[FRONT COVER]
SEMI-ANNUAL REPORT
September 30, 2000
[COVER GRAPHICS: ACORN, COLUMN, GRADUATION CAP, HANDSHAKE]
GALAXY FUND II
GALAXY FUNDS
Galaxy II Large Company Index Fund
Galaxy II Small Company Index Fund
Galaxy II Utility Index Fund
Galaxy II U.S. Treasury Index Fund
Galaxy II Municipal Bond Fund
[GALAXY FUNDS: GALAXY LOGO]
Galaxy
Funds
<PAGE>
MARKET OVERVIEW
[BEGIN SIDEBAR]
"AFTER RISING SHARPLY DURING APRIL, IN ANTICIPATION OF ANOTHER HIKE IN INTEREST
RATES, BOND YIELDS FELL INTO SEPTEMBER AND THEIR PRICES ROSE."
[END SIDEBAR]
BY FLEET INVESTMENT ADVISORS INC.
Changing expectations for economic growth, earnings, inflation, and
interest rates kept stock prices volatile over the six months ended September
30, 2000, and resulted in mixed returns for the major market indices. Bond
prices also fluctuated during this time, but generally ended the reporting
period higher than they were when it began.
For the six-month reporting period, the Standard & Poor's(REGISTRATION
MARK) 500 Composite Stock Price Index (the "S&P(REGISTRATION MARK) 500 Index"),
a benchmark for large-company stocks, had a total return of -3.60%, the Standard
& Poor's(REGISTRATION MARK) Small Cap 600 Stock Price Index (the
"S&P(REGISTRATION MARK) 600 Index"), a benchmark for small-company stocks, had a
total return of 4.35% and the Standard & Poor's(REGISTRATION MARK) Utilities
Composite Stock Index (the "S&P(REGISTRATION MARK) Utilities Index") a benchmark
of utility stocks included in the S&P(REGISTRATION MARK) 500 Index, had a total
return of 41.33%. Over the same period, the U.S. Treasury component of the
Salomon Smith Barney Broad Investment Grade Bond Index (the "U.S. Treasury
Index") returned 4.16%, the Lehman Brothers Quality Intermediate Municipal Bond
Index, a benchmark for municipal bonds, had a total return of 3.67%, and the
Lehman Brothers Seven-year Municipal Bond Index earned a total return of 3.93%.
GROWTH FINALLY SHOWS SIGNS OF SLOWING
Economic growth remained robust in the second quarter of 2000, when the
reporting period began. The Gross Domestic Product ("GDP") that measures the
output of U.S. goods and services improved at an annualized rate of 5.60% for
the quarter, up from 4.80% in the first quarter of 2000. With higher energy
prices, inflation had risen to an annual rate of 3.70%.
Concerned that strong growth would drive inflation higher, the Federal
Reserve ("the Fed") boosted short-term rates by 50 basis points (0.50%) in May.
This increase in rates, combined with rate hikes that the Fed had imposed since
June of 1999, eventually brought signs of slower growth in the third quarter of
2000.
After advancing sharply for most of the first quarter, stock prices fell
sharply in the second quarter, as investors grew nervous about excessive
valuations in the technology sector and the impact of higher interest rates and
slower growth on company profits. After earning a total return of 2.30% in the
first quarter, the S&P 500(REGISTRATION MARK) Index lost 3.01% in the month that
followed and continued its slide into May. With a sizable representation of
technology shares, the small-cap sector was hit particularly hard in the
correction.
Soon after the Fed raised interest rates at its May meeting, signs of
slower growth began to emerge. With the prospect of a peak in short-term rates,
and greater certainty that the economy would continue to expand, stock prices
advanced from the middle of May to the beginning of September. Because investors
had become more focused on company fundamentals, punishing firms for even slight
disappointments in earnings, stock prices were quite volatile during this time.
The renewed emphasis on fundamentals also helped investors recognize the many
values available outside the technology sector, which broadened market
leadership. Small-cap and utility stocks benefited particularly in this
environment.
After rising sharply during April, in anticipation of another hike in
interest rates, bond yields fell into September and their prices rose.
Fixed-income investors were also encouraged by the prospects for an economic
"soft landing" and a peak in short-term interest rates. As concern mounted over
the future for earnings in a slower-growing economy, corporate bonds tended to
underperform Treasuries and other government issues.
In September, stock investors became increasingly worried about how
corporate earnings would respond to slower growth, rising energy prices, and a
weak euro. At the same time, bond investors became concerned that higher energy
prices might add enough upward pressure on inflation to prompt further hikes in
short-term interest rates. In this environment, both stocks and bonds forfeited
some of the gains they had made during the late spring and summer. Corporate
bonds and stocks of larger firms were hit particularly hard by earnings
concerns.
1
<PAGE>
[BEGIN SIDEBAR]
"AS LONG AS CREDIT QUALITY REMAINS A CONCERN FOR INVESTORS, TREASURY BONDS AND
OTHER HIGHER-QUALITY ISSUES MAY CONTINUE TO OUTPERFORM CORPORATE BONDS."
[END SIDEBAR]
SOFT LANDING STILL LIKELY
Although high oil prices and other factors could prompt higher interest
rates, we continue to foresee a "soft landing" for the economy. In months to
come, however, stock prices will probably remain vulnerable to concerns about
earnings and interest rates. With investors more focused on fundamentals, market
leadership may continue to broaden.
Bond prices are likely to continue trading in a relatively narrow range. As
long as credit quality remains a concern for investors, Treasury bonds and other
higher-quality issues may continue to outperform corporate bonds.
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS
<S> <C> <C> <C> <C> <C> <C>
AS OF SEPTEMBER 30, 2000 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS LIFE OF FUND
------------------------------------------------------------------------------------------------------
Large Company Index Fund
(INCEPTION DATE 10/1/90) (3.37)%* 13.14% 16.09% 21.30% 18.79%
......................................................................................................
Small Company Index Fund
(INCEPTION DATE 10/1/90) 4.02%* 24.79% 5.56% 13.07% 16.29%
......................................................................................................
Utility Index Fund
(INCEPTION DATE 1/5/93) 41.30%* 43.42% 22.38% 17.76% 15.17%
......................................................................................................
U.S. Treasury Index Fund
(INCEPTION DATE 6/4/91) 4.08%* 7.03% 5.89% 6.05% 7.18%
......................................................................................................
Municipal Bond Fund
(INCEPTION DATE 4/15/93) 3.08%* 4.83% 3.74% 4.52% 4.86%
......................................................................................................
</TABLE>
* Unannualized total returns.
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NO GUARANTEE OF
FUTURE RESULTS. 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.
2
<PAGE>
PORTFOLIO REVIEWS
[PHOTO OMITTED]
G. JAY EVANS BECAME MANAGER OF THE GALAXY II LARGE COMPANY INDEX FUND, THE
GALAXY II SMALL COMPANY INDEX FUND AND THE GALAXY II UTILITY INDEX FUND IN JULY
1998. HE HAD PREVIOUSLY MANAGED THESE FUNDS UNTIL MARCH OF 1996 AND HAS MANAGED
THE GALAXY EQUITY VALUE FUND SINCE APRIL 1992.
GALAXY II
LARGE COMPANY INDEX FUND
BY G. JAY EVANS, CFA
PORTFOLIO MANAGER
The Galaxy II Large Company Index Fund seeks to match, before the deduction
of operating expenses, the price and yield performance of large-capitalization
stocks as represented by the S&P(REGISTRATION MARK) 500 Index. By investing in
publicly traded U.S. stocks according to their representation in the
S&P(REGISTRATION MARK) 500 Index, the Fund is also structured to deliver the
same volatility and risk as the Index.
For the six months ended September 30, 2000, the S&P(REGISTRATION MARK) 500
Index had a total return of -3.60%, and the Galaxy II Large Company Index Fund
had a total return of -3.37% (after the deduction of operating expenses.) The
Fund's six-month performance represents a correlation coefficient of 99.99%. The
correlation coefficient measures the degree to which the Fund's performance
moved in line with its target index during the period.
TECHNOLOGY SELL-OFF, EARNINGS DISAPPOINTMENTS
Large-capitalization stocks offer greater liquidity and, often, market
dominance that investors prize during periods of competitive pricing and slower
demand. Many of these stocks are global competitors sensitive to foreign
investment, currency swings, and economic developments overseas. Generally,
these and other characteristics earn large-cap stocks higher valuations. During
periods of rising confidence and earnings acceleration, however, they may lose
leadership to companies with smaller capitalizations as investors seek higher
returns in the broader market.
As concern grew about the impact of higher interest rates and slower
economic growth on corporate profits in the second quarter of 2000, the stock
prices of larger firms suffered less in the ensuing market volatility than the
prices for stocks of smaller companies. The tables turned in the third quarter,
however, as investors abandoned the technology sector, which represents a large
part of the S&P 500(REGISTRATION MARK) Index. Large-cap stocks also suffered as
earnings for some firms fell below expectations and a jump in oil prices
weakened the economic prospects and currencies of countries that do business
with U.S. multinational firms.
LOOKING AHEAD
The recent weakness in stocks of multinational firms could continue if oil
prices remain strong. At the same time, a change in the monetary policy that has
previously supported larger-cap stocks should aid the stocks of smaller firms.
Large-cap stocks could benefit, however, as investors continue to broaden their
interest in stocks outside the technology sector and recognize the values
available in stocks that the market may have punished too harshly for near-term
earnings disappointments.
GALAXY II LARGE COMPANY INDEX FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF SEPTEMBER 30, 2000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
TECHNOLOGY 20%
FINANCE 15%
CONSUMER CYCLICAL 7%
ENERGY 7%
CONSUMER STAPLES 17%
U.S. GOVTERNMANT OBLIGATIONS, REPURCHASE AGREEMENT AND
NET OTHER ASSETS AND LIABILITIES 1%
UTILITIES 2%
BASIC MATERIALS 2%
COMMUNICATIONS 20%
INDUSTRIAL 9%
GALAXY II LARGE COMPANY INDEX FUND
GROWTH OF $10,000 INVESTMENT*
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GALAXY LARGE CO
S&P 500 INDEX INDEX FUND
OCT 1, 91 10000 10000
3/92 14255 13539
3/93 15570 15526
3/94 16396 15683
3/95 19255 18048
3/96 25067 23787
3/97 31364 28383
3/98 44244 41806
3/99 53902 49395
3/00 61554 57893
9/00 58994 55944
*SINCE INCEPTION ON 10/1/90. THE S&P(REGISTRATION MARK) 500 INDEX IS AN
UNMANAGED INDEX, WHICH DOES NOT REFLECT MANAGEMENT FEES AND OTHER EXPENSES. AN
INVESTOR CANNOT INVEST IN THE INDEX.
3
<PAGE>
PORTFOLIO REVIEWS
GALAXY II
SMALL COMPANY INDEX FUND
BY G. JAY EVANS, CFA
PORTFOLIO MANAGER
The Galaxy 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 S&P(REGISTRATION MARK) 600 Index. By investing in
smaller-capitalization stocks according to their representation in the
S&P(REGISTRATION MARK) 600 Index, the Fund is also structured to deliver the
same volatility and risk as the Index.
For the six months ended September 30, 2000, the S&P(REGISTRATION MARK) 600
Index produced a total return of 4.35%. Over the same time the Galaxy II Small
Company Index Fund returned 4.02% (after the deduction of operating expenses).
The Fund's six-month performance represents a correlation coefficient of 99.96%.
The correlation coefficient measures the degree to which the Fund's performance
moved in line with its target index during the period.
SMALL-CAP STOCKS OUTPERFORM
Smaller companies are generally more oriented towards the domestic economy
and are thought to be more flexible in responding to business opportunities.
Although they are usually less sensitive to macroeconomic developments,
small-cap stocks generally attract investors when economic confidence is rising.
While the prices of small-cap stocks tend to be more volatile than the prices
for large-cap stocks, volatility can be offset by the potential for higher total
returns in small-cap stocks.
Small-cap stocks far outpaced large-cap stocks during the six-month period
ended September 2000, as the economy slowed and the need for further hikes in
interest rates eased. With slower growth, there was also a heightened risk of
earnings disappointment for many of the larger, high-expectation technology
stocks. At the same time, a jump in oil prices weakened the economic prospects
of the trading partners of U.S. multinational firms. Although small-cap stocks
underperformed as the technology sector weakened early in the quarter, investors
favored the apparently lower risk and better valuations of small-cap stocks in
the months that followed.
ATTRACTIVE VALUATIONS
If it looks like growth and inflation are sufficiently under control for
the Fed to end the hikes in short-term interest rates, small-cap stocks could
enjoy a sustainable rebound. The outperformance by small cap stocks in recent
months suggests the potential for upward swings in one market sector to offset
lesser performance in another. While pockets of overvaluation remain in some
parts of the small-cap sector, most small-cap stocks could continue to benefit
from valuations that are generally attractive versus other areas of the market.
GALAXY II SMALL COMPANY INDEX FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF SEPTEMBER 30, 2000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMMUNICATIONS 6%
CONSUMER STAPLES 22%
INDUSTRIAL 18%
FINANCE 13%
BASIC MATERIALS 2%
U.S. GOV'T OBLIGATION, REPURCHASE AGREEMENT AND
NET OTHER ASSETS AND LIABILITIES 3%
CONSUMER CYCLICAL 15%
TECHNOLOGY 13%
UTILITIES 3%
ENERGY 5%
GALAXY II SMALL COMPANY INDEX FUND
GROWTH OF $10,000 INVESTMENT*
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMPOSITE SMALL
COMPANY INDEX S&P 600 GALAXY SMALL CO
10/1/90 10000 10000 10000
3/92 16338 15684 15833
3/93 19140 18487 18246
3/94 20100 21158 18915
3/95 21848 22435 20354
3/96 28559 30442 26632
3/97 30514 31586 29188
3/98 43830 46353 41220
3/99 35444 39727 33311
3/00 46325 48201 43479
9/00 48338 50821 45226
SINCE INCEPTION ON 10/1/90. THE S&P(REGISTRATION MARK) 600 INDEX AND RUSSELL
SPECIAL SMALL COMPANY(TRADE MARK) INDEX ARE EACH UNMANAGED INDICES, WHICH DO
NOT REFLECT MANAGEMENT FEES AND OTHER EXPENSES. AN INVESTOR CANNOT INVEST IN
THESE INDICES.
**TO SUPPLEMENT THE PERFORMANCE COMPARISON, THE FUND'S INVESTMENT ADVISOR HAS
COMPILED THIS BLENDED INDEX WHICH IS COMPRISED OF THE RUSSELL SPECIAL SMALL
COMPANY(TRADE MARK) INDEX, THE FUND'S ORIGINAL BENCHMARK, FOR THE PERIOD FROM
INCEPTION ON 10/1/90 THROUGH JUNE 30, 1997 AND THE S&P(REGISTRATION MARK) 600
INDEX, THE FUND'S CURRENT BENCHMARK, FROM JULY 1, 1997 TO PRESENT. THE FUND
CHANGED ITS BENCHMARK INDEX ON JULY 1, 1997.
4
<PAGE>
PORTFOLIO REVIEWS
GALAXY II UTILITY INDEX FUND
BY G. JAY EVANS, CFA
PORTFOLIO MANAGER
The Galaxy II Utility Index Fund seeks to match, before the deduction of
operating expenses, the price and yield performance of stocks as represented in
the S&P(REGISTRATION MARK) Utilities Index. To this end, the Fund invests in
publicly traded stocks according to their representation in the S&P(REGISTRATION
MARK) Utilities Index, the Fund is structured to deliver the same volatility and
risk as the Index.
For the six months ended September 30, 2000, the S&P(REGISTRATION MARK)
Utilities Index produced a total return of 41.33%, and the Galaxy II Utility
Index Fund had a total return of 41.30% (after the deduction of operating
expenses). The Fund's six-month performance represents a correlation coefficient
of 99.96%. The correlation coefficient measures the degree to which the Fund's
performance moved in line with its target index during the period.
UTILITIES OUTPERFORM STRONGLY
Utility stocks have historically offered defensive characteristics that are
desirable during periods of high market volatility. With strong yields,
utilities have also performed well when short-term interest rates decline prior
to economic expansions. Utility stocks will most likely remain defensive income
vehicles despite significant industry changes resulting from deregulation.
Several larger companies will now sell electric power, while others narrow their
focus to regulated transmission and distribution. Change is also underway in
telecommunications, as it moves toward deregulation and into new areas such as
data transmission, cellular operations and the Internet.
After underperforming other market sectors when interest rates were rising
in 1999 and the first few months of 2000, utility stocks strongly outperformed
during the reporting period. After the Fed raised interest rates at its May
meeting, it looked like economic growth was slowing enough for the Fed to put
further rate hikes on hold. Of added assistance were the exceptional strength of
several individual energy stocks and the outstripping of the power supply in
several areas due to a hiatus in new capacity. Utility stocks have also
benefited from the excitement of several mergers in the industry.
A POSITIVE CLIMATE AHEAD
We believe that power deregulation will eventually foster the construction
of additional capacity. Until that occurs, however, the profit margins of many
utility firms will continue to expand. An additional slowdown in economic growth
that prompts a peak in interest rates could further benefit the
interest-sensitive utility sector. Because of their defensive nature, utility
stocks may also remain popular with investors if stock prices as a whole remain
volatile.
GALAXY II UTILITY INDEX FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF SEPTEMBER 30, 2000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
UTILITIES 70%
ENERGY 29%
NET OTHER ASSETS AND LIABILITIES 1%
GALAXY IIUTILITY INDEX FUND
GROWTH OF $10,000 INVESTMENT*
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMPOSITE S&P 600 GALAXY UTILITY
UTILITY INDEX** UTILITY INDEX INDEX FUND
1/5/93 10000 10000 10000
3/93 11034 10852 10985
3/94 10503 10762 10454
3/95 11083 11683 10941
3/96 14145 14330 13853
3/97 14533 14567 14332
3/98 20515 19780 19936
3/99 20206 21618 19631
3/00 21956 22400 21106
9/00 31031 30532 29823
* SINCE INCEPTION ON 1/5/93. THE S&P(REGISTRATION MARK) UTILITES INDEX AND
RUSSELL 1000(TRADE MARK) UTILITY INDEX ARE EACH UNMANAGED INDICES, WHICH DO
NOT REFLECT MANAGEMENT FEES AND OTHER EXPENSES. AN INVESTOR CANNOT INVEST IN
THESE INDICES.
**TO SUPPLEMENT THE PERFORMANCE COMPARISON, THE FUND'S INVESTMENT ADVISOR HAS
COMPILED THIS BLENDED INDEX WHICH IS COMPRISED OF THE RUSSELL 1000(TRADE MARK)
UTILITY INDEX, THE FUND'S ORIGINAL BENCHMARK, FOR THE PERIOD FROM INCEPTION ON
1/5/93 THROUGH JUNE 30, 1997 AND THE S&P(REGISTRATION MARK) UTILITIES INDEX,
THE FUND'S CURRENT BENCHMARK, FROM JULY 1, 1997 TO PRESENT. THE FUND CHANGED
ITS BENCHMARK INDEX ON JULY 1, 1997.
5
<PAGE>
PORTFOLIO REVIEWS
[PHOTO OMITTED - DAVID LINDSEY]
[BEGIN SIDEBAR]
DAVID LINDSEY HAS MANAGED THE GALAXY II U.S. TREASURY INDEX FUND SINCE JULY
1994. HE HAS MANAGED FIXED-INCOME PORTFOLIOS FORFLEET INVESTMENT ADVISORS INC.
SINCE 1986.
[END SIDEBAR]
GALAXY II U.S. TREASURY INDEX FUND
BY DAVID LINDSAY
PORTFOLIO MANAGER
The Galaxy II U.S. Treasury Index Fund seeks to match, before the deduction
of operating expenses, the price and yield performance of U.S. Treasury notes
and bonds represented in the U.S. Treasury Index, an unmanaged index of U.S.
Treasury securities. The Fund attempts to meet this objective by investing in
U.S. Treasury notes and bonds according to their representation in the U.S.
Treasury Index.
For the six months ended September 30, 2000, the U.S. Treasury Index posted
a total return of 4.16%, and the Galaxy II U.S. Treasury Index Fund had a total
return of 4.08% (after deduction of operating expenses). This performance
represents a correlation coefficient of 98.98%. The correlation coefficient
measures the degree to which the Fund's performance moved in line with its
target index during the period.
A CHANGING ECONOMIC OUTLOOK
Because Treasury bonds are highly liquid and backed by the full faith and
credit of the U.S. Government, they usually appeal to investors during economic
or market turbulence. With yields that are generally lower than other taxable
issues, Treasuries are frequently less attractive in positive economic and
market climates.
After outperforming other bonds in the first quarter of 2000, as a further
rise in interest rates raised new concerns about future economic growth,
Treasury bonds outperformed by a slight margin in the second quarter. Besides
the additional economic uncertainty at that time, Treasuries benefited from
government buyback programs that reduced supplies of new and existing issues.
With investors concerned that higher energy prices might boost inflation but
interested in the relative value available in shorter maturities, the
intermediate-term bonds where the Fund focuses its investments tended to
outperform longer maturities.
Treasuries underperformed other fixed-income sectors slightly in the third
quarter, as investors focused on both the value available in non-Treasury issues
and the likelihood that the Fed would achieve a "soft landing" for the economy.
For the six-month period ended September 30, 2000, Treasuries and
investment-grade corporates earned similar returns. The Fund continued to
benefit in the third quarter from its emphasis on intermediate-term issues,
which participated in most of the gain in bond prices. Throughout the period, we
added positions in both longer-term intermediate and long maturities to reflect
a lengthening in the average maturity of investments in the Fund's benchmark.
MARKET OUTLOOK FOR TREASURIES
Yields on U.S.Treasury securities are a little low relative to those of
bonds in other sectors. On the other hand, Treasuries are likely to be helped by
an absence of the kinds of credit problems that can hurt some corporate bonds in
a period of slowing growth. In addition, Treasuries should continue to benefit
from the ongoing federal surplus, and the resulting paydowns and buy-backs of
Government debt. The low relative yields and the positive factors cited above
are likely to offset each and produce returns for Treasuries that are in line
with those of other sectors. Given the relative safety of Treasuries, this is a
favorable outlook for the sector.
GALAXY II U.S. TREASURY INDEX FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF SEPTEMBER 30, 2000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
U.S. TREASURY NOTES 63%
U.S. TREASURY BONDS 35%
REPURCHASE AGREEMENT AND NET OTHER ASSETS AND LIABILITIES 2%
GALAXY IIU.S. TREASURY INDEX FUND
GROWTH OF $10,000 INVESTMENT*
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
SALOMON SMITH
BARNEY U.S. TREASURY GALAXY TREASURY
INDEX INDEX FUND
6/4/91 10000 10000
3/92 10932 10899
3/93 12474 12390
3/94 12810 12687
3/95 13362 13171
3/96 14764 14500
3/97 15388 15066
3/98 17264 16831
3/99 18419 17905
3/00 19099 18333
9/00 19894 19080
*SINCE INCEPTION ON 6/4/91. THE SALOMON SMITH BARNEY U.S. TREASURY INDEX IS AN
UNMANAGED INDEX, WHICH DOES NOT REFLECT MANAGEMENT FEES AND OTHER EXPENSES.
AN INVESTOR CANNOT INVEST IN THE INDEX.
6
<PAGE>
PORTFOLIO REVIEWS
[PHOTO OMITTED]
[BEGIN SIDEBAR]
GLENN MIGLIOZZI IS THE MANAGING DIRECTOR OF FIXED INCOME INVESTMENTS FOR FLEET
INVESTMENT ADVISORS INC. HE IS ALSO A MEMBER OF FLEET'S TAX-EXEMPT INVESTMENT
POLICY COMMITTEE, WHICH HAS MANAGED THE GALAXY II MUNICIPAL BOND FUND SINCE
1996.
[END SIDEBAR]
GALAXY II MUNICIPAL BOND FUND
BY GLEN MIGLIOZZI, CFA
MANAGING DIRECTOR, FIXED INCOME INVESTMENTS
The Galaxy II Municipal Bond Fund seeks to provide a high level of income
exempt from regular federal income tax that is consistent with prudent
investment management and 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 the six months ended September 30, 2000, the Galaxy II Municipal Bond
Fund earned a total return of 3.08% (after deduction of operating expenses).
During the same time, intermediate municipal bond funds tracked by Lipper, Inc.
had an average total return of 3.27%, the Lehman Brothers Seven-year Municipal
Bond Index had a total return of 3.93%, and the Lehman Brothers Quality
Intermediate Municipal Bond Index had a total return of 3.67%.
REDUCED SUPPLIES, HEALTHY DEMAND
Municipal bonds performed well against taxable issues for most of the
reporting period, benefiting from supplies that were about 20% below the levels
of a year earlier and healthy demand from investors hoping to capitalize on the
attractive prices and higher yields available in the municipal market. Returns
for municipals with intermediate maturities, where the Fund concentrates its
investments, generally outpaced the performance of other maturities.
The Fund also benefited from our continued emphasis on higher-quality
issues, which tend to outperform as investors gr0w more uncertain about where
the economy will head. To take advantage of changes in the spreads between
yields of different maturities, Fund investments were transformed from a
"laddered" maturity structure to a more "barbelled" portfolio that gives greater
emphasis to issues with maturities of two to three years and 12 to 15 years.
NEW OPPORTUNITIES
In the final weeks of the reporting period, municipal prices weakened as
corporate investors sold municipals to take advantage of expected opportunities
from an increase in the supply of corporate bonds. While there may be additions
to the supply of municipal bonds in coming months, we expect demand to be
strong. At current prices, municipals should be quite appealing to investors.
As always, the Fund will look for new purchasing opportunities that any
near-term market weakness might bring. The plan is to continue emphasizing bonds
with strong credit quality and higher coupons that can not be called in by their
issuers before maturity if interest rates were to fall. Because we believe that
intermediate term issues with longer maturities offer good value, and could
outperform in months to come, we are now giving greater attention to these
securities.
GALAXY II MUNICIPAL BOND FUND
GEOGRAPHICAL DISTRIBUTION OF TOTAL NET ASSETS AS OF SEPTEMBER 30, 2000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
EAST 34%
MOUNTAIN 10%
PACIFIC 13%
NORTH CENTRAL 14%
CASH EQUIVALENTS AND NET OTHER ASSETS AND LIABILITES 2%
SOUTH 24%
OTHER TERRITORY 3%
GALAXY II MUNICIPAL BOND FUND
GROWTH OF $10,000 INVESTMENT*
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
LEHMAN BROTHERS LEHMAN BROTHERS GALAXY II
QUALITY INTERMEDIATE SEVEN-YEAR MUNICIPAL
BOND INDEX MUNICIPAL BOND INDEX BOND FUND
4/15/93 10000 10000 10000
3/94 10269 10235 10310
3/95 10933 10885 10857
3/96 11791 11762 11657
3/97 12325 12307 12141
3/98 13366 13419 13147
3/99 14141 14214 13831
3/00 14283 13960 13823
9/00 14807 14509 14249
*SINCE INCEPTION ON 4/15/93. THE LEHMAN BROTHERS SEVEN-YEAR MUNICIPAL BOND INDEX
AND QUALITY INTERMEDIATE MUNICIPAL BOND INDEX ARE UNMANAGED INDICES, WHICH DO
NOT REFLECT MANAGEMENT FEES AND OTHER EXPENSES. AN INVESTOR CANNOT INVEST IN
THESE INDICES.
7
<PAGE>
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
William Greilich
VICE PRESIDENT
W. Bruce
McConnel, Esq.
SECRETARY
INVESTMENT ADVISOR
Fleet Investment
Advisors Inc.
75 State Street
Boston, MA
02109
DISTRIBUTOR
Provident Distributors, Inc.
3200 Horizon Drive
King of Prussia,
Pennsylvania 19406
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 Provident
Distributors, Inc. by calling toll-free 1-877-BUY-GALAXY (1-877-289-4252). This
report is submitted for the general information of shareholders of Galaxy II. It
is not authorized for distribution to prospective investors unless accompanied
or preceded by an effective prospectus for each Fund of Galaxy II, which
contains more information concerning the investment policies and expenses of the
Funds as well as other pertinent information. Read the prospectus carefully
before you invest.
SHARES OF THE FUNDS ARE NOT BANK DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, FLEETBOSTON FINANCIAL CORPORATION, OR ANY OF ITS AFFILIATES, FLEET
INVESTMENT ADVISORS INC., OR ANY FLEET BANK. SHARES OF THE FUNDS ARE NOT
FEDERALLY INSURED BY, GUARANTEED BY, OBLIGATIONS OF OR OTHERWISE SUPPORTED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENTAL AGENCY. 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 AMOUNT INVESTED.
[GRAPHIC OMITTED: RECYCLE SYMBOL]
This report was printed on recycled paper.
8
<PAGE>
LARGE COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2000 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS - 99.29%
COMMUNICATIONS - 20.12%
8,500 Adaptec, Inc.*................... $ 170,000
55,000 ADC Telecommunications, Inc.*.... 1,478,984
25,686 ALLTEL Corp...................... 1,340,488
187,370 America OnLine, Inc.*............ 10,071,137
306,060 American Telephone &
Telegraph Corp. ................. 8,990,514
6,544 Andrew Corp.*.................... 171,371
153,419 BellSouth Corp................... 6,175,115
14,855 Cabletron Systems, Inc.*......... 436,366
11,470 CenturyTel, Inc.................. 312,557
567,328 Cisco Systems, Inc.*............. 31,344,872
30,941 Clear Channel
Communications, Inc. ............ 1,748,166
73,222 Comcast Corp., Class A*.......... 2,997,526
12,400 Comverse Technology, Inc.*....... 1,339,200
22,508 Corning, Inc..................... 6,684,876
169,495 Disney (Walt) Co................. 6,483,184
7,173 Dow Jones & Co., Inc............. 433,966
21,714 Gannett Co., Inc................. 1,150,842
71,929 Global Crossing, Ltd.*........... 2,229,799
5,874 Harcourt General, Inc............ 346,566
24,616 Interpublic Group of Cos., Inc... 838,482
76,000 JDS Uniphase Corp.*.............. 7,196,250
6,312 Knight-Ridder, Inc............... 320,728
265,653 Lucent Technologies, Inc......... 8,119,020
15,875 McGraw-Hill Cos., Inc............ 1,009,055
4,112 Meredith Corp.................... 121,304
175,559 Motorola, Inc.................... 4,959,542
24,800 Network Appliance, Inc.*......... 3,158,900
13,814 New York Times Co., Class A...... 543,063
61,870 Nextel Communications, Inc.,
Class A* ........................ 2,892,422
241,648 Nortel Networks Corp............. 14,393,159
14,466 Omnicom Group, Inc............... 1,055,114
45,996 Palm, Inc.*...................... 2,434,914
60,400 QUALCOMM, Inc.*.................. 4,303,500
133,115 Qwest Communications
International, Inc.*............. 6,397,839
277,481 SBC Communications, Inc.......... 13,874,050
111,049 Schwab (Charles) Corp............ 3,942,239
12,980 Scientific-Atlanta, Inc.......... 825,852
35,566 Seagram Co., Ltd................. 2,042,822
71,542 Sprint Corp...................... 2,097,075
74,660 Sprint PCS Group*................ 2,617,766
33,352 Tellabs, Inc.*................... 1,592,558
107,349 Time Warner, Inc................. 8,400,059
25,134 Tribune Co....................... 1,096,471
221,884 Verizon Communications........... 10,747,506
124,429 Viacom Inc., Class B*............ 7,279,096
233,495 WorldCom, Inc.*.................. 7,092,411
44,300 Yahoo!, Inc.*.................... 4,031,300
5,900 Young & Rubicam, Inc............. 292,050
-------------
207,580,076
-------------
MARKET
SHARES VALUE
------ ------
Technology - 19.80%
9,800 Adobe Systems, Inc............... $ 1,521,450
24,920 Advanced Micro Devices, Inc.*.... 588,735
32,500 Altera Corp.*.................... 1,551,875
83,712 Amgen, Inc.*..................... 5,845,452
28,800 Analog Devices, Inc.*............ 2,377,800
26,556 Apple Computer, Inc.*............ 683,817
65,906 Applied Materials, Inc.*......... 3,909,050
4,717 Autodesk, Inc.................... 119,694
51,121 Automatic Data Processing, Inc... 3,418,717
19,891 BMC Software, Inc.*.............. 380,415
12,100 Biogen, Inc.*.................... 738,100
17,500 Broadcom Corp. - Class A*........ 4,265,625
11,848 Ceridian Corp.*.................. 332,485
15,100 Citrix Systems, Inc.*............ 302,944
138,497 Compaq Computer Corp............. 3,819,747
48,020 Computer Associates
International, Inc. ............. 1,209,504
13,632 Computer Sciences Corp.*......... 1,012,176
29,351 Compuware Corp.*................. 245,815
17,700 Conexant Systems, Inc.*.......... 741,188
210,053 Dell Computer Corp.*............. 6,472,258
37,946 Electronic Data Systems Corp..... 1,574,759
176,948 EMC Corp.*....................... 17,539,971
33,647 First Data Corp.................. 1,314,336
26,234 Gateway, Inc.*................... 1,226,440
16,404 General Dynamics Corp............ 1,030,376
81,549 Hewlett-Packard Co............... 7,910,253
24,263 IMS Health, Inc.................. 503,457
546,358 Intel Corp....................... 22,742,152
144,554 International Business
Machines Corp. .................. 16,262,325
15,192 KLA-Tencorp Corp.*............... 625,721
10,500 Lexmark International
Group, Inc., Class A*............ 393,750
25,400 Linear Technology Corp........... 1,644,650
34,848 Lockheed Martin Corp............. 1,148,590
25,018 LSI Logic Corp.*................. 731,777
23,000 Maxim Integrated Products, Inc.*. 1,850,063
6,500 Mercury Interactive Corp.*....... 1,018,875
45,232 Micron Technology, Inc.*......... 2,080,672
429,189 Microsoft Corp.*................. 25,858,637
14,355 National Semiconductor Corp.*.... 577,789
7,800 NCR Corp.*....................... 294,938
26,852 Novell, Inc.*.................... 266,842
10,600 Novellus Systems, Inc.*.......... 493,563
231,548 Oracle Corp.*.................... 18,234,405
22,466 Parametric Technology Corp.*..... 245,722
22,520 PeopleSoft, Inc.*................ 629,153
20,973 Pitney Bowes, Inc................ 827,123
9,600 Sapient Corp.*................... 390,600
18,566 Seagate Technology, Inc.*........ 1,281,054
32,600 Siebel Systems, Inc.............. 3,628,788
129,362 Sun Microsystems, Inc.*.......... 15,103,014
1,213 SYNAVANT, Inc.*.................. 8,112
14,100 Teradyne, Inc.*.................. 493,500
133,428 Texas Instruments, Inc........... 6,296,134
25,415 Unisys Corp.*.................... 285,919
38,386 United Technologies Corp......... 2,658,231
31,900 Veritas Software Corp.*.......... 4,529,800
54,305 Xerox Corp....................... 817,969
26,200 Xilinx, Inc.*.................... 2,243,375
-------------
204,299,682
-------------
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
LARGE COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
CONSUMER STAPLES - 17.28%
126,393 Abbott Laboratories.............. $ 6,011,567
4,530 Alberto-Culver Co., Class B...... 130,521
34,518 Albertson's, Inc................. 724,878
10,546 Allergan, Inc.................... 890,478
8,360 ALZA Corp.*...................... 723,140
5,273 American Greetings Corp., Class A 92,277
106,395 American Home Products Corp...... 6,017,967
73,586 Anheuser-Busch Cos., Inc......... 3,113,608
51,558 Archer-Daniels-Midland Co........ 444,688
9,171 Avery Dennison Corp.............. 425,305
19,336 Avon Products, Inc............... 790,359
4,112 Bard (C.R.), Inc................. 173,732
4,319 Bausch & Lomb, Inc............... 168,171
23,623 Baxter International, Inc........ 1,885,411
20,589 Becton Dickinson & Co............ 544,322
22,433 Bestfoods........................ 1,632,001
14,469 Biomet, Inc...................... 506,415
7,990 Block (H&R), Inc................. 296,129
33,256 Boston Scientific Corp.*......... 546,645
160,843 Bristol-Myers Squibb Co.......... 9,188,156
5,582 Brown-Forman Corp., Class B...... 305,614
34,453 Campbell Soup Co................. 891,471
22,472 Cardinal Health, Inc............. 1,981,749
58,763 Cendant Corp.*................... 639,048
19,136 Clorox Co........................ 757,068
201,838 Coca-Cola Co..................... 11,126,320
34,248 Coca-Cola Enterprises, Inc....... 545,827
47,036 Colgate-Palmolive Co............. 2,220,099
40,126 ConAgra, Inc..................... 805,028
12,500 Convergys Corp.*................. 485,937
2,934 Coors (Adolph) Co., Class B...... 185,392
5,911 Deluxe Corp...................... 120,067
9,946 Donnelley (R.R.) & Sons Co....... 244,299
13,157 Dun & Bradstreet Corp............ 453,094
10,613 Ecolab, Inc...................... 382,731
11,482 Equifax, Inc..................... 309,296
12,884 Fortune Brands, Inc.............. 341,426
23,788 General Mills, Inc............... 844,474
85,089 Gillette Co...................... 2,627,123
3,146 Great Atlantic &
Pacific Tea Co., Inc. ........... 34,803
24,989 Guidant Corp.*................... 1,766,410
45,441 HCA-The Healthcare Co............ 1,686,997
31,470 HEALTHSOUTH Corp.*............... 255,694
28,724 Heinz (H.J.) Co.................. 1,064,583
11,162 Hershey Foods Corp............... 604,143
13,661 Humana, Inc.*.................... 146,856
8,426 International Flavors &
Fragrances, Inc. ................ 153,774
113,412 Johnson & Johnson Co............. 10,653,640
33,096 Kellogg Co....................... 800,509
45,334 Kimberly-Clark Corp.............. 2,530,204
68,132 Kroger Co.*...................... 1,537,228
92,149 Lilly (Eli) & Co................. 7,475,588
5,474 Mallinckrodt, Inc................ 249,751
8,337 Manor Care, Inc.*................ 130,787
MARKET
SHARES VALUE
------ ------
22,922 McKesson HBOC, Inc............... $ 700,554
17,000 Medimmune, Inc.*................. 1,313,250
97,632 Medtronic, Inc................... 5,058,558
187,516 Merck & Co., Inc................. 13,958,222
26,582 Nabisco Group Holdings Corp...... 757,587
30,228 Paychex, Inc..................... 1,586,970
117,494 PepsiCo, Inc..................... 5,404,724
513,371 Pfizer, Inc...................... 23,069,609
103,484 Pharmacia Corp................... 6,228,443
186,515 Philip Morris Cos., Inc.......... 5,490,535
106,649 Procter & Gamble Co.............. 7,145,483
10,639 Quaker Oats Co................... 841,811
9,400 Quintiles Transnational Corp.*... 149,812
25,053 Ralston Purina Group............. 593,443
40,520 Safeway, Inc.*................... 1,891,777
70,902 Sara Lee Corp.................... 1,440,197
119,423 Schering-Plough Corp............. 5,553,169
6,822 St. Jude Medical, Inc.*.......... 347,922
10,681 SuperValu, Inc................... 160,883
27,205 Sysco Corp....................... 1,259,932
25,533 Tenet Healthcare Corp............ 928,763
4,736 Tupperware Corp.................. 85,248
46,599 Unilever NV, New York Shares, ADR 2,248,402
13,246 UnitedHealth Group, Inc.......... 1,308,042
13,223 UST, Inc......................... 302,476
7,886 Watson Pharmaceuticals, Inc.*.... 511,604
5,100 Wellpoint Health Networks, Inc.*. 489,600
11,775 Winn-Dixie Stores, Inc........... 169,266
9,255 Wrigley (Wm.) Jr. Co............. 692,968
-------------
178,352,050
-------------
FINANCE - 15.30%
11,468 Aetna, Inc....................... 665,861
21,600 AFLAC, Inc....................... 1,383,750
60,746 Allstate Corp.................... 2,110,923
108,979 American Express Co.............. 6,620,474
20,289 American General Corp............ 1,582,542
188,618 American International
Group, Inc. ..................... 18,048,385
32,060 AmSouth Bancorp.................. 400,750
20,858 AON Corp......................... 818,677
59,360 Associates First Capital Corp.... 2,255,680
135,136 Bank of America Corp............. 7,077,748
60,114 Bank of New York Co., Inc........ 3,370,141
93,536 Bank One Corp.................... 3,612,828
31,894 BB&T Corp........................ 960,807
8,977 Bear Stearns Cos., Inc........... 565,551
15,977 Capital One Financial Corp....... 1,119,389
17,955 Charter One Financial, Inc....... 437,653
106,257 Chase Manhattan Corp............. 4,907,745
14,234 Chubb Corp....................... 1,126,265
13,321 CIGNA Corp....................... 1,390,712
13,060 Cincinnati Financial Corp........ 463,630
21,400 CIT Group, Inc., Cl. A........... 374,500
366,960 Citigroup, Inc................... 19,838,775
12,714 Comerica, Inc.................... 742,974
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
LARGE COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
FINANCE (CONTINUED)
26,544 Conseco, Inc..................... $ 202,398
9,243 Countrywide Credit
Industries, Inc. ................ 348,923
82,206 Fannie Mae....................... 5,877,729
37,928 Fifth Third Bancorp.............. 2,043,371
80,011 First Union Corp................. 2,575,354
79,134 Firstar Corp..................... 1,770,623
73,484 FleetBoston Financial Corp....... 2,865,876
19,898 Franklin Resources, Inc.......... 884,068
56,688 Freddie Mac...................... 3,064,695
12,893 Golden West Financial Corp....... 691,387
17,519 Hartford Financial
Services Group, Inc. ............ 1,277,792
38,609 Household International, Inc..... 2,186,235
19,866 Huntington Bancshares, Inc....... 291,782
8,409 Jefferson-Pilot Corp............. 570,761
35,497 KeyCorp.......................... 898,518
9,853 Lehman Brothers Holdings, Inc.... 1,455,781
15,614 Lincoln National Corp............ 751,424
8,059 Loews Corp....................... 671,919
22,022 Marsh & McLennan Cos., Inc....... 2,923,421
7,992 MBIA, Inc........................ 568,431
65,375 MBNA Corp........................ 2,516,938
40,048 Mellon Financial Corp............ 1,857,226
63,220 Merrill Lynch & Co., Inc......... 4,172,520
8,632 MGIC Investment Corp............. 527,631
13,197 Morgan (J.P) & Co................ 2,156,060
92,274 Morgan Stanley, Dean Witter & Co. 8,437,304
49,394 National City Corp............... 1,092,842
18,076 Northern Trust Corp.............. 1,606,505
11,150 Old Kent Financial Corp.......... 322,653
11,900 Paine Webber Group, Inc.......... 810,688
23,683 PNC Financial Services Group..... 1,539,395
9,800 Price (T. Rowe) Associates, Inc.. 459,988
5,986 Progressive Corp................. 490,104
11,566 Providian Financial Corp......... 1,468,882
17,974 Regions Financial Corp........... 407,785
10,442 Safeco Corp...................... 284,545
13,723 SouthTrust Corp.................. 431,417
17,335 St. Paul Cos., Inc............... 854,832
13,134 State Street Corp................ 1,707,420
18,128 Stilwell Financial, Inc.*........ 788,568
14,386 Summit Bancorp................... 496,317
24,655 SunTrust Banks, Inc.............. 1,228,127
23,056 Synovus Financial Corp........... 488,499
10,451 Torchmark Corp................... 290,668
61,273 U.S. Bancorp..................... 1,393,961
11,040 Union Planters Corp.............. 365,010
19,656 UnumProvident Corp............... 535,626
12,754 USA Education, Inc............... 614,583
16,513 Wachovia Corp.................... 936,081
44,639 Washington Mutual Savings Bank... 1,777,190
131,448 Wells Fargo & Co................. 6,038,393
-------------
157,894,006
-------------
MARKET
SHARES VALUE
------ ------
INDUSTRIAL - 9.06%
36,828 Agilent Technologies, Inc.*...... $ 1,802,270
15,400 Allied Waste Industries, Inc.*... 141,488
15,800 American Power Conversion Corp.*. 303,163
3,249 Armstrong Holdings, Inc.......... 38,785
2,415 Ball Corp........................ 76,525
4,298 Bemis Co., Inc................... 138,073
6,941 Black & Decker Corp.............. 237,295
74,029 Boeing Co........................ 4,663,827
1,802 Briggs & Stratton Corp........... 68,138
34,957 Burlington Northern
Santa Fe Corp. .................. 753,760
28,407 Caterpillar, Inc................. 958,736
7,596 Cooper Industries, Inc........... 267,759
4,963 Crane Co......................... 113,529
10,392 Crown Cork & Seal Co., Inc....... 111,065
17,851 CSX Corp......................... 389,375
3,371 Cummins Engine Co., Inc.......... 100,919
11,529 Danaher Corp..................... 573,568
19,051 Deere & Co....................... 633,446
16,589 Dover Corp....................... 778,646
6,223 Eastman Kodak Co................. 229,862
5,889 Eaton Corp....................... 362,910
34,834 Emerson Electric Co.............. 2,333,878
23,644 FedEx Corp.*..................... 1,048,375
6,210 Fluor Corp....................... 186,300
2,440 FMC Corp.*....................... 163,633
806,990 General Electric Co.............. 46,553,236
8,789 Goodrich (B.F.) Co............... 344,419
65,066 Honeywell International, Inc..... 2,317,976
24,577 Illinois Tool Works, Inc......... 1,373,240
13,145 Ingersoll-Rand Co................ 445,287
7,121 ITT Industries, Inc.............. 230,987
6,939 Johnson Controls, Inc............ 369,068
36,600 Masco Corp....................... 681,675
4,900 McDermott International, Inc..... 53,900
3,771 Millipore Corp................... 182,658
32,290 Minnesota Mining &
Manufacturing Co. ............... 2,942,426
16,000 Molex, Inc....................... 871,000
3,275 National Service Industries, Inc. 64,067
31,198 Norfolk Southern Corp............ 456,271
5,679 Northrop Grumman Corp............ 516,079
4,507 Owens Corning, Inc............... 11,831
11,914 Owens-Illinois, Inc.*............ 110,205
13,776 Pactiv Corp.*.................... 154,119
10,089 Pall Corp........................ 201,149
9,122 Parker-Hannifin Corp............. 307,868
16,940 PE Corp. - PE Biosystems Group... 1,973,510
3,988 PerkinElmer, Inc................. 416,248
3,662 Polaroid Corp.................... 49,208
14,208 PPG Industries, Inc.............. 563,880
27,724 Raytheon Co., Class B............ 788,401
15,357 Rockwell International Corp...... 464,549
4,872 Ryder System, Inc................ 89,828
12,100 Sanmina Corp.*................... 1,132,863
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
LARGE COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
INDUSTRIAL (CONTINUED)
6,831 Sealed Air Corp.*................ $ 309,103
4,739 Snap-On, Inc..................... 111,663
48,624 Solectron Corp.*................. 2,242,782
7,152 Stanley Works.................... 164,943
3,883 Tektronix, Inc................... 298,263
11,732 Textron, Inc..................... 541,139
14,128 Thermo Electron Corp.*........... 367,328
4,712 Thomas & Betts Corp.............. 82,166
4,950 Timken Co........................ 67,753
137,672 Tyco International, Ltd.......... 7,141,735
20,169 Union Pacific Corp............... 784,070
8,200 Vulcan Materials Co., Inc........ 329,538
50,608 Waste Management, Inc............ 882,477
7,057 Worthington Industries, Inc...... 66,159
-------------
93,530,392
-------------
CONSUMER CYCLICAL - 7.08%
12,232 AMR Corp.*....................... 399,833
10,897 AutoZone, Inc.*.................. 247,226
34,600 Bed, Bath & Beyond Inc.*......... 843,916
16,700 Best Buy Co., Inc.*.............. 1,062,537
7,165 Brunswick Corp................... 130,761
49,286 Carnival Corp.................... 1,213,668
4,835 Centex Corp...................... 155,324
16,600 Circuit City Stores-Circuit
City Group....................... 381,800
9,032 Consolidated Stores Corp.*....... 121,932
5,987 Cooper Tire & Rubber Co.......... 60,244
36,440 Costco Wholesale Corp.*.......... 1,273,122
31,851 CVS Corp......................... 1,475,099
12,448 Dana Corp........................ 267,632
10,039 Darden Restaurants, Inc.......... 208,937
45,941 Delphi Automotive Systems Corp... 694,858
9,932 Delta Air Lines, Inc............. 440,732
7,631 Dillards, Inc., Class A.......... 81,079
26,846 Dollar General Corp.............. 449,670
17,418 Federated Department
Stores, Inc.* ................... 455,045
152,897 Ford Motor Co.................... 3,870,206
69,406 Gap, Inc......................... 1,396,796
43,594 General Motors Corp.............. 2,833,610
14,409 Genuine Parts Co................. 274,672
12,709 Goodyear Tire & Rubber Co........ 228,762
7,681 Grainger (W.W.), Inc............. 202,106
24,800 Harley-Davidson, Inc............. 1,187,300
9,910 Harrah's Entertainment, Inc.*.... 272,525
14,018 Hasbro, Inc...................... 160,331
30,023 Hilton Hotels Corp............... 347,141
188,687 Home Depot, Inc.................. 10,012,204
3,898 Kaufman & Broad Home Corp........ 105,002
39,250 Kmart Corp.*..................... 235,500
26,550 Kohl's Corp.*.................... 1,531,603
16,000 Leggett & Platt, Inc............. 253,000
35,008 Limited, Inc..................... 772,364
4,443 Liz Claiborne, Inc............... 171,055
3,245 Longs Drug Stores, Inc........... 62,061
MARKET
SHARES VALUE
------ ------
CONSUMER CYCLICAL (CONTINUED)
31,131 Lowe's Cos., Inc................. $ 1,397,004
19,567 Marriott International, Inc.,
Class A ......................... 712,973
34,741 Mattel, Inc...................... 388,665
27,152 May Department Stores Co......... 556,616
6,361 Maytag Corp...................... 197,589
108,953 McDonald's Corp.................. 3,289,019
5,060 Navistar International Corp.*.... 151,484
21,763 Newell Rubbermaid, Inc........... 496,468
22,315 NIKE, Inc., Class B.............. 893,995
10,972 Nordstrom, Inc................... 170,752
25,800 Office Depot, Inc.*.............. 201,562
6,207 Paccar, Inc...................... 230,047
21,309 Penny (J.C.) Co., Inc............ 251,713
3,358 Pulte Corp....................... 110,814
15,196 RadioShack Corp.................. 982,041
4,633 Reebok International, Ltd.*...... 87,158
2,646 Russell Corp..................... 42,005
10,539 Sabre Group Holdings Corp........ 304,972
28,703 Sears, Roebuck & Co.............. 930,551
40,428 Southwest Airlines Co............ 980,379
1,473 Springs Industries, Inc.......... 41,520
39,534 Staples, Inc.*................... 560,889
15,000 Starbucks Corp.*................. 600,937
74,380 Target Corp...................... 1,905,987
11,800 Tiffany & Co..................... 455,037
24,471 TJX Cos., Inc.................... 550,597
17,602 Toys 'R' Us, Inc.*............... 286,032
11,997 Tricon Global Restaurants, Inc.*. 367,408
10,072 TRW, Inc......................... 409,175
5,440 U.S. Airways Group, Inc.*........ 165,580
9,274 VF Corp.......................... 228,952
10,576 Visteon Corp..................... 159,957
363,568 Wal-Mart Stores, Inc............. 17,496,710
82,235 Walgreen Co...................... 3,119,790
9,286 Wendy's International, Inc....... 186,300
5,997 Whirlpool Corp................... 233,133
-------------
73,023,464
-------------
ENERGY - 6.69%
7,356 Amerada Hess Corp................ 492,392
19,744 Anadarko Petroleum Corp.......... 1,312,186
9,886 Apache Corp...................... 584,510
26,881 Baker Hughes, Inc................ 997,957
17,508 Burlington Resources, Inc........ 644,513
53,182 Chevron Corp..................... 4,533,765
17,435 Coastal Corp..................... 1,292,369
6,530 Columbia Energy Group............ 463,630
50,900 Conoco, Inc., Class B............ 1,371,119
18,900 El Paso Energy Corp.............. 1,164,712
59,690 Enron Corp....................... 5,230,336
283,947 Exxon Mobil Corp................. 25,306,776
36,224 Halliburton Co................... 1,772,712
7,647 Kerr-McGee Corp.................. 506,614
30,069 Occidental Petroleum Corp........ 655,880
See Notes to Financial Statements.
12
<PAGE>
LARGE COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
ENERGY (CONTINUED)
20,714 Phillips Petroleum Co............ $ 1,299,803
7,619 Rowan Cos., Inc.*................ 220,951
174,874 Royal Dutch Petroleum Co., ADR... 10,481,510
46,453 Schlumberger, Ltd................ 3,823,663
7,180 Sunoco, Inc...................... 193,411
45,018 Texaco, Inc...................... 2,363,445
11,800 Tosco Corp....................... 368,012
17,135 Transocean Sedco Forex, Inc...... 1,004,539
19,756 Unocal Corp...................... 700,103
25,409 USX-Marathon Group, Inc.......... 720,980
35,981 Williams Cos., Inc............... 1,520,197
-------------
69,026,085
-------------
UTILITIES - 2.26%
34,724 AES Corp.*....................... 2,378,594
11,141 Ameren Corp...................... 466,529
26,260 American Electric Power Co., Inc. 1,027,423
13,003 C P & L Energy, Inc.............. 542,063
12,914 Cinergy Corp..................... 426,969
8,950 CMS Energy Corp.................. 241,091
17,321 Consolidated Edison, Inc......... 591,079
12,192 Constellation Energy Group, Inc.. 606,552
19,369 Dominion Resources, Inc.......... 1,124,613
11,578 DTE Energy Co.................... 442,859
29,917 Duke Energy Corp................. 2,565,383
2,281 Eastern Enterprises.............. 145,556
27,093 Edison International............. 523,234
18,775 Entergy Corp..................... 699,369
18,841 FirstEnergy Corp................. 507,529
8,000 Florida Progress Corp............ 423,500
14,522 FPL Group, Inc................... 954,822
9,913 GPU, Inc......................... 321,553
14,043 Niagara Mohawk Holdings, Inc.*... 221,177
3,800 NICOR, Inc....................... 137,513
2,326 Oneok, Inc....................... 92,459
13,781 PECO Energy Co................... 834,612
2,843 Peoples Energy Corp.............. 94,885
31,398 PG & E Corp...................... 759,439
6,950 Pinnacle West Capital Corp....... 353,581
11,797 PPL Corp......................... 492,525
17,590 Public Service Enterprise
Group, Inc. ..................... 786,053
24,127 Reliant Energy, Inc.............. 1,121,906
16,640 Sempra Energy.................... 346,320
52,855 Southern Co...................... 1,714,484
21,521 TXU Corp......................... 852,770
14,467 Unicom Corp...................... 812,865
27,440 Xcel Energy, Inc................. 754,600
-------------
23,363,907
-------------
MARKET
SHARES VALUE
------ ------
BASIC MATERIALS - 1.70%
18,715 Air Products & Chemicals, Inc.... $ 673,740
17,798 Alcan Aluminum, Ltd.............. 515,030
70,506 Alcoa, Inc....................... 1,784,683
6,791 Allegheny Technologies, Inc...... 123,087
5,698 Ashland, Inc..................... 191,951
32,282 Barrick Gold Corp................ 492,300
10,725 Bethlehem Steel Corp.*........... 32,175
4,629 Boise Cascade Corp............... 122,958
55,140 Dow Chemical Co.................. 1,375,054
85,424 du Pont (E.I.) deNemours & Co.... 3,539,757
25,287 Eastman Chemical Co.............. 1,033,606
10,363 Engelhard Corp................... 168,399
16,770 Fort James Corp.................. 512,533
13,063 Freeport-McMoran
Copper & Gold, Inc., Class B*.... 115,118
13,912 Georgia-Pacific Group............ 326,932
5,500 Grace (W.R.) & Co.*.............. 37,812
4,425 Great Lakes Chemical Corp........ 129,708
8,698 Hercules, Inc.................... 122,859
21,248 Homestake Mining Co.............. 110,224
14,845 Inco, Ltd.*...................... 239,376
39,439 International Paper Co........... 1,131,406
8,439 Louisiana-Pacific Corp........... 77,533
8,412 Mead Corp........................ 196,630
13,666 Newmont Mining Corp.............. 232,322
6,949 Nucor Corp....................... 209,339
6,369 Phelps Dodge Corp................ 265,906
26,685 Placer Dome, Inc................. 251,840
2,325 Potlatch Corp.................... 73,528
12,813 Praxair, Inc..................... 478,886
17,777 Rohm & Haas Co................... 516,644
13,381 Sherwin-Williams Co.............. 286,019
6,909 Sigma Aldrich Corp............... 227,997
4,231 Temple-Inland, Inc............... 160,249
11,013 Union Carbide Corp............... 415,741
7,249 USX-U.S. Steel Group, Inc........ 110,094
8,201 Westvaco Corp.................... 218,864
18,993 Weyerhaeuser Co.................. 766,842
9,038 Willamette Industries, Inc....... 253,064
-------------
17,520,206
-------------
TOTAL COMMON STOCKS ............. 1,024,589,868
-------------
(Cost $642,272,706)
See Notes to Financial Statements.
13
<PAGE>
LARGE COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000 (UNAUDITED)
MARKET
PAR VALUE VALUE
--------- ------
U.S. GOVERNMENT OBLIGATIONS (A) - 0.25%
U.S. TREASURY BILLS (B) - 0.25%
$2,000,000 5.62%, 03/01/01.................. $ 1,949,750
700,000 5.85%, 03/01/01.................. 682,413
-------------
2,632,163
-------------
TOTAL U.S. GOVERNMENT OBLIGATIONS 2,632,163
-------------
(Cost $2,635,697)
REPURCHASE AGREEMENT - 0.64%
6,581,000 Repurchase Agreement with:
State Street Bank
6.43%, Due 10/02/2000
dated 09/29/2000
Repurchase Price $6,584,526
(Collateralized by U.S.
Treasury Note
5.75%, Due 06/30/2001
Total Par $6,650,000
Market Value $6,716,500)......... 6,581,000
-------------
TOTAL REPURCHASE AGREEMENT ...... 6,581,000
-------------
(Cost $6,581,000)
TOTAL INVESTMENTS - 100.18%...................... 1,033,803,031
-------------
(Cost $651,489,403)
NET OTHER ASSTS AND LIABILITIES - (0.18)%........ (1,831,928)
-------------
NET ASSETS - 100.00%............................. $1,031,971,103
=============
-----------------------------------
* Non-income producing security.
ADR American Depositary Receipt.
(A) Discount yield at time of purchase.
(B) Securities have been deposited as initial margin on open futures contracts.
At September 30, 2000, the Fund's open futures contracts were as follows:
Number of Contract Expiration Opening Current
Contracts Type Date Position Market Value
---------- ---------- ---------- ---------- ----------
17 S&P 500 Dec-00 $6,402,245 $6,178,225
6 S&P 500 Mar-01 2,328,510 2,213,250
---------- ----------
$8,730,755 $8,391,475
========== ==========
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
SMALL COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2000 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS - 97.44%
Consumer Staples - 22.05%
14,100 Aaron Rents, Inc................. $ 181,537
15,900 ABM Industries, Inc.............. 432,281
14,700 ADAC Laboratories*............... 305,944
9,600 Administaff, Inc.*............... 726,720
17,900 Advance Paradigm, Inc.*.......... 755,156
42,600 Advanced Tissue Sciences, Inc.*.. 316,837
7,200 Agribrands International, Inc.*.. 314,100
33,600 Alliance Pharmaceutical Corp.*... 512,400
28,300 Alpharma, Inc., Class A.......... 1,729,837
13,000 American Italian Pasta Co.,
Class A* ........................ 249,437
24,500 Barr Laboratories, Inc.*......... 1,624,656
14,000 Beringer Wine Estates
Holdings, Inc.* ................. 777,875
30,100 Billing Concepts Corp.*.......... 95,944
24,400 Bindley Western Industries....... 780,800
38,700 Bio-Technology General Corp.*.... 442,631
16,600 Biomatrix, Inc.*................. 290,500
26,300 Bowne & Co., Inc................. 256,425
13,600 CDI Corp.*....................... 217,600
26,000 Central Parking Corp............. 515,125
24,100 Cephalon, Inc.*.................. 1,168,850
7,100 Chemed Corp...................... 225,869
47,300 Chiquita Brands
International, Inc. ............. 147,812
6,200 Coca-Cola Bottling Co............ 260,012
10,900 CONMED Corp.*.................... 149,194
10,100 Consolidated Graphics, Inc. *.... 118,675
12,800 Constellation Brands, Inc.,
Class A* ....................... 695,200
10,000 Cooper Cos., Inc................. 353,750
37,600 Cor Therapeutics, Inc.*.......... 2,342,950
25,000 Corn Products International, Inc. 568,750
41,700 Coventry Health Care, Inc.*...... 630,712
6,200 CPI Corp......................... 131,750
6,300 Curative Health Services, Inc.*.. 34,256
18,300 Cygnus, Inc.*.................... 201,300
10,600 Datascope Corp................... 355,100
27,300 Delta & Pine Land Co............. 701,269
9,700 Diagnostic Products Corp......... 520,162
31,700 DiMon, Inc....................... 103,025
31,500 Dura Pharmaceuticals, Inc.*...... 1,114,312
30,200 Earthgrains Co................... 556,812
21,000 Edgewater Technology, Inc.*...... 110,250
27,000 Elan Corp. Plc*.................. 26,156
18,000 Enzo Biochem, Inc.*.............. 873,000
10,700 F.Y.I., Inc.*.................... 399,912
27,900 Fleming Cos., Inc................ 364,444
22,800 Fossil, Inc.*.................... 303,525
14,600 Franklin Covey Co.*.............. 106,762
20,700 Hain Celestial Group, Inc.*...... 727,087
13,600 Hanger Orthopedic Group, Inc.*... 51,000
20,200 Harland (John H.) Co............. 309,312
13,700 Heidrick & Struggles, Inc.*...... 703,837
10,900 Hologic, Inc.*................... 81,069
47,000 Hooper Holmes, Inc............... 446,970
MARKET
SHARES VALUE
------ ------
CONSUMER STAPLES (C0NTINUED)
25,200 IDEXX Laboratories, Inc.*........ $ 674,100
19,500 Immune Response Corp.*........... 134,062
8,200 Insurance Auto Auctions, Inc.*... 132,737
21,400 Invacare Corp.................... 687,475
6,300 J & J Snack Foods Corp.*......... 81,506
30,400 Labor Ready, Inc.*............... 127,300
18,000 Laser Vision Centers, Inc.*...... 78,187
15,000 MAXIMUS, Inc.*................... 331,875
20,900 Medicis Pharmaceutical Corp.,
Class A* ....................... 1,285,350
11,500 MemberWorks, Inc.*............... 378,062
17,300 Mentor Corp...................... 272,475
14,000 Michael Foods, Inc............... 327,250
34,400 MID Atlantic Medical
Services, Inc.* ................ 520,300
11,100 Midas, Inc....................... 155,400
8,100 Nash Finch Co.................... 84,544
4,200 Nashua Corp.*.................... 35,437
12,100 Nature's Sunshine Products, Inc.. 89,994
47,800 NBTY, Inc.*...................... 312,194
9,600 New England Business
Service, Inc. ................... 174,000
15,500 Noven Pharmaceuticals, Inc.*..... 662,625
15,700 On Assignment, Inc.*............. 492,587
24,200 Organogenesis, Inc.*............. 355,740
34,400 Orthodontic Centers of
America, Inc.* ................. 1,145,950
10,100 Osteotech, Inc.*................. 96,581
18,000 PARAEXEL International Corp.*.... 153,000
47,900 Patterson Dental Co.*............ 1,077,750
11,200 Pediatrix Medical Group, Inc.*... 144,900
9,800 Performance Food Group Co.*...... 368,725
17,700 Pharmaceutical Product
Development, Inc.*............... 470,156
26,000 Plexus Corp.*.................... 1,833,000
17,500 PolyMedica Corp.*................ 750,312
16,000 Pre-Paid Legal Services, Inc.*... 517,000
15,800 Priority Healthcare Corp.,
Class B* ........................ 1,204,750
35,300 Profit Recovery Group
International, Inc.* ........... 348,587
27,800 Protein Design Labs, Inc.*....... 3,349,900
21,200 Ralcorp Holdings, Inc.*.......... 299,450
24,900 Regeneron Pharmaceuticals, Inc.*. 812,362
32,100 Renal Care Group, Inc.*.......... 597,862
21,700 ResMed, Inc.*.................... 678,125
20,900 Respironics, Inc.*............... 348,769
14,500 Russ Berrie & Co., Inc........... 286,375
19,900 Scotts Co., Class A*............. 666,650
19,200 Sierra Health Services, Inc.*.... 90,000
40,100 Smithfield Foods, Inc.*.......... 1,052,625
17,700 Sola International, Inc.*........ 113,944
6,800 Spacelabs Medical, Inc.*......... 67,150
45,400 Spherion Corp.*.................. 541,962
10,000 Startek Inc.*.................... 290,000
15,800 Sunrise Medical, Inc.*........... 94,800
16,900 Syncor International Corp.*...... 622,131
14,600 Techne Corp.*.................... 1,635,200
15,800 The Kroll-O'Gara Co.*............ 94,800
21,000 Theragenics Corp.*............... 136,500
17,000 Triarc Cos., Inc.*............... 418,625
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
SMALL COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
CONSUMER STAPLES (C0NTINUED)
64,700 U.S. Oncology, Inc.*............. $ 293,172
13,000 United Natural Foods, Inc.*...... 160,875
21,400 Universal Health
Services, Inc., Class B* ...... 1,832,375
22,200 Varian Medical Systems, Inc.*.... 1,003,162
37,300 Vertex Pharmaceuticals, Inc.*.... 3,151,850
8,800 Vital Signs, Inc................. 233,200
10,700 Volt Information Sciences, Inc.*. 230,050
12,100 Wesley Jessen VisionCare, Inc.*.. 465,094
18,500 Whole Foods Market, Inc.*........ 993,219
-------------
61,473,027
-------------
INDUSTRIAL - 18.26%
19,075 Aeroflex, Inc.*.................. 927,522
6,300 Amcast Industrial Corp........... 59,456
23,000 American Freightways Corp.*...... 365,125
9,100 Analogic Corp.................... 349,781
19,700 Apogee Enterprises, Inc.......... 112,044
14,400 Applied Industrial
Technologies, Inc. ............. 249,300
25,600 AptarGroup, Inc.................. 612,800
27,800 APW, Ltd.*....................... 1,355,250
14,100 Arkansas Best Corp.*............. 216,788
26,500 Artesyn Technologies, Inc.*...... 771,813
13,700 Astec Industries, Inc.*.......... 149,844
24,200 Baldor Electric Co............... 491,563
13,100 Barnes Group, Inc................ 240,713
17,300 Belden, Inc...................... 408,713
13,500 Benchmark Electronics, Inc.*..... 702,000
19,500 BMC Industries, Inc.............. 134,063
16,100 Brady Corp., Class A............. 487,025
4,700 Butler Manufacturing Co.......... 107,806
18,500 C&D Technologies, Inc............ 1,049,875
30,450 Cable Design Technologies Corp.*. 740,316
10,000 Castle (A.M.) & Co............... 96,250
21,500 Checkpoint Systems, Inc.*........ 162,594
12,500 Circle International Group, Inc.. 378,125
17,300 Clarcor, Inc..................... 337,350
30,600 Cognex Corp.*.................... 1,206,788
18,900 Coherent, Inc.*.................. 1,285,200
14,400 Cohu, Inc........................ 220,500
10,100 Commercial Metals Co............. 257,550
12,100 Cross (A.T.) Co., Class A*....... 65,038
19,800 CTS Corp......................... 1,002,375
11,600 CUNO, Inc.*...................... 258,100
15,700 Dionex Corp.*.................... 433,713
27,700 Dycom Industries, Inc.*.......... 1,153,013
20,400 EGL, Inc.*....................... 617,100
13,900 Elcor Corp....................... 201,550
19,000 Electro Scientific
Industries, Inc.* .............. 667,375
12,300 Esterline Technologies Corp.*.... 242,156
36,200 Expeditors International
of Washington, Inc............... 1,631,263
13,200 Florida Rock Industries.......... 520,575
10,500 Flow International Corp.*........ 114,188
14,900 Forward Air Corp.*............... 524,294
29,000 Foster Wheeler Corp.............. 210,250
MARKET
SHARES VALUE
------ ------
INDUSTRIAL (CONTINUED)
26,100 Fritz Cos., Inc.*................ $ 313,200
11,600 Frozen Food Express
Industries, Inc.* .............. 29,725
10,900 Gardner Denver, Inc.*............ 177,125
4,216 General Electric Co.............. 243,211
52,500 Gentex Corp.*.................... 1,312,500
15,800 Gerber Scientific, Inc........... 136,275
14,400 Graco, Inc....................... 464,400
21,200 Griffon Corp.*................... 160,325
18,000 Heartland Express, Inc.*......... 312,750
16,100 Helix Technology Corp............ 480,988
21,100 IDEX Corp........................ 589,481
11,000 IMCO Recycling, Inc.............. 66,000
10,500 Innovex, Inc..................... 143,063
17,700 Insituform Technologies,
Inc., Class A* ................. 595,163
6,000 Insteel Industries, Inc.......... 24,375
9,676 Intermagnetics General Corp.*.... 257,624
18,100 Intermet Corp.................... 131,225
11,500 Ionics, Inc.*.................... 245,094
10,700 Itron, Inc.*..................... 65,538
31,600 JLG Industries, Inc.............. 385,125
61,800 KEMET Corp.*..................... 1,707,225
20,000 Kent Electronics Corp.*.......... 477,500
17,400 Kirby Corp.*..................... 341,475
34,300 Kulicke & Soffa
Industries, Inc.* ............... 456,619
6,400 Landstar System, Inc.*........... 285,600
7,100 Lawson Products, Inc............. 171,731
40,900 Lennox International, Inc........ 383,438
8,800 Lindsay Manufacturing Co......... 163,900
11,200 Lydall, Inc.*.................... 128,100
8,300 M.S. Carriers, Inc.*............. 129,688
17,600 Manitowoc Co., Inc............... 338,800
31,700 MascoTech, Inc................... 525,031
25,300 Methode Electronics, Inc.,
Class A ......................... 1,121,106
25,400 Milacron, Inc.................... 338,138
24,500 Mueller Industries, Inc.*........ 549,719
15,500 Myers Industries, Inc............ 196,656
15,000 Offshore Logistics, Inc.*........ 268,125
7,400 Park Electrochemical Corp........ 411,625
32,400 Paxar Corp.*..................... 289,575
68,700 PolyOne Corp..................... 502,369
10,000 Quanex Corp...................... 190,625
14,900 Regal Beloit Corp................ 252,704
8,400 Republic Group, Inc.............. 154,350
13,800 Roadway Express, Inc............. 247,538
7,800 Robbins & Myers, Inc............. 184,275
24,400 Robotic Vision Systems, Inc.*.... 145,638
41,500 Rollins Truck Leasing Corp....... 261,969
21,600 Roper Industries, Inc............ 716,850
12,100 Scott Technologies, Inc.*........ 214,397
12,700 Shaw Group, Inc.*................ 895,350
8,600 Simpson Manufacturing Co., Inc.*. 384,313
24,100 SLI, Inc......................... 176,231
16,700 Smith (A.O.) Corp................ 209,794
13,600 Specialty Equipment Cos., Inc.*.. 335,750
21,100 Speedfam-IPEC, Inc.*............. 241,331
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
SMALL COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
INDUSTRIAL (CONTINUED)
9,000 SPS Technologies, Inc.*.......... $ 436,500
11,100 Standard Microsystems Corp.*..... 242,119
8,900 Standex International Corp....... 171,881
19,100 Sturm Ruger & Co., Inc........... 156,381
11,600 Technitrol, Inc.................. 1,171,600
27,800 TetraTech, Inc.*................. 794,038
15,000 Texas Industries, Inc............ 478,125
11,000 Thomas Industries, Inc........... 222,750
27,000 Tredegar Corp.................... 467,438
16,300 Trimble Navigator, Ltd.*......... 364,713
14,300 Universal Forest Products, Inc... 163,333
11,400 URS Corp.*....................... 151,050
18,900 USFreightways Corp............... 428,794
24,500 Valence Technology, Inc.*........ 422,625
16,500 Valmont Industries, Inc.......... 327,938
30,200 Vicor Corp.*..................... 1,638,350
37,200 Washington Group
International, Inc.* ........... 425,475
18,800 Watts Industries Inc., Class A... 188,000
33,500 Werner Enterprises, Inc.......... 393,625
8,600 Wolverine Tube, Inc.*............ 127,925
15,100 X-Rite, Inc...................... 132,125
18,000 Yellow Corp.*.................... 272,250
22,400 Zebra Technologies Corp.,
Class A* ........................ 1,076,600
-------------
50,901,501
-------------
CONSUMER CYCLICAL - 14.85%
23,833 99 Cents Only Stores*............ 1,196,119
11,600 Action Performance Cos., Inc.*... 39,875
20,700 Ames Department Stores, Inc.*.... 119,672
8,200 Anchor Gaming*................... 652,412
6,200 Angelica Corp.................... 60,062
22,400 AnnTaylor Stores Corp.*.......... 861,000
18,900 Applebee's International, Inc.... 434,700
16,300 Applica, Inc.*................... 100,856
17,800 Arctic Cat, Inc.................. 224,725
9,600 Ashworth, Inc.*.................. 75,600
15,000 Atlantic Coast Airlines
Holdings, Inc.* ................. 482,812
29,600 Aztar Corp.*..................... 455,100
10,000 Baker (J.), Inc.................. 45,000
8,400 Bassett Furniture
Industries, Inc. ................ 119,175
12,900 Books-A-Million, Inc.*........... 33,862
39,500 Brightpoint, Inc.*............... 198,734
13,000 Brown Shoe Co., Inc.............. 119,437
9,100 Building Materials Holding Corp.* 80,762
26,800 Burlington Coat Factory
Warehouse Corp. ................. 383,575
35,800 Casey's General Stores, Inc...... 465,400
18,400 Cash America International, Inc.. 134,550
18,800 Cato Corp., Class A.............. 235,000
19,100 CEC Entertainment, Inc.*......... 611,200
33,600 Champion Enterprises, Inc.*...... 142,800
12,300 Chico's FAS, Inc.*............... 418,200
35,900 CKE Restaurants, Inc............. 109,944
11,100 Coachmen Industries, Inc......... 115,856
18,100 Cone Mills Corp.*................ 81,450
MARKET
SHARES VALUE
------ ------
CONSUMER CYCLICAL (CONTINUED)
20,800 Consolidated Products, Inc.*..... $ 166,400
38,300 Copart, Inc.*.................... 531,412
14,600 Cost Plus, Inc.*................. 439,825
47,960 D.R. Horton, Inc................. 824,312
4,100 Damark International, Inc.,
Class A* ........................ 50,225
10,300 Department 56, Inc.*............. 135,831
11,900 Discount Auto Parts, Inc.*....... 91,481
13,000 Dress Barn, Inc.*................ 273,000
9,600 Enesco Group, Inc................ 56,400
28,100 Ethan Allen Interiors, Inc....... 795,581
8,800 Factory 2-U Stores, Inc.*........ 268,950
25,200 Fedders Corp..................... 97,650
23,300 Fleetwood Enterprises, Inc....... 316,006
14,000 Footstar, Inc.*.................. 452,375
14,600 G & K Services, Inc., Class A.... 409,712
5,600 GC Cos., Inc.*................... 16,800
23,600 Goody's Family Clothing, Inc.*... 92,925
9,000 Gottschalks, Inc.*............... 55,125
27,300 Great Atlantic & Pacific
Tea Co., Inc. ................... 302,006
15,900 Group 1 Automotive, Inc.*........ 172,912
13,700 Guilford Mills, Inc.............. 25,687
4,700 Haggar Corp...................... 58,750
13,300 Hancock Fabrics, Inc............. 66,500
24,200 Harman International
Industries, Inc. ................ 946,220
20,800 Hartmarx Corp.*.................. 62,400
7,200 Huffy Corp....................... 75,600
16,700 Hughes Supply, Inc............... 327,654
14,200 IHOP Corp.*...................... 271,575
28,350 Insight Enterprises, Inc.*....... 772,537
36,900 Interface, Inc................... 294,047
27,200 Jack in the Box, Inc.*........... 583,100
13,400 JAKKS Pacific, Inc.*............. 126,044
12,800 Jo-Ann Stores, Inc., Class A*.... 92,800
7,400 K-Swiss, Inc., Class A........... 166,500
12,800 K2, Inc.*........................ 114,400
17,000 Kellwood Co...................... 310,250
43,700 La-Z-Boy, Inc.................... 636,381
17,700 Landry's Seafood
Restaurants, Inc. ............... 120,581
10,800 Libbey, Inc...................... 336,150
6,400 Lillian Vernon Corp.............. 62,400
28,300 Linens 'N Things, Inc.*.......... 721,650
15,900 Luby's, Inc...................... 84,469
14,000 Mayor's Jewelers, Inc.*.......... 52,500
15,300 MDC Holdings, Inc................ 397,800
23,100 Mesa Air Group, Inc.*............ 126,328
23,600 Michaels Stores, Inc.*........... 944,000
10,000 Midwest Express Holdings, Inc.*.. 201,250
13,400 Monaco Coach Corp.*.............. 221,100
8,300 Morrison Management
Specialists, Inc. ............... 245,265
5,000 National Presto Industries, Inc.. 149,687
22,200 Nautica Enterprises, Inc.*....... 287,212
6,600 NVR, Inc.*....................... 534,600
36,300 O'Reilly Automotive, Inc.*....... 530,887
8,800 Oshkosh B'Gosh, Inc., Class A.... 133,925
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
SMALL COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
CONSUMER CYCLICAL (CONTINUED)
11,800 Oshkosh Truck Corp............... $ 457,250
23,400 Owens & Minor, Inc............... 368,550
5,400 Oxford Industries, Inc........... 96,525
22,500 Pacific Sunwear of
California, Inc.* .............. 421,875
8,700 Panera Bread Co.*................ 181,612
17,200 Pegasus Solutions, Inc.*......... 336,475
37,800 Pep Boys-Manny, Moe, & Jack...... 189,000
19,400 Phillips-Van Heusen Corp......... 200,062
67,600 Pier 1 Imports, Inc.............. 916,825
18,100 Pinnacle Entertainment, Inc.*.... 393,675
17,000 Polaris Industries, Inc.......... 599,250
31,900 Prime Hospitality Corp.*......... 322,987
15,900 Quiksilver, Inc.*................ 306,075
29,000 Regis Corp....................... 435,000
11,200 Royal Appliance
Manufacturing Co.* ............. 66,500
43,800 Ruby Tuesday, Inc................ 492,750
23,100 Ryan's Family Steakhouses, Inc.*. 177,581
9,300 Ryland Group, Inc................ 288,300
8,100 Salton, Inc.*.................... 261,731
12,400 School Specialty, Inc.*.......... 264,275
12,100 SCP Pool Corp.*.................. 358,462
21,000 Shopko Stores, Inc.*............. 217,875
12,700 Simpson Industries, Inc.......... 155,575
6,200 Skyline Corp..................... 132,137
19,400 SkyWest, Inc..................... 994,250
12,700 Sonic Corp.*..................... 400,050
8,400 Spartan Motors, Inc.............. 26,250
8,600 Standard Motor Products, Inc..... 68,800
20,400 Standard-Pacific Corp............ 367,200
30,700 Stein Mart, Inc.*................ 331,944
30,800 Stride Rite Corp................. 155,925
8,300 Taco Cabana, Class A*............ 35,794
15,100 TBC Corp.*....................... 73,612
24,200 Tenneco Automotive, Inc.......... 125,537
25,800 The Bombay Company, Inc.*........ 62,887
21,800 The Cheesecake Factory, Inc.*.... 942,850
8,200 The Dixie Group, Inc.*........... 31,775
17,400 The Gymboree Corp.*.............. 94,612
21,000 The Marcus Corp.................. 220,500
29,700 The Men's Wearhouse, Inc.*....... 840,881
9,800 The Wet Seal, Inc., Class A*..... 153,737
8,600 Thor Industries, Inc............. 198,875
28,800 Timberland Co., Class A*......... 1,180,800
14,700 Titan International, Inc......... 84,525
25,900 Toll Brothers, Inc.*............. 890,312
9,000 Toro Co.......................... 283,500
33,400 Tower Automotive, Inc.*.......... 313,125
24,200 United Stationers, Inc.*......... 650,375
16,400 Wabash National Corp............. 149,650
19,200 Watsco, Inc...................... 197,568
15,300 Winnebago Industries, Inc........ 191,250
29,600 Wolverine World Wide, Inc........ 275,650
25,000 Zale Corp.*...................... 810,937
-------------
41,420,573
-------------
MARKET
SHARES VALUE
------ ------
TECHNOLOGY - 13.30%
19,200 AAR Corp......................... $ 219,600
16,500 Actel Corp.*..................... 592,969
30,000 Alliance Semiconductor Corp.*.... 596,250
6,700 Alliant Techsystems, Inc.*....... 550,238
30,300 Alpha Industries, Inc.*.......... 1,032,094
29,600 American Management
Systems, Inc.* .................. 508,750
16,100 Analysts International Corp...... 116,222
18,600 Aspen Technology, Inc.*.......... 839,325
27,700 Avant! Corp.*.................... 505,525
17,600 Avid Technology, Inc.*........... 246,400
22,500 AVT Corp.*....................... 125,156
13,400 AXT, Inc.*....................... 560,288
10,000 BARRA, Inc.*..................... 620,625
17,700 BE Aerospace, Inc.*.............. 285,413
19,700 BISYS Group, Inc.*............... 1,523,056
8,700 Brooktrout, Inc.*................ 286,556
31,500 C-Cube Mircosystems, Inc.*....... 645,750
24,000 Cerner Corp.*.................... 1,114,500
28,545 ChoicePoint, Inc.*............... 1,309,502
42,300 CIBER, Inc.*..................... 348,975
14,800 Computer Task Group, Inc......... 46,250
11,600 Concord Communications, Inc.*.... 307,400
42,800 Dallas Semiconductor Corp........ 1,407,050
27,800 Dendrite International, Inc.*.... 745,388
10,700 Digi International, Inc.*........ 84,263
14,700 Electroglas, Inc.*............... 250,819
35,000 eLoyalty Corp.*.................. 446,250
29,500 Epicor Software Corp.*........... 103,250
16,600 ePresence, Inc.*................. 112,050
29,900 ESS Technology, Inc.*............ 427,944
16,300 Exabyte Corp.*................... 183,375
22,900 FactSet Research Systems, Inc.... 861,040
10,200 Fair, Isaac and Co., Inc......... 435,413
24,300 FileNET Corp.*................... 441,956
29,800 GenCorp, Inc..................... 242,125
26,900 General Semiconductor, Inc.*..... 327,844
14,100 Great Plains Software, Inc.*..... 396,563
29,000 Henry (Jack) & Associates, Inc... 1,257,875
20,200 HNC Software, Inc.*.............. 1,652,613
17,600 Hutchinson Technology, Inc.*..... 370,700
23,100 Hyperion Solutions Corp.*........ 597,713
20,700 Information Resources, Inc.*..... 141,019
18,700 Inter-Tel, Inc................... 212,713
22,800 InterVoice-Brite, Inc.*.......... 239,400
16,500 Kaman Corp., Class A............. 208,313
8,800 Kronos, Inc.*.................... 264,000
11,700 Meade Instruments Corp.*......... 236,194
15,100 Mercury Computer Systems, Inc.*.. 419,969
12,300 MICROS Systems, Inc.*............ 185,269
26,800 Midway Games, Inc.*.............. 187,600
23,300 National Data Corp............... 764,531
35,800 National Instruments Corp.*...... 1,579,675
26,600 Orbital Sciences Corp.*.......... 222,775
18,400 Phoenix Technologies, Ltd.*...... 293,250
20,800 Photronics, Inc.*................ 453,700
35,600 Pinnacle Systems, Inc.*.......... 400,500
19,400 Pioneer Standard Electronics, Inc. 263,113
See Notes to Financial Statements.
18
<PAGE>
SMALL COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
TECHNOLOGY (CONTINUED)
25,400 Progress Software Corp.*......... $ 346,075
15,500 Project Software &
Development, Inc.* .............. 240,977
10,800 QRS Corp.*....................... 162,675
12,000 RadiSys Corp.*................... 606,750
35,500 Read-Rite Corp.*................. 399,375
22,200 Remedy Corp.*.................... 419,025
28,100 RSA Security, Inc.*.............. 1,211,813
65,000 S3, Inc.*........................ 670,313
20,700 SAGA SYSTEMS, Inc.*.............. 217,350
24,000 Silicon Valley Group, Inc.*...... 631,500
23,100 Systems & Computer
Technology Corp.* .............. 405,694
13,000 Telcom Semiconductor, Inc.*...... 193,375
22,000 Teledyne Technologies, Inc.*..... 640,750
13,600 THQ, Inc.*....................... 316,200
15,000 Three-Five Systems, Inc.*........ 438,750
15,000 Ultratech Stepper, Inc.*......... 240,938
22,200 Verity, Inc.*.................... 792,263
11,800 ZixIt Corp.*..................... 359,900
-------------
37,090,819
-------------
FINANCE - 12.57%
53,900 AmeriCredit Corp.*............... 1,552,994
17,700 Anchor Bancorp Wisconsin, Inc.... 277,669
9,500 Blanch (E.W.) Holdings, Inc...... 197,125
28,200 Centura Banks, Inc............... 1,080,413
20,300 Chittenden Corp.................. 521,456
21,800 Commerce Bancorp, Inc............ 1,268,488
40,200 Commercial Federal Corp.......... 768,825
34,300 Community First Bankshares, Inc.. 602,394
37,200 Cullen/Frost Bankers, Inc........ 1,209,000
9,100 Dain Rauscher Corp............... 846,300
14,300 Delphi Financial Group, Inc.,
Class A* ....................... 579,150
20,000 Downey Financial Corp............ 790,000
25,300 Eaton Vance Corp................. 1,290,300
27,100 Enhance Financial Services
Group, Inc. ..................... 352,300
47,700 Fidelity National Financial, Inc. 1,180,575
45,100 First American Financial Corp.... 941,463
29,300 First Midwest Bancorp, Inc....... 780,113
19,200 FirstBancorp/Puerto Rico......... 469,200
49,800 Fremont General Corp............. 171,188
26,500 Gallagher (Arthur J.) & Co....... 1,566,813
8,200 GBC Bancorp...................... 279,313
9,300 Hilb, Rogal & Hamilton Co........ 387,694
36,100 Hudson United Bancorp............ 997,263
32,100 Imperial Bancorp*................ 613,913
21,100 Investors Financial
Services Corp. .................. 1,331,938
17,400 Jefferies Group, Inc............. 467,625
16,500 MAF Bancorp, Inc................. 410,438
20,700 Morgan Keegan, Inc............... 362,250
29,300 Mutual Risk Management, Ltd...... 642,769
19,100 Pioneer Group Inc.*.............. 839,803
20,280 Provident Bankshares Corp........ 339,690
14,800 Queens County Bancorp, Inc....... 427,350
26,700 Radian Group, Inc................ 1,802,250
MARKET
SHARES VALUE
------ ------
FINANCE (CONTINUED)
32,800 Raymond James Financial, Inc..... $ 1,080,350
20,100 Riggs National Corp.............. 246,225
7,000 RLI Corp......................... 269,938
6,700 SCPIE Holdings, Inc.............. 134,838
18,500 Selective Insurance Group, Inc... 330,688
32,800 Silicon Valley Bancshares*....... 1,910,088
30,600 South Financial Group, Inc....... 386,325
20,100 Southwest Bancorp
of Texas, Inc.* ................. 657,019
11,260 Southwest Securities Group, Inc.. 329,355
26,200 Staten Island Bancorp, Inc....... 524,000
27,900 Susquehanna Bancshares, Inc...... 425,475
13,200 Trenwick Group, Ltd.............. 250,800
38,100 Trustco Bank Corp................ 469,106
16,000 Tucker Anthony Sutro Co.......... 406,000
29,800 United Bankshares, Inc........... 584,825
37,200 Washington Federal, Inc.......... 846,300
16,100 Whitney Holding Corp............. 584,631
12,200 Zenith National Insurance Corp... 266,875
-------------
35,050,900
-------------
COMMUNICATIONS - 5.65%
26,600 Adaptive Broadband Corp.*........ 518,700
14,400 Advo, Inc.*...................... 475,200
19,900 Allen Telecom, Inc.*............. 337,056
25,900 Anixter International, Inc.*..... 754,337
36,500 Aspect Communications Corp.*..... 752,812
16,000 Audiovox Corp.*.................. 241,000
21,100 Auspex Systems, Inc.*............ 261,112
16,000 Aware, Inc.*..................... 616,000
13,900 Black Box Corp.*................. 648,087
24,100 C-COR.net Corp.*................. 369,031
39,000 Catalina Marketing Corp.*........ 1,467,375
11,200 Cyrk International, Inc.*........ 38,500
9,600 Davox Corp.*..................... 96,600
49,500 DMC Stratex Networks, Inc.*...... 795,094
8,500 4 Kids Entertainment, Inc.*...... 143,437
36,500 General Communication, Inc.,
Class A* ........................ 261,203
45,300 Ha-Lo Industries, Inc.*.......... 181,200
70,058 Havas Advertising SA, ADR*....... 1,024,600
14,900 National Discount Brokers
Group, Inc.* ................... 460,969
15,300 Network Equipment
Technologies, Inc.* ............ 163,519
54,800 P-COM, Inc.*..................... 363,050
22,600 Penton Media, Inc................ 621,500
34,500 Plantronics Inc.*................ 1,311,000
17,900 Proxim, Inc.*.................... 796,550
16,150 SymmetriCom, Inc. *.............. 252,344
57,000 TALK.com, Inc.*.................. 251,156
11,600 Telxon Corp.*.................... 203,000
10,100 Thomas Nelson, Inc............... 82,694
35,200 True North Communications, Inc... 1,258,400
14,800 Viasat, Inc.*.................... 331,150
22,000 Visual Networks, Inc.*........... 144,375
21,200 Xircom, Inc.*.................... 535,300
-------------
15,756,351
-------------
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
SMALL COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
ENERGY - 5.24%
9,800 Atwood Oceanics, Inc.*........... $ 408,537
23,200 Barrett Resources Corp.*......... 877,250
20,200 Cabot Oil & Gas Corp., Class A... 411,575
11,200 Cal Dive International, Inc.*.... 640,500
49,200 Cross Timbers Oil Co............. 944,025
12,300 Dril-Quip, Inc.*................. 490,462
34,600 Friede Goldman Halter, Inc.*..... 244,362
13,400 HS Resources, Inc.*.............. 450,575
36,100 Input/Output, Inc.*.............. 347,462
28,900 Louis Dreyfus Natural Gas Corp.*. 1,145,162
30,100 Newfield Exploration Co.*........ 1,405,294
12,500 Nuevo Energy Co.*................ 229,687
16,200 Oceaneering International, Inc.*. 269,325
12,000 Patina Oil & Gas Corp............ 240,000
12,800 Plains Resources, Inc.*.......... 241,600
28,700 Pogo Producing Co................ 728,262
46,400 Pride International, Inc.*....... 1,229,600
15,300 Remington Oil & Gas Corp.*....... 159,694
12,000 SEACOR Smit, Inc.*............... 559,500
16,800 Seitel, Inc.*.................... 241,500
16,100 St. Mary Land & Exploration Co... 371,306
13,100 Stone Energy Corp.*.............. 720,500
7,800 Swift Energy Co.*................ 324,188
9,600 TETRA Technologies, Inc.*........ 145,800
18,400 Veritas DGC, Inc.*............... 532,450
44,400 Vintage Petroleum, Inc........... 1,010,100
11,000 WD-40 Co......................... 233,750
-------------
14,602,466
-------------
UTILITIES - 3.12%
6,400 American States Water Co......... 193,600
22,500 Atmos Energy Corp................ 464,063
33,500 Avista Corp...................... 753,750
5,200 Bangor Hydro-Electric Co......... 125,775
7,900 Cascade Natural Gas Corp......... 138,250
8,200 Central Vermont Public
Service Corp. ................... 83,538
12,000 CH Energy Group, Inc............. 478,500
21,300 Energen Corp..................... 633,675
3,900 Green Mountain Power Corp........ 29,494
13,400 Laclede Gas Co................... 289,775
12,600 New Jersey Resources Corp........ 511,875
17,900 Northwest Natural Gas Co......... 407,225
16,400 NorthWestern Corp................ 319,800
9,200 NUI Corp......................... 277,725
29,100 Philadelphia Suburban Corp....... 674,756
22,400 Piedmont Natural Gas Co., Inc.... 686,000
32,970 Southern Union Co.*.............. 653,218
22,200 Southwest Gas Corp............... 464,813
17,800 Southwestern Energy Co........... 155,750
19,300 UGI Corp......................... 468,025
9,900 UIL Holdings Corp................ 509,231
23,000 Unisource Energy Corp............ 376,625
-------------
8,695,463
-------------
MARKET
SHARES VALUE
------ ------
BASIC MATERIALS - 2.40%
15,800 Arch Chemicals, Inc.............. $ 288,350
22,100 Birmingham Steel Corp............ 59,394
11,600 Brush Wellman, Inc............... 250,850
24,800 Buckeye Technologies, Inc.*...... 514,600
17,700 Cambrex Corp..................... 654,900
18,300 Caraustar Industries, Inc........ 202,444
11,300 ChemFirst, Inc................... 235,181
11,800 Commonwealth Industries, Inc..... 65,637
8,800 Deltic Timber Corp............... 149,050
16,500 Lilly Industries, Inc., Class A.. 486,750
22,200 MacDermid, Inc................... 466,200
10,900 Material Sciences Corp.*......... 123,987
18,600 Mississippi Chemical Corp........ 74,400
17,000 OM Group, Inc.................... 741,625
28,200 Omnova Solutions, Inc............ 156,862
5,300 Penford Corp..................... 82,150
10,400 Pope & Talbot, Inc............... 148,850
6,300 Quaker Chemical Corp............. 107,100
19,800 Reliance Steel & Aluminum Co..... 417,037
14,800 RTI International Metals, Inc.*.. 213,675
11,000 Schweitzer-Mauduit
International, Inc. ............ 147,125
34,200 Steel Dynamics, Inc.*............ 314,212
7,600 Steel Technologies, Inc.......... 47,975
27,400 Stillwater Mining Co.*........... 741,718
10,300 WHX Corp.*....................... 15,450
-------------
6,705,522
-------------
TOTAL COMMON STOCKS ............. 271,696,622
-------------
(Cost $251,369,090)
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
SMALL COMPANY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000 (UNAUDITED)
MARKET
PAR VALUE VALUE
--------- ------
U.S. GOVERNMENT OBLIGATION (A) - 0.52%
U.S. TREASURY BILL (B) - 0.52%
$1,500,000 5.62%, 03/01/01.................. $ 1,462,313
-------------
TOTAL U.S. GOVERNMENT OBLIGATION. 1,462,313
-------------
(COST $1,464,666)
REPURCHASE AGREEMENT - 2.15%
5,986,000 Repurchase Agreement with:
State Street Bank
6.43%, Due 10/02/2000
dated 09/29/2000
Repurchase Price $5,989,208
(Collateralized by
U.S. Treasury Note
5.75%, Due 06/30/2001
Total Par $6,050,000
Market Value $6,110,500)......... 5,986,000
-------------
TOTAL REPURCHASE AGREEMENT ...... 5,986,000
-------------
(Cost $5,986,000)
TOTAL INVESTMENTS - 100.11%...................... 279,144,935
-------------
(Cost $258,819,756)
NET OTHER ASSETS AND LIABILITIES - (0.11)%....... (303,230)
-------------
NET ASSETS - 100.00%............................. $ 278,841,705
=============
---------------------------------------------
* Non-income producing security.
ADR American Depositary Receipt.
(A) Discount yield at time of purchase.
(B) Securities have been deposited as initial margin on open futures contracts.
At September 30, 2000, the Fund's open futures contracts were as follows:
Number of Contract Expiration Opening Current
Contracts Type Date Position Market Value
--------- -------- ---------- ---------- -----------
12 Russell 2000 Dec-00 $3,278,520 $3,164,400
115 Midcap 400 Dec-00 4,126,500 4,089,750
---------- ----------
$7,405,020 $7,254,150
========== ==========
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
UTILITY INDEX FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2000 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS - 98.74%
UTILITIES - 70.22%
81,000 AES Corp.*....................... $ 5,548,500
24,100 Ameren Corp...................... 1,009,187
56,620 American Electric Power Co., Inc. 2,215,257
28,100 C P & L Energy, Inc.............. 1,171,419
28,000 Cinergy Corp..................... 925,750
19,400 CMS Energy Corp.................. 522,587
37,300 Consolidated Edison, Inc......... 1,272,862
26,300 Constellation Energy Group, Inc.. 1,308,425
41,860 Dominion Resource, Inc........... 2,430,496
25,100 DTE Energy Co.................... 960,075
64,800 Duke Energy Corp................. 5,556,600
4,600 Eastern Enterprises.............. 293,537
57,300 Edison International............. 1,106,606
39,200 Entergy Corp..................... 1,460,200
40,200 FirstEnergy Corp................. 1,082,888
17,400 Florida Progress Corp............ 921,113
31,300 FPL Group, Inc................... 2,057,975
21,300 GPU, Inc......................... 690,919
23,600 KeySpan Corp..................... 946,950
28,200 Niagara Mohawk Holdings, Inc.*... 444,150
8,100 NICOR, Inc....................... 293,119
5,100 Oneok, Inc....................... 202,725
29,900 PECO Energy Co................... 1,810,819
6,200 Peoples Energy Corp.............. 206,925
67,900 PG&E Corp........................ 1,642,331
14,900 Pinnacle West Capital Corp....... 758,038
25,500 PPL Corp......................... 1,064,625
37,700 Public Service Enterprise
Group, Inc. ..................... 1,684,719
51,700 Reliant Energy, Inc.............. 2,404,050
35,900 Sempra Energy.................... 747,169
114,100 Southern Co...................... 3,701,119
46,500 TXU Corp......................... 1,842,563
30,600 Unicom Corp...................... 1,719,338
59,710 XCEL Energy, Inc................. 1,642,025
-------------
51,645,061
-------------
MARKET
SHARES VALUE
------ ------
ENERGY - 28.52%
37,700 Coastal Corp..................... $ 2,794,512
13,700 Columbia Energy Group............ 972,700
40,900 El Paso Energy Corp.............. 2,520,462
130,000 Enron Corp....................... 11,391,250
77,900 Williams Cos., Inc............... 3,291,275
-------------
20,970,199
-------------
TOTAL COMMON STOCKS ............. 72,615,260
-------------
(Cost $48,590,340)
TOTAL INVESTMENTS - 98.74%....................... 72,615,260
-------------
(Cost $48,590,340)
NET OTHER ASSETS AND LIABILITIES - 1.26%......... 929,766
-------------
NET ASSETS - 100.00%............................. $ 73,545,026
=============
----------------------------------------
* Non-income producing security.
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
U.S. TREASURY INDEX FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2000 (UNAUDITED)
MARKET
PAR VALUE VALUE
--------- ------
U.S. GOVERNMENT OBLIGATIONS - 97.67%
U.S. TREASURY NOTES - 62.34%
$1,450,000 5.88%, 10/31/01.................. $ 1,444,562
2,200,000 7.50%, 11/15/01.................. 2,229,546
12,600,000 6.38%, 01/31/02.................. 12,631,500
8,500,000 6.38%, 06/30/02.................. 8,545,135
2,900,000 6.38%, 08/15/02.................. 2,918,125
13,050,000 6.25%, 08/31/02.................. 13,102,983
2,200,000 5.50%, 02/28/03.................. 2,176,614
7,850,000 5.75%, 08/15/03.................. 7,810,750
7,075,000 7.25%, 05/15/04.................. 7,377,881
10,400,000 7.25%, 08/15/04.................. 10,877,672
1,900,000 7.50%, 02/15/05.................. 2,016,375
7,825,000 7.00%, 07/15/06.................. 8,230,883
4,650,000 6.50%, 10/15/06.................. 4,779,316
11,315,000 5.63%, 05/15/08.................. 11,102,844
3,800,000 6.00%, 08/15/09.................. 3,816,606
-------------
99,060,792
-------------
U.S. TREASURY BONDS - 35.33%
250,000 12.38%, 05/15/04................. 301,405
900,000 10.75%, 08/15/05................. 1,080,837
4,050,000 12.00%, 08/15/13................. 5,520,636
7,750,000 7.50%, 11/15/16.................. 8,832,520
3,130,000 8.75%, 05/15/17.................. 3,977,041
2,439,000 8.88%, 08/15/17.................. 3,137,920
2,821,000 8.50%, 02/15/20.................. 3,573,840
2,000,000 7.88%, 02/15/21.................. 2,405,620
4,900,000 8.13%, 08/15/21.................. 6,048,413
11,800,000 7.50%, 11/15/24.................. 13,890,724
7,300,000 6.13%, 11/15/27.................. 7,361,539
-------------
56,130,495
-------------
TOTAL U.S. GOVERNMENT OBLIGATIONS 155,191,287
-------------
(Cost $155,394,551)
MARKET
PAR VALUE VALUE
--------- ------
REPURCHASE AGREEMENT - 1.00%
$1,581,000 Repurchase Agreement with:
State Street Bank 6.43%
Due 10/02/2000, dated 9/29/2000
Repurchase Price $1,581,847
(Collateralized by
U.S. Treasury Note
5.75%, Due 6/30/2001
Total Par 1,600,000
Market Value $1,616,000)......... $ 1,581,000
-------------
TOTAL REPURCHASE AGREEMENT ...... 1,581,000
-------------
(Cost $1,581,000)
TOTAL INVESTMENTS - 98.67%....................... 156,772,287
-------------
(Cost $156,975,551)
NET OTHER ASSETS AND LIABILITIES - 1.33%......... 2,115,247
-------------
NET ASSETS - 100.00%............................. $ 158,887,534
=============
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE>
MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2000 (UNAUDITED)
MARKET
PAR VALUE VALUE
--------- ------
MUNICIPAL BONDS - 98.49%
ALABAMA - 1.29%
$ 400,000 Auburn University Athletics
5.20%, 04/01/04
Insured: MBIA.................... $ 407,500
-------------
ALASKA - 2.85%
1,000,000 North Slope Boro
Capital Appreciation
Series B, GO
4.72%, 01/01/03 (B)
Insured: MBIA.................... 898,750
-------------
ARIZONA - 3.39%
250,000 Maricopa County School
District 1
Elementary Project of 1998,
Series A
6.00%, 07/01/11
Insured: FSA..................... 271,562
750,000 Maricopa County School
District 4, GO
Mesa University, Series A
Prerefunded 07/01/05
5.65%, 07/01/11
Insured: FGIC.................... 795,937
-------------
1,067,499
-------------
CALIFORNIA - 3.45%
1,000,000 Sacramento County
Sanitation District
Series A
6.00%, 12/01/15.................. 1,086,250
-------------
COLORADO - 4.17%
750,000 Colorado Department of
Transportation Revenue
6.00%, 06/15/15
Insured: AMBAC................... 792,187
500,000 Jefferson County School District
Number R-001, GO
5.50%, 12/15/06
Insured: MBIA.................... 521,875
-------------
1,314,062
-------------
FLORIDA - 3.33%
1,000,000 Florida State Board of Education
Capital Outlay, Public Education
Series A, GO Prerefunded 06/01/04
5.70%, 06/01/08
Insured: AMBAC................... 1,047,500
-------------
MARKET
PAR VALUE VALUE
--------- ------
ILLINOIS - 8.23%
$ 500,000 Chicago Il Project, Series C
5.75%, 01/01/13
Insured: FGIC.................... $ 520,000
500,000 Illinois State Sales
Tax Revenue, Series V
6.00%, 06/15/08.................. 532,500
1,000,000 Illinois State, GO
5.70%, 04/01/16
Insured: MBIA.................... 1,018,750
500,000 Kane County Community
School District
Number 304, Geneva, GO
6.00%, 06/01/04
Insured: FGIC.................... 521,875
-------------
2,593,125
-------------
MARYLAND - 4.88%
500,000 Maryland State
GO State and Local Facilities
Loan Second Series
5.25%, 06/15/06.................. 516,250
1,000,000 Maryland State
GO State and Local Facilities
Loan Second Series
5.00%, 07/15/07.................. 1,020,000
-------------
1,536,250
-------------
MASSACHUSETTS - 11.17%
750,000 Massachusetts Bay Transportation
Authority General
Transportation System
Revenue Series A
5.50%, 03/01/14
Insured: MBIA.................... 768,750
500,000 Massachusetts Bay Transportation
Authority Revenue, Series A
5.75%, 07/01/13.................. 525,625
500,000 Massachusetts State Construction
Loan Series B, GO
5.00%, 05/01/19.................. 455,625
250,000 Massachusetts State
Federal Highway
Grant Anticipation Note, Series A
5.25%, 12/15/12.................. 252,812
1,000,000 New England Education
Loan Marketing Corp.
Series G
5.20%, 08/01/02.................. 1,008,750
500,000 Springfield, Series B, GO
5.05%, 01/15/04
Insured: MBIA.................... 508,125
-------------
3,519,687
-------------
MINNESOTA - 1.68%
500,000 University of Minnesota, Series A
5.75%, 07/01/13.................. 527,500
-------------
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE>
MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000 (UNAUDITED)
MARKET
PAR VALUE VALUE
--------- ------
MISSISSIPPI - 1.59%
$ 500,000 Perry County, PCR
Leaf River Forest Project
5.50%, 03/01/02 (A)
LOC: Wachovia Bank N.A........... $ 500,000
-------------
MISSOURI - 3.33%
1,000,000 Sikeston Electric Revenue
6.00%, 06/01/04
Insured: MBIA.................... 1,047,500
-------------
NEVADA - 6.22%
750,000 Clark County School District, GO
5.50%, 06/15/12
Insured: FSA..................... 780,000
635,000 Clark County School District,
Series A
6.00%, 06/15/16
Insured: MBIA.................... 667,544
500,000 Las Vegas Valley Water District
Revenue, GO
5.40%, 09/01/04
Insured: AMBAC................... 511,875
-------------
1,959,419
-------------
NEW JERSEY - 7.84%
750,000 New Jersey Health Care Facilities
Financing Authority,
Dover General
Hospital and Medical Center
5.60%, 07/01/02
Insured: MBIA.................... 763,125
600,000 New Jersey State
Transportation Authority
Transportation System Revenue,
Series A
5.63%, 06/15/12.................. 629,250
1,000,000 New Jersey State
Turnpike Authority,
Series A
6.00%, 01/01/13
Insured: MBIA.................... 1,077,500
-------------
2,469,875
-------------
NEW YORK - 7.30%
500,000 Nassau County IDA
Civic Facility Revenue Hofstra
University Project
5.25%, 07/01/08
Insured: MBIA.................... 516,250
390,000 New York State, Series F, GO
5.75%, 02/01/10.................. 407,063
500,000 New York State
Dormitory Authority
Revenue, City University System
Consolidated, Series A
5.50%, 07/01/02.................. 506,875
MARKET
PAR VALUE VALUE
--------- ------
NEW YORK (CONTINUED)
$ 500,000 New York State Environmental
Facilities Corp., PCR, State
Water Revolving Fund, NYC
Municipal Water
5.75%, 06/15/09.................. $ 533,750
325,000 New York State Medical Care
Facilities Finance Agency Revenue
Prerefunded 02/15/01
7.50%, 08/15/07.................. 335,137
-------------
2,299,075
-------------
OHIO - 2.48%
750,000 Cleveland Waterworks Revenue
First Mortgage, Series G
5.50%, 01/01/13
Insured: MBIA.................... 780,938
-------------
OREGON - 2.54%
750,000 Portland Airport Way
Urban Renewal & Redevelopment
Tax Increment, Series A
6.00%, 06/15/15
Insured: AMBAC................... 798,750
-------------
PENNSYLVANIA - 3.26%
1,000,000 Penn Hills, GO
5.80%, 12/01/13
Insured: AMBAC................... 1,027,500
-------------
TEXAS - 4.65%
500,000 Carrollton Farmers Branch
Independent School District, GO
5.10%, 02/15/04.................. 505,625
500,000 Judson Independent
School District, GO
5.00%, 02/01/17
Insured: PSF..................... 463,125
500,000 Lower Colorado River Authority
Revenue, Junior Lien
Fifth Supplemental Series
5.38%, 01/01/16.................. 497,500
-------------
1,466,250
-------------
VIRGINIA - 5.22%
850,000 Newport News, Series A, GO
6.00%, 05/01/02.................. 869,125
750,000 Virginia State
Transportation Board
Transportation Contract Revenue
Route 28 Project
6.00%, 04/01/10.................. 776,250
-------------
1,645,375
-------------
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE>
MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000 (UNAUDITED)
MARKET
PAR VALUE VALUE
--------- ------
WASHINGTON - 3.28%
$ 750,000 Seattle Municipal Light & Power
Revenue Series B
5.75%, 08/01/07.................. $ 776,250
250,000 Seattle Water System Revenue
5.38%, 08/01/09.................. 258,438
-------------
1,034,688
-------------
WEST VIRGINIA - 4.71%
500,000 West Virginia School
Building Authority
Refunding, Capital Improvement
5.30%, 07/01/09
Insured: AMBAC................... 512,500
300,000 West Virginia State Housing
Development Fund, Housing Finance
Series A
5.55%, 11/01/10.................. 309,000
1,500,000 West Virginia State
University Revenues
West Virginia University Project
Series A
5.79%, 04/01/15 (B)
Insured: AMBAC................... 661,875
-------------
1,483,375
-------------
WISCONSIN - 1.63%
500,000 Wisconsin State Petroleum
Inspection Fee Revenue
Series A
5.50%, 07/01/03.................. 513,125
-------------
TOTAL MUNICIPAL BONDS ........... 31,023,993
-------------
(Cost $30,612,519)
SHARES
------
INVESTMENT COMPANIES - 0.41%
93,025 Dreyfus Tax-Exempt Cash
Management Fund.................. $ 93,025
35,761 Federated Tax-Exempt
Obligations Fund................. 35,761
-------------
TOTAL INVESTMENT COMPANIES ...... 128,786
-------------
(Cost $128,786)
TOTAL INVESTMENTS - 98.90%....................... 31,152,779
-------------
(Cost $30,741,305)
NET OTHER ASSETS AND LIABILITIES - 1.10%......... 346,213
-------------
NET ASSETS - 100.00%............................. $ 31,498,992
=============
-------------------------------------------
(A) Variable rate security. Interest rate is rate in effect at September 30,
2000.
(B) Zero Coupon Bond. Rate shown reflects effective yield to maturity at
time of purchase.
AMBAC American Municipal Bond Assurance Corp.
FGIC Financial Guaranty Insurance Corp.
FSA Financial Security Assurance Corp.
GO General Obligation
IDA Industrial Development Authority
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
PCR Pollution Control Revenue
PSF Permanent School Fund Guaranteed
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
This page left blank intentionally.
<PAGE>
GALAXY FUND II
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
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.................. $ 644,908,403 $ 252,833,756 $ 48,590,340 $ 155,394,551 $ 30,741,305
Repurchase agreement................. 6,581,000 5,986,000 -- 1,581,000 --
Net unrealized
appreciation (depreciation)........ 382,313,628 20,325,179 24,024,920 (203,264) 411,474
-------------- -------------- -------------- ------------- --------------
Total investments at value......... 1,033,803,031 279,144,935 72,615,260 156,772,287 31,152,779
Cash................................... 5,469 75 -- 437 --
Receivable for investments sold........ -- -- 3,011,335 3,044,171 --
Receivable for shares sold............. 584,537 70,417 670,422 177,520 140
Interest and dividend receivables...... 840,529 129,174 104,398 2,408,168 443,380
-------------- -------------- -------------- ------------- --------------
Total Assets....................... 1,035,233,566 279,344,601 76,401,415 162,402,583 31,596,299
-------------- -------------- -------------- ------------- --------------
LIABILITIES:
Payable for investments purchased...... -- -- -- 3,042,980 --
Payable for shares repurchased......... 2,731,071 363,185 338,640 217,617 10,255
Payable for daily variation margin
on future contracts.................. 128,525 44,860 -- -- --
Due to custodian....................... -- -- 2,494,719 -- 7,909
Distributions payable.................. -- -- -- 201,006 63,390
Advisory fee payable (Note 4).......... 87,123 23,253 5,746 13,003 6,539
Sub-account services
fee payable (Note 4) ................ 53,232 1,599 17 1,401 --
Administration fee payable (Note 4).... 261,369 69,758 17,238 39,007 9,154
Other payables......................... 1,143 241 29 35 60
-------------- -------------- -------------- ------------- --------------
Total Liabilities.................. 3,262,463 502,896 2,856,389 3,515,049 97,307
-------------- -------------- -------------- ------------- --------------
NET ASSETS:............................... $1,031,971,103 $ 278,841,705 $ 73,545,026 $ 158,887,534 $ 31,498,992
============== ============== ============== ============= ==============
NET ASSETS CONSIST OF:
Par value (Note 3)..................... $ 25,321 $ 14,958 $ 3,966 $ 15,537 $ 3,084
Paid-in capital in excess of par value. 552,453,699 229,205,879 45,658,164 167,702,658 31,974,547
Undistributed net investment income.... 5,623,978 922,347 62,800 129 163
Accumulated net realized gain (loss) on
investments sold and futures contracts 91,893,756 28,524,212 3,795,176 (8,627,526) (890,276)
Unrealized appreciation (depreciation)
of investments and futures contracts. 381,974,349 20,174,309 24,024,920 (203,264) 411,474
-------------- -------------- -------------- ------------- --------------
TOTAL NET ASSETS:......................... $1,031,971,103 $ 278,841,705 $ 73,545,026 $ 158,887,534 $ 31,498,992
============== ============== ============== ============= ==============
SHARES OF BENEFICIAL INTEREST OUTSTANDING. 25,321,335 14,957,753 3,965,614 15,537,304 3,083,645
NET ASSET VALUE:
offering and redemption price per share
(Net Assets (DIVIDE) Shares Outstanding). $ 40.76 $ 18.64 $ 18.55 $ 10.23 $ 10.21
============== ============== ============== ============= ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE>
GALAXY FUND II
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
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)...................... $ 372,308 $ 240,714 $ 18,279 $ 5,080,890 $ 769,172
Dividends (Note 2)..................... 5,894,295 921,300 996,003 -- 13,087
Less: foreign withholding tax.......... (20,533) -- -- -- --
------------- ------------- ------------- ------------- -------------
Total investment income.............. 6,246,070 1,162,014 1,014,282 5,080,890 782,259
------------- ------------- ------------- ------------- -------------
EXPENSES:
Investment advisory fee (Note 4)....... 524,107 136,518 29,230 78,757 38,196
Sub-account services fee (Note 4)...... 345,393 8,039 85 11,966 --
Administration fee (Note 4)............ 1,572,323 409,555 87,689 236,270 53,474
Trustees' fee (Note 4)................. 8,166 3,268 1,794 2,510 1,640
Miscellaneous.......................... 28,246 8,119 1,876 5,930 726
------------- ------------- ------------- ------------- -------------
Total expenses before reimbursement.. 2,478,235 565,499 120,674 335,433 94,036
------------- ------------- ------------- ------------- -------------
Less: reimbursement by
sub-administrator (Note 4)......... (8,166) (3,268) (1,794) (2,510) (1,640)
------------- ------------- ------------- ------------- -------------
Total expenses net of reimbursement.. 2,470,069 562,231 118,880 332,923 92,396
------------- ------------- ------------- ------------- -------------
NET INVESTMENT INCOME..................... 3,776,001 599,783 895,402 4,747,967 689,863
------------- ------------- ------------- ------------- -------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS AND FUTURES
CONTRACTS (Note 2):
Net realized gain (loss) on
investments sold ................... 34,715,115 18,801,901 2,630,887 (1,226,611) (162,374)
Net realized loss on futures contracts. (45,877) (397,260) -- -- --
Net change in unrealized appreciation
(depreciation) on investments
and futures contracts................ (73,443,848) (8,286,412) 17,031,992 2,650,994 479,330
------------- ------------- ------------- ------------- -------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FUTURES CONTRACTS..................... (38,774,610) 10,118,229 19,662,879 1,424,383 316,956
------------- ------------- ------------- ------------- -------------
NET INCREASE (DECREASE)IN NET ASSETS
RESULTING FROM OPERATIONS................. $ (34,998,609) $ 10,718,012 $ 20,558,281 $ 6,172,350 $ 1,006,819
============= ============= ============= ============= =============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
29
<PAGE>
GALAXY FUND II
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
LARGE COMPANY INDEX FUND SMALL COMPANY INDEX FUND
------------------------------- -------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED SEPTEMBER 30, ENDED ENDED SEPTEMBER 30, ENDED
2000 MARCH 31, 2000 MARCH 31,
(UNAUDITED) 2000 (UNAUDITED) 2000
-------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD...................... $1,065,129,367 $ 828,899,259 $ 279,913,660 $ 259,903,218
-------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income............................... 3,776,001 8,338,238 599,783 1,411,502
Net realized gain (loss) on investments sold
and futures contracts............................. 34,669,238 65,719,701 18,404,641 21,502,773
Net change in unrealized appreciation
(depreciation) of investments
and futures contracts ......................... (73,443,848) 77,676,368 (8,286,412) 48,756,536
-------------- -------------- ------------- -------------
Net increase (decrease) in net assets
resulting from operations....................... (34,998,609) 151,734,307 10,718,012 71,670,811
-------------- -------------- ------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income............................... -- (8,354,459) -- (1,459,959)
Net realized gain on investments
and futures contracts ............................ -- (16,900,167) -- (23,979,469)
-------------- -------------- ------------- -------------
Total Dividends................................... -- (25,254,626) -- (25,439,428)
-------------- ------------- ------------- -------------
SHARE TRANSACTIONS:
Net proceeds from sales of shares................... 96,406,948 327,152,595 8,858,001 82,604,808
Issued to shareholders in reinvestment
of dividends...................................... -- 23,077,462 -- 24,188,523
Cost of shares repurchased.......................... (94,566,603) (240,479,630) (20,647,968) (133,014,272)
-------------- ------------- ------------- -------------
Net increase (decrease) in net assets
from share transactions ........................ 1,840,345 109,750,427 (11,789,967) (26,220,941)
-------------- ------------- ------------- -------------
Net increase (decrease) in net assets............. (33,158,264) 236,230,108 (1,071,955) 20,010,442
-------------- ------------- ------------- -------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A)......... $1,031,971,103 $1,065,129,367 $ 278,841,705 $ 279,913,660
============== ============= ============= =============
(A) Undistributed net investment income............. $ 5,623,978 $ 1,847,977 $ 922,347 $ 322,564
============== ============== ============= =============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold................................................ 2,340,773 8,395,202 495,440 4,907,412
Issued to shareholders in reinvestment
of dividends...................................... -- 579,464 -- 1,544,562
Repurchased......................................... (2,295,512) (6,162,753) (1,157,018) (7,903,618)
-------------- -------------- ------------- -------------
Net increase (decrease) in shares outstanding..... 45,261 2,811,913 (661,578) (1,451,644)
============== ============== ============= =============
</TABLE>
<PAGE>
<TABLE>
UTILITY INDEX FUND U.S. TREASURY INDEX FUND
------------------------------- -------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED SEPTEMBER 30, ENDED ENDED SEPTEMBER 30, ENDED
2000 MARCH 31, 2000 MARCH 31,
(UNAUDITED) 2000 (UNAUDITED) 2000
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD...................... $ 49,977,403 $ 55,130,734 $ 160,388,962 $ 202,419,601
-------------- ------------- ------------- --------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income............................... 895,402 1,986,909 4,747,967 10,705,157
Net realized gain (loss) on investments sold
and futures contracts............................. 2,630,887 2,659,064 (1,226,611) (3,829,905)
Net change in unrealized appreciation
(depreciation) of investments
and futures contracts ......................... 17,031,992 (622,871) 2,650,994 (3,297,536)
-------------- ------------- ------------- --------------
Net increase (decrease) in net assets
resulting from operations....................... 20,558,281 4,023,102 6,172,350 3,577,716
-------------- ------------- ------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income............................... (885,081) (2,020,360) (4,747,967) (11,323,274)
Net realized gain on investments
and futures contracts ............................ -- (1,735,894) -- --
-------------- ------------- ------------- --------------
Total Dividends................................... (885,081) (3,756,254) (4,747,967) (11,323,274)
-------------- ------------- ------------- --------------
SHARE TRANSACTIONS:
Net proceeds from sales of shares................... 16,976,294 6,583,290 15,562,898 60,899,508
Issued to shareholders in reinvestment
of dividends...................................... 807,986 3,466,744 3,406,087 8,610,845
Cost of shares repurchased.......................... (13,889,857) (15,470,213) (21,894,796) (103,795,434)
-------------- ------------- ------------- --------------
Net increase (decrease) in net assets
from share transactions ........................ 3,894,423 (5,420,179) (2,925,811) (34,285,081)
-------------- ------------- ------------- --------------
Net increase (decrease) in net assets............. 23,567,623 (5,153,331) (1,501,428) (42,030,639)
-------------- ------------- ------------- --------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A)......... $ 73,545,026 $ 49,977,403 $ 158,887,534 $ 160,388,962
============== ============= ============= ==============
(A) Undistributed net investment income............. $ 62,800 $ 52,479 $ 129 $ 129
============== ============= ============= ==============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold................................................ 1,024,877 466,071 1,535,526 5,959,352
Issued to shareholders in reinvestment
of dividends...................................... 50,300 272,072 335,916 848,178
Repurchased......................................... (861,558) (1,117,031) (2,161,317) (10,187,373)
-------------- ------------- ------------- --------------
Net increase (decrease) in shares outstanding..... 213,619 (378,888) (289,875) (3,379,843)
============== ============= ============= ==============
</TABLE>
<PAGE>
<TABLE>
MUNICIPAL BOND FUND
-------------------------------
SIX MONTHS YEAR
ENDED SEPTEMBER 30, ENDED
2000 MARCH 31,
(UNAUDITED) 2000
-------------- -------------
<S> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD...................... $ 27,769,061 $ 21,606,862
-------------- -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income...............................
Net realized gain (loss) on investments sold 689,863 990,425
and futures contracts.............................
Net change in unrealized appreciation (162,374) (70,731)
(depreciation) of investments
and futures contracts ......................... 479,330 (874,456)
-------------- -------------
Net increase (decrease) in net assets
resulting from operations....................... 1,006,819 45,238
-------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income............................... (689,863) (1,014,596)
Net realized gain on investments
and futures contracts ............................ -- --
-------------- -------------
Total Dividends................................... (689,863) (1,014,596)
-------------- -------------
SHARE TRANSACTIONS:
Net proceeds from sales of shares................... 6,698,224 16,508,893
Issued to shareholders in reinvestment
of dividends...................................... 338,148 738,954
Cost of shares repurchased.......................... (3,623,397) (10,116,290)
-------------- -------------
Net increase (decrease) in net assets
from share transactions ........................ 3,412,975 7,131,557
-------------- -------------
Net increase (decrease) in net assets............. 3,729,931 6,162,199
-------------- -------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A)......... $ 31,498,992 $ 27,769,061
============== =============
(A) Undistributed net investment income............. $ 163 $ 163
============== =============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold................................................ 667,489 1,615,439
Issued to shareholders in reinvestment
of dividends...................................... 33,343 71,848
Repurchased......................................... (357,385) (987,859)
-------------- -------------
Net increase (decrease) in shares outstanding..... 343,447 699,428
============== =============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
30-31
<PAGE>
LARGE COMPANY INDEX FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
SIX MONTHS ENDED
SEPTEMBER 30, YEARS ENDED MARCH 31,
2000 ---------------------------------------------------------------------
(UNAUDITED) 2000 1999 1998 1997 1996
----------- ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period......... $ 42.14 $ 36.90 $ 31.92 $ 23.09 $ 20.06 $ 15.76
----------- ----------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income(1).................. 0.15 0.32 0.35 0.40 0.43 0.38
Net realized and unrealized gain
on investments and futures contracts.... (1.53) 5.93 5.38 10.23 3.41 4.57
----------- ----------- ---------- ---------- ---------- ----------
Total from Investment Operations...... (1.38) 6.25 5.73 10.63 3.84 4.95
----------- ----------- ---------- ---------- ---------- ----------
Less Dividends:
Dividends from net investment income...... -- (0.33) (0.36) (0.44) (0.38) (0.31)
Dividends from net realized capital gains. -- (0.68) (0.39) (1.36) (0.43) (0.34)
----------- ----------- ---------- ---------- ---------- ----------
Total Dividends....................... -- (1.01) (0.75) (1.80) (0.81) (0.65)
----------- ----------- ---------- ---------- ---------- ----------
Net increase in net asset value.............. (1.38) 5.24 4.98 8.83 3.03 4.30
----------- ----------- ---------- ---------- ---------- ----------
Net Asset Value, End of period............... $ 40.76 $ 42.14 $ 36.90 $ 31.92 $ 23.09 $ 20.06
=========== =========== ========== ========== ========== ==========
Total Return................................. (3.37)%** 17.20% 18.15% 47.29% 19.32% 31.80%
Ratios/Supplemental Data:
Net assets, End of period (in 000's)......... $ 1,031,971 $ 1,065,129 $ 828,899 $ 626,740 $ 421,652 $ 240,689
Ratios to average net assets:
Net investment income including
reimbursement........................... 0.72%* 0.88% 1.11% 1.44% 2.19% 2.11%
Operating expenses including
reimbursement........................... 0.47%* 0.47% 0.47% 0.40% 0.40% 0.40%
Operating expenses excluding
reimbursement........................... 0.47%* 0.47% 0.47% 0.40% 0.40% 0.41%
Portfolio turnover rate...................... 6%** 12% 3% 3% 11% 5%
</TABLE>
------------------------
* Annualized
** Not Annualized
(1) Net investment income per share before reimbursement of certain expenses by
the sub-administrator for the six months ended September 30, 2000
(unaudited) and the years ended March 31, 2000, 1999, 1998, 1997 and 1996
was $0.15, $0.32, $0.35, $0.40, $0.43 and $0.38, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
32
<PAGE>
SMALL COMPANY INDEX FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
SIX MONTHS ENDED
SEPTEMBER 30, YEARS ENDED MARCH 31,
2000 -----------------------------------------------------------------
(UNAUDITED) 2000 1999 1998* 1997 1996
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period.......... $ 17.92 $ 15.22 $ 20.73 $ 22.64 $ 22.30 $ 17.62
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income(1)................... 0.04 0.09 0.10 0.27 0.38 0.32
Net realized and unrealized gain (loss)
on investments and futures contracts..... 0.68 4.31 (4.04) 7.64 1.76 5.07
--------- --------- --------- --------- --------- ---------
Total from Investment Operations....... 0.72 4.40 (3.94) 7.91 2.14 5.39
--------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income....... -- (0.09) (0.09) (0.33) (0.34) (0.38)
Dividends from net realized capital gains.. -- (1.61) (1.48) (9.49) (1.46) (0.33)
--------- --------- --------- --------- --------- ---------
Total Dividends........................ -- (1.70) (1.57) (9.82) (1.80) (0.71)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value.... 0.72 2.70 (5.51) (1.91) 0.34 4.68
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of period................ $ 18.64 $ 17.92 $ 15.22 $ 20.73 $ 22.64 $ 2.30
========= ========= ========= ========= ========= =========
Total Return.................................. 4.02%*** 30.52% (19.19)% 41.22% 9.60% 30.85%
Ratios/Supplemental Data:
Net assets, End of period (in 000's).......... $ 278,842 $ 279,914 $ 259,903 $ 399,162 $ 309,474 $ 291,724
Ratios to average net assets:
Net investment income including
reimbursement............................ 0.44%** 0.53% 0.56% 0.97% 1.59% 1.52%
Operating expenses including
reimbursement............................ 0.41%** 0.41% 0.40% 0.40% 0.40% 0.40%
Operating expenses excluding
reimbursement............................ 0.41%** 0.41% 0.41% 0.40% 0.40% 0.41%
Portfolio turnover rate....................... 19%*** 36% 22% 99% 8% 14%
</TABLE>
-----------------------------
* At a Special Meeting of Shareholders of the Small Company Index Fund held
on May 9, 1997, shareholders approved a change in the Fund's target index
from the Russell Special Small Company Index to the Standard &
Poor's(REGISTRATION MARK)Small Cap 600 Stock Price Index.
** Annualized
*** Not annualized
(1) Net investment income per share before reimbursement of certain expenses by
the sub-administrator for the six months ended September 30, 2000
(unaudited) and the years ended March 31, 2000, 1999, 1998, 1997 and 1996
was $0.04, $0.09, $0.10, $0.27, $0.38 and $0.31, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
33
<PAGE>
UTILITY INDEX FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
SIX MONTHS ENDED
SEPTEMBER 30, YEARS ENDED MARCH 31,
2000 ------------------------------------------------------------
(UNAUDITED) 2000 1999 1998* 1997 1996
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period.......... $ 13.32 $ 13.35 $ 14.18 $ 11.42 $ 12.03 $ 9.88
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income(1)................... 0.23 0.50 0.53 0.54 0.49 0.44
Net realized and unrealized gain (loss)
on investments .......................... 5.23 0.43 (0.71) 3.71 (0.09) 2.15
-------- -------- -------- -------- -------- --------
Total from Investment Operations....... 5.46 0.93 (0.18) 4.25 0.40 2.59
-------- -------- -------- -------- -------- --------
Less Dividends:
Dividends from net investment income....... (0.23) (0.51) (0.51) (0.60) (0.46) (0.44)
Dividends from net realized capital gains.. -- (0.45) (0.14) (0.82) (0.55) --
Return of capital.......................... -- -- -- (0.07) -- --
-------- -------- -------- -------- -------- --------
Total Dividends........................ (0.23) (0.96) (0.65) (1.49) (1.01) (0.44)
-------- -------- -------- -------- -------- --------
Net increase (decrease) in net asset value.... 5.23 (0.03) (0.83) 2.76 (0.61) 2.15
-------- -------- -------- -------- -------- --------
Net Asset Value, End of period................ $ 18.55 $ 13.32 $ 13.35 $ 14.18 $ 11.42 $ 12.03
======== ======== ======== ======== ======== ========
Total Return.................................. 41.30%*** 7.52% (1.53)% 39.07% 3.46% 26.61%
Ratios/Supplemental Data:
Net assets, End of period (in 000's).......... $ 73,545 $ 49,977 $ 55,131 $ 55,864 $ 45,582 $ 56,383
Ratios to average net assets:
Net investment income including
reimbursement............................ 3.05%** 3.61% 3.72% 4.24% 3.96% 3.79%
Operating expenses including
reimbursement............................ 0.40%** 0.40% 0.40% 0.40% 0.40% 0.40%
Operating expenses excluding
reimbursement............................ 0.41%** 0.40% 0.40% 0.40% 0.40% 0.41%
Portfolio turnover rate....................... 13%*** 19% 8% 72% 170% 12%
</TABLE>
-------------------------------
* At a Special Meeting of Shareholders of the Utility Index Fund held on May
9, 1997, shareholders approved a change in the Fund's target index from the
Russell 1000 Utility Index to the Standard & Poor's Utilities Composite
Stock Price Index.
** Annualized
*** Not annualized
(1) Net investment income per share before reimbursement of certain expenses by
the sub-administrator for the six months ended September 30, 2000
(unaudited) and the years ended March 31, 2000, 1999, 1998, 1997 and 1996
was $0.23, $0.50, $0.53, $0.54, $0.49 and $0.44, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
34
<PAGE>
U.S. TREASURY INDEX FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
SIX MONTHS ENDED
SEPTEMBER 30, YEARS ENDED MARCH 31,
2000 ---------------------------------------------------------------
(UNAUDITED) 2000 1999 1998 1997 1996
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.......... $ 10.13 $ 10.54 $ 10.50 $ 9.99 $ 10.24 $ 9.91
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income(1)................... 0.31 0.61 0.61 0.63 0.64 0.66
Net realized and unrealized gain (loss)
on investments 0.10 (0.38) 0.05 0.51 (0.25) 0.33
--------- --------- --------- --------- --------- ---------
Total from Investment Operations....... 0.41 0.23 0.66 1.14 0.39 0.99
--------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income....... (0.31) (0.64) (0.62) (0.63) (0.64) (0.65)
Dividends in excess of net
investment income........................ -- -- -- -- -- (0.01)
--------- --------- --------- --------- --------- ---------
Total Dividends........................ (0.31) (0.64) (0.62) (0.63) (0.64) (0.66)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value.... 0.10 (0.41) 0.04 0.51 (0.25) 0.33
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of period................ $ 10.23 $ 10.13 $ 10.54 $ 10.50 $ 9.99 $ 10.24
========= ========= ========= ========= ========= =========
Total Return.................................. 4.08%** 2.39% 6.38% 11.72% 3.91% 10.09%
Ratios/Supplemental Data:
Net assets, End of period (in 000's).......... $ 158,888 $ 160,389 $ 202,420 $ 118,368 $ 111,313 $ 124,944
Ratios to average net assets:
Net investment income including
reimbursement............................ 6.01%* 5.95% 5.77% 6.12% 6.31% 6.35%
Operating expenses including
reimbursement............................ 0.42%* 0.41% 0.41% 0.40% 0.40% 0.40%
Operating expenses excluding
reimbursement............................ 0.42%* 0.41% 0.41% 0.40% 0.40% 0.41%
Portfolio turnover rate....................... 30%** 56% 70% 79% 39% 35%
</TABLE>
-----------------------
* Annualized
** Not annualized
(1) Net investment income per share before reimbursement of certain expenses by
the sub-administrator for the six months ended September 30, 2000
(unaudited) and the years ended March 31, 2000, 1999, 1998, 1997 and 1996
was $0.31, $0.61, $0.61, $0.63, $0.64 and $0.66, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
35
<PAGE>
MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
SIX MONTHS ENDED
SEPTEMBER 30, YEARS ENDED MARCH 31,
2000 ------------------------------------------------------------
(UNAUDITED) 2000 1999 1998 1997 1996
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beinning of period.......... $ 10.13 $ 10.59 $ 10.51 $ 10.15 $ 10.20 $ 9.94
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income(1)................... 0.23 0.44 0.46 0.47 0.47 0.46
Net realized and unrealized gain (loss)
on investments and futures contracts..... 0.08 (0.45) 0.08 0.36 (0.05) 0.26
-------- -------- -------- -------- -------- --------
Total from Investment Operations....... 0.31 (0.01) 0.54 0.83 0.42 0.72
-------- -------- -------- -------- -------- --------
Less Dividends:
Dividends from net investment income....... (0.23) (0.45) (0.46) (0.47) (0.47) (0.46)
-------- -------- -------- -------- -------- --------
Total Dividends........................ (0.23) (0.45) (0.46) (0.47) (0.47) (0.46)
-------- -------- -------- -------- -------- --------
Net increase (decrease) in net asset value.... 0.08 (0.46) 0.08 0.36 (0.05) 0.26
-------- -------- -------- -------- -------- --------
Net Asset Value, End of period................ $ 10.21 $ 10.13 $ 10.59 $ 10.51 $ 10.15 $ 10.20
======== ======== ======== ======== ======== ========
Total Return.................................. 3.08%** (0.05)% 5.20% 8.29% 4.15% 7.36%
Ratios/Supplemental Data:
Net assets, End of period (in 000's).......... $ 31,499 $ 27,769 $ 21,607 $ 18,147 $ 19,921 $ 22,478
Ratios to average net assets:
Net investment income including
reimbursement............................ 4.50%* 4.28% 4.31% 4.49% 4.57% 4.54%
Operating expenses including
reimbursement............................ 0.60%* 0.60% 0.60% 0.60% 0.60% 0.60%
Operating expenses excluding
reimbursement............................ 0.61%* 0.60% 0.60% 0.60% 0.60% 0.61%
Portfolio turnover rate....................... 36%** 38% 43% 28% 7% 2%
</TABLE>
------------------------------
* Annualized
** Not annualized
(1) Net investment income per share before reimbursement of certain expenses by
the sub-administrator for the six months ended September 30, 2000
(unaudited) and the years ended March 31, 2000, 1999, 1998, 1997 and 1996
was $0.23, $0.44, $0.46, $0.47, $0.47 and $0.46 respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
36
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION:
Galaxy Fund II ("Galaxy II" or the "Trust"), a Massachusetts business trust, is
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company. As of the date of this report, the Trust offered
five managed investment portfolios. The accompanying financial statements and
financial highlights are those of the Large Company Index Fund, the Small
Company Index Fund, the Utility Index Fund, the U.S. Treasury Index Fund, and
the Municipal Bond Fund (individually a "Fund," collectively the "Funds").
2. SIGNIFICANT ACCOUNTING POLICIES:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses during the
reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies in conformity with
generally accepted accounting principles consistently followed by the Trust in
the preparation of its financial statements.
PORTFOLIO VALUATION: Listed investment securities are valued by an independent
pricing service approved by the Trust's Board of Trustees at the last quoted
sale price on the principal exchange where such securities are traded. Unlisted
securities or listed securities for which last sales prices are not available
are valued at the closing bid price in the principal market where such
securities trade. U.S. Government securities (other than short-term investments)
are valued at the mean of the quoted bid and asked prices in the
over-the-counter market. Debt securities of U.S. issuers (other than U.S.
Government securities and short-term securities), including municipal
securities, are valued at the mean between the quoted bid price and the asked
price. Short-term obligations that mature in 60 days or less are valued at
amortized cost, which approximates market value. Futures contracts are valued at
the settlement price established each day by the board of trade or exchange on
which they are traded.
Investments for which market quotations are not readily available are valued
based on fair value as determined in good faith under consistently applied
procedures established by and under the general supervision of the Board of
Trustees.
FUTURES CONTRACTS: Each Fund, 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 gains or losses until the contract is closed
out, at which time the gains or losses are realized.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: Security transactions are accounted
for on a trade date basis. Net realized gains or losses on sales of securities
are determined on the identified cost method. Interest income and expenses are
recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment
income are declared daily and paid monthly for the U.S. Treasury Index Fund and
the Municipal Bond Fund, declared and paid quarterly for the Utility Index Fund
and declared and paid annually for the Small Company Index Fund and the Large
Company Index Fund. Net realized capital gains, if any, are distributed at least
annually. Income dividends and capital gain dividends are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
FEDERAL INCOME TAXES: The Trust treats each Fund as a separate entity for
federal income tax purposes. Each Fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue Code.
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 tax provision is recorded.
REPURCHASE AGREEMENTS: Each Fund may engage in repurchase agreement transactions
with institutions that the Trust's investment advisor has determined are
creditworthy. Each repurchase agreement transaction is recorded at cost plus
accrued interest. Each Fund requires that the securities collateralizing a
repurchase agreement transaction 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 col-
37
<PAGE>
NOTES TO FINANCIAL STATEMENTS
lateral securities is monitored daily to ensure that the value of the
collateral, including accrued interest, equals or exceeds the repurchase price.
Repurchase agreement transactions 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 securities, and a possible
decline in the value of the underlying securities during the period while the
Fund seeks to assert its rights.
3. SHARES OF BENEFICIAL INTEREST:
The Trust's Declaration of Trust authorizes the Trust to issue an unlimited
number of shares of beneficial interest, with a $0.001 par value per share. The
Trust's shares are classified into five series.
4. INVESTMENT ADVISORY, ADMINISTRATION AND DISTRIBUTION
AGREEMENTS:
The Trust and Fleet Investment Advisors Inc. (the "Investment Advisor"), an
indirect wholly-owned subsidiary of FleetBoston Financial Corporation, are
parties to an investment advisory agreement under which the Investment Advisor
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.
The Trust and Fleet National Bank (the "Administrator"), an indirect
wholly-owned subsidiary of FleetBoston Financial Corporation, are parties to an
administration agreement. Under the agreement, the Administrator is responsible
for the payment of 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, annual sub-account fees payable with
respect to shares of the Funds held by defined contribution plans, 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.
The Administrator has entered into a sub-administration agreement with PFPC Inc.
(formerly known as First Data Investor Services Group, Inc.), a member of the
PNC Financial Services Group (formerly known as PNC Bank Corp.), under which
PFPC Inc. provides administrative, accounting and transfer agent services to the
Trust. The Administrator bears the fees of PFPC Inc. for serving in this
capacity. Prior to December 1, 1999, the services described above were provided
by First Data Investor Services Group, Inc., a wholly-owned subsidiary of First
Data Corp. On that date, PFPC Trust Co., a wholly-owned subsidiary of PFPC
Worldwide, Inc., and an indirect wholly-owned subsidiary of PNC Bank Corp.,
acquired all of the outstanding stock of First Data Investor Services Group,
Inc. As part of that transaction, PFPC Inc., also an indirect wholly-owned
subsidiary of PNC Bank Corp., was merged into First Data Investor Services
Group, Inc., which then changed its name to PFPC Inc.
Provident Distributors, Inc. ("the Distributor") acts as the exclusive
distributor of the Trust's shares. Prior to December 1, 1999, First Data
Distributors, Inc., a wholly-owned subsidiary of First Data Investor Services
Group, Inc., acted as the exclusive distributor of the Trust's shares.
The Trust and PFPC Inc. may enter into agreements with one or more entities,
including the Administrator and affiliates of the Investment Advisor, pursuant
to which such entities agree to perform certain sub-account and administrative
functions ("Sub-Account Services") on a per account basis with respect to shares
of the Funds held by defined contribution plans. Such entities are compensated
by PFPCInc. for the Sub-Account Services and in connection therewith the Funds
pay PFPC Inc. out-of-pocket transfer agency expenses (i.e. sub-account services
fee) in an amount equal to these fees.
Certain officers of the Trust are officers of the Investment Advisor or PFPC
Inc. Such officers receive no compensation from the Trust for serving in their
respective roles. Effective September 8, 2000, each Trustee is entitled to
receive for services as a Trustee of the Trust, The Galaxy Fund ("Galaxy") and
The Galaxy VIP Fund ("VIP") an aggregate fee of $54,000 per annum plus certain
other fees for attending or participating in meetings as well as reimbursement
for expenses incurred in attending meetings. For the period May 28, 1999 until
September 7, 2000, each Trustee was entitled to receive for services as a
Trustee of the Trust, Galaxy and VIP, an aggregate fee of $45,000 per annum plus
certain other fees for attending or participating in meetings as well as
reimbursement for expenses incurred in attending meetings. Prior to May 28,
1999, each Trustee was entitled to receive for services as a Trustee of the
Trust, Galaxy and VIP an aggregate fee of $40,000 per annum plus certain other
fees for attending or participating in meetings as well as reimbursement for
expenses incurred in attending meetings. The Chairman of the Boards of Trustees
and the President and Treasurer of the Trust, Galaxy and VIP are also entitled
to additional fees for their services in these capacities. These fees are
allocated among the funds of the Trust, Galaxy and VIP based on their relative
net assets.
38
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Each Trustee is eligible to participate in The Galaxy Fund/The Galaxy VIP
Fund/Galaxy II Deferred Compensation Plan (the "Plan"), an unfunded,
non-qualified deferred compensation plan. The Plan allows each Trustee to defer
receipt of all or a percentage of fees that would otherwise be payable for
services performed.
PFPC Inc. voluntarily agreed to reimburse the Funds for Trustees' fees.
PFPC Inc., at its discretion, may revise or discontinue the voluntary expense
reimbursement at any time.
5. SECURITIES TRANSACTIONS:
The cost of purchases and the proceeds from sales of securities (excluding
short-term investments and futures contracts) for the six months ended September
30, 2000 for each Fund were as follows:
<TABLE>
U.S. GOVERNMENT OTHER INVESTMENT
SECURITIES SECURITIES
---------------------------- ---------------------------
PURCHASES SALES PURCHASES SALES
----------- ---------- ------------ ---------
<S> <C> <C> <C> <C>
Large Company Index........... $ -- $ -- $ 73,057,152 $63,314,923
Small Company Index........... -- -- 50,753,911 60,693,888
Utility Index................. -- -- 11,264,758 7,612,522
U.S. Treasury Index........... 46,630,275 49,907,475 -- --
Municipal Bond................ -- -- 14,530,175 10,756,330
</TABLE>
The aggregate cost, gross unrealized appreciation and depreciation and net
unrealized appreciation (depreciation) for all securities as computed on a
federal income tax basis at September 30, 2000 for each Fund were as follows:
<TABLE>
Cost Appreciation (Depreciation) Net
<S> <C> <C> <C> <C>
Large Company Index $ 651,489,403 $ 426,561,463 $ (44,247,835) $382,313,628
Small Company Index 258,819,756 67,893,532 (47,568,353) 20,325,179
Utility Index 48,590,340 24,638,438 (613,518) 24,024,920
U.S. Treasury Index 156,975,551 2,341,040 (2,544,304) (203,264)
Municipal Bond 30,741,305 584,865 (173,391) 411,474
</TABLE>
At March 31, 2000, the following Funds had capital loss carryforwards:
CAPITAL LOSS EXPIRATION
CARRYFORWARD DATE
------------ ---------
U.S. Treasury Index...... $2,863,608 2003
548,015 2004
1,821,144 2008
Municipal Bond........... 452,493 2003
203,341 2004
72,068 2008
39
<PAGE>
NOTES TO FINANCIAL STATEMENTS
6. FINANCIAL INSTRUMENTS:
The Large Company Index, Small Company Index and Utility Index Funds may enter
into stock index futures contracts that are traded on a national exchange. These
Funds will enter into stock index futures contracts only for bona fide hedging
purposes or as otherwise permitted by the Commodities Futures Trading Commission
("CFTC"). If permitted, these Funds may use stock index futures to maintain cash
reserves while remaining fully invested, to facilitate trading, to reduce
transaction costs or to seek higher investment returns when a stock index
futures contract is priced more attractively than the securities in the
underlying index. The Municipal Bond Fund may enter into interest rate futures
contracts and municipal bond index futures contracts only for bona fide hedging
purposes or as otherwise permitted by CFTC regulations. In addition, the
Municipal Bond Fund may purchase put or call options on interest rate and
municipal bond index futures contracts, which are traded on a United States
exchange, as a hedge against changes in interest rates, and may enter into
closing transactions with respect to such options to terminate existing
positions. A 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 concentrates 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 invests in securities representing a broader range
of investment alternatives.
8. LINE OF CREDIT:
Each Fund and other affiliated funds participate in a $150 million unsecured
line of credit pursuant to a credit agreement dated as of December 29, 1999.
Borrowings may be made under the credit agreement only for temporary or
emergency purposes, such as repurchase or redemption of shares of the Funds.
Interest is charged to each Fund based on its borrowings. In addition, a
commitment fee based on the average daily unused portion of the line of credit
is computed daily and paid quarterly at an annual rate of 10%, and allocated
among the Funds based on average daily net assets. For the period ended
September 30, 2000, no borrowings have been made by the Funds against the line
of credit.
40
<PAGE>
<PAGE>
[GRAPHIC OMITTED: GALAXY LOGO]
Galaxy
Funds
P.O. Box 6520
Providence, RI 02940-6520
Bulk Rate
U. S. Postage Paid
Permit No. 105
North Reading, MA
SANGALII (12/00)
