<PAGE>
[LOGO] 1998
Hartford Life ANNUAL REPORT
- Manager Discussions
- Financials
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THE HARTFORD
SMALL COMPANY FUND
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Portfolio Manager
Q.
How Did The Fund Perform?
[PHOTOGRAPH]
The Hartford Small Company Fund (Class A)
outperformed its Lipper peer group for the year
ending December 31, 1998. The Fund provided a
total return of 10.5% versus -0.3% for the
MARK S. WATERHOUSE Lipper Small Com-pany Mutual Fund Average,
Vice President placing the Fund in the first quartile of
Wellington Management performance for funds in the group.
Company, LLP
Q.
Why Did The Fund Perform This Way?
The greatest single contributor to the great
performance in 1998 was maintaining our
conviction on our holdings during periods of
market volatility, while adhering to our
discipline and taking advantage of market
gyrations to acquire attractively valued
smaller companies.
Q.
What Is Your Outlook For 1999?
We are very optimistic about small cap stocks
in 1999. In light of larger cap companies',
greater reliance on markets outside of the U.S.
for profit growth, aggregate earnings estimates
for small caps exceeds the expected growth for
major companies. In addition, due to their
recent relative under-performance, small caps
are attractively valued with multiples, in some
instances, at 15-20 year lows. Going forward,
we will continue to focus on identifying the
most attractive opportunities in the small cap
universe. As a guide, we will concentrate on
Performance Overview those economic sectors where we see the
7/22/96 - 12/31/98 greatest potential and on those small companies
Growth of a $10,000 with strong, healthy balance sheets and 15-20%
investment in Class A earnings growth.
which includes Sales Charge
[GRAPH]
$14,208 Small Company Fund
$9,450 starting value
$13,711 Russell 2000
$10,000 starting value
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RETURNS (INCEPTION 7/22/96)
Non Sales Charge Adjusted Sales Charge Adjusted
------------------------- ---------------------
ANNUALIZED ANNUALIZED
1 YEAR(1) SINCE INCEPT.(1) 1 YEAR(2) SINCE INCEPT.(2)
Small Co "A" 10.46% 18.16% 4.38% 15.46%
Small Co "B" 9.73% 17.39% 4.73% 16.41%
Small Co "C"* 9.82% 17.43% 7.72% 16.94%
Russell 2000 -2.55% 13.79%
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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, B AND C SHARES REFLECTS THE MAXIMUM
SALES CHARGE AND CDSC, RESPECTIVELY.
*CLASS C SHARES COMMENCED OPERATIONS ON 8/1/98. PERFORMANCE PRIOR TO 8/1/98
REFLECTS CLASS B PERFORMANCE LESS CLASS C EXPENSES.
A $10,000 INVESTMENT IN THE FUND'S CLASS B SHARES AT THE FUND'S INCEPTION ON
7/22/96 WOULD HAVE BEEN VALUED AT $14,797 ON 12/31/98 ($14,497 WITH A
REDEMPTION AT THE END OF THE PERIOD.)
A $10,000 INVESTMENT IN THE FUND'S CLASS C SHARES AT THE FUND'S INCEPTION ON
7/22/96 WOULD HAVE BEEN VALUED AT $14,660 ON 12/31/98 (WITH A REDEMPTION AT
THE END OF THE PERIOD THE VALUE WOULD REMAIN THE SAME BECAUSE THE CDSC PERIOD
HAS EXPIRED.)
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THE HARTFORD
CAPITAL APPRECIATION FUND
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Portfolio Manager
Q.
How Did The Fund Perform?
[PHOTOGRAPH]
The Hartford Capital Appreciation Fund (Class A)
underperformed its Lipper peer group for the
year ending December 31, 1998. The Fund
provided a total return of 3.3% versus 20% for
SAUL J. PANNELL, CFA the Lipper Capital Appreciation Average. Since
Senior Vice President inception, the mutual fund still ranks near the
and Partner top of the Lipper universe.
Wellington Management
Company, LLP Q.
Why Did The Fund Perform This Way?
Due to their perceived safe haven
characteristics, large cap, blue chip stocks
dominated the market in 1998. There was a wide
disparity between the performance of
"mega-caps" and everything else in the market.
The Capital Appreciation Fund is heavily
invested in mid and small cap companies that we
believe have great capital appreciation
potential. The significant exposure to smaller
companies, which has been greater than many
funds with a similar mandate, pressured the
Fund's returns this year.
Q.
What Is Your Outlook For 1999?
During 1999, we may well see a reversal of the
large cap dominance of the equity market.
Therefore, we are confident that our approach
of focusing on opportunities for capital
appreciation regardless of market
capitalization, will provide satisfactory
returns. The overall strategy for the Fund is
dual faceted: we will emphasize smaller
companies with dynamic earnings growth
prospects, and use larger stocks as
opportunistic trades where we see a catalyst
for out-performance. We have tended to roam
off the beaten path, historically where the
most upside potential has been. This approach
should provide positive absolute and relative
Performance Overview results over the longer term. While the
7/22/96 - 12/31/98 overall market outlook remains controversial,
Growth of a $10,000 macroeconomic and valuation factors endorse our
investment in Class A positioning.
which includes Sales Charge
[GRAPH]
$20,850 Capital Appreciation Fund
$9,450 starting value
$20,241 S&P 500
$10,000 starting value
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RETURNS (INCEPTION 7/22/96)
Non Sales Charge Adjusted Sales Charge Adjusted
------------------------- ---------------------
ANNUALIZED ANNUALIZED
1 YEAR(1) SINCE INCEPT.(1) 1 YEAR(2) SINCE INCEPT.(2)
Cap Ap "A" 3.26% 38.24% -2.42% 35.07%
Cap Ap "B" 2.52% 37.32% -2.48% 36.54%
Cap Ap "C"* 2.59% 37.36% 0.56% 36.79%
S&P 500 28.60% 33.45%
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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, B AND C SHARES REFLECTS THE MAXIMUM
SALES CHARGE AND CDSC, RESPECTIVELY.
*CLASS C SHARES COMMENCED OPERATIONS ON 8/1/98. PERFORMANCE PRIOR TO 8/1/98
REFLECTS CLASS B PERFORMANCE LESS CLASS C EXPENSES.
A $10,000 INVESTMENT IN THE FUND'S CLASS B SHARES AT THE FUND'S INCEPTION ON
7/22/96 WOULD HAVE BEEN VALUED AT $21,707 ON 12/31/98 ($21,407 WITH A
REDEMPTION AT THE END OF THE PERIOD.)
A $10,000 INVESTMENT IN THE FUND'S CLASS C SHARES AT THE FUND'S INCEPTION ON
7/22/96 WOULD HAVE BEEN VALUED AT $21,504 ON 12/31/98 (WITH A REDEMPTION AT
THE END OF THE PERIOD THE VALUE WOULD REMAIN THE SAME BECAUSE THE CDSC PERIOD
HAS EXPIRED.)
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THE HARTFORD
MIDCAP FUND
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Portfolio Manager
Q.
How Did The Fund Perform?
[PHOTOGRAPH]
The Hartford MidCap Fund (Class A) outperformed
its Lipper peer group for the year ending
December 31, 1998. The Fund provided a total
return of 23.1% versus 12.2% for the Lipper
MidCap Average, placing the Fund in the first
quartile of performance for funds in the group.
PHILLIP H. PERELMUTER
Vice President Q.
Wellington Management Why Did The Fund Perform This Way?
Company, LLP
Although the market's performance in 1998 was
driven by large cap stocks, mid caps fared
relatively well. A strong rebound in the 4th
quarter was especially helpful. Midcaps, as
measures by the S&P Mid Cap 400 Index, returned
28.2% in the 4th quarter alone. This
performance was better than that of both large
cap and small cap stocks in the same period. In
addition, our steadfast focus on high-quality
mid-cap companies operating in the highest
growth areas of the economy provided a
performance advantage versus the competition.
Q.
What Is Your Outlook For 1999?
Although large cap stocks outperformed mid caps
in 1998, we may be near an inflection point in
relative performance. Mid cap stocks generally
perform well relative to large caps after
Federal Reserve interest rate cuts, of which we
have recently had three. Also supportive of
the asset class, the current gap in valuations
between mid and large caps is very wide. We
will continue to focus on companies on the
verge of greatness within our five sectors of
opportunity: consumer products, finance,
healthcare, services, and technology. These are
the sectors we believe will show faster
earnings growth than the overall market over
the next 12-18 months. High-quality,
market-leading, mid-cap growth companies, which
Performance Overview have minimal overseas exposure, should fare
12/31/97 - 12/31/98 relatively well during a period of modest
Growth of a $10,000 growth in the U.S. and continued turbulence
investment in Class A overseas.
which includes Sales Charge
[GRAPH]
$11,913 S&P 400
$10,000 starting value
$11,624 MidCap
$9,450 starting value
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RETURNS (INCEPTION 12/31/97)
Non Sales Charge Adjusted Sales Charge Adjusted
------------------------- ---------------------
ANNUALIZED ANNUALIZED
1 YEAR(1) SINCE INCEPT.(1) 1 YEAR(2) SINCE INCEPT.(2)
MidCap "A" 23.12% 22.93% 16.35% 16.35%
MidCap "B" 22.32% 22.13% 17.32% 18.15%
MidCap "C"* 22.30% 22.11% 20.08% 20.90%
S&P 400 18.25% 19.08%
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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, B AND C SHARES REFLECTS THE MAXIMUM
SALES CHARGE AND CDSC, RESPECTIVELY.
*CLASS C SHARES COMMENCED OPERATIONS ON 8/1/98. PERFORMANCE PRIOR TO 8/1/98
REFLECTS CLASS B PERFORMANCE LESS CLASS C EXPENSES.
A $10,000 INVESTMENT IN THE FUND'S CLASS B SHARES AT THE FUND'S INCEPTION ON
12/31/97 WOULD HAVE BEEN VALUED AT $12,220 ON 12/31/98 ($11,820 WITH A
REDEMPTION AT THE END OF THE PERIOD.)
A $10,000 INVESTMENT IN THE FUND'S CLASS C SHARES AT THE FUND'S INCEPTION ON
12/31/97 WOULD HAVE BEEN VALUED AT $12,096 ON 12/31/98 (WITH A REDEMPTION AT
THE END OF THE PERIOD THE VALUE WOULD REMAIN THE SAME BECAUSE THE CDSC PERIOD
HAS EXPIRED.)
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THE HARTFORD
INTERNATIONAL OPPORTUNITIES FUND
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Portfolio Manager
Q.
How Did The Fund Perform?
[PHOTOGRAPH]
The Hartford International Opportunities Fund
(Class A) slightly underperformed its Lipper
peer group for the year ending Decem-ber 31,
1998. The Fund provided a total return of 12.5%
versus 13.1% for the Lipper International
Average.
TROND SKRAMSTAD Q.
Senior Vice President Why Did The Fund Perform This Way?
and Partner
Wellington Management Despite a volatile year for international
Company, LLP equity markets, The Hartford International
Opportunities Fund fared well as a result of
its strategic country allocation decisions.
The Fund was well positioned to benefit from
strong performing markets in Europe and limited
losses in crisis areas such as Japan and the
Emerging Markets. The Fund was also
repositioned to have greater exposure to large
cap stocks capable of withstanding the
challenges of less dynamic global economic
growth.
Q.
What Is Your Outlook For 1999?
We expect lackluster corporate profits growth
globally in 1999. Although profit growth will
slow, equities should post good performance due
to lower global interest rates. We believe
owning stable growth companies during such a
period of decelerating corporate profits and
global economic weakness is the prudent
investment strategy. We are bullish on Europe,
where the corporate restructuring and
increased focus on shareholder returns will be
accelerated by the Euro. We are concerned by
the slow pace of change in Japan and will limit
exposure to this market until we see
substantial progress on structural reforms.
Despite Japan's problems, there are select
investment opportunities, such as in the
attractively valued technology sector. The
investment risks in the Emerging Markets
Performance Overview currently outweigh the prospective rewards, but
7/22/96 - 12/31/98 we will continue to monitor developments in
Growth of a $10,000 these regions to identify attractive
investment in Class A opportunities.
which includes Sales Charge
[GRAPH]
$14,182 EAFE GDP
$10,000 starting value
$11,597 International Opportunities
$9,450 starting value
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RETURNS (INCEPTION 7/22/96)
Non Sales Charge Adjusted Sales Charge Adjusted
------------------------- ---------------------
ANNUALIZED ANNUALIZED
1 YEAR(1) SINCE INCEPT.(1) 1 YEAR(2) SINCE INCEPT.(2)
Int'l Opp "A" 12.53% 8.74% 6.34% 6.25%
Int'l Opp "B" 11.82% 8.02% 6.82% 6.91%
Int'l Opp "C"* 11.87% 8.04% 9.75% 7.60%
EAFE GDP** 26.71% 15.37%
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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, B AND C SHARES REFLECTS THE MAXIMUM
SALES CHARGE AND CDSC, RESPECTIVELY.
*CLASS C SHARES COMMENCED OPERATIONS ON 8/1/98. PERFORMANCE PRIOR TO 8/1/98
REFLECTS CLASS B PERFORMANCE LESS CLASS C EXPENSES.
A $10,000 INVESTMENT IN THE FUND'S CLASS B SHARES AT THE FUND'S INCEPTION ON
7/22/96 WOULD HAVE BEEN VALUED AT $12,075 ON 12/31/98 ($11,775 WITH A
REDEMPTION AT THE END OF THE PERIOD.)
A $10,000 INVESTMENT IN THE FUND'S CLASS C SHARES AT THE FUND'S INCEPTION ON
7/22/96 WOULD HAVE BEEN VALUED AT $11,960 ON 12/31/98 (WITH A REDEMPTION AT
THE END OF THE PERIOD THE VALUE WOULD REMAIN THE SAME BECAUSE THE CDSC PERIOD
HAS EXPIRED.)
** THE MORGAN STANLEY EUROPE AUSTRALIA FAR EAST GDP - NET INDEX
<PAGE>
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THE HARTFORD
GLOBAL LEADERS FUND
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Portfolio Managers
RAND L. ALEXANDER, CFA Q.
Senior Vice President How Did The Fund Perform?
and Partner [PHOTOGRAPH]
Wellington Management With a return of 30.4% during the
Company, LLP fourth quarter, The Hartford Global
Leaders Fund (Class A) ranked #2 in
the Lipper Global category which
returned 17.5% for the quarter ending
December 31st, 1998.
[PHOTOGRAPH] ANDREW S. OFFIT
Vice President Q.
Wellington Management Why Did The Fund Perform This Way?
Company, LLP
The portfolio invests in the best
companies around the world. We focus
on companies with superior products,
services and management. These
global leaders are capable of
delivering admirable earnings even
during difficult economic times. The
factors which give them comparative
advantages translate into strong
earnings, growth and stock price
performance.
Q.
What Is Your Outlook For 1999?
Overall, there is a clear focus
toward growth sectors and, while the
valuations may be higher in these
areas, we believe our strategy is
appropriate for this stage of the
world economy. Commodity price
deflation, industrial capacity
oversupply, and intense competition
worldwide have made it difficult for
companies to grow revenues and
profits. Companies that can deliver
growth in this environment can
command investor attention. The
sectors on which we are currently
most focused are information
technology, healthcare, and
information and entertainment. We
Performance Overview are cautious on the materials and
9/30/98 - 12/31/98 energy sectors which require a more
Growth of a $10,000 robust economic backdrop for
Investment in Class A healthier earnings growth.
which includes Sales Charge
[GRAPH]
$12,319 Global Leaders
$9,450 starting value
$12,115 MSCI World
$10,000 starting value
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RETURNS (INCEPTION 9/30/98)
Non Sales Charge Adjusted Sales Charge Adjusted
------------------------- ---------------------
CUMULATIVE CUMULATIVE
SINCE INCEPT.(1) SINCE INCEPT.(2)
Global Leaders "A" 30.36% 23.19%
Global Leaders "B" 30.16% 25.16%
Global Leaders "C"* 30.16% 27.86%
MSCI World** 21.15%
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THE CHART REPRESENTS A HYPOTHETICAL INVESTMENT IN THE GLOBAL LEADERS 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, B AND C SHARES REFLECTS THE MAXIMUM
SALES CHARGE AND CDSC, RESPECTIVELY.
A $10,000 INVESTMENT IN THE FUND'S CLASS B SHARES AT THE FUND'S INCEPTION ON
9/30/98 WOULD HAVE BEEN VALUED AT $13,016 ON 12/31/98 ($12,516 WITH A
REDEMPTION AT THE END OF THE PERIOD.)
A $10,000 INVESTMENT IN THE FUND'S CLASS C SHARES AT THE FUND'S INCEPTION ON
9/30/98 WOULD HAVE BEEN VALUED AT $12,886 ON 12/31/98 ($12,786 WITH A
REDEMPTION AT THE END OF THE PERIOD.)
** THE MORGAN STANLEY EUROPE AUSTRALIA FAR EAST GDP - NET INDEX
<PAGE>
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THE HARTFORD
STOCK FUND
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Portfolio Manager
Q.
How Did The Fund Perform?
[PHOTOGRAPH]
The Hartford Stock Fund (Class A) outperformed
its Lipper peer group for the year ending
December 31, 1998. The Fund provided a total
return of 31.3% versus 22.9% for the Lipper
Growth Average, placing the Fund in the second
quartile of performance for funds in the group.
RAND L. ALEXANDER, CFA
Senior Vice President Q.
and Partner Why Did The Fund Perform This Way?
Wellington Management
Company, LLP In spite of the market turmoil in 1998,
investors who focused on large-cap,
high-quality companies with consistent or
accelerating earnings growth were well
rewarded. The market's performance was
dominated by a small number of very large
companies who were able to deliver in a
difficult environment. These are exactly the
type of companies in which the Stock Fund
invests. The Fund also benefited from our
overweight positions in technology, healthcare,
retail and media -- sectors which performed well
in 1998.
Q.
What Is Your Outlook For 1999?
With low inflation, less dynamic economic
growth, and the potential for lower interest
rates, we expect the market to continue to
focus on companies with consistent and
predictable earnings growth. The Federal
Reserve's interest rate cuts have been welcomed
by Wall Street but have not had much impact on
global economic growth, therefore, we expect
further efforts on the part of the world's
central bankers to stimulate the worldwide
economy. These efforts could lead to a period
of rapid growth which would focus investors'
Performance Overview attention on more cyclical sectors of the
7/22/96 - 12/31/98 market. At such time, we would increase our
Growth of a $10,000 exposure to commodities, producers and
investment in Class A manufacturing.
which includes Sales Charge
[GRAPH]
$20,241 S&P 500
$10,000 starting value
$18,891 Stock Fund
$9,450 starting value
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RETURNS (INCEPTION 7/22/96)
Non Sales Charge Adjusted Sales Charge Adjusted
------------------------- ---------------------
ANNUALIZED ANNUALIZED
1 YEAR(1) SINCE INCEPT.(1) 1 YEAR(2) SINCE INCEPT.(2)
Stock "A" 31.33% 32.77% 24.11% 29.73%
Stock "B" 30.38% 31.84% 25.38% 31.01%
Stock "C"* 30.32% 31.81% 28.02% 31.27%
S&P 500 28.60% 33.45%
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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, B AND C SHARES REFLECTS THE MAXIMUM SALES
CHARGE AND CDSC, RESPECTIVELY.
*CLASS C SHARES COMMENCED OPERATIONS ON 8/1/98. PERFORMANCE PRIOR TO 8/1/98
REFLECTS CLASS B PERFORMANCE LESS CLASS C EXPENSES.
A $10,000 INVESTMENT IN THE FUND'S CLASS B SHARES AT THE FUND'S INCEPTION ON
7/22/96 WOULD HAVE BEEN VALUED AT $19,650 ON 12/31/98 ($19,350 WITH A
REDEMPTION AT THE END OF THE PERIOD.)
A $10,000 INVESTMENT IN THE FUND'S CLASS C SHARES AT THE FUND'S INCEPTION ON
7/22/96 WOULD HAVE BEEN VALUED AT $19,445 ON 12/31/98 (WITH A REDEMPTION AT
THE END OF THE PERIOD THE VALUE WOULD REMAIN THE SAME BECAUSE THE CDSC PERIOD
HAS EXPIRED.)
<PAGE>
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THE HARTFORD
GROWTH AND INCOME FUND
- ------------------------------------------------------------------------------
Portfolio Manager
Q.
How Did The Fund Perform?
[PHOTOGRAPH]
The Hartford Growth and Income Fund (Class A)
outperformed its Lipper peer group for the
quarter ending December 31, 1998. The Fund
provided a total return of 22.9% versus 17.8%
for the Lipper Growth & Income Average.
JAMES A. RULLO, CFA Q.
Vice President Why Did The Fund Perform This Way?
Wellington Management
Company, LLP Large-cap stocks were the key beneficiaries of
the fourth quarter stock market rally. Within
large stocks, growth companies, the focus of
the Growth & Income Fund, outperformed value
stocks. In addition, our significant weighting
in technology stocks, which led the stock
market recovery, also boosted returns.
Q.
What Is Your Outlook For 1999?
We anticipate slower U.S. economic activity and
corporate earnings growth in 1999. However,
the interest rate environment is very positive
for equities, particularly for those stocks
which produce stable earnings growth. We
expect additional interest rate cuts by the
Federal Reserve, which will also be supportive
of stock market returns. Finding superior
stocks will be a more difficult task in 1999 as
Performance Overview valuations are stretched by historical
4/30/98 - 12/31/98 standards. However, we still feel there are
Growth of a $10,000 interesting opportunities in technology and
investment in Class A mid-to-small drug stocks.
which includes Sales Charge
[GRAPH]
$11,171 S&P 500
$10,000 starting value
$10,847 Growth and Income Fund
$9,450 starting value
- ---------------------------------------------------------------------
RETURNS (INCEPTION 4/30/98)
Non Sales Charge Adjusted Sales Charge Adjusted
------------------------- ---------------------
CUMULATIVE CUMULATIVE
SINCE INCEPT.(1) SINCE INCEPT.(2)
Grow & Inc "A" 14.78% 8.47%
Grow & Inc "B" 14.21% 9.21%
Grow & Inc "C"* 14.27% 12.13%
S&P 500 11.71%
- ---------------------------------------------------------------------
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, B AND C SHARES REFLECTS THE MAXIMUM
SALES CHARGE AND CDSC, RESPECTIVELY.
*CLASS C SHARES COMMENCED OPERATIONS ON 8/1/98. PERFORMANCE PRIOR TO 8/1/98
REFLECTS CLASS B PERFORMANCE LESS CLASS C EXPENSES.
A $10,000 INVESTMENT IN THE FUND'S CLASS B SHARES AT THE FUND'S INCEPTION ON
4/30/98 WOULD HAVE BEEN VALUED AT $11,421 ON 12/31/98 ($10,921 WITH A
REDEMPTION AT THE END OF THE PERIOD.)
A $10,000 INVESTMENT IN THE FUND'S CLASS C SHARES AT THE FUND'S INCEPTION ON
4/30/98 WOULD HAVE BEEN VALUED AT $11,313 ON 12/31/98 ($11,213 WITH A
REDEMPTION AT THE END OF THE PERIOD.)
<PAGE>
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THE HARTFORD
DIVIDEND AND GROWTH FUND
- ------------------------------------------------------------------------------
Portfolio Manager
Q.
How Did The Fund Perform?
[PHOTOGRAPH]
The Hartford Dividend and Growth Fund (Class A)
outperformed its Lipper peer group for the year
ending December 31, 1998. The Fund provided a
total return of 14.5% versus 10.9% for the
Lipper Equity Income Average, placing the Fund
in the second quartile of performance for the
LAURIE A. GABRIEL, CFA funds in the group.
Senior Vice President
and Partner Q.
Wellington Management Why Did The Fund Perform This Way?
Company, LLP
During 1998, growth-oriented stocks generally
outpaced value stocks. In light of our
dividend-oriented value bias, some of the
Fund's holdings were under pressure. However,
our substantial holdings in the industrial/
commercial and information/entertainment
sectors proved beneficial to the Fund.
Q.
What Is Your Outlook For 1999?
We will continue to look for value plays across
all industries. This is a key feature of the
Fund's investment strategy. Since the focus of
our investment approach is stock selection, the
sector representation will be fairly stable
over time. In light of slower global growth
and benign inflation trends, we are well
positioned going into 1999 as we have limited
our exposure to cyclical companies
(commodities, manufacturing) while maximizing
holdings in more promising areas such as
Performance Overview healthcare and consumer products. In our stock
7/22/96 - 12/31/98 selection, we will continue identifying stocks
Growth of a $10,000 with above average yields and below average
investment in Class A price/earnings ratios.
which includes Sales Charge
[GRAPH]
$20,241 S&P 500
$10,000 starting value
$16,338 Dividend and Growth Fund
$9,450 starting value
- ---------------------------------------------------------------------
RETURNS (INCEPTION 7/22/96)
Non Sales Charge Adjusted Sales Charge Adjusted
------------------------- ---------------------
ANNUALIZED ANNUALIZED
1 YEAR(1) SINCE INCEPT.(1) 1 YEAR(2) SINCE INCEPT.(2)
Div & Grow "A" 14.47% 25.11% 8.17% 22.24%
Div & Grow "B" 13.62% 24.21% 8.62% 23.31%
Div & Grow "C"* 13.72% 24.25% 11.58% 23.74%
S&P 500 28.60% 33.45%
- ---------------------------------------------------------------------
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, B AND C SHARES REFLECTS THE MAXIMUM
SALES CHARGE AND CDSC, RESPECTIVELY.
*CLASS C SHARES COMMENCED OPERATIONS ON 8/1/98. PERFORMANCE PRIOR TO 8/1/98
REFLECTS CLASS B PERFORMANCE LESS CLASS C EXPENSES.
A $10,000 INVESTMENT IN THE FUND'S CLASS B SHARES AT THE FUND'S INCEPTION ON
7/22/96 WOULD HAVE BEEN VALUED AT $16,987 ON 12/31/98 ($16,687 WITH A
REDEMPTION AT THE END OF THE PERIOD.)
A $10,000 INVESTMENT IN THE FUND'S CLASS C SHARES AT THE FUND'S INCEPTION ON
7/22/96 WOULD HAVE BEEN VALUED AT $16,831ON 12/31/98 (WITH A REDEMPTION AT
THE END OF THE PERIOD THE VALUE WOULD REMAIN THE SAME BECAUSE THE CDSC PERIOD
HAS EXPIRED.)
<PAGE>
- ------------------------------------------------------------------------------
THE HARTFORD
ADVISERS FUND
- ------------------------------------------------------------------------------
Portfolio Managers
RAND L. ALEXANDER, CFA Q.
Senior Vice President How Did The Fund Perform?
and Partner [PHOTOGRAPH]
Wellington Management The Hartford Advisers Fund (Class A)
Company, LLP outperformed its Lipper peer group
for the year ending December 31,
1998. The Fund had a total return of
21.1% versus 14.3% for the Lipper
Flexible Average, placing the fund in
the first quartile of performance for
funds in the group.
[PHOTOGRAPH] PAUL D. KAPLAN
Senior Vice President Q.
and Partner Why Did The Fund Perform This Way?
Wellington Management
Company, LLP During volatile times, allocating
assets between stocks and bonds
within a portfolio is an enormous
advantage. Merely having that
flexibility, however, is not enough.
The asset allocation we used within
the portfolio allowed us to capture
strong stock market performance and
utilize fixed income to protect the
Fund during difficult times, such as
in the third quarter '98. By
gradually adjusting the weighting
between stocks, bonds, and cash we
were able to use our expectations of
market developments to produce
attractive fund returns.
Q.
What Is Your Outlook For 1999?
Short- and intermediate-term yields
are likely to fall as the eventual
weakening of the economy will permit
the Federal Reserve to lower
short-term interest rates. The
current backdrop of slower economic
growth and historically low inflation
bodes well for the U.S. fixed income
market.
While we are optimistic about U.S.
equities, we are also wary about
market valuation levels. Therefore,
we will maintain our exposure to
equities around 55%, this is a
neutral stance versus our benchmark
index. In addition, we will continue
to focus on well-established, larger
Performance Overview companies which will be capable of
7/22/96 - 12/31/98 delivering consistent earnings
Growth of a $10,000 results despite a more challenging
investment in Class A economic environment.
which includes Sales Charge
[GRAPH]
$20,241 S&P 500
$10,000
$15,741 Advisers Fund
$9,450 starting value
$12,622 Lehman Govt/Corp
$10,000
- ---------------------------------------------------------------------
RETURNS (INCEPTION 7/22/96)
Non Sales Charge Adjusted Sales Charge Adjusted
------------------------- ---------------------
ANNUALIZED ANNUALIZED
1 YEAR(1) SINCE INCEPT.(1) 1 YEAR(2) SINCE INCEPT.(2)
Advisers "A" 21.09% 23.22% 14.43% 20.40%
Advisers "B" 20.27% 22.40% 15.27% 21.48%
Advisers "C"* 20.15% 22.35% 17.95% 21.85%
S&P 500 28.60% 33.45%
Lehman G/C 9.47% 10.00%
- ---------------------------------------------------------------------
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, B AND C SHARES REFLECTS THE MAXIMUM
SALES CHARGE AND CDSC, RESPECTIVELY.
*CLASS C SHARES COMMENCED OPERATIONS ON 8/1/98. PERFORMANCE PRIOR TO 8/1/98
REFLECTS CLASS B PERFORMANCE LESS CLASS C EXPENSES.
A $10,000 INVESTMENT IN THE FUND'S CLASS B SHARES AT THE FUND'S INCEPTION ON
7/22/96 WOULD HAVE BEEN VALUED AT $16,388 ON 12/31/98 ($16,088 WITH A
REDEMPTION AT THE END OF THE PERIOD.)
A $10,000 INVESTMENT IN THE FUND'S CLASS C SHARES AT THE FUND'S INCEPTION ON
7/22/96 WOULD HAVE BEEN VALUED AT $16,207 ON 12/31/98 (WITH A REDEMPTION AT
THE END OF THE PERIOD THE VALUE WOULD REMAIN THE SAME BECAUSE THE CDSC PERIOD
HAS EXPIRED.)
<PAGE>
- ------------------------------------------------------------------------------
THE HARTFORD
HIGH YIELD FUND
- ------------------------------------------------------------------------------
Portfolio Manager
Q.
How Did The Fund Perform?
[PHOTOGRAPH]
The Hartford High Yield Fund commenced
operations on October 1, 1998. The Fund's
Class A shares placed in the 2nd quartile of
its Lipper peer group for the three-months
ending December 31, 1998, producing a total
return of 3.33% versus the 2.75% return of the
ALISON D. GRANGER, CFA Lipper High Yield Fixed Income Fund average.
Senior Vice President The Fund's return also outpaced that of its
The Hartford Investment benchmark index, the Lehman Corporate High
Management Company (HIMCO) Yield Index, which returned 2.13% for the
quarter.
Q.
Why Did The Fund Perform This Way?
The decline in the high yield fixed income
market during early October provided the Fund
with the opportunity to purchase many of its
initial investments at levels which contributed
to the Fund's overall outperformance. The
Fund's allocation to issues which possess a
relatively high degree of market liquidity
aided the portfolio's performance, as these
securities were in demand during the fourth
quarter. An underweighting of the steel,
finance, and energy industries during the
quarter also provided additional performance at
the margin.
Q.
What Is Your Outlook For 1999?
As we enter 1999, we are emphasizing three
themes in the high yield fund. The first theme
reflects our belief that there are
opportunities in selected
economically-sensitive issues which, in the
opinion of our analysts, have the wherewithal
to survive the current downturn. While the
outlook for a number of the cyclical industries
remains challenging, the pricing of these
securities reflects a high level of perceived
risk. We therefore feel that the risk/reward
characteristics of these issues are very
attractive.
The second portfolio theme we are emphasizing
focuses on the process of deregulation,
convergence and consolidation that can be
witnessed in a variety of industries, including
the telecommunications and independent power
producing industries. When these conditions
are present, we seek to purchase companies
whose assets are attractive on their own or to
a higher-rated potential acquirer in the
changing competitive environment.
Our final theme aims to invest in relatively
liquid issues of large com-panies who are
leaders in their industries. We seek out
investments in these companies in part because
of their expected continued ability to access
capital in these times of declining
availability of credit. These companies are
Performance Overview also likely to have the staying power to
9/30/98 - 12/31/98 weather a period of declining earnings, and may
Growth of a $10,000 be able to find opportunities left behind by
Investment in Class A smaller, weaker competitors.
which includes Sales Charge
[GRAPH]
$10,213 Lehman High Yield
$10,000 starting value
$9,868 High Yield Fund
$9,550 starting value
- ---------------------------------------------------------------------
RETURNS (INCEPTION 9/30/98)
Non Sales Charge Adjusted Sales Charge Adjusted
------------------------- ---------------------
CUMULATIVE CUMULATIVE
SINCE INCEPT.(1) SINCE INCEPT.(2)
High Yield "A" 3.33% -1.32%
High Yield "B" 3.09% -1.91%
High Yield "C" 3.08% 1.05%
Lehman High Yield 2.13%
- ---------------------------------------------------------------------
THE CHART REPRESENTS A HYPOTHETICAL INVESTMENT IN THE HIGH YIELD 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, B AND C SHARES REFLECTS THE MAXIMUM
SALES CHARGE AND CDSC, RESPECTIVELY.
A $10,000 INVESTMENT IN THE FUND'S CLASS B SHARES AT THE FUND'S INCEPTION ON
9/30/98 WOULD HAVE BEEN VALUED AT $10,309 ON 12/31/98 ($9,809 WITH A
REDEMPTION AT THE END OF THE PERIOD.)
A $10,000 INVESTMENT IN THE FUND'S CLASS C SHARES AT THE FUND'S INCEPTION ON
9/30/98 WOULD HAVE BEEN VALUED AT $10,205 ON 12/31/98 ($10,105 WITH A
REDEMPTION AT THE END OF THE PERIOD.)
<PAGE>
- ------------------------------------------------------------------------------
THE HARTFORD
BOND INCOME STRATEGY FUND
- ------------------------------------------------------------------------------
Portfolio Manager
Q.
How Did The Fund Perform?
[PHOTOGRAPH]
The Hartford Bond Income Strategy Fund Class A
shares placed in the 2nd quartile of its Lipper
peer group for the year ending December 31,
1998, producing a total return of 7.50% versus
the 6.25% return of the Lipper Corporate Debt
"BBB" rated Mutual Fund Universe.
ALISON D. GRANGER, CFA
Senior Vice President Q.
The Hartford Investment Why Did The Fund Perform This Way?
Management Company (HIMCO)
The average maturity and interest rate duration
of the Fund remained longer than its benchmark
index for 1998, resulting in price gains as
Treasury yields declined by roughly a full
percent during the year. We began 1998 with a
higher than average portfolio credit quality,
and continued to increase Treasury holdings
through September. This contributed to the
Fund's out-performance relative to its peer
average during the credit market declines of
the summer and early fall. Although they were
relatively minimal, the fund's holdings in
non-investment grade debt offset some of the
outperformance produced by its longer duration
and high average credit quality. A
concentration in U.S. Treasury Inflation
Protected Securities failed to produce the
expected returns we anticipated, as their
historically attractive real yields did not
decline to the extent expected given 1998's
significant decline in nominal Treasury yields.
Q.
What Is Your Outlook For 1999?
The domestic economy appears indecisive.
Consumer-related indicators, such as retail
sales and housing markets are booming, but
inflation remains in check for now. We believe
any Fed-easing bias will be delayed, and could
be tempered by foreign influences, with the
advent of the Euro and potential repatriation
of assets to Japan. Corporate, asset-backed
and mortgage-related fixed income securities
are still at historically attractive levels,
but pitfalls abound for the unwary. For that
reason, we expect to continue our high-average-
credit-quality approach to management of the
Performance Overview Fund. Select opportunities can be found in the
7/22/96 - 12/31/98 commodity sectors, which underperformed during
Growth of a $10,000 1998, and now display an attractive risk/reward
investment in Class A profile.
which includes Sales Charge
[GRAPH]
$12,622 Lehman Govt/Corp
$10,000 starting value
$12,027 Bond Income Strategy
$9,550 starting value
- ---------------------------------------------------------------------
RETURNS (INCEPTION 7/22/96)
Non Sales Charge Adjusted Sales Charge Adjusted
------------------------- ---------------------
ANNUALIZED ANNUALIZED
1 YEAR(1) SINCE INCEPT.(1) 1 YEAR(2) SINCE INCEPT.(2)
Bond "A" 7.48% 9.89% 2.64% 7.84%
Bond "B" 6.70% 9.07% 1.70% 7.98%
Bond "C"* 6.74% 9.09% 4.67% 8.65%
Lehman G/C 9.47% 10.00%
- ---------------------------------------------------------------------
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, B AND C SHARES REFLECTS THE MAXIMUM
SALES CHARGE AND CDSC, RESPECTIVELY.
*CLASS C SHARES COMMENCED OPERATIONS ON 8/1/98. PERFORMANCE PRIOR TO 8/1/98
REFLECTS CLASS B PERFORMANCE LESS CLASS C EXPENSES.
A $10,000 INVESTMENT IN THE FUND'S CLASS B SHARES AT THE FUND'S INCEPTION ON
7/22/96 WOULD HAVE BEEN VALUED AT $12,366 ON 12/31/98 ($12,066 WITH A
REDEMPTION AT THE END OF THE PERIOD.)
A $10,000 INVESTMENT IN THE FUND'S CLASS C SHARES AT THE FUND'S INCEPTION ON
7/22/96 WOULD HAVE BEEN VALUED AT $12,247 ON 12/31/98 (WITH A REDEMPTION AT
THE END OF THE PERIOD THE VALUE WOULD REMAIN THE SAME BECAUSE THE CDSC PERIOD
HAS EXPIRED.)
<PAGE>
THE HARTFORD MONEY MARKET FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- -----------
<C> <S> <C>
COMMERCIAL PAPER -- 68.5%
$1,000,000 Abbey National, North America
4.83% due 03/15/99.................... $ 990,205
1,000,000 Air Products & Chemicals
4.98% due 03/01/99.................... 991,838
1,000,000 Allergan, Inc.
5.60% due 01/06/99.................... 999,222
1,000,000 Bass Finance Ltd.
5.20% due 01/19/99.................... 997,400
850,000 Cafco
5.35% due 01/05/99.................... 849,494
700,000 Caterpillar Financial Services, Inc.
5.42% due 02/22/99.................... 694,519
1,000,000 Ciesco L.P.
5.15% due 01/19/99.................... 997,425
1,000,000 Coca-Cola Co.
4.98% due 03/01/99.................... 991,838
700,000 Colgate-Palmolive Co.
5.15% due 02/12/99.................... 695,794
1,000,000 Countrywide Home Loan
5.22% due 01/29/99.................... 995,940
750,000 Daimler-Benz N.A.
5.42% due 02/25/99.................... 743,789
1,160,000 Eaton Corp.
5.08% due 04/26/99.................... 1,141,175
1,000,000 Emerson Electric Co.
5.05% due 02/11/99.................... 994,248
1,000,000 General Electric Capital Corporation
5.33% due 02/25/99.................... 991,856
1,000,000 Goldman Sachs Group L.P. (The)
5.18% due 02/18/99.................... 993,093
1,000,000 GTE Corporation
5.40% due 02/11/99.................... 993,850
750,000 Halifax PLC
5.47% due 01/25/99.................... 747,265
1,000,000 IBM Credit Corp.
5.24% due 01/05/99.................... 999,417
1,000,000 International Lease Finance
5.10% due 02/05/99.................... 995,041
1,094,000 Market Street Funding
5.75% due 01/06/99.................... 1,093,126
1,000,000 Merita Bank Ltd.
5.11% due 01/25/99.................... 996,593
1,000,000 Merrill Lynch & Co.
5.14% due 02/10/99.................... 994,288
1,000,000 Morgan Stanley Group, Inc.
5.30% due 02/01/99.................... 995,436
1,000,000 Morgan (J.P.) & Co
5.25% due 01/14/99.................... 998,104
1,000,000 Motorola, Inc.
5.02% due 02/26/99.................... 992,191
1,000,000 National Fuel Gas Co.
5.35% due 02/17/99.................... 993,015
1,000,000 National Rural Utilities
4.95% due 04/16/99.................... 985,562
1,000,000 Pacific Gas and Electric Co.
5.65% due 01/04/99.................... 999,529
1,000,000 Penney (J.C.) Co.
5.20% due 02/19/99.................... 992,922
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- -----------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
$1,000,000 Rubbermaid, Inc.
5.05% due 03/08/99.................... $ 990,741
1,000,000 Sharp Electronics Corp.
5.55% due 01/12/99.................... 998,304
1,000,000 Toyota Motor Credit Corp.
5.15% due 02/05/99.................... 994,993
1,000,000 Westpac Capital Corp.
5.05% due 01/13/99.................... 998,316
1,000,000 Zeneca, Inc.
5.07% due 01/19/99.................... 997,482
-----------
Total commercial paper.................. $32,824,011
-----------
-----------
CORPORATE NOTES -- 17.3%
1,000,000 CIT Group Holdings, Inc.
6.25% due 03/22/99.................... $ 1,001,973
750,000 Finova Capital
6.05% due 10/08/99.................... 754,273
1,000,000 Ford Motor Credit Co.
7.25% due 05/15/99.................... 1,005,448
1,000,000 General Motors Corp.
5.3417% due 02/12/99.................. 999,986
1,000,000 Honda Motor Corp.
5.3297% due 04/16/99.................. 1,000,000
1,000,000 John Deere Capital
5.2467% due 02/09/99.................. 999,935
1,000,000 Key Bank N.A.
5.1807% due 08/20/99.................. 999,988
750,000 Lehman Brothers Holdings, Inc.
5.2487% due 01/13/99.................. 750,000
750,000 PepsiCo, Inc.
5.209% due 08/19/99................... 749,466
-----------
Total corporate notes................... $ 8,261,069
-----------
-----------
REPURCHASE AGREEMENT -- 14.7%
7,059,000 Interest in $121,902,000 joint $ 7,059,000
repurchase
agreement dated 12/31/98 with State
Street Bank 4.750% due 01/04/99;
maturity amount $7,062,726
(Collateralized by $121,902,000 U.S.
Treasury Bonds 8.125% due 05/15/21)....
-----------
-----------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
DIVERSIFICATION OF NET ASSETS:
Total commercial paper (cost
$32,824,011)........................... 68.5% $32,824,011
Total corporate notes (cost
$8,261,069)............................ 17.3 8,261,069
Total repurchase agreement (cost
$7,059,000)............................ 14.7 7,059,000
----- -----------
Total investment in securities
(total cost $48,144,080*).............. 100.5 48,144,080
Cash, receivables and other assets...... 2.0 947,610
Payable for Fund shares redeemed........ (2.2) (1,040,937)
Payable for dividends................... (0.3) (167,357)
----- -----------
Net assets.............................. 100.0% $47,883,396
----- -----------
----- -----------
* Aggregate cost for federal income tax purposes.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
14
<PAGE>
<TABLE>
<CAPTION>
VALUE
-----------
<S> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $.001 per share;
800,000,000 shares authorized; 47,883,395 shares
outstanding...................................... $ 47,883
Paid-in surplus................................... 47,835,513
-----------
Net assets........................................ $47,883,396
-----------
-----------
Class A
Shares of beneficial interest outstanding,
$0.001 par value; 400,000,000 shares authorized
(Net assets $29,423,829)....................... $29,423,829
-----------
-----------
</TABLE>
<TABLE>
<S> <C>
Net asset value and offering price per share.... $1.00
-----
-----
</TABLE>
<TABLE>
<S> <C>
Class B
Shares of beneficial interest outstanding,
$0.001 par value; 200,000,000 shares authorized
(Net assets $11,935,792)....................... $11,935,792
-----------
-----------
</TABLE>
<TABLE>
<S> <C>
Net asset value and offering price per share.... $1.00
-----
-----
</TABLE>
<TABLE>
<S> <C>
Class C
Shares of beneficial interest outstanding,
$0.001 par value; 100,000,000 shares authorized
(Net assets $1,203,354)........................ $1,203,354
----------
----------
</TABLE>
<TABLE>
<S> <C>
Net asset value per share....................... $1.00
-----
-----
Maximum offering price per share ($1.00
DIVIDED BY 99.0%)............................. $1.01
-----
-----
</TABLE>
<TABLE>
<S> <C>
Class Y
Shares of beneficial interest outstanding,
$0.001 par value; 100,000,000 shares authorized
(Net assets $5,320,420)........................ $5,320,420
----------
----------
</TABLE>
<TABLE>
<S> <C>
Net asset value and offering price per share.... $1.00
-----
-----
<CAPTION>
<S> <C>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
15
<PAGE>
THE HARTFORD BOND INCOME STRATEGY FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- -----------
<C> <S> <C>
ASSET-BACKED SECURITIES -- 0.8%
$ 400,000 California Infrastructure Pacific Gas &
Electric, Series 1997-1 Class A6
6.32% due 09/25/05.................... $ 411,332
250,000 California Infrastructure Southern
California Edison, Series 1997-1 Class
A5
6.28% due 09/25/05.................... 260,605
-----------
Total asset backed securities........... $ 671,937
-----------
-----------
COMMERCIAL MORTGAGE-BACKED SECURITIES -- 2.9%
64,055 Capital Lease Funding Securitization,
Series 1997-CTL1 Class A1
7.421% due 06/22/24................... $ 66,076
1,200,000 Comed Transitional Funding Trust, Series
1998-1 Class A5
5.44% due 03/25/07.................... 1,203,312
575,000 DLJ Commercial Mortgage Corp., Series
1998-CF1 Class B2
7.33% due 01/15/10.................... 542,880
500,000 Premier Auto Trust, Series 1998-5 Class
A2
5.07% due 04/09/01.................... 499,155
-----------
Total commercial mortgage-backed
securities.............................. $ 2,311,423
-----------
-----------
CORPORATE NOTES -- 53.7%
COLLEGES -- 1.9%
800,000 Massachusetts Institute of Technology
7.25% due 11/02/2096.................. $ 938,099
500,000 Yale University
7.375% due 04/15/2096................. 585,968
-----------
1,524,067
-----------
ENERGY & SERVICES -- 4.7%
1,150,000 Amoco Company
6.00% due 06/09/08.................... 1,193,470
200,000 Clark Refining & Marketing, Inc.
8.375% due 11/15/07................... 188,000
550,000 Enterprise Oil PLC
6.50% due 05/01/05.................... 552,484
200,000 Enterprise Oil PLC
6.70% due 09/15/07.................... 198,677
200,000 Gulf Canada Resources Ltd.
8.375% due 11/15/05................... 197,000
100,000 Gulf Canada Resources Ltd.
8.25% due 03/15/17.................... 99,381
300,000 Lasmo (USA). Inc.
8.375% due 06/01/23................... 306,421
350,000 Occidental Petroleum Corp.
7.375% due 11/15/08................... 359,191
200,000 R & B Falcon Corp.
7.375% due 04/15/18................... 162,264
160,000 R & B Falcon Corp.
9.50% due 12/15/08.................... 159,800
100,000 Tesoro Petroleum Corp.
9.00% due 07/01/08.................... 97,000
250,000 Tuboscope, Inc.
7.50% due 02/15/08.................... 227,500
-----------
3,741,188
-----------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- -----------
<C> <S> <C>
</TABLE>
CORPORATE NOTES -- (CONTINUED)
<TABLE>
<C> <S> <C>
FINANCIAL SERVICES -- 16.0%
$ 400,000 Abbey National First Capital
8.20% due 10/15/04.................... $ 447,535
500,000 Abbey National PLC
6.69% due 10/17/05.................... 523,427
145,000 Allstate Corp.
6.75% due 05/15/18.................... 151,025
500,000 Amvescap PLC
6.60% due 05/15/05.................... 500,906
500,000 Associates Corporation of North America
5.75% due 11/01/03.................... 503,571
500,000 Bank of New York Co., Inc. (The)
7.625% due 07/15/02................... 534,350
300,000 BankBoston Corp.
7.00% due 09/15/07.................... 312,884
500,000 Bayerische Landesbank (NY)
6.375% due 10/15/05................... 526,724
375,000 CIT Group, Inc.
5.57% due 12/08/03.................... 372,163
500,000 Citicorp, Inc.
7.125% due 05/15/06................... 535,791
350,000 Conseco, Inc.
7.875% due 12/15/00................... 347,096
300,000 Dime Bancorp, Inc.
10.50% due 11/15/05................... 315,000
300,000 Equity Residential Properties Trust
7.125% due 10/15/17................... 278,067
500,000 Ford Motor Credit Co.
6.125% due 01/09/06................... 509,980
200,000 General Motors Acceptance Corp.
5.507% due 08/18/03................... 198,109
500,000 Household Netherlands BV
6.20% due 12/01/03.................... 503,105
700,000 Inter-American Development Bank
8.875% due 06/01/09................... 893,987
200,000 Interpool, Inc.
7.35% due 08/01/07.................... 190,441
1,000,000 Landeskreditbank Baden-Wurttemberg
7.625% due 02/01/23................... 1,161,610
500,000 Massachusetts Mutual Life Insurance Co.
7.625% due 11/15/23................... 552,953
1,260,000 NationsBank Corp
7.00% due 09/15/01.................... 1,308,731
500,000 Phoenix Home Life Insurance Co.
6.95% due 12/01/06.................... 514,068
200,000 Swiss Bank Corporation-NY
7.375% due 06/15/17................... 212,143
300,000 Trenwick Group, Inc.
6.70% due 04/01/03.................... 307,391
350,000 Wachovia Corporation
6.25% due 08/01/08.................... 363,674
400,000 Wachovia Corporation
5.625% due 12/15/08................... 397,606
300,000 Westinghouse Credit Corp.
8.875% due 06/14/14................... 330,631
-----------
12,792,968
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
16
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- -----------
<C> <S> <C>
</TABLE>
CORPORATE NOTES -- (CONTINUED)
<TABLE>
<C> <S> <C>
FOOD, BEVERAGE & TOBACCO -- 1.6%
$ 100,000 Keebler Corp.
10.75% due 07/01/06................... $ 111,500
150,000 Nabisco (RJR) Holdings Corp.
8.50% due 07/01/07.................... 148,071
250,000 Ralcorp Holdings, Inc.
8.75% due 09/15/04.................... 290,294
700,000 Seagram (J) & Sons, Inc.
6.25% due 12/15/01.................... 698,931
-----------
1,248,796
-----------
FUNERAL/CEMETERY SERVICES -- 0.3%
300,000 Loewen Group International, Inc.
7.60% due 06/01/08.................... 241,500
-----------
HEALTH CARE -- 1.0%
100,000 Columbia Healthcare
7.50% due 12/15/23.................... 89,631
200,000 Columbia/HCA Healthcare Corp.
7.50% due 11/15/96.................... 174,090
500,000 Tenet Healthcare Corp.
7.625% due 06/01/08................... 519,471
-----------
783,192
-----------
HOME BUILDING -- 0.2%
100,000 U.S. Home Corp.
8.25% due 08/15/04.................... 100,250
50,000 U.S. Home Corp.
7.95% due 03/01/01.................... 51,498
-----------
151,748
-----------
HOTELS & GAMING -- 2.4%
75,000 Boyd Gaming Corp.
9.50% due 07/15/07.................... 74,812
310,000 Circus Circus Enterprises, Inc.
7.625% due 07/15/13................... 278,111
250,000 Harrah's Operating Co., Inc.
7.875% due 12/15/05................... 252,770
350,000 La Quinta Motor Inns
7.25% due 03/15/04.................... 322,635
100,000 MGM Grand, Inc.
6.875% due 02/06/08................... 93,409
200,000 Park Place Entertainment Corp.
7.875% due 12/15/05................... 200,250
756,000 Starwood Hotels & Resorts
7.375% due 11/15/15................... 669,557
-----------
1,891,544
-----------
INDUSTRIAL -- 3.6%
355,000 Agriculture Minerals and Chemicals Co.
10.75% due 09/30/03................... 360,325
300,000 Allied Waste Industries, Inc.
7.625% due 01/01/06................... 301,500
140,000 Arco Chemical Co.
9.80% due 02/01/20.................... 140,915
200,000 Bausch & Lomb, Inc.
7.125% due 08/01/28................... 198,776
100,000 CSC Holdings, Inc.
9.875% due 02/15/13................... 112,000
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- -----------
<C> <S> <C>
</TABLE>
INDUSTRIAL -- (CONTINUED)
<TABLE>
<C> <S> <C>
$ 300,000 du Pont (E.I.) de Nemours & Co.
6.75% due 09/01/07.................... $ 328,270
100,000 Jones Intercable, Inc.
7.625% due 04/15/08................... 103,000
100,000 Jones Intercable, Inc.
9.625% due 03/15/02................... 107,500
100,000 Mark IV Industries, Inc.
7.50% due 09/01/07.................... 96,610
400,000 Placer Dome, Inc.
7.125% due 06/15/07................... 380,898
150,000 Protection One Alarm
8.125% due 01/15/09................... 150,000
300,000 Raytheon Co.
6.15% due 11/01/08.................... 305,880
100,000 Terra Industries, Inc.
10.50% due 06/15/05................... 103,000
150,000 UNISYS Corp.
12.00% due 04/15/03................... 168,000
-----------
2,856,674
-----------
MANUFACTURING -- 0.2%
200,000 AGCO Corp.
8.50% due 03/15/06.................... 194,000
-----------
MEDIA & SERVICES -- 2.7%
500,000 Hollinger International Publishing
8.625% due 03/15/05................... 527,500
450,000 News America Holdings
7.70% due 10/30/25.................... 483,447
100,000 News America, Inc.
7.30% due 04/30/28.................... 102,819
113,000 Paramount Communication
7.50% due 07/15/23.................... 115,710
200,000 Time Warner Enterprises, Inc.
8.875% due 10/01/12................... 246,778
500,000 Time Warner, Inc.
6.625% due 05/15/29................... 508,207
100,000 Turner Broadcasting System, Inc.
7.40% due 02/01/04.................... 106,955
100,000 Viacom, Inc.
6.75% due 01/15/03.................... 102,949
-----------
2,194,365
-----------
PACKAGING & CONTAINERS -- 0.4%
180,000 Domtar, Inc.
9.50% due 08/01/16.................... 185,400
100,000 Owens-Illinois, Inc.
8.10% due 05/15/07.................... 106,888
-----------
292,288
-----------
REAL ESTATE -- 0.3%
250,000 Duke Realty LP
7.25% due 09/22/02.................... 251,906
-----------
RETAIL -- 3.8%
600,000 Fred Meyer, Inc.
7.375% due 03/01/05................... 635,339
100,000 KMart Corp.
7.84% due 01/02/02.................... 101,026
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
17
<PAGE>
THE HARTFORD BOND INCOME STRATEGY FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- -----------
<C> <S> <C>
</TABLE>
CORPORATE NOTES -- (CONTINUED)
RETAIL -- (CONTINUED)
<TABLE>
<C> <S> <C>
$ 100,000 KMart Corp.
7.55% due 07/27/04.................... $ 100,355
275,000 KMart Corp.
7.95% due 02/01/23.................... 277,631
100,000 KMart Corp.
7.75% due 10/01/12.................... 102,534
500,000 Kroger Co. (The)
7.00% due 05/01/18.................... 511,543
200,000 Safeway, Inc.
6.50% due 11/15/08.................... 207,292
200,000 Saks, Inc.
7.25% due 12/01/04.................... 201,549
825,000 Stop & Shop Companies, Inc.
9.75% due 02/01/02.................... 915,703
-----------
3,052,972
-----------
SHIPBUILDING -- 0.1%
100,000 Newport News Shipbuilding
8.625% due 12/01/06................... 105,625
-----------
TELECOMMUNICATIONS -- 1.9%
100,000 Lenfest Communications, Inc.
8.375% due 11/01/05................... 108,000
100,000 Qwest Communications International, Inc.
7.25% due 11/01/08.................... 102,000
200,000 Rogers Cablesystems, Inc.
10.00% due 03/15/05................... 224,000
100,000 Rogers Cantel Mobile, Inc.
8.30% due 10/01/07.................... 100,500
400,000 Rogers Cantel Mobile, Inc.
9.75% due 06/01/16.................... 428,000
500,000 Tele-Communications, Inc.
6.58% due 02/15/05.................... 567,353
-----------
1,529,853
-----------
TEXTILE -- 0.3%
210,000 Westpoint Stevens, Inc.
7.875% due 06/15/08................... 213,412
-----------
TRANSPORTATION -- 4.4%
400,000 AMR Corp.
10.00% due 03/07/01................... 432,078
937,815 Continental Airlines, Inc.
7.461% due 04/01/13................... 980,053
300,000 Continental Airlines, Inc.
9.50% due 12/15/01.................... 313,500
200,000 CSC Holdings, Inc.
7.625% due 07/15/18................... 196,120
200,000 CSC Holdings, Inc.
7.25% due 07/15/08.................... 199,860
200,000 CSX Corp.
7.25% due 05/01/04.................... 213,144
600,000 Norfolk Southern Corp.
6.70% due 05/01/00.................... 609,681
500,000 United Air Lines, Inc.
9.75% due 08/15/21.................... 610,334
-----------
3,554,770
-----------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- -----------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
UTILITIES -- 7.9%
$ 200,000 AES Corp. (The)
8.375% due 08/15/07................... $ 201,500
100,000 AES Corp. Senior Subordinated Note
8.00% due 12/31/08.................... 99,013
200,000 Calpine Corp.
7.875% due 04/01/08................... 201,000
250,000 Cleveland Electric Illuminating Co.
7.13% due 07/01/07.................... 267,748
650,000 El Paso Electric Co.
8.90% due 02/01/06.................... 739,375
303,000 GTE Northwest, Inc.
5.55% due 10/15/08.................... 303,611
550,000 Illinois Power Co,
6.25% due 07/15/02.................... 559,819
500,000 Niagara Mohawk Power Corp.
7.375% due 07/01/03................... 513,856
300,000 Niagara Mohawk Power Corp.
7.25% due 10/01/02.................... 307,314
250,000 Pacific Gas & Electric Co.
7.25% due 03/01/26.................... 260,429
300,000 Pacific Gas and Electric Co.
7.05% due 03/01/24.................... 333,330
1,050,000 PacifiCorp
6.375% due 05/15/08................... 1,093,380
200,000 PacifiCorp
6.12% due 01/15/06.................... 205,037
125,000 Public Service EI-IBC
7.00% due 09/01/24.................... 132,215
250,000 Public Service EI-MBIA
6.75% due 01/01/16.................... 266,433
150,000 Public Service Electric & Gas Co.,
MBIA-Insured
6.75% due 01/01/16.................... 159,859
250,000 Southern Investments UK PLC
6.80% due 12/01/06.................... 259,240
450,000 Worldcom, Inc.
6.125% due 08/15/01................... 457,541
-----------
6,360,700
-----------
Total corporate notes................... $42,981,568
-----------
-----------
ENHANCED EQUIPMENT TRUST CERTIFICATES -- 0.1%
90,154 Norwest Airlines Trust, Series 2
11.30% due 06/21/14................... $ 112,075
-----------
-----------
FOREIGN/YANKEE BONDS & NOTES -- 2.5%
FOREIGN CORPORATIONS -- 0.7%
500,000 KFW International Finance, Inc.
9.50% due 12/15/00.................... $ 541,212
-----------
FOREIGN GOVERNMENTS -- 1.8%
250,000 Province of Alberta
4.875% due 10/29/03................... 246,957
285,000 Province of Manitoba
5.50% due 10/01/08.................... 285,277
500,000 Republic of Argentina
11.00% due 12/04/05................... 497,185
200,000 Republic of Colombia
7.625% due 02/15/07................... 165,288
175,000 Russian Federation (The)
10.00% due 06/26/07................... 47,358
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
18
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- -----------
<C> <S> <C>
</TABLE>
FOREIGN/YANKEE BONDS & NOTES -- (CONTINUED)
FOREIGN GOVERNMENTS -- (CONTINUED)
<TABLE>
<C> <S> <C>
$ 250,000 United Mexican States Discount Bond
6.6171% due 12/31/19.................. $ 202,500
-----------
1,444,565
-----------
Total foreign/yankee bonds & notes...... $ 1,985,777
-----------
-----------
U.S. TREASURIES & FEDERAL AGENCIES -- 34.2%
U.S. TREASURY BONDS -- 14.2%
200,000 5.25% due 11/15/28...................... $ 205,000
315,000 5.50% due 08/15/28...................... 330,159
25,000 6.00% due 02/15/26...................... 27,321
1,190,000 6.125% due 11/15/27..................... 1,332,800
1,745,000 6.625% due 02/15/27..................... 2,064,008
1,190,000 6.875% due 08/15/25..................... 1,443,618
835,000 7.50% due 11/15/16 - 11/15/24........... 1,065,364
400,000 7.625% due 02/15/25..................... 526,625
3,255,000 8.125% due 08/15/19..................... 4,352,546
-----------
11,347,441
-----------
U.S. TREASURY INFLATION-INDEXED
SECURITIES -- 4.5%
458,825 3.375% due 01/15/07..................... 457,721
3,196,316 3.625% due 07/15/02 - 04/15/28.......... 3,176,899
-----------
3,634,620
-----------
U.S. TREASURY NOTES -- 8.0%
520,000 4.75% due 11/15/08...................... 524,062
400,000 5.375% due 07/31/00..................... 404,375
400,000 5.625% due 11/30/99 - 12/31/99.......... 400,894
230,000 5.875% due 01/31/99..................... 230,143
100,000 6.25% due 06/30/02...................... 104,937
300,000 6.50% due 08/31/01 - 10/15/06........... 322,973
120,000 6.875% due 05/15/06..................... 135,637
1,535,000 7.00% due 07/15/06...................... 1,747,981
1,510,000 7.50% due 10/31/99 - 02/15/05........... 1,661,275
750,000 7.875% due 11/15/04..................... 868,828
-----------
6,401,105
-----------
U.S. TREASURY STRIPS -- 0.2%
300,000 0.00% due 02/15/08...................... 192,119
-----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION -- 7.3%
150,000 5.25% due 01/15/03...................... 151,212
5,411,734 6.00% due 02/01/13 - 06/01/28........... 5,414,550
246,036 6.50% due 09/01/28...................... 247,420
-----------
5,813,182
-----------
Total U.S. treasuries & federal
agencies................................ $27,388,467
-----------
-----------
SHORT-TERM SECURITIES -- 4.2%
COMMERCIAL PAPER -- 2.5%
500,000 Airtouch Communications, Inc.
6.05% due 01/04/99.................... $ 499,747
500,000 CSX Corp.
6.18% due 01/20/99.................... 498,369
500,000 ICI Wilmington, Inc.
6.15% due 01/04/99.................... 499,743
500,000 Litton Industries
6.10% due 01/11/99.................... 499,152
-----------
1,997,011
-----------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- -----------
<C> <S> <C>
</TABLE>
SHORT-TERM SECURITIES -- (CONTINUED)
<TABLE>
<C> <S> <C>
REPURCHASE AGREEMENT -- 1.7%
$1,337,000 Interest in $121,902,000 joint $ 1,337,000
repurchase
agreement dated 12/31/98 with State
Street Bank 4.750% due 01/04/99;
maturity amount $1,337,706
(Collateralized by $121,902,000 U.S.
Treasury Bonds 8.125% due 05/15/21)....
-----------
Total short-term securities............. $ 3,334,011
-----------
-----------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
DIVERSIFICATION OF NET ASSETS:
Total asset-backed securities (cost
$649,779).............................. 0.8% $ 671,937
Total commercial mortgage-backed
securities (cost $2,301,632)........... 2.9 2,311,423
Total corporate notes (cost
$41,772,402)........................... 53.7 42,981,568
Total enhanced equipment trust
certificates (cost $110,014)........... 0.1 112,075
Total foreign/yankee bonds & notes (cost
$2,112,510)............................ 2.5 1,985,777
Total U.S. treasuries & federal agencies
(cost $26,912,939)..................... 34.2 27,388,467
Total short-term securities (cost
$3,334,011)............................ 4.2 3,334,011
----- -----------
Total investment in securities (total
cost $77,193,287)...................... 98.4 78,785,258
Cash, receivables and other assets...... 2.0 1,634,590
Payable for Fund shares redeemed........ (0.3) (275,917)
Other liabilities....................... (0.1) (43,616)
----- -----------
Net assets.............................. 100.0% $80,100,315
----- -----------
----- -----------
</TABLE>
<TABLE>
<S> <C>
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $0.001 per share;
300,000,000 shares authorized; 7,480,051 shares
outstanding...................................... $ 7,480
Paid-in surplus................................... 78,280,955
Accumulated undistributed net investment income... 60,865
Accumulated undistributed net realized gains on
investments...................................... 159,044
Unrealized appreciation of investments............ 1,591,971
-----------
Net assets........................................ $80,100,315
-----------
-----------
</TABLE>
<TABLE>
<S> <C>
Class A
Net asset value per share ($47,142,735
DIVIDED BY 4,381,279 shares outstanding)
(125,000,000 shares authorized)................ $10.76
------
------
Maximum offering price per share ($10.76
DIVIDED BY 95.5%)............................. $11.27
------
------
Class B
Net asset value per share ($16,771,709
DIVIDED BY 1,563,857 shares outstanding)
(75,000,000 shares authorized)................. $10.72
------
------
Class C
Net asset value per share ($5,420,000
DIVIDED BY 538,797 shares outstanding)
(50,000,000 shares authorized)................. $10.06
------
------
Maximum offering price per share ($10.06
DIVIDED BY 99.0%)............................. $10.16
------
------
Class Y
Net asset value per share ($10,765,871
DIVIDED BY 996,118 shares outstanding)
(50,000,000 shares authorized)................. $10.81
------
------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
19
<PAGE>
THE HARTFORD ADVISERS FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- -------------- ------------
<C> <S> <C>
CORPORATE NOTES -- 11.3%
CONSUMER DURABLES -- 0.8%
$ 3,000,000 Ford Motor Co. $ 3,086,643
6.625% due 10/01/28...................
2,000,000 General Motors Corp. 2,087,340
6.75% due 05/01/28....................
------------
5,173,983
------------
CONSUMER NON-DURABLES -- 0.3%
2,000,000 Colgate-Palmolive 2,013,046
5.58% due 11/06/08....................
------------
FINANCIAL SERVICES -- 5.9%
2,000,000 Allmerica Financial Corp. 2,139,574
7.625% due 10/15/25...................
2,000,000 Allstate Corp. 2,083,108
6.75% due 05/15/18....................
1,420,000 Amerus Life Holdings 1,429,058
6.95% due 06/15/05....................
2,000,000 Associates Corp N.A. 2,032,176
6.00% due 07/15/05....................
500,000 BankAmerica Corp. 541,713
7.875% due 12/01/02...................
1,260,000 CIGNA Corp. 1,340,647
7.40% due 05/15/07....................
1,000,000 CIGNA Corp. 1,004,345
6.375% due 01/15/06...................
2,000,000 Equitable Cos., Inc. 2,056,308
7.00% due 04/01/28....................
500,000 Finova Capital Corporation 503,667
6.39% due 10/08/02....................
1,000,000 First Union National Bank 997,872
5.80% due 12/01/08....................
1,000,000 Fleet Financial Group 1,044,569
6.875% due 01/15/28...................
500,000 Heller Financial 503,876
6.382% due 11/10/00...................
2,000,000 Jackson National Life Insurance Co. 2,300,176
Surplus Notes**
8.15% due 3/15/27.....................
2,000,000 John Hancock Surplus Notes** 2,167,908
7.375% due 02/15/24...................
1,000,000 Liberty Financial Co. 1,028,908
6.75% due 11/15/08....................
2,000,000 Liberty Mutual Surplus Notes** 2,270,804
8.20% due 05/04/07....................
1,000,000 MBIA, Inc. 1,045,401
7.00% due 12/15/25....................
1,000,000 NationsBank Corp. 1,146,607
7.80% due 09/15/16....................
2,000,000 New England Mutual Life Insurance Co.** 2,148,196
7.875% due 2/15/24....................
2,000,000 Prudential Funding** 1,997,810
6.75% due 09/15/23....................
2,000,000 Torchmark Corp. 2,225,136
8.25% due 08/15/09....................
2,000,000 Toyota Motor Credit Corp. 1,985,000
5.50% due 12/15/08....................
2,000,000 Transamerica Financial 2,008,428
6.125% due 11/01/01...................
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- -------------- ------------
<C> <S> <C>
</TABLE>
FINANCIAL SERVICES -- (CONTINUED)
<TABLE>
<C> <S> <C>
$ 3,000,000 Wachovia Corp. $ 2,982,048
5.625% due 12/15/08...................
------------
38,983,335
------------
FOOD, BEVERAGE & TOBACCO -- 0.7%
2,000,000 Archer Daniels Midland 2,456,220
8.125% due 06/01/12...................
2,000,000 Hershey Foods Corp. 2,249,766
7.20% due 08/15/27....................
------------
4,705,986
------------
HEALTH CARE -- 0.2%
1,000,000 United Healthcare Corp.** 1,006,855
6.60% due 12/01/03....................
------------
INDUSTRIAL MATERIALS -- 2.2%
2,000,000 Alcan Aluminum Ltd 2,002,122
7.25% due 11/01/28....................
2,000,000 American Home Products 2,237,780
7.25% due 03/01/23....................
2,000,000 Becton Dickinson 2,106,816
6.70% due 08/01/28....................
2,000,000 Danaher Corp. 1,993,200
6.00% due 10/15/08....................
500,000 ICI Wilmington 505,946
6.95% due 09/15/04....................
2,000,000 Parker Hannifin Corp. 1,996,700
5.65% due 09/15/03....................
1,000,000 Praxair, Inc. 993,352
6.15% due 04/15/03....................
2,000,000 Rockwell International Corp. 2,082,916
6.70% due 01/15/28....................
500,000 Scripps (E.W.) Company 514,887
6.375% due 10/15/02...................
500,000 Williams Cos., Inc. 507,207
6.50% due 11/15/02....................
------------
14,940,926
------------
RETAIL -- 0.5%
1,345,000 Dayton Hudson Co. 1,364,374
5.875% due 11/01/08...................
2,000,000 Gap, Inc. (The) 2,205,972
6.90% due 09/15/07....................
------------
3,570,346
------------
SOFTWARE & SERVICES -- 0.1%
1,000,000 Computer Associates International 986,570
6.50% due 04/15/08....................
------------
UTILITIES -- 0.6%
1,000,000 New York Telephone 1,039,850
6.00% due 04/15/08....................
2,055,000 Sprint Capital Corp 2,096,825
6.125% due 11/15/08...................
785,000 U.S. West Capital Funding, Inc. 838,463
6.875% due 07/15/28...................
------------
3,975,138
------------
Total corporate notes................... $ 75,356,185
------------
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
20
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- -------------- ------------
<C> <S> <C>
COMMON STOCKS -- 52.7%
AEROSPACE & DEFENSE -- 0.6%
90,400 AlliedSignal, Inc....................... $ 4,005,850
------------
COMMUNICATIONS
EQUIPMENT -- 2.5%
*76,725 Cisco Systems, Inc...................... 7,121,039
55,900 Lucent Technologies, Inc................ 6,149,000
*51,000 Tellabs, Inc............................ 3,496,687
------------
16,766,726
------------
COMPUTERS & OFFICE
EQUIPMENT -- 2.6%
100,000 Compaq Computer Corporation............. 4,193,750
37,000 International Business Machines 6,835,750
Corporation.............................
50,900 Xerox Corporation....................... 6,006,200
------------
17,035,700
------------
CONSUMER NON-DURABLES -- 2.4%
40,000 Estee Lauder Companies - Class A........ 3,420,000
74,000 Gillette Company (The).................. 3,575,125
56,000 Kimberly-Clark Corporation.............. 3,052,000
63,800 Procter & Gamble Co..................... 5,825,737
------------
15,872,862
------------
CONSUMER SERVICES -- 1.3%
50,000 Eastman Kodak Company................... 3,600,000
64,800 McDonald's Corporation.................. 4,965,300
------------
8,565,300
------------
ELECTRONICS -- 3.8%
*101,500 Analog Devices, Inc..................... 3,184,562
120,300 General Electric Company................ 12,278,118
58,200 Intel Corporation....................... 6,900,337
40,000 Sony Corporation........................ 2,870,000
------------
25,233,017
------------
ENERGY & SERVICES -- 3.6%
95,000 Anadarko Petroleum Corporation.......... 2,933,125
*162,300 Conoco, Inc............................. 3,388,012
100,700 Exxon Corporation....................... 7,363,687
80,000 Royal Dutch Petroleum ADR............... 3,830,000
80,000 Schlumberger Ltd........................ 3,690,000
105,800 Unocal Corporation...................... 3,088,037
------------
24,292,861
------------
FINANCIAL SERVICES -- 7.9%
59,750 American International Group, Inc....... 5,773,343
167,000 Associates First Capital Corporation.... 7,076,625
152,050 Citigroup, Inc.......................... 7,526,475
60,000 First Union Corporation................. 3,648,750
110,000 Franklin Resources, Corp................ 3,520,000
127,500 Marsh & McLennan Companies, Inc......... 7,450,781
54,000 Mellon Bank Corporation................. 3,712,500
102,200 Merrill Lynch & Co., Inc................ 6,821,850
69,000 State Street Corporation................ 4,799,812
75,500 U.S. Bancorp............................ 2,680,250
------------
53,010,386
------------
FOOD, BEVERAGE & TOBACCO -- 1.5%
130,500 Philip Morris Co., Inc.................. 6,981,750
<CAPTION>
MARKET
SHARES VALUE
- -------------- ------------
<C> <S> <C>
</TABLE>
FOOD, BEVERAGE & TOBACCO -- (CONTINUED)
<TABLE>
<C> <S> <C>
37,900 Unilever NV - New York Shares........... $ 3,143,331
------------
10,125,081
------------
HEALTH CARE -- 8.4%
95,000 Abbott Laboratories..................... 4,655,000
123,000 American Home Products Corporation...... 6,926,460
70,000 Baxter International, Inc............... 4,501,875
114,800 Boston Scientific Corporation........... 3,078,075
176,000 Columbia/HCA Healthcare Corporation..... 4,356,000
60,000 Johnson & Johnson Co.................... 5,032,500
40,700 Merck & Co., Inc........................ 6,010,881
28,400 Pfizer, Inc............................. 3,562,425
75,900 Pharmacia & Upjohn, Inc................. 4,297,837
80,000 Service Corporation International....... 3,045,000
103,750 ServiceMaster Company (The)............. 2,288,984
50,000 SmithKline Beecham PLC ADR.............. 3,475,000
60,000 Warner-Lambert Company.................. 4,511,250
------------
55,741,287
------------
INDUSTRIAL MATERIALS -- 2.4%
40,100 Aluminum Company of America............. 2,989,956
26,200 Dow Chemical Company.................... 2,382,562
61,000 du Pont (E.I.) de Nemours & Company..... 3,236,812
107,900 Praxair, Inc............................ 3,803,475
*74,900 Sealed Air Corporation.................. 3,824,581
------------
16,237,386
------------
MANUFACTURING -- 0.5%
70,000 Caterpillar, Inc........................ 3,220,000
------------
MEDIA & SERVICES -- 3.2%
*80,600 AirTouch Communications, Inc............ 5,813,275
*120,000 CBS Corporation......................... 3,930,000
119,600 Gannett Co., Inc........................ 7,916,025
130,000 Walt Disney Company (The)............... 3,900,000
------------
21,559,300
------------
RETAIL -- 4.4%
96,800 CVS Corporation......................... 5,324,000
120,000 Gap, Inc. (The)......................... 6,750,000
104,000 Home Depot, Inc. (The).................. 6,363,500
80,000 Staples, Inc............................ 3,495,000
91,100 Wal-Mart Stores, Inc.................... 7,418,956
------------
29,351,456
------------
SOFTWARE & SERVICES -- 3.0%
44,000 Automatic Data Processing, Inc.......... 3,528,250
*65,000 Computer Sciences Corp.................. 4,188,437
94,500 First Data Corporation.................. 2,994,468
*67,000 Microsoft Corporation................... 9,292,062
------------
20,003,217
------------
TRANSPORTATION -- 1.5%
*66,900 AMR Corporation......................... 3,972,187
140,650 Southwest Airlines Co................... 3,155,834
68,600 Union Pacific Corporation............... 3,091,287
------------
10,219,308
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
21
<PAGE>
THE HARTFORD ADVISERS FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- -------------- ------------
<C> <S> <C>
</TABLE>
COMMON STOCKS -- (CONTINUED)
<TABLE>
<C> <S> <C>
UTILITIES -- 3.1%
25,000 Ameritech Corporation................... $ 1,584,375
80,000 Bell Atlantic Corporation............... 4,545,000
114,878 MCI WorldCom, Inc....................... 8,242,496
116,000 SBC Communications, Inc................. 6,220,500
------------
20,592,371
------------
Total common stocks..................... $351,832,108
------------
------------
PREFERRED STOCKS -- 0.1%
INDUSTRIAL MATERIALS -- 0.1%
9,400 Monsanto Company........................ $ 460,600
------------
------------
<CAPTION>
PRINCIPAL
AMOUNT
- --------------
<C> <S> <C>
U.S. TREASURIES & FEDERAL AGENCIES -- 32.6%
U.S. TREASURY NOTES -- 27.1%
$ 23,050,000 5.75% due 09/30/99 - 08/15/03........... $ 23,914,459
24,750,000 5.875% due 11/15/05..................... 26,405,156
15,000,000 6.125% due 08/15/07..................... 16,392,195
11,050,000 6.25% due 05/31/00...................... 11,284,812
18,550,000 6.375% due 08/15/02..................... 19,564,462
29,550,000 6.50% due 08/15/05 - 10/15/06........... 32,519,250
31,000,000 7.25% due 05/15/04...................... 34,739,375
6,000,000 7.50% due 02/15/05...................... 6,868,128
9,000,000 7.75% due 12/31/99...................... 9,270,000
------------
180,957,837
------------
FEDERAL HOME LOAN MORTGAGE ASSOCIATION
-- 0.0%
209,449 6.50% due 09/01/28...................... 211,021
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
-- 5.5%
30,132,421 6.00% due 06/15/28 - 01/01/29........... 29,864,206
5,008,709 6.50% due 04/15/26 - 03/15/28........... 5,057,243
1,313,533 7.00% due 07/15/23 - 04/15/26........... 1,344,169
------------
36,265,618
------------
Total U.S. treasuries & federal $217,434,476
agencies................................
------------
------------
SHORT-TERM SECURITIES -- 8.9%
REPURCHASE AGREEMENT
59,382,000 Interest in $1,162,198 joint repurchase $ 59,382,000
agreement dated 12/31/98 with State
Street Bank 4.773% due 01/04/99;
maturity amount $59,413,492
(Collateralized by $469,031,000 U.S.
Treasury Notes 4.00% - 7.775% due
10/31/99 - 02/15/07, $278,664,000 U.S.
Treasury Bonds 7.875% - 12.75% due
11/15/10 - 02/15/21, $414,503,000 U.S.
Treasury Strips (principal) 0.00% due
02/15/19 - 08/15/21)...................
------------
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
VALUE
------------
<S> <C> <C>
DIVERSIFICATION OF NET ASSETS:
Total corporate notes (cost
$74,108,749)........................... 11.3% $ 75,356,185
Total common stocks (cost
$287,778,964).......................... 52.7 351,832,108
Total preferred stocks (cost
$376,000).............................. 0.1 460,600
Total U.S. treasuries & federal agencies
(cost $212,589,265).................... 32.6 217,434,476
Total short-term securities (cost
$59,382,000)........................... 8.9 59,382,000
----- ------------
Total investment in securities (total
cost $634,234,978)..................... 105.6 704,465,369
Cash, receivables and other assets...... 2.5 16,595,472
Payable for securities purchased........ (7.9) (53,128,284)
Payable for Fund shares redeemed........ (0.1) (403,282)
Payable for dividends................... (0.0) (2,601)
Other liabilities....................... (0.1) (334,415)
----- ------------
Net assets.............................. 100.0% $667,192,259
----- ------------
----- ------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $0.001 per share;
400,000,000 shares authorized; 44,488,592 shares
outstanding...................................... $ 44,489
Paid-in surplus................................... 595,850,112
Accumulated undistributed net investment income... 248
Accumulated undistributed net realized gain on
investments...................................... 1,067,019
Unrealized appreciation of investments............ 70,230,391
------------
Net assets........................................ $667,192,259
------------
------------
</TABLE>
<TABLE>
<S> <C>
Class A
Net asset value per share ($316,435,000
DIVIDED BY 20,135,971 shares outstanding)
(175,000,000 shares authorized)................ $15.71
------
------
Maximum offering price ($15.71 DIVIDED BY
94.5%)......................................... $16.62
------
------
Class B
Net asset value per share ($237,958,738
DIVIDED BY 15,260,394 shares outstanding)
(75,000,000 shares authorized)................. $15.59
------
------
Class C
Net asset value per share ($54,907,392
DIVIDED BY 5,429,340 shares outstanding)
(50,000,000 shares authorized)................. $10.11
------
------
Maximum offering price ($10.11 DIVIDED BY
99.0%)......................................... $10.21
------
------
Class Y
Net asset value per share ($57,891,129
DIVIDED BY 3,662,887 shares outstanding)
(100,000,000 shares authorized)................ $15.80
------
------
</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 December 31,
1998, the market value of these securities amounted to $9,642,988 or 1.4% of
net assets.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
22
<PAGE>
THE HARTFORD DIVIDEND AND GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS -- 97.7%
AEROSPACE & DEFENSE -- 2.8%
28,600 Northrop Grumman Corporation............ $ 2,091,375
61,700 United Technologies Corporation......... 6,709,875
------------
8,801,250
------------
COMPUTERS & OFFICE
EQUIPMENT -- 1.3%
*34,600 Xerox Corporation....................... 4,082,800
------------
CONSUMER DURABLES -- 3.7%
68,200 Cooper Tire & Rubber Company............ 1,393,837
65,500 Ford Motor Company...................... 3,844,031
42,500 General Motors Corporation.............. 3,041,406
16,300 Genuine Parts Company................... 545,031
*22,400 Newell Co............................... 924,000
33,200 TRW, Inc................................ 1,865,425
------------
11,613,730
------------
CONSUMER NON-DURABLES -- 3.6%
19,600 Clorox Company (The).................... 2,289,525
52,100 Colgate-Palmolive Company............... 4,838,787
77,600 Kimberly-Clark Corporation.............. 4,229,200
------------
11,357,512
------------
CONSUMER SERVICES -- 2.5%
88,100 Eastman Kodak Company................... 6,343,200
75,500 Starwood Hotels & Resorts............... 1,712,906
------------
8,056,106
------------
ELECTRONICS -- 5.0%
*120,800 General Electric Company................ 12,329,150
19,600 Johnson Controls, Inc................... 1,156,400
58,300 Thomas & Betts Corporation.............. 2,525,118
------------
16,010,668
------------
ENERGY & SERVICES -- 8.9%
57,400 Amoco Corporation....................... 3,465,525
*48,900 Chevron Corporation..................... 4,055,643
28,900 Eni S.p.A............................... 1,957,975
57,200 Mobil Corporation....................... 4,983,550
111,500 Royal Dutch Petroleum................... 5,338,062
77,810 Sunoco, Inc............................. 2,806,023
136,800 USX Corporation......................... 4,121,100
50,200 Wisconsin Energy Corporation............ 1,578,162
------------
28,306,040
------------
FINANCIAL SERVICES -- 18.8%
44,100 CIGNA Corporation....................... 3,409,481
257,850 Citigroup, Inc.......................... 12,763,575
59,300 Edwards (A.G.) & Sons, Inc.............. 2,208,925
38,300 EXEL Limited............................ 2,872,500
121,900 Federal National Mortgage Association... 9,020,600
86,500 Marsh & McLennan Companies, Inc......... 5,054,843
60,600 National City Corporation............... 4,393,500
166,300 Pacific Century Financial Corporation... 4,053,562
89,600 Pinnacle West Capital Corporation....... 3,796,800
39,500 Republic New York Corporation........... 1,799,718
238,200 U.S. Bancorp............................ 8,456,100
21,300 Wachovia Corporation.................... 1,862,418
------------
59,692,022
------------
<CAPTION>
MARKET
SHARES VALUE
- ----------- ------------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
FOOD, BEVERAGE & TOBACCO -- 7.7%
58,000 Anheuser-Busch Companies, Inc........... $ 3,806,250
57,200 Heinz (H.J.) Company.................... 3,238,950
122,200 McCormick & Co., Inc.................... 4,131,887
*97,800 Nabisco (RJR) Holdings Corporation...... 4,058,700
175,100 Philip Morris Co., Inc.................. 9,367,850
------------
24,603,637
------------
HEALTH CARE -- 12.0%
98,300 Abbott Laboratories..................... 4,816,700
94,800 American Home Products Corporation...... 5,338,425
40,900 Baxter International, Inc............... 2,630,381
32,600 Bristol-Myers Squibb Company............ 4,362,287
*22,300 Merck & Co., Inc........................ 3,293,431
165,600 Pharmacia & Upjohn, Inc................. 9,377,100
110,500 Warner-Lambert Company.................. 8,308,218
------------
38,126,542
------------
INDUSTRIAL MATERIALS -- 3.9%
64,200 Abitibi-Consolidated, Inc............... 597,862
20,900 Aluminum Company of America............. 1,558,356
32,900 BOC Group PLC - Sponsored ADR........... 896,525
16,400 Bowater, Inc............................ 679,575
*60,300 du Pont (E.I.) de Nemours & Company..... 3,199,668
12,400 Imperial Chemical ADR................... 433,225
28,700 Morton International, Inc............... 703,150
32,200 Temple-Inland, Inc...................... 1,909,862
31,900 Weyerhaeuser Company.................... 1,620,918
9,600 Willamette Industries, Inc.............. 321,600
21,200 Witco Corporation....................... 337,875
------------
12,258,616
------------
MANUFACTURING -- 0.9%
16,600 Dana Corporation........................ 678,525
*30,400 Minnesota Mining and Manufacturing 2,162,200
Company................................
------------
2,840,725
------------
MEDIA & SERVICES -- 1.2%
59,500 Gannett Co., Inc........................ 3,938,156
466 Nielson Media Research Inc.............. 8,388
------------
3,946,544
------------
REAL ESTATE -- 2.1%
52,800 Archstone Communities Trust............. 1,069,200
28,000 Boston Properties, Inc.................. 854,000
33,100 Kimco Realty Corp. REIT................. 1,313,656
41,500 Liberty Property Trust REIT............. 1,021,937
66,300 Spieker Properties, Inc. REIT........... 2,295,637
------------
6,554,430
------------
RETAIL -- 2.7%
139,500 May Department Stores Company........... 8,422,312
------------
UTILITIES -- 20.6%
55,900 Ameritech Corporation................... 3,542,662
*24,200 AT&T Corp............................... 1,821,050
131,634 Bell Atlantic Corporation............... 7,478,476
163,200 BellSouth Corp.......................... 8,139,600
*27,850 Columbia Gas System, Inc................ 1,608,337
79,100 DQE, Inc................................ 3,475,456
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
23
<PAGE>
THE HARTFORD DIVIDEND AND GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ----------- ------------
<C> <S> <C>
</TABLE>
COMMON STOCKS -- (CONTINUED)
UTILITIES -- (CONTINUED)
<TABLE>
<C> <S> <C>
*28,700 Duke Energy Corporation................. $ 1,838,593
69,900 El Paso Energy Corporation.............. 2,433,393
120,300 Endesa S.A.............................. 3,248,100
49,500 Enron Corp.............................. 2,824,593
78,600 GPU, Inc................................ 3,473,137
*20,656 MCI WorldCom, Inc....................... 1,482,068
22,500 Montana Power Company................... 1,272,656
71,600 Nipsco Industries, Inc.................. 2,179,325
100,800 Peco Energy Company..................... 4,195,800
33,100 Powergen PLC Sponsored ADR.............. 1,770,850
36,000 Qwest Trends Trust**.................... 1,674,000
116,500 SBC Communications, Inc................. 6,247,312
51,000 Sprint Corporation (FON Group).......... 4,290,375
26,600 Texas Utilities Company................. 1,241,887
32,400 UtiliCorp United, Inc................... 1,188,675
------------
65,426,345
------------
Total common stocks..................... $310,099,279
------------
------------
<CAPTION>
PRINCIPAL
AMOUNT
- -----------
<C> <S> <C>
CORPORATE NOTES -- 0.1%
MEDIA & SERVICES -- 0.1%
CBS Radio, Inc.**
$ 270,000 7.00% due 06/30/11.................... $ 431,756
------------
------------
<CAPTION>
SHARES
- -----------
<C> <S> <C>
PREFERRED STOCKS -- 0.2%
SOFTWARE & SERVICES -- 0.0%
800 Microsoft Corporation................... $ 78,200
------------
UTILITIES -- 0.2%
7,400 Texas Utilities Co...................... 417,176
------------
Total preferred stocks.................. $ 495,376
------------
------------
<CAPTION>
PRINCIPAL
AMOUNT
- -----------
<C> <S> <C>
SHORT-TERM SECURITIES -- 3.2%
REPURCHASE AGREEMENT
$10,295,000 Interest in $1,162,198,000 joint $ 10,295,000
repurchase
agreement dated 12/31/98 with State
Stree Bank 4.773% due 01/04/99;
maturity amount $10,300,460
(Collateralized by $469,031,000 U.S.
Treasury Notes 4.00% - 7.775% due
10/31/99 - 02/15/07, $278,664,000 U.S.
Treasury Bonds 7.875% - 12.75% due
11/15/10 - 02/15/21, $414,503,000 U.S.
Treasury Strips (principal) 0.00% due
02/15/19 - 08/15/21)...................
------------
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
VALUE
-------------
<S> <C> <C>
DIVERSIFICATION OF NET ASSETS:
Total common stocks (cost
$276,855,656).......................... 97.7% $310,099,279
Total corporate notes (cost $297,366)... 0.1 431,756
Total preferred stocks (cost
$441,040).............................. 0.2 495,376
Total short-term securities (cost
$10,295,000)........................... 3.2 10,295,000
----- -------------
Total investment in securities
(total cost $287,889,062).............. 101.2 321,321,411
Cash, receivables and other assets...... 0.8 2,492,046
Payable for securities purchased........ (1.8) (5,589,125 )
Payable for Fund shares redeemed........ (0.1) (342,352 )
Other liabilities....................... (0.1) (263,321 )
----- -------------
Net assets.............................. 100.0% $317,618,659
----- -------------
----- -------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $0.001 per share;
300,000,000 shares authorized; 19,520,403 shares
outstanding...................................... $ 19,520
Paid-in surplus................................... 283,900,603
Accumulated undistributed net investment income... 148,410
Accumulated undistributed net realized gains on
investments...................................... 142,750
Unrealized appreciation of investments............ 33,432,349
Unrealized depreciation of option contracts
written (see Note 2)***.......................... (24,973)
------------
Net assets........................................ $317,618,659
------------
------------
</TABLE>
<TABLE>
<S> <C>
Class A
Net asset value per share ($182,494,685
DIVIDED BY 10,981,443 shares outstanding)
(125,000,000 shares authorized)................ $16.62
------
------
Maximum offering price ($16.62 DIVIDED BY
94.5%)......................................... $17.59
------
------
Class B
Net asset value per share ($108,344,347
DIVIDED BY 6,578,232 shares outstanding)
(75,000,000 shares authorized)................. $16.47
------
------
Class C
Net asset value per share ($9,681,555
DIVIDED BY 936,569 shares outstanding)
(50,000,000 shares authorized)................. $10.34
------
------
Maximum offering price ($10.34 DIVIDED BY
99.0%)......................................... $10.44
------
------
Class Y
Net asset value per share ($17,098,072
DIVIDED BY 1,024,159 shares outstanding)
(50,000,000 shares authorized)................. $16.69
------
------
</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 December 31,
1998, the market value of these securities amounted to $2,105,756 or 0.7% of
net assets.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
24
<PAGE>
***OPTION CONTRACTS WRITTEN -- NOTE 2 -- OUTSTANDING AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF EXERCISE EXPIRATION
DESCRIPTION CONTRACTS PRICE DATE MARKET VALUE
- ------------------------------ --------- --------- -------------- -------------
<S> <C> <C> <C> <C>
AT&T Corp. 24 $68.5 January 1999 $ (1,655)
Chevron Corp. 46 94 January 1999 (902)
Columbia Gas System Co. (The) 28 61 January 1999 (812)
du Pont (E.I.) de Nemours 50 60 January 1999 (2,188)
Duke Energy Corp. 52 67 January 1999 (1,872)
General Electric Corp. 64 110 January 1999 (6,400)
Merck & Co., Inc. 25 162 January 1999 (1,724)
Minnesota Mining &
Manufacturing Company 29 85 January 1999 (725)
Nabisco Holdings Corp. 52 43 January 1999 (7,696)
Newell Co. 224 40 January 1999 (50,399)
U.S. Bancorp. 129 41 January 1999 (2,419)
Xerox Corporation 34 120 January 1999 (15,239)
--- -------------
Total option contracts written
(cost ($67,058)) 757 $ (92,031)
--- -------------
--- -------------
</TABLE>
The securities underlying these option contracts are included in the Fund's
Statement of Net Assets.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
25
<PAGE>
THE HARTFORD STOCK FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS -- 92.3%
AEROSPACE & DEFENSE -- 1.2%
130,200 AlliedSignal, Inc....................... $ 5,769,487
------------
COMMUNICATIONS EQUIPMENT -- 4.5%
*103,400 Cisco Systems, Inc...................... 9,596,812
74,300 Lucent Technologies, Inc................ 8,173,000
*70,000 Tellabs, Inc............................ 4,799,375
------------
22,569,187
------------
COMPUTERS & OFFICE
EQUIPMENT -- 4.6%
125,000 Compaq Computer Corporation............. 5,242,187
50,000 International Business Machines Corp.... 9,237,500
71,800 Xerox Corporation....................... 8,472,400
------------
22,952,087
------------
CONSUMER NON-DURABLES -- 3.9%
33,700 Estee Lauder Companies - Class A........ 2,881,350
88,500 Gillette Company (The).................. 4,275,656
80,300 Kimberly-Clark Corporation.............. 4,376,350
88,000 Proctor & Gamble Co..................... 8,035,500
------------
19,568,856
------------
CONSUMER SERVICES -- 2.8%
75,000 Eastman Kodak Company................... 5,400,000
110,000 McDonald's Corporation.................. 8,428,765
------------
13,828,765
------------
ELECTRONICS -- 6.8%
*157,800 Analog Devices, Inc..................... 4,950,975
154,100 General Electric Company................ 15,727,831
82,300 Intel Corporation....................... 9,757,693
46,300 Sony Corporation........................ 3,322,025
------------
33,758,524
------------
ENERGY & SERVICES -- 6.2%
117,300 Anadarko Petroleum Corporation.......... 3,621,637
*210,100 Conoco, Inc............................. 4,385,837
134,800 Exxon Corporation....................... 9,857,250
94,400 Royal Dutch Petroleum ADR............... 4,519,400
110,000 Schlumberger Ltd........................ 5,073,750
123,200 Unocal Corporation...................... 3,595,900
------------
31,053,774
------------
FINANCIAL SERVICES -- 14.3%
80,350 American International Group, Inc....... 7,763,818
241,200 Associates First Capital Corporation.... 10,220,850
200,499 Citigroup, Inc.......................... 9,924,700
60,000 First Union Corporation................. 3,648,750
154,500 Franklin Resources, Corp................ 4,944,000
183,200 Marsh & McLennan Companies, Inc......... 10,705,750
69,600 Mellon Bank Corporation................. 4,785,000
137,700 Merrill Lynch & Co., Inc................ 9,191,475
100,800 State Street Corporation................ 7,011,900
83,700 U.S. Bancorp............................ 2,971,350
------------
71,167,593
------------
FOOD, BEVERAGE & TOBACCO -- 2.7%
180,800 Philip Morris Co., Inc.................. 9,672,800
<CAPTION>
MARKET
SHARES VALUE
- ----------- ------------
<C> <S> <C>
</TABLE>
FOOD, BEVERAGE & TOBACCO -- (CONTINUED)
<TABLE>
<C> <S> <C>
48,100 Unilever United States, Inc............. $ 3,989,293
------------
13,662,093
------------
HEALTH CARE -- 14.1%
117,300 Abbott Laboratories..................... 5,747,700
150,000 American Home Products Corporation...... 8,446,875
90,300 Baxter International, Inc............... 5,807,418
*143,400 Boston Scientific Corporation........... 3,844,912
206,000 Columbia/HCA Healthcare Corporation..... 5,098,500
73,400 Johnson & Johnson....................... 6,156,425
54,400 Merck & Co., Inc........................ 8,034,200
37,800 Pfizer, Inc............................. 4,741,537
91,900 Pharmacia & Upjohn, Inc................. 5,203,837
95,900 Service Corporation International....... 3,650,193
144,150 ServiceMaster Company (The)............. 3,180,309
60,000 SmithKline Beecham PLC ADR.............. 4,170,000
78,500 Warner-Lambert Company.................. 5,902,218
------------
69,984,124
------------
INDUSTRIAL MATERIALS -- 4.5%
58,000 Aluminum Company of America............. 4,324,625
48,500 Dow Chemical Company.................... 4,410,468
72,000 du Pont (E.I.) de Nemours & Compnay..... 3,820,500
129,100 Praxair, Inc............................ 4,550,775
*100,100 Sealed Air Corporation.................. 5,111,356
------------
22,217,724
------------
MANUFACTURING -- 0.8%
90,000 Caterpillar, Inc........................ 4,140,000
------------
MEDIA & SERVICES -- 5.5%
*100,000 AirTouch Communications, Inc............ 7,212,500
142,500 CBS Corporation......................... 4,666,875
170,000 Gannett Co., Inc........................ 11,251,875
138,600 Walt Disney Company (The)............... 4,158,000
------------
27,289,250
------------
RETAIL -- 7.4%
123,000 CVS Corporation......................... 6,765,000
159,500 Gap, Inc. (The)......................... 8,971,875
120,000 Home Depot, Inc. (The).................. 7,342,500
*94,500 Staples, Inc............................ 4,128,468
116,500 Wal-Mart Stores, Inc.................... 9,487,468
------------
36,695,311
------------
SOFTWARE & SERVICES -- 5.1%
61,500 Automatic Data Processing, Inc.......... 4,931,531
*70,000 Computer Sciences Corp.................. 4,510,625
128,300 First Data Corporation.................. 4,065,506
*83,900 Microsoft Corporation................... 11,635,881
------------
25,143,543
------------
TRANSPORTATION -- 2.6%
*90,200 AMR Corporation......................... 5,355,625
179,900 Southwest Airlines Co................... 4,036,506
79,000 Union Pacific Corporation............... 3,559,937
------------
12,952,068
------------
UTILITIES -- 5.3%
25,000 Ameritech Corporation................... 1,584,375
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
26
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ----------- ------------
<C> <S> <C>
</TABLE>
COMMON STOCKS -- (CONTINUED)
UTILITIES -- (CONTINUED)
<TABLE>
<C> <S> <C>
96,100 Bell Atlantic Corporation............... $ 5,459,681
*163,878 MCI WorldCom, Inc....................... 11,758,246
141,600 SBC Communications, Inc................. 7,593,300
------------
26,395,602
------------
Total common stocks..................... $459,147,988
------------
------------
PREFERRED STOCKS -- 0.1%
INDUSTRIAL MATERIALS -- 0.1%
12,500 Monsanto Company........................ $ 612,500
------------
------------
<CAPTION>
PRINCIPAL
AMOUNT
- -----------
<C> <S> <C>
SHORT-TERM SECURITIES -- 9.2%
REPURCHASE AGREEMENT
$45,807,000 Interest in $1,162,198,000 joint $ 45,807,000
repurchase
agreement dated 12/31/98 with State
Street Bank 4.773% due 01/04/99;
maturity amount $45,831,293
(Collateralized by $469,031,000 U.S.
Treasury Notes 4.00% - 7.775% due
10/31/99 - 02/15/07, $278,664,000 U.S.
Treasury Bonds 7.875% - 12.75% due
11/15/10 - 02/15/21, $414,503,000 U.S.
Treasury Strips (principal) 0.00% due
02/15/19 - 08/15/21)...................
------------
------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
DIVERSIFICATION OF NET ASSETS:
Total common stocks (cost
$384,696,035).......................... 92.3% $459,147,988
Total preferred stocks (cost
$500,000).............................. 0.1 612,500
Total short-term securities (cost
$45,807,000)........................... 9.2 45,807,000
----- ------------
Total investment in securities (total
cost $431,003,035)..................... 101.6 505,567,488
Cash, receivables and other assets...... 1.8 8,855,708
Payable for securities purchased........ (3.3) (16,383,147)
Payable for Fund shares redeemed........ (0.1) (407,036)
Other liabilities....................... (0.0) (244,269)
----- ------------
Net assets.............................. 100.0% $497,388,744
----- ------------
----- ------------
<CAPTION>
<S> <C> <C>
<CAPTION>
MARKET
VALUE
------------
<S> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $.001 per share;
300,000,000 shares authorized; 27,030,602 shares
outstanding...................................... $ 27,031
Paid-in surplus................................... 423,259,212
Distribution in excess of net realized gains on
investments...................................... (462,352)
Unrealized appreciation of investments............ 74,564,453
------------
Net assets........................................ $497,388,744
------------
------------
</TABLE>
<TABLE>
<S> <C>
Class A
Net asset value per share ($268,226,261
DIVIDED BY 13,616,983 shares outstanding)
(125,000,000 shares authorized)................ $19.70
------
------
Maximum offering price ($19.70 DIVIDED BY
94.5%)......................................... $20.85
------
------
Class B
Net asset value per share ($185,204,765
DIVIDED BY 9,566,493 shares outstanding)
(75,000,000 shares authorized)................. $19.36
------
------
Class C
Net asset value per share ($36,038,533
DIVIDED BY 3,449,096 shares outstanding)
(50,000,000 shares authorized)................. $10.45
------
------
Maximum offering price ($10.45 DIVIDED BY
99.0%)......................................... $10.56
------
------
Class Y
Net asset value per share ($7,919,185
DIVIDED BY 398,030 shares outstanding)
(50,000,000 shares authorized)................. $19.89
------
------
</TABLE>
* Non-income producing during period.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
27
<PAGE>
THE HARTFORD CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS -- 95.6%
AEROSPACE & DEFENSE -- 3.1%
200,000 AlliedSignal, Inc....................... $ 8,862,500
157,500 Precision Castparts Corporation......... 6,969,375
110,000 Raytheon Co. Class A.................... 5,685,625
------------
21,517,500
------------
BUSINESS SERVICES -- 2.9%
*321,000 Cendant Corporation..................... 6,119,062
*462,500 Computer Learning Centers, Inc.......... 3,092,968
*555,000 Corporation Geo Sa de C.V.-Class B...... 1,540,888
*151,000 Getty Images, Inc....................... 2,595,312
*193,000 Ingram Micro, Inc....................... 6,730,875
------------
20,079,105
------------
CLOSED END INVESTMENT
COMPANY -- 0.4%
445,000 Morgan Stanley Asia Pacific Fund........ 3,115,000
------------
COMMUNICATIONS EQUIPMENT -- 4.9%
*461,400 ADC Telecommunications, Inc............. 16,033,650
*125,000 ATMI, Inc............................... 3,156,250
*150,000 General Instrument Corporation.......... 5,090,625
155,000 Harris Corporation...................... 5,676,875
*300,000 Pairgain Technologies, Inc.............. 2,306,250
80,000 Scientific-Atlanta, Inc................. 1,825,000
------------
34,088,650
------------
COMPUTERS & OFFICE
EQUIPMENT -- 0.5%
*88,500 NCR Corporation......................... 3,694,875
------------
CONSUMER NON-DURABLES -- 3.5%
*286,400 Ivex Packaging Corp..................... 6,658,800
*270,000 Smithfield Foods, Inc................... 9,146,250
*190,000 Timberland Company (The)................ 8,656,875
------------
24,461,925
------------
CONSUMER SERVICES -- 4.8%
*140,000 Anchor Gaming........................... 7,892,500
*300,000 Cheesecake Factory Incorporated (The)... 8,896,875
*160,000 Sun International Hotels Ltd............ 7,270,000
430,000 Starwood Hotels & Resorts............... 9,755,625
------------
33,815,000
------------
ELECTRONICS -- 7.5%
*150,000 Analog Devices, Inc..................... 4,706,250
*500,000 Clare (C.P.) Corporation................ 2,562,500
*194,400 Credence Systems Corporation............ 3,596,400
*350,000 Kent Electronics Corp................... 4,462,512
*100,000 Maxim Integrated Products, Inc.......... 4,368,750
125,000 Phillips N.V. ADR....................... 8,460,937
190,000 Siemans AG.............................. 12,491,556
*270,000 Teradyne, Inc........................... 11,441,250
------------
52,090,155
------------
ENERGY & SERVICES -- 3.0%
69,500 British Petroleum PLC ADR............... 6,228,937
100,000 Eni Ads................................. 6,775,000
*259,200 McDermott (J. Ray) S.A.................. 6,334,200
60,000 Transocean Offshore, Inc................ 1,608,750
------------
20,946,887
------------
<CAPTION>
MARKET
SHARES VALUE
- ----------- ------------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
FINANCIAL SERVICES -- 8.1%
280,000 Ace Ltd................................. $ 9,642,500
275,000 American Bankers Insurance Group, Inc... 13,303,125
*490,000 Annuity and Life Re (Holdings), Ltd..... 13,230,000
158,250 Citigroup, Inc.......................... 7,833,375
*176,300 FIRSTPLUS Financial Group, Inc.......... 484,825
250,000 NAC Re Corp............................. 11,734,375
------------
56,228,200
------------
FOOD, BEVERAGE & TOBACCO -- 2.5%
*570,000 General Cigar Holdings, Inc............. 4,951,875
110,000 Philip Morris Co., Inc.................. 5,885,000
*281,100 United Natural Foods, Inc............... 6,781,537
------------
17,618,412
------------
HEALTH CARE -- 12.2%
*224,700 Agouron Pharmaceuticals, Inc............ 13,201,125
*337,600 Boston Scientific Corporation........... 9,051,900
275,000 Columbia/HCA Healthcare Corporation..... 6,806,250
*319,900 Genzyme Corporation..................... 15,915,025
290,000 ICN Pharmaceuticals, Inc................ 6,561,250
*86,400 IDEC Pharmaceuticals Corporation........ 4,060,800
*100,700 Immunex Corporation..................... 12,669,318
174,600 Pharmacia & Upjohn, Inc................. 9,886,725
*300,000 PSS World Medical, Inc.................. 6,900,000
------------
85,052,393
------------
INDUSTRIAL MATERIALS -- 0.2%
155,000 Titanium Metals Corporation............. 1,317,500
------------
MANUFACTURING -- 1.6%
*147,800 Covance, Inc............................ 4,304,675
550,000 Helix Technology Corporation............ 7,150,000
------------
11,454,675
------------
MEDIA & SERVICES -- 9.9%
*95,000 America Online, Inc..................... 13,751,250
*272,100 American Tower Corporation.............. 8,043,956
*324,300 Capstar Broadcasting Corporation........ 7,418,362
*200,000 Chancellor Media Corp................... 9,575,000
*2,000,000 Rogers Communications Class B........... 17,774,108
*343,200 Univision Communications, Inc........... 12,419,550
------------
68,982,226
------------
REAL ESTATE -- 1.4%
*300,000 Beacon Properties Corporation**......... 4,800,000
240,000 LNR Property Corporation................ 4,785,000
------------
9,585,000
------------
RETAIL -- 7.1%
*270,000 Abercrombie & Fitch Co.................. 19,102,500
*400,000 CompUSA, Inc............................ 5,225,000
*145,500 Consolidated Stores, Inc................ 2,937,281
*100,000 Finish Line, Inc. (The)-Class A......... 800,000
*206,300 Hot Topic, Inc.......................... 2,656,112
360,000 Intimate Brands, Inc.................... 10,755,000
*97,300 United Rentals (North America), Inc..... 3,223,062
200,000 Warnaco Group, Inc. (The)-Class A....... 5,050,000
------------
49,748,955
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
28
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ----------- ------------
<C> <S> <C>
</TABLE>
COMMON STOCKS -- (CONTINUED)
<TABLE>
<C> <S> <C>
SOFTWARE & SERVICES -- 10.5%
*499,600 Activision, Inc......................... $ 5,558,050
*350,000 Avant! Corporation...................... 5,600,000
200,000 First Data Corporation.................. 6,337,500
*466,500 Learning Company, Inc. (The)............ 12,099,843
*349,800 Mobius Management Systems, Inc.......... 5,203,275
*190,000 Peerless Systems Corporation............ 1,615,000
*645,000 Pegasystems, Inc........................ 2,680,781
*165,000 Policy Management Systems Corporation... 8,332,500
*650,000 Rational Software Corporation........... 17,225,000
*605,200 Unigraphics Solutions, Inc.............. 8,775,400
------------
73,427,349
------------
TRANSPORTATION -- 6.3%
329,500 Air Express International Corporation... 7,166,625
*76,800 AMR Corporation......................... 4,560,000
*187,200 Atlas Air, Inc.......................... 9,161,100
*486,900 Jevic Transportation, Inc............... 3,834,337
310,000 Robinson (C.H.) Worldwide, Inc.......... 8,040,625
200,000 Sea Containers, Ltd..................... 5,987,500
194,600 Swift Transportation Co., Inc........... 5,454,881
------------
44,205,068
------------
UTILITIES -- 2.6%
196,000 COMSAT Corporation...................... 7,056,000
84,100 Enron Corp.............................. 4,798,956
*380,000 Intermedia Communications, Inc.......... 6,555,000
------------
18,409,956
------------
WASTE MANAGEMENT -- 2.6%
*782,600 Newpark Resources, Inc.................. 5,331,462
*125,000 Superior Services, Inc.................. 2,507,812
224,750 Waste Management, Inc................... 10,478,968
------------
18,318,242
------------
Total common stocks..................... $668,157,073
------------
------------
<CAPTION>
PRINCIPAL
AMOUNT
- -----------
<C> <S> <C>
CORPORATE BONDS -- 0.8%
INDUSTRIAL MATERIALS -- 0.8%
$10,000,000 American Pad & Paper $ 5,700,000
13.00% due 11/15/05...................
------------
------------
PREFERRED STOCKS -- 1.4%
CONSUMER SERVICES -- 0.1%
*193,536 SGW Holdings Corporation***............. $ 483,840
------------
TRANSPORTATION -- 1.3%
200,000 Union Pacific Capital Trust**........... 9,250,000
------------
Total preferred stocks.................. $ 9,733,840
------------
------------
SHORT-TERM SECURITIES -- 4.2%
REPURCHASE AGREEMENT
28,824,000 Interest in $1,162,198,000 joint $ 28,824,000
repurchase
agreement dated 12/31/98 with State
Street Bank 4.773% due 01/04/99;
maturity amount $28,839,286
(Collateralized by $469,031,000 U.S.
Treasury Notes 4.00% - 7.775% due
10/31/99 - 02/15/07, $278,664,000 U.S.
Treasury Bonds 7.875% - 12.75% due
11/15/10 - 02/15/21, $414,503,000 U.S.
Treasury Strips (principal) 0.00% due
02/15/19 - 08/15/21)...................
------------
------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
<CAPTION>
MARKET
VALUE
------------
<S> <C> <C>
DIVERSIFICATION OF NET ASSETS:
Total common stocks (cost
$630,851,782).......................... 95.6% $668,157,073
Total corporate bonds (cost
$5,486,586)............................ 0.8 5,700,000
Total preferred stocks (cost
$11,958,001)........................... 1.4 9,733,840
Total short-term securities (cost
$28,824,000)........................... 4.2 28,824,000
------ ------------
Total investment in securities
(total cost $677,120,369).............. 102.0 712,414,913
Cash, receivables and other assets...... 1.5 10,385,136
Payable for securities purchased........ (3.0) (21,200,006)
Payable for Fund shares redeemed........ (0.5) (2,789,853)
Other liabilities....................... (0.0) (171,511)
------ ------------
Net assets.............................. 100.0% $698,638,678
------ ------------
------ ------------
</TABLE>
<TABLE>
<S> <C>
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $0.001 per share;
300,000,000 shares authorized; 35,187,971 shares
outstanding...................................... $ 35,188
Paid-in surplus................................... 677,286,052
Distribution in excess of net investment income... (20,872)
Distribution in excess of net realized gains on
investments...................................... (13,958,753)
Unrealized appreciation of investments............ 35,294,544
Unrealized appreciation on translation of other
assets and liabilities in foreign currencies..... 2,519
------------
Net assets........................................ $698,638,678
------------
------------
</TABLE>
<TABLE>
<S> <C>
Class A
Net asset value per share ($364,951,142
DIVIDED BY 17,874,840 shares outstanding)
(125,000,000 shares authorized)................ $20.42
------
------
Maximum offering price ($20.42 DIVIDED BY
94.5%)......................................... $21.61
------
------
Class B
Net asset value per share ($290,756,112
DIVIDED BY 14,479,774 shares outstanding)
(75,000,000 shares authorized)................. $20.08
------
------
Class C
Net asset value per share ($15,231,448
DIVIDED BY 1,492,402 shares outstanding)
(50,000,000 shares authorized)................. $10.21
------
------
Maximum offering price ($10.21 DIVIDED BY
99.0%)......................................... $10.31
------
------
Class Y
Net asset value per share ($27,699,976
DIVIDED BY 1,340,955 shares outstanding)
(50,000,000 shares authorized)................. $20.66
------
------
</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 by qualified institutional buyers. As of December 31,
1998, the market value of these securities amounted to $14,050,000 or 2.0%
of net assets.
*** Restricted Security (see Note 2).
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
29
<PAGE>
THE HARTFORD SMALL COMPANY FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ---------- -----------
<C> <S> <C>
COMMON STOCKS -- 90.8%
AEROSPACE & DEFENSE -- 0.9%
16,000 Primex Technologies, Inc................ $ 680,000
-----------
BUSINESS SERVICES -- 3.8%
*21,500 Iron Mountain, Inc...................... 775,343
*35,600 Pierce Leahy Corp....................... 907,800
30,400 U.S. Satellite Broadcasting............. 418,000
*19,200 Young & Rubicam, Inc.................... 621,600
-----------
2,722,743
-----------
COMMUNICATIONS EQUIPMENT -- 6.9%
*35,500 ADC Telecommunications, Inc............. 1,233,625
*114,000 Advanced Fibre Communications........... 1,246,875
*25,300 Com21, Inc.............................. 531,300
*34,000 Crown Castle International Corp......... 799,000
*10,600 E-Tek Dynamics, Inc..................... 283,550
*14,200 VeriSign, Inc........................... 839,575
-----------
4,933,925
-----------
COMPUTERS & OFFICE EQUIPMENT -- 3.4%
*36,500 Data General Corporation................ 599,968
*47,000 Sequent Computer Systems, Inc........... 566,937
20,000 Symbol Technologies, Inc................ 1,278,750
-----------
2,445,655
-----------
CONSUMER NON-DURABLES -- 4.4%
*70,300 Ivex Packaging Corp..................... 1,634,475
*44,200 Smithfield Foods, Inc................... 1,497,275
-----------
3,131,750
-----------
CONSUMER SERVICES -- 0.4%
*9,200 Cheesecake Factory Inc. (The)........... 272,837
-----------
ELECTRONICS -- 12.4%
*65,000 Analog Devices, Inc..................... 2,039,375
*36,300 Cognex Corporation...................... 726,000
*50,200 Conexant Systems, Inc................... 840,850
34,200 General Cable Corporation............... 701,100
17,500 Kuhlman Corporation..................... 662,812
*15,000 Maxim Integrated Products, Inc.......... 655,312
*23,500 Quanta Services, Inc.................... 518,468
*32,700 SCI Systems, Inc........................ 1,888,425
*21,000 Teradyne, Inc........................... 889,875
-----------
8,922,217
-----------
ENERGY & SERVICES -- 1.6%
*40,000 Marine Drilling Company, Inc............ 307,500
*14,300 McDermott (J. Ray) S.A.................. 349,456
40,000 Pogo Producing Company.................. 520,000
-----------
1,176,956
-----------
FINANCIAL SERVICES -- 7.1%
*19,400 Annuity And Life Re (Holdings), Ltd..... 523,800
25,500 Capital Re Corporation.................. 511,593
29,700 Heller Financial, Inc................... 872,437
6,600 Jefferies Group, Inc.................... 327,525
12,900 Metzler Group, Inc. (The)............... 628,068
13,600 NAC Re Corp............................. 638,350
11,455 Reinsurance Group of America, Inc....... 801,850
<CAPTION>
MARKET
SHARES VALUE
- ---------- -----------
<C> <S> <C>
</TABLE>
FINANCIAL SERVICES -- (CONTINUED)
<TABLE>
<C> <S> <C>
*55,400 Scottish Annuity & Life Holdings, $ 761,750
Ltd.....................................
-----------
5,065,373
-----------
FOOD, BEVERAGE & TOBACCO -- 0.6%
*18,400 United Natural Foods, Inc............... 443,900
-----------
HEALTH CARE -- 9.4%
22,400 Agouron Pharmaceuticals, Inc............ 1,316,000
15,500 Allergan, Inc........................... 1,003,625
21,000 Bergen Brunswig Corporation............. 732,375
27,000 Genzyme Corporation..................... 1,343,250
*42,000 Haemonetics Corporation................. 955,500
*20,000 IDX Systems Corporation................. 880,000
*14,300 Trigon Healthcare, Inc.................. 533,568
-----------
6,764,318
-----------
MANUFACTURING -- 0.7%
*16,200 Covance, Inc............................ 471,825
-----------
MEDIA & SERVICES -- 10.2%
*37,900 American Tower Corporation.............. 1,120,418
*40,700 Capstar Broadcasting Corporation........ 931,012
*135,000 Rogers Communications, Inc.............. 1,198,125
39,700 Stewart Enterprises, Inc................ 883,325
*21,100 United Video Satellite Group, Inc....... 498,487
*43,900 Univision Communications, Inc........... 1,588,631
*21,000 Valasis Communications, Inc............. 1,084,125
-----------
7,304,123
-----------
RETAIL -- 6.1%
*21,800 Abercrombie & Fitch Co.................. 1,542,350
*26,500 Borders Group, Inc...................... 660,843
*49,500 CompUSA, Inc............................ 646,593
*6,700 Ethan Allen Interiors, Inc.............. 274,700
*34,000 Stage Stores, Inc....................... 318,750
*20,000 Whole Foods Market, Inc................. 967,500
-----------
4,410,736
-----------
SOFTWARE & SERVICES -- 16.8%
34,000 Aspen Technologies, Inc................. 493,000
*19,700 Bisys Group, Inc. (The)................. 1,017,012
*15,600 Brio Technolgy, Inc..................... 275,925
*40,100 Cognos, Inc............................. 1,002,500
27,000 Cyberian Outpost, Inc................... 742,500
*111,100 Learning Company, Inc. (The)............ 2,881,671
5,500 Lycos, Inc.............................. 305,593
21,100 National Computer Systems, Inc.......... 780,700
*20,600 Peerless Systems Corporation............ 175,100
*24,200 Policy Management Systems Corporation... 1,222,100
*52,600 Rational Software Corporation........... 1,393,900
*25,500 Safeguard Scientifics, Inc.............. 699,656
*20,500 Sterling Software, Inc.................. 554,781
*8,000 Veritas Software Corp................... 479,500
-----------
12,023,938
-----------
TRANSPORTATION -- 5.1%
*24,100 Atlas Air, Inc.......................... 1,179,393
*26,600 Mesaba Holdings, Inc.................... 548,625
22,000 Robinson (C.H.) Worldwide, Inc.......... 570,625
*25,200 Swift Transportation Co., Inc........... 706,387
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
30
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ---------- -----------
<C> <S> <C>
</TABLE>
COMMON STOCKS -- (CONTINUED)
TRANSPORTATION -- (CONTINUED)
<TABLE>
<C> <S> <C>
38,300 Werner Enterprises, Inc................. $ 677,431
-----------
3,682,461
-----------
UTILITIES -- 1.0%
*23,300 Access Worldwide Communication, Inc..... 195,137
32,000 Intermedia Communications, Inc.......... 552,000
-----------
747,137
-----------
Total common stocks..................... $65,199,894
-----------
-----------
PREFERRED STOCKS -- 0.0%
CONSUMER SERVICES -- 0.0%
*8,612 SGW Holdings Corporation**.............. $ 21,530
-----------
-----------
<CAPTION>
PRINCIPAL
AMOUNT
- ----------
<C> <S> <C>
SHORT-TERM SECURITIES -- 4.9%
REPURCHASE AGREEMENT
$3,489,000 Interest in $1,162,198,000 joint $ 3,489,000
repurchase
agreement dated 12/31/98 with State
Street Bank 4.773% due 01/04/99;
maturity amount $3,490,850
(Collateralized by $469,031,000 U.S.
Treasury Notes 4.00% - 7.775% due
10/31/99 - 02/15/07, $278,664,000 U.S.
Treasury Bonds 7.875% - 12.75% due
11/15/10 - 02/15/21, $414,503,000 U.S.
Treasury Strips (principal) 0.00% due
02/15/19 - 08/15/21)...................
-----------
-----------
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
ASSETS
Investment in securities, at value (total cost
$57,915,878) - see accompanying portfolio........ $68,710,424
Receivable for investment securities sold......... 3,979,376
Receivable for Fund shares sold................... 745,355
Receivable for dividends and interest............. 18,315
Cash and other assets............................. 411
Deferred organizational costs, net................ 19,329
-----------
Total assets...................................... $73,473,210
-----------
-----------
LIABILITIES
Investment securities purchased................... $ 1,619,866
Payable for Fund shares redeemed.................. 75,356
Other accrued expenses............................ 21,975
Payable to The Hartford Life Insurance Co......... 19,329
-----------
Total liabilities................................. 1,736,526
-----------
Net assets........................................ $71,736,684
-----------
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
VALUE
-----------
<S> <C>
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $0.001 per share;
300,000,000 shares authorized; 5,456,870 shares
outstanding...................................... $ 5,457
Paid-in surplus................................... 65,300,624
Accumulated undistributed net investment income... 831
Distribution in excess of net realized gains on
investments...................................... (4,364,805)
Unrealized appreciation of investments............ 10,794,546
Unrealized appreciation on translation of other
assets and liabilities in foreign currencies..... 31
-----------
Net assets........................................ $71,736,684
-----------
-----------
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Class A
Net asset value per share ($37,623,380
DIVIDED BY 2,826,146 shares outstanding)
(125,000,000 shares authorized)................ $13.31
------
------
Maximum offering price ($13.31 DIVIDED BY
94.5%)......................................... $14.08
------
------
Class B
Net asset value per share ($18,344,502
DIVIDED BY 1,401,653 shares outstanding)
(75,000,000 shares authorized)................. $13.09
------
------
Class C
Net asset value per share ($2,764,566
DIVIDED BY 263,760 shares outstanding)
(50,000,000 shares authorized)................. $10.48
------
------
Maximum offering price ($10.48 DIVIDED BY
99.0%)......................................... $10.59
------
------
Class Y
Net asset value per share ($13,004,236
DIVIDED BY 965,311 shares outstanding)
(50,000,000 shares authorized)................. $13.47
------
------
</TABLE>
* Non-income producing during period.
** Restricted security (see Note 2).
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
31
<PAGE>
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ------------ -----------
<C> <S> <C>
COMMON STOCKS -- 94.8%
AUSTRALIA -- 4.5%
*41,019 AMP Ltd.**.............................. $ 520,170
81,851 Australia & New Zealand Banking......... 536,180
22,724 News Corp. Ltd.......................... 150,251
254,061 Pasminco Ltd............................ 193,235
14,297 Rio Tinto Ltd........................... 169,728
10,500 Schlumberger Ltd........................ 484,312
*41,498 Telstra Corporation Ltd................. 194,208
91,359 WMC Ltd................................. 275,696
-----------
2,523,780
-----------
BRAZIL -- 0.4%
*6,400 Embratel Participacoes S.A.............. 89,200
*3,700 Telesp Celular Participacoes S.A........ 64,755
3,400,000 Telesp Participacoes S.A................ 77,387
-----------
231,342
-----------
CANADA -- 0.5%
5,400 Canadian National Railway Company....... 280,125
-----------
DENMARK -- 1.5%
9,300 Unidanmark AS-A Shares (Reg.)........... 840,232
-----------
FINLAND -- 2.1%
19,590 Metsa-Serla Class B Shares.............. 160,564
8,430 Nokia AB OYJ Class A Shares............. 1,032,258
-----------
1,192,822
-----------
FRANCE -- 15.0%
2,408 AGF - Assurance Generale de France...... 143,893
7,650 Alcatel................................. 936,733
5,750 Axa..................................... 833,784
13,305 Banque National de Paris**.............. 1,096,124
3,510 Casino Guichard-Perrachon S.A........... 365,703
3,000 Compagnie de Saint-Gobain S.A........... 423,737
7,470 Compagnie Financiere de Paribas......... 649,511
3,440 Elf Aquitaine........................... 397,822
4,360 France Telecom S.A...................... 346,551
520 Groupe Danone........................... 148,943
3,780 Renault S.A............................. 169,849
3,721 Rhone-Poulenc - A Shares................ 191,578
2,250 Suez Lyonnaise des Eaux................. 462,405
8,120 Total S.A. - B Shares................... 822,755
5,520 Vivendi................................. 1,432,865
-----------
8,422,253
-----------
GERMANY -- 7.2%
640 Allianz AG.............................. 238,248
11,630 Bayer AG................................ 488,445
*4,100 DaimlerChrysler AG...................... 407,409
21,230 Hoechst AG.............................. 878,249
940 Karstadt AG............................. 492,145
8,330 Mannesmann AG........................... 964,024
8,620 Siemans AG.............................. 566,722
-----------
4,035,242
-----------
GREECE -- 0.2%
*4,600 Panafon S.A.**.......................... 123,195
-----------
HONG KONG -- 1.4%
41,000 Cheung Kong Holdings Ltd................ 295,048
*2,400 China Telecom (Hong Kong) Ltd........... 83,405
<CAPTION>
MARKET
SHARES VALUE
- ------------ -----------
<C> <S> <C>
</TABLE>
HONG KONG -- (CONTINUED)
<TABLE>
<C> <S> <C>
*72,200 China Telecom (Hong Kong) Ltd........... $ 124,884
36,000 Sun Hung Kai Properties................. 262,552
-----------
765,889
-----------
ITALY -- 4.0%
99,300 Banca Commerciale Italiana S.p.A........ 686,533
99,700 ENI S.p.A............................... 653,020
104,888 Telecom Italia S.p.A.................... 896,917
-----------
2,236,470
-----------
JAPAN -- 11.0%
3,300 Advantest Corporation................... 209,474
78,000 Asahi Bank Ltd.......................... 286,290
7,000 Bridgestone Corp........................ 159,180
54,000 Fuji Bank, Ltd.......................... 199,154
7,000 Fuji Machine Manufacturing Co........... 221,549
9,000 Fuji Photo Film Co., Ltd................ 335,116
8,000 Kao Corporation......................... 180,856
2,600 Mabuchi Motor Co., Ltd.................. 199,385
9,000 Matsumotokiyoshi........................ 348,680
3,000 Matsushita Communication Industrial 141,759
Co., Ltd................................
23,000 NEC Corporation......................... 212,063
3,600 Nichiei Co., Ltd........................ 287,242
90 NTT Mobile Communication 371,021
Network, Inc.**.........................
40,000 Olympus Optical Co., Ltd................ 460,652
4,000 Rohm Company Ltd........................ 364,904
96,000 Sakura Bank Ltd......................... 220,432
8,100 Sony Corporation........................ 591,001
4,000 Takeda Chemical Industries Ltd.......... 154,259
2,100 Takefuji Corp........................... 153,595
12,000 Tokyo Style Co.......................... 121,705
98,000 Toshiba Corporation..................... 584,716
5,500 Uni-Charm Corp.......................... 258,429
3,000 Yamanouchi Pharmaceuticals Co., Ltd..... 96,811
-----------
6,158,273
-----------
MEXICO -- 0.3%
3,100 Telefonos de Mexico S.A. ADR............ 150,931
-----------
NETHERLANDS -- 7.7%
3,300 Aegon N.V............................... 405,495
11,000 Gucci Group NV.......................... 534,880
7,666 ING Groep N.V........................... 467,720
6,400 Koninklijke Ahold N.V................... 236,674
12,100 Philips Electronics N.V................. 812,397
5,500 Royal Dutch Petroleum Company........... 274,022
*3,400 STMicroelectronics N.V.................. 265,412
16,815 TNT Post Group N.V...................... 542,081
8,700 Unilever N.V. CVA....................... 744,058
-----------
4,282,739
-----------
SOUTH AFRICA -- 0.1%
1,900 De Beers-Centenary Linked-UT............ 24,223
-----------
SPAIN -- 3.3%
5,500 Banco Santander S.A..................... 109,463
38,700 ENDESA - Empresa Nacional de 1,026,964
Electricidad S.A........................
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
32
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ------------ -----------
<C> <S> <C>
</TABLE>
COMMON STOCKS -- (CONTINUED)
SPAIN -- (CONTINUED)
<TABLE>
<C> <S> <C>
3,300 Repsol S.A.............................. $ 176,310
4,126 Telefonica de Espana S.A................ 558,543
-----------
1,871,280
-----------
SWEDEN -- 4.5%
3,700 Hennes & Mauritz AB..................... 302,188
70,020 Nordbanken Holding AB................... 449,203
27,520 Pharmacia & Upjohn...................... 1,541,424
10,070 Telefonaktiebolaget LM Ericsson 239,775
Class B.................................
-----------
2,532,590
-----------
SWITZERLAND -- 4.9%
405 Holderbank Financiere Glarus AG 479,460
(Bearer)................................
147 Nestle S.A.............................. 320,011
200 Novartis................................ 393,161
40 Roche Holdings AG Genusss............... 488,102
1,430 Swisscom AG............................. 598,660
1,590 UBS AG.................................. 488,524
-----------
2,767,918
-----------
TAIWAN -- 0.6%
*21,530 Taiwan Semiconductor ADR................ 305,456
-----------
UNITED KINGDOM -- 25.6%
28,300 Allied Domecq PLC....................... 257,322
57,440 Allied Irish Banks PLC.................. 1,022,584
38,200 Bank of Scotland........................ 456,340
94,200 Billiton PLC............................ 187,297
37,900 BOC Group PLC........................... 554,910
82,900 British American Tobacco PLC............ 735,851
57,834 British Petroleum Co., PLC.............. 863,130
32,000 British Telecommunications PLC.......... 481,570
*23,300 Cable & Wireless PLC.................... 213,022
24,000 Cadbury Schweppes PLC................... 408,895
79,200 Compass Group PLC....................... 906,597
40,288 Diageo PLC.............................. 452,795
21,000 Glaxo Wellcome PLC...................... 720,109
4,400 Granada Group PLC....................... 78,075
11,400 Great Universal Stores PLC.............. 119,399
9,600 HSBC Holdings PLC....................... 261,469
7,400 Imperial Chemical Industries PLC........ 63,899
30,200 National Westminster Bank PLC........... 581,857
72,900 Next PLC................................ 591,899
30,400 Orange PLC.............................. 352,795
8,300 Powergen PLC............................ 109,371
97,300 Rentokil Initial PLC.................... 727,685
50,400 Scottish Power PLC...................... 516,130
144,000 Siebe PLC............................... 565,425
90,485 SmithKline Beecham PLC.................. 1,269,879
45,100 Standard Chartered PLC.................. 520,759
64,200 Vodafone Group PLC...................... 1,040,387
6,900 Zeneca Group PLC........................ 301,355
-----------
14,360,806
-----------
Total common stocks..................... $53,105,566
-----------
-----------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ -----------
<C> <S> <C>
SHORT-TERM SECURITIES -- 4.5%
U.S. TREASURY BILLS -- 0.3%
$ 100,000 3.59% due 01/14/99...................... $ 99,870
50,000 3.80% due 01/14/99...................... 49,931
-----------
149,801
-----------
REPURCHASE AGREEMENT -- 4.2%
2,340,000 Interest in $1,162,198,000 joint 2,340,000
repurchase
agreement dated 12/31/98 with State
Street Bank 4.773% due 01/04/99;
maturity amount $2,341,241
(Collateralized by $469,031,000 U.S.
Treasury Notes 4.00% - 7.775% due
10/31/99 - 02/15/07, $278,664,000 U.S.
Treasury Bonds 7.875% - 12.75% due
11/15/10 - 02/15/21, $414,503,000 U.S.
Treasury Strips (principal) 0.00% due
02/15/19 - 08/15/21)...................
-----------
Total short-term securities............. $ 2,489,801
-----------
-----------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
DIVERSIFICATION OF NET ASSETS:
Total common stocks (cost
$48,189,228)........................... 94.8% $53,105,566
Total short-term securities (cost
$2,489,801)............................ 4.5 2,489,801
----- -----------
Total investment in securities (total
cost $50,679,029)...................... 99.3 55,595,367
Cash, receivables and other assets...... 0.9 522,226
Payable for Fund shares redeemed........ (0.1) (40,827)
Other liabilities....................... (0.1) (56,178)
----- -----------
Net assets.............................. 100.0% $56,020,588
----- -----------
----- -----------
</TABLE>
<TABLE>
<S> <C>
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $0.001 per share;
300,000,000 shares authorized; 4,746,637 shares
outstanding...................................... $ 4,747
Paid-in surplus................................... 53,685,184
Accumulated undistributed net investment income... 73,679
Distribution in excess of net realized gains on
investments...................................... (2,616,612)
Unrealized appreciation of investments............ 4,916,338
Unrealized depreciation of forward foreign
currency contracts (see Note 2)***............... (46,311)
Unrealized appreciation on translation of other
assets and liabilities in foreign currencies..... 3,563
-----------
Net assets........................................ $56,020,588
-----------
-----------
</TABLE>
<TABLE>
<S> <C>
Class A
Net asset value per share ($32,014,370
DIVIDED BY 2,691,654 shares outstanding)
(125,000,000 shares authorized)................ $11.89
------
------
Maximum offering price ($11.89 DIVIDED BY
94.5%)......................................... $12.58
------
------
Class B
Net asset value per share ($11,766,898
DIVIDED BY 1,003,228 shares outstanding)
(75,000,000 shares authorized)................. $11.73
------
------
Class C
Net asset value per share ($1,379,136
DIVIDED BY 144,180 shares outstanding)
(50,000,000 shares authorized)................. $ 9.57
------
------
Maximum offering price ($9.57 DIVIDED BY
99.0%)......................................... $ 9.67
------
------
Class Y
Net asset value per share ($10,860,184
DIVIDED BY 907,575 shares outstanding)
(50,000,000 shares authorized)................. $11.97
------
------
</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 December 31,
1998 the market value of these securities amounted to $1,590,340 or 2.8% of
net assets.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
33
<PAGE>
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS -- (CONTINUED)
DECEMBER 31, 1998
***FORWARD FOREIGN CURRENCY CONTRACTS -- OUTSTANDING AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
UNREALIZED
TOTAL AGGREGATE DELIVERY APPRECIATION
DESCRIPTION MARKET VALUE FACE VALUE DATE (DEPRECATION)
- ------------------------------ ------------- ----------- --------- --------------
<S> <C> <C> <C> <C>
Japanese Yen (Sell) $223,174 $220,243 01/13/99 $ (2,931)
Japanese Yen (Sell) 693,011 652,144 01/13/99 (40,867)
Japanese Yen (Sell) 444,588 442,075 01/13/99 (2,513)
--------------
$ (46,311)
--------------
--------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
34
<PAGE>
THE HARTFORD MIDCAP FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ------- -----------
<C> <S> <C>
COMMON STOCKS -- 98.4%
AEROSPACE & DEFENSE -- 0.9%
*18,280 Loral Space & Communications............ $ 325,612
-----------
BUSINESS SERVICES -- 8.1%
*14,950 Ingram Micro, Inc....................... 521,381
*25,950 Iron Mountain, Inc...................... 935,821
*21,000 Pierce Leahy Corp....................... 535,500
*5,000 Robert Half International Inc........... 222,500
17,300 Viad Corp............................... 525,487
*8,700 Young & Rubicam, Inc.................... 281,662
-----------
3,022,351
-----------
COMMUNICATIONS EQUIPMENT -- 1.5%
*11,400 ADC Telecommunications, Inc............. 396,150
*3,700 Network Appliance, Inc.................. 166,500
-----------
562,650
-----------
COMPUTERS & OFFICE EQUIPMENT -- 3.5%
*11,400 Affiliated Computer Services, Inc....... 513,000
*11,800 NCR Corporation......................... 492,650
*8,700 Unisys Corporation...................... 299,606
-----------
1,305,256
-----------
CONSUMER NON-DURABLES -- 1.8%
3,200 Black & Decker Corporation.............. 179,419
18,800 Miller (Herman) Inc..................... 505,250
-----------
684,669
-----------
CONSUMER SERVICES -- 5.1%
*7,800 Devry, Inc.............................. 238,875
10,075 Galileo International, Inc.............. 438,262
11,355 Hertz Corporation....................... 518,071
17,200 Sodexho Marriott Services, Inc.......... 476,225
*4,300 Starbucks Corporation................... 241,337
-----------
1,912,770
-----------
ELECTRONICS -- 6.8%
*16,820 Analog Devices, Inc..................... 527,727
10,200 Linear Technology Corporation........... 913,537
*15,200 Maxim Integrated Products, Inc.......... 664,050
*7,200 Sanmina Corporation..................... 450,000
-----------
2,555,314
-----------
FINANCIAL SERVICES -- 15.5%
16,935 Ace Ltd................................. 583,199
10,190 City National Corporation............... 424,158
15,810 Equifax, Inc............................ 540,504
15,570 Franklin Resources, Corp................ 498,240
17,600 Heller Financial, Inc................... 517,000
11,140 Legg Mason, Inc......................... 351,606
7,183 Old Kent Financial Corporation.......... 334,009
*16,000 Sabre Group Holdings.................... 712,000
11,350 State Street Corporation................ 789,534
17,200 T. Rowe Price Associates, Inc........... 589,100
8,100 Unum Corporation........................ 472,837
-----------
5,812,187
-----------
FOOD, BEVERAGE & TOBACCO -- 1.6%
*15,700 Keebler Foods Company................... 590,712
-----------
<CAPTION>
MARKET
SHARES VALUE
- ------- -----------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
HEALTH CARE -- 12.4%
12,350 Biomet, Inc............................. $ 497,087
*5,100 Forest Laboratories, Inc................ 271,256
*2,500 Genentech, Inc.......................... 199,218
*18,200 Health Management Associates, Inc....... 393,575
*9,670 Human Genome Sciences, Inc.............. 343,889
*6,500 Immunex Corporation..................... 817,781
4,350 Perkin-Elmer Corporation................ 424,396
27,700 ServiceMaster Company (The)............. 611,131
11,600 Stryker Corporation..................... 638,725
*9,050 Sunrise Assisted Living, Inc............ 469,468
-----------
4,666,526
-----------
INDUSTRIAL MATERIALS -- 3.7%
36,600 Abitibi-Consolidated, Inc............... 340,837
4,900 Phelps Dodge Corporation................ 249,287
*15,700 Sealed Air Corporation.................. 801,681
-----------
1,391,805
-----------
MANUFACTURING -- 3.2%
*23,850 Covance, Inc............................ 694,631
9,100 Danaher Corporation..................... 494,243
-----------
1,188,874
-----------
MEDIA & SERVICES -- 11.8%
*33,225 American Tower Corporation.............. 982,214
*9,600 Lamar Advertising Company............... 357,600
14,590 Outdoor Systems, Inc.................... 437,700
4,500 Scripps (E.W.) Co....................... 223,875
21,720 Stewart Enterprises, Inc................ 483,270
*18,200 Tele-Communications, Inc................ 838,337
*30,700 Univision Communications, Inc........... 1,110,956
-----------
4,433,952
-----------
RETAIL -- 9.7%
*1,100 Amazon.com, Inc......................... 353,375
7,680 CVS Corporation......................... 422,400
39,600 Dollar General Corporation.............. 935,550
10,200 Gucci Group NV.......................... 495,975
*12,300 Papa John's International, Inc.......... 542,737
*9,720 Staples, Inc............................ 424,642
*9,700 Whole Foods Market, Inc................. 469,237
-----------
3,643,916
-----------
SOFTWARE & SERVICES -- 9.7%
*12,740 Bisys Group, Inc. (The)................. 657,702
*26,000 CBT Corp................................ 386,750
*7,930 Ceridan Corporation..................... 553,613
*700 eBay, Inc............................... 168,875
19,900 First Data Corporation.................. 630,581
*11,740 Policy Management Systems Corporation... 592,870
*25,200 Rational Software Corporation........... 667,800
-----------
3,658,191
-----------
TRANSPORTATION -- 1.3%
22,270 Southwest Airlines Co................... 499,683
-----------
UTILITIES -- 1.8%
*13,200 Intermedia Communications, Inc.......... 227,700
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
35
<PAGE>
THE HARTFORD MIDCAP FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ------- -----------
<C> <S> <C>
</TABLE>
COMMON STOCKS -- (CONTINUED)
UTILITIES -- (CONTINUED)
<TABLE>
<C> <S> <C>
*14,300 McLeodUSA Incorporated.................. $ 446,875
-----------
674,575
-----------
Total common stocks..................... $36,929,043
-----------
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- ----------
<C> <S> <C>
SHORT-TERM SECURITIES -- 0.0%
REPURCHASE AGREEMENT
Interest in $1,162,198,000 joint
repurchase
agreement dated 12/31/98 with State
Street Bank 4.773% due 01/04/99;
maturity amount $10,005 (Collateralized
by $469,031,000 U.S. Treasury Notes
4.00% - 7.775% due 10/31/99 - 02/15/07,
$278,664,000 U.S. Treasury Bonds 7.875%
- 12.75% due 11/15/10 - 02/15/21,
$414,503,000 U.S. Treasury Strips
(principal) 0.00% due 02/15/19 -
08/15/21)..............................
$10,000 $ 10,000
------------
------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
ASSETS
Investment in securities, at value
(total cost $32,167,069) - see accompanying
portfolio........................................ $36,939,043
Receivable for securities sold.................... 4,223,682
Receivable for Fund shares sold................... 320,578
Receivable for dividends and interest............. 13,013
Cash and other assets............................. 11,961
-----------
Total assets...................................... $41,508,277
-----------
-----------
LIABILITIES
Payable for securities purchased.................. $ 3,916,045
Payable for Fund shares redeemed.................. 67,446
-----------
Total liabilities................................. 3,983,491
-----------
Net assets, applicable to $0.001 per share based
on 3,064,711 shares outstanding (300,000,000
authorized)...................................... $37,524,786
-----------
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
VALUE
-----------
<S> <C>
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $0.001 per share;
300,000,000 shares authorized; 3,064,711 shares
outstanding...................................... $ 3,065
Paid-in surplus................................... 32,794,366
Distribution in excess of net realized gains on
investments...................................... (44,619)
Unrealized appreciation of investments............ 4,771,974
-----------
Net assets........................................ $37,524,786
-----------
-----------
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Class A
Net asset value per share ($24,294,465
DIVIDED BY 1,974,455 shares outstanding)
(125,000,000 shares authorized)................ $12.30
------
------
Maximum offering price ($12.30 DIVIDED BY
94.5%)......................................... $13.02
------
------
Class B
Net asset value per share ($8,402,992
DIVIDED BY 687,667 shares outstanding)
(75,000,000 shares authorized)................. $12.22
------
------
Class C
Net asset value per share ($1,077,208
DIVIDED BY 99,054 shares outstanding)
(50,000,000 shares authorized)................. $10.87
------
------
Maximum offering price ($10.87 DIVIDED BY
99.0%)......................................... $10.98
------
------
Class Y
Net asset value per share ($3,750,121
DIVIDED BY 303,535 shares outstanding)
(50,000,000 shares authorized)................. $12.35
------
------
</TABLE>
* Non-income producing during period.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
36
<PAGE>
THE HARTFORD GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- -------- -----------
<C> <S> <C>
COMMON STOCKS -- 95.3%
AEROSPACE & DEFENSE -- 3.2%
3,100 Allied Signal, Inc...................... $ 137,368
2,100 Lockheed Martin Corporation............. 177,975
2,700 United Technologies Corporation......... 293,625
-----------
608,968
-----------
BUSINESS SERVICES -- 1.0%
1,400 Fluor Corporation....................... 59,587
*3,900 Snyder Communications, Inc.............. 131,625
-----------
191,212
-----------
COMMUNICATIONS EQUIPMENT -- 2.8%
*3,200 Cisco Systems, Inc...................... 297,000
1,900 Lucent Technologies, Inc................ 209,000
*750 Sprint Corporation (PCS Group).......... 17,343
-----------
523,343
-----------
COMPUTERS & OFFICE EQUIPMENT -- 6.3%
5,800 Compaq Computer Corporation............. 243,237
*1,400 Dell Computer Corporation............... 102,462
*1,700 EMC Corporation......................... 144,500
*1,000 Gateway 2000, Inc....................... 51,187
1,800 Hewlett-Packard Company................. 122,962
2,100 International Business Machines 387,975
Corporation.............................
1,600 Sun Microsystems, Inc................... 137,000
-----------
1,189,323
-----------
CONSUMER DURABLES -- 2.0%
3,900 Ford Motor Company...................... 228,881
2,000 General Motors Corporation.............. 143,125
-----------
372,006
-----------
CONSUMER NON-DURABLES -- 2.0%
1,200 Leggett & Platt, Inc.................... 26,400
3,800 Procter & Gamble Co..................... 346,987
-----------
373,387
-----------
CONSUMER SERVICES -- 2.5%
5,700 Darden Restaurants, Inc................. 102,600
3,000 Eastman Kodak Company................... 216,000
2,000 McDonald's Corporation.................. 153,250
-----------
471,850
-----------
ELECTRONICS -- 6.0%
*2,600 Analog Devices, Inc..................... 81,575
3,200 General Electric Company................ 326,600
3,900 Intel Corporation....................... 462,393
1,300 Texas Instruments, Inc.................. 111,231
3,600 York International Corp................. 146,925
-----------
1,128,724
-----------
ENERGY & SERVICES -- 4.7%
*1,500 Conoco, Inc............................. 31,312
700 Exxon Corporation....................... 51,187
*2,600 Friede Goldman International, Inc....... 29,575
6,800 Noble Affiliates, Inc................... 167,450
3,700 Royal Dutch Petroleum................... 177,137
1,800 Sunoco, Inc............................. 64,912
19,900 Union Pacific Resources Group, Inc...... 180,343
<CAPTION>
MARKET
SHARES VALUE
- -------- -----------
<C> <S> <C>
</TABLE>
ENERGY & SERVICES -- (CONTINUED)
<TABLE>
<C> <S> <C>
5,900 USX Corporation......................... $ 177,737
-----------
879,653
-----------
FINANCIAL SERVICES -- 15.3%
400 American Express Company................ 40,900
1,700 American International Group, Inc....... 164,262
4,000 Associates First Capital Corporation.... 169,500
2,900 CIGNA Corporation....................... 224,206
8,150 Citigroup, Inc.......................... 403,449
2,000 City National Corporation............... 83,250
3,200 Cullen/Frost Bankers, Inc............... 175,600
2,400 Edwards (A.G.) & Sons, Inc.............. 89,400
3,100 Federal Home Loan Mortgage 199,756
Corporation.............................
5,700 Federal National Mortgage Association... 421,800
2,300 FINOVA Group, Inc. (The)................ 124,056
2,100 Marsh & McLennan Companies, Inc......... 122,718
2,700 Mercantile Bankshares Corporation....... 103,950
2,100 NAC Re Corp............................. 98,568
3,100 National City Corporation............... 224,750
6,800 Pacific Century Financial Corporation... 165,750
800 Reinsurance Group of America, Inc....... 56,000
-----------
2,867,915
-----------
FOOD, BEVERAGE & TOBACCO -- 6.0%
5,800 Anheuser-Busch Companies, Inc........... 380,625
800 Coca-Cola Company, (The)................ 53,500
1,900 Heinz (H.J.) Company.................... 107,587
4,400 Interstate Bakeries Corp................ 116,325
6,500 Philip Morris Co., Inc.................. 347,750
1,500 Unilever United States Inc.............. 124,406
-----------
1,130,193
-----------
HEALTH CARE -- 12.2%
9,300 Abbott Laboratories..................... 455,700
6,600 American Home Products Corporation...... 371,662
*1,600 Amgen, Inc.............................. 167,300
800 Baxter International, Inc............... 51,450
3,800 Bergen Brunswig Corporation............. 132,525
*4,500 Boston Scientific Corporation........... 120,656
600 Bristol-Myers Squibb Company............ 80,287
5,600 Columbia/HCA Healthcare Corporation..... 138,600
*4,300 Genzyme Corporation..................... 213,925
*302 Genzyme Molecular Oncology.............. 981
3,400 HBO & Company........................... 97,537
400 Merck & Co., Inc........................ 59,075
1,400 Pharmacia & Upjohn, Inc................. 79,275
4,300 Warner-Lambert Company.................. 323,306
-----------
2,292,279
-----------
INDUSTRIAL MATERIALS -- 3.5%
4,900 Air Products & Chemicals, Inc........... 196,000
2,000 Aluminum Company of America............. 149,125
5,900 Engelhard Corporation................... 115,050
1,100 Georgia-Pacific Corporation............. 64,418
1,900 Minerals Technologies, Inc.............. 77,781
*1,000 Sealed Air Corporation.................. 51,062
-----------
653,436
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
37
<PAGE>
THE HARTFORD GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- -------- -----------
<C> <S> <C>
</TABLE>
COMMON STOCKS -- (CONTINUED)
<TABLE>
<C> <S> <C>
MEDIA & SERVICES -- 2.4%
*2,500 AirTouch Communications, Inc............ $ 180,312
*600 America Online, Inc..................... 86,850
2,700 Gannett Co., Inc........................ 178,706
-----------
445,868
-----------
REAL ESTATE -- 0.5%
4,000 Starwood Hotels & Resorts............... 90,750
-----------
RETAIL -- 6.3%
2,800 Dayton-Hudson Corp...................... 151,900
4,300 Dollar General Corporation.............. 101,587
3,750 Gap, Inc. (The)......................... 210,937
1,100 Home Depot, Inc. (The).................. 67,306
2,000 May Department Stores Company........... 120,750
6,400 Wal-Mart Stores, Inc.................... 521,200
-----------
1,173,680
-----------
SOFTWARE & SERVICES -- 5.8%
*1,900 Bisys Group, Inc. (The)................. 98,087
*1,100 BMC Software, Inc....................... 49,018
4,100 First Data Corporation.................. 129,918
*5,300 Microsoft Corporation................... 735,043
*2,800 Sterling Software, Inc.................. 75,775
-----------
1,087,841
-----------
UTILITIES -- 12.8%
2,070 ALLTEL Corp............................. 123,811
3,200 Ameritech Corporation................... 202,800
3,200 AT&T Corp............................... 240,800
4,800 Bell Atlantic Corporation............... 272,700
8,600 BellSouth Corp.......................... 428,925
5,800 Central & South West Corp............... 159,137
4,100 DQE, Inc................................ 180,143
2,500 El Paso Energy Corporation.............. 87,031
4,800 GPU, Inc................................ 212,100
6,700 SBC Communications, Inc................. 359,287
1,600 Sprint Corporation (FON Group).......... 134,600
-----------
2,401,334
-----------
Total common stocks (cost $17,881,762
$15,553,655)............................
-----------
-----------
<CAPTION>
PRINCIPAL
AMOUNT
- --------
<C> <S> <C>
SHORT-TERM SECURITIES -- 3.9%
REPURCHASE AGREEMENT
$723,000 Interest in $1,162,198,000 joint $ 723,000
repurchase
agreement dated 12/31/98 with State
Street Bank 4.773% due 01/04/99;
maturity amount $723,383
(Collateralized by $469,031,000 U.S.
Treasury Notes 4.00% - 7.775% due
10/31/99 - 02/15/07, $278,664,000 U.S.
Treasury Bonds 7.875% - 12.75% due
11/15/10 - 02/15/21, $414,503,000 U.S.
Treasury Strips (principal) 0.00% due
02/15/19 - 08/15/21)...................
-----------
-----------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
<CAPTION>
MARKET
VALUE
-----------
<S> <C> <C>
DIVERSIFICATION OF NET ASSETS:
Total common stocks (cost
$15,553,655)........................... 95.3% $17,881,762
Total short-term securities (cost
$723,000).............................. 3.9 723,000
----- -----------
Total investment in securities
(total cost $16,276,655)............... 99.2 18,604,762
Cash, receivables and other assets...... 2.9 549,017
Other assets............................ 0.1 21,187
Payable for securities purchased........ (2.2) (403,587)
Payable for Fund shares redeemed........ (0.0) (1,101)
----- -----------
Net assets.............................. 100.0% $18,770,278
----- -----------
----- -----------
</TABLE>
<TABLE>
<S> <C>
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $0.001 per share;
300,000,000 shares authorized; 1,646,243 shares
outstanding...................................... $ 1,646
Paid-in surplus................................... 16,569,933
Distribution in excess of net realized gains on
investments...................................... (142,973)
Unrealized appreciation of investments............ 2,328,107
Unrealized appreciation of futures contracts**.... 13,565
-----------
Net assets........................................ $18,770,278
-----------
-----------
</TABLE>
<TABLE>
<S> <C>
Class A
Net asset value per share ($11,120,296
DIVIDED BY 971,363 shares outstanding)
(125,000,000 shares authorized)................ $11.45
------
------
Maximum offering price ($11.45 DIVIDED BY
94.5%)......................................... $12.12
------
------
Class B
Net asset value per share ($3,537,848
DIVIDED BY 309,991 shares outstanding)
(75,000,000 shares authorized)................. $11.41
------
------
Class C
Net asset value per share ($3,725,893
DIVIDED BY 331,236 shares outstanding)
(50,000,000 shares authorized)................. $11.25
------
------
Maximum offering price ($11.25 DIVIDED BY
99.0%)......................................... $11.36
------
------
Class Y
Net asset value per share ($386,242 DIVIDED BY
33,653 shares outstanding) (50,000,000 shares
authorized).................................... $11.48
------
------
</TABLE>
* Non-income producing during period.
** The Fund had 1 Standard & Poor's 500 March 1999 futures contract open as of
December 31, 1998. This contract had a value of $311,375 as of December 31,
1998 and was collateralized by $13,500 of cash.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
38
<PAGE>
THE HARTFORD HIGH YIELD FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- ------------
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS -- 0.7%
$100,000 DLJ Commercial Mortgage Corp., Series
1998-CF1 Class B2
7.33% due 01/15/10.................... $ 94,414
------------
------------
<CAPTION>
SHARES
- ----------
<C> <S> <C>
CONVERTIBLE PREFERRED STOCK -- 1.4%
UTILITIES -- 1.4%
8,000 Coastal Finance Corp.................... $ 197,000
------------
------------
<CAPTION>
PRINCIPAL
AMOUNT
- ----------
<C> <S> <C>
CORPORATE NOTES -- 88.5%
CONSUMER NON-DURABLES -- 0.3%
$ 50,000 Revlon Consumer Products Corp.
8.625% due 02/01/08................... $ 45,500
------------
CONSUMER SERVICES -- 2.6%
150,000 Regal Cinemas, Inc.
9.50% due 06/01/08................... 156,000
200,000 Six Flags Entertainment Corp.
8.875% due 04/01/06................... 205,250
------------
361,250
------------
ELECTRONICS -- 3.2%
100,000 Advanced Micro Devices
11.00% due 08/01/03................... 106,500
75,000 AES Corp. Senior Subordinated Note
10.25% due 07/15/06................... 81,000
50,000 AES Corp. Senior Subordinated Note
8.00% due 12/31/08................... 49,506
200,000 Calpine Corp.
9.25% due 02/01/04................... 210,000
------------
447,006
------------
ENERGY & SERVICES -- 8.2%
150,000 Belco Oil & Gas Corp.
8.875% due 09/15/07.................. 138,000
125,000 Clark Refining & Marketing, Inc.
8.375% due 11/15/07.................. 117,500
50,000 Coda Energy Group
10.50% due 04/01/06.................. 49,500
50,000 Gulf Canada Resources Ltd.
8.375% due 11/15/05.................. 49,250
100,000 Gulf Canada Resources Ltd.
9.625% due 07/01/05.................. 99,750
103,000 Nuevo Energy Co.
9.50% due 04/15/06.................. 99,910
100,000 Ocean Energy, Inc.
10.375% due 10/15/05.................. 104,000
150,000 R & B Falcon Corp.
10.25% due 05/15/03.................. 158,250
100,000 R & B Falcon Corp.
7.375% due 04/15/18.................. 81,132
25,000 R & B Falcon Corp.
9.50% due 12/15/08.................. 24,968
100,000 Tesoro Petroleum Corp.
9.00% due 07/01/08.................. 97,000
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- ------------
<C> <S> <C>
</TABLE>
CORPORATE NOTES -- (CONTINUED)
ENERGY & SERVICES -- (CONTINUED)
<TABLE>
<C> <S> <C>
$150,000 Tuboscope, Inc.
7.50% due 02/15/08.................... $ 136,500
------------
1,155,760
------------
FINANCIAL SERVICES -- 1.1%
50,000 Conseco, Inc.
7.875% due 12/15/00.................. 49,585
100,000 Trizec Finance Ltd.
10.875% due 10/15/05.................. 106,250
------------
155,835
------------
FOOD, BEVERAGE & TOBACCO -- 4.4%
250,000 Agrilink Foods, Inc.
11.875% due 11/01/08.................. 254,375
200,000 Chiquita Brands International, Inc.
10.25% due 11/01/06.................. 207,500
100,000 Keebler Corp.
10.75% due 07/01/06.................. 111,500
50,000 Nabisco (RJR) Holdings Corp.
8.75% due 07/15/07.................. 50,488
------------
623,863
------------
FUNERAL/CEMETERY SERVICES -- 0.9%
150,000 Loewen Group International, Inc.
7.60% due 06/01/08.................. 120,750
------------
HEALTH CARE -- 3.3%
250,000 Columbia/HCA Healthcare Corp.
9.00% due 12/15/14.................. 260,080
100,000 Owens & Minor, Inc.
10.875% due 06/01/06.................. 107,500
100,000 Tenet Healthcare Corp.
8.625% due 12/01/03.................. 105,515
------------
473,095
------------
HOME BUILDING -- 2.6%
50,000 DEL Webb Corp.
9.375% due 05/01/09................... 49,000
100,000 MDC Holdings, Inc.
8.375% due 02/01/08................... 98,000
100,000 Toll Corp.
8.75% due 11/15/06................... 102,500
125,000 Toll Corp.
7.75% due 09/15/07................... 124,687
------------
374,187
------------
HOTELS & GAMING -- 6.4%
125,000 Circus Circus Enterprises, Inc.
9.25% due 12/01/05................... 126,250
150,000 Circus Circus Enterprises, Inc.
7.625% due 07/15/13................... 134,569
50,000 Harrah's Operating Co., Inc.
7.875% due 12/15/05................... 50,554
50,000 Host Marriott Travel Plaza
9.50% due 05/15/05................... 51,125
50,000 La Quinta Motor Inns
7.25% due 03/15/04................... 46,090
200,000 MGM Grand, Inc.
6.875% due 02/06/08................... 186,818
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
39
<PAGE>
THE HARTFORD HIGH YIELD FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- ------------
<C> <S> <C>
</TABLE>
CORPORATE NOTES -- (CONTINUED)
HOTELS & GAMING -- (CONTINUED)
<TABLE>
<C> <S> <C>
$175,000 Park Place Entertainment Corp.
7.875% due 12/15/05................... $ 175,218
150,000 Starwood Hotels & Resorts
7.375% due 11/15/15................... 132,848
------------
903,472
------------
INDUSTRIAL -- 18.2%
175,000 Agriculture Minerals and Chemicals Co.
10.75% due 09/30/03.................. 177,625
150,000 Allied Waste Industries, Inc.
7.625% due 01/01/06.................. 150,750
13,000 American Standard, Inc.
10.875% due 05/15/99.................. 13,032
50,000 AMR Corp.
10.00% due 03/07/01.................. 54,009
300,000 Arco Chemical Co.
9.80% due 02/01/20.................. 301,962
75,000 Big Flower Press Holdings, Inc.
8.625% due 12/01/08.................. 75,750
100,000 Borden Chemical, Inc.
9.50% due 05/01/05.................. 83,000
100,000 Call-Net Enterprises, Inc.
8.00% due 08/15/08.................. 96,500
175,000 Container Corp. of America
11.25% due 05/01/04.................. 182,000
100,000 Domtar, Inc.
8.75% due 08/01/06.................. 103,000
250,000 Fisher Scientific International, Inc.
9.00% due 02/01/08.................. 250,000
200,000 Huntsman Corp.
9.50% due 07/01/07.................. 199,000
125,000 ISP Holdings, Inc.
9.00% due 10/15/03.................. 131,562
125,000 Jones Intercable, Inc.
9.625% due 03/15/02.................. 134,375
100,000 RCN Corp.
10.00% due 10/15/07.................. 95,500
125,000 Stone Container Corp.
12.58% due 08/01/16.................. 133,750
55,000 Terra Industries, Inc.
10.50% due 06/15/05.................. 56,650
100,000 UNISYS Corp.
7.875% due 04/01/08.................. 108,500
150,000 UNISYS Corp.
12.00% due 04/15/03.................. 168,000
70,000 WMX Corp.
10.50% due 04/15/05.................. 65,100
------------
2,580,065
------------
MANUFACTURING -- 1.4%
125,000 AGCO Corp.
8.50% due 03/15/06.................... 121,250
75,000 Hayes Lemmerz International, Inc.
8.25% due 12/15/08.................... 74,261
------------
195,511
------------
MEDIA & SERVICES -- 7.6%
200,000 Chancellor Media Corp. of Los Angeles
8.75% due 06/15/07.................. 205,000
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- ------------
<C> <S> <C>
</TABLE>
MEDIA & SERVICES -- (CONTINUED)
<TABLE>
<C> <S> <C>
$175,000 Fox Family Worldwide, Inc.
9.25% due 11/01/07.................. $ 173,250
150,000 Fox/Liberty Networks LLC
8.875% due 08/15/07.................. 153,000
100,000 Hollinger International Publishing, Inc.
9.25% due 02/01/06.................. 105,500
250,000 Primedia, Inc.
10.25% due 06/01/04.................. 262,500
230,000 TCI Satellite Entertainment, Inc.
10.875% due 02/15/07.................. 75,900
100,000 Time Warner Telecom LLC
9.75% due 07/15/08.................. 105,000
------------
1,080,150
------------
PACKAGING & CONTAINERS -- 0.8%
115,000 Ball Corp.
8.25% due 08/01/08.................... 119,600
------------
RETAIL -- 2.1%
125,000 Carr-Gottstein Foods Co.
12.00% due 11/15/05................... 143,437
43,000 Jitney-Jungle Stores of America, Inc.
12.00% due 03/01/06................... 47,945
47,000 KMart Corp.
12.50% due 03/01/05................... 58,824
50,000 Saks, Inc.
8.25% due 11/15/08................... 53,000
------------
303,206
------------
SHIPBUILDING -- 0.7%
100,000 Newport News Shipbuilding
9.25% due 12/01/06.................... 105,750
------------
TELECOMMUNICATIONS -- 16.0%
147,000 Adelphia Communications Corp.
9.25% due 10/01/02................... 155,085
100,000 Centennial Cellular Corp.
10.75% due 12/15/08................... 100,015
225,000 Charter Communication International
11.25% due 03/15/06................... 253,125
200,000 Comcast Cellular Holdings Corp.
9.50% due 05/01/07................... 212,000
100,000 Flag Limited
8.25% due 01/30/08................... 98,250
125,000 Lenfest Communications
10.50% due 06/15/06................... 146,250
175,000 Level 3 Communications
9.125% due 05/01/08................... 172,812
100,000 McLeodUSA, Inc.
9.50% due 11/08/08................... 106,000
100,000 McLeodUSA, Inc.
9.25% due 07/15/07................... 104,500
140,000 Metromedia Fiber Network
10.00% due 11/15/08................... 143,850
150,000 Nextlink Communications
12.50% due 04/15/06................... 162,000
192,000 Rogers Cablesystems, Inc.
10.125% due 09/01/12.................. 211,200
150,000 Rogers Cantel Mobile, Inc.
9.375% due 06/01/08.................. 158,250
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
40
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- ------------
<C> <S> <C>
</TABLE>
CORPORATE NOTES -- (CONTINUED)
TELECOMMUNICATIONS -- (CONTINUED)
<TABLE>
<C> <S> <C>
$ 75,000 Rogers Cantel Mobile, Inc.
9.75% due 06/01/16.................. $ 80,250
50,000 Telewest Communications PLC
9.625% due 10/01/06.................. 51,500
100,000 Telewest Communications PLC
11.25% due 11/01/08.................. 112,000
------------
2,267,087
------------
TEXTILE -- 0.7%
100,000 Westpoint Stevens, Inc.
7.875% due 06/15/05................... 101,625
------------
TRANSPORTATION -- 4.5%
200,000 CSC Holdings, Inc.
9.875% due 02/15/13................... 224,000
125,000 Enterprises Shipholding, Inc.
8.875% due 05/01/08................... 102,500
200,000 Teekay Shipping Corp.
8.32% due 02/01/08................... 194,250
100,000 United Air Lines, Inc.
9.125% due 01/15/12................... 115,373
------------
636,123
------------
UTILITIES -- 3.3%
125,000 Cogentrix Energy, Inc.
8.75% due 10/15/08................... 133,750
125,000 Connecticut Light & Power Co.
7.875% due 10/01/24................... 130,815
125,000 El Paso Electric Co.
9.40% due 05/01/11................... 144,687
50,000 Public Service Company of New Mexico
7.10% due 08/01/05................... 50,358
------------
459,610
------------
Total corporate notes................... $ 12,509,445
------------
------------
FOREIGN/YANKEE BONDS & NOTES -- 5.6%
FOREIGN GOVERNMENTS -- 5.6%
250,000 Republic of Argentina
11.00% due 12/04/05.................. $ 248,600
100,000 Republic of Colombia
8.375% due 02/15/27.................. 74,050
100,000 Republic of Panama
8.875% due 09/30/27.................. 93,500
250,000 Republic of Venezuela
6.75% due 03/31/20.................. 173,906
250,000 United Mexican States Discount Bond
9.531% due 12/31/19................... 202,500
------------
Total foreign/yankee bonds & notes...... $ 792,556
------------
------------
SHORT-TERM SECURITIES -- 1.1%
REPURCHASE AGREEMENT
161,000 Interest in $121,902,000 joint $ 161,000
repurchase
agreement dated 12/31/98 with State
Street Bank 4.750% due 01/04/99;
maturity amount $161,085
(Collateralized by $121,902,000 U.S.
Treasury Bonds 8.125% due 05/15/21)....
------------
------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
<CAPTION>
MARKET
VALUE
-----------
<S> <C> <C>
DIVERSIFICATION OF NET ASSETS:
Total collateralized mortgage
obligations (cost $93,417)............. 0.7% $ 94,414
Total convertible preferred stock (cost
$196,000).............................. 1.4 197,000
Total corporate notes (cost
$12,370,499)........................... 88.5 12,509,445
Total foreign/yankee bonds & notes (cost
$764,610).............................. 5.6 792,556
Total short-term securities (cost
$161,000).............................. 1.1 161,000
----- -----------
Total investment in securities
(total cost $13,585,526)............... 97.3 13,754,415
Cash, receivables and other assets...... 3.8 532,492
Payable for securities purchased........ (1.1) (142,781)
Other liabilities....................... (0.0) (2,842)
----- -----------
Net assets.............................. 100.0% $14,141,284
----- -----------
----- -----------
</TABLE>
<TABLE>
<S> <C>
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $0.001 per share;
300,000,000 shares authorized; 1,393,403 shares
outstanding...................................... $ 1,393
Paid-in surplus................................... 13,949,557
Accumulated undistributed net investment income... 18,333
Accumulated undistributed net realized gains on
investments...................................... 3,112
Unrealized appreciation of investments............ 168,889
-----------
Net assets........................................ $14,141,284
-----------
-----------
</TABLE>
<TABLE>
<S> <C>
Class A
Net asset value per share ($8,507,449
DIVIDED BY 838,163 shares outstanding)
(125,000,000 shares authorized)................ $10.15
------
------
Maximum offering price ($10.15 DIVIDED BY
95.5%)......................................... $10.63
------
------
Class B
Net asset value per share ($2,322,172
DIVIDED BY 228,903 shares outstanding)
(75,000,000 shares authorized)................. $10.14
------
------
Class C
Net asset value per share ($2,278,096
DIVIDED BY 224,561 shares outstanding)
(50,000,000 shares authorized)................. $10.14
------
------
Maximum offering price ($10.14 DIVIDED BY
99.0%)......................................... $10.24
------
------
Class Y
Net asset value per share ($1,033,567
DIVIDED BY 101,776 shares outstanding)
(50,000,000 shares authorized)................. $10.16
------
------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
41
<PAGE>
THE HARTFORD GLOBAL LEADERS FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ------- ----------
<C> <S> <C>
COMMON STOCK -- 92.7%
DOMESTIC COMMON STOCKS -- 58.6%
COMMUNICATIONS EQUIPMENT -- 4.1%
*1,290 Cisco Systems, Inc...................... $ 119,728
820 Lucent Technologies, Inc................ 90,200
----------
209,928
----------
COMPUTERS & OFFICE EQUIPMENT -- 5.8%
*1,100 EMC Corporation......................... 93,500
750 International Business Machines Corp.... 138,593
550 Xerox Corporation....................... 64,900
----------
296,993
----------
CONSUMER NON-DURABLES -- 0.8%
460 Procter & Gamble Co..................... 42,003
----------
CONSUMER SERVICES -- 1.2%
820 McDonald's Corporation.................. 62,832
----------
ELECTRONICS -- 4.9%
1,400 General Electric Company................ 142,887
780 Intel Corporation....................... 92,478
190 Texas Instruments, Inc.................. 16,256
----------
251,621
----------
ENERGY & SERVICES -- 2.4%
850 Exxon Corporation....................... 62,156
1,340 Schlumberger Ltd........................ 61,807
----------
123,963
----------
FINANCIAL SERVICES -- 9.5%
620 American Express Company................ 63,395
870 American International Group, Inc....... 84,063
1,470 Associates First Capital Corporation.... 62,291
1,830 Citigroup, Inc.......................... 90,585
960 Marsh & McLennan Companies, Inc......... 56,100
940 Merrill Lynch & Co., Inc................ 62,745
1,060 State Street Corporation................ 73,736
----------
492,915
----------
FOOD, BEVERAGE & TOBACCO -- 1.3%
1,300 Philip Morris Co., Inc.................. 69,550
----------
HEALTH CARE -- 8.5%
1,060 American Home Products Corporation...... 59,691
*480 Amgen, Inc.............................. 50,190
460 Johnson & Johnson....................... 38,582
740 Medtronic, Inc.......................... 54,945
770 Pfizer, Inc............................. 96,586
1,610 Service Corporation International....... 61,280
1,060 Warner-Lambert Company.................. 79,698
----------
440,972
----------
MANUFACTURING -- 1.2%
840 Tyco International, Ltd................. 63,367
----------
MEDIA & SERVICES -- 2.9%
*170 America Online, Inc..................... 24,607
1,230 Gannett Co., Inc........................ 81,410
1,470 Walt Disney Company (The)............... 44,100
----------
150,117
----------
<CAPTION>
MARKET
SHARES VALUE
- ------- ----------
<C> <S> <C>
</TABLE>
DOMESTIC COMMON STOCKS -- (CONTINUED)
<TABLE>
<C> <S> <C>
RETAIL -- 9.3%
1,240 CVS Corporation......................... $ 68,200
1,570 Gap, Inc. (The)......................... 88,312
1,140 Gucci Group NV.......................... 55,432
1,710 Home Depot, Inc. (The).................. 104,630
*1,760 Staples, Inc............................ 76,890
1,060 Wal-Mart Stores, Inc.................... 86,323
----------
479,787
----------
SOFTWARE & SERVICES -- 2.1%
*770 Microsoft Corporation................... 106,789
----------
TRANSPORTATION -- 0.7%
*630 AMR Corporation......................... 37,406
----------
UTILITIES -- 3.9%
320 AT&T Corp............................... 24,080
*1,470 MCI WorldCom, Inc....................... 105,472
1,310 SBC Communications, Inc................. 70,248
----------
199,800
----------
Total domestic common stocks............ $3,028,043
----------
FOREIGN COMMON STOCKS -- 34.1%
FINLAND -- 2.1%
870 Nokia AB Oy............................. $ 106,531
----------
FRANCE -- 4.4%
400 Alcatel................................. 48,979
260 Axa..................................... 37,701
50 L'Oreal................................. 36,161
400 Vivendi................................. 103,830
----------
226,671
----------
GERMANY -- 3.4%
*720 DaimlerChrysler AG...................... 71,545
1,470 Hoechst AG.............................. 60,811
680 Siemans AG.............................. 44,706
----------
177,062
----------
ITALY -- 1.6%
9,880 Telecom Italia S.p.A.................... 84,485
----------
JAPAN -- 4.1%
1,070 Fuji Photo Film Co., Ltd................ 39,841
290 Mabuchi Motor Co., Ltd.................. 22,239
4,300 Olympus Optical Co., Ltd................ 49,520
610 Sony Corporation........................ 44,507
9,460 Toshiba Corporation..................... 56,443
----------
212,550
----------
NETHERLANDS -- 4.3%
410 Aegon Nv................................ 50,379
800 Heineken NV............................. 48,170
570 ING Groep N.V........................... 34,777
460 Philips Electronics NV.................. 30,884
640 Unilever NV CVA......................... 54,735
----------
218,945
----------
SPAIN -- 0.5%
580 Telefonica De Espana.................... 515
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
42
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ------- ----------
<C> <S> <C>
</TABLE>
FOREIGN COMMON STOCKS -- (CONTINUED)
SPAIN -- (CONTINUED)
<TABLE>
<C> <S> <C>
*580 Telefonica S.A.......................... $ 25,829
----------
26,344
----------
SWEDEN -- 3.1%
960 Hennes & Mauritz AB..................... 78,405
1,420 Pharmacia & Upjohn...................... 79,535
----------
157,940
----------
UNITED KINGDOM -- 10.6%
5,930 British Petroleum Co., PLC.............. 88,500
*3,200 COLT Telecom Group PLC.................. 46,852
4,640 Compass Group PLC....................... 53,113
2,390 Glaxo Wellcome PLC...................... 81,955
3,380 National Westminster Bank PLC........... 65,121
10,000 Rentokil Initial PLC.................... 74,787
3,590 SmithKline Beecham PLC.................. 50,382
5,460 Vodafone Group PLC...................... 88,481
549,191
----------
Total foreign common stocks............. $1,759,719
----------
Total common stocks..................... $4,787,762
----------
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- ----------
<C> <S> <C>
SHORT-TERM SECURITIES -- 9.2%
REPURCHASE AGREEMENT
$477,000 Interest in $1,162,198,000 joint $ 477,000
repurchase
agreement dated 12/31/98 with State
Street Bank 4.773% due 01/04/99;
maturity amount $477,253
(Collateralized by $469,031,000 U.S.
Treasury Notes 4.00% - 7.775% due
10/31/99 - 02/15/07, $278,664,000 U.S.
Treasury Bonds 7.875% - 12.75% due
11/15/10 - 02/15/21, $414,503,000 U.S.
Treasury Strips (principal) 0.00% due
02/15/19 - 08/15/21)...................
-----------
-----------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
<CAPTION>
MARKET
VALUE
----------
<S> <C> <C>
DIVERSIFICATION OF NET ASSETS:
Total common stocks (cost $3,965,360)... 92.7% $4,787,762
Total short-term securities (cost
$477,000).............................. 9.2 477,000
----- ----------
Total investment in securities
(total cost $4,442,360)................ 101.9 5,264,762
Cash, receivables and other assets...... 2.3 117,916
Payable for securities purchased........ (3.5) (182,254)
Payable for Fund shares redeemed........ (0.7) (34,701)
----- ----------
Net assets.............................. 100.0% $5,165,723
----- ----------
----- ----------
</TABLE>
<TABLE>
<S> <C>
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $0.001 per share;
300,000,000 shares authorized; 407,663 shares
outstanding...................................... $ 408
Paid-in surplus................................... 4,273,845
Accumulated undistributed net investment income... 511
Accumulated undistributed net realized gains on
investments...................................... 68,557
Unrealized appreciation of investments............ 822,402
----------
Net assets........................................ $5,165,723
----------
----------
</TABLE>
<TABLE>
<S> <C>
Class A
Net asset value per share ($3,771,458
DIVIDED BY 297,551 shares outstanding)
(125,000,000 shares authorized)................ $12.67
------
------
Maximum offering price ($12.67 DIVIDED BY
94.5%)......................................... $13.41
------
------
Class B
Net asset value per share ($485,932 DIVIDED BY
38,411 shares outstanding) (75,000,000 shares
authorized).................................... $12.65
------
------
Class C
Net asset value per share ($516,642 DIVIDED BY
40,834 shares outstanding) (50,000,000 shares
authorized).................................... $12.65
------
------
Maximum offering price ($12.65 DIVIDED BY
99.0%)......................................... $12.78
------
------
Class Y
Net asset value per share ($391,691 DIVIDED BY
30,867 shares outstanding) (50,000,000 shares
authorized).................................... $12.69
------
------
</TABLE>
* Non-income producing during period.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
43
<PAGE>
THE HARTFORD MUTUAL FUNDS, INC.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
THE HARTFORD THE HARTFORD THE HARTFORD
MONEY BOND INCOME THE HARTFORD DIVIDEND AND
MARKET FUND STRATEGY FUND ADVISERS FUND GROWTH FUND
------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ -- $ 6,006 $ 2,352,735 $ 5,162,583
Interest............... 2,143,009 3,538,018 8,747,939 396,563
Less: Foreign tax
withheld.............. -- -- (17,719) (55,292)
------------- -------------- -------------- -------------
Total investment
income, net......... 2,143,009 3,544,024 11,082,955 5,503,854
------------- -------------- -------------- -------------
EXPENSES:
Investment advisory
fees.................. 192,694 365,863 2,704,478 1,667,617
Transfer agent fees.... 102,621 103,456 692,380 472,976
Distribution fees
Class A.............. 82,074 110,637 561,759 387,546
Class B.............. 76,539 105,399 1,173,413 761,269
Class C.............. 3,705 10,233 89,821 17,876
Custodian fees gross... 4,209 8,049 7,076 9,873
Custodian fee expense
offset................ (1,741) (2,938) (3,923) (2,840)
Accounting fees........ 8,094 17,506 78,780 47,018
Registration and filing
fees.................. 9,598 22,090 211,347 98,157
Board of Directors
fees.................. 743 1,087 7,019 4,300
Amortization of
deferred
organizational
costs................. 7,535 7,535 26,900 26,900
Other expenses......... 14,653 20,981 129,757 80,027
------------- -------------- -------------- -------------
Total expenses
(before waivers and
reimbursements)..... 500,724 769,898 5,678,807 3,570,719
Expense waivers and
reimbursements........ (73,325) (20,229) (17,556) (6,047)
------------- -------------- -------------- -------------
Total expenses, net.... 427,399 749,669 5,661,251 3,564,672
------------- -------------- -------------- -------------
Net investment income
(loss)................ 1,715,610 2,794,355 5,421,704 1,939,182
------------- -------------- -------------- -------------
NET REALIZED AND CHANGE
IN UNREALIZED GAINS
(LOSSES) ON INVESTMENTS:
Net realized gain
(loss) on
investments........... 678 615,413 12,814,096 1,323,906
Net realized gain
(loss) on forward
foreign currency
contracts............. -- -- (2) 2,008
Net realized gain
(loss) on option
contracts............. -- -- -- 23,932
Net realized gain
(loss) on futures
contracts............. -- -- -- --
Net realized gain
(loss) on foreign
currency
transactions.......... -- 14 -- 5,633
Change in net
unrealized
appreciation
(depreciation) of
investments........... -- 574,704 53,719,779 24,293,100
Change in net
unrealized
appreciation
(depreciation) of
futures contracts..... -- -- -- --
Change in net
unrealized
appreciation
(depreciation) of
foreign foward
currency contracts.... -- -- -- --
Change in net
unrealized
appreciation
(depreciation) of
options............... -- -- -- (24,973)
Change in net
unrealized
appreciation
(depreciation) on
translation of other
assets and liabilities
in foreign
currencies............ -- -- -- --
------------- -------------- -------------- -------------
Net realized and change
in unrealized gains
(losses) on
investments........... 678 1,190,131 66,533,873 25,623,606
------------- -------------- -------------- -------------
Net increase in net
assets resulting from
operations............ $1,716,288 $3,984,486 $71,955,577 $27,562,788
------------- -------------- -------------- -------------
------------- -------------- -------------- -------------
</TABLE>
* From inception April 30, 1998, to December 31, 1998.
** From inception September 30, 1998, to December 31, 1998.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
44
<PAGE>
<TABLE>
<CAPTION>
THE HARTFORD THE HARTFORD THE HARTFORD THE HARTFORD
THE HARTFORD CAPITAL SMALL INTERNATIONAL THE HARTFORD GROWTH AND
STOCK FUND APPRECIATION FUND COMPANY FUND OPPORTUNITIES FUND MIDCAP FUND INCOME FUND*
------------- ------------------ ------------- ------------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 2,843,310 $ 2,934,582 $ 162,399 $ 833,286 $ 76,518 $ 71,009
Interest............... 728,704 1,539,583 178,688 275,302 51,443 21,785
Less: Foreign tax
withheld.............. (18,612) (66,161) (2,665) (91,114) (781) (770)
------------- ------------------ ------------- ------------------- ------------ -------------
Total investment
income, net......... 3,553,402 4,408,004 338,422 1,017,474 127,180 92,024
------------- ------------------ ------------- ------------------- ------------ -------------
EXPENSES:
Investment advisory
fees.................. 2,072,900 4,745,355 435,779 367,845 162,468 43,952
Transfer agent fees.... 585,570 1,360,691 112,735 91,472 45,610 11,979
Distribution fees
Class A.............. 448,656 934,218 81,644 73,286 37,794 10,854
Class B.............. 969,066 2,510,428 132,611 96,685 44,472 11,399
Class C.............. 61,874 26,962 4,109 2,545 1,727 5,325
Custodian fees gross... 5,625 31,020 8,455 144,332 9,811 5,439
Custodian fee expense
offset................ (1,395) (26,938) (5,309) (5) (2,516) (21)
Accounting fees........ 54,738 124,942 10,794 13,270 4,040 1,161
Registration and filing
fees.................. 169,344 248,222 17,532 13,605 14,806 6,384
Board of Directors
fees.................. 5,024 11,443 990 835 371 107
Amortization of
deferred
organizational
costs................. 7,535 26,900 7,535 7,535 -- --
Other expenses......... 93,339 212,855 19,194 16,354 7,815 2,959
------------- ------------------ ------------- ------------------- ------------ -------------
Total expenses
(before waivers and
reimbursements)..... 4,472,276 10,206,098 826,069 827,759 326,398 99,538
Expense waivers and
reimbursements........ (28,040) (3,762) (33,329) (83,930) (25,070) (8,949)
------------- ------------------ ------------- ------------------- ------------ -------------
Total expenses, net.... 4,444,236 10,202,336 792,740 743,829 301,328 90,589
------------- ------------------ ------------- ------------------- ------------ -------------
Net investment income
(loss)................ (890,834) (5,794,332) (454,318) 273,645 (174,148) 1,435
------------- ------------------ ------------- ------------------- ------------ -------------
NET REALIZED AND CHANGE
IN UNREALIZED GAINS
(LOSSES) ON INVESTMENTS:
Net realized gain
(loss) on
investments........... 5,767,222 (15,650,758) (4,257,905) (2,421,958) 129,345 (146,818)
Net realized gain
(loss) on forward
foreign currency
contracts............. -- 38,179 (79) (74,106) 739 --
Net realized gain
(loss) on option
contracts............. -- -- -- (11,481) -- --
Net realized gain
(loss) on futures
contracts............. -- -- -- 494,661 -- 3,845
Net realized gain
(loss) on foreign
currency
transactions.......... -- 152,754 54 20,311 (555) --
Change in net
unrealized
appreciation
(depreciation) of
investments........... 65,840,333 32,023,573 10,894,738 5,684,085 4,771,974 2,328,107
Change in net
unrealized
appreciation
(depreciation) of
futures contracts..... -- -- -- (42,532) -- 13,565
Change in net
unrealized
appreciation
(depreciation) of
foreign foward
currency contracts.... -- 35,449 -- (21,549) -- --
Change in net
unrealized
appreciation
(depreciation) of
options............... -- -- -- 585 -- --
Change in net
unrealized
appreciation
(depreciation) on
translation of other
assets and liabilities
in foreign
currencies............ -- 31,305 31 6,862 -- --
------------- ------------------ ------------- ------------------- ------------ -------------
Net realized and change
in unrealized gains
(losses) on
investments........... 71,607,555 16,630,502 6,636,839 3,634,878 4,901,503 2,198,699
------------- ------------------ ------------- ------------------- ------------ -------------
Net increase in net
assets resulting from
operations............ $70,716,721 $10,836,170 $6,182,521 $ 3,908,523 $4,727,355 $2,200,134
------------- ------------------ ------------- ------------------- ------------ -------------
------------- ------------------ ------------- ------------------- ------------ -------------
<CAPTION>
THE HARTFORD THE HARTFORD
HIGH YIELD GLOBAL LEADERS
FUND** FUND**
------------- ---------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 4,188 $ 5,962
Interest............... 265,772 8,986
Less: Foreign tax
withheld.............. -- (217)
------------- ---------------
Total investment
income, net......... 269,960 14,731
------------- ---------------
EXPENSES:
Investment advisory
fees.................. 22,100 8,591
Transfer agent fees.... 5,660 1,844
Distribution fees
Class A.............. 6,270 2,171
Class B.............. 4,466 1,010
Class C.............. 4,050 1,031
Custodian fees gross... 1,664 10,372
Custodian fee expense
offset................ (50) (35)
Accounting fees........ 1,402 479
Registration and filing
fees.................. 4,862 1,476
Board of Directors
fees.................. 62 19
Amortization of
deferred
organizational
costs................. -- --
Other expenses......... 2,133 1,353
------------- ---------------
Total expenses
(before waivers and
reimbursements)..... 52,619 28,311
Expense waivers and
reimbursements........ (4,947) (10,660)
------------- ---------------
Total expenses, net.... 47,672 17,651
------------- ---------------
Net investment income
(loss)................ 222,288 (2,920)
------------- ---------------
NET REALIZED AND CHANGE
IN UNREALIZED GAINS
(LOSSES) ON INVESTMENTS:
Net realized gain
(loss) on
investments........... 3,113 190,260
Net realized gain
(loss) on forward
foreign currency
contracts............. -- (204)
Net realized gain
(loss) on option
contracts............. -- --
Net realized gain
(loss) on futures
contracts............. -- --
Net realized gain
(loss) on foreign
currency
transactions.......... (21) 2,052
Change in net
unrealized
appreciation
(depreciation) of
investments........... 168,889 822,402
Change in net
unrealized
appreciation
(depreciation) of
futures contracts..... -- --
Change in net
unrealized
appreciation
(depreciation) of
foreign foward
currency contracts.... -- --
Change in net
unrealized
appreciation
(depreciation) of
options............... -- --
Change in net
unrealized
appreciation
(depreciation) on
translation of other
assets and liabilities
in foreign
currencies............ -- --
------------- ---------------
Net realized and change
in unrealized gains
(losses) on
investments........... 171,981 1,014,510
------------- ---------------
Net increase in net
assets resulting from
operations............ $394,269 $1,011,590
------------- ---------------
------------- ---------------
</TABLE>
* From inception April 30, 1998, to December 31, 1998.
** From inception September 30, 1998, to December 31, 1998.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
45
<PAGE>
THE HARTFORD MUTUAL FUNDS, INC.
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
THE HARTFORD THE HARTFORD THE HARTFORD
MONEY BOND INCOME THE HARTFORD DIVIDEND AND
MARKET FUND STRATEGY FUND ADVISERS FUND GROWTH FUND
------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment
income................ $ 1,715,610 $ 2,794,355 $ 5,421,704 $ 1,939,182
Net realized gains
(losses).............. 678 615,427 12,814,094 1,355,479
Net change in
unrealized
appreciation of
investments........... -- 574,704 53,719,779 24,268,127
------------- -------------- -------------- -------------
Net increase in net
assets resulting from
operations............ 1,716,288 3,984,486 71,955,577 27,562,788
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Class A.............. (1,250,248) (1,856,234) (3,501,112) (1,330,894)
Class B.............. (293,833) (465,495) (1,575,666) (278,341)
Class Y.............. (158,226) (415,556) (964,943) (188,063)
Class C.............. (13,303) (49,319) (335,363) (40,654)
From net realized gains
on investments
Class A.............. (458) (332,756) (4,769,981) (660,247)
Class B.............. (148) (110,679) (3,555,678) (402,501)
Class Y.............. (60) (72,826) (915,537) (66,070)
Class C.............. (12) (28,241) (1,043,179) (21,621)
From capital
Class A.............. -- -- -- --
Class B.............. -- -- -- --
Class Y.............. -- -- -- --
Class C.............. -- -- -- --
CAPITAL SHARE
TRANSACTIONS:
Class A.............. 6,845,426 18,077,755 189,233,392 100,464,774
Class B.............. 7,486,854 10,923,635 181,342,293 66,777,347
Class Y.............. 2,682,545 5,928,169 10,589,232 1,867,464
Class C.............. 1,203,354 5,427,294 52,992,750 9,091,056
------------- -------------- -------------- -------------
Net increase in net
assets................ 18,218,179 41,010,233 489,451,785 202,775,038
NET ASSETS:
Beginning of period.... 29,665,217 39,090,082 177,740,474 114,843,621
------------- -------------- -------------- -------------
End of period.......... $47,883,396 $80,100,315 $667,192,259 $317,618,659
------------- -------------- -------------- -------------
------------- -------------- -------------- -------------
Accumulated
undistributed
(distribution in
excess of) net
investment income..... $ -- $ 60,865 $ 248 $ 148,410
------------- -------------- -------------- -------------
------------- -------------- -------------- -------------
</TABLE>
* From inception April 30, 1998, to December 31, 1998.
** From inception September 30, 1998, to December 31, 1998.
*** This amount represents seed money deposited in the fund on December 31,
1997.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
46
<PAGE>
<TABLE>
<CAPTION>
THE HARTFORD THE HARTFORD THE HARTFORD
THE HARTFORD CAPITAL SMALL INTERNATIONAL THE HARTFORD
STOCK FUND APPRECIATION FUND COMPANY FUND OPPORTUNITIES FUND MIDCAP FUND
------------- ------------------ ------------- ------------------- ---------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment
income................ $ (890,834) $ (5,794,332) $ (454,318) $ 273,645 $ (174,148)
Net realized gains
(losses).............. 5,767,222 (15,459,825) (4,257,930) (1,992,573) 129,529
Net change in
unrealized
appreciation of
investments........... 65,840,333 32,090,327 10,894,769 5,627,451 4,771,974
------------- ------------------ ------------- ------------------- ---------------
Net increase in net
assets resulting from
operations............ 70,716,721 10,836,170 6,182,521 3,908,523 4,727,355
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Class A.............. -- -- -- (41,500) --
Class B.............. -- -- -- -- --
Class Y.............. -- -- -- (37,687) --
Class C.............. -- -- -- (3,377) --
From net realized gains
on investments
Class A.............. (2,436,707) (2,172,667) (271,473) -- --
Class B.............. (1,709,941) (1,804,600) (131,872) -- --
Class Y.............. (74,780) (169,843) (103,247) -- --
Class C.............. (499,945) -- -- -- --
From capital
Class A.............. (98,443) -- -- -- --
Class B.............. (69,082) -- -- -- --
Class Y.............. (3,021) -- -- -- --
Class C.............. (20,198) -- -- -- --
CAPITAL SHARE
TRANSACTIONS:
Class A.............. 164,791,250 127,426,826 15,445,033 14,249,167 19,029,730
Class B.............. 126,414,554 116,849,576 7,306,977 3,691,053 6,757,968
Class Y.............. 690,373 (3,521,427) 2,803,478 3,654,992 3,069,631
Class C.............. 33,120,833 13,508,727 2,358,036 1,288,344 940,059
------------- ------------------ ------------- ------------------- ---------------
Net increase in net
assets................ 390,821,614 260,952,762 33,589,453 26,709,515 34,524,743
NET ASSETS:
Beginning of period.... 106,567,130 437,685,916 38,147,231 29,311,073 3,000,043***
------------- ------------------ ------------- ------------------- ---------------
End of period.......... $497,388,744 $698,638,678 $71,736,684 $56,020,588 $37,524,786
------------- ------------------ ------------- ------------------- ---------------
------------- ------------------ ------------- ------------------- ---------------
Accumulated
undistributed
(distribution in
excess of) net
investment income..... $ -- $ (20,872) $ 831 $ 73,679 $ --
------------- ------------------ ------------- ------------------- ---------------
------------- ------------------ ------------- ------------------- ---------------
<CAPTION>
THE HARTFORD THE HARTFORD THE HARTFORD
GROWTH AND HIGH YIELD GLOBAL LEADERS
INCOME FUND* FUND** FUND**
------------- ------------- ---------------
<S> <C> <C> <C>
OPERATIONS:
Net investment
income................ $ 1,435 $ 222,288 $ (2,920)
Net realized gains
(losses).............. (142,973) 3,092 192,108
Net change in
unrealized
appreciation of
investments........... 2,341,672 168,889 822,402
------------- ------------- ---------------
Net increase in net
assets resulting from
operations............ 2,200,134 394,269 1,011,590
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Class A.............. (1,118) (131,217) --
Class B.............. (139) (29,122) --
Class Y.............. (72) (17,821) --
Class C.............. (106) (25,775) --
From net realized gains
on investments
Class A.............. -- -- (85,972)
Class B.............. -- -- (11,627)
Class Y.............. -- -- (10,428)
Class C.............. -- -- (12,093)
From capital
Class A.............. (13,420) -- --
Class B.............. (1,667) -- --
Class Y.............. (868) -- --
Class C.............. (1,271) -- --
CAPITAL SHARE
TRANSACTIONS:
Class A.............. 9,822,522 8,391,345 3,137,747
Class B.............. 3,098,120 2,290,229 398,757
Class Y.............. 340,604 1,017,821 310,428
Class C.............. 3,327,559 2,251,555 427,321
------------- ------------- ---------------
Net increase in net
assets................ 18,770,278 14,141,284 5,165,723
NET ASSETS:
Beginning of period.... -- -- --
------------- ------------- ---------------
End of period.......... $18,770,278 $14,141,284 $5,165,723
------------- ------------- ---------------
------------- ------------- ---------------
Accumulated
undistributed
(distribution in
excess of) net
investment income..... $ -- $ 18,333 $ 511
------------- ------------- ---------------
------------- ------------- ---------------
</TABLE>
* From inception April 30, 1998, to December 31, 1998.
** From inception September 30, 1998, to December 31, 1998.
*** This amount represents seed money deposited in the fund on December 31,
1997.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
47
<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 change in
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
------------- --------------
------------- --------------
Accumulated
undistributed
(distribution in
excess of) net
investment income..... $ -- $ 50,902
------------- --------------
------------- --------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
48
<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 change in
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
-------------- ------------- ------------- ------------------ ------------- -------------------
-------------- ------------- ------------- ------------------ ------------- -------------------
Accumulated
undistributed
(distribution in
excess of) net
investment income..... $ 74,337 $ 45,193 $ (617,538) $ 64,234 $ -- $ (107,688)
-------------- ------------- ------------- ------------------ ------------- -------------------
-------------- ------------- ------------- ------------------ ------------- -------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
49
<PAGE>
THE HARTFORD MUTUAL FUNDS, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
1. ORGANIZATION:
The Hartford Mutual Funds, Inc. (the Company) is a diversified open-end
investment management company comprised of twelve 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 High
Yield Bond Fund, The Hartford Advisers Fund, The Hartford Dividend and
Growth Fund, The Hartford Growth and Income Fund, The Hartford Stock Fund,
The Hartford MidCap Fund, The Hartford Small Company Fund, The Hartford
Capital Appreciation Fund, The Hartford International Opportunities Fund
and The Hartford Global Leaders Fund. The Company is organized under the
laws of the State of Maryland and is registered with the Securities and
Exchange Commission (SEC) under the Investment Company Act of 1940, as
amended.
The Funds and their investment objectives are listed below:
<TABLE>
<S> <C> <C>
The Hartford Money Market Fund -- Seeks maximum current income consistent
(Money Market Fund) with liquidity and preservation of
capital.
The Hartford Bond Income Strategy Fund -- Seeks a high level of current income
(Bond Income Strategy Fund) consistent with a 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
(Advisers Fund) return by investing in 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
(Dividend and Growth Fund) consistent with growth of capital by
investing primarily in equity
securities.
The Hartford Stock Fund -- Seeks long-term growth of capital with
(Stock Fund) income as a secondary consideration by
investing primarily in equity
securities.
The Hartford Capital Appreciation Fund -- Seeks maximum capital appreciation by
(Capital Appreciation Fund) investing in stocks of small, medium and
large companies.
The Hartford Small Company Fund -- Seeks maximum capital appreciation by
(Small Company Fund) investing primarily in stocks of
companies with market capitalizations
within the range represented by the
Russell 2000 Index.
The Hartford International Opportunities -- Seeks growth of capital by investing
Fund primarily in equity securities issued by
(International Opportunities Fund) non-U.S. companies.
The Hartford MidCap Fund -- Seeks to achieve long-term capital
(MidCap Fund) growth through capital appreciation by
investing primarily in equity
securities.
The Hartford Growth and Income Fund -- Seeks growth of capital and current
(Growth and Income Fund) income by investing primarily in equity
securities with earnings growth
potential and steady or rising
dividends.
The Hartford High Yield Bond Fund -- Seeks high current income, growth of
(High Yield Fund) capital is a secondary objective.
The Hartford Global Leaders Fund -- Seeks growth of capital by investing
(Global Leaders Fund) primarily in high-quality U.S. and
non-U.S. companies.
</TABLE>
Each Fund is divided into Class A, Class B, Class C 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 C Shares are
sold with a front-end load sales charge of up to 1% and a contingent
deferred sales charge of up to 1%. 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.
______________________________________ 50 ______________________________________
<PAGE>
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.
b) SECURITY VALUATION--Debt securities (other than short-term securities)
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. For The Hartford Bond Income Strategy
Fund, The Hartford High Yield Bond Fund, The Hartford Advisers Fund, The
Hartford Dividend and Growth Fund, The Hartford Growth and Income Fund,
The Hartford Stock Fund, The Hartford MidCap Fund,The Hartford Small
Company Fund, The Hartford Capital Appreciation Fund, The Hartford
International Opportunities Fund and The Hartford Global Leaders Fund,
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. The difference between amortized cost and market value for debt
and equity securities is recorded in the statement of operations and
accumulated in shareholders' equity.
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. (See Note 2 f))
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 translated into U.S. dollars at prevailing
exchange rates on the date translated. 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 portfolio security valuation
resulting from fluctuations in the foreign currency exchange rates on
portfolio securities from the fluctuations arising from changes in the
market prices of securities held. Such fluctuations are included with the
net realized and change in unrealized gains or losses on investments in
the accompanying financial statements.
Net realized and unrealized foreign exchange gains or losses arising from
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 are reported as net
realized gain (loss) on foreign currency transactions and net unrealized
appreciation (depreciation) on translation of other assets and
liabilities in foreign currencies, respectively.
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
______________________________________ 51 ______________________________________
<PAGE>
THE HARTFORD MUTUAL FUNDS, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998
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 TRANSACTIONS--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
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.
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 is
subsequently "marked-to-market" through net unrealized appreciation
(depreciation) of options 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.
The Funds may write covered options. "Covered" means that so long as the
Fund is obligated as the writer of an option, it will own either the
underlying securities or currency or an option to purchase or sell the
same underlying securities or currency having an expiration date of the
covered option and an exercise price equal to or less than the exercise
price of the covered option, or will establish or maintain with its
custodian for the term of the option a "segregated account" consisting of
cash or other liquid securities having a value equal to the fluctuating
market value of the option securities or currencies. The Fund receives a
premium from writing a call or put option, recorded as a component of
other liabilities on the Statement of Net Assets, which increases the
Fund's return, recorded as a realized gain, if the option expires
unexercised or is closed out at a net profit. Any loss realized from the
covered option is offset by the gain realized on the sale of the
underlying. Covered options, at times before exercise or close
______________________________________ 52 ______________________________________
<PAGE>
out, are marked-to-market through net unrealized appreciation
(depreciation) of options. The Fund's option activity was as follows
during 1998:
THE HARTFORD DIVIDEND AND GROWTH FUND
OPTIONS CONTRACTS WRITTEN DURING THE PERIOD
<TABLE>
<CAPTION>
NUMBER OF PREMIUM REALIZED
CALL WRITES CONTRACTS DOLLAR AMOUNTS GAIN/(LOSS)
- ----------------------------------- --------- --------------- -----------
<S> <C> <C> <C>
Beginning of Period................ -- $ -- --
During the Period.................. 4,128 346,124 --
Expired during the period.......... (114) (8,898) 8,898
Closed during the period........... (3,135) (253,212) 82,223
Exercised during the period........ (122) (16,956) --
--------- --------------- -----------
Balance at the end of period....... 757 67,058 91,121
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF PREMIUM REALIZED
WRITTEN PUTS CONTRACTS DOLLAR AMOUNTS GAIN/(LOSS)
- ----------------------------------- --------- --------------- -----------
<S> <C> <C> <C>
Beginning of Period................ -- $ -- --
During the Period.................. 1,060 104,519 --
Expired during the period.......... -- -- --
Closed during the period........... (1,060) (104,519) (67,189)
Exercised during the period........ -- -- --
--------- --------------- -----------
Balance at the end of period....... -- -- (67,189)
</TABLE>
g) FORWARD FOREIGN CURRENCY CONTRACTS--As of December 31, 1998, the
International Opportunities 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.
h) 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.
i) 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, except that certain dividends for foreign securities
where the ex-dividend date may have passed, are recorded as soon as the
Fund is informed of the ex-dividend data in the exercise of reasonable
diligence. 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 Stock Fund, the MidCap Fund, the Capital
Appreciation Fund, the International Opportunities Fund, and the Global
Leaders 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, and the
High Yield Bond 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
______________________________________ 53 ______________________________________
<PAGE>
THE HARTFORD MUTUAL FUNDS, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998
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
deferred 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).
j) ORGANIZATIONAL COSTS--As of June 30, 1998, costs incurred by new funds
in connection with their organization, are expensed as incurred in accordance
with Statement of Position 98-5, "Reporting on the Costs of Start-Up
Activities." Costs incurred by the Funds, prior to June 30, 1998, 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 December 31, 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 reporting 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 December 31, 1998 the Funds held the following restricted securities
(excluding 144A issues):
<TABLE>
<CAPTION>
PERCENTAGE OF
ACQUISITION ACQUISITION MARKET FUND'S
FUND SECURITY DATE COST VALUE NET ASSETS
- ------------------------- ------------------------ ----------- ------------ --------- -------------
<S> <C> <C> <C> <C> <C>
Capital Appreciation
Fund.................... SGW Holdings Corporation 8/15/97 $ 2,000,001 $ 483,840 0.07%
Small Company Fund....... SGW Holdings Corporation 8/15/97 $ 88,996 $ 21,530 0.03%
</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 Dividend and Growth Fund, Growth and Income Fund, Advisers Fund,
Stock Fund, MidCap Fund, Small Company Fund, Capital Appreciation Fund,
International Opportunities Fund and Global Leaders 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 services to the Bond
Income Strategy Fund, High Yield Fund and Money Market Fund. Each Fund
pays a fee to HIFSCO, a portion of which may be used to compensate
Wellington or HIMCO.
The schedule below reflects the rates of compensation paid to HIFSCO for
services rendered:
MONEY MARKET FUND
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS ANNUAL FEE
- -------------------------------------------------- ----------
<S> <C>
On first $500 million .50%
On next $500 million .45%
Over $1 billion .40%
</TABLE>
______________________________________ 54 ______________________________________
<PAGE>
BOND INCOME STRATEGY FUND
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS ANNUAL FEE
- -------------------------------------------------- ----------
<S> <C>
On first $500 million .65%
On next $500 million .55%
Over $1 billion .50%
</TABLE>
SMALL COMPANY, INTERNATIONAL
OPPORTUNITIES, GLOBAL LEADERS AND
MIDCAP FUNDS
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS ANNUAL FEE
- -------------------------------------------------- ----------
<S> <C>
On first $500 million .85%
On next $500 million .75%
Over $1 billion .70%
</TABLE>
CAPITAL APPRECIATION, STOCK AND
GROWTH AND INCOME FUNDS
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS ANNUAL FEE
- -------------------------------------------------- ----------
<S> <C>
On first $500 million .80%
On next $500 million .70%
Over $1 billion .65%
</TABLE>
ADVISERS, HIGH YIELD AND
DIVIDEND AND GROWTH FUNDS
<TABLE>
<CAPTION>
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, B AND C SHARES--Until October
31, 1998, Hartford Securities Distribution Company. (HSD), an indirect
majority-owned subsidiary of The Hartford, was the principal underwriter
and distributor of the Funds. Effective November 1, 1998, HIFSCO became
the principal underwriter and distributor of the Funds. HIFSCO 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 year ended December 31, 1998, the
following revenues were received by HSD and HIFSCO:
<TABLE>
<CAPTION>
FRONT-END LOAD CONTINGENT DEFERRED
SALES CHARGE SALES CHARGE
--------------- --------------------
<S> <C> <C>
HSD $24,636,536 $ 1,380,028
HIFSCO 5,192,834 452,536
--------------- --------------------
TOTAL $29,829,370 $ 1,832,564
--------------- --------------------
--------------- --------------------
</TABLE>
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 (HIFSCO) for the distribution of Class A,
Class B and Class C shares and servicing the accounts of Class A, Class B
and Class C 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 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 Class B 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. After eight years, Class B shares convert to Class A shares.
Upon conversion to Class A shares the Class A plan described above will
apply to those shares. For Class C shares, some or all of the fee may be
re-allocated to broker-dealers for distribution
______________________________________ 55 ______________________________________
<PAGE>
THE HARTFORD MUTUAL FUNDS, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998
and/or shareholder account services. Under the Class C plan, the Fund
pays the Distributor 1.00% of the average daily net assets of Class C
shares outstanding, 0.25% of which is intended as a fee for services
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, C 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 C CLASS Y
- ------------------------------ ------- ------- ------- -------
<S> <C> <C> <C> <C>
Money Market Fund............. 1.00% 1.70% 1.70% 0.55%
Bond Income Strategy Fund..... 1.25% 1.95% 1.95% 0.80%
High Yield Bond Fund.......... 1.40% 2.10% 2.10% 0.95%
Dividend and Growth Fund...... 1.40% 2.10% 2.10% 0.95%
Advisers Fund................. 1.40% 2.10% 2.10% 0.95%
Growth and Income Fund........ 1.45% 2.15% 2.15% 1.00%
Stock Fund.................... 1.45% 2.15% 2.15% 1.00%
MidCap Fund................... 1.45% 2.15% 2.15% 1.00%
Small Company Fund............ 1.45% 2.15% 2.15% 1.00%
Capital Appreciation Fund..... 1.45% 2.15% 2.15% 1.00%
International Opportunities
Fund......................... 1.65% 2.35% 2.35% 1.20%
Global Leaders Fund........... 1.65% 2.35% 2.35% 1.20%
</TABLE>
Such voluntary and temporary fee waivers and expense limitation
arrangements may be terminated by The Hartford at any time without
notice.
Amounts incurred which exceed the above limits are deducted from expenses
and are reported as expense waivers and reimbursements on the Statement
of Operations.
d) OTHER RELATED PARTY TRANSACTIONS--The Hartford and its subsidiaries
provide facilities and office equipment, as well as perform certain other
services, including fund accounting and financial reporting, to the
Funds. Certain officers of the Funds are Directors and/or officers of
HIFSCO, HIMCO, HSD and/or The Hartford or its subsidiaries. No officer of
the Funds receives any compensation directly from the Funds.
e) EXPENSE OFFSET--The Funds have entered into certain expense offset
arrangements with the Custodian Bank. The amount of the Funds' expense
reductions is shown on the accompanying statement of operations as
Custodian expense offset.
4. AFFILIATE HOLDINGS:
As of December 31, 1998 affiliates of The Hartford had ownership of shares
in the Funds as follows:
<TABLE>
<CAPTION>
FUND CLASS A CLASS B CLASS C CLASS Y
- ------------------------------ --------- --------- ------- -------
<S> <C> <C> <C> <C>
Money Market Fund............. 8,855,885 2,089,929 141 10,064
Bond Income Strategy Fund..... 2,242,964 301,760 202,187 1,013
High Yield Bond Fund.......... 704,094 100,543 100,613 100,529
Dividend and Growth Fund...... -- -- -- 1,010
Advisers Fund................. -- -- -- 1,010
Growth and Income Fund........ 210,522 60,057 30,098 1,003
Stock Fund.................... 3,726 1,972 294,988 1,000
MidCap Fund................... 210,000 60,000 30,000 1,000
Small Company Fund............ 6,641 297,163 38,962 1,000
Capital Appreciation Fund..... -- -- -- 1,000
International Opportunities
Fund......................... -- 127,349 183,810 1,000
Global Leaders Fund........... 210,000 30,000 30,000 30,000
</TABLE>
______________________________________ 56 ______________________________________
<PAGE>
5. INVESTMENT TRANSACTIONS:
For the year ended December 31, 1998, aggregate purchases and sales of
investment securities (excluding short-term investments) were as follows:
<TABLE>
<CAPTION>
FUND COST OF PURCHASES PROCEEDS FROM SALES
- ---------------------------------------- ------------------ --------------------
<S> <C> <C>
Bond Income Strategy Fund............... $109,784,244 $ 73,984,407
High Yield Bond Fund.................... 14,564,401 1,158,555
Dividend and Growth Fund................ 271,376,276 99,261,170
Advisers Fund........................... 550,042,302 140,932,326
Growth and Income Fund.................. 18,731,016 3,030,543
Stock Fund.............................. 384,471,498 91,552,056
MidCap Fund............................. 54,448,565 25,483,989
Small Company Fund...................... 150,453,629 127,135,721
Capital Appreciation Fund............... 959,931,998 706,327,096
International Opportunities Fund........ 82,292,685 57,356,301
Global Leaders Fund..................... 5,757,712 1,982,610
</TABLE>
6. TAX COST AND UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS:
As of December 31, 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 GROSS AGGREGATE GROSS
UNREALIZED UNREALIZED NET UNREALIZED
FUND TAX COST APPRECIATION DEPRECIATION APPRECIATION
- ------------------------------ ------------ ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Bond Income Strategy Fund..... $ 77,233,349 $ 1,898,553 $ (346,644) $ 1,551,909
Advisers Fund................. 634,408,008 78,831,508 (8,774,147) 70,057,361
Dividend and Growth Fund...... 287,898,017 43,068,144 (9,644,750) 33,423,394
Stock Fund.................... 431,122,122 85,742,579 (11,297,213) 74,445,366
Capital Appreciation Fund..... 678,238,251 130,281,680 (96,105,018) 34,176,662
Small Company Fund............ 58,337,278 13,715,918 (3,342,772) 10,373,146
International Opportunities
Fund......................... 51,226,175 6,113,647 (1,744,455) 4,369,192
MidCap Fund................... 32,286,749 5,711,201 (1,058,907) 4,652,294
Growth and Income Fund........ 16,297,344 2,582,680 (275,261) 2,307,419
High Yield Fund............... 13,587,645 311,219 (144,449) 166,770
Global Leaders Fund........... 4,449,564 831,086 (15,887) 815,199
</TABLE>
7. CAPITAL SHARE TRANSACTIONS:
The following information is for the year ended December 31, 1998:
<TABLE>
<CAPTION>
BOND INCOME STRATEGY
MONEY MARKET FUND FUND ADVISERS FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold.............. 72,590,461 $ 72,590,461 2,217,207 $ 23,772,753 14,668,464 $216,723,178
Shares issued on
reinvestment of
distributions........... 1,109,430 1,109,430 197,172 2,108,757 534,467 8,159,366
Shares redeemed.......... (66,854,465) (66,854,465) (727,575) (7,803,755) (2,419,880) (35,649,152)
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 6,845,426 $ 6,845,426 1,686,804 $ 18,077,755 12,783,051 $189,233,392
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
______________________________________ 57 ______________________________________
<PAGE>
THE HARTFORD MUTUAL FUNDS, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
CAPITAL APPRECIATION
DIVIDEND AND GROWTH FUND STOCK FUND FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold.............. 7,385,119 $116,092,425 10,615,322 $188,034,558 11,038,450 $220,993,901
Shares issued on
reinvestment of
distributions........... 125,486 1,961,799 130,820 2,493,447 103,173 2,127,930
Shares redeemed.......... (1,137,735) (17,589,450) (1,467,139) (25,736,755) (5,002,856) (95,695,005)
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 6,372,870 $100,464,774 9,279,003 $164,791,250 6,138,767 $127,426,826
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL
SMALL COMPANY FUND OPPORTUNITIES FUND MIDCAP FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold.............. 2,098,937 $ 25,705,200 1,561,672 $ 18,230,610 1,877,292 $ 20,232,636
Shares issued on
reinvestment of
distributions........... 19,781 255,555 3,432 40,680 -- --
Shares redeemed.......... (887,713) (10,515,722) (357,834) (4,022,123) (112,836) (1,202,906)
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 1,231,005 $ 15,445,033 1,207,270 $ 14,249,167 1,764,456 $ 19,029,730
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND HIGH YIELD FUND GLOBAL LEADERS FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold.............. 989,220 $ 10,007,211 827,597 $ 8,285,112 290,399 $ 3,051,775
Shares issued on
reinvestment of
distributions........... 1,522 14,537 12,984 130,321 7,152 85,972
Shares redeemed.......... (19,379) (199,227) (2,419) (24,088) -- --
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 971,363 $ 9,822,522 838,162 $ 8,391,345 297,551 $ 3,137,747
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
BOND INCOME STRATEGY
MONEY MARKET FUND FUND ADVISERS FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS B
Shares sold.............. 18,281,807 $ 18,281,807 1,343,487 $ 14,373,594 12,788,835 $188,280,059
Shares issued on
reinvestment of
distributions........... 245,990 245,990 47,193 503,881 319,674 4,856,441
Shares redeemed.......... (11,040,944) (11,040,944) (369,800) (3,953,640) (799,212) (11,794,207)
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 7,486,854 $ 7,486,854 1,020,880 $ 10,923,635 12,309,297 $181,342,293
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION
DIVIDEND AND GROWTH FUND STOCK FUND FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS B
Shares sold.............. 4,738,961 $ 74,046,718 7,718,134 $134,930,641 8,049,387 $161,848,122
Shares issued on
reinvestment of
distributions........... 42,146 645,761 90,591 1,697,807 84,258 1,714,921
Shares redeemed.......... (512,477) (7,915,132) (594,162) (10,213,894) (2,499,822) (46,713,467)
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 4,268,630 $ 66,777,347 7,214,563 $126,414,554 5,633,823 $116,849,576
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
______________________________________ 58 ______________________________________
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL
SMALL COMPANY FUND OPPORTUNITIES FUND MIDCAP FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS B
Shares sold.............. 695,531 $ 8,513,456 425,868 $ 4,892,462 657,060 $ 7,070,206
Shares issued on
reinvestment of
distributions........... 9,889 126,081 2 25 -- --
Shares redeemed.......... (109,150) (1,332,560) (107,860) (1,201,434) (29,393) (312,238)
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 596,270 $ 7,306,977 318,011 $ 3,691,053 627,667 $ 6,757,968
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND HIGH YIELD FUND GLOBAL LEADERS FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS B
Shares sold.............. 312,295 $ 3,119,978 228,235 $ 2,283,684 40,185 $ 421,831
Shares issued on
reinvestment of
distributions........... 189 1,806 2,050 20,573 969 11,627
Shares redeemed.......... (2,494) (23,663) (1,382) (14,028) (2,743) (34,701)
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 309,991 $ 3,098,120 228,903 $ 2,290,229 38,411 $ 398,757
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
BOND INCOME STRATEGY
MONEY MARKET FUND FUND ADVISERS FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS C
Shares sold.............. 2,584,648 $ 2,584,648 577,572 $ 5,816,789 5,386,522 $ 52,552,713
Shares issued on
reinvestment of
distributions........... 9,179 9,179 6,895 69,395 129,003 1,283,774
Shares redeemed.......... (1,390,473) 1,390,473) (45,670) (458,890) (86,185) (843,737)
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 1,203,354 $ 1,203,354 538,797 $ 5,427,294 5,429,340 $ 52,992,750
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION
DIVIDEND AND GROWTH FUND STOCK FUND FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS C
Shares sold.............. 952,615 $ 9,249,867 3,472,413 $ 33,293,936 1,549,815 $ 14,023,487
Shares issued on
reinvestment of
distributions........... 6,321 61,804 50,177 507,292 -- --
Shares redeemed.......... (22,367) (220,615) (73,495) (680,394) (57,413) (514,760)
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 936,569 $ 9,091,056 3,449,096 $ 33,120,833 1,492,402 $ 13,508,727
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL
SMALL COMPANY FUND OPPORTUNITIES FUND MIDCAP FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS C
Shares sold.............. 269,600 $ 2,413,522 144,221 $ 1,288,663 104,562 $ 989,561
Shares issued on
reinvestment of
distributions........... -- -- 353 3,362 -- --
Shares redeemed.......... (5,840) (55,486) (394) (3,680) (5,508) (49,502)
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 263,760 $ 2,358,036 144,180 $ 1,288,344 99,054 $ 940,059
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
______________________________________ 59 ______________________________________
<PAGE>
THE HARTFORD MUTUAL FUNDS, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND HIGH YIELD FUND GLOBAL LEADERS FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS C
Shares sold.............. 339,082 $ 3,403,834 223,263 $ 2,238,547 39,826 $ 415,228
Shares issued on
reinvestment of
distributions........... 128 1,202 2,376 23,878 1,008 12,093
Shares redeemed.......... (7,974) (77,476) (1,078) (10,870) --
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 331,236 $ 3,327,559 224,561 $ 2,251,555 40,834 $ 427,321
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
BOND INCOME STRATEGY
MONEY MARKET FUND FUND ADVISERS FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS Y
Shares sold.............. 11,162,631 $ 11,162,631 782,903 $ 8,441,971 1,028,339 $ 15,147,226
Shares issued on
reinvestment of
distributions........... 138,240 138,240 45,476 488,379 123,062 1,880,476
Shares redeemed.......... (8,618,326) (8,618,326) (279,284) (3,002,181 (442,801) (6,438,471)
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 2,682,545 $ 2,682,545 549,095 $ 5,928,169 708,600 $ 10,589,232
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION
DIVIDEND AND GROWTH FUND STOCK FUND FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS Y
Shares sold.............. 534,171 $ 8,408,783 39,075 $ 725,569 678,544 $ 13,618,020
Shares issued on
reinvestment of
distributions........... 16,122 254,131 4,044 77,800 8,140 169,470
Shares redeemed.......... (422,594) (6,795,450) (6,476) (112,996) (826,549) (17,308,917)
----------- ------------ ---------- ------------ ---------- ------------
Net Increase
(decrease).............. 127,700 $ 1,867,464 36,643 $ 690,373 (139,865) $ (3,521,427)
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL
SMALL COMPANY FUND OPPORTUNITIES FUND MIDCAP FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS Y
Shares sold.............. 513,335 $ 6,387,840 574,757 $ 6,741,690 355,368 $ 3,943,675
Shares issued on
reinvestment of
distributions........... 7,878 102,734 3,164 37,687 -- --
Shares redeemed.......... (296,016) (3,687,096) (275,192) (3,124,385) (81,834) (874,044)
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 225,198 $ 2,803,478 302,729 $ 3,654,992 273,535 $ 3,069,631
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND HIGH YIELD FUND GLOBAL LEADERS FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS Y
Shares sold.............. 33,554 $ 339,664 100,000 $ 1,000,000 30,000 $ 300,000
Shares issued on
reinvestment of
distributions........... 98 940 1,776 17,821 867 10,428
Shares redeemed.......... -- -- -- -- -- --
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 33,652 $ 340,604 101,776 $ 1,017,821 30,867 $ 310,428
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
______________________________________ 60 ______________________________________
<PAGE>
The following information is for the period ending December 31, 1997:
<TABLE>
<CAPTION>
BOND INCOME STRATEGY
MONEY MARKET FUND FUND ADVISERS FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <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
Shares issued on
reinvestment of
distributions........... 872,366 872,366 145,580 1,522,249 87,579 1,135,044
Shares redeemed.......... (27,278,534) (27,278,534) (668,900) (7,075,576) (184,092) (2,386,422)
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 11,824,783 $ 11,824,783 1,630,045 $ 16,849,692 6,058,317 $ 77,673,780
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION
DIVIDEND AND GROWTH FUND STOCK FUND FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold.............. 4,527,342 $ 62,564,218 4,284,826 $ 61,336,237 11,903,386 $236,230,545
Shares issued on
reinvestment of
distributions........... 62,376 889,158 8,399 122,981 387,629 7,293,278
Shares redeemed.......... (512,573) (7,020,346) (499,124) (7,219,622) (1,230,817) (25,238,492)
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 4,077,145 $ 56,433,030 3,794,101 $ 54,239,596 11,060,198 $218,285,331
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL
SMALL COMPANY FUND OPPORTUNITIES FUND
------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold................... 1,563,737 $ 19,638,094 1,404,244 $ 15,957,135
Shares issued on reinvestment
of distributions............. 66,524 768,836 28,770 299,574
Shares redeemed............... (472,607) (6,262,441) (349,105) (3,879,591)
----------- ------------ ---------- ------------
Net Increase.................. 1,157,654 $ 14,144,489 1,083,909 $ 12,377,118
----------- ------------ ---------- ------------
----------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
BOND INCOME STRATEGY
MONEY MARKET FUND FUND ADVISERS FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS B
Shares sold.............. 5,870,708 $ 5,870,708 612,657 $ 6,438,050 2,882,743 $ 36,730,437
Shares issued on
reinvestment of
distributions........... 44,356 44,356 11,668 122,715 26,867 346,972
Shares redeemed.......... (1,466,126) (1,466,126) (93,401) (973,394) (94,146) (1,188,076)
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 4,448,938 $ 4,448,938 530,924 $ 5,587,371 2,815,464 $ 35,889,333
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION
DIVIDEND AND GROWTH FUND STOCK FUND FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS B
Shares sold.............. 2,538,636 $ 34,876,647 2,451,215 $ 34,862,504 8,639,143 $172,632,683
Shares issued on
reinvestment of
distributions........... 27,298 385,513 4,573 66,285 284,109 5,301,745
Shares redeemed.......... (320,322) (4,637,659) (212,892) (3,097,391) (144,046) (2,910,190)
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 2,245,612 $ 30,624,501 2,242,896 $ 31,831,398 8,779,206 $175,024,238
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
______________________________________ 61 ______________________________________
<PAGE>
THE HARTFORD MUTUAL FUNDS, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
INTERNATIONAL
SMALL COMPANY FUND OPPORTUNITIES FUND
------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
CLASS B
Shares sold................... 788,063 $ 10,175,219 689,420 $ 7,753,696
Shares issued on reinvestment
of distributions............. 34,763 398,035 12,211 125,757
Shares redeemed............... (40,102) (486,917) (31,621) (348,497)
----------- ------------ ---------- ------------
Net Increase.................. 782,724 $ 10,086,337 670,010 $ 7,530,956
----------- ------------ ---------- ------------
----------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
BOND INCOME STRATEGY
MONEY MARKET FUND FUND ADVISERS FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <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
Shares issued on
reinvestment of
distributions........... 81,393 81,393 13,863 146,182 58,225 752,023
Shares redeemed.......... (3,167,837) (3,167,837) (43,885) (455,655) (331,924) (4,128,773)
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 2,637,595 $ 2,637,595 446,518 $ 4,707,315 2,951,224 $ 33,363,110
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION
DIVIDEND AND GROWTH FUND STOCK FUND FUND
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS Y
Shares sold.............. 931,473 $ 12,795,139 357,092 $ 5,308,377 1,565,763 $ 30,037,701
Shares issued on
reinvestment of
distributions........... 13,922 198,485 718 10,592 49,948 945,864
Shares redeemed.......... (52,079) (696,187) (270) (3,307) (142,907) (2,765,560)
----------- ------------ ---------- ------------ ---------- ------------
Net Increase............. 893,316 $ 12,297,437 357,540 $ 5,315,662 1,472,804 $ 28,218,005
----------- ------------ ---------- ------------ ---------- ------------
----------- ------------ ---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL
SMALL COMPANY FUND OPPORTUNITIES FUND
------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
CLASS Y
Shares sold................... 805,629 $ 9,682,345 671,155 $ 7,458,393
Shares issued on reinvestment
of distributions............. 32,532 378,667 13,375 139,815
Shares redeemed............... (104,804) (1,277,729) (85,615) (975,640)
----------- ------------ ---------- ------------
Net Increase.................. 733,357 $ 8,783,283 598,915 $ 6,622,568
----------- ------------ ---------- ------------
----------- ------------ ---------- ------------
</TABLE>
8. RECLASSIFICATION OF CAPITAL ACCOUNTS:
In accordance with American Institute of Certified Public Accountants
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 realized gain on investments on a tax basis which is
considered to be more informative to the shareholder. The reclassifications
are a result of temporary and permanent differences between GAAP and tax
accounting as a result of losses on wash sale transactions, paydown gains
and losses on mortgage-backed securities, foreign currency gains and
losses, post October loss deferrals and realized and unrealized gains and
losses on passive foreign investment companies. Therefore the source of the
Funds' distributions may be shown in the accompanying Statement of Changes
in Net Assets as from investment income, from net realized gains on
investments or from capital
______________________________________ 62 ______________________________________
<PAGE>
depending on the type of book and tax differences that exist. As of
December 31, 1998, the Funds recorded the following reclassifications to
increase (decrease) the accounts listed below.
<TABLE>
<CAPTION>
ACCUMULATED
ACCUMULATED UNDISTRIBUTED
UNDISTRIBUTED (DISTRIBUTION
(DISTRIBUTION IN EXCESS OF)
IN EXCESS OF) NET REALIZED
NET INVESTMENT GAIN ON PAID-IN
FUND INCOME INVESTMENTS SURPLUS
- ----------------------------------- --------------- -------------- ------------
<S> <C> <C> <C>
Bond Income Strategy Fund.......... $ 2,212 $ (2,158) $ (54)
High Yield Bond Fund............... (20) 20 --
Advisers Fund...................... 881,291 (880,193) (1,098)
Dividend and Growth Fund........... 1,987 -- (1,987)
Growth and Income Fund............. 17,226 -- (17,226)
Stock Fund......................... 890,834 (699,919) (190,915)
MidCap Fund........................ 174,148 (174,148) --
Capital Appreciation Fund.......... 5,709,226 1,515,918 (7,225,144)
Small Company Fund................. 455,149 205 (455,354)
International Opportunities Fund... (9,714) 7,605 2,109
Global Leaders Fund................ 3,431 (3,431) --
</TABLE>
9. CAPITAL LOSS CARRYOVER:
At December 31, 1998, (tax year-end) the following Funds had capital loss
forwards for U.S. federal tax purposes of approximately:
<TABLE>
<CAPTION>
YEAR OF
FUND AMOUNT EXPIRATION
- ---------------------------------------- ----------- ----------
<S> <C> <C>
Capital Appreciation Fund............... $24,202,309 2006
International Opportunities Fund........ 1,727,302 2006
Growth and Income Fund.................. 108,720 2006
Small Company Fund...................... 5,336,785 2006
</TABLE>
10. TAX INFORMATION NOTICE: (UNAUDITED)
For the year ended December 31, 1998, the following Funds distributed
long-term capital gain dividends as following:
<TABLE>
<S> <C>
Bond Income Strategy Fund......................... $ 76,114
Dividend and Growth Fund.......................... 1,297,876
Stock Fund........................................ 4,332,814
Advisers Fund..................................... 9,168,305
Small Company Fund................................ 121,564
</TABLE>
11. EUROPEAN MONETARY UNION:
On January 1, 1999, the European Monetary Union "EMU" introduced a new
single currency, the euro, which will replace the national currencies of
the participating members countries. Until 2002, the national currencies
will continue to exist, but exchange rates will be tied to the euro. The
introduction of the euro is likely to affect all stages of the investment
process, including trading, foreign exchange and accounting. Because this
change to a single currency is new, the introduction of the euro may result
in market volatility and may affect the business or financial conditions of
European issuers or of a Portfolio investing in European issuers. In
addition, while the conversion will eliminate currency risk among the
participating nations, currency risk between the euro and the U.S. dollar
remains a factor.
12. LINE OF CREDIT:
The Funds participate in a $500,000,000 committed revolving line of credit
facility. The facility is to be used for temporary or emergency purposes.
Under the arrangement, the Funds are required to own securities having a
market value in excess of 300% of the total bank borrowings. The interest
rate on borrowings varies depending on the nature of the loan. The facility
also requires a fee to be paid based on the amount of the commitment which
has not been utilized. During the year ended December 31, 1998, the Funds
did not have any borrowings under these facilities.
______________________________________ 63 ______________________________________
<PAGE>
HARTFORD MUTUAL FUNDS, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
-- SELECTED PER-SHARE DATA(A) --
------------------------------------------------------------------------------------------------------
NET REALIZED
AND
NET ASSET UNREALIZED DIVIDENDS
VALUE AT NET GAIN TOTAL FROM FROM NET DISTRIBUTIONS DISTRIBUTIONS
BEGINNING INVESTMENT (LOSS) ON INVESTMENT INVESTMENT FROM REALIZED FROM
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME CAPITAL GAINS CAPITAL
---------- ----------- ------------- ----------- ----------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
THE HARTFORD MONEY MARKET
FUND
For the Year Ended
December 31, 1998
Class A............... $ 1.00 $ 0.50 $-- $ 0.50 $ (0.50) $-- $--
Class B............... 1.00 0.40 -- 0.40 (0.40) -- --
Class Y............... 1.00 0.50 -- 0.50 (0.50) -- --
From inception August
1, 1998, through
December 31, 1998
Class C............... 1.00 0.20 -- 0.20 (0.20) -- --
For the Year Ended
December 31, 1997
Class A............... 1.00 0.05 -- 0.05 (0.05) -- --
Class B............... 1.00 0.01 -- 0.01 (0.01) -- --
Class Y............... 1.00 0.05 -- 0.05 (0.05) -- --
From inception July,
1996 to December 31,
1996
Class A............... 1.00 0.02 -- 0.02 (0.02) -- --
Class Y............... 1.00 0.02 -- 0.02 (0.02) -- --
THE HARTFORD BOND INCOME
STRATEGY FUND
For the Year Ended
December 31, 1998
Class A............... 10.61 0.54 0.23 0.77 (0.54) (0.08) --
Class B............... 10.58 0.47 0.22 0.69 (0.47) (0.08) --
Class Y............... 10.64 0.58 0.24 0.82 (0.57) (0.08) --
From inception August
1, 1998, through
December 31, 1998
Class C............... 10.00 0.18 0.14 0.32 (0.20) (0.06) --
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) --
From inception July 1,
1996 to 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 Year Ended
December 31, 1998
Class A............... 13.41 0.23 2.58 2.81 (0.25) (0.26) --
Class B............... 13.33 0.15 2.54 2.69 (0.17) (0.26) --
Class Y............... 13.46 0.29 2.59 2.88 (0.28) (0.26) --
From inception August
1, 1998, through
December 31, 1998
Class C............... 10.00 0.10 0.41 0.51 (0.14) (0.26) --
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) --
From inception July 1,
1996 to December 31,
1996
Class A............... 10.00 0.09 1.07 1.16 (0.08) -- --
Class B............... 10.00 0.02 1.11 1.13 (0.08) -- --
Class Y............... 10.00 0.03 1.16 1.19 (0.09) -- --
THE HARTFORD DIVIDEND AND
GROWTH FUND
For the Year Ended
December 31, 1998
Class A............... 14.72 0.15 1.97 2.12 (0.15) (0.07) --
Class B............... 14.61 0.06 1.92 1.98 (0.05) (0.07) --
Class Y............... 14.77 0.24 1.94 2.18 (0.19) (0.07) --
From inception August
1, 1998, through
December 31, 1998
Class C............... 10.00 0.03 0.44 0.47 (0.06) (0.07) --
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) --
From inception July 1,
1996 to 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 Year Ended
December 31, 1998
Class A............... 15.16 (0.01) 4.75 4.74 -- (0.19) (0.01)
Class B............... 15.01 (0.05) 4.60 4.55 -- (0.19) (0.01)
Class Y............... 15.25 0.06 4.78 4.84 -- (0.19) (0.01)
From inception August
1, 1998, through
December 31, 1998
Class C............... 10.00 (0.01) 0.48 0.47 -- (0.01) (0.01)
For the Year Ended
December 31, 1997
Class A............... 11.53 -- 3.66 3.66 -- (0.03) --
Class B............... 11.50 (0.02) 3.56 3.54 -- (0.03) --
Class Y............... 11.55 0.03 3.70 3.73 -- (0.03) --
From inception July 1,
1996 to December 31,
1996
Class A............... 10.00 0.02 1.53 1.55 (0.02) -- --
Class B............... 10.00 -- 1.52 1.52 (0.02) -- --
Class Y............... 10.00 0.01 1.57 1.58 (0.03) -- --
</TABLE>
(a) Information presented relates to a share of capital stock outstanding
throughout the indicated period.
(b) Annualized.
(c) Does not include sales charges.
(d) Not annualized.
(e) 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.
64
<PAGE>
<TABLE>
<CAPTION>
-- RATIOS AND SUPPLEMEMENTAL DATA --
--------------------------------------------------
-- SELECTED PER-SHARE DATA(A) -- RATIO OF
-------------------------------------------- EXPENSES
NET ASSET NET ASSETS TO AVERAGE
NET INCREASE VALUE AT AT END OF NET ASSETS
TOTAL (DECREASE) IN END TOTAL PERIOD BEFORE WAIVERS AND
DISTRIBUTIONS NET ASSETS OF PERIOD RETURN(C) (IN THOUSANDS) REIMBURSEMENTS
-------------- -------------- ---------- ----------- --------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
THE HARTFORD MONEY MARKET
FUND
For the Year Ended
December 31, 1998
Class A................ $ (0.50) $-- $ 1.00 4.69% $ 29,424 1.20%
Class B................ (0.40) -- 1.00 3.97 11,936 1.86
Class Y................ (0.50) -- 1.00 5.16 5,320 0.71
From inception August
1, 1998, through
December 31, 1998
Class C................ (0.20) -- 1.00 1.58(d) 1,203 2.02(b)
For the Year Ended
December 31, 1997
Class A................ (0.05) -- 1.00 4.73 22,578 1.23
Class B................ (0.01) -- 1.00 1.45(d) 4,449 3.63(b)
Class Y................ (0.05) -- 1.00 5.23 2,638 0.82
From inception July,
1996 to December 31,
1996
Class A................ (0.02) -- 1.00 2.01(d) 10,754 2.70(b)
Class Y................ (0.02) -- 1.00 2.34(d) 0.30 3,496.38(b)
THE HARTFORD BOND INCOME
STRATEGY FUND
For the Year Ended
December 31, 1998
Class A................ (0.62) 0.15 10.76 7.48 47,143 1.27
Class B................ (0.55) 0.14 10.72 6.70 16,772 2.01
Class Y................ (0.65) 0.17 10.81 7.98 10,766 0.84
From inception August
1, 1998, through
December 31, 1998
Class C................ (0.26) 0.06 10.06 3.19(d) 5,420 2.13(b)
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 5,756 1.01
From inception July 1,
1996 to December 31,
1996
Class A................ (0.31) 0.26 10.26 5.73(d) 10,925 2.72(b)
Class B................ (0.29) 0.25 10.25 5.38(d) 124 22.36(b)
Class Y................ (0.32) 0.27 10.27 5.95(d) 5 185.34(b)
THE HARTFORD ADVISERS
FUND
For the Year Ended
December 31, 1998
Class A................ (0.51) 2.30 15.71 21.09 316,435 1.38
Class B................ (0.42) 2.26 15.59 20.27 237,959 2.11
Class Y................ (0.54) 2.34 15.80 21.62 57,891 0.90
From inception August
1, 1998, through
December 31, 1998
Class C................ (0.40) 0.11 10.11 5.25(d) 54,907 2.18(b)
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
From inception July 1,
1996 to December 31,
1996
Class A................ (0.08) 1.08 11.08 11.56(d) 14,347 2.94(b)
Class B................ (0.08) 1.05 11.05 11.28(d) 1,499 6.71(b)
Class Y................ (0.09) 1.10 11.10 11.88(d) 34 144.82(b)
THE HARTFORD DIVIDEND AND
GROWTH FUND
For the Year Ended
December 31, 1998
Class A................ (0.22) 1.90 16.62 14.47 182,495 1.38
Class B................ (0.12) 1.86 16.47 13.62 108,344 2.10
Class Y................ (0.26) 1.92 16.69 14.86 17,098 0.91
From inception August
1, 1998, through
December 31, 1998
Class C................ (0.13) 0.34 10.34 4.82(d) 9,682 2.20(b)
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 33,730 2.34
Class Y................ (0.29) 3.31 14.77 31.59 13,236 1.09
From inception July 1,
1996 to December 31,
1996
Class A................ (0.08) 1.45 11.45 15.29(d) 6,083 4.12(b)
Class B................ (0.09) 1.40 11.40 14.82(d) 33,741 12.97(b)
Class Y................ (0.09) 1.46 11.46 15.49(d) 13,241 141.53(b)
THE HARTFORD STOCK FUND
For the Year Ended
December 31, 1998
Class A................ (0.20) 4.54 19.70 31.33 268,226 1.44
Class B................ (0.20) 4.35 19.36 30.38 185,205 2.16
Class Y................ (0.20) 4.64 19.89 31.80 7,919 0.96
From inception August
1, 1998, through
December 31, 1998
Class C................ (0.02) 0.45 10.45 6.60(d) 36,039 2.24(b)
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
From inception July 1,
1996 to December 31,
1996
Class A................ (0.02) 1.53 11.53 15.50(d) 6,273 3.96(b)
Class B................ (0.02) 1.50 11.50 15.20(d) 1,254 7.76(b)
Class Y................ (0.03) 1.55 11.55 15.80(d) 44 133.50(b)
<CAPTION>
RATIO OF RATIO OF
EXPENSES TO NET
AVERAGE INVESTMENT
NET ASSETS INCOME PORTFOLIO
AFTER WAIVERS AND TO AVERAGE TURNOVER
REIMBURSEMENTS NET ASSETS RATE(E)
----------------- -------------- --------
<S> <C> <C> <C>
THE HARTFORD MONEY MARKET
FUND
For the Year Ended
December 31, 1998
Class A................ 1.00% 4.57% N/A
Class B................ 1.70 3.83 --
Class Y................ 0.55 4.99 --
From inception August
1, 1998, through
December 31, 1998
Class C................ 1.70(b) 3.57(b) --
For the Year Ended
December 31, 1997
Class A................ 1.00 4.67 N/A
Class B................ 1.70(b) 3.92 --
Class Y................ 0.55 5.13 --
From inception July,
1996 to December 31,
1996
Class A................ 1.00(b) 4.49(b) N/A
Class Y................ 0.55(b) 4.56(b) --
THE HARTFORD BOND INCOME
STRATEGY FUND
For the Year Ended
December 31, 1998
Class A................ 1.25 5.04 135.01%
Class B................ 1.95 4.32 --
Class Y................ 0.80 5.48 --
From inception August
1, 1998, through
December 31, 1998
Class C................ 1.95(b) 4.13(b) --
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 --
From inception July 1,
1996 to December 31,
1996
Class A................ 1.25(b) 5.72(b) 75.52
Class B................ 1.95(b) 5.22(b) --
Class Y................ 0.80(b) 6.17(b) --
THE HARTFORD ADVISERS
FUND
For the Year Ended
December 31, 1998
Class A................ 1.38 1.67 40.24
Class B................ 2.10 0.98 --
Class Y................ 0.90 2.09 --
From inception August
1, 1998, through
December 31, 1998
Class C................ 2.10(b) 1.06(b) --
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 --
From inception July 1,
1996 to December 31,
1996
Class A................ 1.40(b) 2.13(b) 19.75
Class B................ 2.10(b) 1.24(b) --
Class Y................ 0.95(b) 2.75(b) --
THE HARTFORD DIVIDEND AND
GROWTH FUND
For the Year Ended
December 31, 1998
Class A................ 1.38 1.08 46.43
Class B................ 2.10 0.39 --
Class Y................ 0.91 1.53 --
From inception August
1, 1998, through
December 31, 1998
Class C................ 2.10(b) 0.23(b) --
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 --
From inception July 1,
1996 to December 31,
1996
Class A................ 1.40(b) 1.95(b) 29.80
Class B................ 2.10(b) 0.82(b) --
Class Y................ 0.95(b) 2.41(b) --
THE HARTFORD STOCK FUND
For the Year Ended
December 31, 1998
Class A................ 1.44 (0.07) 37.03
Class B................ 2.15 (0.77) --
Class Y................ 0.96 0.36 --
From inception August
1, 1998, through
December 31, 1998
Class C................ 2.15(b) (0.76)(b) --
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 --
From inception July 1,
1996 to December 31,
1996
Class A................ 1.45(b) 0.71(b) 11.87
Class B................ 2.15(b) (0.12)(b) --
Class Y................ 1.00(b) 1.37(b) --
</TABLE>
(a) Information presented relates to a share of capital stock outstanding
throughout the indicated period.
(b) Annualized.
(c) Does not include sales charges.
(d) Not annualized.
(e) 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.
65
<PAGE>
HARTFORD MUTUAL FUNDS, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS -- (CONTINUED)
<TABLE>
<CAPTION>
-- SELECTED PER-SHARE DATA(A) --
------------------------------------------------------------------------------------------------------
NET REALIZED
AND
NET ASSET UNREALIZED DIVIDENDS
VALUE AT NET GAIN TOTAL FROM FROM NET DISTRIBUTIONS DISTRIBUTIONS
BEGINNING INVESTMENT (LOSS) ON INVESTMENT INVESTMENT FROM REALIZED FROM
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME CAPITAL GAINS CAPITAL
---------- ----------- ------------- ----------- ----------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
THE HARTFORD CAPITAL
APPRECIATION FUND
For the Year Ended
December 31, 1998
Class A............... $19.90 $(0.10) $ 0.75 $ 0.65 $-- $ (0.13) $--
Class B............... 19.71 (0.21) 0.71 0.50 -- (0.13) --
Class Y............... 20.05 (0.06) 0.80 0.74 -- (0.13) --
From inception August
1, 1998, through
December 31, 1998
Class C............... 10.00 (0.03) 0.24 0.21 -- -- --
For the Year Ended
December 31, 1997
Class A............... 13.36 (0.03) 7.34 7.31 -- (0.77) --
Class B............... 13.32 (0.06) 7.22 7.16 -- (0.77) --
Class Y............... 13.38 (0.03) 7.47 7.44 -- (0.77) --
From inception July 1,
1996 to December 31,
1996
Class A............... 10.00 (0.03) 3.80 3.77 -- (0.41) --
Class B............... 10.00 (0.02) 3.75 3.73 -- (0.41) --
Class Y............... 10.00 -- 3.79 3.79 -- (0.41) --
THE HARTFORD SMALL
COMPANY FUND
For the Year Ended
December 31, 1998
Class A............... 12.16 (0.06) 1.33 1.27 -- (0.12) --
Class B............... 12.04 (0.12) 1.29 1.17 -- (0.12) --
Class Y............... 12.24 (0.03) 1.38 1.35 -- (0.12) --
From inception August
1, 1998, through
December 31, 1998
Class C............... 10.00 (0.02) 0.50 0.48 -- -- --
For the Year Ended
December 31, 1997
Class A............... 10.68 (0.02) 2.05 2.03 -- (0.55) --
Class B............... 10.65 (0.03) 1.97 1.94 -- (0.55) --
Class Y............... 10.71 (0.01) 2.09 2.08 -- (0.55) --
From inception July 1,
1996 to December 31,
1996
Class A............... 10.00 (0.02) 1.42 1.40 -- (0.72) --
Class B............... 10.00 (0.02) 1.39 1.37 -- (0.72) --
Class Y............... 10.00 -- 1.43 1.43 -- (0.72) --
THE HARTFORD
INTERNATIONAL
OPPORTUNITIES FUND
For the Year Ended
December 31, 1998
Class A............... 10.58 0.07 1.26 1.33 (0.02) -- --
Class B............... 10.49 0.01 1.23 1.24 -- -- --
Class Y............... 10.62 0.12 1.27 1.39 (0.04) -- --
From inception August
1, 1998, through
December 31, 1998
Class C............... 10.00 (0.01) (0.39) (0.40) (0.03) -- --
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) --
From inception July 1,
1996 to 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 -- 0.84 0.84 (0.08) (0.03) --
THE HARTFORD MIDCAP FUND
For the Year Ended
December 31, 1998
Class A............... 10.00 (0.05) 2.35 2.30 -- -- --
Class B............... 10.00 (0.10) 2.32 2.22 -- -- --
Class Y............... 10.00 (0.02) 2.37 2.35 -- -- --
From inception August
1, 1998, through
December 31, 1998
Class C............... 10.00 (0.03) 0.90 0.87 -- -- --
THE HARTFORD GROWTH AND
INCOME FUND
From inception April
30, 1998, through
December 31, 1998
Class A............... 10.00 0.02 1.45 1.47 -- -- (0.02)
Class B............... 10.00 (0.01) 1.43 1.42 -- -- (0.01)
Class Y............... 10.00 0.05 1.46 1.51 -- -- (0.03)
From inception August
1, 1998, through
December 31, 1998
Class C............... 10.00 0.01 1.27 1.28 -- -- (0.03)
THE HARTFORD HIGH YIELD
FUND
From inception
September 30, 1998,
through December 31,
1998
Class A............... 10.00 0.19 0.13 0.32 (0.17) -- --
Class B............... 10.00 0.16 0.14 0.30 (0.16) -- --
Class Y............... 10.00 0.21 0.13 0.34 (0.18) -- --
Class C............... 10.00 0.16 0.14 0.30 (0.16) -- --
THE HARTFORD GLOBAL
LEADERS FUND
From inception
September 30, 1998,
through December 31,
1998
Class A............... 10.00 (0.01) 3.03 3.02 -- (0.35) --
Class B............... 10.00 (0.02) 3.02 3.00 -- (0.35) --
Class Y............... 10.00 0.01 3.03 3.04 -- (0.35) --
Class C............... 10.00 (0.02) 3.02 3.00 -- (0.35) --
</TABLE>
(a) Information presented relates to a capital share outstanding throughout the
indicated period.
(b) Annualized.
(c) Does not include sales charges.
(d) Not annualized.
(e) 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.
66
<PAGE>
<TABLE>
<CAPTION>
-- RATIOS AND SUPPLEMEMENTAL DATA --
-------------------------------------------------
RATIO OF
-- SELECTED PER-SHARE DATA(A) -- EXPENSES
-------------------------------------------- TO AVERAGE
NET ASSET NET ASSETS NET ASSETS
NET INCREASE VALUE AT AT END OF BEFORE WAIVERS
TOTAL (DECREASE) IN END TOTAL PERIOD AND
DISTRIBUTIONS NET ASSETS OF PERIOD RETURN(C) (IN THOUSANDS) REIMBURSEMENTS
-------------- -------------- ---------- ----------- --------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
THE HARTFORD CAPITAL
APPRECIATION FUND
For the Year Ended
December 31, 1998
Class A................ $ (0.13) $ 0.52 $20.42 3.26% $364,951 1.44%
Class B................ (0.13) 0.37 20.08 2.52 290,756 2.15
Class Y................ (0.13) 0.61 20.66 3.68 27,700 0.96
From inception August
1, 1998, through
December 31, 1998
Class C................ -- 0.21 10.21 2.10(d) 15,231 2.29(b)
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 26,693 1.13
From inception July 1,
1996 to December 31,
1996
Class A................ (0.41) 3.36 13.36 37.75(d) 9,028 4.10(b)
Class B................ (0.41) 3.32 13.32 37.35(d) 889 9.05(b)
Class Y................ (0.41) 3.38 13.38 37.95(d) 107 93.64(b)
THE HARTFORD SMALL
COMPANY FUND
For the Year Ended
December 31, 1998
Class A................ (0.12) 1.15 13.31 10.46 37,623 1.52
Class B................ (0.12) 1.05 13.09 9.73 18,345 2.22
Class Y................ (0.12) 1.23 13.47 11.05 13,004 1.02
From inception August
1, 1998, through
December 31, 1998
Class C................ -- 0.48 10.48 4.80(d) 2,765 2.46(b)
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
From inception July 1,
1996 to December 31,
1996
Class A................ (0.72) 0.68 10.68 14.11(d) 4,673 4.24(b)
Class B................ (0.72) 0.65 10.65 13.81(d) 241 20.03(b)
Class Y................ (0.72) 0.71 10.71 14.41(d) 72 115.33(b)
THE HARTFORD
INTERNATIONAL
OPPORTUNITIES FUND
For the Year Ended
December 31, 1998
Class A................ (0.02) 1.31 11.89 12.53 32,014 1.84
Class B................ -- 1.24 11.73 11.82 11,767 2.56
Class Y................ (0.04) 1.35 11.97 13.11 10,860 1.36
From inception August
1, 1998, through
December 31, 1998
Class C................ (0.03) (0.43) 9.57 (4.05)(d) 1,379 2.83(b)
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
From inception July 1,
1996 to December 31,
1996
Class A................ (0.09) 0.72 10.72 8.14(d) 4,294 5.35(b)
Class B................ (0.10) 0.69 10.69 7.86(d) 163 32.61(b)
Class Y................ (0.11) 0.73 10.73 8.36(d) 64 126.52(b)
THE HARTFORD MIDCAP FUND
For the Year Ended
December 31, 1998
Class A................ -- 2.30 12.30 23.12 24,294 1.57
Class B................ -- 2.22 12.22 22.32 8,403 2.31
Class Y................ -- 2.35 12.35 23.62 3,750 1.12
From inception August
1, 1998, through
December 31, 1998
Class C................ -- 0.87 10.87 8.70(d) 1,077 2.57(b)
THE HARTFORD GROWTH AND
INCOME FUND
From inception April
30, 1998, through
December 31, 1998
Class A................ (0.02) 1.45 11.45 14.78(d) 11,120 1.58(b)
Class B................ (0.01) 1.41 11.41 14.21(d) 3,538 2.32(b)
Class Y................ (0.03) 1.48 11.48 15.18(d) 386 1.20(b)
From inception August
1, 1998, through
December 31, 1998
Class C................ (0.03) 1.25 11.25 12.80(d) 3,726 2.38(b)
THE HARTFORD HIGH YIELD
FUND
From inception
September 30, 1998,
through December 31,
1998
Class A................ (0.17) 0.15 10.15 3.33(d) 8,507 1.53(b)
Class B................ (0.16) 0.14 10.14 3.09(d) 2,322 2.31(b)
Class Y................ (0.18) 0.16 10.16 3.51(d) 1,034 1.17(b)
Class C................ (0.16) 0.14 10.14 3.08(d) 2,278 2.31(b)
THE HARTFORD GLOBAL
LEADERS FUND
From inception
September 30, 1998,
through December 31,
1998
Class A................ (0.35) 2.67 12.67 30.36(d) 3,771 2.66(b)
Class B................ (0.35) 2.65 12.65 30.16(d) 486 3.55(b)
Class Y................ (0.35) 2.69 12.69 30.57(d) 392 2.46(b)
Class C................ (0.35) 2.65 12.65 30.16(d) 517 3.57(b)
<CAPTION>
RATIO OF RATIO OF
EXPENSES TO NET
AVERAGE INVESTMENT
NET ASSETS INCOME PORTFOLIO
AFTER WAIVERS AND TO AVERAGE TURNOVER
REIMBURSEMENTS NET ASSETS RATE(E)
----------------- -------------- --------
<S> <C> <C> <C>
THE HARTFORD CAPITAL
APPRECIATION FUND
For the Year Ended
December 31, 1998
Class A................ 1.44% (0.70)% 123.42%
Class B................ 2.15 (1.39) --
Class Y................ 0.96 (0.27) --
From inception August
1, 1998, through
December 31, 1998
Class C................ 2.15(b) (1.34)(b) --
For the Year Ended
December 31, 1997
Class A................ 1.45 (0.80) 119.62
Class B................ 2.15 (1.46) --
Class Y................ 1.00 (0.35) --
From inception July 1,
1996 to December 31,
1996
Class A................ 1.45(b) (0.70)(b) 149.99
Class B................ 2.15(b) (1.53)(b) --
Class Y................ 1.00(b) 0.04(b) --
THE HARTFORD SMALL
COMPANY FUND
For the Year Ended
December 31, 1998
Class A................ 1.45 (0.79) 266.82
Class B................ 2.15 (1.49) --
Class Y................ 1.00 (0.33) --
From inception August
1, 1998, through
December 31, 1998
Class C................ 2.15(b) (1.49)(b) --
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) --
From inception July 1,
1996 to December 31,
1996
Class A................ 1.45(b) (0.60)(b) 69.92
Class B................ 2.15(b) (1.30)(b) --
Class Y................ 1.00(b) 0.03(b) --
THE HARTFORD
INTERNATIONAL
OPPORTUNITIES FUND
For the Year Ended
December 31, 1998
Class A................ 1.65 0.69 148.58
Class B................ 2.35 0.01 --
Class Y................ 1.20 1.17 --
From inception August
1, 1998, through
December 31, 1998
Class C................ 2.35(b) (0.71)(b) --
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 --
From inception July 1,
1996 to December 31,
1996
Class A................ 1.65(b) 0.51(b) 21.51
Class B................ 2.35(b) (0.86)(b) --
Class Y................ 1.20(b) 0.57(b) --
THE HARTFORD MIDCAP FUND
For the Year Ended
December 31, 1998
Class A................ 1.45 (0.78) 139.02
Class B................ 2.15 (1.48) --
Class Y................ 1.00 (0.33) --
From inception August
1, 1998, through
December 31, 1998
Class C................ 2.15(b) (1.45)(b) --
THE HARTFORD GROWTH AND
INCOME FUND
From inception April
30, 1998, through
December 31, 1998
Class A................ 1.45(b) 0.23(b) 35.10
Class B................ 2.15(b) (0.47)(b) --
Class Y................ 1.00(b) 0.76(b) --
From inception August
1, 1998, through
December 31, 1998
Class C................ 2.15(b) (0.53)(b) --
THE HARTFORD HIGH YIELD
FUND
From inception
September 30, 1998,
through December 31,
1998
Class A................ 1.40(b) 7.06(b) 10.85
Class B................ 2.10(b) 6.50(b) --
Class Y................ 0.95(b) 7.48(b) --
Class C................ 2.10(b) 6.49(b) --
THE HARTFORD GLOBAL
LEADERS FUND
From inception
September 30, 1998,
through December 31,
1998
Class A................ 1.65(b) (0.19)(b) 49.04
Class B................ 2.35(b) (0.92)(b) --
Class Y................ 1.20(b) 0.31(b) --
Class C................ 2.35(b) (0.90)(b) --
</TABLE>
(a) Information presented relates to a capital share outstanding throughout the
indicated period.
(b) Annualized.
(c) Does not include sales charges.
(d) Not annualized.
(e) 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.
67
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF
THE HARTFORD MUTUAL FUNDS, INC.:
We have audited the accompanying statements of net assets of The Hartford Mutual
Funds, Inc. (a Maryland Corporation) (consisting of The Hartford Money Market,
The Hartford Bond Income Strategy, The Hartford Advisers, The Hartford Dividend
and Growth, The Hartford Stock, The Hartford Capital Appreciation, The Hartford
Small Company, The Hartford International Opportunities, The Hartford Global
Leaders, The Hartford High Yield, The Hartford MidCap and The Hartford Growth
and Income Funds) (the Funds) as of December 31, 1998, and the related
statements of operations, statement of changes in net assets and financial
highlights for the periods presented. These financial statements and financial
highlights are the responsibility of the Funds' management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1998, by correspondence with the custodian bank. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds comprising The Hartford Mutual Funds, Inc. for the
periods presented in conformity with generally accepted accounting principles.
Hartford, Connecticut
February 16, 1999 ARTHUR ANDERSEN LLP
______________________________________ 68 ______________________________________
