39,750
6,400 Broderbund Software, Inc.* ........................ 241,600
5,000 Brooktree Corp.* .................................. 45,000
6,500 BW/Ip, Inc. ....................................... 116,188
11,800 C-Cube Microsystems, Inc.* ........................ 619,500
2,600 C-Tec Corp.* ...................................... 96,850
15,450 Cadence Design Systems, Inc.* ..................... 681,731
7,100 Calgene, Inc.* .................................... 40,825
6,400 California Microwave, Inc.* ....................... 118,400
9,900 Cascade Communications Corp.* ..................... 888,525
400 Catalina Marketing Corp.* ......................... 31,250
8,300 Catellus Development Corp.* ....................... 64,325
1,100 CDI Corp.* ........................................ 29,425
7,700 Century Telephone Enterprises, Inc. ............... 244,475
8,700 Cephalon, Inc.* ................................... 225,113
1,368 Ceridian Corp.* ................................... 58,824
2,400 Cerner Corp.* ..................................... 55,800
5,400 Cheyenne Software, Inc.* .......................... 85,050
7,700 Chips & Technologies, Inc.* ....................... 69,300
14,600 Cirrus Logic, Inc.* ............................... 263,713
1,300 Coherent, Inc.* ................................... 55,250
600 CommNet Cellular, Inc.* ........................... 16,725
2,000 Computer Network Technology Corp.* ................ 11,250
5,400 Compuware Corp.* .................................. 124,200
4,300 Comverse Technology, Inc.* ........................ 103,738
3,100 Continuum, Inc.* .................................. 129,038
1,900 Control Data Systems, Inc.* ....................... 37,644
1,900 CopyTele, Inc.* ................................... 18,644
2,900 Cox Communications, Inc., Class A* ................ 63,438
9,150 Credence Systems Corp.* ........................... 153,263
26,500 Cypress Semiconductor Corp.* ...................... 311,375
2,400 Cyrix Corp.* ...................................... 57,300
11,900 Dallas Semiconductor Corp. ........................ 218,663
4,000 Datascope Corp.* .................................. 94,000
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
TECHNOLOGY (CONTINUED)
<S> <C> <C>
31,300 Dell Computer Corp.* .............................. $1,048,550
700 Devon Group, Inc.* ................................ 19,950
300 Dialogic Corp.* ................................... 12,675
1,800 DSP Group, Inc.* .................................. 22,500
4,400 Dynatech Corp.* ................................... 103,400
3,600 Ennis Business Forms, Inc. ........................ 40,950
5,100 Exabyte Corp.* .................................... 83,194
700 Exide Electronics Group, Inc. ..................... 9,275
3,000 Fair Issac & Co., Inc. ............................ 90,000
11,366 Federal Signal Corp. .............................. 291,254
1,700 FileNet Corp.* .................................... 98,175
5,500 Firstmerit Corp. .................................. 170,500
10,300 Fiserv, Inc.* ..................................... 288,400
2,800 Fore Systems, Inc.* ............................... 200,200
600 Franklin Electric, Inc. ........................... 21,600
1,400 Fusion Systems Corp.* ............................. 35,350
2,400 General Datacomm Industries, Inc.* ................ 25,500
1,700 Gerber Scientific, Inc. ........................... 25,500
34,900 Guidant Corp. ..................................... 1,888,963
1,500 Gupta Corp.* ...................................... 8,344
1,680 Harman International Industries, Inc. ............. 63,000
2,100 Heartland Wireless Communications, Inc.* .......... 54,075
2,700 Hunt Manufacturing Co. ............................ 41,175
13,200 IDEXX Laboratories, Inc.* ......................... 554,400
5,100 Information Resources, Inc.* ...................... 73,950
32,400 Informix Corp.* ................................... 854,550
18,400 Input/Output, Inc.* ............................... 570,400
3,800 Insituform Technologies, Inc., Class A* ........... 39,900
23,700 Integrated Device Technology, Inc.* ............... 269,588
8,000 Interdigital Communications Corp.* ................ 70,500
9,300 Interface, Inc., Class A .......................... 111,600
7,866 International Cabletel, Inc.* ..................... 236,963
7,600 International Rectifier Corp.* .................... 136,800
3,800 Intervoice, Inc.* ................................. 108,775
18,900 Iomega Corp.* ..................................... 484,313
4,400 Kimball International, Inc., Class B .............. 125,400
16,000 KLA Instruments Corp.* ............................ 362,000
10,100 Lam Research Corp.* ............................... 353,500
1,300 Landmark Graphics Corp.* .......................... 21,613
2,900 Landstar System, Inc.* ............................ 72,500
9,600 Lattice Semiconductor Corp.* ...................... 272,400
25,300 Linear Technology Corp. ........................... 1,056,275
10,000 Macneal-Schwendler Corp. .......................... 142,500
1,800 Macromedia, Inc.* ................................. 76,950
8,000 Magnetek, Inc.* ................................... 63,000
4,799 Mark IV Industries, Inc. .......................... 105,578
1,400 Marquette Electronics, Inc., Class A* ............. 27,125
4,000 Marshall Industries, Inc.* ........................ 122,000
1,500 Material Sciences Corp.* .......................... 22,313
19,000 Maxim Integrated Products, Inc.* .................. 589,000
500 Mcwhorter Technologies, Inc.* ..................... 8,688
6,100 Measurex Corp. .................................... 176,900
3,200 MediSense, Inc.* .................................. 142,600
1,600 Merix Corp.* ...................................... 59,200
3,200 Metricom, Inc.* ................................... 40,800
500 Micro Linear Corp.* ............................... 4,563
1,200 MicroAge, Inc.* ................................... 12,450
5,250 Microchip Technology, Inc.* ....................... 144,375
2,500 Micron Electronics, Inc.* ......................... 24,688
6,100 Microtouch Systems, Inc.* ......................... 93,025
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE> 21
- ----------------
Galaxy Fund II
- ----------------
<TABLE>
SMALL COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
TECHNOLOGY (CONTINUED)
<S> <C> <C>
4,900 Minnesota Educational Computing Corp.* ............ $ 110,250
9,500 Mobile Telecommunications Technologies Corp.* ..... 148,438
18,008 Molex, Inc. ....................................... 628,029
3,900 MTS Systems Corp. ................................. 146,250
9,128 Nellcor Puritan Bennett, Inc.* .................... 586,474
9,200 Netcom On-Line Communication Services, Inc.* ...... 220,800
15,000 NetManage, Inc.* .................................. 163,125
5,800 Network General Corp.* ............................ 232,000
15,000 New World Communications Group, Inc., Class A* .... 294,375
1,900 Novellus Systems, Inc.* ........................... 84,550
3,600 Oak Industries, Inc.* ............................. 89,550
5,600 Octel Communications Corp.* ....................... 270,200
1,300 Ois Optical Imaging Systems, Inc.* ................ 5,038
800 Optical Data Systems, Inc.* ....................... 16,400
1,350 Osmonics, Inc.* ................................... 25,313
1,200 Pacific Scientific Co. ............................ 25,350
22,800 Parametric Technology Corp.* ...................... 892,050
1,171 Paxar Corp.* ...................................... 18,590
7,900 Paxson Communications Corp.* ...................... 123,438
9,850 Paychex, Inc. ..................................... 576,225
5,400 PeopleSoft, Inc.* ................................. 310,500
16,650 Pioneer Standard Electronics, Inc. ................ 255,994
3,100 Policy Management Systems Corp.* .................. 139,500
7,350 Premier Industrial Corp. .......................... 239,794
100 Presstek, Inc.* ................................... 10,838
2,400 Progress Software Corp.* .......................... 36,000
5,300 Protein Design Laboratories, Inc.* ................ 130,513
12,450 Quantum Corp.* .................................... 224,100
12,800 Reynolds & Reynolds Co., Class A .................. 524,800
8,000 Robotic Vision Systems, Inc.* ..................... 129,000
10,000 Sanmina Corp.* .................................... 297,500
6,500 SCI Systems, Inc.* ................................ 238,063
25,004 Seagate Technology, Inc.* ......................... 1,368,969
13,000 Sensormatic Electronics Corp. ..................... 263,250
1,300 Shiva Corp.* ...................................... 117,975
7,200 Sierra On-Line, Inc.* ............................. 242,100
4,900 Softdesk, Inc.* ................................... 66,150
2,100 Spacelabs Medical, Inc.* .......................... 48,825
7,600 Standard Microsystems Corp.* ...................... 121,600
7,900 Standard Register Co. ............................. 187,625
7,746 Sterling Software, Inc.* .......................... 546,093
13,528 Storage Technology Corp.* ......................... 353,419
23,200 StrataCom, Inc.* .................................. 849,700
4,700 Stratus Computer, Inc.* ........................... 130,425
8,900 Structural Dynamics Research Corp.* ............... 300,375
10,000 Sungard Data Systems, Inc.* ....................... 342,500
11,600 Sybase, Inc.* ..................................... 269,700
6,300 Symantec Corp.* ................................... 81,113
2,400 Symmetricom, Inc.* ................................ 23,700
4,000 Synopsys, Inc.* ................................... 128,000
2,400 Syratech Corp.* ................................... 61,800
11,925 System Software Associates, Inc. .................. 304,088
700 Systems & Computer Technology Corp.* .............. 10,325
7,400 Systemsoft Corp.* ................................. 118,400
7,800 Tech Data Corp.* .................................. 130,650
20,000 Teradyne, Inc.* ................................... 335,000
4,600 3D Systems Corp.* ................................. 96,600
6,400 3DO Co.* .......................................... 58,400
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
TECHNOLOGY (CONTINUED)
<S> <C> <C>
6,800 Total System Services, Inc. ....................... $ 282,200
6,60 Tseng Laboratories, Inc. .......................... 66,000
2,100 U.S. Long Distance Corp.* ......................... 41,738
5,400 U.S. Robotics Corp.* .............................. 697,950
9,500 Unitrode Corp.* ................................... 230,375
6,650 Vanguard Cellular Systems, Inc., Class A* ......... 133,000
5,000 VeriFone, Inc.* ................................... 210,000
3,200 Viewlogic Systems, Inc.* .......................... 35,200
8,600 Viking Office Products, Inc.* ..................... 478,375
6,232 Vishay Intertechnology, Inc.* ..................... 168,264
6,500 VLSI Technology, Inc.* ............................ 83,688
9,600 Wallace Computer Services, Inc. ................... 560,400
700 Westcott Communications, Inc.* .................... 12,425
8,800 Western Digital Corp.* ............................ 169,400
23,600 Wheelabrator Technologies, Inc. ................... 392,350
1,500 WMS Industries, Inc.* ............................. 26,063
6,500 Wyle Electronics .................................. 225,063
31,900 Xilinx, Inc.* ..................................... 1,012,825
5,300 Young Broadcasting Corp., Class A* ................ 157,675
11,200 Zero Corp. ........................................ 187,600
6,600 Zilog, Inc.* ...................................... 222,750
-----------
46,272,548
-----------
CONSUMER CYCLICAL - 11.81%
7,750 Acclaim Entertainment, Inc.* ...................... 81,859
13,750 Advanta Corp., Class A ............................ 715,000
6,500 ADVO, Inc. ........................................ 63,375
11,846 AES Corp.* ........................................ 294,669
700 Alexander's, Inc.* ................................ 46,200
1,700 Allen Group, Inc. ................................. 32,938
5,250 American Business Information, Inc.* .............. 84,000
3,200 American Classic Voyages Co. ...................... 26,400
5,100 American Media, Inc., Class A* .................... 18,488
2,200 Ameron, Inc. ...................................... 82,225
600 Arbor Drugs, Inc. ................................. 12,600
4,500 Arctco, Inc. ...................................... 44,438
4,000 Argosy Gaming Corp.* .............................. 30,000
2,300 Arvin Industries, Inc. ............................ 47,725
6,200 Autotote Corp., Class A* .......................... 19,375
28,000 AutoZone, Inc.* ................................... 948,500
5,300 Bandag, Inc. ...................................... 279,575
6,825 Banta Corp. ....................................... 182,569
7,700 Belo (A.H.) Corp., Class A ........................ 261,800
12,466 Bob Evans Farms, Inc. ............................. 202,573
13,937 Bombay Co., Inc.* ................................. 113,238
17,700 Boyd Gaming Corp.* ................................ 196,913
6,200 Breed Technologies, Inc. .......................... 115,475
2,300 Burlington Coat Factory Warehouse Corp.* .......... 27,025
8,850 Butler Manufacturing Co. .......................... 292,050
10,200 Cablevision Systems Corp., Class A* ............... 586,500
5,400 Carlisle Cos., Inc. ............................... 234,225
3,300 Carson Pirie Scott & Co.* ......................... 74,250
5,000 Casey's General Stores, Inc. ...................... 117,500
1,200 Casino America, Inc.* ............................. 8,250
3,100 Casino Magic Corp.* ............................... 12,497
7,800 CellStar Corp.* ................................... 118,950
2,800 Central Newspapers, Inc., Class A ................. 99,750
15,093 Century Communications Corp., Class A* ............ 146,213
4,681 Chris-Craft Industries, Inc.* ..................... 195,446
2,700 Chromcraft Revington, Inc.* ....................... 65,138
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE> 22
- ----------------
Galaxy Fund II
- ----------------
<TABLE>
SMALL COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
CONSUMER CYCLICAL (CONTINUED)
<S> <C> <C>
13,250 Circus Circus Enterprises, Inc.* .................. $ 445,531
16,035 Clayton Homes, Inc. ............................... 334,731
1,600 Clear Channel Communications, Inc.* ............... 90,400
9,980 Comdisco, Inc. .................................... 220,808
3,400 Compusa, Inc.* .................................... 188,275
11,000 Consolidated Stores Corp.* ........................ 368,500
5,300 CPI Corp. ......................................... 84,800
6,400 Crown Crafts, Inc. ................................ 60,800
10,300 Danaher Corp. ..................................... 381,100
5,300 Discovery Zone, Inc.* ............................. 4,638
5,100 Donaldson Co., Inc. ............................... 140,250
2,300 Eagle Hardware & Garden, Inc.* .................... 23,575
7,800 Eckerd Corp.* ..................................... 375,375
1,000 Exide Corp.* ...................................... 23,375
900 Express Scripts, Inc., Class A* ................... 42,075
2,645 Fedders Corp. ..................................... 17,193
3,400 Fibreboard Corp.* ................................. 80,325
1,900 Fisher Scientific International, Inc. ............. 72,675
17,050 Flowers Industries, Inc. .......................... 230,175
105,400 Food Lion, Inc., Class B .......................... 632,400
1,100 Franklin Quest Co.* ............................... 29,700
9,200 Friedman's, Inc., Class A* ........................ 184,000
5,400 Gartner Group, Inc., Class A* ..................... 329,400
10,500 Gaylord Entertainment Co., Class A ................ 283,500
10,200 GenCorp, Inc. ..................................... 127,500
96,900 General Motors Corp., Class E (D) ................. 5,523,300
37,000 General Motors Corp., Class H ..................... 2,340,250
6,000 Gibson Greetings, Inc.* ........................... 81,000
5,250 Goody's Family Clothing, Inc. ..................... 46,594
5,115 Grand Casinos, Inc.* .............................. 153,450
8,200 GTECH Holdings Corp.* ............................. 254,200
5,700 Hanover Direct, Inc. .............................. 6,769
22,000 Harley-Davidson, Inc. ............................. 855,250
10,390 Healthcare Compare Corp.* ......................... 523,396
14,800 Hechinger Co., Class A ............................ 53,650
13,200 Heilig-Meyers Co. ................................. 272,250
3,300 Hollywood Park, Inc. .............................. 32,588
4,000 Houghton Mifflin Co. .............................. 176,500
6,900 Huffy Corp. ....................................... 73,313
1,800 In Focus Systems, Inc.* ........................... 63,113
12,900 Infinity Broadcasting Corp., Class A* ............. 559,538
1,900 Integrated Health Services, Inc. .................. 44,413
9,900 Intelligent Electronics, Inc. ..................... 54,450
4,400 Juno Lighting, Inc. ............................... 60,500
8,150 Kelly Services, Inc., Class A ..................... 261,055
3,000 Kindercare Learning Centers, Inc.* ................ 37,500
3,900 La-Z-Boy Chair Co. ................................ 121,388
5,300 Lafarge Corp. ..................................... 100,038
18,100 Lear Seating Corp.* ............................... 590,513
11,200 Lee Enterprises, Inc. ............................. 236,600
21,600 Manpower, Inc. .................................... 669,600
7,526 Marvel Entertainment Group, Inc.* ................. 79,023
4,400 Medaphis Corp.* ................................... 213,400
3,691 Medpartners/Mullikin, Inc.* ....................... 105,194
1,800 Medusa Corp. ...................................... 55,125
1,725 Men's Wearhouse, Inc.* ............................ 54,338
7,500 Miller (Herman), Inc. ............................. 232,500
5,300 Modine Manufacturing Co. .......................... 140,450
2,275 Morrison Fresh Cooking, Inc.* ..................... 17,916
3,033 Morrison Health Care, Inc.* ....................... 50,803
10,000 Musicland Stores Corp.* ........................... 38,750
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
CONSUMER CYCLICAL (CONTINUED)
<S> <C> <C>
10,793 Myers Industries, Inc.$ ........................... $ 182,132
6,500 National Computer Systems, Inc. ................... 131,625
15,140 NovaCare, Inc.* ................................... 105,980
11,455 Olsten Corp. ...................................... 369,424
16,200 Omnicom Group, Inc. ............................... 729,000
10,720 OrNda Healthcorp* ................................. 308,200
1,800 Oshkosh Truck Corp., Class B ...................... 27,225
7,050 PETsMART, Inc.* ................................... 255,563
3,900 PHH Corp. ......................................... 216,938
4,300 Pinkertons, Inc.* ................................. 93,525
1,500 Playboy Enterprises, Inc., Class B* ............... 15,188
6,900 Players International, Inc.* ...................... 65,658
4,100 Primadonna Resorts, Inc.* ......................... 62,525
9,800 QUALCOMM, Inc.* ................................... 406,700
1,100 Renters Choice, Inc.* ............................. 19,113
1,400 Republic Gypsum Co. ............................... 18,375
6,300 Rio Hotel & Casino, Inc.* ......................... 96,075
1,600 Robert Half International, Inc.* .................. 77,800
6,350 Rollins, Inc. ..................................... 148,431
6,600 Ross Stores, Inc. ................................. 165,825
4,550 Ruby Tuesday, Inc.* ............................... 104,650
14,600 Ruddick Corp. ..................................... 178,850
75,000 Safeway, Inc.* .................................... 2,137,500
2,900 Scholastic Corp.* ................................. 199,375
8,962 Schulman (A.), Inc. ............................... 189,322
20,600 Shaw Industries, Inc. ............................. 226,600
1,000 Smith (A.O.) Corp. ................................ 23,625
8,600 Smith's Food & Drug Centers, Inc.,Class B ......... 206,400
4,900 Sodak Gaming, Inc.* ............................... 116,375
3,800 Sotheby's Holdings, Inc., Class A ................. 55,575
8,000 Southdown, Inc. ................................... 189,000
7,350 Spartan Motors, Inc. .............................. 56,044
5,700 Spelling Entertainment Group, Inc.* ............... 57,000
2,800 Standard-Pacific Corp. ............................ 20,300
20,738 Staples, Inc.* .................................... 422,527
6,800 Station Casinos, Inc.* ............................ 79,050
5,850 Stewart Enterprises, Inc., Class A ................ 250,088
11,756 Sun Healthcare Group, Inc.* ....................... 155,767
2,800 Sun Television & Appliances, Inc. ................. 11,550
4,900 Superior Industries International, Inc. ........... 122,500
8,400 TBC Corp.* ........................................ 60,900
2,500 U.S. Home Corp.* .................................. 64,375
9,900 USG Corp.* ........................................ 251,213
2,400 Walbro Corp. ...................................... 48,900
1,700 Washington Post Co., Class B ...................... 506,813
4,600 Weis Markets, Inc. ................................ 138,575
8,100 Western Publishing Group, Inc.* ................... 79,988
8,200 Westwood One, Inc.* ............................... 150,675
3,500 Winnebago Industries, Inc. ........................ 30,188
-----------
34,456,574
-----------
UTILITIES - 11.14%
11,100 AGL Resources, Inc. ............................... 203,963
34,600 Allegheny Power Systems, Inc. ..................... 1,050,975
7,200 American Water Works, Inc. ........................ 277,200
1,400 Arch Communications Group, Inc.* .................. 32,375
600 Aspect Telecommunications Corp.* .................. 27,450
15,400 Atlantic Energy, Inc .............................. 257,950
15,200 Boston Edison Co .................................. 410,400
10,250 Brooklyn Union Gas Co ............................. 274,188
700 California Water Service Co. ...................... 24,500
</TABLE>
See Notes to Financial Statements.
20
<PAGE> 23
- ----------------
Galaxy Fund II
- ----------------
<TABLE>
SMALL COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
UTILITIES (CONTINUED)
<S> <C> <C>
1,900 Cellular Communications International, Inc.* ...... $ 63,175
600 Cellular Communications of Puerto Rico, Inc.* ..... 16,200
38,900 Centerior Energy Corp. ............................ 311,200
4,800 Central Louisiana Electric, Inc. .................. 129,000
10,100 Central Maine Power Co. ........................... 146,450
2,700 CILCORP, Inc. ..................................... 116,100
18,100 Cincinnati Bell, Inc. ............................. 941,200
9,900 CIPSCO, Inc. ...................................... 382,388
8,655 Citizens Utilities Co., Class B ................... 94,126
23,900 CMS Energy Corp. .................................. 705,050
13,624 Comsat Corp. ...................................... 318,461
15,200 Delmarva Power & Light Co. ........................ 323,000
29,050 DPL, Inc. ......................................... 693,569
22,950 DQE, Inc. ......................................... 662,681
3,150 E'town Corp. ...................................... 85,838
3,300 Eastern Utilities Associates ...................... 70,950
4,800 Embrace Systems Corp. (B)* ........................ 0
28,900 Enova Corp. ....................................... 661,088
7,200 Equitable Resources, Inc. ......................... 210,600
25,800 Florida Progress Corp. ............................ 880,425
28,900 Frontier Corp. .................................... 910,350
9,500 Geotek Communications, Inc.* ...................... 97,375
9,450 Glenayre Technologies, Inc.* ...................... 361,463
5,600 Hawaiian Electric Industries, Inc. ................ 196,000
13,000 Idaho Power Co. ................................... 377,000
7,800 IES Industries, Inc. .............................. 217,425
24,700 Illinova Corp. .................................... 694,688
600 IPALCO Enterprises, Inc. .......................... 16,050
18,300 Kansas City Power & Light Co. ..................... 466,650
11,700 Ku Energy Corp. ................................... 336,375
9,500 L G & E Energy Corp. .............................. 407,313
3,900 Lincoln Telecommunications Co. .................... 75,075
28,800 Long Island Lighting Co. .......................... 507,600
8,500 MAPCO, Inc. ....................................... 474,938
19,400 MCN Corp. ......................................... 448,625
1,300 MFS Communications Co., Inc.* ..................... 80,925
23,814 MidAmerican Energy Co. ............................ 425,675
8,200 Minnesota Power & Light Co. ....................... 227,550
15,400 Montana Power Co. ................................. 333,025
7,200 National Fuel Gas Co. ............................. 249,300
11,200 Nevada Power Co. .................................. 245,000
16,100 New England Electric System ....................... 615,825
20,400 New York State Electric & Gas Corp. ............... 479,400
21,005 NEXTEL Communications, Inc., Class A* ............. 396,469
15,500 Nipsco Industries, Inc. ........................... 577,375
1,200 North Carolina Natural Gas Corp. .................. 30,150
36,400 Northeast Utilities ............................... 718,900
1,200 Northwest Natural Gas Co. ......................... 38,100
1,800 Northwestern Public Service Co. ................... 52,200
3,800 NUI Corp. ......................................... 70,775
11,500 Oklahoma Gas & Electric Co. ....................... 458,563
3,300 Orange & Rockland Utilities, Inc. ................. 118,388
2,500 Otter Tail Power Co. .............................. 95,625
10,900 Paging Network, Inc.* ............................. 272,500
600 Pennsylvania Enterprises, Inc. .................... 23,175
900 People's Choice TV Corp.* ......................... 16,425
5,200 PictureTel Corp.* ................................. 161,200
5,544 Piedmont Natural Gas Co., Inc. .................... 123,354
22,100 Pinnacle West Capital Corp. ....................... 638,138
13,500 Portland General Corp. ............................ 415,125
31,400 Potomac Electric Power Co. ........................ 820,325
</TABLE>
[CAPTION]
<TABLE>
VALUE
SHARES (NOTE 2)
- ------ --------
UTILITIES (CONTINUED)
<S> <C> <C>
15,100 Public Service Co. of Colorado .................... $ 532,275
11,300 Public Service Co. of New Mexico* ................. 210,463
6,450 Public Service Co. of North Carolina .............. 103,200
17,000 Puget Sound Power & Light Co. ..................... 433,500
14,400 Rochester Gas & Electric Corp. .................... 311,400
25,700 SCANA Corp. ....................................... 706,750
2,400 Scripps (E.W.) Co., Class A ....................... 100,500
7,400 Sierra Pacific Resources .......................... 185,925
18,300 Southern New England Telecommunications Corp. ..... 736,575
11,700 Southwest Gas Corp. ............................... 201,825
3,500 Southwestern Energy Co. ........................... 42,000
12,900 Southwestern Public Service Co. ................... 428,925
8,500 Symbol Technologies, Inc.* ........................ 298,563
5,600 TCA Cable Tv, Inc. ................................ 163,100
32,600 TECO Energy, Inc. ................................. 810,925
8,600 Telephone & Data Systems, Inc. .................... 397,750
32,200 Tucson Electric Power Co.* ........................ 92,575
18,200 Turner Broadcasting System, Inc., Class B ......... 493,675
8,400 U.S. Cellular Corp. ............................... 289,800
9,400 UGI Corp. ......................................... 199,750
4,700 United Cities Gas Co. ............................. 83,425
6,600 United Water Resources, Inc. ...................... 86,625
11,500 Utilicorp United, Inc. ............................ 329,188
12,800 Valero Energy Corp. ............................... 315,200
5,700 Washington Energy Co. ............................. 116,850
9,000 Washington Gas Light Co. .......................... 196,875
11,500 Washington Water Power Co. ........................ 219,938
4,000 Western Gas Resources, Inc. ....................... 57,500
17,024 Western Resources, Inc. ........................... 519,232
1,500 Western Waste Industries* ......................... 57,188
25,850 Wisconsin Energy Corp. ............................ 733,494
6,600 WPL Holdings, Inc. ................................ 203,775
5,700 WPS Resources Corp. ............................... 191,663
----------
32,491,345
----------
BASIC MATERIALS - 4.98%
4,200 Acme Metals, Inc.* ................................ 76,650
3,600 Actel Corp.* ...................................... 55,350
8,800 Allegheny Ludlum Corp. ............................ 162,800
300 Alpharma, Inc., Class A ........................... 6,975
1,900 Amcol International Corp. ......................... 23,988
800 Armor All Products Corp. .......................... 13,100
300 Ashland Coal, Inc. ................................ 7,013
700 Astec Industries, Inc.* ........................... 7,088
3,300 Birmingham Steel Corp. ............................ 48,675
10,900 Bowater, Inc. ..................................... 406,025
4,400 Brush Wellman, Inc. ............................... 78,650
6,100 Calgon Carbon Corp. ............................... 73,963
4,600 Calmat Co. ........................................ 83,950
7,050 Castle (A.M.) & Co. ............................... 207,975
1,200 Chesapeake Corp. .................................. 36,300
6,300 Consolidated Papers, Inc. ......................... 354,375
11,500 Crompton & Knowles Corp. .......................... 168,188
6,000 Dexter Corp. ...................................... 159,000
23,591 Ethyl Corp. ....................................... 227,063
2,500 Gaylord Container Corp., Class A* ................. 22,969
8,400 Georgia Gulf Corp. ................................ 315,000
6,600 Glatfelter (P.H.) Co. ............................. 114,675
7,300 Handy & Harman .................................... 119,538
</TABLE>
See Notes to Financial Statements.
21
<PAGE> 24
- ----------------
Galaxy Fund II
- ----------------
<TABLE>
SMALL COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
BASIC MATERIALS (CONTINUED)
<S> <C> <C>
7,350 Hanna (M.A.) Co. .................................. $ 255,413
7,600 Harsco Corp. ...................................... 503,500
14,000 IMC Global, Inc. .................................. 511,000
12,500 Intermet Corp.* ................................... 164,063
3,300 International Aluminum Corp. ...................... 88,275
28,500 International Game Technology ..................... 388,313
8,700 Jefferson Smurfit Corp.* .......................... 96,788
7,800 Justin Industries, Inc. ........................... 90,675
4,000 Kennametal, Inc. .................................. 144,500
1,800 Lilly Industries, Inc., Class A ................... 24,525
6,700 Loctite Corp. ..................................... 338,350
11,400 Longview Fibre Co. ................................ 192,375
22,000 LTV Corp.* ........................................ 286,000
2,200 Lukens, Inc. ...................................... 54,725
12,200 Lyondell Petrochemical Co. ........................ 372,100
5,000 Manville Corp.* ................................... 70,000
2,900 Maxxam, Inc.* ..................................... 141,738
7,700 Minerals Technologies, Inc. ....................... 266,613
3,600 Mississippi Chemical Corp. ........................ 72,900
2,400 Mueller Industries, Inc.* ......................... 84,900
6,000 Mycogen Corp. ..................................... 103,500
11,700 Northwestern Steel & Wire Co.* .................... 73,125
14,100 O'Sullivan Corp. .................................. 155,100
4,500 Olin Corp. ........................................ 391,500
9,500 OM Group, Inc. .................................... 352,688
5,900 Oregon Steel Mills, Inc. .......................... 83,338
34,100 Owens-Illinois, Inc.* ............................. 549,863
9,700 Pentair, Inc. ..................................... 244,925
7,400 Platinum Technology, Inc.* ........................ 111,925
6,300 Quanex Corp. ...................................... 137,813
3,300 Rayonier, Inc. .................................... 119,625
11,900 Rhone-Poulenc Rorer, Inc. ......................... 725,900
16,643 RPM, Inc. ......................................... 257,967
6,000 Scotts Co., Class A* .............................. 106,500
9,600 Sealed Air Corp.* ................................. 327,600
1,000 Sequa Corp., Class A* ............................. 34,125
11,900 Shorewood Packaging Corp.* ........................ 179,988
9,300 Solectron Corp.* .................................. 409,200
27,470 Sonoco Products Co. ............................... 748,558
3,000 St. Joe Paper Co. ................................. 173,250
4,900 Telxon Corp. ...................................... 104,125
1,300 Tencor Instruments* ............................... 23,400
23,400 Terra Industries, Inc. ............................ 301,275
500 Texas Industries, Inc. ............................ 31,813
8,300 Thiokol Corp. ..................................... 364,163
500 TriMas Corp. ...................................... 11,000
1,000 Valspar Corp. ..................................... 45,375
5,676 Wausau Paper Mills Co. ............................ 130,548
17,500 Wci Steel, Inc. ................................... 91,875
6,600 Wellman, Inc. ..................................... 155,100
6,500 WHX Corp.* ........................................ 73,125
10,500 Witco Corp. ....................................... 370,125
9,000 Wolverine Tube, Inc.* ............................. 365,625
17,300 Zeigler Coal Holding Co. .......................... 250,850
------------
14,520,952
------------
CAPITAL GOODS - 4.37%
17,500 ADC Telecommunications, Inc.* ..................... 603,750
6,900 AGCO Corp. ........................................ 166,463
5,600 Air & Water Technologies Corp., Class A* .......... 31,500
4,600 Alliant Techsystems, Inc.* ........................ 222,525
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
CAPITAL GOODS (CONTINUED)
<S> <C> <C>
2,800 Allied Products Corp. ............................. $ 63,350
6,300 American Management Systems, Inc.* ................ 160,650
29,600 American Standard Cos., Inc.* ..................... 865,800
13,200 AMETEK, Inc. ...................................... 232,650
7,600 AMSCO International, Inc.* ........................ 106,400
6,000 Applied Power, Inc., Class A ...................... 195,750
7,400 Aptargroup, Inc. .................................. 307,100
13,919 BancTec, Inc.* .................................... 240,103
8,550 Bearings, Inc. .................................... 242,606
4,600 Checkpoint Systems, Inc.* ......................... 114,425
4,100 Coltec Industries, Inc.* .......................... 49,713
8,550 Commercial Intertech Corp. ........................ 161,381
6,666 Commercial Metals Co. ............................. 191,648
600 Corrections Corp. of America* ..................... 34,200
600 Curtiss-Wright Corp. .............................. 31,200
1,100 Daniel Industries, Inc. ........................... 14,850
4,000 Dentsply International, Inc. ...................... 161,000
10,912 Diebold, Inc. ..................................... 432,388
1,900 Digital Microwave Corp.* .......................... 17,100
8,200 Dionex Corp.* ..................................... 290,075
7,500 Duriron Co., Inc. ................................. 206,250
7,100 Federal-Mogul Corp ................................ 132,238
4,200 GATX Corp. ........................................ 193,200
8,500 Gentex Corp.* ..................................... 252,875
6,200 Goulds Pumps, Inc. ................................ 135,625
2,798 Healthdyne Technologies, Inc.* .................... 34,800
7,751 Hubbell, Inc., Class B ............................ 502,846
900 IDEX Corp. ........................................ 34,988
9,200 IMCO Recycling, Inc. .............................. 181,700
1,700 Imo Industries, Inc.* ............................. 10,838
6,600 Kasler Holding Co.* ............................... 52,800
2,800 KEMET Corp.* ...................................... 63,350
6,500 Keystone International, Inc. ...................... 146,250
7,414 Litton Industries, Inc.* .......................... 341,044
10,800 Martech USA, Inc. (B)* ............................ 0
7,000 Mascotech, Inc. ................................... 93,625
1,400 Mid-American Waste Systems, Inc.* ................. 2,450
3,500 Molten Metal Technology, Inc. ..................... 117,250
2,700 Nordson Corp. ..................................... 164,025
2,100 Nortek, Inc.* ..................................... 25,463
2,000 Orbital Sciences Corp.* ........................... 27,000
5,850 Pittway Corp., Class A ............................ 289,575
9,144 Raymond Corp.* .................................... 160,028
5,000 Regal Beloit Corp. ................................ 105,000
1,400 Roper Industries, Inc. ............................ 64,400
1,900 Silicon Valley Group, Inc.* ....................... 46,313
9,900 Simpson Industries, Inc. .......................... 92,813
4,800 Starrett (L.S.) Co., Class A ...................... 120,000
8,100 Stewart & Stevenson Services, Inc. ................ 227,813
21,800 Sundstrand Corp. .................................. 888,350
600 Teleflex, Inc. .................................... 27,075
13,850 Thermo Electron Corp. ............................. 824,075
8,100 Trinity Industries, Inc. .......................... 282,488
5,416 U.S.A. Waste Services, Inc.* ...................... 138,108
8,900 Varian Associates, Inc. ........................... 443,888
8,800 Vulcan Materials Co. .............................. 498,300
5,700 Watts Industries, Inc., Class A ................... 113,288
6,600 Wyman-Gordon Co.* ................................. 111,375
13,200 York International Corp ........................... 646,800
------------
12,734,933
------------
</TABLE>
See Notes to Financial Statements.
22
<PAGE> 25
- ----------------
Galaxy Fund II
- ----------------
<TABLE>
SMALL COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
ENERGY - 3.81%
<S> <C> <C>
4,500 Albemarle Corp. ................................... $ 100,688
23,100 Anadarko Petroleum Corp ........................... 1,282,050
15,852 Apache Corp. ...................................... 426,023
3,500 ARCO Chemical Co. ................................. 181,563
300 Atmos Energy Corp. ................................ 6,900
2,800 Benton Oil & Gas Co.* ............................. 44,100
8,700 Berry Petroleum Co., Class A ...................... 95,700
4,000 BJ Services Co.* .................................. 134,000
540 BJ Services Co. Warrants* ......................... 6,075
19,000 Cabot Corp. ....................................... 579,500
3,400 Cabot Oil & Gas Corp., Class A .................... 48,450
9,960 California Energy Co., Inc.* ...................... 265,185
4,200 Cooper Cameron Corp.* ............................. 176,400
10,300 Devon Energy Corp. ................................ 242,050
7,100 Diamond Shamrock, Inc. ............................ 230,750
13,090 El Paso Natural Gas Co. ........................... 484,330
3,100 Energy Ventures, Inc.* ............................ 82,538
9,000 Enron Oil & Gas Co. ............................... 237,375
1,825 Ensco International, Inc.* ........................ 50,872
200 FINA, Inc., Class A ............................... 9,675
9,000 Finova Group, Inc. ................................ 491,625
4,150 Fuller (H.B.) Co. ................................. 123,463
23,800 Global Marine, Inc.* .............................. 238,000
2,800 Global Natural Resources, Inc.* ................... 37,100
4,100 Hondo Oil & Gas Co.* .............................. 50,738
1,800 KCS Energy, Inc. .................................. 27,900
6,150 KN Energy, Inc. ................................... 191,419
1,200 Lone Star Technologies, Inc.* ..................... 12,600
2,000 Mine Safety Appliances Co. ........................ 92,500
7,050 Mitchell Energy & Development Corp., Class A ...... 121,613
10,715 Murphy Oil Corp. .................................. 459,406
34,100 Ngc Corp. ......................................... 434,775
7,600 Noble Affiliates, Inc. ............................ 247,000
7,800 Noble Drilling Corp.* ............................. 96,525
900 Nuevo Energy Co.* ................................. 25,875
4,100 Oceaneering International, Inc.* .................. 55,863
7,300 Parker & Parsley Petroleum Co. .................... 167,900
21,500 Parker Drilling Co.* .............................. 150,500
5,300 Pogo Producing Co. ................................ 165,625
1,400 Production Operators Corp. ........................ 43,400
10,300 Quaker State Corp. ................................ 144,200
11,600 Questar Corp. ..................................... 382,800
6,000 Reading & Bates Corp.* ............................ 118,500
1,800 RPC, Inc.* ........................................ 18,675
8,700 Seagull Energy Corp.* ............................. 196,838
8,500 Smith International, Inc.* ........................ 214,625
5,300 Snyder Oil Corp. .................................. 44,388
880 Tejas Gas Corp.* .................................. 43,010
15,300 Tesoro Petroleum Corp.* ........................... 130,050
5,600 Texas Meridian Resources Corp.* ................... 67,200
8,800 Tosco Corp. ....................................... 412,500
9,100 Triton Energy, Ltd., Class A ...................... 507,325
1,700 Tuboscope Vetco International Corp.* .............. 16,575
9,900 Ultramar Corp. .................................... 285,863
10,200 Union Texas Petroleum Holdings, Inc. .............. 201,450
6,000 Varco International, Inc.* ........................ 72,750
9,978 Weatherford Enterra, Inc.* ........................ 347,983
-----------
11,122,783
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
TRANSPORTATION - 2.32%
<S> <C> <C>
4,400 Airborne Freight Corp. ............................ $ 111,100
13,900 Alexander & Baldwin, Inc. ......................... 333,600
16,908 America West Airlines, Inc., Class B* ............. 361,409
3,100 American Freightways Corp.* ....................... 39,913
6,800 American President Cos., Ltd. ..................... 156,400
1,600 Arnold Industries, Inc. ........................... 25,200
9,300 Atlantic Southeast Airlines, Inc. ................. 238,313
11,137 Comair Holdings, Inc. ............................. 387,011
6,400 Continental Airlines, Inc., Class B* .............. 360,800
800 Covenant Transport, Inc., Class A* ................ 13,000
7,738 Fritz Cos., Inc.* ................................. 301,782
2,100 Greyhound Lines, Inc.* ............................ 7,875
6,400 Hunt (J.B.) Transport Services, Inc. .............. 126,400
16,200 Illinois Central Corp., Series A .................. 461,700
5,200 Kirby Corp.* ...................................... 89,050
9,100 Kysor Industrial Corp. ............................ 240,013
1,725 Lawyers Title Corp. ............................... 32,344
800 Lo-Jack Corp.* .................................... 7,600
6,300 Mesa Airlines, Inc.* .............................. 67,725
900 M.s. Carriers, Inc.* .............................. 17,100
16,300 Northwest Airlines Corp., Class A* ................ 835,375
9,600 Offshore Logistics, Inc.* ......................... 126,000
7,200 Overseas Shipholding Group, Inc. .................. 131,400
11,000 Republic Industries, Inc.* ........................ 345,125
2,250 Rollins Truck Leasing Corp. ....................... 23,344
16,000 Rural/Metro Corp.* ................................ 428,000
300 Sanifill, Inc.* ................................... 11,513
7,000 Southern Pacific Rail Corp.* ...................... 164,500
2,600 Standard Products Co. ............................. 63,375
14,100 Tidewater, Inc. ................................... 535,800
9,450 TNT Freightways Corp. ............................. 214,988
3,300 Top Source Technologies, Inc.* .................... 21,656
1,400 United Waste Systems, Inc.* ....................... 70,000
3,000 Wabash National Corp. ............................. 56,625
1,600 Werner Enterprises, Inc. .......................... 38,400
2,600 Wisconsin Central Transportation Corp.* ........... 172,900
3,200 XTRA Corp. ........................................ 149,600
----------
6,766,936
----------
METALS AND MINING - 1.80%
2,100 Alumax, Inc.* ..................................... 74,288
13,300 Amax Gold, Inc.* .................................. 91,438
43,000 Battle Mountain Gold .............................. 419,250
3,300 Carpenter Technology Corp. ........................ 127,050
8,071 Coeur d'Alene Mines Corp. ......................... 164,447
6,783 Freeport-McMoRan, Inc. ............................ 270,472
59,032 Freeport-McmoRan Copper & Gold, Inc., Class A ..... 1,815,234
13,300 Hecla Mining Co.* ................................. 101,413
36,400 Newmont Gold Co. .................................. 2,042,950
6,600 Varlen Corp. ...................................... 151,800
----------
5,258,342
----------
DURABLE GOODS - 1.50%
5,200 Acuson Corp.* .................................... . 81,900
1,700 Albany International Corp., Class A ............... 34,000
749 Alltrista Corp.* .................................. 17,882
16,000 Altera Corp.* ..................................... 894,000
6,800 Beckman Instruments, Inc. ......................... 265,200
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE> 26
- ----------------
Galaxy Fund II
- ----------------
<TABLE>
SMALL COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
DURABLE GOODS (CONTINUED)
<S> <C> <C>
3,000 Borg-Warner Security Corp.* ....................... $ 33,375
7,800 Cintas Corp. ...................................... 390,000
12,600 Electronic Arts, Inc.* ............................ 333,900
4,300 Empi, Inc.* ....................................... 79,013
13,200 Fastenal Co. ...................................... 508,200
1,300 Figgie International, Inc., Class A* .............. 17,550
6,500 Genzyme Corp., General Division* .................. 357,500
6,900 HON Industries, Inc. .............................. 158,700
12,500 Mentor Graphics Corp.* ............................ 178,125
16,600 Nabors Industries, Inc.* .......................... 236,550
4,600 OEA, Inc. ......................................... 167,900
5,300 Precision Castparts Corp. ......................... 212,000
12,600 Read-Rite Corp.* .................................. 236,250
6,800 Sequent Computer Systems, Inc.* ................... 79,050
5,200 Valassis Communications, Inc.* .................... 86,450
------------
4,367,545
------------
CONSUMER PRODUCTS - 0.46%
28,200 Readers Digest Association, Inc., Class A (D) ..... 1,332,450
------------
1,332,450
------------
CHEMICALS AND DRUGS - 0.42%
8,400 Betz Laboratories, Inc. ........................... 390,600
8,500 Ferro Corp. ....................................... 241,188
20,400 Lubrizol Corp. .................................... 601,800
------------
1,233,588
------------
MISCELLANEOUS - 0.10%
5,400 Flightsafety International, Inc. .................. 301,050
------------
301,050
------------
BUILDING AND CONSTRUCTION - 0.07%
3,200 Castle & Cooke, Inc.* ............................. 52,400
1,500 Chittenden Corp. .................................. 40,125
2,800 IWC Resources Corp. ............................... 58,100
2,700 TJ International, Inc. ............................ 42,525
------------
193,150
------------
TOTAL COMMON STOCKS ............................... 273,973,404
------------
(Cost $191,393,257)
</TABLE>
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
- --------- --------
U.S. GOVERNMENT OBLIGATION - 0.17%
<S> <C> <C>
U.S. TREASURY BILL (A)(C) - 0.17%
$500,000 4.99%, 06/27/96 .................................. $ 494,055
------------
TOTAL U.S. GOVERNMENT OBLIGATION ................. 494,055
------------
(Cost $494,055)
REPURCHASE AGREEMENT - 4.70%
13,715,715 Chase Securities, Inc.
5.20%, 04/01/96, Dated 03/29/96
Repurchase Price $13,721,658
(Collateralized by U.S. Treasury Bond
11.25%, Due 2015, Total Par Value $9,200,000
Market Value $13,526,875) ........................ 13,715,715
------------
TOTAL REPURCHASE AGREEMENT ....................... 13,715,715
------------
(Cost $13,715,715)
TOTAL INVESTMENTS - 98.79% ................................... 288,183,174
------------
(Cost $205,603,027)
NET OTHER ASSETS AND LIABILITIES - 1.21% ..................... 3,541,077
------------
NET ASSETS - 100.00% ......................................... $291,724,251
============
- ----------
<FN>
* Non-income producing security.
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 March 31, 1996, the Fund's open futures contracts were as follows:
<CAPTION>
NUMBER OF
CONTRACTS CURRENT
PURCHASED EXPIRATION OPENING MARKET
(SOLD) CONTRACT TYPE DATE POSITION VALUE
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
146 Midcap 6/96 $16,844,110 $16,972,500
(D) All or a portion of these shares are used as collateral on open futures
contracts.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE> 27
- ----------------
Galaxy Fund II
- ----------------
<TABLE>
UTILITY INDEX FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCKS - 99.12%
UTILITIES - 74.21%
<S> <C> <C>
3,200 AGL Resources, Inc. ............................... $ 58,800
9,100 Allegheny Power Systems, Inc. ..................... 276,413
14,500 ALLTEL Corp. ...................................... 449,500
15,200 American Electric Power, Inc. ..................... 634,600
1,300 American Water Works, Inc. ........................ 50,050
44,200 Ameritech Corp. ................................... 2,408,900
5,500 Atlantic Energy, Inc. ............................. 92,125
13,900 Baltimore Gas & Electric Co. ...................... 383,988
34,500 Bell Atlantic Corp. ............................... 2,130,375
79,400 BellSouth Corp. ................................... 2,937,800
3,700 Boston Edison Co. ................................. 99,900
2,900 Brooklyn Union Gas Co. ............................ 77,575
12,600 Carolina Power & Light Co. ........................ 469,350
11,000 Centerior Energy Corp. ............................ 88,000
16,300 Central & South West Corp. ........................ 464,550
4,900 Cincinnati Bell, Inc. ............................. 254,800
12,647 Cinergy Corp. ..................................... 379,410
2,400 CIPSCO, Inc. ...................................... 92,700
6,000 CMS Energy Corp. .................................. 177,000
3,600 Columbia Gas System, Inc. ......................... 165,150
2,900 Comsat Corp. ...................................... 67,788
19,200 Consolidated Edison Co. of New York ............... 612,000
6,700 Consolidated Natural Gas Co. ...................... 291,450
4,700 Delmarva Power & Light Co. ........................ 99,875
13,800 Dominion Resources, Inc. .......................... 546,825
7,400 DPL, Inc. ......................................... 176,675
6,100 DQE, Inc. ......................................... 176,138
11,900 DTE Energy Co. .................................... 400,138
16,300 Duke Power Co. .................................... 823,150
24,900 Edison International .............................. 426,413
9,000 Enova Corp. ....................................... 205,875
6,600 Enserch Corp. ..................................... 107,250
18,683 Entergy Corp. ..................................... 523,124
7,900 Florida Progress Corp. ............................ 269,588
14,400 FPL Group, Inc. ................................... 651,600
13,100 Frontier Corp. .................................... 412,650
10,500 General Public Utilities Corp. .................... 346,500
4,650 Glenayre Technologies, Inc.* ...................... 177,863
77,000 GTE Corp. ......................................... 3,378,375
1,700 Hawaiian Electric Industries, Inc. ................ 59,500
18,600 Houston Industries, Inc. .......................... 402,225
3,000 Idaho Power Co. ................................... 87,000
6,300 Illinova Corp. .................................... 177,188
4,050 IPALCO Enterprises, Inc. .......................... 108,338
5,100 Kansas City Power & Light Co. ..................... 130,050
3,600 KU Energy Corp. ................................... 103,500
4,700 LCI International, Inc.* .......................... 115,150
2,800 L G & E Energy Corp. .............................. 120,050
10,700 Long Island Lighting Co. .......................... 188,588
3,800 MCN Corp. ......................................... 87,875
1,800 MFS Communications Co., Inc.* ..................... 112,050
3,900 Midamerican Energy Co. ............................ 69,713
1,900 Minnesota Power & Light Co. ....................... 52,725
3,600 Montana Power Co. ................................. 77,850
3,000 National Fuel Gas Co. ............................. 103,875
4,500 Nevada Power Co. .................................. 98,438
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
UTILITIES (CONTINUED)
<S> <C> <C>
5,500 New England Electric System ....................... $ 210,375
5,700 New York State Electric & Gas Corp. ............... 133,950
9,600 Nextel Communications, Inc., Class A* ............. 181,200
8,900 NGC Corp. ......................................... 113,475
13,300 Niagara Mohawk Power Corp. ........................ 88,113
3,200 NICOR, Inc. ....................................... 85,600
4,700 NIPSCO Industries, Inc. ........................... 175,075
9,600 Noram Energy Corp. ................................ 88,800
8,900 Northeast Utilities ............................... 175,775
4,600 Northern States Power Co. ......................... 224,250
34,000 NYNEX corp. ....................................... 1,695,750
12,000 Ohio Edison Co. ................................... 271,500
3,200 Oklahoma Gas & Electric Co. ....................... 127,600
6,800 Pacific Enterprises ............................... 175,950
33,100 Pacific Gas & Electric Co. ........................ 748,888
34,600 Pacific Telesis Group ............................. 955,825
21,900 Pacificorp ........................................ 457,163
8,600 Paging Network, Inc.* ............................. 215,000
12,400 Panhandle Eastern Corp. ........................... 385,950
17,900 PECO Energy Co. ................................... 476,588
2,100 Peoples Energy Corp. .............................. 67,988
6,800 Pinnacle West Capital Corp. ....................... 196,350
3,700 Portland General Corp. ............................ 113,775
9,600 Potomac Electric Power Co. ........................ 250,800
10,000 P P & L Resources, Inc. ........................... 243,750
5,100 Public Service Co. of Colorado .................... 179,775
20,000 Public Service Enterprise Group, Inc. ............. 550,000
3,900 Puget Sound Power & Light Co. ..................... 99,450
2,700 Questar Corp. ..................................... 89,100
2,700 Rochester Gas & Electric Corp. .................... 58,388
48,300 SBC Communications, Inc. .......................... 2,541,788
5,800 Scana Corp. ....................................... 159,500
7,100 Sonat, Inc. ....................................... 255,600
52,700 Southern Co. ...................................... 1,258,213
4,100 Southern New England Telecommunication Corp. ...... 165,025
2,400 Southwestern Public Service Co. ................... 79,800
9,600 TECO Energy, Inc. ................................. 238,800
3,900 Telephone & Data Systems, Inc. .................... 180,375
17,400 Texas Utilities Co. ............................... 719,925
3,200 United States Cellular Corp.* ..................... 110,400
36,700 U.S. West Communications Group .................... 1,188,163
17,400 Unicom Corp. ...................................... 469,800
8,300 Union Electric Co. ................................ 340,300
3,300 Utilicorp United, Inc. ............................ 94,463
2,300 Washington Gas Light Co. .......................... 50,313
3,600 Washington Water Power Co. ........................ 68,850
4,900 Western Resources, Inc. ........................... 149,450
8,200 Williams Cos., Inc. ............................... 413,075
9,200 Wisconsin Energy Corp. ............................ 261,050
15,189 Worldcom, Inc.* ................................... 698,694
2,800 WPL Holdings, Inc. ................................ 86,450
------------
41,844,615
------------
TECHNOLOGY - 23.90%
38,800 Airtouch Communications, Inc.* .................... 1,207,650
126,800 American Telephone & Telegraph Corp. .............. 7,766,487
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE> 28
- ----------------
Galaxy Fund II
- ----------------
<TABLE>
UTILITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
<CAPTION>
VALUE
SHARES (NOTE 2)
- ------ --------
TECHNOLOGY (CONTINUED)
<S> <C> <C>
6,600 Ascend Communications, Inc.* ...................... $ 355,575
2,600 Century Telephone Enterprises, Inc. ............... 82,550
4,100 Cox Communications, Inc., Class A* ................ 89,688
54,200 MCI Communications Corp. .......................... 1,639,550
4,300 Mobile Telecommunications Technologies Corp.* ..... 67,188
27,098 Sprint Corp. ...................................... 1,029,724
9,033 360 Communications Co.* ........................... 215,655
52,700 Tele-Communications, Inc., Series A, Tci Group* ... 978,244
2,100 Vanguard Cellular Systems, Inc., Class A* ......... 42,000
------------
13,474,311
------------
CONSUMER CYCLICAL - 1.01%
1,300 Cablevision Systems Corp., Class A* ............... 74,750
19,800 Comcast Corp., Special, Class A ................... 350,213
3,400 Qualcomm, Inc.* ................................... 141,100
------------
566,063
------------
TOTAL COMMON STOCKS ............................... 55,884,989
------------
(Cost $51,399,872)
REPURCHASE AGREEMENT - 0.44%
PAR VALUE
- ---------
$ 247,838 Chase Securities, Inc.
5.20%, 04/01/96, Dated 3/29/96
Repurchase Price $247,946
(Collateralized by U.S. Treasury Note,
6.875%, Due 1997, Total Par Value $250,000.
Market Value $253,125) ............................ 247,838
------------
TOTAL REPURCHASE AGREEMENT ........................ 247,838
------------
(Cost $247,838)
TOTAL INVESTMENTS - 99.56% ................................... 56,132,827
------------
(Cost $51,647,710)
NET OTHER ASSETS AND LIABILITIES - 0.44% ..................... 250,668
------------
NET ASSETS - 100.00% ......................................... $ 56,383,495
============
- ----------
<FN>
* Non-income producing security.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE> 29
- ----------------
Galaxy Fund II
- ----------------
<TABLE>
UTILITY INDEX FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
- --------- --------
U.S. GOVERNMENT OBLIGATIONS - 96.86%
U.S. TREASURY NOTES - 72.20%
<S> <C> <C>
$7,552,000 8.63%, 08/15/97 ............................... $7,844,791
5,855,000 5.63%, 08/31/97 ............................... 5,851,891
5,091,000 6.00%, 11/30/97 ............................... 5,112,021
7,200,000 7.88%, 04/15/98 ............................... 7,485,905
1,752,000 9.25%, 08/15/98 ............................... 1,881,543
6,600,000 7.13%, 10/15/98 ............................... 6,792,449
3,000,000 5.13%, 12/31/98 ............................... 2,942,217
3,500,000 5.00%, 01/31/99 ............................... 3,417,712
1,750,000 8.88%, 02/15/99 ............................... 1,884,538
2,800,000 5.50%, 02/28/99 ............................... 2,768,805
3,100,000 7.00%, 04/15/99 ............................... 3,189,153
4,400,000 6.38%, 07/15/99 ............................... 4,450,684
3,400,000 7.75%, 01/31/00 ............................... 3,593,491
4,700,000 5.50%, 04/15/00 ............................... 4,618,309
4,000,000 6.25%, 05/31/00 ............................... 4,022,796
2,953,000 8.75%, 08/15/00 ............................... 3,251,368
3,250,000 7.50%, 11/15/01 ............................... 3,450,814
1,900,000 7.50%, 05/15/02 ............................... 2,024,049
3,000,000 6.38%, 08/15/02 ............................... 3,019,167
1,800,000 6.25%, 02/15/03 ............................... 1,795,858
3,000,000 5.75%, 08/15/03 ............................... 2,898,480
3,600,000 7.25%, 05/15/04 ............................... 3,795,764
3,750,000 7.88%, 11/15/04 ............................... 4,111,759
------------
90,203,564
------------
U.S. TREASURY BONDS - 24.66%
400,000 10.75%, 08/15/05 ............................... 519,511
3,630,000 11.75%, 11/15/14 ............................... 5,262,952
4,100,000 7.25%, 05/15/16 ............................... 4,281,790
7,864,000 8.88%, 08/15/17 ............................... 9,636,538
4,021,000 8.50%, 02/15/20 ............................... 4,778,874
5,850,000 7.50%, 11/15/24 ............................... 6,331,391
------------
30,811,056
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS ............. 121,014,620
------------
(Cost $119,598,353)
REPURCHASE AGREEMENT - 1.33%
$1,664,852 Chase Securities, Inc.
5.20%, 04/01/96, Dated 03/29/96
Repurchase Price $1,665,574
(Collateralized by U.S. Treasury Note,
6.00%, Due 1997, Total Par Value 1,690,000,
Market Value $1,697,394) ...................... $ 1,664,852
------------
TOTAL REPURCHASE AGREEMENT .................... 1,664,852
------------
(Cost $1,664,852)
TOTAL INVESTMENTS - 98.19% ................................... 122,679,472
------------
(Cost - $121,263,205)
NET OTHER ASSETS AND LIABILITIES - 1.81% ..................... 2,264,707
------------
NET ASSETS - 100.00% ......................................... $124,944,179
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE> 30
- ----------------
Galaxy Fund II
- ----------------
<TABLE>
MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
- --------- --------
MUNICIPAL BONDS - 99.06%
<S> <C> <C>
ALABAMA - 4.34%
$ 980,000 Auburn University Revenues, Athletic, Series 1993
5.20%, 04/01/04
Insured: MBIA .................................... $ 975,100
---------
FLORIDA - 4.59%
1,000,000 Florida State Board of Education Capital Outlay
Public Education, Series A, GO
5.70%, 06/01/08 .................................. 1,032,500
---------
GEORGIA - 4.56%
1,000,000 Atlanta Airport Facilities Revenue, Series A
5.20%, 01/01/02
Insured: Ambac ................................... 1,025,000
---------
ILLINOIS - 11.53%
500,000 Chicago Metropolitan Water Reclamation District
Greater Chicago, Series 1993, GO
5.10%, 12/01/03 .................................. 510,000
1,000,000 Illinois Health Facilities Authority Revenue
University of Chicago Hospitals, Series 1993 A
5.25%, 08/15/03
Insured: MBIA .................................... 1,018,750
500,000 Illinois State Sales Tax Revenue, Series V
6.00%, 06/15/08 .................................. 525,000
500,000 Kane County Community School District
Number 304
Geneva, Series 1992, GO
6.00%, 06/01/04
Insured: FGIC .................................... 536,875
---------
2,590,625
---------
LOUISIANA - 2.21%
500,000 Jefferson Parish Hospital Revenue
Service District 1, Series 1993
4.80%, 01/01/02
Insured: FGIC .................................... 496,250
---------
MASSACHUSETTS - 8.19%
1,000,000 Massachusetts State Consolidated Loan,
Series B, GO
5.70%, 08/01/07
Insured: FGIC .................................... 1,040,000
800,000 Springfield, Series 1993 B, GO
5.05%, 01/15/04
Insured: MBIA .................................... 802,000
---------
1,842,000
---------
MISSOURI - 9.35%
$1,000,000 Sikeston Electric Revenue
6.00%, 06/01/04
Insured: MBIA .................................... $1,077,500
1,000,000 St. Louis Water Revenue
5.30%, 07/01/99
Insured: FGIC .................................... 1,023,750
---------
2,101,250
---------
NEVADA - 8.17%
1,000,000 Clark County School District Revenue
Series 1993 B, GO
5.00%, 05/01/02
Insured: FGIC .................................... 1,010,000
300,000 Henderson, Water Revenue, Series 1993 A, GO
5.65%, 12/01/03
Insured: AMBAC ................................... 314,625
500,000 Las Vegas Valley Water District Revenue, GO
5.40%, 09/01/04
Insured: AMBAC ................................... 511,875
---------
1,836,500
---------
NEW HAMPSHIRE - 5.62%
750,000 New Hampshire Hefa
Mary Hitchcock Memorial Hospital, Series 1993 A
5.00%, 08/15/03
Insured: FGIC .................................... 753,750
500,000 New Hampshire Municipal Bond Bank,
Series 1993 A
5.25%, 11/15/03 .................................. 510,000
---------
1,263,750
---------
NEW JERSEY - 4.65%
1,000,000 New Jersey Health Care Facilities
Financing Authority
Dover General Hospital and Medical Center
5.60%, 07/01/02
Insured: MBIA .................................... 1,046,250
---------
NEW YORK - 6.74%
500,000 Battery Park City Authority Revenue
Junior Lien, Series 1993 B
4.70%, 11/01/00 .................................. 496,875
500,000 New York Municipal Water Finance Authority
Water and Sewer System Revenue, Series 1993 B
4.75%, 06/15/01 .................................. 500,625
500,000 New York State Environmental
Facilities Corp., Pcr
5.75%, 06/15/09 .................................. 516,875
---------
1,514,375
---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE> 31
- ----------------
Galaxy Fund II
- ----------------
<TABLE>
MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
- --------- --------
<S> <C> <C>
PENNSYLVANIA - 4.50%
$1,000,000 Pennsylvania State Ida, Economic Development
5.00%, 01/01/00
Insured: Ambac ................................... $ 1,011,250
-----------
TEXAS - 6.22%
500,000 Carrollton Farmers Branch
Independent School District, Series 1993, GO
5.10%, 02/15/04 .................................. 503,750
375,000 Harlingen Waterworks and Sewer System
5.25%, 11/01/10
Insured: MBIA .................................... 367,500
500,000 Houston Water and Sewer System Revenue
Junior Lien, Series 1992 A
5.75%, 12/01/03
Insured: MBIA .................................... 526,875
-----------
1,398,125
-----------
UTAH - 2.38%
525,000 Utah Associated Municipal Power System Revenue
Central St. George Project, Series 1993
5.15%, 12/01/03
Insured: Ambac ................................... 535,500
-----------
VIRGINIA - 4.58%
1,000,000 Virginia State Transportation Board
Transportation Contract Revenue, Route 28 Project
6.00%, 04/01/10 .................................. 1,030,000
-----------
WASHINGTON - 6.83%
$1,000,000 Seattle Municipal Light & Power Revenue, Series B
5.75%, 08/01/07 .................................. $1,033,750
500,000 Washington State Public Power Supply System
Nuclear Project Number 1 Revenue, Series 1993 B
5.10%, 07/01/04
Insured: MBIA .................................... 501,875
-----------
1,535,625
-----------
WISCONSIN - 4.60%
1,000,000 Milwaukee Corporate Purpose, Series A, GO
5.50%, 06/15/08 .................................. 1,033,750
-----------
TOTAL INVESTMENTS - 99.06% ................................... 22,267,850
-----------
(Cost $21,700,230)
NET OTHER ASSETS AND LIABILITIES - 0.94% ..................... 210,388
-----------
NET ASSETS - 100.00% ......................................... $22,478,238
===========
- ----------
<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.
29
<PAGE> 32
- ----------------
Galaxy Fund II
- ----------------
<TABLE>
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1996
<CAPTION>
LARGE SMALL U.S.
COMPANY COMPANY UTILITY TREASURY MUNICIPAL
INDEX FUND INDEX FUND INDEX FUND INDEX FUND BOND FUND
---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost ......................... $ 160,274,011 $ 191,887,312 $ 51,399,872 $ 119,598,353 $ 21,700,230
Repurchase Agreements ....................... 10,238,192 13,715,715 247,838 1,664,852 --
Net unrealized appreciation (depreciation) .. 70,149,869 82,580,147 4,485,117 1,416,267 567,620
------------- ------------- ------------- ------------- -------------
Total investments at value ................ 240,662,072 288,183,174 56,132,827 122,679,472 22,267,850
Cash .......................................... 3,394 327 -- -- --
Receivable for daily variation margin
on futures contracts ....................... -- 99,960 -- -- --
Receivable for investments sold ............... 14,641 2,787,244 -- -- --
Receivable for shares sold .................... 581,329 502,809 92,312 318,402 9,641
Interest and dividend receivables ............. 396,661 343,045 183,927 2,249,784 335,226
------------- ------------- ------------- ------------- -------------
Total Assets .............................. 241,658,097 291,916,559 56,409,066 125,247,658 22,612,717
------------- ------------- ------------- ------------- -------------
LIABILITIES:
Payable for investments purchased ............. 783,206 -- -- -- --
Payable for shares repurchased ................ 49,585 96,224 6,622 139,543 0
Payable to custodian .......................... -- -- 115 -- 114,253
Distributions payable ......................... -- -- -- 121,343 8,716
Payable for daily variation margin
on futures contracts ........................ 56,000 -- -- -- --
Advisory fee payable (Note 4) ................. 19,994 24,021 4,709 10,649 4,799
Administration fee payable (Note 4) ........... 59,986 72,063 14,125 31,944 6,711
------------- ------------- ------------- ------------- -------------
Total Liabilities ....................... 968,771 192,308 25,571 303,479 134,479
------------- ------------- ------------- ------------- -------------
NET ASSETS ..................................... 240,689,326 291,724,251 56,383,495 124,944,179 22,478,238
============= ============= ============= ============= =============
NET ASSETS CONSIST OF:
Par value (Note 3) ............................ $ 11,999 $ 13,083 $ 4,686 $ 12,199 $ 2,203
Paid-in capital in excess of par value ........ 166,726,922 196,883,886 53,402,467 128,763,878 22,997,113
Undistributed (overdistributed)
net investment income ....................... 950,077 291,719 80,298 23,099 21,593
Accumulated net realized gain (loss) on
investments sold and futures contracts ...... 2,769,128 11,827,026 (1,589,073) (5,271,264) (1,110,291)
Unrealized appreciation (depreciation)
of investments and futures contracts ........ 70,231,200 82,708,537 4,485,117 1,416,267 567,620
------------- ------------- ------------- ------------- -------------
TOTAL NET ASSETS ............................... $ 240,689,326 $ 291,724,251 $ 56,383,495 $ 124,944,179 $ 22,478,238
============= ============= ============= ============= =============
SHARES OF BENEFICIAL INTEREST OUTSTANDING ...... 11,998,707 13,083,419 4,686,392 12,198,618 2,202,864
NET ASSET VALUE,
offering and redemption price per share
(Net Assets / Shares Outstanding) ......... $ 20.06 $ 22.30 $ 12.03 $ 10.24 $ 10.20
============= ============= ============= ============= =============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
30
<PAGE> 33
- --------------
GALAXY FUND II
- --------------
<TABLE>
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1996
<CAPTION>
LARGE SMALL U.S.
COMPANY COMPANY UTILITY TREASURY MUNICIPAL
INDEX FUND INDEX FUND INDEX FUND INDEX FUND BOND FUND
---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest (Note 2) ................................ 306,690 558,173 23,703 7,924,207 1,202,574
Dividend (Note 2) ................................ 4,557,162 4,474,825 2,281,470 -- --
----------- ----------- ----------- ----------- ----------
Total Investment Income ........................ 4,863,852 5,032,998 2,305,173 7,924,207 1,202,574
----------- ----------- ----------- ----------- ----------
EXPENSES:
Investment advisory fee (Note 4) .................. 194,615 264,753 55,279 117,603 59,097
Administration fee (Note 4) ....................... 581,697 787,499 164,968 352,810 82,017
Trustees fees (Note 4) ............................ 11,595 15,693 3,288 7,024 1,400
----------- ----------- ----------- ----------- ----------
Total Expenses before reimbursement ............. 787,907 1,067,945 223,535 477,437 142,514
Less: Reimbursement by sub-administrator (Note 4) (11,595) (15,693) (3,288) (7,024) (1,400)
----------- ----------- ----------- ----------- ----------
Total Expenses net of reimbursement ............. 776,312 1,052,252 220,247 470,413 141,114
----------- ----------- ----------- ----------- ----------
NET INVESTMENT INCOME ................................. 4,087,540 3,980,746 2,084,926 7,453,794 1,061,460
----------- ----------- ----------- ----------- ----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Net realized gain (loss) on investment sold ....... 3,658,009 13,922,758 (494,211) 489,553 24,569
Net realized gain (loss) on futures contracts ..... 1,108,385 1,344,925 -- -- --
----------- ----------- ----------- ----------- ----------
Net realized gain (loss) on investments sold
and futures contracts ..................... 4,766,394 15,267,683 (494,211) 489,553 24,569
Net change in unrealized appreciation
(depreciation) on investments sold
and futures contracts .......................... 43,100,141 50,356,620 11,134,521 2,627,125 609,928
----------- ----------- ----------- ----------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS ................................. 47,866,535 65,624,303 10,640,310 3,116,678 634,497
----------- ----------- ----------- ----------- ----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS ...................... $51,954,075 $69,605,049 $12,725,236 $10,570,472 $1,695,957
=========== =========== =========== =========== ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
31
<PAGE> 34
- --------------
GALAXY FUND II
- --------------
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
LARGE COMPANY INDEX FUND SMALL COMPANY INDEX FUND
YEARS ENDED MARCH 31, YEARS ENDED MARCH 31,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD: .................................. $147,597,190 $143,827,623 $235,294,714 $255,346,570
------------ ------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income ............................................. 4,087,540 3,524,343 3,980,746 4,136,582
Net realized gain (loss) on investments sold
and futures contracts ........................................... 4,766,394 3,346,885 15,267,683 5,469,858
Net change in unrealized appreciation
(depreciation) of investments and futures contracts ............. 43,100,141 13,100,963 50,356,620 7,352,947
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting
from operations ................................................. 51,954,075 19,972,191 69,605,049 16,959,387
------------ ------------ ------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income: ............................................ (3,206,646) (3,497,258) (4,757,318) (4,172,587)
Dividends in excess of net investment income ...................... -- -- -- --
Net realized gain on investments .................................. (3,754,041) (3,053,288) (4,274,380) (10,375,944)
Dividends in excess of net realized gain on investments ........... -- -- -- --
Return of capital ................................................. -- -- -- --
------------ ------------ ------------ ------------
Total Dividends ................................................. (6,960,687) (6,550,546) (9,031,698) (14,548,531)
------------ ------------ ------------ ------------
SHARE TRANSACTIONS:
Net proceeds from sales of shares ................................. 78,100,033 21,883,550 40,205,781 31,022,102
Issued to shareholders in reinvestment
of dividends .................................................... 6,344,797 6,276,842 8,699,735 14,147,774
Costs of shares repurchased ....................................... (36,346,082) (37,812,470) (53,049,330) (67,632,588)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from share transactions ..... 48,098,748 (9,652,078) (4,143,814) (22,462,712)
------------ ------------ ------------ ------------
Net increase in net assets ........................................ 93,092,136 3,769,567 56,429,537 (20,051,856)
------------ ------------ ------------ ------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) ...................... $240,689,326 $147,597,190 $291,724,251 $235,294,714
============ ============ ============ ============
(A) Accumulated undistributed (overdistributed) net investment income $ 950,077 $ 69,183 $ 291,719 $ 1,068,291
============ ============ ============ ============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold .............................................................. 4,288,969 1,471,323 1,958,689 1,783,921
Issued to shareholders in reinvestment
of dividends .................................................... 341,875 428,648 418,056 876,546
Repurchased ....................................................... (1,995,829) (2,548,892) (2,647,174) (3,905,141)
------------ ------------ ------------ ------------
Net increase (decrease) in shares outstanding ................... 2,635,015 (648,921) (270,429) (1,244,674)
============ ============ ============ ============
</TABLE>
See Notes to Financial Statements.
32
<PAGE> 35
<TABLE>
<CAPTION>
UTILITY INDEX FUND U.S. TREASURY INDEX FUND MUNICIPAL BOND FUND
YEARS ENDED MARCH 31, YEARS ENDED MARCH 31, YEARS ENDED MARCH 31,
1996 1995 1996 1995 1996 1995
- ------------ ------------ ------------ ------------ ----------- ------------
<C> <C> <C> <C> <C> <C>
$ 52,831,112 $ 68,444,762 $104,250,685 $138,225,244 $24,559,594 $ 33,352,444
- ------------ ------------ ------------ ------------ ----------- ------------
2,084,926 2,746,549 7,453,794 7,489,284 1,061,460 1,335,592
(494,211) (1,051,438) 489,553 (3,631,305) 24,569 (1,071,810)
11,134,521 753,302 2,627,125 (227,559) 609,928 1,013,967
- ------------ ------------ ------------ ------------ ----------- ------------
12,725,236 2,448,413 10,570,472 3,630,420 1,695,957 1,277,749
- ------------ ------------ ------------ ------------ ----------- ------------
(2,114,529) (2,658,065) (7,385,819) (7,582,470) (1,061,460) (1,326,592)
-- -- (67,974) (73,790) -- --
-- (490,699) -- -- -- --
-- (43,424) -- (1,789,194) -- --
-- -- -- (55,162) -- --
- ------------ ------------ ------------ ------------ ----------- ------------
(2,114,529) (3,192,188) (7,453,793) (9,500,616) (1,061,460) (1,326,592)
- ------------ ------------ ------------ ------------ ----------- ------------
6,908,802 7,273,913 38,639,829 12,236,048 2,239,987 3,245,583
1,935,740 2,900,165 6,197,486 8,472,368 953,563 1,209,050
(15,902,866) (25,043,953) (27,260,500) (48,812,779) (5,909,403) (13,198,640)
- ------------ ------------ ------------ ------------ ----------- ------------
(7,058,324) (14,869,875) 17,576,815 (28,104,363) (2,715,853) (8,744,007)
- ------------ ------------ ------------ ------------ ----------- ------------
3,552,383 (15,613,650) 20,693,494 (33,974,559) (2,081,356) (8,792,850)
- ------------ ------------ ------------ ------------ ----------- ------------
$ 56,383,495 $ 52,831,112 $124,944,179 $104,250,685 $22,478,238 $ 24,559,594
============ ============ ============ ============ =========== ============
$ 80,298 $ 109,901 $ 23,099 $ (67,975) $ 21,593 $ 21,592
============ ============ ============ ============ =========== ============
596,420 730,210 3,712,495 1,220,368 218,792 331,420
171,694 299,833 596,650 855,095 93,310 123,821
(1,430,584) (2,529,880) (2,628,230) (4,880,675) (579,680) (1,355,956)
- ------------ ------------ ------------ ------------ ----------- ------------
(662,470) (1,499,837) 1,680,915 (2,805,212) (267,578) (900,715)
============ ============ ============ ============ =========== ============
</TABLE>
See Notes to Financial Statements.
33
<PAGE> 36
- --------------
GALAXY FUND II
- --------------
<TABLE>
LARGE COMPANY INDEX FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<CAPTION>
YEARS ENDED MARCH 31,
-------------------------------------------------------
1996 1995 1994(1) 1993(1) 1992(1)
-------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of year ........ $ 15.76 $ 14.36 $ 14.59 $ 13.04 $ 12.10
-------- -------- -------- -------- -------
Income from Investment Operations:
Net investment income(3) ................ 0.38 0.37 0.36 0.34 0.31
Net realized and unrealized gain (loss)
on investments and futures contracts .. 4.57 1.73 (0.20) 1.55 0.95
-------- -------- -------- -------- -------
Total from Investment Operations .... 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 4.30 1.40 (0.23) 1.55 0.94
-------- -------- -------- -------- -------
Net Asset Value, End of year .............. $ 20.06 $ 15.76 $ 14.36 $ 14.59 $ 13.04
======== ======== ======== ======== =======
Total Return .............................. 31.80% 15.07% 1.02% 14.68% 10.43%
Ratios/Supplemental Data:
Net assets, End of year (in 000's) ........ $240,689 $147,597 $143,828 $133,426 $87,118
Ratios to average net assets:
Net investment income ................... 2.11% 2.48% 2.41% 2.57% 2.79%
Net operating expenses(3) ............... 0.40% 0.40% 0.40% 0.40% 0.40%
Portfolio turnover rate ................... 5% 7% 4% 0% 0%
Average Commission Rate Paid(2) ........... $ 0.0203 NA NA NA NA
<FN>
- ----------
(1) Audited by other auditors
(2) Required disclosure for the year ended 3/31/96.
(3) Net investment income per share and the net operating expense ratios before
reimbursement by the sub-administrator for the years ended March 31, 1996
and 1995 were $0.38 and 0.41% and $0.37 and 0.41%, respectively.
</TABLE>
See Notes to Financial Statements.
34
<PAGE> 37
- --------------
GALAXY FUND II
- --------------
<TABLE>
SMALL COMPANY INDEX FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<CAPTION>
YEARS ENDED MARCH 31,
----------------------------------------------------------------------
1996 1995 1994(1) 1993(1) 1992(1)
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of year ........ $ 17.62 $ 17.49 $ 17.42 $ 15.39 $ 13.08
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income(3) ................ 0.32 0.32 0.26 0.25 0.20
Net realized and unrealized gain (loss)
on investments and futures contracts .. 5.07 0.91 0.39 2.07 2.40
-------- -------- -------- -------- --------
Total from Investment Operations .... 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 4.68 0.13 0.07 2.03 2.31
-------- -------- -------- -------- --------
Net Asset Value, End of year .............. $ 22.30 $ 17.62 $ 17.49 $ 17.42 $ 15.39
======== ======== ======== ======== ========
Total Return .............................. 30.85% 7.60% 3.64% 15.20% 20.04%
Ratios/Supplemental Data:
Net assets, End of year (in 000's) ........ $291,724 $235,295 $255,347 $213,669 $116,290
Ratios to average net assets:
Net investment income ................... 1.52% 1.72% 1.55% 1.80% 2.26%
Net operating expenses(3) ............... 0.40% 0.40% 0.40% 0.40% 0.40%
Portfolio turnover rate ................... 14% 10% 17% 5% 6%
Average Commission Rate Paid(2) ........... $ 0.0225 NA NA NA NA
<FN>
- ----------
(1) Audited by other auditors
(2) Required disclosure for the year ended 3/31/96.
(3) Net investment income per share and the net operating expense ratios before
reimbursement by the sub-administrator for the years ended March 31, 1996
and 1995 were $0.31 and 0.41% and $0.31 and 0.40%, respectively
</TABLE>
See Notes to Financial Statements.
35
<PAGE> 38
- --------------
GALAXY FUND II
- --------------
<TABLE>
UTILITY INDEX FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<CAPTION>
YEARS ENDED MARCH 31,
------------------------------------------------------
1996 1995 1994(1) 1993(1)(2)
------- ------- ------- ---------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of year ................ $ 9.88 $ 9.99 $ 10.93 $ 10.00
------- ------- ------- -------
Income from Investment Operations:
Net investment income (4) ....................... 0.44 0.47 0.43 0.06
Net realized and unrealized gain (loss)
on investments ................................ 2.15 (0.03) (0.93) 0.93
------- ------- ------- -------
Total from Investment Operations ............ 2.59 0.44 (0.50) 0.99
------- ------- ------- -------
Less Dividends:
Dividends from net investment income ............ (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 ............................... (0.44) (0.55) (0.44) (0.06)
------- ------- ------- -------
Net Increase (decrease) in net asset value ........ 2.15 (0.11) (0.94) 0.93
------- ------- ------- -------
Net Asset Value, End of year ...................... $ 12.03 $ 9.88 $ 9.99 $ 10.93
======= ======= ======= =======
Total Return ...................................... 26.61% 4.67% 4.83% 9.85%**
Ratios/Supplemental Data:
Net assets, End of year (in 000's) ................ $56,383 $52,831 $68,445 $38,151
Ratios to average net assets:
Net investment income ........................... 3.79% 4.62% 4.08% 4.66%*
Net operating expenses (4) ...................... 0.40% 0.40% 0.40% 0.40%*
Portfolio turnover rate ........................... 12% 5% 19% 0%
Average Commissions Rate Paid(3) .................. $0.0230 NA NA NA
<FN>
- ----------
* Annualized.
** Not Annualized.
(1) Audited by other auditors
(2) The Fund commenced operations on January 5, 1993.
(3) Required disclosure for the year ended 3/31/96.
(4) Net investment income per share and the net operating expense ratios before
reimbursement by the sub-administrator for the years ended March 31, 1996
and 1995 were $0.44 and 0.41% and $0.47 and 0.41%, respectively.
</TABLE>
See Notes to Financial Statements.
36
<PAGE> 39
- --------------
GALAXY FUND II
- --------------
<TABLE>
U.S. TREASURY INDEX FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<CAPTION>
YEARS ENDED MARCH 31,
---------------------------------------------------------------------
1996 1995 1994(1) 1993(1) 1992(1)(2)
-------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of year ................ $ 9.91 $ 10.38 $ 11.01 $ 10.39 $ 10.00
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income (3) ....................... 0.66 0.65 0.58 0.63 0.51
Net realized and unrealized gain (loss)
on investments ................................ 0.33 (0.29) (0.29) 0.75 0.38
-------- -------- -------- -------- --------
Total from Investment Operations ............ 0.99 0.36 0.29 1.38 0.89
-------- -------- -------- -------- --------
Less Dividends:
Dividends from net investment income ............ (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 ............................. (0.66) (0.83) (0.92) (0.76) (0.50)
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value ........ 0.33 (0.47) (0.63) 0.62 0.39
-------- -------- -------- -------- --------
Net Asset Value, End of year ...................... $ 10.24 $ 9.91 $ 10.38 $ 11.01 $ 10.39
======== ======== ======== ======== ========
Total Return ...................................... 10.09% 3.81% 2.40% 13.69% 8.99%**
Ratios/Supplemental Data:
Net assets, End of year (in 000's) ................ $124,944 $104,251 $138,225 $145,353 $102,830
Ratios to average net assets:
Net investment income ........................... 6.35% 6.43% 5.21% 5.87% 6.40%*
Net operating expenses (3) ...................... 0.40% 0.40% 0.40% 0.40% 0.40%*
Portfolio turnover rate ........................... 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 net operating expense ratios before
reimbursement by the sub-administrator for the years ended March 31, 1996
and 1995 were $0.66 and 0.41% and $0.65 and 0.41%, respectively.
</TABLE>
See Notes to Financial Statements.
37
<PAGE> 40
- --------------
GALAXY FUND II
- --------------
<TABLE>
MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<CAPTION>
YEARS ENDED MARCH 31,
----------------------------------
1996 1995 1994(1)(2)
------- ------- ----------
<S> <C> <C> <C>
Net Asset Value, Beginning of year ............................. $ 9.94 $ 9.89 $ 10.00
------- ------- -------
Income from Investment Operations:
Net investment income (3) .................................... 0.46 0.46 0.43
Net realized and unrealized gain (loss)
on investments ............................................. 0.26 0.05 (0.11)
------- ------- -------
Total from Investment Operations ......................... 0.72 0.51 0.32
------- ------- -------
Less Dividends:
Dividends from net investment income ......................... (0.46) (0.46) (0.43)
Dividends from net realized capital gains .................... -- -- --
------- ------- -------
Total Dividends .......................................... (0.46) (0.46) (0.43)
------- ------- -------
Net Increase (decrease) in net asset value ..................... 0.26 0.05 (0.11)
------- ------- -------
Net Asset Value, End of year ................................... $ 10.20 $ 9.94 $ 9.89
======= ======= =======
Total Return ................................................... 7.36% 5.34% 3.10%**
Ratios/Supplemental Data:
Net assets, End of year (in 000's) ............................. $22,478 $24,560 $33,352
Ratios to average net assets:
Net investment income ........................................ 4.54% 4.72% 4.35%*
Net operating expenses (3) ................................... 0.60% 0.60% 0.60%*
Portfolio turnover rate ........................................ 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 net operating expense ratios before
reimbursement by the sub-administrator for the years ended March 31, 1996
and 1995 were $0.46 and 0.61% and $0.46 and 0.63%, respectively.
</TABLE>
See Notes to Financial Statements.
38
<PAGE> 41
- --------------
GALAXY FUND II
- --------------
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION:
Galaxy Fund II ("Galaxy II" or the "Trust"), formerly the "IBM Mutual Funds", is
registered under the Investment Company Act of 1940, as amended, as an open-end
investment company established as a Massachusetts Business Trust. 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 average 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 average 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 in accordance with procedures
established by and under the general supervision of the Board of Trustees.
REPURCHASE AGREEMENTS: Each Fund may invest in repurchase agreement transactions
with institutions that the Trust's investment adviser has determined are
creditworthy pursuant to guidelines established by the Trust's Board of
Trustees. Each repurchase agreement is recorded at cost. Each Fund requires that
the collateral be transferred to the Trust's custodian in a manner that is
intended to enable the Fund to obtain those securities in the event of a
counterparty default. The value of the collateral securities, including accrued
interest, is monitored daily to ensure that the value of the collateral equals
or exceeds 101% of the repurchase price. Repurchase agreements involve certain
risks in the event of default or insolvency of the counterparty, including
possible delays or restrictions upon a Fund's ability to dispose of the
underlying collateral securities and a possible decline in the value of the
underlying securities during the period while the Fund seeks to assert its
rights.
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 the 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. On
September 7, 1995, the Board of Trustees approved an amendment to the dividend
policy of the Large Company Index Fund pursuant to which the Fund will declare
and pay dividends from net investment income on an annual basis. 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.
39
<PAGE> 42
- --------------
GALAXY FUND II
- --------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
4. INVESTMENT ADVISORY, ADMINISTRATIVE 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 July 1, 1994, the Trust and Fleet National Bank (the "Administrator")
became parties to an administrative 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 IBM Mutual 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. Each Trustee is
entitled to receive for services of the Trust, The Galaxy VIP Fund ("VIP") and
The Galaxy Fund ("Galaxy"), affiliated registered investment companies, an
aggregate fee of $23,000 per annum plus certain other fees for attending or
participating in meetings. The Chairman of the Boards of Trustees of the Trust,
VIP and Galaxy is entitled to an additional annual fee of $4,000 and the
President and Treasurer of the Trust, VIP and Galaxy is entitled to an
additional annual fee of $2,500 for their services in these capacities. These
fees are allocated among the Funds of the Trust, VIP and Galaxy based on their
relative net assets. 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.
40
<PAGE> 43
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GALAXY FUND II
- --------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. SECURITIES TRANSACTIONS:
<TABLE>
The cost of purchases and the proceeds from sales of securities (excluding
short-term investments and futures contracts) for the year ended March 31, 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 .... $ -- $ -- $50,387,468 $ 9,981,775
Small Company Index .... -- -- 35,752,607 53,278,979
Utility Index .......... -- -- 6,369,713 13,136,571
U.S. Treasury Index .... 57,156,535 39,744,791 -- --
Municipal Bond ......... -- -- 374,875 2,581,497
</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 March 31, 1996 for each Fund is as follows:
<CAPTION>
Cost Appreciation (Depreciation) Net
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Large Company Index ........ $170,593,449 $73,672,203 $ 3,603,580 $70,068,623
Small Company Index ........ 205,708,904 96,336,317 13,862,047 82,474,270
Utility Index .............. 51,827,434 6,779,666 2,474,273 4,305,393
U.S. Treasury Index ........ 121,285,939 2,985,630 1,592,097 1,393,533
Municipal Bond ............. 21,700,230 584,966 17,346 567,620
</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, Utility Index and Municipal Bond
Funds may enter into stock index futures contracts that are traded on a national
exchange. These Funds will enter into stock index futures contracts for hedging
purposes, 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
securities comprising the index. In addition, the Municipal Bond Fund may
purchase put or call options on interest rate and municipal bond index futures
contracts 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.
41
<PAGE> 44
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of
Galaxy Fund II:
We have audited the accompanying statements of assets and liabilities of
the Large Company Index Fund, Small Company Index Fund, Utility Index Fund, U.S.
Treasury Index Fund and Municipal Bond Fund (five series of Galaxy Fund II),
including the portfolios of investments, as of March 31, 1996, and the related
statements of operations for the year then ended, and the statements of changes
in net assets and financial highlights for each of the two years in the period
then ended. These financial statements and financial highlights are the
responsibility of Galaxy Fund II's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audits. The financial highlights of the aforementioned portfolios of Galaxy Fund
II for periods prior to the year ended March 31, 1995, presented herein, were
audited by other auditors whose report dated May 16, 1994 expressed an
unqualified opinion on such financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1996 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
aforementioned portfolios of Galaxy Fund II as of March 31, 1996, the results of
their operations for the year then ended and the changes in their net assets and
financial highlights for each of the two years in the period then ended, in
conformity with generally accepted accounting principles.
Boston, Massachusetts Coopers & Lybrand L.L.P.
May 10, 1996
42
<PAGE> 45
[GALAXY FUND -----------------
II LOGO] 4400 Computer Drive BULK RATE
P.O. Box 5108 U.S. POSTAGE PAID
Westborough, MA 01581-5108 PERMIT NO. 54201
BOSTON, MA
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