<PAGE>
[LOGO]
1998
SEMI ANNUAL
REPORT
MANAGER DISCUSSIONS
FINANCIALS
<PAGE>
THE HARTFORD
SMALL COMPANY FUND
PORTFOLIO MANAGER
[PHOTO]
MARK S. WATERHOUSE
Vice President
Wellington Management Company, LLP
PERFORMANCE OVERVIEW
7/22/96 - 6/30/98
[GRAPH]
GROWTH OF A $10,000 INVESTMENT IN CLASS A WHICH INCLUDES SALES CHARGE
SMALL COMPANY FUND RUSSELL 2000
$9,450 starting value $10,000 starting value
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RETURNS (INCEPTION 7/22/96)
Non Sales Charge Adjusted Sales Charge Adjusted
------------------------- ---------------------
ANNUALIZED ANNUALIZED
YTD* 1 YEAR(1)* SINCE INCEPT.(1) 1 YEAR(2)* SINCE INCEPT.(2)
<S> <C> <C> <C> <C> <C>
Small Co "A" 9.05% 18.22% 22.58% 11.72% 19.05%
Small Co "B" 8.73% 17.45% 21.80% 12.45% 20.08%
Russell 2000 4.93% 16.51% 22.25%
- --------------------------------------------------------------------------------
</TABLE>
THE CHART REPRESENTS A HYPOTHETICAL INVESTMENT IN THE SMALL COMPANY FUND. PAST
PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE VALUE OF SHARES WILL
FLUCTUATE SO THAT WHEN REDEEMED, SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
(1) PERFORMANCE RESULTS DO NOT REFLECT SALES CHARGE.
(2) THE INITIAL INVESTMENT IN CLASS A AND B SHARES REFLECTS THE MAXIMUM SALES
CHARGE AND CDSC, RESPECTIVELY.
* YEAR-TO-DATE AND 1 YEAR RETURNS ARE CUMULATIVE.
A $10,000 INVESTMENT IN THE FUND'S CLASS B SHARES AT INCEPTION ON 7/22/96 WOULD
HAVE BEEN VALUED AT $14,661 ON 6/30/98 ($14,261 WITH A REDEMPTION AT THE END OF
THE PERIOD.)
Q. HOW DID THE FUND PERFORM?
The Hartford Small Company Fund outperformed its Lipper peer group for the six
month period ended June 30, 1998. The Small Company Fund returned 9.1% versus
6.5% for the Lipper Small Company Mutual Fund Average, placing the Fund in the
first quartile of performance for funds in the group.
Q. WHY DID THE FUND PERFORM THIS WAY?
A theme that has been present for the past year continued; investors want
exposure to the US market but they also want liquidity due to the fear of a
slowdown is the US economy. As a result, large capitalization stocks have
dramatically outperformed smaller names. Nonetheless, the stock selections made
in the Fund focused on companies with strong fundamentals, such as THE LEARNING
COMPANY, and ADC TELECOMMUNICATIONS, and have resulted in competitive relative
performance.
Q.WHAT IS YOUR OUTLOOK FOR THE REST OF 1998?
The US economy remains healthy, led by strong consumer demand. However, a
widening trade gap, a strong US dollar, and continued weakness in the Asian
economies should result in a slowing of the economy in 1999. In this
environment, we believe that winners will be in the energy and technology
stocks. As such, we will try to opportunistically increase the Fund+s exposure
to these areas. In terms of stock selection, we will try to find great small
companies and buy them below their intrinsic value.
<PAGE>
THE HARTFORD
CAPITAL APPRECIATION FUND
PORTFOLIO MANAGER
[PHOTO]
SAUL J. PANNELL, CFA
Senior Vice President and Partner
Wellington Management Company, LLP
PERFORMANCE OVERVIEW
[GRAPH]
7/22/96 - 6/30/98
GROWTH OF A $10,000 INVESTMENT IN CLASS A WHICH INCLUDES SALES CHARGE
CAPITAL APPRECIATION FUND S&P 500
$9,450 starting value $10,000 starting value
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RETURNS (INCEPTION 7/22/96)
Non Sales Charge Adjusted Sales Charge Adjusted
------------------------- ---------------------
ANNUALIZED ANNUALIZED
YTD* 1 YEAR(1)* SINCE INCEPT.(1) 1 YEAR(2)* SINCE INCEPT.(2)
<S> <C> <C> <C> <C> <C>
Cap Ap "A" 5.33% 20.61% 51.92% 13.98% 47.56%
Cap Ap "B" 4.98% 19.76% 50.95% 14.76% 49.54%
S&P 500 17.72% 30.17% 37.44%
- --------------------------------------------------------------------------------
</TABLE>
THE CHART REPRESENTS A HYPOTHETICAL INVESTMENT IN THE CAPITAL APPRECIATION FUND.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE VALUE OF SHARES WILL
FLUCTUATE SO THAT WHEN REDEEMED, SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
(1) PERFORMANCE RESULTS DO NOT REFLECT SALES CHARGE.
(2) THE INITIAL INVESTMENT IN CLASS A AND B SHARES REFLECTS THE MAXIMUM SALES
CHARGE AND CDSC, RESPECTIVELY.
* YEAR-TO-DATE AND 1 YEAR RETURNS ARE CUMULATIVE.
A $10,000 INVESTMENT IN THE FUND'S CLASS B SHARES AT INCEPTION ON 7/22/96 WOULD
HAVE BEEN VALUED AT $22,226 ON 6/30/98 ($21,826 WITH A REDEMPTION AT THE END OF
THE PERIOD.)
Q. HOW DID THE FUND PERFORM?
The Hartford Capital Appreciation Fund underperformed its Lipper peer group for
the six month period ended June 30, 1998. The Capital Appreciation Fund
returned 5.3% versus 12.9% for the Lipper Capital Appreciation Mutual Fund
Average. However, the Capital Appreciation Fund continues to rank near the top
of the Lipper universe over longer periods.
Q. WHY DID THE FUND PERFORM THIS WAY?
We began the year by finding gains in a handful of companies across sectors such
as finance, telecommunications and retail, and by reducing our overall foreign
stock exposure in light of the Asian crisis. As we moved into the second
quarter, large cap growth was clearly the place to be in the US equity market.
The S&P 500 Index exceeded the Russell 2000 Index by a whopping 8 percent and
within the large cap sector, growth stocks outperformed value by over 4 percent.
The Fund+s performance was negatively impacted by a combination of factors
including 1) an emphasis on smaller companies, 2) a tilt toward value versus
growth, and 3) tactical security selection bets that went against us.
Strong performers over the six month period included AMERICA ONLINE and THE
LEARNING COMPANY.
Q. WHAT IS YOUR OUTLOOK FOR THE REST OF 1998?
Our overall strategy for the Fund remains duel faceted. We maintain an emphasis
on smaller companies with dynamic earnings growth prospects, and couple that
with an opportunistic trading approach to larger cap stocks where we typically
see a catalyst for outperformance. Following a period of underperformance as we
now have experienced, the temptation is to alter the Fund+s approach by moving
closer to the large cap growth paradigm which has dominated the US equity market
over the past year. In our view, however, the real risk now is to chase what
worked yesterday and be poorly positioned for a potential rebound in small and
mid cap stocks.
<PAGE>
THE HARTFORD
MIDCAP FUND
PORTFOLIO MANAGER
[PHOTO]
PHILLIP H. PERELMUTER
Vice President
Wellington Management Company, LLP
PERFORMANCE OVERVIEW
[GRAPH]
12/30/97 - 6/30/98
GROWTH OF A $10,000 INVESTMENT IN CLASS A WHICH INCLUDES SALES CHARGE
MIDCAP S&P 400
$9,450 starting value $10,000 starting value
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RETURNS (INCEPTION 12/30/97)
Non Sales Charge Adjusted Sales Charge Adjusted
------------------------- ---------------------
CUMULATIVE CUMULATIVE
YTD* 1 YEAR(1)* SINCE INCEPT.(1) 1 YEAR(2)* SINCE INCEPT.(2)
<S> <C> <C> <C> <C> <C>
MidCap "A" 14.92% --% 14.80% --% 8.49%
MidCap "B" 14.51% --% 14.40% --% 9.40%
S&P 400 8.63% --% 9.45%
- --------------------------------------------------------------------------------
</TABLE>
THE CHART REPRESENTS A HYPOTHETICAL INVESTMENT IN THE MIDCAP FUND. PAST
PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE VALUE OF SHARES WILL
FLUCTUATE SO THAT WHEN REDEEMED, SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
(1) PERFORMANCE RESULTS DO NOT REFLECT SALES CHARGE.
(2) THE INITIAL INVESTMENT IN CLASS A AND B SHARES REFLECTS THE MAXIMUM SALES
CHARGE AND CDSC, RESPECTIVELY.
* YEAR-TO-DATE AND 1 YEAR RETURNS ARE CUMULATIVE.
A $10,000 INVESTMENT IN THE FUND'S CLASS B SHARES AT INCEPTION ON 12/30/97 WOULD
HAVE BEEN VALUED AT $11,440 ON 6/30/98 ($10,940 WITH A REDEMPTION AT THE END OF
THE PERIOD.)
Q. HOW DID THE FUND PERFORM?
The Hartford MidCap Fund outperformed its Lipper peer group for the six month
period ended June 30, 1998. The MidCap Fund provided a total return of 14.9%
versus 10.7% for the Lipper Mid Cap Mutual Fund Average, placing the Fund in the
first quartile of performance for funds in the group.
Q. WHY DID THE FUND PERFORM THIS WAY?
Despite the fact that mid cap stocks have grown their earnings faster than large
cap stocks over the past five years, investors+ preference for stability,
liquidity, and safety in a slowing economic environment drove large cap
outperformance for the last year. There were several changes to the Fund+s
industry weights during the six month period that contributed to positive
returns relative to competitors. Overall, the strong performance was led by our
stock selection in the technology sector. Many technology stocks did well as
the slowing pace of overall earnings growth made their year over year growth
numbers stand out. Additionally, computer service and software companies are
seeing demand accelerate due to the Year 2000 crunch, a continuation of the
outsourcing trend, and a shortage of information technology employees. Two of
our recent purchases, AMERICAN TOWER and SFX ENTERTAINMENT did well as they were
up over 20% and 40%, respectively in the second quarter.
Q. WHAT IS YOUR OUTLOOK FOR THE REST OF 1998?
The Fund consists of high quality mid cap companies "on the verge of greatness"
within our five sectors of opportunity: consumer products, finance, health
care, services, and technology. The outlook for the type of mid cap companies
that we buy for the Fund is good. These high quality, market leading mid cap
growth companies which have minimal overseas exposure should fare relatively
well during a period of modest growth in the United States and turbulence
outside the United States.
<PAGE>
THE HARTFORD
INTERNATIONAL OPPORTUNITIES FUND
PORTFOLIO MANAGER
[PHOTO]
TROND SKRAMSTAD
Senior Vice President and Partner
Wellington Management Company, LLP 5
PERFORMANCE OVERVIEW
[GRAPH]
7/22/96 - 6/30/98
GROWTH OF A $10,000 INVESTMENT IN
CLASS A WHICH INCLUDES SALES CHARGE
INTERNATIONAL OPPORTUNITIES EAFE GDP
$9,450 starting value $10,000 starting value
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RETURNS (INCEPTION 7/22/96)
Non Sales Charge Adjusted Sales Charge Adjusted
------------------------- ---------------------
ANNUALIZED ANNUALIZED
YTD* 1 YEAR(1)* SINCE INCEPT.(1) 1 YEAR(2)* SINCE INCEPT.(2)
<S> <C> <C> <C> <C> <C>
Int+l Opp "A" 15.97% 7.08% 12.87% 1.19% 9.63%
Int+l Opp "B" 15.63% 6.44% 12.13% 1.44% 10.27%
EAFE GDP** 21.88% 15.14% 17.36%
- --------------------------------------------------------------------------------
</TABLE>
THE CHART REPRESENTS A HYPOTHETICAL INVESTMENT IN THE INTERNATIONAL
OPPORTUNITIES FUND. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE
VALUE OF SHARES WILL FLUCTUATE SO THAT WHEN REDEEMED, SHARES MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST.
(1) PERFORMANCE RESULTS DO NOT REFLECT SALES CHARGE.
(2) THE INITIAL INVESTMENT IN CLASS A AND B SHARES REFLECTS THE MAXIMUM SALES
CHARGE AND CDSC, RESPECTIVELY.
* YEAR-TO-DATE AND 1 YEAR RETURNS ARE CUMULATIVE.
A $10,000 INVESTMENT IN THE FUND'S CLASS B SHARES AT INCEPTION ON 7/22/96 WOULD
HAVE BEEN VALUED AT $12,487 ON 6/30/98 ($12,087 WITH A REDEMPTION AT THE END OF
THE PERIOD.)
** THE MORGAN STANLEY EUROPE AUSTRALIA FAR EAST GDP - NET INDEX
Q. HOW DID THE FUND PERFORM?
The Hartford International Opportunities Fund outperformed its Lipper peer group
for the six month period ended June 30, 1998. The International Opportunities
Fund returned 16.0% versus 15.5% for the Lipper International Mutual Fund
Average, placing the Fund in the second quartile of performance for funds in the
group.
Q. WHY DID THE FUND PERFORM THIS WAY?
Overall, Europe showed strong performance and the Fund continued to benefit as a
result of its large, overweight position in that region. Also a benefit was our
underweight position in Asia where virtually every market in the region took a
turn for the worse after having seen a short but unsustainable bounce at the
beginning of the year.
Q. WHAT IS YOUR OUTLOOK FOR THE REST OF 1998?
Europe remains the Fund's major area of exposure, and Japan remains the area
that is most significantly underweighted versus international benchmarks. In
all markets, we take a -fundamental research+ approach, seeking stocks that are
attractively valued relative to their long-term prospects for growth. We
continue to feel that Europe shows the most promise for continued economic
growth and profit improvement. While there are many companies in Japan and the
rest of the Asia Pacific region that are attractively valued relative to
companies in other regions, we do not believe that the region has turned the
corner yet and feel that the investment risks outweigh the prospective rewards
at this time.
<PAGE>
THE HARTFORD
STOCK FUND
PORTFOLIO MANAGER
[PHOTO]
RAND L. ALEXANDER, CFA
Senior Vice President and Partner
Wellington Management Company, LLP
PERFORMANCE OVERVIEW
[GRAPH]
7/22/96 - 6/30/98
GROWTH OF A $10,000 INVESTMENT IN CLASS A WHICH INCLUDES SALES CHARGE
STOCK FUND S&P 500
$9,450 starting value $10,000 starting value
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RETURNS (INCEPTION 7/22/96)
Non Sales Charge Adjusted Sales Charge Adjusted
------------------------- ---------------------
ANNUALIZED ANNUALIZED
YTD* 1 YEAR(1)* SINCE INCEPT.(1) 1 YEAR(2)* SINCE INCEPT.(2)
<S> <C> <C> <C> <C> <C>
Stock "A" 21.64% 31.89% 37.38% 24.64% 33.43%
Stock "B" 21.18% 30.94% 36.42% 25.94% 34.87%
S&P 500 17.72% 30.17% 37.44%
- --------------------------------------------------------------------------------
</TABLE>
THE CHART REPRESENTS A HYPOTHETICAL INVESTMENT IN THE STOCK FUND. PAST
PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE VALUE OF SHARES WILL
FLUCTUATE SO THAT WHEN REDEEMED, SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
(1) PERFORMANCE RESULTS DO NOT REFLECT SALES CHARGE.
(2) THE INITIAL INVESTMENT IN CLASS A AND B SHARES REFLECTS THE MAXIMUM SALES
CHARGE AND CDSC, RESPECTIVELY.
* YEAR-TO-DATE AND 1 YEAR RETURNS ARE CUMULATIVE.
A $10,000 INVESTMENT IN THE FUND'S CLASS B SHARES AT INCEPTION ON 7/22/96 WOULD
HAVE BEEN VALUED AT $18,264 ON 6/30/98 ($17,864 WITH A REDEMPTION AT THE END OF
THE PERIOD.)
Q. HOW DID THE FUND PERFORM?
The Hartford Stock Fund outperformed its Lipper peer group for the six month
period ended 6/30/98. The Stock Fund provided a total return of 21.6% versus
15.1% for the Lipper Growth Mutual Fund Average, placing the Fund in the first
quartile of performance for funds in the group.
Q. WHY DID THE FUND PERFORM THIS WAY?
Overall, the Fund+s performance over the last six month period was helped by
favorable sector weightings and strong stock selection. We continued to
emphasize predictable growth companies where results would not be seriously
damaged by the slowdown in the Pacific Rim. Our emphasis on less cyclical
companies in areas such as health care and household products, and our
overweights in financials and technology, continued to produce good results
through the first half of 1998.
Q. WHAT IS YOUR OUTLOOK FOR THE REST OF 1998?
While concerns have surfaced about valuations as a result of the strong
performance of the US equity market during the first half of the year, we
continue to remain optimistic about the outlook. The economy seems to be
slowing at just the right time to prevent the Fed from raising interest rates.
Employment levels are extremely favorable. Inflation remains low and well under
control. US consumers are benefiting from lower priced Asian imports, low
interest rates and falling commodity prices. The Federal budget is in surplus.
US companies are gaining access to areas of the world that promise excellent
earnings growth over time. Mutual fund cash flows remain strong. The bond
market has started to provide support for higher multiples as yields move lower.
While this may all sound too good to be true, the fact is that it is true and we
see no reason why this should change anytime soon.
<PAGE>
THE HARTFORD
GROWTH AND INCOME FUND
PORTFOLIO MANAGER
[PHOTO]
JAMES A. RULLO, CFA
Vice President
Wellington Management Company, LLP
PERFORMANCE OVERVIEW
[GRAPH]
5/1/98 - 6/30/98
GROWTH OF A $10,000 INVESTMENT IN CLASS A WHICH INCLUDES SALES CHARGE
GROWTH AND INCOME FUND S&P 500
$9,450 starting value $10,000 starting value
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RETURNS (INCEPTION 5/1/98)
Non Sales Charge Adjusted Sales Charge Adjusted
------------------------- ---------------------
CUMULATIVE CUMULATIVE
1 YEAR(1) SINCE INCEPT.(1) 1 YEAR(2) SINCE INCEPT.(2)
<S> <C> <C> <C> <C>
Grow & Inc "A" -- 1.50% -- -4.08%
Grow & Inc "B" -- 1.40% -- -3.60%
S&P 500 -- 2.27%
- --------------------------------------------------------------------------------
</TABLE>
THE CHART REPRESENTS A HYPOTHETICAL INVESTMENT IN THE GROWTH & INCOME FUND. PAST
PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE VALUE OF SHARES WILL
FLUCTUATE SO THAT WHEN REDEEMED, SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
(1) PERFORMANCE RESULTS DO NOT REFLECT SALES CHARGE.
(2) THE INITIAL INVESTMENT IN CLASS A AND B SHARES REFLECTS THE MAXIMUM SALES
CHARGE AND CDSC, RESPECTIVELY.
* YEAR-TO-DATE AND 1 YEAR RETURNS ARE CUMULATIVE.
A $10,000 INVESTMENT IN THE FUND'S CLASS B SHARES AT INCEPTION ON 5/1/98 WOULD
HAVE BEEN VALUED AT $10,140 ON 6/30/98 ($9,640 WITH A REDEMPTION AT THE END OF
THE PERIOD.)
Q. HOW DID THE FUND PERFORM?
The Hartford Growth and Income Fund outperformed its Lipper peer group for the
two month period ended June 30, 1998. The Fund returned 1.5% versus -0.4% for
the Lipper Growth & Income Average.
Q. WHY DID THE FUND PERFORM THIS WAY?
While it is early to comment on performance, in the inaugural months, the Fund
is competing well in its Lipper universe. The US equity market continued its
upward trend, but at a slower pace and with a very narrow focus. Large-cap
growth stocks provided almost all of the gains. Several of the Fund's top
performing names were in the technology sector, such as COMPUTER SCIENCES,
MICROSOFT and DELL COMPUTER. Another sector which helped performance was
retailing; strong US economic growth continues to bolster companies like GAP,
HOME DEPOT and WAL-MART. Weakness in oil prices continues to plague our energy
service companies such as FRIEDE GOLDMAN and HELMERICH & PAYNE. These are good
companies in a difficult environment, and we have added to them during the price
declines.
Q. WHAT IS YOUR OUTLOOK FOR THE REST OF 1998?
With the economy showing more obvious signs of slowing, and consumer spending
likely to have more staying power than business investment, we expect to keep
the Fund+s moderate sector and industry emphasis on finance, consumer
discretionary, and utilities. We'll reduce emphasis on most cyclical areas, as
well as the more richly valued drug and consumer staples stocks.
<PAGE>
THE HARTFORD
DIVIDEND AND GROWTH FUND
PORTFOLIO MANAGER
[PHOTO]
LAURIE A. GABRIEL, CFA
Senior Vice President and Partner
Wellington Management Company, LLP
PERFORMANCE OVERVIEW
[GRAPH]
7/22/96 - 6/30/98
GROWTH OF A $10,000 INVESTMENT IN
CLASS A WHICH INCLUDES SALES CHARGE
DIVIDEND AND GROWTH FUND S&P 500
$9,450 starting value $10,000 starting value
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RETURNS (INCEPTION 7/22/96)
Non Sales Charge Adjusted Sales Charge Adjusted
------------------------- ---------------------
ANNUALIZED ANNUALIZED
YTD* 1 YEAR(1)* SINCE INCEPT.(1) 1 YEAR(2)* SINCE INCEPT.(2)
<S> <C> <C> <C> <C> <C>
Div & Grow "A" 9.81% 21.43% 29.79% 14.75% 26.06%
Div & Grow "B" 9.45% 20.69% 28.90% 15.69% 27.27%
S&P 500 17.72% 30.17% 37.44%
- --------------------------------------------------------------------------------
</TABLE>
THE CHART REPRESENTS A HYPOTHETICAL INVESTMENT IN THE DIVIDEND AND GROWTH FUND.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE VALUE OF SHARES WILL
FLUCTUATE SO THAT WHEN REDEEMED, SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
(1) PERFORMANCE RESULTS DO NOT REFLECT SALES CHARGE.
(2) THE INITIAL INVESTMENT IN CLASS A AND B SHARES REFLECTS THE MAXIMUM SALES
CHARGE AND CDSC, RESPECTIVELY.
* YEAR-TO-DATE AND 1 YEAR RETURNS ARE CUMULATIVE.
A $10,000 INVESTMENT IN THE FUND'S CLASS B SHARES AT INCEPTION ON 7/22/96 WOULD
HAVE BEEN VALUED AT $16,363 ON 6/30/98 ($15,963 WITH A REDEMPTION AT THE END OF
THE PERIOD.)
Q. HOW DID THE FUND PERFORM?
The Hartford Dividend and Growth Fund outperformed its Lipper peer group for the
six month period ended June 30, 1998. The Dividend and Growth Fund provided a
total return of 9.8% versus 9.1% for the Lipper Equity Income Mutual Fund
Average, placing the Fund in the second quartile of performance for funds in the
group.
Q. WHY DID THE FUND PERFORM THIS WAY?
The health care industry was an area of strength for the Fund due to positive
stock selection, with strong performance from names such as WARNER-LAMBERT and
AMERICAN HOME PRODUCTS. The finance sector was initially a drag on performance
at the beginning of the year, yet CITICORP ultimately helped performance, as did
MARSH & MCLELLAN. During the second quarter, large capitalization stocks
outperformed small cap stocks by almost 8% and growth outperformed value by more
than 4%. Therefore, the Fund+s large capitalization focus was a positive, while
the strength in growth-oriented securities was a detriment given our value
orientation.
Q. WHAT IS YOUR OUTLOOK FOR THE REST OF 1998?
Broad diversification across economic sectors is an ongoing part of the Fund's
approach. Since our focus is on stock selection, the sector representation will
be fairly stable over time. The competitive pricing environment brought on by
the deteriorating economic conditions in Asia and the rising US dollar exchange
rate should ensure a very low inflation rate for the year. As a result, we
believe the Fund is well-positioned going forward given its emphasis on less
cyclical companies in areas such as health care and household products with
above-average yields, below average price-to-earnings ratios and risk.
<PAGE>
THE HARTFORD
ADVISERS FUND
PORTFOLIO MANAGERS
[PHOTO]
RAND L. ALEXANDER, CFA
Senior Vice President and Partner
Wellington Management Company, LLP
[PHOTO]
PAUL D. KAPLAN
Senior Vice President and Partner
Wellington Management Company, LLP
PERFORMANCE OVERVIEW
[GRAPH]
7/22/96 - 6/30/98
GROWTH OF A $10,000 INVESTMENT IN
CLASS A WHICH INCLUDES SALES CHARGE
ADVISERS FUND S&P 500 LEHMAN GOVT/CORP
$9,450 starting value $10,000 $10,000
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RETURNS (INCEPTION 7/22/96)
Non Sales Charge Adjusted Sales Charge Adjusted
------------------------- ---------------------
ANNUALIZED ANNUALIZED
YTD* 1 YEAR(1)* SINCE INCEPT.(1) 1 YEAR(2)* SINCE INCEPT.(2)
<S> <C> <C> <C> <C> <C>
Advisers "A" 13.91% 23.08% 26.06% 16.31% 22.43%
Advisers "B" 13.48% 22.27% 25.19% 17.27% 23.51%
S&P 500 17.72% 30.17% 37.44%
Lehman G/C 4.17% 11.28% 9.90%
- --------------------------------------------------------------------------------
</TABLE>
THE CHART REPRESENTS A HYPOTHETICAL INVESTMENT IN THE ADVISERS FUND. PAST
PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE VALUE OF SHARES WILL
FLUCTUATE SO THAT WHEN REDEEMED, SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
(1) PERFORMANCE RESULTS DO NOT REFLECT SALES CHARGE.
(2) THE INITIAL INVESTMENT IN CLASS A AND B SHARES REFLECTS THE MAXIMUM SALES
CHARGE AND CDSC, RESPECTIVELY.
* YEAR-TO-DATE AND 1 YEAR RETURNS ARE CUMULATIVE.
A $10,000 INVESTMENT IN THE FUND'S CLASS B SHARES AT INCEPTION ON 7/22/96 WOULD
HAVE BEEN VALUED AT $15,462 ON 6/30/98 ($15,062 WITH A REDEMPTION AT THE END OF
THE PERIOD.)
Q. HOW DID THE FUND PERFORM?
The Hartford Advisers Fund outperformed its Lipper peer group for the six month
period ended 6/30/98. The Advisers Fund provided a total return of 13.9% versus
10.1% for the Lipper Flexible Mutual Fund Average, placing the Fund in the first
quartile of performance for funds in the group.
Q. WHY DID THE FUND PERFORM THIS WAY?
The reasons for the strong performance of the Fund relative to competitors
for the six month period are twofold. First, the equity portion of the Fund
has achieved significantly greater total return than the competition and,
second, the Fund+s equity ratio has been high during a period of strong
equity markets. Although the bond portion of the Fund has performed well, the
keys to performance have been in the equity portion and in the asset
allocation (63% stocks, 33% bonds and 4% cash as of 6/30/98).
Q.WHAT IS YOUR OUTLOOK FOR THE REST OF 1998?
We have felt for some time that the direction of bond yields was downward, and
we have positioned the Fund+s fixed income portfolio with longer-than-benchmark
duration in order to take advantage of any interest rate decline. In addition,
we have limited our holdings of mortgage-backed securities and corporate bonds
given their stretched valuations. While concerns have surfaced about valuations
as a result of the strong performance of the US equity market during the first
half of the year, we continue to remain optimistic about the outlook. Given the
economic environment with low inflation, low interest rates, and reasonable
economic growth, we see little reason to reduce the Funds' equity ratio. The
bull market has been a long one, but we remain comfortable with an equity ratio
in the area of 62%. We continue to prefer bonds to cash and are therefore
keeping the Funds+ cash commitment quite low.
<PAGE>
THE HARTFORD
BOND INCOME STRATEGY FUND
PORTFOLIO MANAGER
[PHOTO]
ALISON D. GRANGER, CFA
Senior Vice President The Hartford Investment
Management Company (HIMCO)
PERFORMANCE OVERVIEW
[GRAPH]
7/22/96 - 6/30/98
GROWTH OF A $10,000 INVESTMENT IN CLASS A WHICH INCLUDES SALES CHARGE
BOND INCOME STRATEGY LEHMAN GOVT/CORP
$9,550 starting value $10,000 starting value
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RETURNS (INCEPTION 7/22/96)
Non Sales Charge Adjusted Sales Charge Adjusted
------------------------- ---------------------
ANNUALIZED ANNUALIZED
YTD* 1 YEAR(1)* SINCE INCEPT.(1) 1 YEAR(2)* SINCE INCEPT.(2)
<S> <C> <C> <C> <C> <C>
Bond "A" 3.85% 11.03% 10.64% 6.03% 8.04%
Bond "B" 3.52% 10.28% 9.84% 5.28% 7.93%
Lehman G/C 4.17% 11.28% 9.90%
- --------------------------------------------------------------------------------
</TABLE>
THE CHART REPRESENTS A HYPOTHETICAL INVESTMENT IN THE BOND INCOME STRATEGY.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE VALUE OF SHARES WILL
FLUCTUATE SO THAT WHEN REDEEMED, SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
(1) PERFORMANCE RESULTS DO NOT REFLECT SALES CHARGE.
(2) THE INITIAL INVESTMENT IN CLASS A AND B SHARES REFLECTS THE MAXIMUM SALES
CHARGE AND CDSC, RESPECTIVELY.
* YEAR-TO-DATE AND 1 YEAR RETURNS ARE CUMULATIVE.
A $10,000 INVESTMENT IN THE FUND'S CLASS B SHARES AT INCEPTION ON 7/22/96 WOULD
HAVE BEEN VALUED AT $11,996 ON 6/30/98 ($11,596 WITH A REDEMPTION AT THE END OF
THE PERIOD.)
Q. HOW DID THE FUND PERFORM?
The Hartford Bond Income Strategy Fund Class A shares placed in the 54th
percentile of its Lipper peer group for the six months ended June 30, 1998,
producing a total return of 3.35% versus the 3.31% average return of the Lipper
Corporate Debt "BBB" rated Mutual Fund universe.
Q. WHY DID THE FUND PERFORM THIS WAY?
There were two major contributors to the fund+s performance this quarter. The
first was the Fund+s duration of 6.2 years which was approximately 16% longer
than its benchmark index. Yields declined between 20 and 30 basis points during
the quarter in ten-year and longer- maturity Treasuries, resulting in price
gains. High quality long-maturity corporate securities also benefited. The
Fund+s overweighted position in these securities contributed positively to
returns. Second, the Fund+s allocation to BB rated domestic high yield and
emerging market issues. The combination of huge new issue supply in the
domestic high yield market and Asian-induced weakness in the Emerging Markets
resulted in underperformance of these securities relative to higher quality
alternatives during the quarter. We began the quarter with an underweighted
position in these assets and gradually increased the portfolio allocation to an
overweighted position at the end of the second quarter, as attractive values
emerged. Second quarter performance, however, was impacted by this allocation.
Q. WHAT IS YOUR OUTLOOK FOR THE REST OF 1998?
High inflation-adjusted Treasury yields, the continued perceived safety of US
investments amidst recent global volatility, and the improving deficit
situation, all contribute to our expectation that Treasury securities will
continue to perform well over the course of 1998. We have added a position in
Treasury Inflation Protected Securities in to our belief that these securities
are fundamentally inexpensive, and could significantly outperform other fixed
income assets (of any quality) in the event that inflation emerges and/or real
Treasury yields decline. We continue to hold a portfolio of high average
quality in order to express our view that US Treasuries provide one of the most
attractive risk/reward profiles among the taxable fixed income asset classes.
The second quarter increase in allocation to high yield securities will provide
our shareholders with additional yield, but it is also our expectation that
these securities will perform well in the near term. Finally, we continue to
find value in fifteen-year discount mortgage passthroughs, such as FNMA Dwarf
6s, to provide additional yield, limit risk of a significant rise in
prepayments, and enhance portfolio diversification.
<PAGE>
THE HARTFORD MONEY MARKET FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------- ------------
<C> <S> <C>
COMMERCIAL PAPER -- 78.4%
Air Products & Chemicals
$1,000,000 5.50% due 09/22/98............... $ 987,319
Allergan, Inc.
1,000,000 5.55% due 07/28/98............... 995,837
Allied Signal, Inc.
1,000,000 5.50% due 09/11/98............... 989,000
Aristar, Inc.
750,000 5.60% due 07/10/98............... 748,950
Associates Corporation Of North
America
1,000,000 5.49% due 08/24/98............... 991,765
Bankers Trust New York
750,000 5.50% due 09/28/98............... 739,802
Bell Atlantic Financial Services
1,000,000 5.50% due 07/06/98............... 999,236
Caterpillar Financial Services
750,000 5.47% due 07/14/98............... 748,518
Colgate-Palmolive Co.
1,000,000 5.57% due 08/03/98............... 994,894
Countrywide Home Loan
750,000 5.54% due 07/21/98............... 747,691
du Pont (E.I.) de Nemours & Co.
750,000 5.46% due 07/30/98............... 746,701
Eaton Corp.
1,000,000 5.49% due 11/03/98............... 980,920
Finova Capital Corp.
750,000 5.54% due 09/08/98............... 742,036
Ford Motor Credit Corp.
1,000,000 5.48% due 07/27/98............... 996,042
General Electric Capital Corp.
1,000,000 5.52% due 08/07/98............... 994,326
General Signal Corp.
750,000 5.60% due 07/21/98............... 747,666
Goldman Sachs Group
1,000,000 5.50% due 09/28/98............... 986,402
J.P. Morgan & Co., Inc.
1,000,000 5.50% due 11/16/98............... 978,916
Merrill Lynch & Co., Inc.
750,000 5.51% due 07/06/98............... 749,426
Monsanto
750,000 5.50% due 10/26/98............... 736,593
Morgan Stanley
1,000,000 5.50% due 08/31/98............... 990,680
National Rural Utilities
750,000 5.47% due 07/22/98............... 747,606
Nationwide Building Society
750,000 5.50% due 10/13/98............... 738,083
Nordbanken North America
1,000,000 5.50% due 10/05/98............... 985,333
Rubbermaid, Inc.
1,000,000 5.50% due 10/08/98............... 984,875
Salomon Smith Barney
1,000,000 5.51% due 08/24/98............... 991,735
Sharp Electronics Corp.
750,000 5.56% due 08/12/98............... 745,135
Sherwin-Williams Co.
750,000 5.54% due 08/18/98............... 744,460
Southland Corp.
750,000 5.53% due 08/11/98............... 745,276
Spintab
750,000 5.56% due 11/18/98............... 733,783
Svenska Handelsbanken, Inc.
750,000 5.44% due 09/22/98............... 740,593
Westpac Capital Corp.
1,000,000 5.50% due 08/17/98............... 992,819
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------------
<C> <S> <C>
Zeneca, Inc.
$ 750,000 5.48% due 07/15/98............... $ 748,422
------------
Total commercial paper............. $ 28,490,830
------------
------------
NON-CONVERTIBLE CORPORATE NOTES -- 11.7%
John Deere
1,000,000 5.49% due 02/09/99............... $ 999,645
First USA Bank
750,000 5.89% due 10/22/98............... 750,927
Honda Motor Corp.
1,000,000 5.67% due 04/16/99............... 1,000,000
Lehman Brothers Holdings
750,000 5.92% due 01/13/99............... 750,000
Triangle Funding Ltd.
750,000 5.75% due 11/15/98............... 750,000
------------
Total non-convertible corporate
notes............................ $ 4,250,572
------------
------------
REPURCHASE AGREEMENT -- 8.4%
3,067,000 Interest in $131,291,000 joint
repurchase agreement with State
Street Bank dated 06/30/98 at
5.90%, to be repurchased at
$3,067,503 on 07/01/98;
(Collateralized by $131,291,000
U.S. Treasury Bonds 6.5% due
11/15/26)........................ $ 3,067,000
------------
------------
DIVERSIFICATION OF NET ASSETS:
Total commercial paper (cost $28,490,830).... 78.4 % $ 28,490,830
Total non-convertible corporate notes (cost
$4,250,572)................................ 11.7 4,250,572
Total repurchase agreement (cost
$3,067,000)................................ 8.4 3,067,000
Total investment in securities (total cost
$35,808,402)*.............................. 98.5 35,808,402
Excess of cash, receivables and other assets
over liabilities........................... 1.5 534,602
------ ------------
Net assets (applicable to $1.00 per share
based on 36,343,004 shares outstanding).... 100.0 % $ 36,343,004
------ ------------
------ ------------
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $1.00 per share; 800,000,000
shares authorized; 36,343,004 shares outstanding... $ 36,343
Paid-in surplus...................................... 36,306,661
------------
Total net assets..................................... $ 36,343,004
------------
------------
Class A
Shares of beneficial interest outstanding, $0.001
par value; 400,000,000 shares authorized (Net
assets $27,236,238)................................ 27,236,238
------------
------------
Net asset value and offering price per
share.................................... $ 1.00
-----
-----
Class B
Shares of beneficial interest outstanding, $0.001
par value; 200,000,000 shares authorized (Net
assets $6,866,563)................................. 6,866,563
------------
------------
Net asset value and offering price per
share.................................... $ 1.00
-----
-----
Class Y
Shares of beneficial interest outstanding, $0.001
par value; 100,000,000 shares authorized (Net
assets $2,240,203)................................. 2,240,203
------------
------------
Net asset value and offering price per
share.................................... $ 1.00
-----
-----
</TABLE>
* Aggregate cost for federal income tax purposes.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
11
<PAGE>
THE HARTFORD BOND INCOME STRATEGY FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<C> <S> <C>
COMMERCIAL MORTGAGE-BACKED SECURITIES -- 0.1%
FINANCIAL SERVICES -- 0.1%
Capital Lease Funding
Securitization,
Series 1997-CTL1, Class A1
$ 71,103 7.42% due 06/22/24.......... $ 73,280
------------
------------
CORPORATE BONDS -- 0.8%
UTILITIES -- 0.8%
Pg & E 97-1 A6
400,000 6.32% due 09/25/05.......... $ 406,996
------------
------------
CORPORATE NOTES -- 54.8%
COLLEGES -- 2.8%
Massachusetts Institute of
Technology
800,000 7.25% due 11/02/96.......... $ 926,164
Yale University
500,000 7.37% due 04/15/96.......... 593,493
------------
1,519,657
------------
COMMUNICATIONS EQUIPMENT --
1.6%
Comcast Cellular
400,000 9.50% due 05/01/07.......... 417,000
Jones Intercable, Inc.
200,000 7.62% due 04/15/08.......... 202,000
Lenfest Communications
100,000 8.38% due 11/01/05.......... 106,250
Paramount Communication
113,000 7.50% due 07/15/23.......... 113,034
------------
838,284
------------
CONSUMER DURABLES -- 1.3%
Fred Meyer Inc. Senior Notes
600,000 7.37% due 03/01/05.......... 604,671
Mark IV Industries, Inc.
100,000 7.50% due 09/01/07.......... 100,708
------------
705,379
------------
FINANCIAL SERVICES -- 15.6%
Abbey National First
Capital-Yankee
400,000 8.20% due 10/15/04.......... 441,417
Allstate Corp.
145,000 6.75% due 05/15/18.......... 148,681
Amvescap PLC
500,000 6.60% due 05/15/05.......... 505,293
Bayerische Landesbank NY
500,000 6.38% due 10/15/05.......... 511,456
Bellsouth Capital Funding
500,000 7.12% due 07/15/97.......... 553,452
California Infrastructure
250,000 6.28% due 09/25/05.......... 254,777
Citicorp
500,000 7.12% due 05/15/06.......... 527,597
Dime Bancorp, Inc. Senior
Notes
300,000 10.50% due 11/15/05......... 318,000
Duke Realty LP
250,000 7.25% due 09/22/02.......... 258,716
Equity Residential
300,000 7.12% due 10/15/17.......... 303,543
Ford Motor Credit Corp.
500,000 6.12% due 01/09/06.......... 497,868
General Motors Acceptance
Corp.
500,000 6.88% due 07/15/01.......... 512,239
Landeskreditbank
Baden-Wurttemberg
750,000 7.62% due 02/01/23.......... 880,685
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<C> <S> <C>
CORPORATE NOTES -- (CONTINUED)
FINANCIAL SERVICES --
(CONTINUED)
Lehman Brothers, Inc.
$ 150,000 8.87% due 03/01/02.......... $ 162,854
Massachusetts Mutual Life
Insurance Co.*
500,000 7.62% due 11/15/23.......... 565,990
Phoenix Home Life Insurance
Co.*
500,000 6.95% due 12/01/06.......... 517,018
Societe Generale
250,000 9.88% due 07/15/03.......... 287,121
Southern Investments UK PLC
250,000 6.80% due 12/01/06.......... 259,027
Swiss Bank Corporation-NY
200,000 7.37% due 06/15/17.......... 222,073
Trenwick Group
300,000 6.70% due 04/01/03.......... 302,794
Westinghouse Credit Corp.
300,000 8.87% due 06/14/14.......... 338,265
------------
8,368,866
------------
FOOD, BEVERAGE & TOBACCO --
0.8%
Ralcorp Holdings
250,000 8.75% due 09/15/04.......... 284,708
RJR Nabisco, Inc.
150,000 8.50% due 07/01/07.......... 150,510
------------
435,218
------------
HEALTH CARE -- 1.4%
Columbia Healthcare
100,000 7.50% due 12/15/23.......... 94,457
Columbia/HCA Healthcare
200,000 7.50% due 11/15/95.......... 185,505
Tenet Healthcare Corp.
400,000 8.13% due 12/01/08.......... 402,500
Tenet Healthcare Corp.
100,000 8.00% due 01/15/05.......... 102,643
------------
785,105
------------
HOTELS & GAMING -- 0.8%
Boyd Gaming Corporation
400,000 9.50% due 07/15/07.......... 410,000
------------
INDUSTRIAL -- 5.5%
American Standard Companies
400,000 7.37% due 02/01/08.......... 391,500
American Standard Companies
200,000 7.37% due 04/15/05.......... 199,298
Buckeye Cellulos
100,000 8.50% due 12/15/05.......... 102,000
Clark Refining & Marketing,
Inc.
200,000 8.38% due 11/15/07.......... 200,000
Domtar, Inc.
180,000 9.50% due 08/01/16.......... 200,016
E.I. Dupont de Nemours
300,000 6.75% due 09/01/07.......... 313,569
Loewen Group International,
Inc.
300,000 8/25% due 10/15/03.......... 311,577
Newport News Shipbuilding,
Inc.
100,000 8.62% due 12/01/06.......... 105,250
Owens-Illinois, Inc.
100,000 8.10% due 05/15/07.......... 106,784
Placer Dome, Inc.
400,000 7.12% due 06/15/07.......... 404,844
Terra Industries
100,000 10.50% due 06/15/05......... 107,750
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
12
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<C> <S> <C>
CORPORATE NOTES -- (CONTINUED)
INDUSTRIAL -- (CONTINUED)
Tesoro Petroleum Corp.
$ 100,000 9.00% due 07/01/08.......... $ 100,000
U.S. Home Corp.
50,000 7.95% due 03/01/01.......... 51,040
U.S. Home Corp.
100,000 8.25% due 08/15/04.......... 101,000
Wyman-Gordon Company Senior
Notes
250,000 8.00% due 12/15/07.......... 253,750
------------
2,948,378
------------
MEDIA & SERVICES -- 2.3%
Hollinger Intl Publishing
200,000 8.62% due 03/15/05.......... 209,000
News America Holdings, Inc.
450,000 7.70% due 10/30/25.......... 482,474
Rogers Cablesystems
100,000 9.63% due 08/01/02.......... 106,750
Time Warner Entertainment
200,000 8.87% due 10/01/12.......... 243,548
Turner Broadcasting
100,000 7.40% due 02/01/04.......... 104,494
Viacom, Inc.
100,000 6.75% due 01/15/03.......... 100,958
------------
1,247,224
------------
RETAIL -- 3.8%
Kmart Corp.
100,000 7.84% due 01/02/02.......... 102,318
Kmart Corp.
100,000 7.55% due 07/27/04.......... 101,667
Kmart Corp.
100,000 7.75% due 10/01/12.......... 100,926
K Mart Corp.
275,000 7.95% due 02/01/23.......... 280,500
Kroger Co.
500,000 7.00% due 05/01/18.......... 512,695
Stop & Shop Companies, Inc.
825,000 9.75% due 02/01/02.......... 920,455
------------
2,018,561
------------
TELECOMMUNICATIONS -- 3.8%
Rogers Cantel, Inc.
100,000 8.30% due 10/01/07.......... 98,000
Rogers Cablesystems
200,000 10.00% due 03/15/05......... 222,000
Rogers Cantel, Inc.
100,000 9.38% due 06/01/08.......... 103,750
Rogers Cantel, Inc.
200,000 9.75% due 06/01/16.......... 209,000
Tele-Communications
467,000 9.25% due 01/15/23.......... 536,961
TCI Communications, Inc.
300,000 7.88% due 08/01/13.......... 346,309
Tele-Communications, Inc.
500,000 6.58% due 02/15/05.......... 544,941
------------
2,060,961
------------
TRANSPORTATION -- 4.5%
Continental Airlines
300,000 9.50% due 12/15/01.......... 318,750
Continental Airlines*
941,463 7.46% due 04/01/13.......... 1,018,606
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<C> <S> <C>
TRANSPORTATION -- (CONTINUED)
CSX Corp.
$ 200,000 7.25% due 05/01/04.......... $ 209,556
Interpool, Inc.*
200,000 7.35% due 08/01/07.......... 201,546
United Air Lines
500,000 9.75% due 08/15/21.......... 667,760
------------
2,416,218
------------
UTILITIES -- 10.4%
Abbey-Global
500,000 6.69% due 10/17/05.......... 514,738
Calpine Corporation
200,000 7.88% due 04/01/08.......... 199,500
Calpine Corporation
100,000 8.75% due 07/15/07.......... 102,750
Cleveland Electric
Illuminating Co.
250,000 7.13% due 07/01/07.......... 265,037
El Paso Electric
650,000 8.90% due 02/01/06.......... 724,750
Long Island Lighting Co.
300,000 8.90% due 07/15/19.......... 318,179
Niagara Mohawk Power
500,000 7.75% due 10/01/08.......... 513,125
Niagara Mohawk Power
300,000 7.25% due 10/01/02.......... 299,625
Pacific Gas and Electric Co.
250,000 7.25% due 03/01/26.......... 258,822
Pacific Gas & Electric Co.
300,000 7.05% due 03/01/24.......... 326,412
Pacificorp
1,050,000 6.38% due 05/15/08.......... 1,056,117
Pacificorp
200,000 6.12% due 01/15/06.......... 199,322
Public Service El-IBC
125,000 7.00% due 09/01/24.......... 129,137
Public Service El-MBIA
250,000 6.75% due 01/01/16.......... 259,845
Public Service El-MBIA
150,000 6.75% due 01/01/16.......... 155,907
The AES Corp.
200,000 8.38% due 08/15/07.......... 202,000
WorldCom, Inc.
100,000 8.87% due 01/15/06.......... 108,250
------------
5,633,516
------------
Total corporate notes......... $ 29,387,367
------------
------------
ENHANCED EQUIPMENT TRUST CERTIFICATES -- 0.2%
TRANSPORTATION -- 0.2%
Northwest Airlines Trust,
Series 2
91,385 11.30% due 06/21/14......... $ 120,678
------------
------------
FOREIGN GOVERNMENT BONDS -- 5.1%
ARGENTINA -- 0.6%
Republic Of Argentina
400,000 5.50% due 03/31/23.......... $ 297,750
------------
CANADA -- 0.2%
Gulf Canada Resources
100,000 8.25% due 03/15/17.......... 110,192
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
13
<PAGE>
THE HARTFORD BOND INCOME STRATEGY FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS -- (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<C> <S> <C>
FOREIGN GOVERNMENT BONDS -- (CONTINUED)
COLOMBIA -- 0.3%
Republic Of Colombia
$ 200,000 7.62% due 02/15/07.......... $ 179,439
------------
PANAMA -- 2.0%
Republic Of Panama
1,155,000 8.87% due 09/30/27.......... 1,089,309
------------
RUSSIA -- 0.8%
Ministry Fin Russia
575,000 10.00% due 06/26/07......... 435,562
------------
SOUTH KOREA -- 0.2
Republic Of Korea
125,000 8.87% due 04/15/08.......... 114,296
------------
VENEZUELA -- 0.9%
Venezuela Unsecured
650,000 9.25% due 09/15/27.......... 504,156
------------
Total foreign government
bonds....................... $ 2,730,704
------------
------------
NON-CONVERTIBLE PREFERRED STOCKS -- 0.9%
FINANCIAL SERVICES -- 0.9%
20,000 The Coastal Corporation....... $ 495,000
------------
------------
U.S. TREASURIES & FEDERAL AGENCIES -- 34.8%
U.S. TREASURY STRIPS -- 0.3%
300,000 0.00% due 02/15/08.......... $ 175,977
------------
U.S. GOVERNMENT AGENCIES --
2.2%
Israel Aid (State of)
1,200,000 4.88% due 09/15/98.......... 1,197,466
------------
U.S. TREASURY BONDS -- 5.2%
500,000 6.375% due 08/15/27......... 549,219
1,095,000 6.625% due 02/15/27......... 1,237,008
90,000 6.875% due 08/15/25......... 104,259
325,000 7.50% due 11/15/16.......... 390,203
400,000 7.625% due 02/15/25......... 503,625
------------
2,784,314
------------
U.S. TREASURY
INFLATION-INDEXED SECURITIES
-- 3.8%
458,825 3.375% due 01/15/07......... 455,887
1,578,812 3.625% due 07/15/02 -
04/15/28.................... 1,567,979
------------
2,023,866
------------
U.S. TREASURY NOTES -- 12.7%
1,405,000 5.625% due 11/30/98 -
02/15/06.................... 1,407,350
150,000 5.75% due 11/15/00.......... 150,750
1,345,000 5.875% due 10/31/98 -
11/15/05.................... 1,358,950
100,000 6.125% due 11/15/98......... 107,156
700,000 6.25% due 07/31/98 -
06/30/02.................... 703,031
170,000 6.375% due 03/31/01......... 173,599
480,000 6.50% due 10/15/06.......... 509,850
120,000 6.625% due 07/31/01......... 123,600
330,000 6.875% due 08/31/99 -
05/15/06.................... 336,312
1,810,000 7.50% due 10/31/99 -
02/15/05.................... 1,958,675
------------
6,829,273
FEDERAL NATIONAL MORTGAGE
ASSOCIATION -- 10.5%
150,000 5.25% due 01/15/03.......... 147,738
5,299,797 6.00% due 02/01/13 -
05/01/13.................... 5,240,147
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<C> <S> <C>
U.S. TREASURIES & FEDERAL AGENCIES -- (CONTINUED)
FEDERAL NATIONAL MORTGAGE
ASSOCIATION -- (CONTINUED)
$ 248,340 6.50% due 07/25/28.......... $ 247,251
------------
5,635,136
------------
Total U.S. treasuries &
federal agencies............ $ 18,646,032
------------
------------
SHORT-TERM SECURITIES -- 1.9%
REPURCHASE AGREEMENT -- 1.9%
1,036,000 Interest in $131,291,000 joint
repurchase agreement with
State Street Bank dated
06/30/98 at 5.90%, to be
repurchased at $1,036,170 on
07/01/98; (Collateralized by
$131,291,000 U.S. Treasury
Bonds 6.5% due 11/15/26).... $ 1,036,000
------------
------------
</TABLE>
<TABLE>
<S> <C> <C>
DIVERSIFICATION OF NET ASSETS:
Total commercial mortgage-backed securities
(cost $72,499)............................. 0.1% $ 73,280
Total corporate bonds (cost $399,833)........ 0.8 406,996
Total corporate notes (cost $28,290,911)..... 54.8 29,387,367
Total enhanced equipment trust certificates
(cost $111,825)............................ 0.2 120,678
Total foreign government bonds (cost
$2,876,089)................................ 5.1 2,730,704
Total non-convertible preferred stock
($500,000)................................. 0.9 495,000
Total U.S. treasuries & federal agencies
(cost $18,527,844)......................... 34.8 18,646,032
Total short-term securities (cost
$1,036,000)................................ 1.9 1,036,000
------ ------------
Total investment in securities (total cost
$51,815,001)............................... 98.6 52,896,057
Excess of cash, receivables and other assets
over liabilities........................... 1.4 752,145
------ ------------
Net assets................................... 100.0% $ 53,648,202
------ ------------
------ ------------
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $.001 per share; 300,000,000
shares authorized; 5,009,488 shares outstanding.... $ 5,009
Paid-in surplus...................................... 52,074,826
Accumulated undistributed net investment income...... 38,354
Accumulated undistributed net realized gain on
investments........................................ 448,957
Unrealized appreciation of investments............... 1,081,056
------------
Net assets........................................... $ 53,648,202
------------
------------
Class A
Net asset value per share ($35,827,984
DIVIDED BY 3,345,208 shares outstanding)
(175,000,000 shares authorized)............ $ 10.71
------
------
Maximum offering price per share ($10.71
DIVIDED BY 95.5%)......................... $ 11.21
------
------
Class B
Net asset value per share ($10,217,077
DIVIDED BY 956,845 shares outstanding)
(75,000,000 shares authorized)............. $ 10.68
------
------
Class Y
Net asset value per share ($7,603,141
DIVIDED BY 707,435 shares outstanding)
(50,000,000 shares authorized)............. $ 10.75
------
------
</TABLE>
* Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers. As of June 30, 1998, the market
value of these securities amounted to $2,303,160, or 4.29% of net assets.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
14
<PAGE>
THE HARTFORD ADVISERS FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
----------- -------------
<C> <S> <C>
COMMON STOCKS -- 61.5%
COMMUNICATIONS EQUIPMENT --
2.8%
*49,450 Cisco Systems, Inc............ $ 4,552,490
40,000 Ericsson (L.M.)
Telephone-ADR............... 1,145,000
22,000 Lucent Technologies, Inc...... 1,830,125
*30,000 Tellabs, Inc.................. 2,148,750
-------------
9,676,365
-------------
COMPUTERS & OFFICE
EQUIPMENT -- 2.9%
40,000 Compaq Computer Corporation... 1,135,000
*51,400 EMC Corporation............... 2,303,362
31,000 International Business
Machines Corporation........ 3,559,187
30,500 Xerox Corporation............. 3,099,562
-------------
10,097,111
-------------
CONSUMER NON-DURABLES -- 3.9%
25,000 Colgate-Palmolive Company..... 2,200,000
27,000 Estee Lauder Companies-Class
A........................... 1,881,562
44,000 Gillette Company (The)........ 2,494,250
56,000 Kimberly-Clark Corporation.... 2,569,000
48,800 Proctor & Gamble Company
(The)....................... 4,443,850
-------------
13,588,662
-------------
CONSUMER SERVICES -- 0.9%
*90,000 Mirage Resorts,
Incorporated................ 1,918,125
26,900 ServiceMaster Company (The)... 1,023,881
-------------
2,942,006
-------------
ELECTRONICS -- 3.7%
*49,000 Analog Devices, Inc........... 1,203,562
*40,000 Applied Materials, Inc........ 1,180,000
81,000 General Electric Company...... 7,371,000
43,200 Intel Corporation............. 3,202,200
-------------
12,956,762
-------------
ENERGY & SERVICES -- 1.5%
24,500 Chevron Corporation........... 2,035,031
19,200 Exxon Corporation............. 1,369,200
23,600 Schlumberger N.V.............. 1,612,175
-------------
5,016,406
-------------
FINANCIAL SERVICES -- 12.1%
32,000 American Express Company...... 3,648,000
24,500 American International Group,
Inc......................... 3,577,000
46,000 Associates First Capital
Corporation................. 3,536,250
28,000 BankAmerica Corporation....... 2,420,250
20,500 Citicorp...................... 3,059,625
43,000 First Union Corporation....... 2,504,750
67,500 Marsh & McLennan Companies,
Inc......................... 4,079,531
40,000 Mellon Bank Corporation....... 2,785,000
61,200 Merrill Lynch & Co., Inc...... 5,645,700
51,000 State Street Corporation...... 3,544,500
76,000 Travelers Group Inc........... 4,607,500
55,500 U.S. Bancorp.................. 2,386,500
-------------
41,794,606
-------------
FOOD, BEVERAGE & TOBACCO --
2.8%
35,000 Coca-Cola Company (The)....... 2,992,500
55,000 Nabisco Holdings
Corporation................. 1,983,437
62,000 PepsiCo, Inc.................. 2,553,625
<CAPTION>
MARKET
SHARES VALUE
----------- -------------
<C> <S> <C>
FOOD, BEVERAGE & TOBACCO --
(CONTINUED)
25,800 Unilever N.V.-New York
Shares...................... $ 2,036,587
-------------
9,566,149
-------------
HEALTH CARE -- 9.2%
58,000 Abbott Laboratories........... 3,474,375
81,000 American Home Products
Corporation and
Subsidiaries................ 4,191,750
85,000 Columbia/HCA Healthcare
Corporation................. 2,475,625
50,000 Johnson & Johnson............. 3,687,500
35,500 Merck & Co., Inc.............. 4,748,125
27,000 Pfizer, Inc................... 2,934,562
55,900 Pharmacia & Upjohn, Inc....... 2,578,387
40,000 Service Corporation
International............... 1,715,000
40,000 SmithKline Beecham PLC ADR.... 2,420,000
*32,000 Tenet Healthcare
Corporation................. 1,000,000
36,000 Warner-Lambert Company........ 2,497,500
-------------
31,722,824
-------------
MANUFACTURING -- 0.5%
30,000 The Perkin-Elmer
Corporation................. 1,865,625
-------------
MEDIA & SERVICES -- 3.5%
*35,000 Airtouch Communications,
Inc......................... 2,045,312
*60,000 CBS Corporation............... 1,905,000
*11,800 Clear Channel Communications,
Inc......................... 1,287,675
60,000 Gannett Co., Inc.............. 4,263,750
25,000 Walt Disney Company (The)..... 2,626,562
-------------
12,128,299
-------------
RETAIL -- 6.1%
86,800 CVS Corporation............... 3,379,775
58,000 Gap, Inc...................... 3,574,250
40,000 Home Depot, Inc. (The)........ 3,322,500
56,800 McDonald's Corporation........ 3,919,200
*70,000 Staples, Inc.................. 2,025,625
79,000 Wal-Mart Stores, Inc.......... 4,799,250
-------------
21,020,600
-------------
SOFTWARE & SERVICES -- 5.4%
*25,000 America Online, Inc........... 2,650,000
26,000 Automatic Data Processing,
Inc......................... 1,894,750
*50,000 Computer Sciences
Corporation................. 3,200,000
59,500 First Data Corporation........ 1,982,093
*65,000 Microsoft Corporation......... 7,044,375
*43,000 PeopleSoft, Inc............... 2,021,000
-------------
18,792,218
-------------
TRANSPORTATION -- 2.0%
*26,800 AMR Corporation............... 2,231,100
92,500 Southwest Airlines Co......... 2,740,312
45,800 Union Pacific Corporation..... 2,020,925
-------------
6,992,337
-------------
UTILITIES -- 4.2%
25,000 Ameritech Corporation......... 1,121,875
70,000 Bell Atlantic Corporation..... 3,193,750
30,000 Duke Energy Corporation....... 1,777,500
20,000 MCI Communications
Corporation................. 1,162,500
106,000 SBC Communications, Inc....... 4,240,000
*60,000 WorldCom, Inc................. 2,906,262
-------------
14,401,887
-------------
Total common stocks........... $ 212,561,857
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
15
<PAGE>
THE HARTFORD ADVISERS FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS -- (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- -------------
<C> <S> <C>
CORPORATE NOTES -- 3.5%
FINANCIAL SERVICES -- 2.5%
BankAmerica Corp.
$ 500,000 7.88% due 12/01/02.......... $ 534,853
Cigna Corp.
1,000,000 6.38% due 01/15/06.......... 1,000,137
Finova Capital Corporation
500,000 6.39% due 10/08/02.......... 505,294
First Union Corp.
1,000,000 6.40% due 04/01/08.......... 1,006,342
Fleet Financial Corp.
1,000,000 6.88% due 01/15/28.......... 1,026,270
Heller Financial
500,000 6.38% due 01/10/00.......... 502,435
MBIA Inc
1,000,000 7.00% due 02/15/25.......... 1,062,954
NationsBank Corp.
1,000,000 7.80% due 09/15/16.......... 1,132,255
New York Telephone
1,000,000 6.00% due 04/15/08.......... 993,078
US West Cap Funding Inc.
785,000 6.88% due 07/15/28.......... 787,433
-------------
8,551,051
-------------
INDUSTRIAL -- 0.6%
ICI Wilmington
500,000 6.95% due 09/15/04.......... 520,334
Praxair Inc.
1,000,000 6.15% due 04/15/03.......... 998,960
Williams Companies Inc.
500,000 6.50% due 01/15/02.......... 505,946
-------------
2,025,240
-------------
MEDIA & SERVICES -- 0.1%
E.W. Scripps Company
500,000 6.38% due 10/15/02.......... 504,636
SOFTWARE & SERVICES -- 0.3%
Computer Associates
International
1,000,000 6.50% due 01/15/08.......... 1,004,392
-------------
Total corporate notes......... $ 12,085,319
-------------
-------------
U.S. TREASURIES & FEDERAL AGENCIES -- 28.9%
U.S. TREASURY NOTES -- 26.9%
18,050,000 5.75% due 09/30/99 -
08/15/03.................... $ 18,212,315
25,075,000 6.25% due 05/01/00 -
08/15/23.................... 26,206,171
8,550,000 6.375% due 08/15/02......... 8,809,176
19,000,000 6.50% due 08/15/05 -
10/15/06.................... 20,083,127
8,950,000 7.25% due 05/15/04 -
05/15/16.................... 9,967,031
6,000,000 7.50% due 02/15/05......... 6,643,128
3,000,000 7.75% due 12/31/99......... 3,093,750
-------------
93,014,698
-------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION -- 1.9%
5,139,148 6.50% due 04/15/26 -
03/15/28.................... 5,126,299
1,430,058 7.00% due 07/15/23 -
04/15/26.................... 1,454,668
-------------
6,580,967
-------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- -------------
<C> <S> <C>
U.S. TREASURIES & FEDERAL AGENCIES -- CONTINUED
FEDERAL HOME LOAN MORTGAGE
COMPANY -- 0.1%
$ 213,487 6.50% due 03/01/28......... $ 212,751
-------------
Total U.S. treasuries &
federal agencies............ $ 99,808,416
-------------
-------------
SHORT-TERM SECURITIES -- 4.2%
REPURCHASE AGREEMENT -- 4.2%
14,424,000 Interest in $1,111,215,000
joint repurchase agreement
with State Street Bank dated
06/30/98 at 5.80%, to be
repurchased at $14,426,324
on 07/01/98; (Collateralized
by $421,318,000 U.S.
Treasury Notes 5.75%-7.825%
due 05/15/99-11/15/04,
563,474,000 U.S. Treasury
Bonds 8.00%-11.125% due
02/15/15-08/15/25,
121,000,000 U.S. Treasury
Strips (principal) 0% due
08/15/04-08/15/07 and
5,423,000 U.S. Treasury
Bills 0% due 08/13/98)...... $ 14,424,000
-------------
-------------
</TABLE>
<TABLE>
<S> <C> <C>
DIVERSIFICATION OF NET ASSETS:
Total common stocks (cost $170,031,853)...... 61.5% $ 212,561,857
Total corporate notes (cost $11,926,483)..... 3.5 12,085,319
Total U.S. treasuries & federal agencies
(cost $97,749,596)......................... 28.9 99,808,416
Total short-term securities (cost
$14,424,000)............................... 4.2 14,424,000
------ -------------
Total investment in securities (total cost
$294,131,932).............................. 98.1 338,879,592
Excess of cash, receivables and other assets
over liabilities........................... 1.9 6,730,582
------ -------------
Net assets................................... 100.0% $ 345,610,174
------ -------------
------ -------------
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $.001 per share; 400,000,000
shares authorized; 22,823,420 shares outstanding... $ 22,823
Paid-in surplus...................................... 298,632,863
Accumulated undistributed net investment income...... 49,838
Accumulated undistributed net realized gain.......... 2,156,990
Unrealized appreciation of investments............... 44,747,660
-------------
Net assets........................................... $ 345,610,174
-------------
-------------
Class A
Net asset value per share ($181,463,605
DIVIDED BY 11,962,836) (7,352,918 shares
outstanding) (200,000,000 shares
authorized)................................ $ 15.17
------
------
Maximum offering price ($15.17 DIVIDED BY
94.5%)..................................... $ 16.05
------
------
Class B
Net asset value per share ($113,093,363
DIVIDED BY 7,509,657 shares outstanding)
(100,000,000 shares authorized)............ $ 15.06
------
------
Class Y
Net asset value per share ($51,053,206
DIVIDED BY 3,350,927 shares outstanding)
(100,000,000 shares authorized)............ $ 15.24
------
------
</TABLE>
* Non-income producing during period.
** Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. As of June 30,
1998, the market value of these securities amounted to $1,004,392, or .3% of
net assets.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
16
<PAGE>
THE HARTFORD DIVIDEND AND GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
---------- -------------
<C> <S> <C>
COMMON STOCKS -- 96.7%
AEROSPACE & DEFENSE -- 2.0%
21,700 Northrop Grumman Corp......... $ 2,237,812
27,200 United Technologies
Corporation................. 2,516,000
-------------
4,753,812
-------------
COMPUTERS & OFFICE
EQUIPMENT -- 0.8%
17,200 Xerox Corp.................... 1,747,950
-------------
CONSUMER DURABLES -- 1.6%
68,200 Cooper Tire & Rubber
Company..................... 1,406,625
19,900 Ford Motor Company............ 1,174,100
21,800 TRW, Inc...................... 1,190,825
-------------
3,771,550
-------------
CONSUMER NON-DURABLES -- 3.3%
19,600 Clorox Company (The).......... 1,869,350
36,300 Colgate-Palmolive Company..... 3,194,400
60,300 Kimberly-Clark Corp........... 2,766,262
-------------
7,830,012
-------------
CONSUMER SERVICES -- 1.6%
49,700 Eastman Kodak Company......... 3,631,206
-------------
ELECTRONICS -- 6.5%
22,400 AMP, Inc...................... 770,000
109,800 General Electric Co........... 9,991,800
35,000 Johnson Controls, Inc......... 2,001,562
51,100 Thomas & Betts Corporation.... 2,516,675
-------------
15,280,037
-------------
ENERGY & SERVICES -- 9.9%
26,200 Ashland, Inc.................. 1,352,575
36,100 Chevron Corporation........... 2,998,556
79,000 Eni Ads....................... 5,135,000
5,800 Exxon Corporation............. 413,612
4,900 Pennzoil Company.............. 248,062
14,800 Phillips Petroleum Company.... 713,175
48,400 Repsol S.A. ADR............... 2,662,000
40,900 Royal Dutch Petroleum......... 2,241,831
*33,234 Sempra Energy................. 922,242
59,710 Sun Company, Inc.............. 2,317,494
85,000 USX Corporation............... 2,916,562
50,200 Wisconsin Energy Corp......... 1,524,825
-------------
23,445,934
-------------
FINANCIAL SERVICES -- 19.1%
36,500 CIGNA Corporation............. 2,518,500
69,400 Citicorp...................... 10,357,950
34,100 Exel Limited.................. 2,653,406
90,300 Federal National Mortgage
Association................. 5,485,725
64,700 First Union Corporation....... 3,768,775
67,800 Marsh & McLennan Companies,
Inc......................... 4,097,662
127,400 Pacific Century Financial
Corp........................ 3,057,600
37,300 Peoples Heritage Financial
Group, Inc.................. 881,212
16,000 Pinnacle West Capital Corp.... 720,000
238,200 U.S. Bancorp.................. 10,242,600
16,700 Wachovia Corporation.......... 1,411,150
-------------
45,194,580
-------------
FOOD, BEVERAGE & TOBACCO --
5.2%
29,850 Flowers Industries, Inc....... 610,059
51,800 H.J. Heinz Company............ 2,907,275
24,100 Interstate Bakeries........... 799,818
73,800 McCormick & Company, Inc...... 2,636,043
<CAPTION>
SHARES MARKET
---------- VALUE
-------------
<C> <S> <C>
FOOD, BEVERAGE & TOBACCO --
(CONTINUED)
60,900 Nabisco Holdings
Corporation................. $ 2,196,206
59,100 Philip Morris Companies,
Inc......................... 2,327,062
28,200 Schweitzer Mauduit Intl....... 817,800
-------------
12,294,263
-------------
FOREIGN SECURITIES -- 0.3%
265,934 Southcorp Limited............. 772,344
-------------
HEALTH CARE -- 11.3%
80,800 Abbott Laboratories........... 3,302,700
58,000 American Home Products Corp.
and Subsidiaries............ 3,001,500
36,700 Baxter International, Inc..... 1,974,918
21,100 Bristol-Myers Squibb Co....... 2,425,181
17,900 Merck & Co., Inc.............. 2,394,125
153,800 Pharmacia & Upjohn, Inc....... 7,094,025
94,200 Warner-Lambert Co............. 6,535,125
-------------
26,727,574
-------------
INDUSTRIAL MATERIALS -- 4.5%
14,200 Aluminum Company of America... 936,312
18,900 BetzDearborn, Inc............. 797,343
18,400 BOC Group PLC-Sponsored ADR... 499,100
24,900 Calgon Carbon Corp............ 247,443
35,800 du Pont (E.I.) de Nemours &
Co.......................... 2,671,575
9,700 Eastman Chemical Co........... 603,825
8,700 Georgia-Pacific (Timber
Group)...................... 200,643
16,600 Georgia-Pacific Corporation... 978,362
3,100 Imperial Chemical ADR......... 199,950
27,900 International Paper Co........ 1,199,700
20,000 RPM, Inc...................... 340,000
32,200 Temple-Inland, Inc............ 1,734,775
10,000 Witco Chemical Corp........... 292,500
-------------
10,701,528
-------------
MANUFACTURING -- 2.1%
20,100 Deere & Company............... 1,062,787
20,500 Eaton Corporation............. 1,593,875
29,500 Minnesota Mining &
Manufacturing Co............ 2,424,531
-------------
5,081,193
-------------
MEDIA & SERVICES -- 1.7%
1,400 Cognizant Corp................ 88,200
55,000 Gannett Co., Inc.............. 3,908,437
-------------
3,996,637
-------------
REAL ESTATE -- 2.7%
11,900 Kimco Realty Corporation...... 487,900
18,600 Liberty Property Trust........ 475,462
10,500 Nationwide Health Properties,
Inc......................... 250,687
52,800 Security Capital Pacific
Trust....................... 1,188,000
42,200 Spieker Properties, Inc....... 1,635,250
45,800 Starwood Hotels & Resorts..... 2,212,712
6,800 Sunstone Hotel Investors,
Inc......................... 90,525
-------------
6,340,536
-------------
RETAIL -- 4.3%
42,500 American Greetings
Corporation................. 2,164,843
80,800 May Department Stores Company
(The)....................... 5,292,400
38,600 J.C. Penney Company, Inc...... 2,791,262
-------------
10,248,505
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
17
<PAGE>
THE HARTFORD DIVIDEND AND GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS -- (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES MARKET
---------- VALUE
-------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
UTILITIES -- 19.5%
66,800 Ameritech Corporation......... $ 2,997,650
24,200 AT&T Corp..................... 1,382,425
76,734 Bell Atlantic Corp............ 3,500,988
71,000 BellSouth Corp................ 4,765,875
20,500 CINergy Corp.................. 717,500
51,500 Duke Energy Corporation....... 3,051,375
51,800 El Paso Natural Gas Company... 1,981,350
59,600 Endesa S.A.................... 1,288,850
65,300 GPU, Inc...................... 2,469,156
61,300 MCN Energy Group, Inc......... 1,524,837
35,500 Montana Power Co.............. 1,233,625
47,200 National Power PLC-Sponsored
ADR......................... 1,740,500
41,000 New England Electric System... 1,773,250
71,600 NIPSCO Industries, Inc........ 2,004,800
61,800 Northern States Power
Company..................... 1,769,025
22,700 PowerGen PLC Sponsored ADR.... 1,279,712
98,600 SBC Communications, Inc....... 3,944,000
71,200 Southern Company (The)........ 1,971,350
43,600 Sprint Corp................... 3,073,800
26,600 Texas Utilities Co............ 1,107,225
27,850 The Columbia Gas System,
Inc......................... 1,549,156
*20,656 WorldCom, Inc................. 1,000,525
-------------
46,126,974
-------------
WASTE MANAGEMENT -- 0.3%
20,300 Waste Management, Inc......... 710,500
-------------
Total common stocks........... $ 228,655,135
-------------
-------------
CONVERTIBLE PREFERRED STOCKS -- 1.4%
AEROSPACE & DEFENSE -- 1.2%
35,700 Loral Space &
Communications.............. $ 2,699,833
-------------
MEDIA & SERVICES -- 0.2%
5,400 American Radio Systems
Corporation................. 426,600
-------------
SOFTWARE & SERVICES -- 0.0%
800 Microsoft Corporation......... 76,000
-------------
Total preferred stocks........ $ 3,202,433
-------------
-------------
<CAPTION>
NO. OF
WARRANTS
----------
<C> <S> <C>
WARRANTS -- 0.0%
984 Security Capital Group........ $ 338
-------------
-------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- -------------
<C> <S> <C>
SHORT-TERM SECURITIES 2.4%
REPURCHASE AGREEMENT -- 2.4%
$5,569,000 Interest in $1,111,215,000
joint repurchase agreement
with State Street Bank dated
06/30/98 at 5.80%, to be
repurchased at $5,569,897 on
07/01/98; (Collateralized by
$421,318,000 U.S. Treasury
Notes 5.75%-7.825% due
05/15/99-11/15/04,
563,474,000 U.S. Treasury
Bonds 8.00%-11.125% due
02/15/15-08/15/25,
121,000,000 U.S. Treasury
Strips (principal) 0% due
08/15/04-08/15/07 and
5,423,000 U.S. Treasury
Bills 0% due 08/13/98)...... $ 5,569,000
-------------
-------------
</TABLE>
<TABLE>
<S> <C> <C>
DIVERSIFICATION OF NET ASSETS:
Total common stocks (cost $209,993,673)...... 96.7% $ 228,655,135
Total convertible preferred stocks (cost
$2,647,409)................................ 1.4 3,202,433
Total warrants (cost $0)..................... 0.0 338
Total short-term securities (cost
$5,569,000)................................ 2.4 5,569,000
-------- -------------
Total investment in securities
(total cost $218,210,082).................. 100.5 237,426,906
Excess of liabilities over cash, receivables
and other assets........................... (0.5) (959,055)
-------- -------------
Net assets................................... 100.0% $ 236,467,851
-------- -------------
-------- -------------
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital Stock, par value $.001 per share; 300,000,000
shares authorized; 14,744,549 shares outstanding..... $ 14,745
Paid-in surplus........................................ 214,309,113
Accumulated undistributed net investment income........ 30,129
Accumulated undistributed net realized gain on
investments.......................................... 2,906,813
Unrealized appreciation of investments................. 19,216,824
Unrealized depreciation on option contracts............ (8,630)
Unrealized depreciation on translation of other assets
and liabilities in foreign currencies................ (1,143)
-------------
Net assets............................................. $ 236,467,851
-------------
-------------
Class A
Net asset value per share ($137,847,215
DIVIDED BY 8,570,905 shares outstanding)
(175,000,000 shares authorized)............ $ 16.08
-----------
-----------
Maximum offering price ($16.08 DIVIDED BY
94.5%)..................................... $ 17.02
-----------
-----------
Class B
Net asset value per share ($84,048,265
DIVIDED BY 5,271,039 shares outstanding)
(75,000,000 shares authorized)............. $ 15.95
-----------
-----------
Class Y
Net asset value per share ($14,572,371
DIVIDED BY 902,605 shares outstanding)
(50,000,000 shares authorized)............. $ 16.14
-----------
-----------
</TABLE>
* Non-income producing during period.
WRITTEN OPTIONS
<TABLE>
<CAPTION>
UNREALIZED
NUMBER OF PREMIUM MARKET APPRECIATION
DESCRIPTION CONTRACTS RECEIVED VALUE (DEPRECIATION)
- ---------------------------------------------- --------------- ----------- --------- -------------
<S> <C> <C> <C> <C>
American Home Products July 1998 Strike Price
55 58 $ 3,634 $1,450 $ 2,184
Ford Motor Company July 1998 Strike Price 60 19 1,137 2,256 (1,119)
Merck & Co. July 1998 Strike price 35 17 1,383 4,250 (2,867)
Nabisco Holdings Co. July 1998 Strike Price 40 150 8,607 7,500 1,107
Philip Morris July 1998 Strike Price 42.5 26 1,448 488 960
Warner-Lambert Company July 1998 Strike Price
70 75 6,216 16,406 (10,190)
Warner-Lambert Company July 1998 Strike Price
75 15 1,095 1,125 (30)
Xerox July 1998 Strike Price 115 17 1,538 213 1,325
-------------
$ (8,630)
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
18
<PAGE>
THE HARTFORD STOCK FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
----------- -------------
<C> <S> <C>
COMMON STOCKS -- 94.1%
COMMUNICATIONS EQUIPMENT --
4.0%
*49,500 Cisco Systems, Inc............ $ 4,557,093
36,000 Ericsson (L.M.) Telephone
ADR......................... 1,030,500
30,000 Lucent Technologies, Inc...... 2,495,625
*30,000 Tellabs, Inc.................. 2,148,750
-------------
10,231,968
-------------
COMPUTERS & OFFICE EQUIPMENT
-- 4.8%
50,000 Compaq Computer Corporation... 1,418,750
*56,000 EMC Corporation............... 2,509,500
32,000 International Business
Machines Corporation........ 3,674,000
47,700 Xerox Corporation............. 4,847,512
-------------
12,449,762
-------------
CONSUMER NON-DURABLES -- 5.9%
32,900 Colgate-Palmolive Company..... 2,895,200
22,000 Estee Lauder Companies Class
A........................... 1,533,125
58,500 Gillette Company (The)........ 3,316,218
62,200 Kimberly-Clark Corporation.... 2,853,425
50,000 Procter & Gamble Company
(The)....................... 4,553,125
-------------
15,151,093
-------------
CONSUMER SERVICES -- 1.2%
*100,000 Mirage Resorts, Inc........... 2,131,250
29,000 The ServiceMaster Company..... 1,103,812
-------------
3,235,062
-------------
ELECTRONICS -- 6.5%
*75,700 Analog Devices, Inc........... 1,859,381
*63,800 Applied Materials, Inc........ 1,882,100
107,600 General Electric Company...... 9,791,600
45,000 Intel Corporation............. 3,335,625
-------------
16,868,706
-------------
ENERGY & SERVICES -- 2.6%
25,300 Chevron Corporation........... 2,101,481
33,300 Exxon Corp.................... 2,374,706
33,600 Schlumberger N.V.............. 2,295,300
-------------
6,771,487
-------------
FINANCIAL SERVICES -- 18.2%
34,900 American Express Co........... 3,978,600
26,500 American International Group,
Inc......................... 3,869,000
45,000 Associates First Capital
Corp........................ 3,459,375
35,000 BankAmerica Corporation....... 3,025,312
22,000 Citicorp...................... 3,283,500
50,000 First Union Corporation....... 2,912,500
84,900 Marsh & McLennan Companies,
Inc......................... 5,131,143
49,600 Mellon Bank Corp.............. 3,453,400
70,000 Merrill Lynch & Co., Inc...... 6,457,500
50,000 State Street Corp............. 3,475,000
96,349 Travelers Group Inc........... 5,841,158
57,000 U.S. Bancorp.................. 2,451,000
-------------
47,337,488
-------------
FOOD, BEVERAGE & TOBACCO --
4.3%
45,100 Coca-Cola Company (The)....... 3,856,050
55,000 Nabisco Holdings
Corporation................. 1,983,437
66,000 PepsiCo, Inc.................. 2,718,375
32,000 Unilever NV-New York Shares... 2,526,000
-------------
11,083,862
-------------
<CAPTION>
SHARES MARKET
----------- VALUE
-------------
<C> <S> <C>
HEALTH CARE -- 13.9%
94,000 Abbott Laboratories........... $ 3,842,250
84,000 American Home Products
Corporation and
Subsidiaries................ 4,347,000
117,500 Columbia/HCA Healthcare
Corp........................ 3,422,187
50,000 Johnson & Johnson............. 3,687,500
38,000 Merck & Co., Inc.............. 5,082,500
34,700 Pfizer, Inc................... 3,771,456
71,900 Pharmacia & Upjohn, Inc....... 3,316,387
60,400 Service Corporation
International............... 2,589,650
40,000 Smithkline Beecham PLC ADR.... 2,420,000
*28,000 Tenet Healthcare Corp......... 875,000
36,300 Warner-Lambert Co............. 2,518,312
-------------
35,872,242
-------------
MANUFACTURING -- 0.7%
30,000 The Perkin-Elmer
Corporation................. 1,865,625
-------------
MEDIA & SERVICES -- 6.0%
*35,000 Airtouch Communications,
Inc......................... 2,045,312
*72,700 CBS Corporation............... 2,308,225
*21,600 Clear Channel Communications,
Inc......................... 2,357,100
86,200 Gannett Co., Inc.............. 6,125,587
25,000 Walt Disney Company (The)..... 2,626,562
-------------
15,462,786
-------------
RETAIL -- 9.6%
98,000 CVS Corporation............... 3,815,875
63,000 Gap, Inc...................... 3,882,375
50,000 Home Depot, Inc. (The)........ 4,153,125
62,000 McDonald's Corporation........ 4,278,000
*94,500 Staples, Inc.................. 2,734,593
98,300 Wal-Mart Stores, Inc.......... 5,971,725
-------------
24,835,693
-------------
SOFTWARE & SERVICES -- 7.8%
*27,000 America Online, Inc........... 2,862,000
*36,500 Automatic Data Processing,
Inc......................... 2,659,937
*50,000 Computer Sciences Corp........ 3,200,000
60,000 First Data Corp............... 1,998,750
*65,000 Microsoft Corp................ 7,044,375
*50,700 PeopleSoft, Inc............... 2,382,900
-------------
20,147,962
-------------
TRANSPORTATION -- 3.1%
*29,200 AMR Corporation............... 2,430,900
120,500 Southwest Airlines Co......... 3,569,812
45,000 Union Pacific Corp............ 1,985,625
-------------
7,986,337
-------------
UTILITIES -- 5.5%
25,000 Ameritech Corporation......... 1,121,875
70,000 Bell Atlantic Corporation..... 3,193,750
30,000 Duke Energy Corporation....... 1,777,500
20,000 MCI Communications
Corporation................. 1,162,500
100,000 SBC Communications, Inc....... 4,000,000
*60,000 WorldCom, Inc................. 2,906,250
-------------
14,161,875
-------------
Total common stocks........... $ 243,461,948
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
19
<PAGE>
THE HARTFORD STOCK FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS -- (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- -------------
<C> <S> <C>
SHORT-TERM SECURITIES -- 4.2%
REPURCHASE AGREEMENT -- 4.2%
$10,907,000 Interest in $1,111,215,000
joint repurchase agreement
with State Street Bank dated
06/30/98 at 5.80%, to be
repurchased at $10,908,757
on 07/01/98; (Collateralized
by $421,318,000 U.S.
Treasury Notes 5.75%-7.825%
due 05/15/99-11/15/04,
563,474,000 U.S. Treasury
Bonds 8.00%-11.125% due
02/15/15-08/15/25,
121,000,000 U.S. Treasury
Strips (principal) 0% due
08/15/04-08/15/07 and
5,423,000 U.S. Treasury
Bills 0% due 08/13/98)...... $ 10,907,000
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- -------------
<C> <S> <C>
SHORT-TERM SECURITIES -- 4.2%
REPURCHASE AGREEMENT --
(CONTINUED)
-------------
-------------
</TABLE>
DIVERSIFICATION OF NET ASSETS:
Total 94.1 % $ 243,461,948
common
stocks
(cost
$203,704,651)...
Total 4.2 10,907,000
short-term
securities
(cost
$10,907,000)...
----- -------------
Total 98.3 254,368,948
investment
in
securities
(total
cost
$214,611,651)...
Excess of 1.7 4,477,126
cash,
receivables
and other
assets
over
liabilities...
----- -------------
Net 100.0 % $ 258,846,074
assets...
-----
----- -------------
-------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
20
<PAGE>
THE HARTFORD CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------- ------------
<C> <S> <C>
COMMON STOCKS -- 95.9%
AEROSPACE & DEFENSE -- 1.4%
*39,000 Loral Space & Communications
LTD......................... $ 1,101,750
157,500 Precision Castparts Corp...... 8,406,562
------------
9,508,312
------------
BUSINESS SERVICES -- 2.2%
*63,898 Aztec Technology Partners..... 487,219
*251,000 Getty Images, Inc............. 5,584,750
*201,400 Imagemax, Inc................. 1,132,875
*31,949 Navigant International Inc.... 271,564
1 School Specialty, Inc......... 10
*79,872 U.S. Office Products
Company..................... 1,557,504
*42,598 Workflow Management Inc....... 343,448
*165,000 Young & Rubicam Inc........... 5,280,000
------------
14,657,370
------------
CLOSED END INVESTMENT
COMPANY -- 0.4%
*445,000 Morgan Stanley Asia Pacific
Fund........................ 2,864,687
------------
COMMUNICATIONS EQUIPMENT --
1.3%
*206,000 Elsag Bailey Process Auto
NV.......................... 4,956,875
*308,700 Videoserver, Inc.............. 3,781,575
------------
8,738,450
------------
COMPUTERS & OFFICE
EQUIPMENT -- 2.6%
*446,300 Computer Learning Centers,
Inc......................... 11,101,712
*145,000 EMC Corporation............... 6,497,812
------------
17,599,524
------------
CONSUMER NON-DURABLES -- 0.6%
262,300 Stride Rite Corporation
(The)....................... 3,950,893
------------
CONSUMER SERVICES -- 3.8%
*158,200 Berg Electronics Corp......... 3,094,787
*267,950 Cheesecake Factory, Inc.
(The)....................... 6,062,368
*64,901 Midway Games, Inc............. 1,014,075
*200,000 Papa John's International,
Inc......................... 7,887,500
*160,000 Sun International Hotels
Ltd......................... 7,280,000
------------
25,338,730
------------
ELECTRONICS -- 8.3%
*500,000 Clare (C.P.) Corporation...... 4,750,000
*75,000 Celestica, Inc................ 1,406,250
*295,400 CMF Technologies, Inc......... 4,283,300
*190,300 Credence Systems
Corporation................. 3,615,700
*900,000 Cypress Semiconductor
Corporation................. 7,481,250
*164,600 Galileo Technology Ltd........ 2,222,100
*267,000 Jabil Circuit, Inc............ 8,827,687
*350,000 Kent Electronics Corp......... 6,409,375
*103,100 Lattice Semiconductor
Corporation................. 2,928,684
150,000 Philips N.V. ADR.............. 12,750,000
82,800 Rogers Communications, Inc.... 745,200
------------
55,419,546
------------
ENERGY & SERVICES -- 3.9%
90,000 Anadarko Petroleum
Corporation................. 6,046,875
100,000 Eni Ads....................... 6,500,000
*200,000 J Ray McDermott SA............ 8,300,000
*120,000 Rowan Companies, Inc.......... 2,332,500
60,000 Transocean Offshore, Inc...... 2,670,000
------------
25,849,375
------------
FINANCIAL SERVICES -- 8.2%
260,000 Ace Limited................... 10,140,000
*415,400 Annuity And Life Re
(holdings).................. 9,190,725
100,000 Bear Stearns Co. Inc.......... 5,687,500
*278,200 FIRSTPLUS Financial Group,
Inc......................... 10,015,200
<CAPTION>
SHARES MARKET
------- VALUE
------------
<C> <S> <C>
FINANCIAL SERVICES --
(CONTINUED)
32,000 Legg Mason Inc................ $ 1,842,000
222,000 NAC Re Corp................... 11,849,250
200,000 Unibanco GDR.................. 5,900,000
------------
54,624,675
------------
FOOD, BEVERAGE & TOBACCO --
1.9%
*505,000 General Cigar Holdings,
Inc......................... 4,986,875
*268,900 United Natural Foods, Inc..... 7,663,650
------------
12,650,525
------------
FOREIGN SECURITIES -- 5.4%
36,000 Alcatel Alsthom............... 7,329,769
65,000 Brookfield Properties......... 895,078
*450,000 Corporation Geo Sa de C.V.
Class B..................... 2,413,225
*2,000,000 Rogers Communication.......... 17,816,560
130,000 Siemans AG.................... 7,907,884
------------
36,362,516
------------
HEALTH CARE -- 14.4%
*218,700 Agouron Phamaceuticals,
Inc......................... 6,629,343
*208,000 Biogen, Inc................... 10,192,000
250,000 Columbia/HCA Healthcare
Corporation................. 7,281,250
*368,500 Genzyme Corp.................. 9,419,781
15,500 Herbalife International, Inc.
Class B..................... 319,687
*428,900 Humana Inc.................... 13,376,318
255,000 ICN Pharmaceuticals, Inc...... 11,650,312
*86,400 IDEC Pharmaceuticals
Corporation................. 2,035,800
160,000 IDX Systems Corporation....... 7,370,000
112,000 Pediatrix Medical Group
Inc......................... 4,165,000
*723,600 Perrigo Company............... 7,281,225
174,600 Pharmacia & Upjohn, Inc....... 8,053,425
460,000 PSS World Medical, Inc........ 6,727,500
*200,000 Regeneron Pharmacy Inc........ 1,843,750
------------
96,345,391
------------
INDUSTRIAL MATERIALS -- 0.9%
*155,000 Titanium Metals Corp.......... 3,419,687
220,000 Pohang Iron & Steel-sponsored
ADR......................... 2,640,000
------------
6,059,687
------------
MANUFACTURING -- 2.7%
*370,000 Covance Inc................... 8,325,000
*250,000 PRI Automation, Inc........... 4,265,625
92,960 The Perkin-Elmer Corp......... 5,780,950
------------
18,371,575
------------
MEDIA & SERVICES -- 6.5%
*536,400 ADC Telecommunications,
Inc......................... 19,595,362
*125,000 American Tower Corp. - Class
A........................... 3,117,187
*74,300 Capstar Broadcasting
Corporation................. 1,866,787
*360,000 Hearst-Argyle Television,
Inc......................... 14,400,000
*69,000 Lamar Advertising Company..... 2,475,375
*128,050 Playboy Enterprises, Inc...... 2,272,887
------------
43,727,598
------------
REAL ESTATE -- 1.7%
68,000 Boston Properties Inc......... 2,346,000
*108,000 Security Capital Group Inc. -
Class B..................... 2,875,500
*130,000 Starwood Hotels & Resorts..... 6,280,625
------------
11,502,125
------------
RETAIL -- 6.6%
*240,000 Cendant Corporation........... 5,010,000
*317,900 CompUSA Inc................... 5,742,068
*182,100 Consolidated Stores
Corporation................. 6,601,125
*259,000 Gadzooks, Inc................. 7,138,687
*170,000 Gap, Inc...................... 10,476,250
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
21
<PAGE>
THE HARTFORD CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS -- (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES MARKET
------- VALUE
------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
RETAIL -- (CONTINUED)
*206,300 Hot Topic, Inc................ $ 4,899,625
*235,000 Micro Warehouse Inc........... 3,642,500
*250,000 Track'n Trail, Inc............ 1,187,500
------------
44,697,755
------------
SOFTWARE & SERVICES -- 13.9%
*399,600 Activision Inc................ 4,120,875
*40,000 America Online, Inc........... 4,240,000
*400,000 Avant Corp.................... 9,900,000
100,000 Computer Task Group, Inc...... 3,350,000
125,000 Electronic Data Systems
Corp........................ 5,000,000
*407,300 Endosonics Corporation........ 2,443,800
200,000 First Data Corporation........ 6,662,500
*470,000 Learning Company, Inc.
(The)....................... 13,923,750
*349,800 Mobius Management Systems,
Inc......................... 5,247,000
*190,000 Peerless Systems Corp......... 3,942,500
*500,000 Pegasystems, Inc.............. 13,562,500
*140,000 Policy Management Systems
Corp........................ 5,495,000
*550,000 Rational Software
Corporation................. 8,387,500
*219,200 Splash Technology Holdings,
Inc......................... 3,767,500
*250,000 Unigraphics Solutions Inc..... 3,500,000
------------
93,542,925
------------
TRANSPORTATION -- 5.2%
329,500 Air Express International
Corporation................. 8,814,125
*280,000 Atlas Air, Inc................ 9,467,500
*291,100 C.H. Robinson Worldwide,
Inc......................... 7,241,112
*486,900 Jevic Transportation, Inc..... 5,538,487
*194,600 Swift Transportation.......... 3,855,512
------------
34,916,736
------------
UTILITIES -- 1.6%
*360,000 Apac Teleservices, Inc........ 2,103,767
*412,900 Cultural Access Worldwide,
Inc......................... 4,025,775
218,000 Endesa S.A.................... 4,714,250
------------
10,843,792
------------
WASTE MANAGEMENT -- 2.4%
*200,000 Republic Industries, Inc...... 5,000,000
310,000 Waste Management, Inc......... 10,850,000
------------
15,850,000
------------
Total common stocks........... $643,422,187
------------
------------
NON-CONVERTIBLE PREFERRED STOCKS -- 2.0%
CONSUMER SERVICES -- 0.2%
*193,536 SGW Holdings Corporation**.... 1,222,121
------------
FINANCIAL SERVICES -- 1.8%
260,000 Union Pacific Cap Trust....... 11,927,500
------------
Total non-convertible
preferred stocks............ $ 13,149,621
------------
------------
PRIVATE PLACEMENTS -- 0.9%
REAL ESTATE
*300,000 Beacon Capital Corp.***....... $ 6,000,000
------------
------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
------- ------------
<C> <S> <C>
SHORT-TERM SECURITIES -- 0.8%
REPURCHASE AGREEMENT -- 0.8%
$5,572,000 Interest in $1,111,215,000
joint repurchase agreement
with State Street Bank dated
06/30/98 at 5.80%, to be
repuchased at $5,572,898 on
07/01/98; (Collateralized by
$421,318,000 U.S. Treasury
Notes 5.75%-7.825% due
05/15/99-11/15/04,
563,474,000 U.S. Treasury
Bonds 8.00%-11.125% due
02/15/15-08/15/25,
121,000,000 U.S. Treasury
Strips (principal) 0% due
08/15/04-08/15/07 and
5,423,000 U.S. Treasury
Bills 0% due 08/13/98)...... $ 5,572,000
------------
------------
DIVERSIFICATION OF NET ASSETS:
Total common stocks (cost $624,962,375)...... 95.9 % $ 643,422,187
Total non-convertible preferred stocks (cost
$14,958,001)............................... 2.0 13,149,621
Total private placements (cost $6,000,000)... 0.9 6,000,000
Total short-term securities (cost
$5,572,000)................................ 0.8 5,572,000
------ -------------
Total investment in securities
(total cost $651,492,376).................. 99.6 668,143,808
Excess of cash, receivables and other assets
over liabilities........................... 0.4 3,051,664
------ -------------
Net assets................................... 100.0 % $ 671,195,472
------ -------------
------ -------------
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $.001 per share; 300,000,000
shares authorized; 32,398,813 shares outstanding... $ 32,399
Paid-in surplus...................................... 645,330,719
Distribution in excess of net investment income...... (2,719,776)
Accumulated undistributed net realized gain on
investments........................................ 11,955,404
Unrealized appreciation of investments............... 16,651,432
Unrealized depreciation of forward currency contracts
(see Note 2)....................................... (49,928)
Unrealized depreciation on translation of other
assets and liabilities in foreign currencies....... (4,778)
-------------
Net assets........................................... $ 671,195,472
-------------
-------------
</TABLE>
<TABLE>
<S> <C>
Class A
Net asset value per share ($353,396,263
DIVIDED BY 16,968,751 shares outstanding)
(175,000,000 shares authorized)............ $ 20.83
------
------
Maximum offering price ($20.83 DIVIDED BY
94.5%)..................................... $ 22.04
------
------
Class B
Net asset value per share ($290,183,071
DIVIDED BY 14,116,560 shares outstanding)
(75,000,000 shares authorized)............. $ 20.56
------
------
Class Y
Net asset value per share ($27,616,138
DIVIDED BY 1,313,502 shares outstanding)
(50,000,000 shares authorized)............. $ 21.02
------
------
</TABLE>
* Non-income producing during period.
** Restricted security (see Note 2).
*** Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. As of June 30,
1998, the market value of these securities amounted to $16,000,000, or .9%
of net assets.
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT JUNE 30, 1998
<TABLE>
<CAPTION>
TOTAL AGGREGATE DELIVERY UNREALIZED
DESCRIPTION MARKET VALUE FACE VALUE DATE DEPRECIATION
- ------------------------------ ------------ ----------- --------- -------------
<S> <C> <C> <C> <C>
Brazilian Real (Sell) $2,313,261 $2,263,333 08/19/98 $ (49,928)
-------------
$ (49,928)
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
22
<PAGE>
THE HARTFORD SMALL COMPANY FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
---------- ------------
<C> <S> <C>
COMMON STOCKS -- 90.8%
BUSINESS SERVICES -- 5.6%
*10,609 Aztec Technology Partners.......... $ 80,892
*20,800 Getty Images, Inc.................. 462,800
*4,500 Iron Mountain, Inc................. 201,375
*40,004 Navigant International, Inc........ 340,037
1 School Specialty, Inc.............. 12
18,300 Select Appointments Hldg-ADR....... 539,850
*13,261 US Office Products Company......... 258,589
*57,073 Workflow Management, Inc........... 460,147
*25,900 Young & Rubicam, Inc............... 828,800
------------
3,172,502
------------
COMMUNICATIONS EQUIPMENT -- 3.6%
*8,000 Cellstar Corporation............... 103,500
19,200 ECI Telecommunications............. 727,200
*42,400 Innova Corporation................. 217,300
*23,400 RCN Corporation.................... 453,375
*15,990 Transwitch Corporation............. 219,862
*9,500 VeriSign, Inc...................... 355,062
------------
2,076,299
------------
COMPUTERS & OFFICE EQUIPMENT --
3.6%
*19,000 Seagate Technology, Inc............ 452,437
30,400 Symbol Technologies, Inc........... 1,147,600
*10,000 Synopsis........................... 457,500
------------
2,057,537
------------
CONSUMER NON-DURABLES -- 1.3%
50,900 Stride Rite Corporation (The)...... 766,681
------------
CONSUMER SERVICES -- 2.2%
*19,650 Cheesecake Factory, Inc. (The)..... 444,581
*18,000 SFX Entertainment, Inc. - Class
A................................ 825,750
------------
1,270,331
------------
ELECTRONICS -- 5.7%
*64,100 Cypress Semiconductor
Corporation...................... 532,831
*24,900 Jabil Circuit, Inc................. 823,256
*135,000 Rogers Communications, Inc......... 1,215,000
*18,500 SCI Systems, Inc................... 696,062
------------
3,267,149
------------
ENERGY & SERVICES -- 3.5%
8,900 Coflexip ADR....................... 544,012
*14,300 J Ray McDermott SA................. 593,450
*30,000 Marine Drilling Companies, Inc..... 480,000
15,000 Pogo Producing Co.................. 376,875
------------
1,994,337
------------
FINANCIAL SERVICES -- 12.7%
11,400 Finova Group, Inc. (The)........... 645,525
*26,400 FIRSTPLUS Financial Group, Inc..... 950,400
*23,600 Golden State Bancorp, Inc.......... 702,100
*30,000 Heller Financial, Inc.............. 900,000
*55,200 Imperial Credit Industries, Inc.... 1,297,200
13,000 Jefferies Group, Inc............... 533,000
11,866 Legg Mason, Inc.................... 683,036
*9,200 Long Island Bancorp, Inc........... 558,900
9,955 Reinsurance Group of America,
Inc.............................. 588,589
38,400 Rock Financial Corporation......... 393,600
------------
7,252,350
------------
<CAPTION>
SHARES MARKET
---------- VALUE
------------
<C> <S> <C>
HEALTH CARE -- 8.6%
*16,000 Agouron Pharmaceuticals, Inc....... $ 485,000
20,500 Allergan, Inc...................... 950,687
*27,000 Genzyme Corporation................ 690,187
*6,800 Gilead Sciences, Inc............... 218,025
21,500 Herbalife International, Inc. Class
B................................ 443,437
11,850 ICN Pharmaceuticals, Inc........... 541,396
*8,400 LAM Research Corporation........... 160,650
*32,400 Magellan Health Services, Inc...... 822,150
13,200 Pharmacia & Upjohn, Inc............ 608,850
------------
4,920,382
------------
INDUSTRIAL MATERIALS -- 0.8%
19,000 Titanium Metals Corporation........ 419,187
------------
MANUFACTURING -- 2.6%
*33,000 Cognex Corporation................. 610,500
*38,700 Covance, Inc....................... 870,750
------------
1,481,250
------------
MEDIA & SERVICES -- 10.2%
*49,000 ADC Telecommunications, Inc........ 1,790,031
*48,700 American Tower Corp. - Class A..... 1,214,456
*38,100 Capstar Broadcasting Corporation... 957,262
*27,000 Hearst-Arglye Television, Inc...... 1,080,000
*20,800 Lamar Advertising Company.......... 746,200
------------
5,787,949
------------
RETAIL -- 3.4%
*44,000 CompUSA, Inc....................... 794,750
6,000 Ethan Allen, Inc................... 299,625
*14,100 Gadzooks, Inc...................... 388,631
*8,000 Whole Foods Market................. 484,000
------------
1,967,006
------------
SOFTWARE & SERVICES -- 21.6%
*64,900 Activision, Inc.................... 669,281
*800 Acxiom Corp........................ 19,950
*2,800 AnswerThink Consulting Group,
Inc.............................. 60,200
*35,000 Broderbund Software................ 798,437
*26,000 CBT Group PLC-ADR.................. 1,391,000
*35,000 Check Point Software Tech.......... 1,146,250
*10,000 Comverse Technology, Inc........... 518,750
*13,000 Inktomi Corporation, Inc........... 516,750
*12,000 J.D. Edwards & Co.................. 515,250
*67,000 Learning Company, Inc. (The)....... 1,984,875
*13,100 Mobius Management Systems, Inc..... 196,500
*20,600 Peerless Systems Corporation....... 427,450
*38,000 Pegasystems, Inc................... 1,030,750
*8,000 PeopleSoft, Inc.................... 376,000
*37,200 Policy Management Systems
Corporation...................... 1,460,100
*25,500 Safeguard Scientifics, Inc......... 1,063,031
*8,600 Transition Systems, Inc............ 91,375
------------
12,265,949
------------
TRANSPORTATION -- 3.9%
*37,100 Atlas Air, Inc..................... 1,254,443
22,000 C.H. Robinson Worldwide, Inc....... 547,250
*22,700 Swift Transportation............... 449,743
------------
2,251,436
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
23
<PAGE>
THE HARTFORD SMALL COMPANY FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS -- (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES MARKET
---------- VALUE
------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
UTILITIES -- 1.5%
*60,500 Cultural Access Worldwide, Inc..... $ 589,875
*6,700 Snyder Communications.............. 294,800
------------
884,675
------------
Total common stocks................ $ 51,835,020
------------
------------
NON-CONVERTIBLE PREFERRED STOCK -- 0.1%
CONSUMER SERVICES
*8,612 SGW Holdings Corporation**......... $ 54,395
------------
------------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
SHORT-TERM SECURITIES -- 7.1%
REPURCHASE AGREEMENT -- 7.1%
$4,058,000 Interest in $1,111,215,000 joint
repurchase agreement with State
Street Bank dated 06/30/98 at
5.80%, to be repurchased at
$4,058,654 on 07/01/98;
(Collateralized by $421,318,000
U.S. Treasury Notes 5.75%-7.825%
due 05/15/99-11/15/04,
563,474,000 U.S. Treasury Bonds
8.00%-11.125% due 02/15/15,
121,000,000 U.S. Treasury Strips
(principal) 0% due
08/15/04-08/15/07 and 5,423,000
U.S. Treasury Bills 0% due
08/13/98)........................ $ 4,058,000
------------
------------
</TABLE>
<TABLE>
<S> <C> <C>
DIVERSIFICATION OF NET ASSETS:
Total common stocks (cost $47,851,222)....... 90.8% $51,835,020
Total non-convertible preferred stock (cost
$89,009)................................... 0.1 54,395
Total short-term securities (cost
$4,058,000)................................ 7.1 4,058,000
------ -----------
Total investment in securities
(total cost $51,998,231)................... 98.0 55,947,415
Excess of cash, receivables and other assets
over liabilities........................... 2.0 1,133,057
------ -----------
Net assets................................... 100.0% $57,080,472
------ -----------
------ -----------
<CAPTION>
MARKET
VALUE
-----------
<S> <C> <C>
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $.001 per share; 300,000,000
shares authorized; 4,350,381 shares outstanding.... $ 4,350
Paid-in surplus...................................... 53,463,082
Distribution in excess of net investment income...... (178,735)
Accumulated net realized loss on investments......... (157,409)
Unrealized depreciation of investments............... 3,949,184
-----------
Net assets........................................... $57,080,472
-----------
-----------
Class A
Net asset value per share ($30,891,587
DIVIDED BY 2,350,726 shares outstanding)
(175,000,000 shares authorized)............ $ 13.14
------
------
Maximum offering price ($13.14 DIVIDED BY
94.5%)..................................... $ 13.90
------
------
Class B
Net asset value per share ($14,698,894
DIVIDED BY 1,133,652 shares outstanding)
(75,000,000 shares authorized)............. $ 12.97
------
------
Class Y
Net asset value per share ($11,489,991
DIVIDED BY 866,003 shares outstanding)
(50,000,000 shares authorized)............. $ 13.27
------
------
</TABLE>
*Non-income producing during period.
**Restricted Security (see Note 2).
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
24
<PAGE>
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
-------- ------------
<C> <S> <C>
COMMON STOCKS -- 87.4%
ARGENTINA -- 0.3%
3,800 Telefonica de Argentina ADR... $ 123,262
------------
AUSTRALIA -- 3.3%
30,544 AMP Limited................... 357,480
36,405 Australia & New Zealand
Banking..................... 251,136
37,000 CSR Ltd....................... 106,770
76,914 News Corporation Ltd.......... 627,747
131,383 Pasminco Limited.............. 100,071
38,690 WMC Limited................... 116,439
------------
1,559,643
------------
BRAZIL -- 1.4%
300,300 Banco Itau SA................. 170,063
143,700 Cervejaria Brahma............. 88,895
1,589,800 Cia Bras Distr................ 34,775
3,811,976 Cia Energetica Minas.......... 117,990
548,000 Petroleo Brasileiro........... 101,866
1,268,700 Telecomunicacoes Brasileiras
SA.......................... 139,856
------------
653,445
------------
CANADA -- 0.2%
1,900 Canadian National Railway
Co.......................... 100,937
------------
CHILE -- 0.1%
3,100 Cia Telecom Chile ADR......... 62,968
------------
DENMARK -- 2.1%
3,300 Novov-Nordisk................. 454,906
5,810 Unidanmark AS A Shares
(Reg.)...................... 522,113
------------
977,019
------------
FINLAND -- 1.5%
24,000 Metsa-Serla OYJ Class B
Shares...................... 231,842
6,210 Nokia OYJ Class A Shares...... 456,710
------------
688,552
------------
FRANCE -- 15.4%
2,788 AGF - Assurance Generale de
France...................... 157,752
4,210 Alcatel Alsthom............... 857,175
98 Allianz Bcvg Warrant.......... 569
5,240 AXA-UAP....................... 589,345
9,635 Banque Nationale de Paris**... 787,242
140 Carrefour Supermarche......... 88,570
2,320 Compagnie de Saint Gobain..... 430,153
5,040 Elf Aquitaine................. 708,564
10,950 Michelin...................... 632,076
8,761 Rhone-Poulenc SA Class A...... 494,126
3,962 Societe Generale Class A...... 823,719
4,100 Total SA Class B Shares....... 533,011
5,340 Vivendi....................... 1,140,242
------------
7,242,544
------------
GERMANY -- 14.2%
1,010 Adidas AG..................... 174,578
26,910 Bayer AG...................... 1,387,963
13,820 Dresdner Bank AG.............. 744,964
3,830 Henkel........................ 380,870
11,060 Hoechst AG.................... 552,070
1,520 Hornbach Holding AG........... 139,365
1,130 Karstadt AG................... 545,895
1,320 M.A.N. AG..................... 513,364
7,000 Mannesmann AG................. 710,069
4,350 Metallgesellschaft AG......... 89,167
540 SAP AG-vorzug................. 367,073
230 SAP Ag-vorzug Pfd............. 139,526
6,830 Siemans AG.................... 415,468
7,380 Veba AG....................... 502,893
------------
6,663,265
------------
<CAPTION>
SHARES MARKET
-------- VALUE
------------
<C> <S> <C>
HONG KONG -- 0.4%
35,000 Cheung Kong Holdings Ltd...... $ 172,096
------------
IRELAND -- 0.4%
59,739 Smurfit (Jefferson) Group..... 179,912
------------
ITALY -- 1.4%
58,589 Telecom Italia S.p.A.......... 431,287
4,400 Gucci Group NV-NY Reg
Shares...................... 233,200
------------
664,487
------------
JAPAN -- 8.7%
2,500 Advantest Corp................ 134,380
8,000 Dai Nippon Printing........... 127,679
40,000 Daiwa Securities, Inc......... 172,064
10,000 Fuji Machine Manufacturing
Co.......................... 265,158
12,000 Fuji Photo Film Co............ 417,624
17,000 Jusco Co. Ltd................. 311,741
6,000 Kao Corp...................... 92,517
3,300 Mabuchi Motor Co., Ltd........ 209,244
5,700 Matsumotokiyoshi.............. 200,425
15,000 Matsushita Electric Industrial
Co.......................... 241,020
330 Nippon Telegraph & Tel........ 273,444
18,000 Olympus Optical............... 156,414
2,000 Rohm Company Limited.......... 205,353
15,000 Sanwa Bank Ltd................ 134,128
400 Shohkoh Fund.................. 98,281
7,400 Sony Corporation.............. 637,172
300 Square Co. Ltd................ 7,997
69,000 Toshiba Corporation........... 281,896
3,000 Uni-cham Corporation.......... 111,107
------------
4,077,644
------------
MEXICO -- 1.7%
55,100 Coca Cola Femsa SA Ser L...... 96,670
52,800 Grupo Financiero Banamex...... 100,296
7,700 Grupo Televisa SA............. 145,406
49,000 Kimberly-Clark de Mexico Class
A........................... 170,625
5,900 Telefonos de Mexico S.A.
ADR......................... 283,568
------------
796,565
------------
NETHERLANDS -- 7.0%
11,766 ING Groep NV.................. 770,432
7,360 Kon Knp NV.................... 467,746
11,900 Philips Electronics NV........ 1,000,333
3,500 Royal Dutch Petroleum......... 191,843
10,800 Unilever NV-CVA............... 856,897
------------
3,287,251
------------
NEW ZEALAND -- 0.3%
3,400 Telecom Corp. New Zealand
ADR......................... 111,350
8,000 Telecom Corp. New Zealand
Ltd......................... 17,109
------------
128,459
------------
NORWAY -- 0.3%
10,050 Saga Petroleum Asa - A
Shares...................... 154,544
------------
PHILIPPINES -- 0.2%
82,800 Ayala Land Inc................ 23,827
18,000 Manila Electric Co. - Class
B........................... 47,481
------------
71,308
------------
SINGAPORE -- 0.3%
57,000 Overseas Union Bank Ltd....... 124,831
------------
SOUTH AFRICA -- 0.0%
900 De Beers - Centenary.......... 15,921
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
25
<PAGE>
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS -- (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES MARKET
-------- VALUE
------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
SPAIN -- 3.1%
1,785 Banco Popular Espanol......... $ 152,510
8,200 Banco de Santander SA......... 210,235
17,500 Endesa S.A.................... 383,516
5,045 Telefonica de Espana SA ADR... 701,570
------------
1,447,831
------------
SWEDEN -- 3.0%
60,190 Nordbanken Holding AB......... 441,522
5,190 Pharmacia & Upjohn, Inc....... 238,839
3,730 Sparbanken Sverige AB - A
Shares...................... 112,251
20,360 Volvo AB-B.................... 606,336
------------
1,398,948
------------
SWITZERLAND -- 4.4%
490 Cemig SA Spons ADR............ 15,166
100 Cie Financ Richemont.......... 130,866
2,420 Credit Suisse Group........... 538,465
575 Holderbank Financial Glarus
B........................... 731,633
297 Nestle SA (reg.).............. 635,584
------------
2,051,714
------------
THAILAND -- 0.0%
14,700 Bangkok Bank.................. 18,070
------------
UNITED KINGDOM -- 18.0%
35,140 Allied Irish Banks PLC........ 508,039
39,300 B.A.T. Industries PLC......... 392,449
24,925 BTR PLC....................... 70,802
22,218 Bass PLC...................... 415,192
11,599 BOC Group PLC................. 158,307
43,597 British Petroleum Co. PLC..... 634,671
18,200 British Telecom Co. PLC....... 223,954
42,500 Compass Group PLC............. 489,288
5,565 Cookson Group PLC............. 19,127
40,488 Diageo PLC.................... 482,000
6,900 Granada Group PLC............. 127,099
30,900 Great Universal Stores........ 407,555
18,800 HSBC Holdings PLC............. 477,104
16,100 Lloyds Tsb Group PLC.......... 224,842
11,300 Marks & Spencer PLC........... 103,131
14,400 Next PLC...................... 123,976
27,331 PowerGen PLC.................. 378,495
32,522 Reckitt & Colman PLC.......... 620,768
21,638 Royal & Sun Alliance Insurance
Group....................... 220,770
12,800 Royal Bank of Scotland Group
PLC......................... 221,897
10,100 Siebe PLC..................... 202,053
77,558 Smithkline Beecham............ 944,014
20,900 Standard Chartered PLC........ 237,301
64,200 WPP Group PLC................. 422,579
8,500 Zeneca Group PLC.............. 365,193
------------
8,470,606
------------
Total common stocks........... $ 41,131,822
------------
------------
<CAPTION>
SHARES MARKET
-------- VALUE
------------
<C> <S> <C>
NON-CONVERTIBLE PREFERRED STOCKS -- 0.3%
UNITED KINGDOM -- (CONTINUED)
COMMUNICATIONS EQUIPMENT
2,000 Nokia Corp. - Sponsored ADR... $ 145,184
------------
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------
<C> <S> <C>
SHORT-TERM SECURITIES -- 10.5%
REPURCHASE AGREEMENT -- 10.5%
4,941,000 Interest in $1,111,215,000
joint repurchase agreement
with State Street Bank dated
06/30/98 at 5.80%, to be
repurchased at $4,941,796 on
07/01/98; (Collateralized by
$421,318,000 U.S. Treasury
Notes 5.75%-7.825% due
05/15/99-11/15/04,
563,474,000 U.S. Treasury
Bonds 8.00%-11.125% due
02/15/15-08/15/25,
121,000,000 U.S. Treasury
Strips (principal) 0% due
08/15/04-08/15/07 and
5,423,000 U.S. Treasury
Bills 0% due 08/13/98) $ 4,941,000
------------
------------
DIVERSIFICATION OF NET ASSETS:
Total common stocks (cost $37,500,146)....... 87.4 % $ 41,131,822
Total non-convertible preferred stocks (cost
$127,976).................................. 0.3 145,184
Total short-term securities (cost
$4,941,000)................................ 10.5 4,941,000
------ ------------
Total investment in securities (total cost
$42,569,122)............................... 98.2 46,218,006
Excess of cash, receivables and other assets
over liabilities........................... 1.8 858,815
------ ------------
Net assets................................... 100.0 % $ 47,076,821
------ ------------
------ ------------
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $.001 per share; 300,000,000
shares authorized; 3,841,133 shares outstanding.... $ 3,841
Paid-in surplus...................................... 43,414,712
Accumulated undistributed net investment income...... 196,248
Accumulated net realized loss on investments......... (181,876)
Unrealized appreciation of investments............... 3,648,884
Unrealized depreciation on translation of other
assets and liabilities in foreign currencies....... (4,988)
------------
Net assets........................................... $ 47,076,821
------------
------------
Class A
Net asset value per share ($26,705,332
DIVIDED BY 2,175,795 shares outstanding)
(175,000,000 shares authorized)............ $12.27
------
------
Maximum offering price ($12.27 DIVIDED BY
94.5%)..................................... $12.98
------
------
Class B
Net asset value per share ($10,629,875
DIVIDED BY 876,275 shares outstanding)
(75,000,000 shares authorized)............. $12.13
------
------
Class Y
Net asset value per share ($9,741,614
DIVIDED BY 789,063 shares outstanding)
(50,000,000 shares authorized)............. $12.35
------
------
</TABLE>
* Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers. As of June 30, 1998, the market
value of these securities amounted to $787,242, or 1.7% of net assets.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
26
<PAGE>
THE HARTFORD MIDCAP FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
----------- -------------
<C> <S> <C>
COMMON STOCKS -- 98.2%
AEROSPACE & DEFENSE -- 2.7%
*12,580 Loral Space & Communications
Ltd......................... $ 355,385
5,300 York International Corp....... 230,881
-------------
586,266
-------------
BUSINESS SERVICES -- 2.8%
*4,300 Iron Moutain, Inc............. 192,425
3,800 Select Appointments
Holding-ADR................. 112,100
*9,100 Young & Rubicam Inc........... 291,200
-------------
595,725
-------------
COMMUNICATIONS EQUIPMENT --
2.8%
*1,830 Ciena Corporation............. 127,413
9,065 General Cable Corporation..... 261,751
*3,000 Tellabs, Inc.................. 214,875
-------------
604,039
-------------
COMPUTERS & OFFICE
EQUIPMENT -- 3.1%
*7,690 EMC Corporation............... 344,608
*2,000 Intuit Inc.................... 122,500
*5,700 Xilinx, Inc................... 193,800
-------------
660,908
-------------
CONSUMER DURABLES -- 4.3%
*9,800 Avis Rent a Car Inc........... 242,550
9,955 The Hertz Corporation......... 441,130
*11,120 Unova, Inc.................... 239,080
-------------
922,760
-------------
CONSUMER NON-DURABLES -- 2.9%
1,600 Black & Decker Corporation
(The)....................... 97,600
10,000 Leggett & Platt............... 250,000
*10,080 Polo Ralph Lauren
Corporation................. 282,240
-------------
629,840
-------------
CONSUMER SERVICES -- 6.2%
9,775 Galileo International, Inc.... 440,481
*11,870 Mirage Resorts, Inc........... 252,979
*4,500 SFX Entertainment Inc.-Class
A........................... 206,437
7,300 ServiceMaster Company (The)... 277,856
*4,430 Starbucks Corporation......... 236,728
-------------
1,414,481
-------------
ELECTRONICS -- 3.3%
*20,220 Analog Devices, Inc........... 496,653
*5,340 Solectron Corporation......... 224,613
-------------
721,266
-------------
ENERGY & SERVICES -- 2.0%
4,150 Coflexip ADR.................. 253,668
*2,460 Western Atlas, Inc............ 208,792
-------------
462,460
-------------
FINANCIAL SERVICES -- 17.6%
8,335 Ace Limited................... 325,065
5,690 City National Corporation..... 210,174
5,810 Equifax Inc................... 210,975
4,970 Franklin Resources, Inc....... 268,380
*10,300 Heller Financial, Inc......... 309,000
7,240 Legg Mason, Inc............... 416,752
3,590 Mercantile Bancorporation
Inc......................... 180,846
5,930 Nationwide Financial Services,
Inc......................... 302,430
2,750 Northern Trust Corporation.... 209,687
<CAPTION>
MARKET
SHARES VALUE
----------- -------------
<C> <S> <C>
FINANCIAL SERVICES --
(CONTINUED)
4,290 Finova Group Inc. (The)....... $ 242,921
4,484 Old Kent Financial
Corporation................. 161,265
6,050 State Street Corporation...... 420,475
8,400 T. Rowe Price Associates,
Inc......................... 315,525
4,600 Unum Corporation.............. 255,300
-------------
3,828,795
-------------
FOOD, BEVERAGE & TOBACCO --
1.2%
6,770 Coca-Cola Enterprises Inc..... 265,722
-------------
HEALTH CARE -- 6.9%
8,250 Biomet, Inc................... 272,765
*6,970 Human Genome Sciences, Inc.... 248,741
8,530 Service Corporation
International............... 365,723
*9,650 Sunrise Assisted Living,
Inc......................... 331,718
*8,570 Tenet Healthcare
Corporation................. 267,812
-------------
1,486,759
-------------
INDUSTRIAL MATERIALS -- 0.3%
*2,000 Sealed Air Corporation........ 73,500
-------------
MANUFACTURING -- 6.6%
4,230 Avery Dennison Corporation.... 227,362
*13,550 Covance Inc................... 304,875
6,100 Danaher Corporation........... 223,793
6,100 Dover Corporation............. 208,925
7,550 Perkin-Elmer Corporation
(The)....................... 469,515
-------------
1,434,470
-------------
MEDIA & SERVICES -- 12.2%
*11,800 ADC Telecommunications,
Inc......................... 431,068
*10,150 American Tower Corp. Class
A........................... 253,115
*1,895 Clear Channel Communications,
Inc......................... 206,791
3,700 Cognizant Corporation......... 233,100
*8,400 Intermedia Communications,
Inc......................... 352,275
*7,500 Lamar Advertising Company..... 269,062
*16,890 Outdoor Systems, Inc.......... 472,920
3,000 Scripps E W Co................ 164,437
9,820 Stewart Enterprises, Inc...... 261,457
-------------
2,644,225
-------------
RETAIL -- 10.0%
8,620 American Greetings
Corporation................. 296,453
*12,760 Borders Group, Inc............ 472,120
*6,630 Consolidated Stores
Corporation................. 240,337
9,180 CVS Corporation............... 357,446
*6,400 Papa John's International,
Inc......................... 252,400
*13,820 Staples, Inc.................. 399,916
-------------
2,018,672
-------------
SOFTWARE & SERVICES -- 11.9%
*2,880 America Online, Inc........... 305,280
*5,740 BMC Software, Inc............. 298,121
*8,740 Bisys Group, Inc. (The)....... 358,340
*4,630 Ceridan Corporation........... 272,012
*5,230 Computer Sciences
Corporation................. 334,720
*3,760 DST Systems, Inc.............. 210,560
*6,840 PeopleSoft, Inc............... 321,480
*8,040 Policy Management Systems
Corporation................. 315,570
*1,000 Yahoo, Inc.................... 157,500
-------------
2,573,583
-------------
TRANSPORTATION -- 1.4%
8,080 Southwest Airlines Co......... 239,370
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
27
<PAGE>
THE HARTFORD MIDCAP FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS -- (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES MARKET
----------- VALUE
-------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
TRANSPORTATION -- (CONTINUED)
*5,300 Virgin Express Holdings ADR... $ 68,591
-------------
307,961
-------------
Total common stocks........... $ 21,231,432
-------------
-------------
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<C> <S> <C>
SHORT-TERM SECURITIES -- 0.2%
REPURCHASE AGREEMENT -- 0.2%
$ 49,000 Interest in $1,111,215,000
joint repurchase agreement
with State Street Bank dated
06/30/98 at 5.80%, to be
repurchased at $49,008 on
07/01/98; (Collateralized by
$421,318,000 U.S. Treasury
Notes 5.75%-7.825% due
05/15/99-11/15/04,
563,474,000 U.S. Treasury
Bonds 8.00%-11.125% due
02/15/15-08/15/25,
121,000,000 U.S. Treasury
Strips (principal) 0% due
08/15/04-08/15/07 and
5,423,000 U.S. Treasury
Bills 0% due 08/13/98)...... $ 49,000
-------------
-------------
</TABLE>
<TABLE>
<S> <C> <C>
DIVERSIFICATION OF NET ASSETS:
Total common stocks (cost $19,934,102)....... 98.2% $ 21,231,432
Total short-term securities (cost $49,000)... 0.2 49,000
------ ------------
Total investment in securities
(total cost $19,983,102)................... 98.4 21,280,432
Excess of cash, receivables and other assets
over liabilities........................... 1.6 350,070
------ ------------
Net assets................................... 100.0% $ 21,630,502
------ ------------
------ ------------
MARKET
VALUE
------------
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $.001 per share; 300,000,000
shares authorized; 1,885,965 shares outstanding.... $ 1,886
Paid-in surplus...................................... 20,071,122
Distribution in excess of net investment income...... (48,185)
Accumulated undistributed net realized gain on
investments........................................ 308,349
Unrealized appreciation of investments............... 1,297,330
------------
Net assets........................................... $ 21,630,502
------------
------------
Class A
Net asset value per share ($14,428,173
DIVIDED BY 1,257,139 shares outstanding)
(1,725,000,000 shares authorized).......... $ 11.48
------
------
Maximum offering price ($11.48 DIVIDED BY
94.5%)..................................... $ 12.15
------
------
Class B
Net asset value per share ($5,260,755
DIVIDED BY 459,965 shares outstanding)
(75,000,000 shares authorized)............. $ 11.44
------
------
Class Y
Net asset value per share ($1,941,574
DIVIDED BY 168,861 shares outstanding)
(50,000,000 shares authorized)............. $ 11.50
------
------
* Non-income producing during period.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
28
<PAGE>
THE HARTFORD GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
--------- -----------
<C> <S> <C>
COMMON STOCKS -- 92.8%
AEROSPACE & DEFENSE -- 5.2%
600 Lockheed Martin Corporation... $ 63,525
100 Northrop Grumman
Corporation................. 10,312
700 Textron, Inc.................. 50,181
900 United Technologies
Corporation................. 83,250
600 York International Corp....... 26,137
-----------
233,405
-----------
BUSINESS SERVICES -- 0.7%
600 Fluor Corporation............. 30,600
-----------
COMMUNICATIONS EQUIPMENT --
3.2%
*800 Cisco Systems, Inc............ 73,650
500 Lucent Technologies, Inc...... 41,593
*400 Tellabs, Inc.................. 28,650
-----------
143,893
-----------
COMPUTERS & OFFICE
EQUIPMENT -- 3.2%
*300 Dell Computer Corporation..... 27,843
*800 EMC Corporation............... 35,850
*200 Gateway 2000, Inc............. 10,125
600 International Business
Machines Corporation........ 68,887
-----------
142,705
-----------
CONSUMER DURABLES -- 2.0%
1,300 Ford Motor Company............ 76,700
400 ITT Industries, Inc........... 14,950
-----------
91,650
-----------
CONSUMER NON-DURABLES -- 3.2%
600 Leggett & Platt............... 15,000
1,400 The Procter & Gamble
Company..................... 127,487
-----------
142,487
-----------
ELECTRONICS -- 3.4%
*1,300 Analog Devices, Inc........... 31,931
900 General Electric Company...... 81,900
500 Intel Corporation............. 37,062
-----------
150,893
-----------
ENERGY & SERVICES -- 5.3%
600 Ashland, Inc.................. 30,975
400 Exxon Corporation............. 28,525
*800 Friede Goldman International
Inc......................... 23,100
900 Helmerich & Payne, Inc........ 20,025
800 Royal Dutch Petroleum......... 43,850
1,700 Sun Company, Inc.............. 65,981
600 Transocean Offshore, Inc...... 26,700
-----------
239,156
-----------
FINANCIAL SERVICES -- 16.1%
600 Citicorp...................... 89,550
1,100 Federal Home Loan Mortgage
Corporation................. 51,768
1,400 Federal National Mortgage
Association................. 85,050
900 First Chicago NBD
Corporation................. 79,762
1,500 First Union Corporation....... 87,375
500 Franklin Resources, Inc....... 27,000
900 Marsh & McLennan Companies,
Inc......................... 54,393
300 Merrill Lynch & Co., Inc...... 27,675
300 NAC Re Corp................... 16,012
200 Reinsurance Group of America,
Inc......................... 11,825
<CAPTION>
MARKET
SHARES VALUE
--------- -----------
<C> <S> <C>
FINANCIAL SERVICES --
(CONTINUED)
800 Chase Manhattan Corporation
(The)....................... $ 60,400
1,600 Travelers Group, Inc.......... 97,000
900 U.S. Bancorp.................. 38,700
-----------
726,510
-----------
FOOD, BEVERAGE & TOBACCO --
5.9%
700 Coca-Cola Company (The)....... 59,850
1,000 H.J. Heinz Company............ 56,125
800 Interstate Bakeries........... 26,550
1,300 Philip Morris Companies,
Inc......................... 51,187
900 Unilever N.V.-New York
Shares...................... 71,043
-----------
264,755
-----------
HEALTH CARE -- 13.8%
2,500 Abbott Laboratories........... 102,187
*900 Amgen, Inc.................... 58,837
500 Baxter International, Inc..... 26,906
500 Bergen Brunswig Corporation... 23,187
2,100 Columbia/HCA Healthcare
Corporation................. 61,162
*1,500 Genzyme Corporation........... 38,343
1,200 Johnson & Johnson............. 88,500
300 Life Technologies, Inc........ 9,412
500 Loews Corporation............. 43,562
600 Mallinckrodt, Inc............. 17,812
600 Pfizer, Inc................... 65,212
500 Pharmacia & Upjohn, Inc....... 23,062
*700 Tenet Healthcare
Corporation................. 21,875
600 Warner-Lambert Company........ 41,625
-----------
621,682
-----------
INDUSTRIAL MATERIALS -- 2.8%
1,100 Air Products and Chemicals,
Inc......................... 44,000
1,200 Engelhard Corporation......... 24,300
500 Georgia-Pacific Corporation... 29,468
500 Temple-Inland, Inc............ 26,937
-----------
124,705
-----------
MANUFACTURING -- 2.6%
1,300 Deere & Company............... 68,737
400 Dover Corporation............. 13,700
300 Honeywell, Inc................ 25,068
200 Ingersoll-Rand Company........ 8,812
-----------
116,317
-----------
MEDIA & SERVICES -- 1.3%
*500 360 Communications Company.... 16,000
600 Gannett Co., Inc.............. 42,637
-----------
58,637
-----------
REAL ESTATE -- 0.6%
600 Starwood Hotels & Resorts..... 28,987
-----------
RETAIL -- 7.6%
700 American Greetings
Corporation................. 35,656
600 Dayton Hudson Corporation..... 29,100
400 Gap, Inc...................... 24,650
900 Home Depot, Inc. (The)........ 74,756
700 May Department Stores Company
(The)....................... 45,850
600 Rite Aid Corporation.......... 22,537
1,800 Wal-Mart Stores, Inc.......... 109,350
-----------
341,899
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
29
<PAGE>
THE HARTFORD GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS -- (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
--------- -----------
<C> <S> <C>
COMMON STOCKS -- CONTINUED
SOFTWARE & SERVICES -- 6.0%
*200 BMC Software, Inc............. $ 10,387
*500 Bisys Group, Inc. (The)....... 20,500
600 Computer Sciences
Corporation................. 38,400
*1,700 Microsoft Corporation......... 184,237
*500 Sterling Software, Inc........ 14,781
-----------
268,305
-----------
TRANSPORTATION -- 0.9%
300 Delta Air Lines, Inc.......... 38,775
-----------
UTILITIES -- 9.0%
500 Ameritech Corporation......... 22,437
1,000 AT&T Corp..................... 57,125
1,200 Bell Atlantic Corporation..... 54,750
1,300 Bellsouth Corporation......... 87,262
500 Duke Energy Corporation....... 29,625
600 GPU, Inc...................... 22,687
1,200 Nipsco Industries, Inc........ 33,600
1,900 SBC Communications, Inc....... 76,000
*400 WorldCom, Inc................. 19,397
-----------
402,883
-----------
Total common stocks........... $ 4,168,244
-----------
-----------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
SHORT-TERM SECURITIES -- 6.2%
REPURCHASE AGREEMENT -- 6.2%
$ 277,000 Interest in $1,111,215,000
joint repurchase agreement
with State Street Bank dated
06/30/98 at 5.80%, to be
repurchased at $277,045 on
07/01/98; (Collateralized by
$421,318,000 U.S. Treasury
Notes 5.75%-7.825% due
05/15/99-11/15/04,
563,474,000 U.S. Treasury
Bonds 8.00%-11.125% due
02/15/15-08/15/25
121,000,000 U.S. Treasury
Strips (principal) 0% due
08/15/04-08/15/07 and
5,423,000 U.S. Treasury
Bills 0% due 08/13/98)...... $ 277,000
-----------
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
VALUE
-------------
DIVERSIFICATION OF NET ASSETS: $%
Total common stocks (cost $4,082,042)........ 92.8 4,168,244
<S> <C> <C>
Total short-term securities (cost
$277,000).................................. 6.2 277,000
------ -------------
Total investment in securities
(total cost $4,359,042).................... 99.0 4,445,244
Excess of cash, receivables and other assets
over liabilities........................... 1.0 47,232
------ -------------
Net assets................................... 100.0% $ 4,492,476
------ -------------
------ -------------
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $.001 per share; 300,000,000
shares authorized; 442,606 shares outstanding...... $ 443
Paid-in surplus...................................... 4,410,160
Accumulated undistributed net investment income...... 463
Accumulated net realized loss on investments......... (4,792)
Unrealized appreciation of investments............... 86,202
-------------
Net assets........................................... $ 4,492,476
-------------
-------------
Class A
Net asset value per share ($3,338,178
DIVIDED BY 328,828 shares outstanding)
(175,000,000 shares authorized)............ $ 10.15
------
------
Maximum offering price ($10.15 DIVIDED BY
94.5%)..................................... $ 10.74
------
------
Class B
Net asset value per share ($849,498
DIVIDED BY 83,778 shares outstanding)
(75,000,000 shares authorized)............. $ 10.14
------
------
Class Y
Net asset value per share ($304,801
DIVIDED BY 30,000 shares outstanding)
(50,000,000 shares authorized)............. $ 10.16
------
------
* Non-income producing during period.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
30
<PAGE>
This page intentionally left blank.
<PAGE>
THE HARTFORD MUTUAL FUNDS, INC.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
THE HARTFORD
THE HARTFORD BOND INCOME THE HARTFORD
MONEY STRATEGY ADVISERS
MARKET FUND FUND FUND
------------ ------------ ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ -- $ 5,467 $ 752,926
Interest............... 920,078 1,497,500 2,932,349
Less: foreign tax
withheld............. -- -- (4,302)
------------ ------------ ------------
Total investment
income............. 920,078 1,502,967 3,680,973
------------ ------------ ------------
EXPENSES:
Investment advisory
fees................. 81,293 149,963 954,456
Transfer agent fees.... 42,016 57,003 120,571
Distribution fees
Class A.............. 36,858 47,891 208,261
Class B.............. 28,311 38,940 354,505
Custodian fees......... 2,750 2,700 3,682
Accounting fees........ 2,971 4,225 17,659
Registration and filing
fees................. 4,769 7,049 23,220
Board of directors
fees................. 479 1,227 4,665
Audit fees............. 2,109 2,999 9,332
Legal fees............. 1,198 1,704 7,179
Amortization of
deferred
organizational
costs................ 3,768 3,768 3,768
Other expenses......... 1,981 2,614 113,496
------------ ------------ ------------
Total expenses
(before waivers and
reimbursements).... 208,503 320,083 1,820,794
Expense waivers and
reimbursements....... (31,236) (18,894) --
------------ ------------ ------------
Total expenses, net.... 177,267 301,189 1,820,794
------------ ------------ ------------
Net investment income
(loss)............... 742,811 1,201,778 1,860,179
------------ ------------ ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on
investments.......... -- 468,165 2,739,497
Net realized loss on
forward foreign
currency contracts... -- -- --
Net realized gain on
futures contracts.... -- -- --
Net realized gain
(loss) on foreign
currency
transactions......... -- -- --
Net unrealized
appreciation of
investments.......... -- 63,789 28,237,048
Net unrealized
depreciation of
futures contracts.... -- -- --
Net unrealized
appreciation
(depreciation) of
forward foreign
currency contracts... -- -- --
Net unrealized
appreciation
(depreciation) of
purchased options.... -- -- --
Net unrealized
appreciation
(depreciation) on
translation of other
assets and
liabilities in
foreign currencies... -- -- --
------------ ------------ ------------
Net realized and
unrealized gain on
investments.......... -- 531,954 30,976,545
------------ ------------ ------------
Net increase in net
assets resulting from
operations........... $742,811 $1,733,732 $32,836,724
------------ ------------ ------------
------------ ------------ ------------
* From inception April
30, 1998 to June 30,
1998.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
32
<PAGE>
<TABLE>
<CAPTION>
THE HARTFORD THE HARTFORD THE HARTFORD
DIVIDEND AND THE HARTFORD CAPITAL SMALL
GROWTH FUND STOCK FUND APPRECIATION FUND COMPANY FUND
------------- ------------- ----------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 2,073,874 $ 789,050 $ 1,285,896 $ 82,184
Interest............... 168,086 239,845 700,009 104,694
Less: foreign tax
withheld............. (8,879) (4,040) (35,549) (1,671)
------------- ------------- ----------------- --------------
Total investment
income............. 2,233,081 1,024,855 1,950,356 185,207
------------- ------------- ----------------- --------------
EXPENSES:
Investment advisory
fees................. 662,743 681,438 2,344,337 202,138
Transfer agent fees.... 84,742 81,470 329,600 55,650
Distribution fees
Class A.............. 154,839 155,355 451,730 37,793
Class B.............. 292,201 304,207 1,197,641 60,385
Custodian fees......... 3,918 3,722 3,526 6,500
Accounting fees........ 11,404 10,486 42,796 4,356
Registration and filing
fees................. 15,897 15,262 55,417 7,889
Board of directors
fees................. 3,013 2,771 11,308 1,265
Audit fees............. 6,026 5,541 22,615 3,091
Legal fees............. 4,636 4,261 17,397 1,757
Amortization of
deferred
organizational
costs................ 3,768 3,768 3,768 3,768
Other expenses......... 80,430 83,881 254,230 2,166
------------- ------------- ----------------- --------------
Total expenses
(before waivers and
reimbursements).... 1,323,617 1,352,162 4,734,365 386,758
Expense waivers and
reimbursements....... -- -- -- (22,817)
------------- ------------- ----------------- --------------
Total expenses, net.... 1,323,617 1,352,162 4,734,365 363,941
------------- ------------- ----------------- --------------
Net investment income
(loss)............... 909,464 (327,307) (2,784,009) (178,734)
------------- ------------- ----------------- --------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on
investments.......... 2,961,217 1,609,999 11,971,179 (50,329)
Net realized loss on
forward foreign
currency contracts... -- -- -- --
Net realized gain on
futures contracts.... -- -- -- --
Net realized gain
(loss) on foreign
currency
transactions......... 7,885 -- 2,368 --
Net unrealized
appreciation of
investments.......... 10,077,575 31,033,177 13,380,461 4,049,376
Net unrealized
depreciation of
futures contracts.... -- -- -- --
Net unrealized
appreciation
(depreciation) of
forward foreign
currency contracts... -- -- (14,479) --
Net unrealized
appreciation
(depreciation) of
purchased options.... (8,630) -- -- --
Net unrealized
appreciation
(depreciation) on
translation of other
assets and
liabilities in
foreign currencies... (1,143) -- 24,008 --
------------- ------------- ----------------- --------------
Net realized and
unrealized gain on
investments.......... 13,036,904 32,643,176 25,363,537 3,999,047
------------- ------------- ----------------- --------------
Net increase in net
assets resulting from
operations........... $ 13,946,368 $ 32,315,869 $22,579,528 $ 3,820,313
------------- ------------- ----------------- --------------
------------- ------------- ----------------- --------------
* From inception April
30, 1998 to June 30,
1998.
<CAPTION>
THE HARTFORD THE THE HARTFORD
INTERNATIONAL HARTFORD GROWTH AND
OPPORTUNITIES FUND MIDCAP FUND INCOME FUND*
------------------ ----------- ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 542,324 $ 23,443 $ 5,978
Interest............... 141,954 18,895 3,749
Less: foreign tax
withheld............. (62,033) (161) (67)
------------------ ----------- ------------
Total investment
income............. 622,245 42,177 9,660
------------------ ----------- ------------
EXPENSES:
Investment advisory
fees................. 157,508 48,593 4,800
Transfer agent fees.... 43,470 14,661 2,294
Distribution fees
Class A.............. 30,650 11,580 1,312
Class B.............. 43,388 12,907 1,129
Custodian fees......... 83,700 4,000 750
Accounting fees........ 3,399 1,058 164
Registration and filing
fees................. 7,361 3,191 136
Board of directors
fees................. 987 307 48
Audit fees............. 2,412 751 116
Legal fees............. 1,371 426 66
Amortization of
deferred
organizational
costs................ 3,768 -- --
Other expenses......... 3,272 810 321
------------------ ----------- ------------
Total expenses
(before waivers and
reimbursements).... 381,286 98,284 11,136
Expense waivers and
reimbursements....... (62,977) (7,921) (1,939)
------------------ ----------- ------------
Total expenses, net.... 318,309 90,363 9,197
------------------ ----------- ------------
Net investment income
(loss)............... 303,936 (48,186) 463
------------------ ----------- ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on
investments.......... (6,923) 308,349 (4,792)
Net realized loss on
forward foreign
currency contracts... (7,848) -- --
Net realized gain on
futures contracts.... 531,065 -- --
Net realized gain
(loss) on foreign
currency
transactions......... (66,526) -- --
Net unrealized
appreciation of
investments.......... 4,416,631 1,297,330 86,202
Net unrealized
depreciation of
futures contracts.... (42,532) -- --
Net unrealized
appreciation
(depreciation) of
forward foreign
currency contracts... 24,762 -- --
Net unrealized
appreciation
(depreciation) of
purchased options.... 585 -- --
Net unrealized
appreciation
(depreciation) on
translation of other
assets and
liabilities in
foreign currencies... (1,689) -- --
------------------ ----------- ------------
Net realized and
unrealized gain on
investments.......... 4,847,525 1,605,679 81,410
------------------ ----------- ------------
Net increase in net
assets resulting from
operations........... $5,151,461 $1,557,493 $81,873
------------------ ----------- ------------
------------------ ----------- ------------
* From inception April
30, 1998 to June 30,
1998.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
33
<PAGE>
The Hartford Mutual Funds, Inc.
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
THE HARTFORD THE HARTFORD
MONEY BOND INCOME THE HARTFORD
MARKET FUND STRATEGY FUND ADVISERS FUND
------------ ------------- -------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 742,811 $ 1,201,778 $ 1,860,179
Net realized gain
(loss) on
investments.......... -- 468,165 2,739,497
Net unrealized
appreciation
(depreciation) of
investments.......... -- 63,789 28,237,048
------------ ------------- -------------
Net increase in net
assets resulting
from operations.... 742,811 1,733,732 32,836,724
------------ ------------- -------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Class A.............. (572,713) (847,261) (1,107,882)
Class B.............. (111,645) (186,400) (384,703)
Class Y.............. (58,453) (180,665) (392,093)
From net realized gain
on investments
Class A.............. -- (73,319) --
Class B.............. -- (20,906) --
Class Y.............. -- (15,260) --
------------ ------------- -------------
Net increase in net
assets resulting
from capital share
transactions....... (742,811) (1,323,811) (1,884,678)
------------ ------------- -------------
CAPITAL SHARE
TRANSACTIONS:
Class A.............. 4,657,783 6,941,493 65,922,274
Class B.............. 2,417,624 4,412,771 65,211,948
Class Y.............. (397,616) 2,793,935 5,783,432
------------ ------------- -------------
Total Capital Share
transactions....... 6,677,787 14,148,199 136,917,654
------------ ------------- -------------
Total increase in net
assets............... 6,677,787 14,558,120 167,869,700
NET ASSETS:
Beginning of period.... 29,665,217 39,090,082 177,740,474
------------ ------------- -------------
End of period.......... $ 36,343,004 $ 53,648,202 $ 345,610,174
------------ ------------- -------------
------------ ------------- -------------
* From inception April
30, 1998 to June 30,
1998.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
34
<PAGE>
<TABLE>
<CAPTION>
THE HARTFORD THE HARTFORD THE HARTFORD THE HARTFORD THE THE HARTFORD
DIVIDEND AND THE HARTFORD CAPITAL SMALL INTERNATIONAL HARTFORD GROWTH AND
GROWTH FUND STOCK FUND APPRECIATION FUND COMPANY FUND OPPORTUNITIES FUND MIDCAP FUND INCOME FUND*
------------ ------------ ----------------- -------------- ------------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 909,464 $ (327,307) $ (2,784,009) $ (178,734) $ 303,936 $ (48,186) $ 463
Net realized gain
(loss) on
investments.......... 2,969,102 1,609,999 11,973,547 (50,329) 449,768 308,349 (4,792)
Net unrealized
appreciation
(depreciation) of
investments.......... 10,067,802 31,033,177 13,389,990 4,049,376 4,397,757 1,297,330 86,202
------------ ------------ ----------------- -------------- ------------------ ----------- ------------
Net increase in net
assets resulting
from operations.... 13,946,368 32,315,869 22,579,528 3,820,313 5,151,461 1,557,493 81,873
------------ ------------ ----------------- -------------- ------------------ ----------- ------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Class A.............. (641,853) -- -- -- -- -- --
Class B.............. (182,656) -- -- -- -- -- --
Class Y.............. (100,018) -- -- -- -- -- --
From net realized gain
on investments
Class A.............. -- -- (2,174,371) (271,473) -- -- --
Class B.............. -- -- (1,806,193) (131,872) -- -- --
Class Y.............. -- -- (169,843) (103,247) -- -- --
------------ ------------ ----------------- -------------- ------------------ ----------- ------------
Net increase in net
assets resulting
from capital share
transactions....... (924,527) -- (4,150,407) (506,592) -- -- --
------------ ------------ ----------------- -------------- ------------------ ----------- ------------
CAPITAL SHARE
TRANSACTIONS:
Class A.............. 62,274,951 67,364,650 109,655,383 9,676,272 8,183,313 13,305,321 3,274,002
Class B.............. 46,354,239 52,392,644 109,348,995 4,246,723 2,251,872 4,894,410 836,601
Class Y.............. (26,801) 205,781 (3,923,942) 1,696,525 2,179,102 1,873,278 300,000
------------ ------------ ----------------- -------------- ------------------ ----------- ------------
Total Capital Share
transactions....... 108,602,389 119,963,075 215,080,435 15,619,520 12,614,287 20,073,009 4,410,603
------------ ------------ ----------------- -------------- ------------------ ----------- ------------
Total increase in net
assets............... 121,624,230 152,278,944 233,509,556 18,933,241 17,765,748 21,630,502 4,492,476
NET ASSETS:
Beginning of period.... 114,843,621 106,567,130 437,685,916 38,147,231 29,311,073 -- --
------------ ------------ ----------------- -------------- ------------------ ----------- ------------
End of period.......... $236,467,851 $258,846,074 $671,195,472 $ 57,080,472 $47,076,821 $21,630,502 $4,492,476
------------ ------------ ----------------- -------------- ------------------ ----------- ------------
------------ ------------ ----------------- -------------- ------------------ ----------- ------------
* From inception April
30, 1998 to June 30,
1998.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
35
<PAGE>
The Hartford Mutual Funds, Inc.
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
THE HARTFORD THE HARTFORD
MONEY BOND INCOME
MARKET FUND STRATEGY FUND
----------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 1,010,481 $ 1,319,673
Net realized gain
(loss) on
investments.......... -- 533,521
Net unrealized
appreciation
(depreciation) of
investments.......... -- 857,991
----------------- ---------------
Net increase
(decrease) in net
assets resulting
from operations.... 1,010,481 2,711,185
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Class A.............. (883,567) (1,122,490)
Class B.............. (45,518) (71,146)
Class Y.............. (81,396) (89,767)
From net realized gain
on investments
Class A.............. -- (412,671)
Class B.............. -- (67,122)
Class Y.............. -- (56,419)
CAPITAL SHARE
TRANSACTIONS:
Class A.............. 11,824,783 16,849,692
Class B.............. 4,448,938 5,587,371
Class Y.............. 2,637,595 4,707,315
----------------- ---------------
Total increase in net
assets............... 18,911,316 28,035,948
NET ASSETS:
Beginning of year...... 10,753,901 11,054,134
----------------- ---------------
End of year............ $29,665,217 $39,090,082
----------------- ---------------
----------------- ---------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
36
<PAGE>
<TABLE>
<CAPTION>
THE HARTFORD THE HARTFORD THE HARTFORD THE HARTFORD
THE HARTFORD DIVIDEND AND THE HARTFORD CAPITAL SMALL INTERNATIONAL
ADVISERS FUND GROWTH FUND STOCK FUND APPRECIATION FUND COMPANY FUND OPPORTUNITIES FUND
------------- ------------ ------------ ----------------- ------------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 1,470,189 $ 550,147 $ (64,098) $ (1,489,458) $ (103,029) $ 130,356
Net realized gain
(loss) on
investments.......... 258,915 916,848 (354,110) 19,357,082 2,066,814 (310,893)
Net unrealized
appreciation
(depreciation) of
investments.......... 15,479,132 8,681,047 8,234,272 2,363,518 (252,464) (981,405)
------------- ------------ ------------ ----------------- ------------------- ------------------
Net increase
(decrease) in net
assets resulting
from operations.... 17,208,236 10,148,042 7,816,064 20,231,142 1,711,321 (1,161,942)
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Class A.............. (691,617) (320,941) -- -- -- (75,930)
Class B.............. (165,238) (96,584) -- -- -- (24,517)
Class Y.............. (544,413) (79,474) -- -- -- (43,020)
From net realized gain
on investments
Class A.............. (472,440) (590,306) (127,319) (7,591,824) (776,601) (232,598)
Class B.............. (191,894) (301,354) (69,023) (5,559,834) (409,953) (104,930)
Class Y.............. (207,612) (119,013) (10,592) (945,726) (378,670) (96,796)
CAPITAL SHARE
TRANSACTIONS:
Class A.............. 77,673,780 56,433,030 54,239,596 218,285,331 14,144,489 12,377,118
Class B.............. 35,889,333 30,624,501 31,831,398 175,024,238 10,086,337 7,530,956
Class Y.............. 33,363,110 12,297,437 5,315,662 28,218,005 8,783,283 6,622,568
------------- ------------ ------------ ----------------- ------------------- ------------------
Total increase in net
assets............... 161,861,245 107,995,338 98,995,786 427,661,332 33,160,206 24,790,909
NET ASSETS:
Beginning of year...... 15,879,229 6,848,283 7,571,344 10,024,584 4,987,025 4,520,164
------------- ------------ ------------ ----------------- ------------------- ------------------
End of year............ $ 177,740,474 $114,843,621 $106,567,130 $437,685,916 $38,147,231 $29,311,073
------------- ------------ ------------ ----------------- ------------------- ------------------
------------- ------------ ------------ ----------------- ------------------- ------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
37
<PAGE>
The Hartford Mutual Funds, Inc.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 (UNAUDITED)
1. ORGANIZATION:
The Hartford Mutual Funds, Inc. (the Company) is an open-end management
investment company comprised of ten diversified portfolios (each a "Fund" or
together the "Funds"). The Funds are The Hartford Money Market Fund, The
Hartford Bond Income Strategy Fund, The Hartford Advisers Fund, The Hartford
Dividend and Growth Fund, The Hartford Stock Fund, The Hartford Capital
Appreciation Fund, The Hartford Small Company Fund, The Hartford
International Opportunities Fund, The Hartford MidCap Fund and The Hartford
Growth and Income Fund. The Company was organized under the laws of the
State of Maryland and was registered with the Securities and Exchange
Commission (SEC) under the Investment Company Act of 1940, as amended, as a
diversified open-end management investment company.
The Funds and their investment objectives are listed below:
<TABLE>
<S> <C> <C>
The Hartford Money Market Fund -- Seeks maximum current income consistent with liquidity and
(Money Market Fund) preservation of capital.
The Hartford Bond Income Strategy Fund -- Seeks a high level of current income consistent with a
(Bond Income Strategy Fund) competitive total return, as compared to bond funds with
similar investment objectives and policies, by investing
primarily in debt securities.
The Hartford Advisers Fund -- Seeks maximum long-term total rate of return by investing in
(Advisers Fund) common stocks and other equity securities, bonds and other
debt securities and money market instruments.
The Hartford Dividend and Growth Fund -- Seeks a high level of current income consistent with growth
(Dividend and Growth Fund) of capital by investing primarily in equity securities.
The Hartford Stock Fund -- Seeks long-term growth of capital with income as a secondary
(Stock Fund) consideration by investing primarily in equity securities.
The Hartford Capital Appreciation Fund -- Seeks growth of capital by investing primarily in equity
(Capital Appreciation Fund) securities selected on the basis of potential for capital
appreciation.
The Hartford Small Company Fund -- Seeks growth of capital by investing primarily in equity
(Small Company Fund) securities selected on the basis of potential for capital
appreciation.
The Hartford International -- Seeks growth of capital by investing primarily in equity
Opportunities Fund (International securities issued by non-U.S. companies.
Opportunities Fund)
The Hartford MidCap Fund -- Seeks to achieve long-term capital growth through capital
(MidCap Fund) appreciation by investing primarily in equity securities.
The Hartford Growth and Income Fund -- Seeks growth of capital and current income by investing
(Growth and Income Fund) primarily in equity securities with earnings growth potential
and steady or rising dividends.
</TABLE>
The Company consists of ten series of portfolios, each of which is divided
into Class A, Class B and Class Y shares. Class A shares are sold with a
front-end load sales charge of up to 5.50%. Class B shares are sold with a
contingent deferred sales charge which is assessed on the lesser of the net
asset value of the shares at the time of redemption or the original purchase
price, and declines from 5.00% to zero depending on the period of time the
shares are held. Class Y shares are sold to certain eligible institutional
investors without a sales charge. All classes of shares have identical
voting, redemption, dividend, liquidation and other rights and the same
terms and conditions, except that each class may have different expenses
which may affect performance.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the Funds,
which are in accordance with generally accepted accounting principles in the
investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Security gains and
losses are determined on the basis of identified cost.
38
<PAGE>
b) SECURITY VALUATION--Debt securities (other than short-term obligations)
are valued on the basis of valuations furnished by an unaffiliated
pricing service which determines valuations for normal institutional size
trading units of debt securities. Mortgage securities are valued at the
bid price. Short-term securities held in the Money Market Fund, are
valued at amortized cost or original cost plus accrued interest
receivable, both of which approximate market value. In the Bond Income
Strategy Fund, the Advisers Fund, the Dividend and Growth Fund, the Stock
Fund, the Capital Appreciation Fund, the Small Company Fund, the
International Opportunities Fund, the MidCap Fund and the Growth and
Income Funds, short-term investments with a maturity of 60 days or less
when purchased are valued at amortized cost, which approximates market
value. Short-term investments purchased with a maturity of more than 60
days when purchased are valued based on market quotations until the
remaining days to maturity become less than 61 days. From such time until
maturity, the investments are valued at amortized cost.
Equity securities are valued at the last sales price reported on the
principal securities exchange on which such securities are traded
(domestic or foreign) or on the principal over-the-counter market on
which such securities are traded, as of the close of business on the day
the securities are being valued. If no sale took place on a particular
day then such securities are valued at the mean between the bid and asked
prices. Securities quoted in foreign currencies are translated into U.S.
dollars at the exchange rates at the end of each business day. Options
are valued at the last sales price; if no sale took place on such day,
then options are valued at the mean between the bid and asked prices.
Securities for which market quotations are not readily available and all
other assets are valued in good faith at fair value by, or under the
direction of, the Funds' Board of Directors.
c) FOREIGN CURRENCY TRANSACTIONS--The accounting records of the Funds are
maintained in U.S. dollars. All assets and liabilities initially
expressed in foreign currencies are converted into U.S. dollars at
prevailing exchange rates. Purchases and sales of investment securities,
dividend and interest income and certain expenses are translated at the
rates of exchange prevailing on the respective dates of such
transactions.
The funds do not isolate that portion of the results of operations
resulting from changes in the foreign currency exchange rates on
investments from the fluctuations arising from changes in the market
prices of securities held. Such fluctuations are included with the net
realized and unrealized gain or loss on investments in the accompanying
financial statements.
Net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales of foreign currencies, and the difference
between asset and liability amounts initially stated in foreign
currencies and the U.S. dollar value of the amounts actually received or
paid. Net unrealized foreign exchange gains or losses arise from changes
in the value of portfolio securities and other assets and liabilities at
the end of the reporting period, resulting from changes in the exchange
rates.
d) REPURCHASE AGREEMENTS--A repurchase agreement is an agreement by which
the seller of a security agrees to repurchase the security sold at a
mutually agreed upon time and price. At the time the Funds enter into a
repurchase agreement, the value of the underlying collateral
security(ies), including accrued interest, will be equal to or exceed the
value of the repurchase agreement and, in the case of repurchase
agreements exceeding one day, the value of the underlying security(ies),
including accrued interest, is required during the term of the agreement
to be equal to or exceed the value of the repurchase agreement.
Securities which serve to collateralize the repurchase agreement are held
by each Fund's custodian in book entry or physical form in the custodial
account of the Fund. Repurchase agreements are valued at cost plus
accrued interest receivable.
e) JOINT TRADING ACCOUNT--Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the Funds may transfer uninvested
cash balances into a joint trading account managed by The Hartford
Investment Management Company (HIMCO) or Wellington Management Company
LLP (Wellington). These balances may be invested in one or more
repurchase agreements and/or short-term money market instruments.
f) FUTURES, OPTIONS ON FUTURES AND OPTIONS TRANSASTIONS--The Funds enter
into futures contracts to retain their cash balance and yet be exposed to
the market, thereby providing the liquidity necessary to accommodate
redemptions while at the same time providing shareholders with the
investment return of a fully invested portfolio. A futures contract is an
agreement between two parties to buy and sell a security at a set price
on a future date. When the Funds enter into such contracts, they are
required to deposit with their custodian an amount of "initial margin" of
39
<PAGE>
THE HARTFORD MUTUAL FUNDS, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
cash or U.S. Treasury Bills. Subsequent payments, called maintenance
margin, to and from the broker, are made on a daily basis as the price of
the underlying debt security fluctuates, making the long and short
positions in the futures contract more or less valuable (i.e.,
mark-to-market), which results in an unrealized gain or loss to the
Funds. The market value of a traded futures contract is the last sale
price. In the absence of a last sale price, the last offering price is
used. In the absence of either of these prices, fair value is determined
according to procedures established by the Funds' Board of Directors. The
variation margin on futures contracts is included in cash, receivables,
and other assets or liabilities, as applicable, in each Fund's Statement
of Net Assets.
At any time prior to expiration of the futures contract, the Funds may
close the position by taking an opposite position which would operate to
terminate the position in the futures contract. A final determination of
maintenance margin is then made, additional cash is required to be paid
by or released to the Funds and the Funds realize a gain or loss.
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's Statement of Net Assets as an investment and
subsequently "marked-to-market" to reflect the current market value of
the option purchased as of the end of the reporting period. If an option
which the Fund has purchased expires on its stipulated expiration date,
the Fund realizes a loss in the amount of the cost of the option. If the
Fund enters into a closing transaction, it realizes a gain or loss,
depending on whether the proceeds from the sale are greater or less than
the cost of the option. If the Fund exercises a put option, it realizes a
gain or loss from the sale of the underlying security and the proceeds
from such sale will be decreased by the premium originally paid. If the
Fund exercises a call option, the cost of the security which the Fund
purchases upon exercise will be increased by the premium originally paid
to buy the call.
g) FEDERAL INCOME TAXES--For federal income tax purposes, the Funds intend
to continue to qualify as regulated investment companies under Subchapter
M of the Internal Revenue Code by distributing substantially all of their
taxable net investment income and net realized capital gains to their
shareholders or otherwise complying with the requirements of regulated
investment companies. Accordingly, no provision for federal income taxes
has been made in the accompanying financial statements.
h) FUND SHARE VALUATION AND DIVIDEND DISTRIBUTIONS TO SHAREHOLDERS--Orders
for the Fund's shares are executed in accordance with the investment
instructions of the shareholders. Dividend income is accrued as of the
ex-dividend date. Interest income and expenses are accrued on a daily
basis. The net asset value of each Fund's shares is determined as of the
close of each business day of the New York Stock Exchange (the Exchange).
The net asset value per share is determined separately for each class of
each fund by dividing the Fund's net assets attributable to that class by
the number of shares of the class outstanding. Orders for the purchase of
a Fund's shares received prior to the close of the Exchange on any day on
which the fund is open for business are priced at the per-share net asset
value determined as of the close of the Exchange. Orders received after
the close of the Exchange, or on a day on which the Exchange and/or the
Fund is not open for business, are priced at the per-share net asset
value next determined.
Each Fund intends to distribute substantially all of its net investment
income and net realized capital gains to shareholders no less frequently
than once a year. Normally, dividends from net investment income of the
Small Company Fund, the Capital Appreciation Fund, the International
Opportunities Fund, the Stock Fund, and the MidCap Fund will be declared
and paid annually; dividends from net investment income of the Dividend
and Growth Fund, the Advisers Fund, and the Growth and Income Fund will
be declared and paid quarterly; dividends from the net investment income
of the Bond Income Strategy Fund will be declared and paid monthly and
dividends from net investment income of the Money Market Fund will be
declared daily and paid monthly. Dividends from the Money Market Fund are
not paid on shares until the day following the date on which the shares
are issued. Unless shareholders specify otherwise, all dividends and
distributions will be automatically reinvested in additional full or
fractional shares of each Fund.
Distributions from net investment income and net realized capital gains
are determined in accordance with federal income tax regulations which
may differ from generally accepted accounting principles. These
differences include the treatment of non-taxable dividends, expiring
capital loss carryforwards, foreign currency gains and losses, losses
40
<PAGE>
deffered due to wash sales and excise tax regulations. Permanent book and
federal income tax basis differences relating to shareholder
distributions will result in reclassifications to certain of the Funds'
capital accounts (see Note 8).
i) FORWARD FOREIGN CURRENCY CONTRACTS--As of June 30, 1998, the Capital
Appreciation Fund entered into forward foreign currency exchange
contracts that obligate the Fund to repurchase/replace or sell currencies
at specified future dates. The Fund enters into forward foreign currency
contracts to hedge against adverse fluctuations in exchange rates between
currencies.
Forward contracts involve elements of market risk in excess of the amount
reflected in the Statement of Net Assets. In addition, risks may arise
upon entering into these contracts from the potential inability of
counterparties to meet the terms of the contract and from unanticipated
movement in the value of foreign currencies relative to the U. S. dollar.
j) ORGANIZATIONAL COSTS--Costs incurred by the Funds in connection with
their organization have been deferred and are being amortized on a
straight line basis over five years. The unamortized deferred
organizational costs of each Fund as of June 30, 1998 are included in the
excess of cash, receivables and other assets over liabilities or the
excess of liabilities over cash, receivables and other assets, as
applicable, in each Fund's Statement of Net Assets.
k) USE OF ESTIMATES--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 as of the date of the financial statements and the reported
amounts of income and expenses during the period. Operating results in
the future could vary from the amounts derived from management's
estimates
l) RESTRICTED SECURITIES--Each Fund is permitted to invest up to 15% of its
net assets in illiquid securities, except for the Money Market Fund,
which may invest up to 10% in such securities. "Illiquid Securities" are
those that may not be sold or disposed of in the ordinary course of
business, at approximately the price used to determine a Fund's net asset
value per share. Each Fund may also purchase certain restricted
securities, commonly known as Rule 144A securities, that can be resold to
institutions and which may be determined to be liquid pursuant to
policies and guidelines established by the Funds' Board of Directors.
At June 30, 1998 the Funds held the following restricted securities
(excluding 144A issues):
<TABLE>
<CAPTION>
PERCENTAGE
ACQUISITION ACQUISITION OF FUND'S
FUND SECURITY DATE COST MARKET VALUE NET ASSETS
- ------------------------------ ---------------------------------------- ---------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Capital Appreciation Fund SGW Holdings Corporation 8/14/97 $ 2,000,001 $ 1,222,121 0.2%
Small Company Fund SGW Holdings Corporation 8/14/97 $ 88,996 $ 54,395 0.1%
</TABLE>
3. EXPENSES:
a) INVESTMENT MANAGEMENT AND ADVISORY AGREEMENTS--Hartford Investment
Financial Services Company (HIFSCO), a majority-owned indirect subsidiary
of The Hartford Financial Services Group, Inc. (The Hartford), serves as
investment manager to each Fund pursuant to an Investment Advisory
Agreement dated March 3, 1997. As investment manager, HIFSCO has overall
investment supervisory responsibility for each Fund. In addition HIFSCO
provides administrative personnel, services, equipment and facilities and
office space for proper operation of the Company. HIFSCO has contracted
with Wellington for the provision of day to day management services to
the Small Company Fund, Capital Appreciation Fund, International
Opportunities Fund, Stock Fund, Dividend and Growth Fund, Advisers Fund,
MidCap Fund, and Growth and Income Fund in accordance with each Fund's
investment objective and policies. In addition, HIFSCO has contracted
with HIMCO, a wholly owned subsidiary of The Hartford, for the provision
of day to day investment management service for the Bond Income Strategy
Fund and Money Market Fund. Each Fund pays a fee to HIFSCO, a portion of
which may be used to compensate Wellington or HIMCO.
41
<PAGE>
THE HARTFORD MUTUAL FUNDS, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
The schedule below reflects the rates of compensation paid to HIFSCO for
services rendered:
<TABLE>
<CAPTION>
MONEY MARKET FUND
AVERAGE DAILY NET ASSETS ANNUAL FEE
- ------------------------------------ ------------
<S> <C>
On first $500 million .50%
On next $500 million .45%
Over $1 billion .40%
<CAPTION>
BOND INCOME STRATEGY FUND
AVERAGE DAILY NET ASSETS ANNUAL FEE
- ------------------------------------ ------------
<S> <C>
On first $500 million .65%
On next $500 million .55%
Over $1 billion .50%
<CAPTION>
SMALL COMPANY,
INTERNATIONAL OPPORTUNITIES AND
MIDCAP FUNDS
AVERAGE DAILY NET ASSETS ANNUAL FEE
- ------------------------------------ ------------
<S> <C>
On first $500 million .85%
On next $500 million .75%
Over $1 billion .70%
<CAPTION>
CAPITAL APPRECIATION,
STOCK AND
GROWTH AND INCOME FUNDS
AVERAGE DAILY NET ASSETS ANNUAL FEE
- ------------------------------------ ------------
<S> <C>
On first $500 million .80%
On next $500 million .70%
Over $1 billion .65%
<CAPTION>
ADVISERS AND
DIVIDEND AND GROWTH FUNDS
AVERAGE DAILY NET ASSETS ANNUAL FEE
- ------------------------------------ ------------
<S> <C>
On first $500 million .75%
On next $500 million .65%
Over $1 billion .60%
</TABLE>
b) DISTRIBUTION AND SERVICE PLAN FOR CLASS A AND B SHARES --Hartford
Securities Distribution Company, Inc. (HSD, or the Distributor), an
indirect majority-owned subsidiary of The Hartford, is the principal
underwriter and distributor of the Funds. HSD is solely engaged in
distribution activities which include marketing, distribution and
clearing of shares through broker-dealers, financing distribution costs,
supervising the activities of the transfer agent and maintaining
financial books and records. During the six months ended June 30, 1998,
HSD earned $14,903,873 in front-end load sales charges on the sale of
fund shares and received $499,662 from the proceeds of imposed contigent
deferred sales charges.
The Funds have adopted Distribution and Service Plans in accordance with
Rule 12b-1 of the Investment Company Act of 1940, as amended, to
compensate the Distributor (HSD) for the distribution of Class A and
Class B shares and servicing the accounts of Class A and Class B
shareholders. The Class A plan provides for periodic payments to brokers
who provide services to accounts that hold Class A shares and for
promotional and other sales related costs. The Distributor is compensated
at an annual rate that may not exceed 0.35% of the average daily net
asset value of Class A shares of the Fund some or all of which may be
remitted to brokers. Up to 0.25% of the fee may be used for shareholder
servicing expenses with the remainder used for distribution expenses. The
Class A Rule 12b-1 fee for
42
<PAGE>
each Fund has been voluntarily capped at 0.30% through April 30, 1999.
The cap may be removed at any time after such date. Some or all of the
12b-1 fee for Class B shares may be paid to broker-dealers for
distribution and/or shareholder account services. Under the Plan, the
Fund pays the Distributor 1.00% of the average daily net assets of Class
B shares that are outstanding for 8 years or less, 0.25% of which is
intended as a fee for service provided to existing shareholders with the
remainder used for distribution expenses.
c) OPERATING EXPENSES--Allocable expenses incurred by the Funds are
allocated to each Fund in proportion to the average daily net assets of
each Fund, except where allocation of certain expenses is more fairly
made directly to the Fund. The Hartford has voluntarily agreed to limit
the total operating expenses of the Class A, B and Y shares of all the
Funds, exclusive of taxes, interest, brokerage commissions, certain
distribution expenses and extraordinary expenses, until at least April
30, 1999 as follows:
<TABLE>
<CAPTION>
FUND CLASS A CLASS B CLASS Y
----------------------------------------- ------- ------- -------
<S> <C> <C> <C>
Money Market Fund........................ 1.00% N/A 0.55%
Bond Income Strategy Fund................ 1.25% 1.95% 0.80%
Advisers Fund............................ 1.40% 2.10% 0.95%
Dividend and Growth Fund................. 1.40% 2.10% 0.95%
Stock Fund............................... 1.45% 2.15% 1.00%
Capital Appreciation Fund................ 1.45% 2.15% 1.00%
Small Company Fund....................... 1.45% 2.15% 1.00%
International Opportunities Fund......... 1.65% 2.35% 1.20%
MidCap Fund.............................. 1.45% 2.15% 1.00%
Growth and Income Fund................... 1.45% 2.15% 1.00%
</TABLE>
4. AFFILIATE HOLDINGS:
a) As of June 30, 1998 affiliates of The Hartford had ownership of shares
in the Funds as follows:
<TABLE>
<CAPTION>
FUND CLASS A CLASS B CLASS Y
- ---------------------------------------------------------------------------------------- ------------ ---------- ---------
<S> <C> <C> <C>
Money Market Fund....................................................................... 8,818,643 2,062,530 138
Bond Income Strategy Fund............................................................... 2,203,477 297,087 198,446
Stock Fund.............................................................................. 3,726 1,972 294,988
Small Company Fund...................................................................... 6,641 297,163 38,962
International Opportunities Fund........................................................ -- 127,349 183,810
MidCap Fund............................................................................. 210,000 60,000 30,000
Growth and Income Fund.................................................................. 210,000 60,000 30,000
</TABLE>
5. INVESTMENT TRANSACTIONS:
For the period from January 1, 1998 to June 30, 1998, aggregate purchases
and sales of investment securities (excluding short-term investments) were
as follows:
<TABLE>
<CAPTION>
COST OF PROCEEDS FROM
FUND PURCHASES SALES
- -------------------------------------------------------------------------------------- ---------------- ------------------
<S> <C> <C>
Bond Income Strategy Fund............................................................. $ 48,817,940 $ 37,498,195
Advisers Fund......................................................................... 149,371,972 25,344,891
Dividend and Growth Fund.............................................................. 137,820,514 32,313,040
Stock Fund............................................................................ 130,166,252 14,580,960
Capital Appreciation Fund............................................................. 559,778,516 336,089,956
Small Company Fund.................................................................... 84,029,151 71,405,466
International Opportunities Fund...................................................... 31,885,980 19,925,719
MidCap Fund........................................................................... 21,114,870 4,474,958
Growth and Income Fund................................................................ 4,126,030 39,197
</TABLE>
43
<PAGE>
THE HARTFORD MUTUAL FUNDS, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
6. TAX COST AND UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS:
As of June 30, 1998, the aggregate gross unrealized appreciation and
depreciation of all investments, based on cost for federal income tax
purposes, was as follows:
<TABLE>
<CAPTION>
AGGREGATE AGGREGATE
GROSS GROSS
UNREALIZED UNREALIZED NET UNREALIZED
FUND TAX COST APPRECIATION DEPRECIATION APPRECIATION
- ------------------------------------------------------------- -------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Bond Income Strategy Fund.................................... 50,824,145 1,320,556 (253,359) 1,067,197
Advisers Fund................................................ 280,034,953 48,924,446 (4,351,318) 44,573,128
Dividend and Growth Fund..................................... 212,667,340 25,683,828 (6,492,575) 19,191,253
Stock Fund................................................... 203,815,521 44,286,097 (4,639,660) 39,646,437
Capital Appreciation Fund.................................... 645,989,042 79,201,108 (66,618,341) 16,582,767
Small Company Fund........................................... 48,405,106 6,391,458 (2,907,149) 3,484,309
International Opportunities Fund............................. 37,701,216 5,027,443 (1,451,657) 3,575,786
MidCap Fund.................................................. 20,007,425 1,950,872 (651,826) 1,299,046
Growth and Income Fund....................................... 7,082,041 201,499 (115,297) 86,202
</TABLE>
7. CAPITAL SHARE TRANSACTIONS:
The following information is for the period from January 1, 1998 to June 30,
1998:
<TABLE>
<CAPTION>
DIVIDEND
BOND INCOME AND
MONEY MARKET FUND STRATEGY FUND ADVISERS FUND GROWTH FUND
---------------------------- ------------------------- -------------------------- -----------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
------------- ------------ ----------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold........... 26,001,988 $ 26,001,988 839,018 $ 8,965,819 6,023,355 $ 86,564,294 4,270,399
Shares issued on
reinvestment of
distributions........ 565,131 565,131 83,378 886,806 74,229 1,099,750 39,277
Shares redeemed....... (21,909,336) (21,909,336) (271,663) (2,911,132) (1,487,666) (21,741,770) (347,344)
------------- ------------ ----------- ------------ ------------ ------------ -----------
Net increase.......... 4,657,783 $ 4,657,783 650,733 $ 6,941,493 4,609,918 $ 65,922,274 3,962,332
------------- ------------ ----------- ------------ ------------ ------------ -----------
------------- ------------ ----------- ------------ ------------ ------------ -----------
<CAPTION>
INTERNATIONAL
CAPITAL OPPORTUNITIES
STOCK FUND APPRECIATION FUND SMALL COMPANY FUND FUND
---------------------------- ------------------------- -------------------------- -----------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
------------- ------------ ----------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold........... 4,293,589 $ 73,169,361 6,774,053 $141,722,899 944,252 $ 12,099,846 831,967
Shares issued on
reinvestment of
distributions........ -- -- 103,203 2,128,184 19,781 255,546 --
Shares redeemed....... (338,125) (5,804,711) (1,644,578) (34,195,700) (208,447) (2,679,121) (140,555)
------------- ------------ ----------- ------------ ------------ ------------ -----------
Net increase.......... 3,955,464 $ 67,364,650 5,232,678 $109,655,383 755,586 $ 9,676,272 691,412
------------- ------------ ----------- ------------ ------------ ------------ -----------
------------- ------------ ----------- ------------ ------------ ------------ -----------
<CAPTION>
GROWTH AND INCOME FUND*
MIDCAP FUND
---------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
------------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold........... 1,273,416 $ 13,485,943 329,914 $ 3,284,802
Shares issued on
reinvestment of
distributions........ -- -- -- --
Shares redeemed....... (16,277) (180,622) (1,086) (10,800)
------------- ------------ ----------- ------------
Net increase.......... 1,257,139 $ 13,305,321 328,828 $ 3,274,002
------------- ------------ ----------- ------------
------------- ------------ ----------- ------------
<CAPTION>
AMOUNT
------------
<S> <C>
CLASS A
Shares sold........... $ 67,130,469
Shares issued on
reinvestment of
distributions........ 631,735
Shares redeemed....... (5,487,253)
------------
Net increase.......... $ 62,274,951
------------
------------
AMOUNT
------------
<S> <C>
CLASS A
Shares sold........... $ 9,779,951
Shares issued on
reinvestment of
distributions........ --
Shares redeemed....... (1,596,638)
------------
Net increase.......... $ 8,183,313
------------
------------
<S> <C>
CLASS A
Shares sold...........
Shares issued on
reinvestment of
distributions........
Shares redeemed.......
Net increase..........
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
DIVIDEND
BOND INCOME AND
MONEY MARKET FUND STRATEGY FUND ADVISERS FUND GROWTH FUND
---------------------------- ------------------------- -------------------------- -----------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
------------- ------------ ----------- ------------ ------------ ------------ -----------
CLASS B
<S> <C> <C> <C> <C> <C> <C> <C>
Shares sold........... 5,768,796 $ 5,768,796 486,009 $ 5,181,366 4,695,353 $ 67,170,168 3,096,999
Shares issued on
reinvestment of
distributions........ 110,195 110,195 17,360 184,205 25,047 369,254 10,942
Shares redeemed....... (3,461,367) (3,461,367) (89,502) (952,800) (161,840) (2,327,474) (146,505)
------------- ------------ ----------- ------------ ------------ ------------ -----------
Net increase.......... 2,417,624 $ 2,417,624 413,867 $ 4,412,771 4,558,560 $ 65,211,948 2,961,436
------------- ------------ ----------- ------------ ------------ ------------ -----------
------------- ------------ ----------- ------------ ------------ ------------ -----------
<CAPTION>
INTERNATIONAL
CAPITAL OPPORTUNITIES
STOCK FUND APPRECIATION FUND SMALL COMPANY FUND FUND
---------------------------- ------------------------- -------------------------- -----------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
------------- ------------ ----------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS B
Shares sold........... 3,217,783 $ 54,473,582 5,849,054 $121,335,565 377,799 $ 4,889,086 226,588
Shares issued on
reinvestment of
distributions........ -- -- 84,249 1,714,752 9,891 126,110 --
Shares redeemed....... (125,622) (2,080,938) (662,694) (13,701,322) (59,421) (768,473) (35,530)
------------- ------------ ----------- ------------ ------------ ------------ -----------
Net increase.......... 3,092,161 $ 52,392,644 5,270,609 $109,348,995 328,269 $ 4,246,723 191,058
------------- ------------ ----------- ------------ ------------ ------------ -----------
------------- ------------ ----------- ------------ ------------ ------------ -----------
<CAPTION>
GROWTH AND INCOME FUND*
MIDCAP FUND
---------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
------------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS B
Shares sold........... 469,704 $ 5,001,750 83,778 $ 836,601
Shares issued on
reinvestment of
distributions........ -- -- -- --
Shares redeemed....... (9,739) (107,340) -- --
------------- ------------ ----------- ------------
Net increase.......... 459,965 $ 4,894,410 83,778 $ 836,601
------------- ------------ ----------- ------------
------------- ------------ ----------- ------------
<CAPTION>
DIVIDEND
BOND INCOME AND
MONEY MARKET FUND STRATEGY FUND ADVISERS FUND GROWTH FUND
---------------------------- ------------------------- -------------------------- -----------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
------------- ------------ ----------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
Shares sold........... 2,459,455 $ 2,459,455 335,316 $ 3,597,282 591,448 $ 8,536,180 336,382
Shares issued on
reinvestment of
distributions........ 58,457 58,457 18,364 195,924 26,355 392,091 6,186
Shares redeemed....... (2,915,528) (2,915,528) (93,268) (999,271) (221,163) (3,144,839) (336,422)
------------- ------------ ----------- ------------ ------------ ------------ -----------
Net
increase/(decrease).. (397,616) $ (397,616) 260,412 $ 2,793,935 396,640 $ 5,783,432 6,146
------------- ------------ ----------- ------------ ------------ ------------ -----------
------------- ------------ ----------- ------------ ------------ ------------ -----------
<CAPTION>
AMOUNT
------------
CLASS B
<S> <C>
Shares sold........... $ 48,493,684
Shares issued on
reinvestment of
distributions........ 174,433
Shares redeemed....... (2,313,878)
------------
Net increase.......... $ 46,354,239
------------
------------
AMOUNT
------------
<S> <C>
CLASS B
Shares sold........... $ 2,650,294
Shares issued on
reinvestment of
distributions........ --
Shares redeemed....... (398,422)
------------
Net increase.......... $ 2,251,872
------------
------------
<S> <C>
CLASS B
Shares sold...........
Shares issued on
reinvestment of
distributions........
Shares redeemed.......
Net increase..........
AMOUNT
------------
<S> <C>
CLASS Y
Shares sold........... $ 5,332,106
Shares issued on
reinvestment of
distributions........ 100,018
Shares redeemed....... (5,458,925)
------------
Net
increase/(decrease).. $ (26,801)
------------
------------
</TABLE>
45
<PAGE>
THE HARTFORD MUTUAL FUNDS, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
INTERNATIONAL
CAPITAL OPPORTUNITIES
STOCK FUND APPRECIATION FUND SMALL COMPANY FUND FUND
---------------------------- ------------------------- -------------------------- -----------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
------------- ------------ ----------- ------------ ------------ ------------ -----------
CLASS Y
<S> <C> <C> <C> <C> <C> <C> <C>
Shares sold........... 11,910 $ 211,443 411,619 $ 8,681,358 262,496 $ 3,480,542 297,305
Shares issued on
reinvestment of
distributions........ -- -- 8,140 169,470 7,878 102,734 --
Shares redeemed....... (350) (5,662) (587,077) (12,774,770) (144,485) (1,886,751) (113,088)
------------- ------------ ----------- ------------ ------------ ------------ -----------
Net
increase/(decrease).. 11,560 $ 205,781 (167,318) $ (3,923,942) 125,889 $ 1,696,525 184,217
------------- ------------ ----------- ------------ ------------ ------------ -----------
------------- ------------ ----------- ------------ ------------ ------------ -----------
<CAPTION>
GROWTH AND INCOME FUND*
MIDCAP FUND
---------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
------------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
Shares sold........... 227,679 $ 2,515,561 30,000 $ 300,000
Shares issued on
reinvestment of
distributions........ -- -- -- --
Shares redeemed....... (58,818) (642,283) -- --
------------- ------------ ----------- ------------
Net
increase/(decrease).. 168,861 $ 1,873,278 30,000 $ 300,000
------------- ------------ ----------- ------------
------------- ------------ ----------- ------------
<CAPTION>
AMOUNT
------------
CLASS Y
<S> <C>
Shares sold........... $ 3,469,123
Shares issued on
reinvestment of
distributions........ --
Shares redeemed....... (1,290,021)
------------
Net
increase/(decrease).. $ 2,179,102
------------
------------
<S> <C>
CLASS Y
Shares sold...........
Shares issued on
reinvestment of
distributions........
Shares redeemed.......
Net
increase/(decrease)..
</TABLE>
* From inception April 30 to June 30, 1998.
The following information is for the year ended December 31, 1997:
<TABLE>
<CAPTION>
MONEY MARKET BOND INCOME DIVIDEND AND
FUND STRATEGY FUND ADVISERS FUND GROWTH FUND
--------------------------- ---------------------------- ----------------------- -------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
------------- ----------- ------------- ------------ ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold............. 38,230,951 $38,230,951 2,153,365 $ 22,403,019 6,154,830 $78,925,158 4,527,342
Shares issued on
reinvestment of
distributions.......... 872,366 872,366 145,580 1,522,249 87,579 1,135,044 62,376
Shares redeemed......... (27,278,534) (27,278,534) (668,900) (7,075,576) (184,092) (2,386,422) (512,573)
------------- ----------- ------------- ------------ ---------- ----------- -------------
Net increase............ 11,824,783 $11,824,783 1,630,045 $ 16,849,692 6,058,317 $77,673,780 4,077,145
------------- ----------- ------------- ------------ ---------- ----------- -------------
------------- ----------- ------------- ------------ ---------- ----------- -------------
<CAPTION>
INTERNATIONAL
CAPITAL OPPORTUNITIES
STOCK FUND APPRECIATION FUND SMALL COMPANY FUND FUND
--------------------------- ---------------------------- ----------------------- -------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
------------- ----------- ------------- ------------ ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold............. 4,284,826 $61,336,237 11,903,386 $236,230,545 1,563,737 $19,638,094 1,404,244
Shares issued on
reinvestment of
distributions.......... 8,399 122,981 387,629 7,293,278 66,524 768,836 28,770
Shares redeemed......... (499,124) (7,219,622) (1,230,817) (25,238,492) (472,607) (6,262,441) (349,105)
------------- ----------- ------------- ------------ ---------- ----------- -------------
Net increase............ 3,794,101 $54,239,596 11,060,198 $218,285,331 1,157,654 $14,144,489 1,083,909
------------- ----------- ------------- ------------ ---------- ----------- -------------
------------- ----------- ------------- ------------ ---------- ----------- -------------
<CAPTION>
AMOUNT
------------
<S> <C>
CLASS A
Shares sold............. $ 62,564,218
Shares issued on
reinvestment of
distributions.......... 889,158
Shares redeemed......... (7,020,346)
------------
Net increase............ $ 56,433,030
------------
------------
AMOUNT
------------
<S> <C>
CLASS A
Shares sold............. $ 15,957,135
Shares issued on
reinvestment of
distributions.......... 299,574
Shares redeemed......... (3,879,591)
------------
Net increase............ $ 12,377,118
------------
------------
</TABLE>
46
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET BOND INCOME DIVIDEND AND
FUND STRATEGY FUND ADVISERS FUND GROWTH FUND
--------------------------- ---------------------------- ----------------------- -------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
------------- ----------- ------------- ------------ ---------- ----------- -------------
CLASS B
<S> <C> <C> <C> <C> <C> <C> <C>
Shares sold............. 5,870,708 $ 5,870,708 612,657 $ 6,438,050 2,882,743 $36,730,437 2,538,636
Shares issued on
reinvestment of
distributions.......... 44,356 44,356 11,668 122,715 26,867 346,972 27,298
Shares redeemed......... (1,466,126) (1,466,126) (93,401) (973,394) (94,146) (1,188,076) (320,322)
------------- ----------- ------------- ------------ ---------- ----------- -------------
Net increase............ 4,448,938 $ 4,448,938 530,924 $ 5,587,371 2,815,464 $35,889,333 2,245,612
------------- ----------- ------------- ------------ ---------- ----------- -------------
------------- ----------- ------------- ------------ ---------- ----------- -------------
<CAPTION>
INTERNATIONAL
CAPITAL OPPORTUNITIES
STOCK FUND APPRECIATION FUND SMALL COMPANY FUND FUND
--------------------------- ---------------------------- ----------------------- -------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
------------- ----------- ------------- ------------ ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS B
Shares sold............. 2,451,215 $34,862,504 8,639,143 $172,632,683 788,063 $10,175,219 689,420
Shares issued on
reinvestment of
distributions.......... 4,573 66,285 284,109 5,301,745 34,763 398,035 12,211
Shares redeemed......... (212,892) (3,097,391) (144,046) (2,910,190) (40,102) (486,917) (31,621)
------------- ----------- ------------- ------------ ---------- ----------- -------------
Net increase............ 2,242,896 $31,831,398 8,779,206 $175,024,238 782,724 $10,086,337 670,010
------------- ----------- ------------- ------------ ---------- ----------- -------------
------------- ----------- ------------- ------------ ---------- ----------- -------------
<CAPTION>
MONEY MARKET BOND INCOME DIVIDEND AND
FUND STRATEGY FUND ADVISERS FUND GROWTH FUND
--------------------------- ---------------------------- ----------------------- -------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
------------- ----------- ------------- ------------ ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
Shares sold............. 5,724,039 $ 5,724,039 476,540 $ 5,016,788 3,224,923 $36,739,860 931,473
Shares issued on
reinvestment of
distributions.......... 81,393 81,393 13,863 146,182 58,225 752,023 13,922
Shares redeemed......... (3,167,837) (3,167,837) (43,885) (455,655) (331,924) (4,128,773) (52,079)
------------- ----------- ------------- ------------ ---------- ----------- -------------
Net increase............ 2,637,595 $ 2,637,595 446,518 $ 4,707,315 2,951,224 $33,363,110 893,316
------------- ----------- ------------- ------------ ---------- ----------- -------------
------------- ----------- ------------- ------------ ---------- ----------- -------------
<CAPTION>
INTERNATIONAL
CAPITAL OPPORTUNITIES
STOCK FUND APPRECIATION FUND SMALL COMPANY FUND FUND
--------------------------- ---------------------------- ----------------------- -------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
------------- ----------- ------------- ------------ ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
Shares sold............. 357,092 $ 5,308,377 1,565,763 $ 30,037,701 805,629 $ 9,682,345 671,155
Shares issued on
reinvestment of
distributions.......... 718 10,592 49,948 945,864 32,532 378,667 13,375
Shares redeemed......... (270) (3,307) (142,907) (2,765,560) (104,804) (1,277,729) (85,615)
------------- ----------- ------------- ------------ ---------- ----------- -------------
Net increase............ 357,540 $ 5,315,662 1,472,804 $ 28,218,005 733,357 $ 8,783,283 598,915
------------- ----------- ------------- ------------ ---------- ----------- -------------
------------- ----------- ------------- ------------ ---------- ----------- -------------
<CAPTION>
AMOUNT
------------
CLASS B
<S> <C>
Shares sold............. $ 34,876,647
Shares issued on
reinvestment of
distributions.......... 385,513
Shares redeemed......... (4,637,659)
------------
Net increase............ $ 30,624,501
------------
------------
AMOUNT
------------
<S> <C>
CLASS B
Shares sold............. $ 7,753,696
Shares issued on
reinvestment of
distributions.......... 125,757
Shares redeemed......... (348,497)
------------
Net increase............ $ 7,530,956
------------
------------
AMOUNT
------------
<S> <C>
CLASS Y
Shares sold............. $ 12,795,139
Shares issued on
reinvestment of
distributions.......... 198,485
Shares redeemed......... (696,187)
------------
Net increase............ $ 12,297,437
------------
------------
AMOUNT
------------
<S> <C>
CLASS Y
Shares sold............. $ 7,458,393
Shares issued on
reinvestment of
distributions.......... 139,815
Shares redeemed......... (975,640)
------------
Net increase............ $ 6,622,568
------------
------------
</TABLE>
8. RECLASSIFICATION OF CAPITAL ACCOUNTS:
In accordance with AICPA Statement of Position 93-2, DETERMINATION,
DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME, CAPITAL GAIN,
AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES, the Funds have
recorded several reclassifications in their capital accounts. These
reclassifications had no impact on the net asset value of the Funds and are
designed generally to present accumulated undistributed (distribution in
excess of) net investment income and
47
<PAGE>
THE HARTFORD MUTUAL FUNDS, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
realized gain on investments on a tax basis which is considered to be more
informative to the shareholder. As of December 31, 1997, the Funds recorded
the following reclassifications to increase (decrease) the accounts listed
below.
<TABLE>
<CAPTION>
ACCUMULATED
ACCUMULATED UNDISTRIBUTED
UNDISTRIBUTED (DISTRIBUTION IN
(DISTRIBUTION EXCESS OF)
IN EXCESS OF) NET REALIZED
NET INVESTMENT GAIN PAID-IN
INCOME ON INVESTMENTS SURPLUS
-------------- -------------------- -------
<S> <C> <C> <C>
Bond Income Strategy Fund....................................................... $ 4,342 $ (4,432) $ --
Advisers Fund................................................................... 3,640 (3,640) --
Dividend and Growth Fund........................................................ (6,895) 7,032 (137)
Stock Fund...................................................................... 64,098 (64,098) --
Capital Appreciation Fund....................................................... 1,553,692 (1,553,692) --
Small Company Fund.............................................................. 103,029 (103,029) --
International Opportunities Fund................................................ (92,840) 92,840 --
</TABLE>
48
<PAGE>
This page intentionally left blank.
<PAGE>
THE HARTFORD MUTUAL FUNDS, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
-- SELECTED PER-SHARE DATA(A) --
------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED
AND DISTRIBUTIONS
NET ASSET UNREALIZED DIVIDENDS FROM NET
VALUE AT NET GAIN (LOSS) TOTAL FROM FROM NET REALIZED
BEGINNING INVESTMENT ON INVESTMENT INVESTMENT GAIN ON
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME INVESTMENTS
--------- ---------- ------------ ----------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
THE HARTFORD MONEY MARKET
FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ $1.00 $ 0.02 $ 0.00 $ 0.02 $(0.02) $ 0.00
Class B................ 1.00 0.02 0.00 0.02 (0.02) 0.00
Class Y................ 1.00 0.03 0.00 0.03 (0.03) 0.00
For the Year Ended
December 31, 1997
Class A................ 1.00 0.05 0.00 0.05 (0.05) 0.00
Class B(e)............. 1.00 0.01 0.00 0.01 (0.01) 0.00
Class Y................ 1.00 0.05 0.00 0.05 (0.05) 0.00
For the Year Ended
December 31, 1996
Class A................ 1.00 0.02 0.00 0.02 (0.02) 0.00
Class Y................ 1.00 0.02 0.00 0.02 (0.02) 0.00
THE HARTFORD BOND INCOME
STRATEGY FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ 10.61 0.25 0.15 0.40 (0.28) (0.02)
Class B................ 10.58 0.19 0.17 0.36 (0.24) (0.02)
Class Y................ 10.64 0.26 0.17 0.43 (0.30) (0.02)
For the Year Ended
December 31, 1997
Class A................ 10.26 0.57 0.50 1.07 (0.56) (0.16)
Class B................ 10.25 0.53 0.46 0.99 (0.50) (0.16)
Class Y................ 10.27 0.58 0.54 1.12 (0.59) (0.16)
For the Year Ended
December 31, 1996
Class A................ 10.00 0.26 0.31 0.57 (0.25) (0.06)
Class B................ 10.00 0.20 0.34 0.54 (0.23) (0.06)
Class Y................ 10.00 0.28 0.31 0.59 (0.26) (0.06)
THE HARTFORD ADVISERS
FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ 13.41 0.09 1.77 1.86 (0.10) --
Class B................ 13.33 0.04 1.75 1.79 (0.06) --
Class Y................ 13.46 0.13 1.77 1.90 (0.12) --
For the Year Ended
December 31, 1997
Class A................ 11.08 0.16 2.41 2.57 (0.17) (0.07)
Class B................ 11.05 0.16 2.31 2.47 (0.12) (0.07)
Class Y................ 11.10 0.31 2.32 2.63 (0.20) (0.07)
For the Year Ended
December 31, 1996
Class A................ 10.00 0.09 1.07 1.16 (0.08) 0.00
Class B................ 10.00 0.02 1.11 1.13 (0.08) 0.00
Class Y................ 10.00 0.03 1.16 1.19 (0.09) 0.00
THE HARTFORD DIVIDEND AND
GROWTH FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ 14.72 0.07 1.37 1.44 (0.08) --
Class B................ 14.61 0.03 1.35 1.38 (0.04) --
Class Y................ 14.77 0.13 1.34 1.47 (0.10) --
For the Year Ended
December 31, 1997
Class A................ 11.45 0.13 3.40 3.53 (0.12) (0.14)
Class B................ 11.40 0.13 3.30 3.43 (0.08) (0.14)
Class Y................ 11.46 0.21 3.39 3.60 (0.15) (0.14)
For the Year Ended
December 31, 1996
Class A................ 10.00 0.07 1.46 1.53 (0.06) (0.02)
Class B................ 10.00 0.01 1.48 1.49 (0.07) (0.02)
Class Y................ 10.00 0.02 1.53 1.55 (0.07) (0.02)
THE HARTFORD STOCK FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ 15.16 (0.01) 3.29 3.28 0.00 0.00
Class B................ 15.01 (0.05) 3.23 3.18 0.00 0.00
Class Y................ 15.25 0.02 3.31 3.33 0.00 0.00
For the Year Ended
December 31, 1997
Class A................ 11.53 0.00 3.66 3.66 0.00 (0.03)
Class B................ 11.50 (0.02) 3.56 3.54 0.00 (0.03)
Class Y................ 11.55 0.03 3.70 3.73 0.00 (0.03)
For the Year Ended
December 31, 1996
Class A................ 10.00 0.02 1.53 1.55 (0.02) 0.00
Class B................ 10.00 0.00 1.52 1.52 (0.02) 0.00
Class Y................ 10.00 0.01 1.57 1.58 (0.03) 0.00
</TABLE>
(a) Information presented relates to a capital share outstanding throughout the
indicated period.
(b) Annualized.
(c) Does not include sales charges.
(d) Portfolio turnover rate is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(e) Inception date August 22, 1997.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
50
<PAGE>
- --------------------------------------------------------------------------------
-- RATIOS AND SUPPLEMENTAL DATA
- --
- --------------------------
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIO OF
EXPENSES TO
NET INCREASE NET ASSETS AVERAGE
(DECREASE) NET ASSET AT END OF NET ASSETS
IN VALUE AT PERIOD BEFORE WAIVERS
TOTAL NET ASSET END TOTAL (IN AND
DISTRIBUTIONS VALUE OF PERIOD RETURN(C) THOUSANDS) REIMBURSEMENTS(B)
---------- ------------ --------- ------- ----------- ------------------
<S> <C> <C> <C> <C> <C> <C>
THE HARTFORD MONEY MARKET
FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ $(0.02) $ 0.00 $1.00 2.33 % $26,742 1.19%
Class B................ (0.02) 0.00 1.00 1.98 6,833 1.86
Class Y................ (0.03) 0.00 1.00 2.56 2,205 1.27
For the Year Ended
December 31, 1997
Class A................ (0.05) 0.00 1.00 4.73 22,578 1.23
Class B(e)............. (0.01) 0.00 1.00 1.45 4,449 3.63
Class Y................ (0.05) 0.00 1.00 5.23 2,638 0.82
For the Year Ended
December 31, 1996
Class A................ (0.02) 0.00 1.00 2.01 10,754 2.70
Class Y................ (0.02) 0.00 1.00 2.34 0.3 3,496.38
THE HARTFORD BOND INCOME
STRATEGY FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ (0.30) 0.10 10.71 3.85 35,828 1.33
Class B................ (0.26) 0.10 10.68 3.52 10,217 2.04
Class Y................ (0.32) 0.11 10.75 4.09 7,603 0.86
For the Year Ended
December 31, 1997
Class A................ (0.72) 0.35 10.61 10.80 28,589 1.44
Class B................ (0.66) 0.33 10.58 9.96 5,745 2.19
Class Y................ (0.75) 0.37 10.64 11.30 4,756 1.01
For the Year Ended
December 31, 1996
Class A................ (0.31) 0.26 10.26 5.73 10,925 2.72
Class B................ (0.29) 0.25 10.25 5.38 124.0 22.36
Class Y................ (0.32) 0.27 10.27 5.95 5.0 185.34
THE HARTFORD ADVISERS
FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ (0.10) 1.76 15.17 13.91 181,464 --
Class B................ (0.06) 1.73 15.06 13.48 113,093 --
Class Y................ (0.12) 1.78 15.24 14.15 51,053 --
For the Year Ended
December 31, 1997
Class A................ (0.24) 2.33 13.41 23.30 98,633 1.55
Class B................ (0.19) 2.28 13.33 22.44 39,334 2.31
Class Y................ (0.27) 2.36 13.46 23.80 39,773 1.03
For the Year Ended
December 31, 1996
Class A................ (0.08) 1.08 11.08 11.56 14,347 2.94
Class B................ (0.08) 1.05 11.05 11.28 1,499 6.71
Class Y................ (0.09) 1.10 11.10 11.88 34 144.82
THE HARTFORD DIVIDEND AND
GROWTH FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ (0.08) 1.36 16.08 9.81 137,847 --
Class B................ (0.04) 1.34 15.95 9.45 84,048 --
Class Y................ (0.10) 1.37 16.14 9.98 14,572 --
For the Year Ended
December 31, 1997
Class A................ (0.26) 3.27 14.72 30.99 67,861 1.59
Class B................ (0.22) 3.21 14.61 30.20 33,741 2.34
Class Y................ (0.29) 3.31 14.77 31.59 13,241 1.09
For the Year Ended
December 31, 1996
Class A................ (0.08) 1.45 11.45 15.29 6,083 4.12
Class B................ (0.09) 1.40 11.40 14.82 730 12.97
Class Y................ (0.09) 1.46 11.46 15.49 36 141.53
THE HARTFORD STOCK FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ -- 3.28 18.44 21.64 152,904 --
Class B................ -- 3.18 18.19 21.18 99,013 --
Class Y................ -- 3.33 18.58 21.84 6,929 --
For the Year Ended
December 31, 1997
Class A................ (0.03) 3.63 15.16 31.78 65,763 1.64
Class B................ (0.03) 3.51 15.01 30.82 35,294 2.38
Class Y................ (0.03) 3.70 15.25 32.33 5,510 1.11
For the Year Ended
December 31, 1996
Class A................ (0.02) 1.53 11.53 15.50 6,273 3.96
Class B................ (0.02) 1.50 11.50 15.20 1,254 7.76
Class Y................ (0.03) 1.55 11.55 15.80 44 133.50
<CAPTION>
RATIO OF
EXPENSES TO RATIO OF NET
AVERAGE INVESTMENT
NET ASSETS INCOME (LOSS) PORTFOLIO
AFTER WAIVERS AND TO AVERAGE TURNOVER
REIMBURSEMENTS(B) NET ASSETS(B) RATE(D)
----------------- ------------- ---------
<S> <C> <C> <C>
THE HARTFORD MONEY MARKET
FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ 1.00% 4.66% --
Class B................ 1.70 3.94 --
Class Y................ 0.55 5.12 --
For the Year Ended
December 31, 1997
Class A................ 1.00 4.67 --
Class B(e)............. 1.70(b) 3.92(b) --
Class Y................ 0.55 5.13 --
For the Year Ended
December 31, 1996
Class A................ 1.00 4.49 --
Class Y................ 0.55 4.56 --
THE HARTFORD BOND INCOME
STRATEGY FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ 1.25 5.25 156.16%
Class B................ 1.95 4.56 --
Class Y................ 0.80 5.70 --
For the Year Ended
December 31, 1997
Class A................ 1.25 5.59 220.45
Class B................ 1.95 4.85 --
Class Y................ 0.80 5.98 --
For the Year Ended
December 31, 1996
Class A................ 1.25 5.72 75.52
Class B................ 1.95 5.22 --
Class Y................ 0.80 6.17 --
THE HARTFORD ADVISERS
FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ 1.31 1.58 8.56
Class B................ 1.99 0.87 --
Class Y................ 0.91 1.99 --
For the Year Ended
December 31, 1997
Class A................ 1.40 1.54 38.62
Class B................ 2.10 0.80 --
Class Y................ 0.95 2.08 --
For the Year Ended
December 31, 1996
Class A................ 1.40 2.13 19.75
Class B................ 2.10 1.24 --
Class Y................ 0.95 2.75 --
THE HARTFORD DIVIDEND AND
GROWTH FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ 1.30 1.22 18.78
Class B................ 1.99 0.53 --
Class Y................ 0.91 1.61 --
For the Year Ended
December 31, 1997
Class A................ 1.40 1.42 28.75
Class B................ 2.10 0.69 --
Class Y................ 0.95 1.83 --
For the Year Ended
December 31, 1996
Class A................ 1.40 1.95 29.80
Class B................ 2.10 0.82 --
Class Y................ 0.95 2.41 --
THE HARTFORD STOCK FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ 1.34 (0.14) 8.88
Class B................ 2.04 (0.85) --
Class Y................ 0.96 0.28 --
For the Year Ended
December 31, 1997
Class A................ 1.45 0.06 42.83
Class B................ 2.15 (0.66) --
Class Y................ 1.00 0.53 --
For the Year Ended
December 31, 1996
Class A................ 1.45 0.71 11.87
Class B................ 2.15 (0.12) --
Class Y................ 1.00 1.37 --
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
51
<PAGE>
THE HARTFORD MUTUAL FUNDS, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS -- (CONTINUED)
-- SELECTED PER-SHARE DATA(A) --
------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED
AND DISTRIBUTIONS
NET ASSET UNREALIZED DIVIDENDS FROM NET
VALUE AT NET GAIN (LOSS) TOTAL FROM FROM NET REALIZED
BEGINNING INVESTMENT ON INVESTMENT INVESTMENT GAIN ON
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME INVESTMENTS
--------- ---------- ------------ ----------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
THE HARTFORD CAPITAL
APPRECIATION FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ $19.90 $(0.06) $ 1.12 $ 1.06 $ 0.00 $(0.13)
Class B................ 19.71 (1.19) 2.17 0.98 0.00 (0.13)
Class Y................ 20.05 (0.03) 1.13 1.10 0.00 (0.13)
For the Year Ended
December 31, 1997
Class A................ 13.36 (0.03) 7.34 7.31 0.00 (0.77)
Class B................ 13.32 (0.06) 7.22 7.16 0.00 (0.77)
Class Y................ 13.38 (0.03) 7.47 7.44 0.00 (0.77)
For the Year Ended
December 31, 1996
Class A................ 10.00 (0.03) 3.80 3.77 0.00 (0.41)
Class B................ 10.00 (0.02) 3.75 3.73 0.00 (0.41)
Class Y................ 10.00 0.00 3.79 3.79 0.00 (0.41)
THE HARTFORD SMALL
COMPANY FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ 12.16 (0.04) 1.14 1.10 0.00 (0.12)
Class B................ 12.04 (0.07) 1.12 1.05 0.00 (0.12)
Class Y................ 12.24 (0.01) 1.16 1.15 0.00 (0.12)
For the Year Ended
December 31, 1997
Class A................ 10.68 (0.02) 2.05 2.03 0.00 (0.55)
Class B................ 10.65 (0.03) 1.97 1.94 0.00 (0.55)
Class Y................ 10.71 (0.01) 2.09 2.08 0.00 (0.55)
For the Year Ended
December 31, 1996
Class A................ 10.00 (0.02) 1.42 1.40 0.00 (0.72)
Class B................ 10.00 (0.02) 1.39 1.37 0.00 (0.72)
Class Y................ 10.00 0.00 1.43 1.43 0.00 (0.72)
THE HARTFORD
INTERNATIONAL
OPPORTUNITIES FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ 10.58 0.07 1.62 1.69 0.00 0.00
Class B................ 10.49 0.03 1.61 1.64 0.00 0.00
Class Y................ 10.62 0.09 1.64 1.73 0.00 0.00
For the Year Ended
December 31, 1997
Class A................ 10.72 0.09 (0.01) 0.08 (0.05) (0.17)
Class B................ 10.69 0.07 (0.06) 0.01 (0.04) (0.17)
Class Y................ 10.73 0.15 (0.02) 0.13 (0.07) (0.17)
For the Year Ended
December 31, 1996
Class A................ 10.00 0.02 0.79 0.81 (0.06) (0.03)
Class B................ 10.00 (0.01) 0.80 0.79 (0.07) (0.03)
Class Y................ 10.00 0.00 0.84 0.84 (0.08) (0.03)
THE HARTFORD MIDCAP FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ 10.00 (0.02) 1.50 1.48 0.00 0.00
Class B................ 10.00 (0.04) 1.48 1.44 0.00 0.00
Class Y................ 10.00 (0.01) 1.51 1.50 0.00 0.00
THE HARTFORD GROWTH AND
INCOME FUND
April 30, 1998 to June
30, 1998 (Unaudited)
Class A................ 10.00 0.00 0.15 0.15 0.00 0.00
Class B................ 10.00 (0.01) 0.15 0.14 0.00 0.00
Class Y................ 10.00 0.01 0.15 0.16 0.00 0.00
</TABLE>
(a) Information presented relates to a capital share outstanding throughout the
indicated period.
(b) Annualized.
(c) Does not include sales charges.
(d) Portfolio turnover rate is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
52
<PAGE>
- --------------------------------------------------------------------------------
-- RATIOS AND SUPPLEMENTAL DATA
- --
- --------------------------
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIO OF
EXPENSES TO
NET INCREASE NET ASSETS AVERAGE
(DECREASE) NET ASSET AT END OF NET ASSETS
IN VALUE AT PERIOD BEFORE WAIVERS
TOTAL NET ASSET END TOTAL (IN AND
DISTRIBUTIONS VALUE OF PERIOD RETURN(C) THOUSANDS) REIMBURSEMENTS(B)
---------- ------------ --------- ------- ----------- ------------------
<S> <C> <C> <C> <C> <C> <C>
THE HARTFORD CAPITAL
APPRECIATION FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ $(0.13) $ 0.93 $20.83 $5.33 $353,396 --
Class B................ (0.13) 0.85 20.56 4.98 290,183 --
Class Y................ (0.13) 0.97 21.02 5.49 27,616 --
For the Year Ended
December 31, 1997
Class A................ (0.77) 6.54 19.90 55.11 233,601 1.64%
Class B................ (0.77) 6.39 19.71 54.15 174,392 2.38
Class Y................ (0.77) 6.67 20.05 56.00 29,693 1.13
For the Year Ended
December 31, 1996
Class A................ (0.41) 3.36 13.36 37.75 9,028 4.10
Class B................ (0.41) 3.32 13.32 37.35 889 9.05
Class Y................ (0.41) 3.38 13.38 37.95 107 93.64
THE HARTFORD SMALL
COMPANY FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ (0.120) 0.98 13.14 9.05 30,892 1.55
Class B................ (0.120) 0.93 12.97 8.73 14,699 2.25
Class Y................ (0.120) 1.03 13.27 9.40 11,490 1.06
For the Year Ended
December 31, 1997
Class A................ (0.55) 1.48 12.16 19.28 19,391 1.77
Class B................ (0.55) 1.39 12.04 18.49 9,694 2.53
Class Y................ (0.55) 1.53 12.24 19.69 9,062 1.30
For the Year Ended
December 31, 1996
Class A................ (0.72) 0.68 10.68 14.11 3,845 4.24
Class B................ (0.72) 0.65 10.65 13.81 66 20.03
Class Y................ (0.72) 0.71 10.71 14.41 8 115.33
THE HARTFORD
INTERNATIONAL
OPPORTUNITIES FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ -- 1.69 12.27 15.97 26,705 1.99
Class B................ -- 1.64 12.13 15.63 10,630 2.70
Class Y................ -- 1.73 12.35 16.29 9,742 1.50
For the Year Ended
December 31, 1997
Class A................ (0.22) (0.14) 10.58 0.84 15,701 2.25
Class B................ (0.21) (0.20) 10.49 0.12 7,188 3.03
Class Y................ (0.24) (0.11) 10.62 1.31 6,422 1.76
For the Year Ended
December 31, 1996
Class A................ (0.09) 0.72 10.72 8.14 4,294 5.35
Class B................ (0.10) 0.69 10.69 7.86 163 32.61
Class Y................ (0.11) 0.73 10.73 8.36 64 126.52
THE HARTFORD MIDCAP FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ -- 1.48 11.48 14.92 14,428 1.6
Class B................ -- 1.44 11.44 14.51 5,261 2.32
Class Y................ -- 1.50 11.50 15.12 1,942 1.11
THE HARTFORD GROWTH AND
INCOME FUND
April 30, 1998 to June
30, 1998 (Unaudited)
Class A................ -- 0.15 10.15 1.50 3,338 1.58
Class B................ -- 0.14 10.14 1.40 849 2.16
Class Y................ -- 0.16 10.16 1.60 305 1.11
<CAPTION>
RATIO OF
EXPENSES TO RATIO OF NET
AVERAGE INVESTMENT
NET ASSETS INCOME (LOSS) PORTFOLIO
AFTER WAIVERS AND TO AVERAGE TURNOVER
REIMBURSEMENTS(B) NET ASSETS(B) RATE(D)
----------------- ------------- ---------
<S> <C> <C> <C>
THE HARTFORD CAPITAL
APPRECIATION FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ 1.40% (0.70)% 60.83%
Class B................ 2.09 (1.40) --
Class Y................ 0.99 (0.28) --
For the Year Ended
December 31, 1997
Class A................ 1.45 (0.80) 119.61
Class B................ 2.15 (1.46) --
Class Y................ 1.00 (0.35) --
For the Year Ended
December 31, 1996
Class A................ 1.45 (0.70) 149.99
Class B................ 2.15 (1.53) --
Class Y................ 1.00 0.04 --
THE HARTFORD SMALL
COMPANY FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ 1.45 (0.67) 161.62
Class B................ 2.15 (1.37) --
Class Y................ 1.00 (0.20) --
For the Year Ended
December 31, 1997
Class A................ 1.45 (0.61) 255.37
Class B................ 2.15 (1.30) --
Class Y................ 1.00 (0.14) --
For the Year Ended
December 31, 1996
Class A................ 1.45 (0.60) 69.92
Class B................ 2.15 (1.30) --
Class Y................ 1.00 0.03 --
THE HARTFORD
INTERNATIONAL
OPPORTUNITIES FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ 1.65 1.38 50.74
Class B................ 2.35 0.63 --
Class Y................ 1.20 1.80 --
For the Year Ended
December 31, 1997
Class A................ 1.65 0.88 59.16
Class B................ 2.35 (0.05) --
Class Y................ 1.20 1.33 --
For the Year Ended
December 31, 1996
Class A................ 1.65 0.51 21.51
Class B................ 2.35 (0.86) --
Class Y................ 1.20 0.57 --
THE HARTFORD MIDCAP FUND
For the Six Months
Ended June 30, 1998
(Unaudited)
Class A................ 1.45 (0.73)(b) 39.87
Class B................ 2.15 (1.39)(b) --
Class Y................ 1 (0.28)(b) --
THE HARTFORD GROWTH AND
INCOME FUND
April 30, 1998 to June
30, 1998 (Unaudited)
Class A................ 1.45 0.05(b) 1.06
Class B................ 2.15 (0.13)(b) --
Class Y................ 1 0.24(b) --
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
53
